Tuesday, January 27, 2004
C.A.: Summary Judgment Based on Parol Evidence Rule Was Improper
By DAVID WATSON, Staff Writer
The parol evidence rule does not bar evidence of an oral promise in an employment case where the plaintiff alleges he relied on the promise before seeing the written contract, the Fourth District Court of Appeal ruled yesterday.
The court’s Div. Three said Orange Superior Court Judge Kim Garlin Dunning erred in relying on the parol evidence rule in granting summary judgment in favor of Fluor Enterprises Inc. in Robert Blitz’s suit for fraud, negligent misrepresentation and Labor Code violations. Dunning found that the rule barred Blitz from contending that Fluor promised him long-term employment when he quit his job and moved from New Jersey to California.
Blitz conceded that the employment contract he signed with Fluor upon taking up his new job provided he could be fired at will.
Writing for the appellate court, Justice William Bedsworth noted that the fraud exception to the parol evidence rule contained in Code of Civil Procedure Sec. 1856(g) was narrowly construed by state Supreme Court in Bank of America v. Pendergrass (1935) 4 Cal.2d 258. In that case the court held that it would destroy the parol evidence rule to allow a plaintiff to claim that a defendant orally promised not to enforce a provision of a written agreement.
While the Pendergrass rule has been applied to preclude claims of misrepresentations made to induce execution of a contract, Bedsworth said, he pointed out that Blitz’s situation was distinguished from the circumstances considered in those cases by the his allegation of reliance on the misrepresentations prior to execution.
The justice explained:
“At the time he was first presented with his employment agreement, he had already quit his long-term employment based upon Fluor’s prior representations. There was no evidence he had been pursuing any other job opportunities which might be available for him to choose instead of Fluor’s, and, assuming he needed a paycheck (his insistence on long-term employment suggests he did), he had little choice but to sign.”
Though Blitz alleged a Fluor representative promised him the at-will contract provision would not be enforced, his suit was not based only on that claim, Bedsworth said.
“Here, Blitz’s reliance was the resignation of his former employment, rather than the subsequent execution of the written agreement,” Bedsworth declared, “and thus this case appears to fall outside the fraud in the inducement rule announced in Pendergrass and applied in the numerous cases following it.”
Blitz’s situation was more like that of the plaintiff in Tenzer v. Superscope (1985) 39 Cal.3d 18, the justice asserted. While Tenzer involved the statute of frauds, not the parol evidence rule, Bedsworth observed, he said that the two legal doctrines were “closely analogous.”
“Just as with the statute of frauds, a party can be estopped from relying upon the parol evidence rule,” the justice wrote.
“In this case, there is sufficient evidence to demonstrate a triable issue of fact concerning estoppel. According to Blitz, Fluor had committed to ‘creating another position for [him] if one was not available’ when his project duties were finished. He would never have accepted Fluor’s offer if it did not include a promise of long-term, rather than project-based, employment….Thus, by promising Blitz a long-term position, Fluor obtained a benefit it would likely not have obtained otherwise, i.e., Blitz’s services on its ‘high priority’ project. Fluor would thus be unjustly enriched if it were allowed to retain that benefit with no repercussions. By the same token, Blitz detrimentally relied upon Fluor’s promise when he resigned his prior long-term employment.”
The case is Blitz v. Fluor Enterprises, Inc., G031651.
Copyright 2004, Metropolitan News Company