Continental Airlines, Inc. v. McDonnell Douglas Corp. (216 Cal. App. 3d 388, 1989)

Opinion

HOFFMAN, J.

Introduction and Procedural History

This action was commenced by plaintiff and respondent Continental Airlines, Inc. (Continental), in the Los Angeles Superior Court on December 3, 1979, and alleged, against defendant and appellant McDonnell Douglas Corporation (Douglas), causes of action for negligence, strict liability, deceit, breach of warranty and breach of contract.

In 1980, Douglas filed a complaint in the federal court seeking a declaration that the exculpatory provision of Article 12 of its Purchase Agreement with Continental was valid and barred Continental’s action. Continental counterclaimed, raising essentially the same claims presented in its state court lawsuit.

In early 1985, the federal court granted a partial summary judgment in favor of Douglas, confirming the validity of the contract’s exculpatory clause. The court’s ruling, which was made final, foreclosed Continental’s state claims based on negligence, strict liability and implied warranty under principles of res judicata. However, the federal court stated it made no ruling with regard to Continental’s claims for breach of the contract’s Warranty nor its Service Life Policy, since they were not properly presented in the motion.

The trial in the superior court began on September 26, 1985, on Continental’s fraud, breach of express warranty and breach of contract (the Service Life Policy) claims. At the conclusion of plaintiff’s case, a nonsuit motion was made by Douglas; it was later granted only with respect to the breach of warranty cause of action.

The case was submitted to the jury on five different fraud theories and one breach of contract theory, based on the Service Life Policy. On January 30, 1986, the jury returned verdicts in favor of Continental for $17 million on its claims for (1) fraud by misrepresentation, (2) fraud by nondisclosure of known facts and (3) negligent misrepresentation. The jury returned verdicts in favor of Douglas on Continental’s claims for (1) fraud by concealment and, (2) fraud by making a promise without intent to perform. On the breach of the Service Life Policy claim, the jury awarded Continental damages of $13.4 million.

On March 19, 1986, the trial court denied Douglas’s motions for new trial and judgment notwithstanding the verdict. In response to the jury’s determination that prejudgment interest was appropriate, the trial court awarded Continental interest at the rate of 7 percent from March 1, 1978, to January 1, 1983, and at 10 percent thereafter, on the fraud and breach of contract awards. Judgment was granted on the higher fraud award and, alternatively, on the breach of contract award, in the event the fraud verdicts did not withstand an appeal.

This appeal is from that judgment. We affirm the judgment as modified.

Statement of Facts

On March 1, 1978, a Continental DC-10 aircraft, which had been delivered to Continental by Douglas in 1972, was in its takeoff roll at Los Angeles International Airport when two tires burst on the left landing gear. The captain elected to try to stop the plane, but it ran off the end of the runway at 85 miles per hour. The landing gear broke through the tarmac, burrowed into the ground, and was ripped from the wing, making a 3.7 foot hole which allowed fuel to pour from the wing fuel tanks. The plane was severely damaged by the resulting fire and rendered unrepairable.

Douglas had approached Continental in 1968 to sell Continental DC-10 aircraft. Douglas used a series of briefings and sales brochures in its sales campaign. The sales brochures given to Continental consisted of hundreds of pages of technical information drafted by Douglas’s engineers, and reviewed by its top management, for the express purpose of explaining the DC-10 design and a “Detail Type Specification” (Detail Specification or Specification) to potential aircraft purchasers. That Specification, as its name implies, described the technical details of the DC-10. The briefings, the question and answer period following, and the brochures, were intended by Douglas to constitute Continental’s review of the DC-10 specifications.

The Douglas briefings covered the landing gear and wing design, as did many of its brochures. Continental personnel used the brochures to write portions of Continental’s “Tri-Jet Evaluation,” a comparison between the DC-10 and Lockheed’s L-1011, which became a basis for Continental’s decision to purchase the DC-10.

The brochures contained statements that “[t]he fuel tank will not rupture under crash load conditions”; that the landing gear “are designed for wipe-off without rupturing the wing fuel tank”; that “the support structure is designed to a higher strength than the gear to prevent fuel tank rupture due to an accidental landing gear overload”; that the DC-10 “is designed and tested for crashworthiness”; that the “landing gear will be tested” to demonstrate the fail safe integrity and wipe-off characteristics of the gear design; and that “good reliability” for the DC-10 landing gear could be predicted with an “unusually high degree of confidence” because of its close similarity to the successful design on the DC-8 and DC-9 aircraft.

When Continental decided to purchase the DC-10, instead of the L-1011 aircraft, it finalized a Purchase Agreement with Douglas which contained an integration clause and incorporated by reference the Detail Specification for the DC-10. In contrast to the absolute guarantees of the brochures, the Detail Specification used qualified language on the subject of the landing gear breakaway characteristic. It recited, in relevant part, that the landing gear “shall be designed” so that, under certain specified load conditions, failure of the landing gear “is not likely” to rupture the wing fuel tanks or fuel lines. That clause, its interpretation, and the precontract representations which varied the terms of the Specification, became the focus of the instant trial.

Contentions

I. Douglas contends with respect to Continental’s fraud claims that:

A. Continental’s negligent misrepresentation claim was barred by the exculpatory clause of the Purchase Agreement.

B. The jury instruction on fraud by “failure to disclose” was incomplete in two vital particulars.

C. The trial court prejudicially erred in refusing to admit the “Six Bulletin.”

D. The trial court prejudicially erred in admitting the “Starlof Letter” and the evidence associated with it.

E. The trial court prejudicially erred in refusing to permit Douglas’s expert witness McCarthy to testify from documents prepared by his subordinates.

F. The trial court prejudicially erred in permitting the contractual term of the Detail Specification to be varied, amplified and supplemented by parol evidence.

G. There was no substantial evidence of fraud: (1) the Detail Specification was not false, and (2) precontract promotional materials cannot form the basis of a fraud claim.

H. There was no substantial evidence that Douglas’s misrepresentations were material or that Continental reasonably relied on them in deciding to purchase the DC-10.

I. The trial court’s treatment of the Service Life Policy issues prejudiced the entire case.

J. The trial court erroneously instructed the jury on the measure of damages for fraud.

K. The trial court erred in awarding prejudgment interest at 10 percent.

II. Douglas contends Continental’s claim for breach of contract under the Service Life Policy was submitted to the jury in error because:

A. The value of the aircraft cannot be recovered under the Service Life Policy.

B. Continental never “triggered” the policy by giving the required notice.

C. Continental’s insurer had no standing to make a claim under the policy since it is nonassignable.

Discussion

I. The Fraud Claims

A. Continental’s Cause of Action For Negligent Misrepresentation Was Not Barred by the Exculpatory Clause of the Contract.

