The Newhope Corp. v. Yamaha Electronics Corp.

Filed 2/15/08 The Newhope Corp. v. Yamaha Electronics Corp. CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Steven L. Perk, Judge. Affirmed.

Ackerman & Kevorkian, Michael G. Ackerman and Kevin B. Kevorkian for Plaintiffs and Appellants.

Crowell & Moring LLP, Roger Scott Feldmann and Christine E. Cwiertny for Defendant and Respondent.

The Newhope Corporation (Newhope) was an independent sales representative for Yamaha Electronics Corporation USA (Yamaha). Newhopes principals formed a partnership called The Experience At, LLC. (TEA), and opened an electronics sales showroom selling Yamaha and its competitors consumer electronic products. A large Yamaha customer then refused to place further orders for Yamaha products through Newhope because by opening TEA, Newhope had become a competitor. Yamaha subsequently terminated Newhope as its sales representative pursuant to a provision in the written sales representative agreement allowing termination of the agreement at will with or without cause on 90 days advance notice. Newhope and TEA sued Yamaha for promissory fraud and promissory estoppel. They contended that prior to executing the written contract, Newhope had asked for and received oral assurances from Yamaha that if Newhope opened TEA, Yamaha would not invoke a noncompetition clause in the contract (which prohibited Newhope from selling Yamahas competitors products without Yamahas written permission), and Yamaha would not terminate Newhope as its sales representative for any reason having to do with its opening TEA. The trial court granted summary judgment/adjudication motions and motions in limine concluding the parol evidence rule precluded Yamaha and TEA from introducing evidence of Yamahas alleged oral promises that contradicted the written agreement. Newhope and TEA appeal primarily contending the trial court misapplied the parol evidence rule. We find no error and affirm the judgment.

I

FACTS

Yamaha produces and distributes consumer electronic goods in the United States. In 1977, Newhope became the Yamaha independent sales representative for the territory comprised of New York City, Long Island, New York, and the state of New Jersey.

The 1990 Sales Representative Agreement

An independent sales representative agreement between Newhope and Yamaha executed in 1990 (the 1990 SRA) contained the following pertinent provisions (which are repeated verbatim in the sales representative agreement executed in 2003).

Noncompetition: Paragraph 2A was a noncompetition clause which provided, Unless authorized by Yamaha in writing, neither Representative nor any other business entity in which Representative or any of its principals has any ownership or other financial interest shall act, at any time during the term of this Agreement, as a sales representative or distributor or in any other capacity for any product or product lines which are in any way similar in design, function[,] or intended use to Yamaha Products, or which otherwise are competitive, in Yamahas sole judgment, with Yamaha Products.

Termination With or Without Cause: Paragraph 11A provided the agreement had no definite term, and could be terminated at any time: This Agreement is for no definite time period, and may be terminated by either party, at will, with or without cause. Except as otherwise provided in subparagraphs B and C hereof, ninety (90) days advance written notice of termination shall be provided by the terminating party to the other party. EACH PARTY ACKNOWLEDGES THAT SUCH PERIOD IS ADEQUATE TO ALLOW IT TO TAKE ALL ACTIONS REQUIRED TO ADJUST ITS BUSINESS OPERATIONS IN ANTICIPATION OF TERMINATION. Subparagraph B gave Yamaha the right to terminate the agreement immediately (i.e., no advance notice required) if Newhope violated certain provisions of the agreement, including the noncompetition clause, Paragraph 2A.

Limitation of Liability; No Damages for Termination: Paragraph 11F provided, THIS AGREEMENT IS EXECUTED BY BOTH YAMAHA AND REPRESENTATIVE WITH THE KNOWLEDGE THAT IT MAY BE TERMINATED AT WILL BY EITHER PARTY. NEITHER REPRESENTATIVE NOR YAMAHA SHALL BE LIABLE TO THE OTHER FOR COMPENSATION[,] . . . REIMBURSEMENT FOR INVESTMENTS, EXPENSES OR BUSINESS COMMITMENTS, LOST PROFITS, INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES OF ANY OTHER KIND OR CHARACTER, BECAUSE OF ANY EXERCISE OF ITS RIGHT TO TERMINATE THIS AGREEMENT . . . .

Mutual Release and Limitations on Future Claims:Paragraph 15 provided that except as to unpaid accounts or commissions, in consideration of their mutual execution of this Agreement, Yamaha and Representative agree to and do hereby release each other of and from any and all manner of claims, causes of action and liabilities of every kind, nature and description, whether known or unknown, whether in law or in equity . . . which such parties or their respective successors or assigns ever had, now have, or which they or any of them hereafter can, shall or may have against the other party, by reason of any matter, cause or thing whatsoever from the beginning of time until the date hereof. . . .

