Unpublished Disposition, 869 F.2d 1496 (9th Cir. 1989)

MEMORANDUM^* 

This is an appeal from the district court's entry of summary judgment in favor of the holder of a promissory note and against the note's co-makers. We review de novo, see Smith v. Retirement Fund Trust, 857 F.2d 587, 589 (9th Cir. 1988), and we affirm.

With respect to the appellants' first argument, it is true that a holder who releases one party to an instrument without expressly reserving her rights against the other parties to that instrument thereby releases them as well. See Cal.Comm. Code Sec. 3606(1) (a). However, there is nothing in this record to show that the appellee did, in fact, release anyone from his obligations under the terms of the note. Indeed, the declarations of Crocker and Kupper filed in support of the motion for summary judgment expressly stated that no release or agreement not to sue existed. The district court did not err on this point.

The appellants' second argument is that Kupper's handling of the note for delivery to Crocker's attorneys constituted a discharge of the note's makers. Aside from the fact that this argument fails to distinguish between mere physical possession of a note (i.e., as a messenger) and assertive possession in the legal sense,¹  it also ignores Kupper's express declaration that he never reacquired possession of the original note. The district court did not err on this point.

The gravamen of the appellants' third argument is that the district court erred by invoking the parol evidence rule to bar the appellants from introducing evidence of an agreement that Kupper's use of the $40,000 in question constituted "payment" on the note. This argument also fails.

The parol evidence rule applies to promissory notes, Montgomery v. Riess, 176 Cal. App. 2d 711, 1 Cal. Rptr. 550, 554 (1959), and holds that such evidence is admissible only to prove the existence of a separate oral agreement as to a matter on which the written agreement is silent and which is not inconsistent with the terms of that written agreement. Gerdlund v. Electronic Dispensers Int'l, 190 Cal. App. 3d 263, 235 Cal. Rptr. 279, 282 (1987). The key provision of the alleged oral agreement, viz., that the $40,000 did not have to be repaid so long as the money was used by Kupper, is totally inconsistent with the terms of the written agreement. Accordingly, the district court did not err on this matter.

The appellants' final argument is that the district court erred by denying their motion to compel the deposition testimony of Crocker and Kupper on the ground of privileged attorney-client communications. This position also lacks merit.

California law recognizes confidential communications between a lawyer and his client as being privileged. Cal.Evid. Code Sec. 954. Such communications may involve necessary third parties, see Cal.Evid. Code Secs. 951, 952, i.e., messengers or other agents of transmission. City & County of San Francisco v. Superior Court, 37 Cal. 2d 227, 231 P.2d 26, 31 (1951) (en banc). The fact that such communications may be relevant to a party's claim or defense, or that a party can show good cause for the disclosure of such communications, is irrelevant where the privilege is concerned. See Grand Lake Drive In, Inc. v. Superior Court, 179 Cal. App. 2d 122, 3 Cal. Rptr. 621, 629 (1960). Since it is uncontroverted that Kupper was acting on behalf of Crocker while performing the role of messenger between Crocker and her attorneys, we conclude that the district court did not err in its holding that such communications were privileged.

AFFIRMED.