Hall v. Harker

In Hall v. Harker (1999) 69 Cal. App. 4th 836, the defendant in the underlying action prevailed against the underlying plaintiff's claim for breach of an oral contract because the parol evidence rule and statute of frauds barred the plaintiff from establishing the oral contract. The underlying defendant then sued for malicious prosecution, and the trial court found the favorable termination element was satisfied. ( Hall, supra, 69 Cal. App. 4th at pp. 840-841.) The Hall court reversed, concluding the parol evidence rule was a procedural rather than substantive rule that did not relate to the merits of defendant's innocence of or responsibility for the alleged misconduct. ( Id. at pp. 844-845.) The Hall court discussed the parol evidence rule at length, noting: "The parol evidence rule . . . is problematic because it is not merely a rule of evidence exclusion based on policy or probative value, but is a substantive rule of law. 'The rule derives from the concept of an integrated contract. When the parties to an agreement incorporate the complete and final terms of the agreement in a writing, such an integration in fact becomes the complete and final contract between the parties. Such a contract may not be contradicted by evidence of purportedly collateral agreements.' Quoting Hayter Trucking, Inc. v. Shell Western E&P, Inc. (1993) 18 Cal. App. 4th 1. The purpose of the parol evidence rule 'is to make sure that the parties' final understanding, deliberately expressed in writing, shall not be changed.' ( 2 Witkin, Cal. Evidence (3d ed. 1986) Documentary Evidence, 964, p. 912.) 'According to this substantive rule of law, when the parties intend a written agreement to be the final and complete expression of their understanding, that writing becomes the final contract between the parties, which may not be contradicted by even the most persuasive evidence of collateral agreements. Such evidence is legally irrelevant. ' ( EPA Real Estate Partnership v. Kang (1992) 12 Cal. App. 4th 171. . . .)" ( Hall, 69 Cal. App. 4th at p. 844.) Hall also concluded that termination based on noncompliance with the statute of frauds is not a favorable termination. Although it is unnecessary to resolve this issue, this conclusion appears open to substantial doubt. Hall's only analysis was that "the statute of frauds is clearly a procedural defense. It renders certain types of contracts unenforceable, not invalid, unless they are reduced to writing and signed by the party to be charged." ( Hall, supra, 69 Cal. App. 4th at p. 844.) The Court reversed a judgment, finding the court's expressions of negative opinions about attorneys throughout the trial denied the attorney defendant a fair and impartial trial in violation of his right to due process. (Id. at p. 841.) The court observed the statements "strongly suggest the judge held preconceived ideas about the proclivity of attorneys to initiate and churn litigation for financial gain, regardless of the merit of the claims or the damage it might do to the defendant. Whether Harker initiated Taylor's cross-complaint without probable cause and for an improper purpose was the central issue in the malicious prosecution case against him." (Id. at pp. 842-843.)