Douglas contends Continental’s claim for negligent misrepresentation was barred by Article 12 of the Purchase Agreement wherein Continental expressly agreed to waive all claims for negligence. Although the cause of action was submitted in accordance with BAJI No. 12.45, which is entitled “Fraud and Deceit—Negligent Misrepresentation,” on the instruction given to the jury, the court changed the name of the tort to “fraud and deceit by representation without reasonable grounds.”

While Douglas makes much ado about this name change, the real question presented is whether negligent misrepresentation is a species of fraud which, pursuant to California statutory and case law, may not be waived by an exculpatory clause.

The elements of a cause of action for negligent misrepresentation are: “1. The defendant must have made a representation as to a past or existing material fact, [¶] 2. The representation must have been untrue; [¶] 3. Regardless of his actual belief the defendant must have made the representation without any reasonable ground for believing it to be true; [¶] 4. The representation must have been made with the intent to induce plaintiff to rely upon it; [¶] 5. The plaintiff must have been unaware of the falsity of the representation; he must have acted in reliance upon the truth of the representation and he must have been justified in relying upon the representation, [¶] 6. And, finally, as a result of his reliance upon the truth of the representation, the plaintiff must have sustained damage.” (BAJI No. 12.45, italics added; see Walters v. Marler (1978) 83 Cal.App.3d 1, 17 [147 Cal.Rptr. 655], overruled on another ground in Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 505-507 [198 Cal.Rptr. 551, 674 P.2d 253, 44 A.L.R.4th 763].)

Section 1668 of the Civil Code declares unlawful as against public policy “[a]ll contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent . . . .” (Italics added.)

Section 1710, subdivision 2, defines one form of deceit as: “The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true." (Italics added.)

Section 1572, subdivision 2, provides that actual fraud includes the following act: “The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true.” (Italics added.)

Douglas argues that since section 1668 does not list “misrepresentation” among the kinds of conduct for which a party may not exculpate itself, coupled with the fact that the word “fraud” is not modified, whereas the modifier “willful or negligent” expressly applies only to the phrase “violation of law,” that confirms that “fraud” is used in section 1668 in its traditional sense as an intentional tort.

Douglas’s argument is disingenuous. However, Douglas’s assertion, that Continental’s claim for negligent misrepresentation was barred by the exculpatory clause of the contract, is bolstered by the erroneous holding of Tokio Marine & Fire Ins. v. McDonnell Douglas Corp. (2d Cir. 1980) 617 F.2d 936, in which the federal court, construing an almost identical exculpatory clause, declared that “[w]here there has been no violation of law, negligent misrepresentations in a commercial transaction such as that involved herein do not fall within the provisions of § 1668.” (Id. at p. 940.) The cases on which the Tokio Marine court relied for that incorrect statement of California law (Delta Air Lines, Inc. v. Douglas Aircraft Co. (1965) 238 Cal.App.2d 95, 105-106 [47 Cal.Rptr. 518]; Werner v. Knoll (1948) 89 Cal.App.2d 474, 475-477 [201 P.2d 45]) do not support its conclusion.

The Werner case involved a wrongful death action. The court held that lawsuit was barred by the exculpatory clause of the parties’ agreement, since contracts relieving individuals from the results of their own ordinary negligence are not invalid under section 1668 for contravening public policy. (89 Cal.App.2d at pp. 475-476.) The Delta Air Lines case concerned an action for breach of warranty. The court determined the exculpatory clause was valid and covered not only contractual warranty liability but also tort liability. (238 Cal.App.2d at p. 101.) It further held the clause was not void as an attempt to exempt defendant from liability for an express violation of law because defendant’s complained-of acts did not constitute such violation. (Id. at pp. 105-106.) Neither of these cases involved a cause of action for negligent misrepresentation.

We have found no other case which interprets the relationship amongst sections 1668, 1710, subdivision 2, and 1572, subdivision 2, in this context, although all of these sections were enacted in 1872 as part of the original Civil Code.

The case law, however, is clear that in California negligent misrepresentation is a form of fraud and deceit under sections 1710, subdivision 2, and 1572, subdivision 2. Thus, in Andrepont v. Meeker (1984) 158 Cal.App.3d 878, at page 884 [204 Cal.Rptr. 887], the court observed: “Since Gagne v. Bertran (1954) 43 Cal.2d 481, 487-488 [ ], was decided, California courts have recognized that a negligent misrepresentation is actionable as a form of deceit. [Citing to and quoting §§ 1710, subd. 2, and 1572, subd. 2.]” In Gold v. Los Angeles Democratic League (1975) 49 Cal.App.3d 365, at pages 373-374 [122 Cal.Rptr. 732], the court declared: “Negligent misrepresentation is a form of ‘actual fraud.’ (Civ. Code, §§ 1572, subd. 2, 1710, subd. 2; Gagne v. Bertran (1954) 43 Cal.2d 481, 487, fn. 4 [ ]; Ciar v. Board of Trade (1958) 164 Cal.App.2d 636, 644 [ ] . . . .)” In In re Cheryl E. (1984) 161 Cal.App.3d 587, at page 599 [207 Cal.Rptr. 728], the court stated: “[N]o actual intent to defraud . . . need be shown, as fraud includes not only intentional misrepresentations but also negligent misrepresentations. (Balfour, Guthrie & Co. v. Hansen (1964) 227 Cal.App.2d 173, 192 [ ].) Thus, ‘scienter’ is not an element of every cause of action for deceit. (Hale v. George A. Hormel & Co. (1975) 48 Cal.App.3d 73, 84 [ ].)” In Chavez v. Citizens for a Fair Farm Labor Law (1978) 84 Cal.App.3d 77, at page 80, footnote 4 [148 Cal.Rptr. 278], the court noted that “[i]n order to state a cause of action for fraud, a plaintiff must allege (1) a false representation of a material fact, (2) made recklessly or without reasonable ground for believing its truth. . . . (Gonsalves v. Hodgson [1951] 38 Cal.2d 91, 100-101 [ ].)” (See also 5 Witkin, Summary of Cal. Law (9th ed. 1988) Torts, § 722, p. 821; 5 Witkin, Cal. Procedure (3d ed. 1985) Pleading, § 676, pp. 126-127.)