Integration and Modification: Paragraph 16I provided, This Agreement constitutes the final agreement between the parties pertaining in any manner to the subject matter hereof, and contains all of the covenants and undertakings between the parties with respect to said subject matter. Each party to this Agreement acknowledges that no written or oral representations, inducements, promises or agreements have been made which are not embodied herein. IT IS THE INTENTION AND DESIRE OF THE PARTIES THAT THIS AGREEMENT NOT BE SUBJECT TO IMPLIED COVENANTS OF ANY KIND. Any and all prior or contemporaneous written or oral agreements between the parties pertaining in any manner to the subject matter of this Agreement expressly are superseded and cancelled by this Agreement. Except as otherwise provided in this Agreement, this Agreement (including the Agreement modification provisions set forth in this sentence) may not be amended, modified or supplemented, except by a written instrument signed by both parties hereto.

Formation and Opening of TEA

In 2001, Ken Sternfeld, president of Newhope, and other principals of Newhope, decided to open their own consumer electronics showroom called The Experience At Macys (i.e., TEA) in leased space inside Macys department stores. TEA would sell Yamaha products and Yamahas competitors products. Sternfeld approached Steve Caldero, vice-president of Yamaha, about selling Yamaha products and about whether Yamaha would enforce the noncompetition clause in the 1990 SRA. Caldero understood Newhopes source of funds for starting up TEA would be Newhopes Yamaha commissions. Concerned about how other Yamaha customers would feel about their Yamaha sales representative going into direct competition with them, Caldero asked Sternfeld if all Newhopes Yamaha dealers were on board. Sternfeld said they were. Caldero claimed that by on board he meant the other dealers had approved Newhope opening a competing business; Sternfeld claimed Caldero only suggested Sternfeld must inform his customers about his plan to go into competition with them and denied ever being required to obtain their specific approval.

In April 2003, Sternfeld met with Caldero and Yamahas president, Ken Iida, at Yamahas annual sales representative review meeting. Sternfeld again discussed with them his business plan for TEA. He asked for assurances that Newhope would not be terminated as Yamahas sales representative if he went forward with opening TEA and asked for Yamaha to modify the 1990 SRA to allow Newhope to open TEA. Sternfeld claimed Iida and Caldero orally agreed Yamaha would not terminate Newhope for any reason related to TEA. Yamaha conceded in its separate statement of material facts it had orally agreed in April 2003 that it would not enforce the noncompetition clause in the 1990 SRA.

The Master Authorized Dealer Agreement

In May 2003, Yamaha and TEA executed a Master Authorized Dealer Agreement (the Dealer Agreement), permitting TEA to sell Yamaha products in its showroom. Sternfeld signed the Dealer Agreement as president and CEO of TEA. The Dealer Agreement was for a term of one year and could be terminated with or without cause on 30 days written notice. TEA opened for business in July 2003.

Paragraph 11B of the Dealer Agreement limited Yamahas and TEAs liability to each other as follows: Except as otherwise provided . . . neither party shall be liable to the other party for any incidental, indirect, consequential or special damages in connection with any matters relating directly or indirectly to this agreement or otherwise relating to the business relationship of the parties . . . . It contained a mutual release of all existing claims between the parties, and contained an integration/no oral modifications clause virtually identical to the one in the 1990 SRA.

The 2003 SRA

In September 2003, Caldero sent Sternfeld a new Yamaha sales representative agreement (the 2003 SRA). The 2003 SRA contained the identical noncompetition clause that was in the 1990 agreement (i.e., Paragraph 2A). It also contained the same provision concerning termination with or without cause on 90 days written notice and an identical integration/no oral modification clause (i.e., Paragraph 11). Sternfeld mentioned to Caldero the noncompetition clause in the new agreement had not been modified to permit Newhope to own and operate TEA. Sternfeld only mentioned the noncompetition clause (Paragraph 2A) in the new agreement, and never discussed the termination without cause provision (Paragraph 11). No modifications were made to the new contract. Caldero orally assured Sternfeld that Yamaha would not enforce the noncompetition clause and indicated Yamaha would send Newhope written authorization to own and operate an entity selling goods that competed with Yamahas goods. Sternfeld signed the 2003 SRA.

A Yamaha Customer Complains

In December 2003, Gary Richards, an owner of a large consumer electronics sales business called P.C. Richards, contacted Yamaha. P.C. Richards was a major Yamaha customer and one of Newhopes biggest Yamaha accounts. Richards was incensed that his Yamaha sales representative (i.e., Newhope) was now in direct competition with him as an electronics retailer. Richards denied having been told by Sternfeld about his plans to open a competing business. P.C. Richards had banned Sternfeld and any Newhope employees from its offices and refused to allow Newhope to service its Yamaha account any longer.

