Marketing West, Inc. v. Sanyo Fisher (USA) Corp.

• Decision Date: 12 May 1992
• Docket Number: No. B062559,B062559
• Citation: 6 Cal.App.4th 603,7 Cal.Rptr.2d 859
• Court: California Court of Appeals Court of Appeals
• Parties: MARKETING WEST, INC., et al., Plaintiffs and Appellants, v. SANYO FISHER (USA) CORPORATION, Defendant and Respondent.

Page 859

7 Cal.Rptr.2d 859

6 Cal.App.4th 603

MARKETING WEST, INC., et al., Plaintiffs and Appellants, v. SANYO FISHER (USA) CORPORATION, Defendant and Respondent.

No. B062559.

Court of Appeal, Second District, Division 7, California.

May 12, 1992.

Browne & Woods, Peter W. Ross and Michael J. Olecki, Beverly Hills, for plaintiffs and appellants.

Pillsbury Madison & Sutro, Kenneth R. Chiate, Michael H. Salinsky and Kent B. Goss, Los Angeles for defendant and respondent.

FRED WOODS, Associate Justice.

Plaintiffs appeal from a judgment entered in defendant's favor following the granting of defendant's summary judgment motion on the basis that plaintiffs could not reasonably rely on defendant's alleged representations or alleged concealed facts which were contradicted by an unambiguous "without cause" termination provision in their employment agreements with defendant. Plaintiffs contend that their evidence of defendant's fraudulent concealment is not barred by the parol evidence rule and their contract claim is not barred by the statute of limitations. ¹ We

reverse because defendant's summary judgment motion did not address the alternative theory of fraudulent concealment.

FACTUAL AND PROCEDURAL SYNOPSIS

A. The Written Agreements

Each of the six appellants is a corporation and a former independent sales representative for respondent's Home Appliance Division.

In 1987, appellants signed written agreements ("1987 Agreements" or "New Jersey Agreements") which provided for termination without cause and were fully integrated.

By letter dated May 25, 1988, respondent sent appellants revised Sales Representative Agreements ("1988 Agreements") and requested that appellants sign and return the Agreements prior to June 6, 1988. That letter stated:

"In connection with the reorganization of Sanyo Electric, Inc. and Fisher Corporation into one corporation, Sanyo Fisher (USA) Corporation, we have been conducting a thorough review and evaluation of our marketing policies and objectives, including the development of new, substantially improved Sales Representative Agreements. In order to conform the terms of our Home Appliance Division Sales Representative Agreement with you dated as of December 1, 1987, to the new Sales Representative Agreements being offered to sales representatives for our consumer electronics and other products, we have revised our Home Appliance Division Sales Representative Agreement."

Appellants each signed the 1988 Agreement, which became effective on June 1, 1988. The 1988 Agreements contained the following provisions:

"Either party may terminate this Agreement, without cause, at any time upon ninety (90) days' prior written notice to the other party; provided, however, that SFC may not exercise its right to terminate this Agreement, without cause, pursuant to this Article VI.B(1) prior to November 30, 1988."

"There are no understandings not contained in this Agreement, and this Agreement shall supersede and cancel all previous contracts, arrangements or understandings that may have existed or may exist between the parties. This Agreement may be amended only by a written instrument signed by a duly authorized representative of SFC and Sales Representative."

Five of the appellants were terminated effective May 1989, and the sixth was terminated effective May 1990.

B. The Complaint

On March 6, 1990, appellants filed a complaint containing seven causes of action, all relating to their termination. The complaint asserted causes of action for fraud, negligent misrepresentation, rescission, breach of contract, breach of the implied covenant of good faith and fair dealing, quantum meruit, and interference with advantageous business relations. Appellants later filed a first amended complaint which added a prayer for attorney's fees.

Appellants alleged that prior to December 1987, each appellant had served as an independent sales representative for respondent pursuant to an oral agreement, which could be terminated only for good cause, which was narrowly defined.