Under the weight of these authorities, we hold that a cause of action for negligent misrepresentation is included within the meaning of the word “fraud” in section 1668. Therefore, the exculpatory clause of the parties’ contract in Article 12, wherein Continental agreed to waive all claims for negligence, was not a bar to Continental’s claim for negligent misrepresentation.

B. The Court’s Instruction on Fraud by Nondisclosure Constituted Prejudicial Error.

Douglas contends the court’s instruction on fraud by nondisclosure constituted prejudicial error. Specifically, it argues the two instructions relating to nondisclosure erroneously omitted any reference to the necessary intent and reliance elements of that claim.

In Lingsch v. Savage (1963) 213 Cal.App.2d 729 [29 Cal.Rptr. 201], the court set forth the components of a nondisclosure cause of action as follows: “(1) Nondisclosure by the defendant of facts materially affecting the value or desirability of the property; (2) Defendant’s knowledge of such facts and of their being unknown to or beyond the reach of the plaintiff; (3) Defendant's intention to induce action by the plaintiff; (4) Inducement of the plaintiff to act by reason of the nondisclosure and (5) Resulting damages.” (Id. at p. 738, italics added; see County of Mariposa v. Yosemite West Associates (1988) 202 Cal.App.3d 791, 812 [248 Cal.Rptr. 778]; Barnhouse v. City of Pinole (1982) 133 Cal.App.3d 171, 190, fn. 7 [183 Cal.Rptr. 881].)

In the instant case, the court instructed the jury on five kinds of fraud—intentional, concealment, nondisclosure, false promise, and negligence—all derived from essentially the same operative facts. It actually instructed the jury twice, the first time when it informed the jury on the issues on which Continental had the burden of proof and a second time when it formally listed the elements of each theory. None of the instructions purported to cover more than one species of fraud. In other words, none can be interpreted to apply to any cause of action other than the specific one for which it was given. Eight of the ten instructions correctly informed the jury that fraudulent intent as well as reliance are elements of the cause of action to which the instruction referred. However, the two instructions relating to nondisclosure omitted any reference whatever to intent and reliance.

The first instruction, which relates to burden of proof, reads as follows: “As to fraud and deceit by nondisclosure of known facts: [¶] 1. That the defendant failed to disclose to Continental a material fact known to McDonnell Douglas and not known to Continental; and [¶] 2. That McDonnell Douglas knew of material facts and also knew that such facts were neither known nor readily accessible to the other party; [¶] 3. That as a legal cause of the fraud and deceit Continental sustained damages; [¶] 4. The nature and extent of plaintiff’s damages and the amount thereof.”

The second instruction, which defines the elements of the tort, was similarly defective. It reads: “The essential elements of fraud and deceit by failing to disclose known facts, each of which must be proved to recover damages under this theory are: [¶] Except as you may otherwise be instructed, where material facts are known to one party and not to the other, failure to disclose them is not actionable fraud unless there is some relationship between the parties which gives rise to a duty to disclose such known facts. [¶] A duty to disclose known facts arises where one party knows of material facts and also knows that such facts are neither known nor readily accessible to the other party.”

In his closing argument, when explaining intentional fraud and fraud by concealment to the jury, Continental’s counsel used the court’s proposed instructions for guidance and covered all the elements of the claims, including intent and reliance. But when he turned to nondisclosure, apparently still using the court’s instructions, he failed even then to inform the jury of the elements of that cause of action. Thus, the jury’s findings against Douglas on the issue of nondisclosure did not include a finding of fraudulent intent nor of reliance.

Moreover, Continental can find no assistance in the jury’s answers to the special interrogatories on the nondisclosure cause of action, since the jury simply found that “each of the elements of fraud and deceit by nondisclosure of known facts, as defined in the court’s instruction” had been proved. (Italics added.) And, because each instruction specifically covered only one species of fraud, even when we consider the instructions as a whole, the error is not cured. (Compare, Pacific-Southern Mortgage Trust Co. v. Insurance Co. of North America (1985) 166 Cal.App.3d 703, 714-715 [212 Cal.Rptr. 754]; Little v. Stuyvesant Life Ins. Co. (1977) 67 Cal.App.3d 451, 464-465 [136 Cal.Rptr. 653].)

Continental, relying on Spahn v. Guild Industries Corp. (1979) 94 Cal.App.3d 143, 160 [156 Cal.Rptr. 375], argues that, inasmuch as Douglas did not request a “specific proper” instruction, it cannot complain on appeal that the instruction was defective. Continental’s argument embodies a once common misapprehension concerning the impact of Code of Civil Procedure section 647, which obviates the need to object to an order “giving an instruction, refusing to give an instruction, or modifying an instruction requested . . . .” The matter was clarified by the Supreme Court in Agarwal v. Johnson (1979) 25 Cal.3d 932, 948-949 [160 Cal.Rptr. 141, 603 P.2d 58], decided six months after Spahn. The court, reconciling apparently divergent cases, ultimately quoted with approval from Rivera v. Parma (1960) 54 Cal.2d 313, at page 316 [5 Cal.Rptr. 665, 353 P.2d 273], as follows: “ ‘ “To hold that it is the duty of a party to correct the errors of his adversary’s instructions . . . would be in contravention of section 647, Code of Civil Procedure, which gives a party an exception to instructions that are given .... While the exception will be of no avail where an instruction states the law correctly but is ‘deficient merely by reason of generality,’ in other cases he will not be foreclosed from claiming error and prejudice.” ’ ” (Agarwal, supra, 25 Cal.3d at p. 949; see Enis v. Specialty Auto Sales (1978) 83 Cal.App.3d 928, 939-940 [148 Cal.Rptr. 255]; see also Tannehill v. Finch (1986) 188 Cal.App.3d 224, 227, fn. 3 [232 Cal.Rptr. 749]; Pappert v. San Diego Gas & Electric Co. (1982) 137 Cal.App.3d 205, 212 [186 Cal.Rptr. 847].)

Continental also relies on Spahn v. Guild Industries Corp., supra, 94 Cal.App.3d 143, for the proposition that the omission of the reliance element from the instruction was not prejudicial. In Spahn, the verdict was saved because the evidence of reliance was so compelling the court found that “even if the jury had been specifically instructed as to reliance, they could only have found that the franchisees relied on the misrepresentations . . . .” (Id. at p. 159.) Further, the court observed that “[g]iven the record . . . and assuming the most comprehensive instruction on reliance, there is no possibility that the jury could have returned a verdict favorable to the franchisors.” (Id. at p. 160.)