In mid-January 2004, Caldero and other Yamaha executives decided it was in Yamahas best business interest to invoke the provision of the 2003 SRA allowing it to terminate Newhope as its sales representative for any reason (i.e., without cause) on 90 days advance notice. It sent written notification to Newhope the 2003 SRA would end in 90 days. Yamaha did not terminate TEAs Dealer Agreement, but it expired by its own terms a few months later. TEA shut down its operations in January 2004.

The Complaint

Newhope and TEA filed suit against Yamaha. The original complaint asserted causes of action for breach of oral contract (i.e., the alleged April 2003 promise that Yamaha would not terminate Newhope for any reason related to TEA), equitable and promissory estoppel, and negligent misrepresentation. Yamahas demurrer was sustained with leave to amend. The court (Judge James Brooks) concluded the breach of oral contract cause of action was barred by the parol evidence rule, and Newhope and TEA conceded the negligent misrepresentation cause of action lacked merit. The court concluded the complaint could be amended to state causes of action for promissory fraud and promissory estoppel.

The second amended complaint alleged that when Sternfeld and the other principals of Newhope formed TEA, they intended to fund TEAs start-up with commissions Newhope earned on sales of Yamaha products. Yamahas president, Iida, verbally approved of Newhope opening TEA. Caldero verbally agreed Yamaha would not enforce the noncompetition clause and would amend the sales representative agreement to permit Newhope to operate TEA. Sternfeld signed the 2003 SRA, containing the same noncompetition provision and the same 90 day termination provision as the prior agreement because Caldero promised Yamaha would not enforce the noncompetition clause. In January 2004, Yamaha notified Newhope it was exercising its rights under the 2003 SRA to terminate the agreement on 90 days notice. Newhope and TEA alleged Yamaha had bowed to pressure from P.C. Richard. Yamaha knew terminating the 2003 SRA would cause Newhope to go out of business, and in turn, deprive TEA of necessary funding to continue its operations.

The second amended complaint contained a cause of action for promissory fraud. Newhope and TEA alleged Yamaha promised to not invoke the noncompetition clause of the 2003 SRA, while concealing its intent to instead invoke the 90 day termination clause. The complaint also contained a cause of action for promissory estoppel, alleging Yamaha was estopped to deny the existence of its oral promise to not terminate the 2003 SRA for any reason related to Newhopes formation and operation of TEA.

First Round of Summary Judgment Motions

In April 2005, Yamaha filed a motion for summary judgment against Newhope alone on both causes of action on several grounds including: (1) the damages were too speculative and barred by the waiver of liability provisions in the 2003 SRA; (2) there was no evidence Yamaha made any false promises; (3) there was no evidence Yamaha had a fraudulent intent to not perform; (4) there was no evidence Newhope reasonably relied on any of Yamahas representations; and (5) there was no evidence of causation. Although not articulated as a separate grounds for summary judgment, in its points and authorities, Yamaha argued the parol evidence rule barred evidence of oral promises made prior to or contemporaneously with executing the 2003 SRA.

On June 22, 2005, the trial court (before Judge James Brooks) denied the motion for summary judgment. In its minute order, the court stated because Yamaha had failed to identify and address each cause of action separately in its moving papers, it would treat the motion only as one for summary judgment (i.e., not summary adjudication in the alternative). The court stated there was a material issue of fact as to Newhopes misrepresentation cause of action particularly as to reliance and the applicability of the parol evidence rule.

Between July 2005 and October 2005, Yamaha filed several additional summary judgment/adjudication motions against Newhope and TEA raising various issues.[1] The case was transferred to Judge Steven Perk. In orders issued on February 8 and 24, 2006, the trial court ruled on and denied the motions.

The Motions at Issue

On May 4, 2006, Yamaha filed a motion (its seventh) for summary adjudication of Newhopes promissory estoppel cause of action on the ground that as a matter of law a promissory estoppel claim could not be pursued when there was a valid enforceable contract between the parties. Yamahas separate statement of material facts contained only one undisputed fact: On September 22, 2003, Newhope entered into the 2003 SRA. The evidence provided in support of the motion included the 1990 SRA, the 2003 SRA, and portions of depositions of Sternfeld and Newhopes prior president Bernard Tonn.