Appellants alleged that in November 1987, they were summoned to a meeting in New Jersey at which they were presented with the 1987 Agreements. At the meeting:

"Plaintiffs were informed by Sanyo's Senior Vice President, Patricia Rienzi, among others, that the New Jersey Agreements had been developed for use by Sanyo's other divisions, but that plaintiffs were being asked to sign only for Appellants also alleged that they were told they would be terminated if they did not sign the agreements before they left the room, that respondent concealed from them its decision to replace them as sales representatives and that the purpose of the 1987 Agreements was to circumvent the good cause requirement of the oral agreements, and that they signed the 1987 Agreements.

the purpose of uniformity, and the New Jersey Agreements would have no effect on plaintiffs' division. Plaintiffs were further informed that the agreements 'did not mean anything,' did not change the terms of their relationship with Sanyo, were just part of the reorganization process involved in the merger, and that the execution of the New Jersey Agreements was a mere 'formality' and was 'just pro forma,' and that Sanyo's appliance division would not 'go direct' (meaning the independent sales representatives would not be replaced by an in-house sales staff) as long as the independent sales representatives continued to perform."

Appellants alleged that they were unaware of the true facts when they signed the 1988 Agreements. It was further alleged that the 1989 and 1990 terminations were without good cause as defined in the oral agreements.

C. The Summary Judgment Motion

Respondent filed a motion for summary judgment on the basis that appellant had signed the 1987 and 1988 Agreements which unequivocally provided for termination without cause and were fully integrated. Respondent's separate statement of facts was supported by declarations and exhibits.

Appellants filed an opposition and responsive separate statement of facts. The majority of the evidence supporting appellant's disputed facts and additional material facts consisted of their responses to interrogatories, which were made on information and belief and not on personal knowledge, and their unverified complaint. The court sustained respondent's hearsay objections to the use of the interrogatories and the unverified complaint.

The court granted respondent's motion for summary judgment.

Subsequently, appellants' motions for reconsideration and a new trial were denied. Judgment was entered, and appellant filed a timely notice of appeal.

DISCUSSION

I. Standard of Review

"Summary judgment is a drastic measure which should be used with caution so that it does not become a substitute for trial. Affidavits of the moving party are strictly construed and those of the opponent liberally construed, with doubts as to the propriety of granting the motion resolved in favor of the opposing party. [Citation.] Summary judgment raises only questions of law, which are reviewed independently. Our review tracks the same, three-step process used by the trial court: First, we identify the issues framed by the pleadings. Second, we determine whether the moving party has established facts sufficient to negate the opponent's claim. Third, if that burden is met, we examine whether the opposing party's showing discloses that triable issues of material fact exist." (Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, 1420, 267 Cal.Rptr. 819.)

" 'A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff's asserted causes of action can prevail. [Citation.] To succeed, the defendant must conclusively negate a necessary element of the plaintiff's case, and demonstrate that under no hypothesis is there a material issue of fact that requires the process of a trial.' [Citation.] An appellate court determines de novo whether there is a genuine issue of material fact and whether the moving party was entitled to summary judgment as a matter of law." (Emphasis added.) (Homestead Savings v. Darmiento (1991) 230 Cal.App.3d 424, 430, 281 Cal.Rptr. 367.)

II. Fraudulent Representations

Appellants state that the trial court granted summary judgment in respondent's favor based on a line of cases which holds that when promissory fraud is alleged, the parol evidence rule bars evidence of fraudulent promises which directly contradict promises contained in the written agreement. (Bank of America etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258, 263, 48 P.2d 659; West v. Henderson (1991) 227 Cal.App.3d 1578, 1583, 278 Cal.Rptr. 570.) Appellants contend that since they complained of a fraudulent concealment of material facts which resulted in their execution of written agreements with respondent, the court erred in holding that evidence of respondent's fraudulent concealment is barred by the parol evidence rule, and therefore the summary judgment must be reversed.

Appellants state that the only ground upon which respondent challenged their fraud claim was that appellant's evidence of fraud was barred by the parol evidence rule. Appellants are not correct. Although that ground was raised in respondent's reply brief below, respondents moved for summary judgment on the basis that appellants could not have reasonably relied upon alleged oral representations which contradicted the unambiguous "without cause" termination provision of the written Agreements and that no representations were made in connection with the 1988 Agreements pursuant to which appellants were terminated.

In its order, the court made the following relevant rulings:

"Plaintiffs' asserted causes of action for fraud and negligent misrepresentation ... cannot be established, since, as a matter of law, plaintiffs could not reasonably have relied upon alleged oral representations or alleged concealed facts which contradicted...