Spahn is distinguishable. In Spahn, only one element necessary to be proved—reliance—was omitted from the instruction, whereas here, the intent element was also omitted. Moreover, we cannot say in this case, as did the court in Spahn, that there “is no possibility” (94 Cal.App.3d at p. 160) the jury would have returned a verdict more favorable to Douglas on Continental’s nondisclosure claim absent these errors.

On the contrary, it appears probable the defect in the nondisclosure instructions did affect the verdict. We reach this conclusion because, when the jury was correctly instructed as to all the elements of fraud by concealment, it found in favor of Douglas. It did so although none of the instructions were specific as to the facts and Continental’s counsel made no attempt in his argument to distinguish the facts upon which Continental based its claims, instead discussing the same matters purportedly concealed, or not disclosed, interchangeably without reference to specific instructions or theories.

In making our determination whether the defective instructions constituted reversible error, we are guided by the language of our Supreme Court in Henderson v. Harnischfeger Corp. (1974) 12 Cal.3d 663 [117 Cal.Rptr. 1, 527 P.2d 353], wherein the court stated: “Generally speaking if it appears that error in giving an improper instruction was likely to mislead the jury and thus to become a factor in its verdict, it is prejudicial and ground for reversal. [Citation.] To put it another way, ‘[w]here it seems probable that the jury’s verdict may have been based on the erroneous instruction prejudice appears and this court “should not speculate upon the basis of the verdict.” ’ [Citations.] . . . ‘The determination whether, in a specific instance, the probable effect of the instruction has been to mislead the jury and whether the error has been prejudicial so as to require reversal depends on all the circumstances of the case, including the evidence and the other instructions given. No precise formula can be drawn.’ [Citations.]” (Id. at pp. 670-671; Frantz v. San Luis Medical Clinic (1978) 81 Cal.App.3d 34, 47 [146 Cal.Rptr. 146].)

From our examination of the entire record, including the evidence and the other instructions, we can only conclude the court’s error in instructing the jury on fraud by nondisclosure misled the jury, was prejudicial and resulted in a miscarriage of justice; therefore, the judgment cannot stand to the extent it is based on the fraud by nondisclosure verdict. (Cal. Const., art. VI, § 13; Henderson v. Harnischfeger Corp., supra, 12 Cal.3d at pp. 670, 674; see Seaman’s Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752, 771, 774 [206 Cal.Rptr. 354, 686 P.2d 1158].) However, as we discuss later in this opinion, the judgment can be upheld based on the intentional fraud and negligent misrepresentation verdicts.

C. The Robert Six Bulletin Was Properly Excluded.

Douglas made numerous unsuccessful attempts at trial to introduce into evidence a December 1979 written statement which was issued to all Continental employees by Robert F. Six, then chairman of the board and chief executive officer of Continental. The statement informed them that a group of insurance companies retained by Continental had filed a lawsuit against Douglas and others; that insurance companies customarily file such suits in the name of the client to whom they have paid benefits; that Continental was in fact not suing Douglas and had not been asked to participate in the preparation of the lawsuit.

The bulletin concluded with the following sentence: “We continue to feel that the DC-10, which we have been flying throughout our system since 1972, is an excellent airplane—safe, efficient, hardy and responsive.”

Douglas contends the bulletin should have been admitted into evidence because of “its obvious status as an admission” (Evid. Code, § 1220) and points out that it was originally rejected in its entirety only because it mentioned insurance. In support of its argument, Douglas urges the court erred in excluding the evidence because Evidence Code section 1155, which proscribes the admission of evidence that a person was insured “to prove negligence or other wrongdoing," is not applicable in the instant case. Citing North v. Vinton (1936) 17 Cal.App.2d 214 [61 P.2d 950], Douglas argues that where an admission makes only incidental reference to insurance, “the entire statement is admissible, not to prove the fact of insurance, but solely because the reference to the insurance is part of the admission.” (Id. at p. 219, italics added.)

While we have no argument with that principle, the exception set forth in North, and relied on by Douglas, is not here applicable. To the contrary, what Douglas was attempting to do in the court below is that which North forbids, namely, “to prove the fact of insurance.” (17 Cal.App.2d at p. 219.) Douglas wanted to show the jury that Continental’s insurance company, not Continental, is the real party in interest in this lawsuit and that, in fact, Continental disavowed any participation in its insurer’s allegations of fraud or lack of safety.

The trial court correctly perceived that bringing that information before the jurors would be highly prejudicial and misleading. (Evid. Code, § 352.) The same considerations which underlie Evidence Code section 1155 require exclusion of the evidence. (See 1 Witkin, Cal. Evidence (3d ed. 1986) § 417, p. 391 [“[t]he evidence is regarded as both irrelevant and prejudicial”].)

Further, the instant lawsuit was brought only in the name of Continental; Continental’s status as the real party in interest was not challenged by Douglas, although such challenge was appropriate if the insurer had paid Continental in full for its loss. (See 4 Witkin, Cal. Procedure (3d ed. 1985) Pleading, § 112, pp. 147-148.)

Although the trial court excluded the entire Robert Six bulletin, it ruled the last sentence of the bulletin (quoted above) would be received in evidence if Douglas could show its relevance: It could do so by producing evidence it was issued before Continental made the postaccident design change to remedy the landing gear defect, as recommended by Douglas in its safety bulletin.

Douglas, however, failed to carry its burden and now, on appeal, contends the court by its ruling improperly reversed the burden of the parties, confusing admissibility with weight. That contention is devoid of merit. The last sentence of the Robert Six bulletin was not relevant to impeach Continental’s claim it was defrauded by Douglas, regarding the safety of the aircraft, if Continental only “continued” to believe the DC-10 was safe after the landing gear defect was remedied. Therefore, the sentence was properly excluded absent a proper foundation.

D. The Starlof Letter Was Properly Admitted in Evidence.

We find Douglas’s argument that the trial court prejudicially erred in admitting the “Starlof letter,” and the evidence associated with it, lacking in merit.

William C. Starlof, the manager of Douglas’s Federal Aviation Administration (FAA) Liaison Office, sent a letter on June 4, 1971 (the Starlof letter or letter), to the Aircraft Engineering Division of the FAA. The letter was sent for the specific purpose of demonstrating to the FAA that the DC-10 was in compliance with its special condition A-4. That condition related to protection of the fuel lines in the fuselage in the event of an accident. Condition A-4 had to be met before the FAA would issue a “type certificate” showing the aircraft met federal air regulation standards.