Newhope did not dispute Yamahas undisputed facts and did not provide a separate statement containing any additional undisputed facts, although it did submit evidence in support of its arguments. Sternfeld provided his declaration stating Richards had been informed about his plans to open TEA and Richards said, he would [g]ive me a mulligan meaning that he would allow me to operate [TEA] without his objection. At the time Yamaha terminated Newhope as a dealer, Yamaha accounted for 85 percent of Newhopes revenue. Newhope also provided portions of the depositions of Caldero, Iida, Richard, Sternfeld, and Tonn.

Yamaha also filed a motion for summary judgment/adjudication (its eighth) against TEA on both causes of action. Yamaha contended TEA could not establish the promise element of either cause of action because the parol evidence rule and the integration clause contained in the Dealer Agreement between TEA and Yamaha barred any evidence of outside agreements or promises. It also asserted the promissory estoppel cause of action was barred because of the existence of a written contract between TEA and Yamahathe Dealer Agreement.

Yamahas separate statement of undisputed facts contained two facts: (1) On April 16, 2003, Yamaha orally agreed it would not enforce the noncompetition clause in the 1990 SRA; and (2) on May 5, 2003, TEA entered into the Dealer Agreement with Yamaha which contained an integration clause and a mutual release and limitation on future claims clause. Yamahas evidence in support was largely the same evidence it submitted with its motion for summary adjudication against Newhope. TEA did not dispute either of Yamahas undisputed facts and did not provide any additional undisputed facts. It did submit the same evidence in opposition that Newhope included with the opposition to the summary adjudication motion.

On July 31, 2006, the court granted both of Yamahas summary judgment/adjudication motions. As to the motion against Newhope, the court ruled the existence of a valid written contract between Yamaha and Newhope, i.e., the 2003 SRA, barred Newhopes cause of action for promissory estoppel and granted summary adjudication of that cause of action. As to TEA, the court concluded the parol evidence rule would preclude evidence of any alleged promises by Yamaha to Newhope to not enforce the termination provisions of the 2003 SRA, and the integration clause in the Dealer Agreement between TEA and Yamaha precluded admission of evidence of promises outside the Dealer Agreement.

Motion in Limine

On August 25, 2006, the trial court granted Yamahas motion in limine to exclude evidence of any oral promise allegedly made by Yamaha to Newhope to not terminate the 2003 SRA for any reason related to TEA on the grounds the parol evidence rule precluded such evidence. It concluded the 2003 SRA contained an integration clause. Evidence of an oral promise, made prior to the execution of the agreement, to not enforce the termination clause for any reason related to owning TEA was inconsistent with the express language of the written contract allowing termination without any cause on 90 days notice.

Newhope conceded that in view of the courts ruling on the motion in limine, it could not proceed with its case, and stipulated to the courts granting nonsuit and dismissing the case. On January 10, 2007, the court entered a judgment in Yamahas favor against Newhope and TEA.

II

HARMLESS ERROR ANALYSIS

Newhope and TEA contend the summary judgment/adjudication motions and the motion in limine were procedurally improper because they raised issues contained in earlier summary judgment motions that had been denied. They rely upon Code of Civil Procedure section 437c, subdivision (f)(2), which provides a party may not bring a summary judgment motion based on issues asserted in a prior summary judgment/adjudication motion unless that party establishes to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion. They also rely on Code of Civil Procedure section 1008, subdivision (a), which permits motions for reconsideration only upon a showing of new or different facts, circumstances, or law . . . .

Newhope and TEA argue that in its first summary judgment/adjudication motion (brought against Newhope alone), Yamaha raised the parol evidence argument. The trial court denied the motion ruling there was material issue of fact as to whether the parol evidence rule applied. Newhope and TEA complain that Yamaha did not demonstrate any newly discovered facts or circumstances or a change of law justifying rehashing the parol evidence issue in the subsequent summary judgment motion against TEA or in its motion in limine.

We need not belabor the claimed procedural error. Even assuming Yamahas current motions improperly repeated an issue raised in its first summary judgment motion, we cannot reverse without a showing Newhope and TEA were prejudiced by the courts rulings. (Cal. Const., art. VI,  13.) Prejudice would arise only if the court was wrong on the substantive issue. The applicability of the parol evidence rule is generally a question of law. (Banco Do Brasil, S.A. v. Lafian, Inc. (1991)234 Cal.App.3d 973, 1001 (Banco Do Brasil).) If, in the end, the trial court was correct in applying the parol evidence rule to exclude evidence of the prior oral promise, it would be senseless for us to reverse due to a procedural error.[2]

