The opinion of the court was delivered by: GOETTEL
Before the Court are cross-motions for summary judgment.
The ultimate issue to be decided is whether or not the defendant, Genevieve Gillaizeau ("Gillaizeau"), owes approximately $50,000 to the plaintiff, Bank of America National Trust Savings Association (the "Bank"), in its capacity as executor of the estate of Darryl F. Zanuck ("Zanuck"). This question, in turn, depends on whether Zanuck loaned, rather than gave, Gillaizeau stock worth the same value, and, if so, whether he subsequently released her from any obligation to repay the loan. For reasons outlined below, the Court determines that Zanuck did make a loan, not a gift, and that during his lifetime he did not release her from the obligation to repay the loan.
Both parties agree that the following facts are true and not in dispute.
The Court has subject matter jurisdiction, under 28 U.S.C. § 1391 (1982), by virtue of the diversity of citizenship of the parties and the amount in controversy. The Bank is a citizen of California and Gillaizeau a citizen of New York. The exact amount in controversy is $50,987.60, exclusive of interest.
In June of 1969, Zanuck purchased in the name of Gillaizeau 1,000 shares of Twentieth Century-Fox stock at a price of $30,591.30. In August of 1969, he purchased in her name an additional 1,000 shares at a price of $20,396.30. At the time of the second purchase, Zanuck advised the Comptroller of Twentieth Century-Fox Film Corporation that the purchase was being made as a loan to Gillaizeau.
Apparently in connection with this transaction between Zanuck and Gillaizeau, they signed a document on August 28, 1969, which provides:
It is our mutual understanding and agreement on the two purchases of 20th Century-Fox stock which I made for your benefit, that when you sell the stock you will reimburse me for the cost of the stock (which I believe averages out at somewhere around $50,900), but that the profit at the time of sale will be entirely yours.
I am merely drawing this up as a memorandum in case death should occur to either one of us -- but, I trust we will live to be a hundred.
Both parties acknowledge that this document is unambiguous. Gillaizeau, however, alleges that Zanuck told her that it was needed for his "tax purposes" only. Although she denies that Zanuck ever suggested, or that she ever thought, that he might be referring to a desire to avoid paying the federal gift tax, both parties appear to agree in retrospect that this is what he must have meant if indeed he did make the statement Gillaizeau attributes to him. While not admitting or denying that he made such a statement, the Bank contends that testimony concerning the statement would be inadmissible under the parol evidence rule. The Bank claims that the August 28th document embodies the full agreement between Zanuck and Gillaizeau, and that it clearly and unambiguously shows that he loaned, not gave, her the stock. While admitting that the document by itself indicates that a loan was made, Gillaizeau argues that her parol evidence is admissible to prove that neither she nor Zanuck ever intended to enter into the agreement expressed in the document.
Whether or not such evidence is admissible is the first issue to be decided. If it is determined that the evidence is admissible, then the Court must consider a second issue -- whether any obligation to repay Zanuck was forgiven during his lifetime by means of an inter vivos release.The facts out of which this question arises are as follows.
On October 8, 1970, a little more than a year after Zanuck and Gillaizeau signed the above agreement, ...