## Facts

- A general contractor (BNJV) hired a steel subcontractor (Pacific) for work on a Navy coal-fired power plant’s Flue Gas System (FGS).
- During negotiations, Pacific sought a scope limited to fabricating and erecting only FGS support steel and performing “picks and sets” (hoisting/placing components).
- The executed subcontract required Pacific to “erect complete” and “make a complete installation” of the FGS.
- Pacific objected to that wording but claimed BNJV orally assured it those phrases would be treated as limited to support steel and picks-and-sets; the writing was not revised.
- The subcontract included an integration clause stating the writing was the parties’ final and complete agreement.
- A dispute arose when BNJV demanded full erection/installation of the FGS and Pacific refused, asserting the narrower understanding.
- BNJV sued Pacific and its surety for breach-related claims; Pacific counterclaimed and asserted fraud and negligent misrepresentation based on the alleged pre-contract oral assurances.
- The district court admitted Pacific’s extrinsic evidence; the jury accepted Pacific’s interpretation, and BNJV’s motions for directed verdict and JNOV were denied.

## Issues

1. Whether the integrated subcontract’s “erect complete” and “make a complete installation” language was reasonably susceptible to Pacific’s narrower interpretation, permitting admission of parol evidence.
2. Whether fraud and negligent misrepresentation claims may proceed when they rely on pre-contract oral statements that contradict an unambiguous integrated agreement.
3. Whether BNJV was entitled to judgment as a matter of law on contract interpretation once contradictory extrinsic evidence was excluded.

## Decision

- The Ninth Circuit reversed the judgment for Pacific.
- The court held the subcontract was not reasonably susceptible to Pacific’s interpretation; “erect complete” and “make a complete installation” unambiguously required full erection/installation of the FGS.
- The district court erred by admitting parol evidence that contradicted the integrated written terms.
- BNJV was entitled to judgment as a matter of law (directed verdict/JNOV) on the contract interpretation issue.
- Pacific’s fraud and negligent misrepresentation theories failed because they depended on the same barred, contradictory pre-contract representations.

## Legal Principles

- Extrinsic evidence may be considered to interpret contract language only if the writing is reasonably susceptible to the proffered meaning; it is inadmissible to contradict unambiguous terms.
- An integration clause generally makes the writing the final and complete agreement, superseding prior negotiations and inconsistent oral understandings.
- A party cannot avoid the parol evidence rule by restating a contract-interpretation dispute as fraud or negligent misrepresentation when the alleged misstatements are inconsistent with the integrated, unambiguous contract.

## Conclusion

The Ninth Circuit held that an unambiguous, integrated subcontract requiring a subcontractor to “erect complete” and “make a complete installation” could not be narrowed through prior oral assurances, and that tort claims premised on those inconsistent assurances were barred; the contractor was entitled to judgment as a matter of law.


Brinderson-Newberg Joint Venture v. Pac. Erectors, Inc., 971 F.2d 272 (9th Cir. 1992)