Le Francois v. Goel (2005) 35 Cal.4th 1094 (Le Francois), does not compel a different result. In that case, the Supreme Court considered a trial courts ruling granting a summary judgment motion brought by defendant on the same grounds as a previously denied summary judgment motion without any showing by defendant of new facts, circumstances, or law. It concluded the trial court could reconsider the prior summary judgment motion on its own motion, but could not do so on a partys motion, and reversed the judgment. (Id. at pp. 1108-1109.) In her concurring and dissenting opinion, Justice Kennard concluded the judgment should be affirmed because there had been no showing of prejudice (i.e., that the substantive ruling on the subsequent motion was legally incorrect). (Id. at pp. 1109-1110 [conc. & dis. opn. of Kennard, J.].) The majority responded to Justice Kennards observations in a footnote stating, defendants have made no such harmless error argument, and thus plaintiffs have had no chance to argue against it. Moreover, the trial court did not inform the parties that it might change its previous ruling on its own motion and give them an opportunity to be heard, as it should have done. We do not know what would have occurred if it had done so. Under the circumstances, we think it best to remand the matter for the court and parties to follow proper procedure. (Id. at p. 1109, fn. 6.)

The harmless error analysis raised in Le Francois was considered quite recently in People v. Edward D. Jones & Co. (2007) 154 Cal.App.4th 627, review denied Nov. 28, 2007 (Edward D. Jones). In that case, the trial court granted a motion for judgment on the pleadings brought on the same federal preemption grounds raised in an earlier demurrer that had been overruled by a different trial judge. Defendant had not satisfied Code of Civil Procedure section 438, subdivision (g)(1)s requirement of showing there had been a material change in the applicable case law or statute since the ruling on the demurrer. (Edward D. Jones, supra, 154 Cal.App.4th at p. 633, fn. 5.) The court declined to reach the claimed procedural error, because assuming it was procedurally improper for the trial court to grant the motion for judgment on the pleadings, that error cannot be deemed reversible without reaching the merits of the preemption issue. (Id. at p. 634.)

In Edward D. Jones, supra, 154 Cal.App.4th at page 636, the court concluded Le Francois did not purport to establish that a procedural error in considering an improper motion for reconsideration is always reversible without regard to the substantive issue involved. The majority decided to reverse on the facts of that case both because the parties had not argued harmless error and because, essentially, the court could not tell if the error was harmless because it did not know what would have occurred if the trial court had followed the proper procedure. But in Edward D. Jones, the parties had addressed the issue of harmless error in their briefs. And [m]ore importantly, since we confront here a pure question of law that was argued three times in the trial court, there is no basis for concern about what might have happened absent the alleged procedural error. The question before us now is the same question that will be presented on appeal if the case is tried and the [plaintiffs] prevail--is the action preempted by federal law? If [defendant] is correct in asserting that the action is preempted, then the [plaintiffs] have suffered no harm from the procedural error they assert here. (Id. at p. 636.)

As in Edward D. Jones, supra, 154 Cal.App.4th 627, here, the parties have addressed the harmless error issue and have fully briefed the substantive issues. The issue of whether the parol evidence rule bars Newhope and TEA from introducing evidence of an alleged oral promise to not terminate Newhope as a Yamaha sales representative for any reason related to TEA is one of law argued extensively below. Accordingly, we decline to resolve the case on the procedural issue and turn to the substantive issues.

III

PAROL EVIDENCE RULE

Newhope and TEAs action is premised on their claim that Yamaha had promised Sternfeld (president of Newhope and TEA) it would not terminate Newhope as a Yamaha sales representative for any reason related to Newhopes owning and operating TEA. The threshold issue is whether the trial court properly applied the parol evidence rule to exclude evidence of the alleged oral promise. We conclude the trial court was correct.

The parol evidence rule bars the introduction of extrinsic evidence which contradicts the express language of a contract. (BMW of North America, Inc. v. New Motor Vehicle Bd. (1984) 162 Cal.App.3d 980, 990.) The rule, embodied in Code of Civil Procedure section 1856, provides that where the parties to a contract have reduced the terms of their agreement to a writing which they intend as the final and complete expression of their understanding, the contract it is deemed integrated and may not be contradicted or modified by evidence of any prior agreement or of a contemporaneous oral agreement. (Code Civ. Proc., 1856, subd. (a); Masterson v. Sine (1968) 68 Cal.2d 222, 225; Banco Do Brasil, supra, 234 Cal.App.3d at p. 1000.) The rule is not merely evidentiary, meant to exclude precontractual discussions for lack of credibility or reliability. Rather, it is a rule of substantive law making the parties integrated written agreement their exclusive and binding contract no matter how persuasive the evidence of additional, or different, oral understandings. Evidence of such understandings is legally irrelevant and cannot support a judgment. (Banco Do Brasil, supra, 234 Cal.App.3d at p. 1000.)

