Court Opinion

ID: 9464786
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:42:26.035913+00
Date Added: 2024-06-11T17:38:48.930941
License: Public Domain

KENNEDY, Circuit Judge,
concurring in part and dissenting in part:
I dissent from that portion of the court’s opinion which reverses the trial court’s grant of summary judgment on appellant’s fourth claim. Even assuming the Exxon sales representative had authority to bind Exxon, evidence of his allegedly fraudulent statements is inadmissible under the California parol evidence rule, Cal.Civil Proc. Code § 1856 (West 1955), since those statements directly contradicted the terms of the written contract.
The opinion of the court correctly states that oral statements may be admitted to show fraudulent inducement to enter into a contract even when the contract recites that it is fully integrated. To be admissible, however, the parol evidence offered must “tend to establish some independent fact or representation, some fraud in the procurement of the instrument, or some breach of confidence concerning its use, and not a promise directly at variance with the promise in the writing.” 34 Cal.Jur.3d Fraud and Deceit § 80, at 730 (1977). An oral promise which antedates a written contract is not admissible to prove fraud if it is “in direct contravention of the unconditional promise” contained in the parties’ written agreement. Bank of America National Trust & Savings Ass’n v. Pendergrass, 4 Cal.2d 258, 263, 48 P.2d 659, 661 (1935); accord, Simmons v. California Institute of Technology, 34 Cal.2d 264, 274, 209 P.2d 581, 587 (1949) (en banc); cf. Masterson v. Sine, 68 Cal.2d 222, 65 Cal.Rptr. 545, 436 P.2d 561 (1968) (en banc) (parol evidence admitted to prove existence of separate oral agreement as to any matter on which document is silent and which is not inconsistent with its terms). See generally Sweet, Promissory Fraud and the Parol Evidence Rule, 49 Calif.L.Rev. 877 (1961).
Simmons v. California Institute of Technology, 34 Cal.2d 264, 209 P.2d 581 (1949) (en banc), does not support the conclusion that evidence of the alleged oral representations is admissible. That case expressly states that
“a distinction must be made between * * * a parol promise * * *, which by its very nature is superseded by the final writing, inconsistent with it, and a promise made with no intention of performing the same, not inconsistent with the writing, but which was the inducing cause thereof.”
*717Id. at 274, 209 P.2d at 587, quoting Cobbs v. Cobbs, 53 Cal.App.2d 780, 783, 785, 128 P.2d 373, 374 (1942) (emphasis supplied). In applying that rule to the facts before it, the California Supreme Court expressly considered whether or not the statements constituting the alleged fraudulent inducement contradicted the terms of the written agreement:
[T]he [oral] promise was directed to the matter of the use of the money, whereas the terms of the memorandum dealt with nothing more than the form of the payment of it. These promises by Dr. Clark as to the use of the royalties were the fraudulent inducement, or motive, for the contract, but they were not incorporated in or superseded by the terms of the agreement as to payment. The two are not inconsistent or “at variance,” inasmuch as they deal with wholly different matters. It was, therefore, proper to receive parol evidence to prove the promises of Dr. Clark.
Id. (emphasis supplied).
Application of the Simmons analysis to the case here reveals that the alleged statements made to induce Bell to enter into the contract were superseded and contradicted by the express terms of the agreement. Bell grounds his claim of fraud on an alleged promise that by entering into the sales agreement of May 17, 1973 he would be protected as to his requirements in the event of any temporary fuel supply shortage Exxon should encounter. The written agreement included the following provision:
During any period in which, for any reason, Seller’s supplies of commodities of the kind deliverable under this Agreement which are available, in Seller’s judgment, for sale at the place or places from which deliveries hereunder are normally shipped or crude petroleum from which such commodities are derived from any of Seller’s then existing sources of supply are curtailed or cut off or are inadequate to meet Seller’s obligations to its customers, the obligation of Seller under this Agreement shall, at its option be reduced as Seller may determine to allocate fairly among its customers, whether under contract or not, such available supplies of commodities then in storage and such quantity as Seller may receive . Seller shall not be required 'to make up deliveries omitted on account of any such causes.
C.R. at 32 (emphasis supplied). The language of the contract clearly indicates that a fuel shortage would give Exxon the option to allocate fuel among its customers, and that such allocation would relieve the company of the duty to deliver quantities otherwise required under the agreement. The alleged oral representations that Exxon would continue to meet Bell’s fuel requirements even in the event of a shortage directly contradicts the written terms of the contract. The contract reserved to Exxon the absolute discretion to determine and implement a fair allocation among its customers in the event of a fuel shortage. Bell does not argue that the terms of the agreement were ambiguous or that the oral statements should be admitted to explain the meaning of the contract. See Masterson v. Sine, 68 Cal.2d 222, 65 Cal.Rptr. 545, 436 P.2d 561 (1968) (en banc). Since the alleged oral promise contravened the rights Exxon reserved to itself in the May 17,1973 agreement, evidence of the oral statements is inadmissible under California law to prove fraud in inducement. Shyvers v. Mitchell, 133 Cal.App.2d 569, 284 P.2d 826 (1955) (oral promise that guarantor would not be held liable directly contradicted unconditional written contract of guaranty); Partamian v. Flodine, 95 Cal.App.2d Supp. 931, 213 P.2d 790 (App.Dep’t Super.Ct.1950) (oral promise that buyer could cancel but contract expressly not subject to cancellation).
I would therefore conclude that the trial court was correct in granting summary judgment for Exxon on appellant’s claim of fraudulent inducement.