Developments of Interest

New Cases of Interest - February 15, 2011

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RiverIsland Cold Storage, Inc. v. Fresno-Madera Production Credit Association (2011) 191 Cal.App.4th 611.  Borrowers had an operating loan which went into default as a result of the failure to make a payment when due.  Borrowers then entered into a written forbearance agreement with the lender in which they agreed to provide additional security to the lender.  The forbearance agreement included an integration clause.

In a complaint later filed by the borrowers, they allege that they had been induced to enter into the written forbearance agreement based on the lender’s oral representations regarding the additional collateral which are made at the time of the execution of the agreement.  The trial court did not let the evidence come in regarding the misrepresentations, but that decision was reversed by the court of appeal with the court holding the borrowers could state causes of action for fraud, negligent misrepresentation, rescission and reformation and could invoke the fraud exception of Code of Civil Procedure Section 1856(g) which applies to a fraud committed by misrepresenting the content of a written agreement in order to induce another to sign it.  The evidence is admitted under that section to provide that the written contract is not the actual integrated agreement of the parties.

Grewal v. Jammu (2011) 191 Cal.App.4th 977.  This is a SLAPP case in which the plaintiff had brought causes of action for libel against the editor and publisher of a weekly publication.  The SLAPP motion was denied, with the court stating that the defendants essentially conceded the libelous statements and did not contest plaintiff’s allegation of damage.  The court went further and suggested that the SLAPP motion should have never been filed, and the appeal from the denial of the motion should never have been pursued. 

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