Whether the parol evidence rule applies is a question of law, which we consider de novo to the extent that no evidentiary conflict exists. (Banco Do Brasil, supra, 234 Cal.App.3d at p. 1001.) In applying the parol evidence rule, we employ a two-step process to determine whether: (1) the writing is an integration, and (2) is the agreement reasonably susceptible of the meaning urged by the party offering the evidence. (Gerdlund v. Electronic Dispensers International (1987) 190 Cal.App.3d 263, 270.) Only the first question is relevant here.

Integration is the extent to which a writing constitutes the final expression of the parties agreement. (Esbensen v. Userware Internat., Inc. (1992) 11 Cal.App.4th 631, 636.) In considering whether a writing is integrated, the court must consider the writing itself, including whether the written agreement appears to be complete on its face; whether the agreement contains an integration clause; whether the alleged parol understanding on the subject matter at issue might naturally be made as a separate agreement; and the circumstances at the time of the writing. [Citations.] Whether a contract is integrated is a question of law when the evidence of integration is not in dispute. [Citations.] (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 953-954.)

The alleged oral promise made in April 2003, i.e., that Yamaha would not terminate Newhope for any reason related to its ownership of TEA, is in direct conflict with Paragraph 11A of the 2003 SRA (executed by Sternfeld in September 2003), which provided the agreement had no definite term, and could be terminated at any time at will, with or without cause on 90 days advance written notice. The alleged promise is also in direct conflict with Paragraph 11F, limitation of liability, which provides the agreement is executed with the knowledge that it may be terminated at will by either party[] and that neither party would be liable for any damages to the other such as reimbursement for investments, expenses or business commitments, lost profits, incidental or consequential damages, or damages of any other kind or character due to any termination of the agreement.

The 2003 SRA is a fully integrated agreement. The integration clause provided, This Agreement constitutes the final agreement between the parties pertaining in any manner to the subject matter hereof, and contains all of the covenants and undertakings between the parties with respect to said subject matter. Each party to this Agreement acknowledges that no written or oral representations, inducements, promises or agreements have been made which are not embodied herein. IT IS THE INTENTION AND DESIRE OF THE PARTIES THAT THIS AGREEMENT NOT BE SUBJECT TO IMPLIED COVENANTS OF ANY KIND. Any and all prior or contemporaneous written or oral agreements between the parties pertaining in any manner to the subject matter of this Agreement expressly are superseded and cancelled by this Agreement. . . .

Newhope and TEAs arguments against integration are unavailing. They argue the 2003 SRA was obviously not intended to be a fully integrated agreement on the subject of grounds for Newhopes termination because there was a prior oral promise to not terminate for any reason related to Newhopes ownership of TEA. Accepting that contention would completely eviscerate the parol evidence rule. They also argue a prior oral promise to not terminate for any reason related to Newhopes ownership of TEA would naturally have been the subject of a separate agreement between the parties. We disagree. The 2003 SRA specifically addresses termination, allowing it for any reason at all on 90 days notice. A specific limitation on that language would not naturally have been contained in a separate agreement. The 2003 SRA is fully integrated on the issue of Yamahas right to terminate Newhope as its sales representative.

Newhope and TEA rely on the fraud exception to the parol evidence rule, contained in Code of Civil Procedure section 1856, subdivision (g), which permits admission of parol evidence to prove fraudulent inducement. (Alling v. Universal Manufacturing Corp. (1992) 5 Cal.App.4th 1412, 1436-1437 (Alling).) They contend Sternfeld signed the 2003 SRA in September only because Caldero had promised him Yamaha would not enforce the noncompetition clause (Paragraph 2A), and would provide written authorization for Newhope to operate TEA.

But the California Supreme Court long ago held: Our conception of the rule which permits parol evidence of fraud to establish the invalidity of the instrument is that it 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. (Bank of America etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258, 263 (Pendergrass).) Thus, the fraud exception does not apply to such promissory fraud if the evidence in question is offered to show a promise which contradicts an integrated written agreement. Unless the false promise is either independent of or consistent with the written instrument, evidence thereof is inadmissible. (Alling, supra, 5 Cal.App.4th at p. 1436; see also Wang v. Massey Chevrolet (2002) 97 Cal.App.4th 856, 873.)

The Pendergrass rule, narrowly construing the fraud exception to the parol evidence rule, is based upon the assumption the parties have the ability to protect themselves from an alleged fraud at the time they enter into their written agreement, by refusing to sign an agreement which directly contradicts representations previously made to them.

