Metropolitan News-Enterprise


Thursday, September 12, 2013


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State Supreme Court Will Not Review Parol Evidence Ruling

Court of Appeal Ruling Stands in Suit Over Historic Restaurant




The California Supreme Court yesterday denied review of a First District Court of Appeal ruling favoring the purchasers of an historic San Francisco restaurant, who claimed the prior owner defrauded them in connection with the sale and accompanying lease of the site.

The justices, at their weekly conference in San Francisco, unanimously left standing the June 10 ruling of Div. One in Julius Castle Restaurant Inc. v. Payne (2013) 216 Cal.App.4th 1423.

The Court of Appeal held in that case that a recent Supreme Court decision backs the trial judge’s decision to allow plaintiffs Charles Stinson and John Bonjean to introduce evidence that James Frederick Payne falsely told them that the equipment at Julius’ Castle on Telegraph Hill was in good working order, and that Payne would take responsibility for all repairs necessary to get the landmark 1920s restaurant reopened. 

Payne’s lawyers argued that the evidence should have been excluded under Bank of America etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258, which limited the scope of the statutory fraud exception to the parol evidence rule.

Recent Case Cited

Dondero, however, cited Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169, which called Pendergrass an “aberration” and held that limitations on extrinsic evidence of fraud run counter to both statutory and case law.

Jurors awarded Stinson and Bonjean $205,000—after 30 percent comparative fault was taken into consideration—on their fraud claim, but awarded $75,000 to Payne for breach of contract. San Francisco Superior Court Judge Tomar Mason awarded the plaintiffs more than $150,000 in attorney fees.

Dondero cited Code of Civil Procedure Sec. 1856(f)’s broad exception to the operation of the parol evidence rule:

“Where the validity of the agreement is the fact in dispute, this section does not exclude evidence relevant to that issue.”

 The Pendergrass limitation, that extrinsic evidence “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 of the writing,” was unsupported by the statutory language and inconsistent with the law in other jurisdictions, the Riverisland court held.

Dondero rejected the argument that Riverisland ought not apply to an action between sophisticated contracting parties. The Court of Appeal could not, he said, “carve out an exception to the Riverisland holding that the court itself did not endorse.”

Other Action

In other conference action, the justices:

•Denied a request by the Association of Southern California Defense counsel to order publication of a First District Court of Appeal opinion saying an attorney has no fiduciary duty to tell a disaffected client how much time it has to sue the lawyer for malpractice.

Div. Two affirmed a ruling in favor of an Alameda County firm that its former client’s malpractice suit was barred by the one-year statute of limitations, and that the firm had no obligation to tell the ex-client that it only had a year to sue or that the statute was not tolled while the underlying judgment against it was on appeal.

The case is O’Keefe & O’Keefe LLP v. OZ Optics, Ltd., A131330.

•Granted a request by former Geffen Records general counsel Norman Beil of Santa Monica for reinstatement as a member of the State Bar, subject to payment of dues and fees. Beil, who has a background in math and computer science, resigned from the State Bar and became a creator and producer of video games after his ex-boss David Geffen sold the company and joined Dreamworks.

The high court accepted the recommendation of the State Bar Court’s Review Department, which noted that Beil had no prior disciplinary record, no charges pending, and testified that he resigned from the bar because he did not anticipate returning to practice and did not want to be bothered by entreaties from prospective clients.

•Denied a request by The Betty Ford Center for publication of an opinion of this district’s Court of Appeal, Div. Two, that two lawsuits arising from Carrie Prejean’s infamous same-sex marriage comments at the 2009 Miss Universe pageant were not strategic lawsuits against public participation.

Rancho Santa Fe attorney Charles LiMandri, who represented Prejean in litigation filed in the aftermath of those comments, is suing attorney James D. Nguyen, now a partner at Davis Wright Tremaine; Nguyen’s former firm, Wildman, Harrold, Allen & Dixon; and former Miss California USA executive director Shanna Moakler. He claims the defendants breached confidentiality agreements that were signed following mediation of claims by Prejean against Moakler and others for defamation, invasion of privacy, and religious discrimination.

LiMandri claims the defendants are responsible for the disclosure to the television program and website TMZ that Prejean agreed to dismiss her claims once she learned that the defendants had a copy of an explicit videotape she made for her then-boyfriend when she was 17 years old. The tape was supposed to be destroyed and its prior existence not revealed in exchange for the dismissal, the Court of Appeal said.

The case is LiMandri v. Wildman, Harrold, Allen & Dixon, LLP, B234460.

•Denied review of a First District Court of Appeal ruling that a lawsuit by a would-be minister against the Presbytery of San Francisco is barred because it deals with ecclesiastical matters.

Caroline Mason claims the church breached a contract by failing to provide her access to her entire candidacy file, after it terminated her 10-year effort to join the ministry. In its unpublished opinion in Mason v. Presbytery of San Francisco, A135185, Div. Five held that the confidentiality of the materials in the file had been established as doctrine by the church’s General Assembly prior to the termination of Mason’s application.


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