In his letter, Starlof also made an evaluation of the breakaway characteristics of the aircraft’s main landing gear with respect to the fuel lines and fuel tanks in the wings. On page two of the letter, Starlof made the following statement: “The overall effect of the failure modes described is that the landing gear will break cleanly without r[u]pturing the fuel tanks or fuel lines. In addition to the above, it should be noted that the DC-10 main landing gear and its carry-through structure is similar in design to both the DC-8 and DC-9. Laboratory failure tests on the DC-8 gear and service failures which have been experienced on the DC-8 and DC-9, in most cases, confirm that the gear will sever cleanly from the wing without failing surrounding primary wing structure.” (Italics added.)

Representations similar to that quoted above were made to Continental in the Douglas sales brochures and at the precontract briefings. However, Continental never saw the Starlof letter until after the accident, so there was no question that Continental could not have relied on a misrepresentation in the letter when purchasing the DC-10.

Douglas claims the court prejudicially erred in admitting the letter in evidence because it enabled Continental to present to the jury the distorted picture that misrepresentations in the letter, regarding the breakaway characteristics of the landing gear and wing structure, were relied upon by the FAA in issuing its type certification for the DC-10. As Douglas correctly points out, the FAA did not have a requirement that applied to protection of the wing fuel tank and lines. However, the FAA did have a proposed rule which covered that very subject, although it was not in effect when the Starlof letter was sent to the FAA. Nevertheless, Douglas’s engineers testified that the challenged paragraph was inserted in the letter in an attempt by Douglas to avoid imposition by the FAA of the proposed rule because it would have imposed more rigorous fuel tank protection requirements on Douglas.

Douglas argues the trial court erroneously failed to require Continental to prove all the elements of Douglas’s alleged fraud on the FAA— especially reliance—as preliminary facts (Evid. Code, § 403, subd. (a)(1)) prior to admitting the Starlof letter into evidence. Douglas maintains the letter was only admissible on the fraud or breach of contract issues if the court first determined the FAA relied on the alleged misrepresentations in issuing the type certificate for the DC-10. The type certificate was, of course, Continental’s assurance the FAA determined the aircraft was safe.

Douglas’s argument, however, overlooks the fact that the trial court stated one reason it received the letter was as circumstantial evidence of Douglas’s fraudulent intent with respect to Continental. Under that theory, evidence of even an unsuccessful attempt by Douglas to avoid imposition by the FAA of the proposed rule is relevant circumstantial evidence of Douglas’s intent to defraud Continental. And, under that theory, the FAA’s reliance or lack thereof was not material to the question whether the letter was admissible.

It is well established California law that “ ‘[s]ince direct proof of fraudulent intent is often impossible, the intent may be established by [in]ference from acts of the parties.’ [Citation.]” (Delos v. Farmers Insurance Group (1979) 93 Cal.App.3d 642, 658 [155 Cal.Rptr. 843]; Miller v. National American Life Ins. Co. (1976) 54 Cal.App.3d 331, 338 [126 Cal.Rptr. 731]; 5 Witkin, Summary of Cal. Law, Torts, op. cit. supra, at § 686, p. 787.) It is also settled law that if evidence is admissible for any purpose it must be received, even though it may be highly improper for another purpose. (Daggett v. Atchison T. & S. F. Ry. Co. (1957) 48 Cal.2d 655, 665 [313 P.2d 557, 64 A.L.R.2d 1283].)

However, the party against whom the evidence is offered is entitled, upon request, to a proper instruction limiting the purposes for which the evidence may be considered. (Daggett v. Atchison. T. & S. F. Ry. Co., supra, 48 Cal.2d at pp. 665-666; Evid. Code, § 355.) Here, the trial court properly refused the limiting instruction proffered by Douglas; it was too narrow and did not correctly inform the jury of the purposes for which they could consider the Starlof letter. (See Agarwal v. Johnson, supra, 25 Cal.3d at pp. 950-951; Downing v. Barrett Mobile Home Transport, Inc. (1974) 38 Cal.App.3d 519, 523 [113 Cal.Rptr. 277].) And, contrary to Douglas’s assertion, the instructions the trial court gave the jury covered the material issues and controlling legal principles of the case. (See Agarwal, supra, at p. 951.)

Moreover, the trial court did not abuse its discretion in admitting the evidence. (Evid. Code, §§ 352, 353; Kessler v. Gray (1978) 77 Cal.App.3d 284, 291-292 [143 Cal.Rptr. 496].) The court’s exercise of discretion will be upheld on appeal absent a clear error of law or manifest abuse (Michail v. Fluor Mining & Metals, Inc. (1986) 180 Cal.App.3d 284, 286-287 [225 Cal.Rptr. 403]) and there was neither. The record shows the judge weighed the prejudicial effect of the evidence against its probative value. (Id. at p. 287.) A full expression of the court’s basis for excluding or refusing to exclude evidence under Evidence Code section 352 is not required. (Ibid.; 1 Witkin, Cal. Evidence, op. cit. supra, at § 303, pp. 273-274.)

E. The Trial Court Did Not Prejudicially Err in Limiting the Testimony of Douglas’s Expert Witness McCarthy.

Douglas contends the trial court prejudicially erred in refusing to permit their expert witness, John McCarthy, “to testify from documents prepared by his subordinates” or even to mention he relied on those documents in forming his opinion as to the amount of damage the aircraft would have sustained had there been no fire.

McCarthy was a Douglas employee who, for the last 25 years, worked in a department known as “Recovery and Modification Services, Product Support” (RAMS). He was the manager of the unit for 15 years. His job in RAMS was to make aircraft repair estimates based on data furnished by subordinates. McCarthy was involved in at least a dozen such estimates per year for a quarter of a century: these estimates ran into the millions of dollars.

McCarthy personally inspected the DC-10 at the site of the crash and, from his observations, determined which parts of the aircraft would have needed repair or replacement even if there had been no fire. Eventually, an attorney for Douglas asked him to estimate the cost of the impact damage had there been no fire as a result of the alleged fraud. McCarthy then requested two regular members of his staff, House and Rich, each to prepare an analysis. House’s function was to identify and price the parts needed for the hypothetical job, while Rich developed the manpower figures and labor costs.

According to McCarthy, the project was a “joint effort.” However, although McCarthy was shown the numbers produced by House and Rich, he testified he did not verify them nor did he “review them hard” because “[t]hey looked like they were in the ballpark.” McCarthy’s cost estimate was developed from the information and work sheets they gave him and it was embodied in a report, Exhibit 11,000.