This is not a case in which Newhope and TEA claim Sternfeld misunderstood what the 2003 SRA said or that Caldero misrepresented the contents of the agreement, and thus the cases upon which they rely concerning fraud in the inducement are inapposite. (Union Mut. Ins. Co. v. Wilkinson (1871) 80 U.S. 222 [misrepresentation as to contents of policy]; Hess v. Ford Motor Company (2002) 27 Cal.4th 516, 525 [reformation of contract because of mutual mistake as to content]; Pacific State Bank v. Greene (2003) 110 Cal.App.4th 375, 389 [misrepresentation as to content of agreement]; American Surety Co. v. Heise (1955) 136 Cal.App.2d 689, 694 [mistake as to content of insurance policy].) Indeed, Sternfeld testified he read and understood the agreement and specifically discussed it with Caldero. He nonetheless signed the agreement containing the exact same termination provisions as the 1990 SRA. Their reliance on Ron Greenspan Volkswagen Inc. v. Ford Motor Land Development Cor. (1995) 32 Cal.App.4th 985, is misplaced. That case held merely that there is no per se rule that an integration/no oral representations clause in a written contract establishes, as a matter of law, that a party claiming fraud did not reasonably rely on representations not contained in the contract. (Id. at pp. 987, 996.) It did not suggest that oral promises that directly contradict the integrated written contract are admissible to prove fraud in the inducement of the contract.

The trial court correctly concluded the parol evidence rule barred evidence of prior or contemporaneous oral promises made by Yamaha that contradicted the 2003 SRA. Accordingly, the court properly granted Yamahas motion in limine to exclude such evidence. Newhope conceded that without that evidence it could not make a case for promissory fraud and that nonsuit on that cause of action was proper.

IV

SUMMARY JUDGMENT: TEAS PROMISSORY FRAUD CAUSE OF ACTION

Summary judgment is properly granted when there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Code Civ. Proc.,  437c, subd. (c).) A defendant seeking summary judgment bears the initial burden of proving the cause of action has no merit by showing that one or more elements of plaintiffs cause of action cannot be established or there is a complete defense. [Citations.] Once the defendants burden is met, the burden shifts to the plaintiff to show that a triable issue of fact exists as to that cause of action. [Citation.] [] [We] review[] de novo the trial courts decision to grant summary judgment and we are not bound by the trial courts stated reasons or rationales. [Citations.] We accept as true the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences that can be drawn from them. [Citation.] (Horn v. Cushman & Wakefield Western, Inc. (1999) 72 Cal.App.4th 798, 805.)

Promissory fraud is a subspecies of fraud and deceit. A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud. [Citations.] [] An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract. [Citation.] The elements of fraud that will give rise to a tort action for deceit are: (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or scienter); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. [Citation.] (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974.)

The trial court concluded TEA could not prove the promise element of its promissory fraud cause of action because the parol evidence rule bars evidence of alleged oral promise to not terminate Newhope for any reason related to TEA. We agree.

The trial court found the alleged oral promise conflicted with the Dealer Agreement. TEA argues the alleged promise does not conflict with the Dealer Agreement and the Dealer Agreement is not fully integrated. Yamaha contends the alleged oral promise conflicts with the limitation of liability provision in the Dealer Agreement.[3] Yamaha also argues the alleged oral promise conflicts with the provision in the Dealer Agreement allowing Yamaha to terminate TEA as an authorized Yamaha dealer at will without cause.[4] We need not consider those specific arguments because the parol evidence rule bars evidence of the alleged oral promise because it conflicts with the 2003 SRA for the reasons already stated above.

V

SUMMARY JUDGMENT: PROMISSORY ESTOPPEL CAUSE OF ACTION

Newhope and TEA contend the trial court should not have granted summary judgment on the promissory estoppel cause of action. They contend the trial court erroneously concluded the existence of a written contract (the 2003 SRA and the Dealer Agreement) made the promissory estoppel cause of action untenable. Newhope and TEA assert they were not seeking to enforce written contracts with Yamaha, rather they were trying to enforce the oral promise to not terminate Newhope as a Yamaha sales representative. But, they continue, the oral promise was unenforceable as a contract because it was barred by the parol evidence rule. Thus, since they lack contractual protection for Yamahas oral promise, promissory estoppel is a proper avenue for enforcing the oral promise. We find no error.

In California, under the doctrine of promissory estoppel, A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. [Citations.] Promissory estoppel is a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced. [Citation.] (Kajima/Ray Wilson v. Los AngelesCounty Metropolitan Transportation Authority (2000) 23 Cal.4th 305, 310 (Kajima).)

The required elements for promissory estoppel are largely the same as the elements for promissory fraud: (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) his reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance. (Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885, 890.) Here, Newhope and TEAs promissory fraud cause of action was properly summarily adjudicated for the same reason as their promissory fraud cause of action failsthe same inadmissible parol evidence was needed to prove the promise element.

