FACTS In January 1991, Sandhill and K & B Florida Corporation (K & B), a pharmaceutical retailer,

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FACTS In January 1991, Sandhill and K & B Florida Corporation (K & B), a pharmaceutical retailer, entered into lease agreement (K & B Lease) providing for the rental of a parcel of real property located in the Gulf Breeze Shopping Center in Gulf Breeze, Florida. Shortly before the execution of the K & B Lease, Sandhill had leased space in the shopping center to Delchamps, Inc., a regional supermarket chain, as the ‘‘anchor’’ tenant in the shopping center. Article 2B of the K & B Lease referred to the Delchamps lease and provided:

Lessor represents to Lessee that Lessor has entered into leases with the following named concerns: with Delchamps, Inc. (Delchamps) for a minimum of 45,000 square feet for supermarket grocery store and that Lessor will construct and offer for lease individual retail shops for a minimum of 21,000 square feet for various retail uses, all located and dimensioned shown on the attached Plot Plan, The continued leasing and payment of rent for their store in the Shopping Center by Delchamps is part of the consideration to induce Lessee to lease and pay rent for its store, Accordingly, should Delchamps fail or cease to lease and pay rent for its store in the Shopping Center during the Lease Term as hereinafter set out, Lessee shall have the right and privilege of: (a) canceling this Lease and of terminating all of its obligations hereunder at any time thereafter upon written notice by Lessee to Lessor, and such cancellation and termination shall be effective ninety (90) days after the mailing of such written notice; The K & B Lease contained an integration clause which provided that ‘‘[t]his lease contains all of the agreements made between the parties hereto and may not be modified orally or in any manner other than by an agreement in writing.’’ The Delchamps’ lease included an assignment provision which granted Delchamps ‘‘the right, at any time after the commencement of the term hereof, to assign this lease.’’

In September 1997, Jitney Jungle Stores of America, Inc. (Jitney Jungle), another grocery store operator, acquired Delchamps and continued the operation of the Delchamps’ grocery store in the shopping center. In 1998, Eckerd acquired the K & B drugstore. The K & B Lease was assigned to Eckerd, which began operating an Eckerd drugstore in the leased premises. In October 1999, Jitney Jungle filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Thereafter, an order was entered in the bankruptcy proceeding approving Delchamps’ assignment of its lease in the shopping center to Bruno’s Supermarkets, Inc. (Bruno’s). Since the assignment, Bruno’s has occupied the leased premises under the assigned Delchamps’ lease and has operated a Bruno’s grocery store there. Sandhill did not provide notice to, or obtain consent from, Eckerd of this assignment. On June 22, 2001, Eckerd notified Sandhill that, because Delchamps had ceased to lease and pay rent for its store in the shopping center, pursuant to the K & B Lease, Eckerd was canceling its lease effective September 20, 2001. Sandhill filed suit against Eckerd for an alleged breach of the shopping center lease. At trial, Sandhill sought to introduce testimony relating to its negotiations of the K & B Lease to explain the parties’ intent in drafting the allegedly ambiguous language in article 2B. The trial court prohibited the introduction of this evidence under the parol evidence rule. The district court entered a judgment in favor of Eckerd. This appeal was filed.

DECISION Judgment affirmed.

OPINION Van Nortwick, J. It is a fundamental rule of contract interpretation that a contract which is clear, complete, and unambiguous does not require judicial construction. [Citations.]

In the case on appeal, the trial court concluded, and we agree, that article 2B of the K & B Lease clearly and unambiguously gave the lessee the option to cancel the lease if Delchamps ceased to lease and pay rent for the use of its store. As is clear from article 2B itself, the subject language was an inducement for the drugstore tenant to lease in the shopping center.

Sandhill argues that the trial court erred in applying the parol evidence rule and refusing to allow the introduction of extrinsic evidence in interpreting article 2B of the K & B Lease. Sandhill correctly acknowledges that, if a contract provision is ‘‘clear and unambiguous,’’ a court may not consider extrinsic or ‘‘parol’’ evidence to change the plain meaning set forth in the contract. [Citation.] Sandhill contends that parol evidence was admissible below since the lease is incomplete and contains a latent ambiguity. [Citations.] A latent ambiguity arises when a contract on its face appears clear and unambiguous, but fails to specify the rights or duties of the parties in certain situations. [Citation.] Sandhill submits that, while the reference in article 2B of the K & B Lease to the Delchamps lease may be ‘‘unambiguous’’ when read literally, this reference was not ‘‘clear’’ or ‘‘complete’’ with regard to the operation of the lease should the Delchamps lease be assigned. We cannot agree.

The operation of the parol evidence rule encourages parties to embody their complete agreement in a written contract and fosters reliance upon the written contract. ‘‘The parol evidence rule serves as a shield to protect a valid, complete and unambiguous written instrument from any verbal assault that would contradict, add to, or subtract from it, or affect its construction.’’ [Citation.] The parol evidence rule presumes that the written agreement that is sought to be modified or explained is an integrated agreement; that is, it represents the complete and exclusive instrument setting forth the parties’ intended agreement. [Citation.] The concept of integration is based on a presumption that the parties to a written contract intended that writing ‘‘to be the sole expositor of their agreement.’’ [Citation.] The terms of an integrated written contract can be varied by extrinsic evidence only to the extent that the terms are ambiguous and are given meaning by the extrinsic evidence. [Citation.]

Here, the K & B Lease contains a so-called merger or integration clause. Although the existence of a merger clause does not per se establish that the integration of the agreement is total, [citation], a merger clause is a highly persuasive statement that the parties intended the agreement to be totally integrated and generally works to prevent a party from introducing parol evidence to vary or contradict the written terms. Here, we find that the K & B Lease is an integrated agreement complete in all essential terms.

Further, Article 2B is not in the least unclear or incomplete. It contains no latent or patent ambiguity. Although article 2B does not mention assignment by Delchamps, it unambiguously grants the lessee the right to terminate the K & B Lease if Delchamps ceases to lease and pay rent for its store in the shopping center for any reason. Accordingly, the trial court correctly ruled that it could not admit extrinsic evidence.

INTERPRETATION The parol evidence rule encourages parties to embody their complete agreement in an integrated written contract and fosters reliance upon the written contract.

CRITICAL THINKING QUESTION Do you agree with the parol evidence rule? Explain.