Continental’s counsel objected to McCarthy testifying on the basis of Exhibit 11,000, arguing that McCarthy had no personal knowledge of the facts in that report because he had not personally performed the underlying work. The trial court sustained the objection and ruled that McCarthy could not testify that he relied on the analyses by House and Rich or as to the details of Exhibit 11,000. Thus, Douglas argues McCarthy’s testimony was eviscerated and rendered unpersuasive because, in the eyes of the jury, it was based on nothing more than his viewing of the aircraft after the accident and his general experience.

The questions presented here are whether McCarthy should have been allowed to testify (1) that he relied on the House-Rich cost and price data in forming his opinion on the cost of repairing the aircraft had there been no fire and (2) regarding the details of Exhibit 11,000.

Under Evidence Code section 801, subdivision (b), an expert’s opinion may be “[b]ased on matter (including his special knowledge, skill, experience, training, and education) perceived by or personally known to the witness or made known to him at or before the hearing, whether or not admissible, that is of a type that reasonably may be relied upon by an expert in forming an opinion upon the subject to which his testimony relates

On direct examination the expert may state the reasons for the opinion and the matter upon which the opinion is based, unless he is precluded by law from using such reasons or matter. (Evid. Code, § 802.) The portions of an opinion based in whole or significant part on matter that is not a proper basis therefor must be excluded upon objection, although the expert may testify to that portion of the opinion which is based on proper matter. (Evid. Code, § 803.)

Here, the analyses House and Rich compiled for McCarthy were themselves expert opinions. McCarthy based his final cost estimate for trial on those analyses, in the report designated Exhibit 11,000. Since House and Rich were not present in court to testify, however, their opinions, embodied in the report, were hearsay.

In People v. Coleman (1985) 38 Cal.3d 69, at page 92 [211 Cal.Rptr. 102, 695 P.2d 189], the Supreme Court observed that in Grimshaw v. Ford Motor Co. (1981) 119 Cal.App.3d 757, 788-789 [174 Cal.Rptr. 348], the Court of Appeal explained the current state of the law, quoting from Grimshaw with approval as follows: “ ‘While an expert may state on direct examination the matters on which he relied in forming his opinion, he may not testify as to the details of such matters if they are otherwise inadmissible. [Citations.] The rule rests on the rationale that while an expert may give reasons on direct examination for his opinions, including the matters he considered in forming them, he may not under the guise of reasons bring before the jury incompetent hearsay evidence. [Citation.] Ordinarily, the use of a limiting instruction^] that matters on which an expert based his opinion are admitted only to show the basis of the opinion and not for the truth of the matter[,] cures any hearsay problem involved, but in aggravated situations, where hearsay evidence is recited in detail, a limiting instruction may not remedy the problem. [Citations.]’ ” (Italics added.)

In other words, as relevant here, while an expert may rely on inadmissible hearsay in forming his or her opinion (see People v. Coleman, supra, 38 Cal.3d at p. 90), and may state on direct examination the matters on which he or she relied, the expert may not testify as to the details of those matters if they are otherwise inadmissible (38 Cal.3d at p. 92).

For example, in Whitfield v. Roth (1974) 10 Cal.3d 874 [112 Cal.Rptr. 540, 519 P.2d 588], the expert witness neurosurgeon testified that he saw no abnormality in certain x-ray films. He then testified, over objection, that he presented the films at “ ‘grand rounds at Stanford’ ” to about 50 students, residents and faculty doctors and not one of them could see an abnormality or detect any pathology. (Id. at p. 894.) The Supreme Court held the testimony concerning the opinion of the other doctors who were not present in court was hearsay. (Ibid.) The reason was obvious. The opportunity to cross-examine the other doctors as to the basis for their opinions was denied to the adverse party. (Ibid.)

The Whitfield court cited to and relied on Frampton v. Hartzell (1960) 179 Cal.App.2d 771 [4 Cal.Rptr. 427]. In Frampton, the court held the testimony of an expert witness psychiatrist as to the opinion of the medical staff at the hospital, where he was a supervisor-psychiatrist, was inadmissible hearsay. (Id. at p. 773.) The rationale for the holding was that the party to whom the testimony is adverse is denied the right of cross-examination. (Ibid.)

And, in People v. Young (1987) 189 Cal.App.3d 891 [234 Cal.Rptr. 819], the Court of Appeal held that psychiatric records relied on by two psychiatrist experts were inadmissible except to explain that the doctors relied on the reports in reaching their conclusions regarding appellant’s sanity. (Id. at p. 913.) The court stated the reports were hearsay and observed that “[t]he rule which allows an expert to state the reasons upon which his opinion is based may not be used as a vehicle to bring before the jury incompetent evidence.” (Ibid.)

As the court noted in Mosesian v. Pennwalt Corp. (1987) 191 Cal.App.3d 851, at page 860 [236 Cal.Rptr. 778]: “Experts may rely upon hearsay in forming opinions. They may not relate an out-of-court opinion by another expert as independent proof of fact. [Citation.] It is proper to solicit the fact that another expert was consulted to show the foundation of the testifying expert’s opinion, but not to reveal the content of the hearsay opinion.”

Therefore, in accordance with the foregoing authorities, the trial court correctly ruled that McCarthy could not testify regarding the contents of the report, Exhibit 11,000, even though it was, in McCarthy’s words, a “joint effort.” However, the trial court erred in precluding McCarthy from testifying he relied on the cost and price figures submitted to him by House and Rich in forming his expert opinion on the cost of repairing the aircraft had there been no fire. Douglas was not prejudiced by the trial court’s partially erroneous ruling.

F. The Trial Court Did Not Prejudicially Err in Admitting the Parol Evidence Under the Fraud Exception to the Parol Evidence Rule.

Douglas next argues that the trial court erred in admitting into evidence, over its strong objections, testimonial evidence and promotional brochures which varied and contradicted the negotiated terms of the parties’ contract. Douglas urges the admission of this evidence violated the parol evidence rule, vitiated the integration clause of the parties’ contract, and was unquestionably prejudicial to Douglas’s cause.

The contract negotiated by the parties, by which Continental acquired its fleet of DC-10’s, consists of the Purchase Agreement and letter agreements, which are two inches thick, and incorporates by precise reference the Detail Specification which contains almost another four hundred pages.

The Specification depicts, in detail, the features and configuration of the aircraft, and describes the performance characteristics of its various components. Prior to finalization of the Purchase Agreement, the Detail Specification was provided to Continental, whose engineering department reviewed it and negotiated numerous changes. In Section 32-10.03.00 of the Specification, the parties agreed: “The main landing gear system shall be designed so that if it fails due to overloads during takeoff and landing (assuming the overloads are in the vertical plane parallel to the longitudinal axis of the aircraft), the failure mode is not likely to rupture the integral wing fuel tank or fuel lines.” (Italics added.)