Newhope and TEA cite both Kajima, supra, 23 Cal.4th 305, and Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18 (Tenzer), in support of their contention that when an oral promise is unenforceable, promissory estoppel is a viable theory. But neither case involved parol evidence. Kajima involved the lowest responsible bidder on a public construction project who was erroneously denied award of the contract. The court concluded the bidder could pursue recovery of its bid preparation costs on a promissory estoppel theory. (Kajima, supra, 23 Cal.4th at pp. 311-313.) In Tenzer, plaintiff sued for breach of an oral agreement to pay a finders fee and for fraud. The trial court granted defendants motion for summary judgment on the ground that the oral agreement was unenforceable based on the statute of frauds. (Tenzer, supra, 39 Cal.3d at pp. 24-25.) The Supreme Court reversed, holding defendant was estopped from relying on the statute of frauds to prevent enforcement of the oral agreement because plaintiff performed his obligations in reliance on the oral representation, and a contrary result would be unjust. (Id. at pp. 29-31.)

Newhope and TEA suggest the rationale of Tenzer extends to oral promises barred by the parol evidence rule as well. They rely on Tenzers reference to comment (c) to section 530 of the Restatement Second of Torts that a misrepresentation of ones intention is actionable even when the agreement is oral and made unenforceable by the statute of frauds, or when it is unprovable and so unenforceable under the parol evidence rule. (Tenzer, supra, 39 Cal.3d at p. 29.) Their reliance on this comment is misplaced because Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 346 (Casa Herrera), expressly notes the court rejected this proposition long ago[] in Pendergrass, supra, 4 Cal.2d 258. [T]he doctrine of estoppel may preclude the application of the statute of frauds but has no force against the parol evidence rule. (Casa Herrera, supra, 32 Cal.4th at p. 346.)[5]

VI

DISPOSITION

The judgment is affirmed. In the interests of justice, the parties shall bear their own attorney fees and costs on appeal. (Cal. Rules of Court, rule 8.276(a)(4).)

OLEARY, J.

WE CONCUR:

SILLS, P. J.

RYLAARSDAM, J.

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[1] On July 29, 2005, Yamaha filed a second motion for summary adjudication of Newhopes promissory fraud cause of action, contending Newhope could not prove damages since both the 1990 SRA and 2003 SRA expressly prohibited recovery of damages based on the amounts of its loan made to TEA. On August 5, 2005, Yamaha filed a third motion for summary judgment/adjudication against TEA alone contending there was no evidence of causation because TEA went out of business because Macys would not agree to give TEA two additional outlet locations, which TEA admitted were necessary for it to become a profitable business. Also in August, Yamaha filed a fourth summary judgment/adjudication motion against both Newhope and TEA based on Yamahas affirmative defense of unclean hands. In October 2005, Yamaha filed a fifth summary judgment/adjudication motion against Newhope only. It contended that as to the promissory fraud cause of action, Newhope could not prove fraudulent intent and as to both the promissory fraud and promissory estoppel causes of action, Newhope could not prove causation. Yamaha also filed a sixth summary judgment/adjudication motion against TEA asserting TEA could not establish causation or fraudulent intent and the 2003 Dealer Agreement barred TEAs causes of action.

[2] In applying a harmless error analysis, we do not condone a litigants conduct in bringing repetitive summary judgment/adjudication motions in violation of the statutes. Nor do we approve of Yamahas litigation tactics in this case of papering to death its opponents (and the trial court) by filing multiple summary judgment/adjudication motionsin this case, there were no fewer than seven! For that reason, we exercise our discretion to order that the parties shall bear their own appellate attorney fees and costs in this proceeding. (Cal. Rules of Court, rule 8.276(a)(4).)

[3] That clause (Paragraph 11B) provides that other than accounts receivable claims, neither party will be liable to the other for any damages in connection with any matters relating directly or indirectly to this agreement or otherwise relating to the business relationship of the parties . . . . Yamaha argues the alleged oral promise necessarily conflicts with the limitation of liability clause since breaching the oral promise would lead to an award of damages.

[4] It urges the oral promise to not terminate Newhope as a sales representative would carry with it an impermissible conflicting implied promise to not terminate TEA as a dealer. (See Slivinsky v. Watkins-Johnson Co. (1990) 221 Cal.App.3d 799, 806 [evidence implied agreement which contradicts terms of written agreement inadmissible].)

[5] Because we affirm, we need not address Yamahas contentions that the trial courts rulings on its other summary judgment/adjudication motions were erroneous.