Adbar, L.C. v. New Beginnings C-Star

Brief Fact Summary.

Defendant and Plaintiff were subcontractors on an installation project and both agreed that plaintiff will receive $20,000 added to the actual figure. The trial court awarded Benning $20,000 for supervision & $18,600 for salary and living expenses while its president was involved in such supervision. CACC appealed as to the amount of this supervision award.

Synopsis of Rule of Law.

Parol evidence is not admissible to clarify an agreement if its terms are clear and unambiguous.

Facts.

C. and A. Development Co. (CACC) (defendant) and Benning Constriction Co. (Benning) (plaintiff) were subcontractors on a sewer line installation project. Their agreement expressed the accompanying: “It has additionally concurred that [Benning] will get $20,000 for supervision which will be added to the actual cost figure.” Benning’s president was to direct the supervision of the venture. Benning could exhibit evidence of a verbal consent to pay its president a salary and living expenses—in addition to the $20,000—while he administered. The trial court granted Benning $20,000 for supervision in addition to $18,600 for salary and living expenses while its president was occupied with such supervision. CACC appealed as to the amount of this supervision award.

Issue.

Is parol evidence admissible to clarify an agreement if its terms are clear and unambiguous?

Held.

No. Parol evidence is not admissible to clarify an agreement if its terms are clear and unambiguous.

Dissent.

The terms of the agreement are not ambiguous on their face, but rather a latent ambiguity may exist. Considering the extrinsic evidence, it is unclear whether Benning’s leader’s president’s salary and expenses were part of the “actual costs,” versus the cash dispensed in the agreement for “supervision.” It is true that there is proof to help the majority’s opinion as well, yet given this is a review of the trial court’s assurance that there was latent ambiguity in the agreement, its decision should be given deference and affirmed without modification.

Discussion.

Parol evidence is not admissible to clarify an agreement if its terms are clear and unambiguous. Parol evidence is just acceptable if an agreement’s significance is uncertain. In the present case, the agreement clearly and unambiguously expressed that Benning was to get $20,000 for supervision. Any extraneous agreement that may have existed that were in opposition to or notwithstanding the agreement terms could and ought to have been put to writing. Such extraneous, oral terms are not permissible because the payment terms are not ambiguous as written in the agreement. The trial court erred in awarding salary and living expenses above the $20,000. The trial court’s judgment is accordingly modified and affirmed as modified.