Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Association

291 P.3d 316 (2013)

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Nature of the Case

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Facts

Workman (P) fell behind on their loan payments to Fresno (D). They restructured their debt in an agreement, which confirmed outstanding loans with a total delinquency of $776,380.24. D promised it would take no enforcement action until July 1, 2007, if P made specified payments. As additional collateral, P pledged eight separate parcels of real property. P did not make the required payments. D recorded a notice of default. Eventually, P repaid the loan and D dismissed its foreclosure proceedings. P sought damages for fraud and negligent misrepresentation and including causes of action for rescission and reformation of the restructuring agreement. P alleges that D's vice-president told them two weeks before the agreement was signed, that D would extend the loan for two years in exchange for additional collateral consisting of two ranches. As noted, the contract actually contemplated only three months of forbearance and identified eight parcels as additional collateral. P did not read the agreement, but simply signed it at the locations tabbed for signature. D moved for summary judgment; the parol evidence rule barred evidence of any representations contradicting the terms of the written agreement. P argued that the misrepresentations were admissible under the fraud exception to the parol evidence rule. The trial court granted summary judgment, ruling that the fraud exception does not allow parol evidence of promises at odds with the terms of the written agreement. The Court of Appeal reversed. D appealed.