Continental never asked for any change in the carefully drawn wording of the above-quoted section.

The parties articulated their intention that the extensive, detailed contract would constitute the entirety of their agreement and would not be subject to informal alterations, waivers or embellishments in the following integration clause:

“A. This Agreement is the complete and exclusive statement of the terms and conditions of the entire agreement between the parties hereto. . . .

“B. This Agreement, and any term or condition thereof, shall not be varied, contradicted, explained or supplemented by an oral agreement or representation, by course [of] dealing or performance or by usage of trade, nor amended or changed in any other manner except by an instrument in writing of even or subsequent date hereto, executed by both parties by their duly authorized representatives.”

At the beginning of the trial, Douglas moved in limine to preclude Continental from introducing in evidence precontract promotional sales brochures Continental received from Douglas and oral statements made by Douglas engineers and other personnel at precontract briefings on the DC-10. The court denied the motion and, based on the “fraud exception” to the parol evidence rule, held the evidence was not barred.

As a result of this ruling, at least nine sales brochures, two or three inches thick apiece, were placed before the jury. Portions of the brochures were blown up for emphasis. Witnesses were questioned at length about the contents and about representations made by Douglas’s representatives at briefings which antedated finalization of the contract.

In its opening brief, Douglas complains specifically about the admission of a single sentence appearing in small print in several of the brochures, which made this promise for the DC-10: “The fuel tank will not rupture under crash load conditions.” (Italics added.)

As we will explain, under California law, the admission of this particular sentence in the brochures, and testimony of like oral promises Douglas made, was error.

Code of Civil Procedure section 1856 sets forth the parol evidence rule. Subdivision (a) of that section provides: “Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.” (Italics added.)

Subdivision (b) of section 1856 provides that terms set forth in a writing “may be explained or supplemented by evidence of consistent additional terms unless the writing is intended also as a complete and exclusive statement of the terms of the agreement.” (Italics added.) Here, the parties did so intend. They apparently had this particular provision in mind when, in Article 20 of the Purchase Agreement, they expressly stipulated, inter alia, that the terms of the agreement could not be “varied, contradicted, explained or supplemented by an oral agreement or representation” and that the agreement was “the complete and exclusive statement of the terms and conditions of the entire agreement. ...” (Italics added.)

The justification for the admission of the parol evidence was the “fraud exception” to the parol evidence rule contained in subdivision (g) of section 1856, which provides in relevant part: “This section does not exclude other evidence ... to establish illegality or fraud. ” (Italics added.)

But the fraud exception is not applicable where “promissory fraud” is alleged, unless the false promise is independent of or consistent with the written instrument. (Simmons v. Cal. Institute of Technology (1949) 34 Cal.2d 264, 274-275 [209 P.2d 581]; Newmark v. H and H Products Mfg. Co. (1954) 128 Cal.App.2d 35, 37-38 [274 P.2d 702]; Cobbs v. Cobbs (1942) 53 Cal.App.2d 780, 784-786 [128 P.2d 373].) It does not apply where, as here, parol evidence is offered to show a fraudulent promise directly at variance with the terms of the written agreement. (Bank of America etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258, 263 [48 P.2d 659]; see Simmons v. Cal. Institute of Technology, supra, 34 Cal.2d at pp. 274-275; Green v. Del-Camp Investments. Inc. (1961) 193 Cal.App.2d 479, 482 [14 Cal.Rptr. 420].)

In Pendergrass, supra, 4 Cal.2d 258, at page 263, the Supreme Court announced the law of California as it applies to this question: “Our conception of the rule which permits parol evidence of fraud to establish the invalidity of the instrument is that it must tend to establish some independent fact or representation, some fraud in the procurement of the instrument or some breach of confidence concerning its use, and not a promise directly at variance with the promise of the writing.” (Italics added.)

Here, the Detail Specification recited that (1) the landing gear “shall be designed” so that (2) under certain specified load conditions (i.e., up and aft loads), (3) failure of the landing gear “is not likely” to rupture the wing fuel tanks or fuel lines.

Therefore, the unequivocal promise in the brochures, elicited in testimony, that the wing fuel tank and fuel lines “will not rupture,” varied and contradicted the qualified language of the Detail Specification. Continental’s argument that the evidence of that absolute guarantee was properly admitted fails to acknowledge the existence and viability of Pendergrass. (See Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101, 161 [135 Cal.Rptr. 802]; Davis v. Gulf Oil Corp. (C.D.Cal. 1983) 572 F.Supp. 1393, 1400-1401.) The cases on which Continental relies do not limit or vitiate its applicability; several predate it; others acknowledge its limitation on the fraud exception; while in still others, the parol evidence in question was not offered to prove misrepresentations about subjects covered by the agreement.

Continental’s reliance on Munchow v. Kraszewski (1976) 56 Cal.App.3d 831 [128 Cal.Rptr. 762] is likewise unavailing. First, its incorrect pronouncement that “parol evidence is always admissible to prove fraud” (id. at p. 836, italics added) is dictum and, secondly, it relies on a “line of cases” (ibid.) which consist of (1) decisions antedating Pendergrass, and (2) court of appeal decisions in which the parol evidence offered was not at variance with the instruments in question (id. at p. 836, fn. 5).

Finally, Continental’s reliance on Cobbledick-Kibbe Glass Co. v. Pugh (1958) 161 Cal.App.2d 123 [326 P.2d 197] is misplaced. The holding in Cobbledick-Kibbe is contrary to established California law and is factually distinguishable. The nub of the court’s holding was that, inasmuch as the seller deceived the buyer by tendering a contract without warning him it contained language on the back contrary to the seller’s oral representations, the seller could not use that provision to bar the buyer’s fraud action in which he claimed reliance on the inconsistent oral representations. Here, unlike the buyer in Cobbledick-Kibbe, Continental cannot claim it was unaware of the terms of the Detail Specification or of the integration clause in the contract.

Although neither party has raised the issue, we note the Pendergrass rule, which precludes the admission of evidence of a false promise inconsistent with the terms of a written agreement to prove fraud, has been criticized in at least one court of appeal decision (Coast Bank v. Holmes, supra, 19 Cal.App.3d at pp. 591-592; see Glendale Federal Savings & Loan Assn. v. Marina View Heights Dev. Co., supra, 66 Cal.App.3d at p. 161) and in early law review articles of this state (Note (1950) 38 Cal.L.Rev. 535; Sweet, Promissory Fraud and the Parol Evidence Rule, supra, 49 Cal.L.Rev. 877).

