Unpublished Disposition, 881 F.2d 1084 (9th Cir. 1989)

No. 88-15167.

United States Court of Appeals, Ninth Circuit.

Before WALLACE and SCHROEDER, Circuit Judges, and DICKRAN TEVRIZIAN,¹  District Judge.

MEMORANDUM

Appellant I'2 (I-Squared) appeals from the district court's grant of summary judgment in favor of defendants-appellees Mepco/Electra, Inc. et al. Plaintiff-appellant I'2, Inc. ("I'2"), a California corporation, brought an action alleging breach of contract, breach of the covenant of good faith and fair dealing, fraud and deceit, and negligent misrepresentation against defendant-appellee Mepco/Centralab, Inc. ("Mepco"), successor in interest to the original contracting party, Mepco/Electra, Inc. ("Mepco/Electra"). Appellant sought monetary and punitive damages. The district court granted summary judgment in favor of the defendant-appellee. We affirm.

Appellant is a manufacturers representative, and represents producers of semiconductors such as appellee. Appellant presents its client's line to other manufacturers and arranges for the use of its client's products as components within or as part of the other manufacturers' goods.

In early 1984 the parties began negotiating a contract for I'2's representation of Mepco products. Mepco offered I'2 the opportunity to represent its entire line of products if I'2 would terminate its contracts with manufacturers that Mepco considered to have conflicting product lines. I'2 reluctantly agreed to terminate its relationship with the conflicting lines, but expressed concern that it might have to terminate other existing contracts if Mepco merged with a sister corporation, Centralab. I'2 alleges that it entered into the August 1, 1984 representation agreement after Mepco stated that it did not believe that such a merger would take place in the future and that no conflict would exist if it did. The August 1, 1984 agreement contains a merger and integration clause and allows either party to terminate the contract for any reason with 30 days written notice.

In early 1986 Mepco merged with Centralab. Mepco requested that I'2 terminate its representation with two other manufacturers which Mepco believed had competing products. I'2 would only terminate one of the two relationships, insisting that no conflict existed. Mepco then terminated the August 1, 1984 contract pursuant to the written notice provision of the agreement.

I'2 brought suit in Superior Court of the State of California for the County of Santa Clara on November 20, 1986. Mepco timely removed the action to the United States District Court for the Northern District of California on the ground of diversity of citizenship. Mepco filed a motion for summary judgment on all claims. I'2 opposed the motion, contending that Mepco's alleged representations regarding the merger and any potential conflict raised genuine issues of fact. The district court considered the extrinsic evidence offered by I'2 and found that the contract was fully integrated, and that no collateral agreement existed regarding merger, conflict of interest, or exceptions to discretionary termination. The district court entered judgment in favor of Mepco. I'2 appeals that judgment. We have jurisdiction pursuant to 28 U.S.C. section 1291.

We review the trial court's entry of summary judgment de novo. Darring v. Kincheloe, 783 F.2d 874, 876 (9th Cir. 1986). We are governed by the same standard used by the trial court under Federal Rule of Civil Procedure 56(c). Id. Once the moving party has met its burden of demonstrating that no genuine issue exists as to any material fact and that it is entitled to summary judgment as a matter of law, the party opposing summary judgment must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). A non-moving party who bears the burden of proof at trial to an element essential to its case must make a showing sufficient to establish a genuine dispute of fact with respect to the existence of that element of the case or be subject to summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The non-moving party's burden to demonstrate a genuine issue of fact increases where the factual context makes the claim less plausible. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Mere disagreement or the bald assertion that a genuine issue of material fact exists no longer precludes the use of summary judgment. Harper v. Wallingford, No. 87-4418, slip op. 6273, 6280 (9th Cir. June 14, 1989); California Architectural Building Products, Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987), cert. denied 108 S. Ct. 698 (1988).

I'2 offered a letter from Mepco's president regarding its merger concerns, which stated that "while few people can guarantee events of the future, I would say the probabilities of any combination are miniscule at best." I'2 contends that this representation is sufficient to raise a genuine issue for trial that I'2 was fraudulently induced to enter the contract, and that parol evidence on the issue is admissible because the contract was not fully integrated.

California courts have interpreted California's parol evidence rule, codified at California Code of Civil Procedure section 1856, to require proof of an independent fact or representation to permit parol evidence on a fraud claim. Furthermore, such evidence cannot be offered if it contradicts the written agreement. Bank of America National Trust & Sav. Ass'n v. Pendergrass, 4 Cal. 2d 258, 263 (1935). I'2's evidence of an alleged oral agreement directly contradicts the written agreement. Moreover, in actions alleging fraud and misrepresentation as inducement to contract, plaintiff must allege specific evidence of the promisor's intent to mislead him. Tenzer v. Superscope, Inc., 39 Cal. 3d 18, 30 (1985).

I'2 has not met its burden because it has produced no evidence of Mepco's intent to mislead it. I'2's president testified that he did not believe Mepco's officers intended to mislead him, and the letter which I'2 relies on includes qualifying language that "no one can predict the future" and does not make any specific promises or representations regarding Mepco's willingness to waive any conflicts in event of a merger. A fraudulent inducement to contract claim cannot be supported by representations and opinions as to uncertain future events. Pacesetter Homes, Inc. v. Brodkin, 5 Cal. App. 3d 206, 211 (1970).

In addition, I'2 contends that the oral agreement and letter are collateral agreements, that the contract is not fully integrated, and that parol evidence of those agreements should have been admitted and that such evidence creates a genuine issue of material fact sufficient to oppose summary judgment. California law does not support I'2's position. In California, courts are required to consider any credible extrinsic evidence which is offered to show that the writing is not completely integrated because the writing does not completely embody the intent of the parties. Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging Co., 69 Cal. 2d 33 (1968); Trident Center v. Connecticut General Life Ins. Co., 847 F.2d 564, 569 (9th Cir. 1988) (remand required where district court refused to allow extrinsic evidence that agreement not integrated). The district court considered I'2's extrinsic evidence and found the contract to be wholly integrated. Applying Brawthen v. H & R Block, Inc., 52 Cal. App. 3d 139 (1975) and Masterson v. Sine, 68 Cal. 2d 222 (1968) to the evidence offered by I'2, we reach the same conclusion.

Finally, I'2's promissory estoppel claim must also be dismissed, as it would require the same inadmissible parol evidence needed to prove the collateral agreement and fraudulent inducement to contract claims.

AFFIRMED.²