Brinderson-Newberg Joint Venture v. Pacific Erectors, Inc.

Brinderson-Newberg Joint Venture (Brinderson) (plaintiff) is a general contractor. Pacific Erectors, Inc. (Pacific) (defendant) is a subcontractor. In May 1985, Brinderson was awarded a contract to construct a coal-fired power plant. Brinderson entered into negotiations with Pacific to construct the Flue Gas System (FGS) as part of the overall power plant project. Pacific offered to construct the support steel for FGS. Brinderson, however, wanted Pacific to construct all the required steel for FGS and to build the entire FGS component. In the third negotiations meeting between Brinderson and Pacific, the parties discussed line by line the proposed contract for the work to be performed. The version of the contract submitted by Brinderson stated that Pacific would “erect complete” and “make a complete installation” of the FGS. Pacific disagreed with this statement. Pacific alleges that after voicing its disagreement with this requirement, Brinderson informed Pacific that the language could be interpreted as only requiring Pacific to erect the support steel and complete picks and sets for the FGS. Pacific agreed to this interpretation of the terms, but the language of the contract remained unchanged. Additionally, the contract contained a merger clause stating that it was the final and complete writing between Brinderson and Pacific. Pacific began work on the contract, but refused to erect the entire FGS. Brinderson brought suit in federal district court against Pacific, alleging breach of contract. At trial, Pacific was permitted to submit extrinsic evidence showing that the parties intended the meaning of the contractual language to only encompass the erection of support steel and picks and sets by Pacific. The jury ruled in favor of Pacific, and Brinderson appealed.