More recently, the eminent Bernard E. Witkin opined in his treatise on evidence (2 Witkin, Cal. Evidence (3d ed. 1986) § 1000, pp. 946-947) that the rule may be questioned today where a party seeks fraud damages, rather than merely attempting to avoid or nullify the main agreement. Mr. Witkin expressed that view because in 1985 the California Supreme Court reversed the long-standing and analogous rule that a tort action for damages could not be based on a false promise where the promise itself was unenforceable under the statute of frauds.

However, while the Pendergrass rule may be subject to criticism, and even questioned, it is still the law and we are bound by it (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455 [20 Cal.Rptr. 321, 369 P.2d 937]), as was the court of appeal which criticized the rule 18 years ago in Coast Bank v. Holmes, supra, 19 Cal.App.3d at pages 591-592. (See Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co., supra, 66 Cal.App.3d at p. 161.) Thus, under the Pendergrass rule, the trial court erred in admitting evidence of Douglas’s precontract promise that the wing fuel tank “will not rupture.”

Douglas argues it was prejudiced by the court’s error in admitting that evidence because its effect was to permit Continental to parlay the qualified (“not likely”) contract language it had negotiated into an absolute guarantee that the fuel tank rupture would never occur and to argue to the jury that since it did, Douglas must have committed a species of fraud.

The question we must answer then is whether the erroneous admission of Douglas’s precontract promise requires a reversal of this cause. If the single sentence to which Douglas directs our attention were the only representation on the subject of gear breakaway and wing fuel tank rupture emphasized by Douglas in examining witnesses, and in closing argument, we might be persuaded by Douglas’s claim of prejudice. However, it was not. Continental gave at least the same attention and emphasis to several similar representations which appeared in many of the brochures. Those other representations were factual, and thus admissible under the fraud exception to the parol evidence rule, for reasons which we explain below. The following are examples:

“The structure is designed and tested for crashworthiness. The landing gear, flaps, and wing engines/pylons are designed for wipe-off without rupturing the wing fuel tank or fuselage shell structure.” (Italics added.)

and

“These multiple load paths [on the wing] are designed to provide strength greater than that of the gear itself in order to prevent rupture of the fuel tank in the event of impact with some obstacle during landing and taxiing.” (Italics added.)

and

“Under crash loading conditions, the main landing gear is designed to break away from the wing structure without rupturing fuel lines or the integral wing fuel tank." (Italics added.)

and

“The [wing] support structure is designed to a higher strength than the gear to prevent fuel tank rupture due to an accidental landing gear overload.” (Italics added.)

In its supplemental post-oral-argument brief, Douglas urges that the four representations quoted, supra, are also inadmissible parol promises of future performance, not admissible factual representations, because the aircraft was “to be delivered in the future” and “Continental clearly understood that at the time . . . the brochures [were] distributed, the aircraft was still in the design stage.”

Douglas’s argument fails, however, to acknowledge that one of Continental’s main theories of the case was that when these precontract representations were made, there was in fact no such design in place with respect to the landing gear’s breakaway feature; i.e., there was never a written directive to accomplish such a design; Douglas’s engineers never agreed on a description of how the gear was to fail safely; and the many separate groups and departments at Douglas, responsible for the design, never met and never coordinated a design approach or concept with respect to the breakaway feature. (When the contract was entered two or three years later, its incorporated Design Specification notably provided instead that “[t]he main landing gear shall be designed so that if it fails . . . the failure mode is not likely to rupture the integral fuel tank or fuel lines.”)

Therefore, the four representations from the brochures, quoted supra, which unequivocally announced that the landing gear breakaway design was then a fait accompli, were admissible as factual representations by Douglas to Continental that it had already accomplished its safety-oriented design for that particular feature of the aircraft. That evidence was properly considered by the jury on each of Continental’s relevant theories of fraud.

All the representations from the brochures pertaining to the breakaway feature of the DC-10, quoted supra, were read to the jury in Continental’s closing argument. Counsel did not unduly emphasize the single promissory representation from Douglas’s brochures which, as we discussed, was admitted in error. Further, that promise was less the subject of inquiry during Continental’s examination of witnesses than were the other representations about the breakaway feature.

Thus, we must conclude, after an examination of the entire record, that the challenged evidence of promissory fraud was merely cumulative of other properly admitted evidence on that subject; consequently, its admission was not prejudicial to Douglas’s cause. (Cal. Const., art. VI, § 13; Kalfus v. Froze (1955) 136 Cal.App.2d 415, 423 [288 P.2d 967]; 9 Witkin, Cal. Procedure, Appeal, op. cit. supra, at § 338, pp. 345-346.) There was here no miscarriage of justice. (Ibid.)

G. The Precontract Promotional Materials Can Form the Basis of Continental’s Fraud Claims.

Douglas’s contention that the precontract promotional brochures cannot form the basis for a fraud claim is devoid of merit.

First, Douglas argues that “[t]he Uniform Commercial Code and cases interpreting it have recognized that general promotional observations of this type are merely expressions of opinion that are not actionable as express warranties nor as ‘fraudulent statements.’ ” With respect to Continental’s fraud claims, the only causes of action with which we are now concerned, the cases cited by Douglas do not support its argument.

The alleged false representations in the subject brochures were not statements of “opinion” or mere “puffing.” They were, in essence, representations that the DC-10 was a safe aircraft. (Hauter v. Zogarts (1975) 14 Cal.3d 104, 111-112 [120 Cal.Rptr. 681, 534 P.2d 377, 74 A.L.R.3d 1282].) In Hauter, the Supreme Court held that promises of safety are not statements of opinion—they are “representations of fact.” (Ibid.; Keith v. Buchanan (1985) 173 Cal.App.3d 13, 21-22 [220 Cal.Rptr. 392].)

Next, Douglas urges that the statements in the brochures are not actionable because they are not express warranties under Commercial Code section 2313 and, further, “they were effectively disclaimed by the parties’ contract.” The point Douglas is apparently making with respect to the fraud claims is that the integration clause of the parties’ contract bars any representations in the brochures which are at variance with their negotiated agreement.

We do not accept Douglas’s argument, because to do so would be to nullify Code of Civil Procedure section 1856, subdivision (g), the fraud exception to the parol evidence rule, which specifically allows evid