Trident Center v. Connecticut General Life Insurance. Co.,

847 F.2d 564 (9th Cir 1988)

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Nature of the Case

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Facts

Trident (P) was the partnership of an insurance company and two large law firms. The partnership's goal was to build an office building. P entered into a loan agreement for a building with Connecticut (D). The written agreement stated that P would borrow $56 million to construct an office building. The contract provided that the loan could not be paid off in the first 12 years. If P defaulted in the first 12 years, D could accelerate the payments and add a prepayment fee. The loan rate was 12.5%. After the building was completed, interest rates began to fall, and P sought to repay the loan in full after four years. D refused to allow the prepayment. P brought a declaratory relief action to determine the meaning of the contract. Despite the clear meaning on the face of the contract, P claimed that the parties had intended to allow prepayment at any time if a penalty was paid. At the hearing, P was not permitted to present parol evidence of the meaning of the contract but at the same time admitted that the contract was unambiguous. The court dismissed the suit and imposed sanctions against P for filing a frivolous lawsuit. P appealed.