Opinion
E073638
03-10-2022
CHINO-PACIFIC WAREHOUSE CORPORATION, Plaintiff and Appellant, v. LESLIE'S POOLMART, INC., Defendant and Respondent.
Haight Brown & Bonesteel, Krsto Mijanovic, Arezoo Jamshidi and Catherine M. Asuncion, for Plaintiff and Appellant. Everett Dorey, Seymour B. Everett III, Samantha E. Dorey, Christopher D. Lee and Alexis N. Hishmeh, for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County. No. CIVDS1610810 Donald R. Alvarez, Judge. Affirmed.
Haight Brown & Bonesteel, Krsto Mijanovic, Arezoo Jamshidi and Catherine M. Asuncion, for Plaintiff and Appellant.
Everett Dorey, Seymour B. Everett III, Samantha E. Dorey, Christopher D. Lee and Alexis N. Hishmeh, for Defendant and Respondent.
OPINION
CODRINGTON, J.
I. INTRODUCTION
Chino-Pacific Warehouse Corporation contracted with Leslie's Poolmart, Inc. to provide storage for Poolmart's chlorine products. Chino stored Poolmart's chlorine products in a warehouse whose owner later sued Chino when the owner discovered that the products damaged the warehouse. In response, Chino sued Poolmart in a separate action for breach of contract and fraud, alleging that Poolmart failed to provide Chino with all information necessary to properly store the chlorine products. A jury disagreed and rendered a complete defense verdict for Poolmart.
Chino argues the trial court prejudicially erred by instructing the jury about a disputed condition-precedent provision in the parties' contract and by precluding a "rebuttal witness" from testifying. We find no error and affirm.
II. FACTUAL AND PROCEDURAL BACKGROUND
Chino is a distribution and warehouse storage company that specializes in storing hazardous materials. Chino is subject to various local, state, and federal regulations governing the storage of hazardous materials.
Poolmart is a pool supply store. To sell chlorine, a hazardous material, Poolmart contracts with companies like Chino that specialize in the storage of hazardous materials.
Chino and Poolmart negotiated a contract for the storage of Poolmart's chlorine products. The parties went through multiple drafts of the contract before agreeing to its final terms. Their contract contains the following provision, which the parties call the "condition precedent provision": "[Poolmart] will provide [Chino] with information concerning the stored goods which is accurate, complete, and sufficient to allow [Chino] to comply with all laws and regulations concerning the storage, handling and transporting of the stored goods. [Poolmart] will indemnify and hold [Chino] harmless from all reasonable loss, cost, penalty and expense (including reasonable attorney's fees) which [Chino] pays or incurs as a result of [Poolmart] failing to fully discharge this obligation, provided [Chino] notifies [Poolmart] in writing of any deficiency in the information provided by [Poolmart]."
After executing the contract, Chino leased a warehouse from Majestic Realty Company to store Poolmart's chlorine products. Majestic inspected the warehouse a few years later and determined that Poolmart's chlorine products had caused severe corrosion throughout the warehouse. Majestic sued Chino for breaching their lease agreement, but the parties eventually settled the matter.
Chino then sued Poolmart for breach of contract and fraudulent concealment in a separate indemnity action. Chino alleged that Poolmart breached the condition-precedent provision by intentionally failing to provide Chino "accurate, complete, and sufficient" information about how to lawfully and properly store Poolmart's chlorine products. In particular, Chino claimed Poolmart knew that its chlorine products were not properly secured in storage containers and thus Poolmart knew that chlorine gas would escape and damage Majestic's warehouse.
After a seven-day trial, the jury returned a unanimous, complete defense verdict for Poolmart. The jury found, among other things, that "all the conditions that were required for [Poolmart's] performance" did not occur and Poolmart did not "intentionally fail to disclose facts that [Chino] did not know and could not reasonably have discovered."
The trial court entered judgment for Poolmart, and Chino timely appealed.
III. DISCUSSION
A. Jury Instructions
Over Chino's objections, the trial court instructed the jury with two instructions concerning the condition-precedent provision. The first, contained in CACI No. 303, stated in relevant part: "To recover damages from [Poolmart] for breach of contract, [Chino] must prove . . . [t]hat [Chino] notified [Poolmart], in writing, that there were deficiencies in the information provided by [Poolmart] for it to perform under contract."
The second, contained in CACI No. 322, provided in full: "The parties agreed in their contract that [Poolmart] would not have to indemnify [Chino] unless it was provided with written notice of deficiency in the information that it provided to [Chino]. [Poolmart] contends that this condition did not occur and that it did not have to indemnify [Chino]. To overcome this contention, [Chino] must prove that it provided [Poolmart] with written notice of deficiency in the information that it provided to [Chino]. [¶] If [Chino] does not prove that it provided [Poolmart] with written notice of deficiency in the information that it provided to [Chino], then [Poolmart] was not required to perform by contract."
Chino objected to both instructions for the same reasons. Chino argued that the instructions erroneously told the jury that the contract had a condition-precedent provision and that Chino could not prevail on its breach-of-contract claim unless it satisfied the condition-precedent. In Chino's view, the first sentence of the condition-precedent provision created an "independent obligation" for Poolmart to provide Chino with adequate information about storing its goods. Chino claimed this obligation was not conditioned on anything, including the second sentence of the provision.
In other words, Chino argued that Poolmart had to indemnify Chino if Poolmart did not provide "accurate, complete, and sufficient" information about storing its chlorine, even if Chino did not inform Poolmart in writing that the provided information was inadequate in accordance with the second sentence of the provision. Chino thus argued that it was for the jury to decide whether there was a condition-precedent in the parties' contract and whether Chino satisfied it. Chino also claimed that the issues should be "argued to the jury rather than spelling it out as an element of the claim," which would improperly "provide argument" for Poolmart.
Poolmart disagreed, arguing that the provision created a clear condition-precedent: Poolmart would be liable for damages arising from its failure to provide Chino "accurate, complete, and sufficient" storage information only if Chino informed Poolmart in writing that the information Poolmart provided was deficient.
The trial court decided to give the instructions on the ground that the parties could argue their respective interpretations about the provision to the jury. There was no further objection by Chino.
On appeal, Chino argues for the first time that "the condition [was] excused" because the condition-precedent provision is "unenforceable," "nonsensical," "unreasonable," "impossible" to perform, and "render[ed] the entire indemnity clause illusory" because the provision is "wholly inconsistent with the intent of the indemnity provision." Chino also asserts the trial court, not the jury, should have decided whether the provision created an enforceable condition-precedent. Because of these alleged problems with the condition-precedent provision, Chino contends the trial court erred by instructing the jury with CACI Nos. 303 and 322.
Chino forfeited these arguments by failing to raise them in the trial court, so we decline to address them. (See Perez v. Grajales (2008) 169 Cal.App.4th 580, 591-592 [arguments raised for the first time on appeal are forfeited]; People v. Seumanu (2015) 61 Cal.4th 1293, 1320 [failure to object to a jury instruction on a specific ground argued on appeal forfeits the argument].) Chino never argued below that the condition-precedent provision was unenforceable for any reason or that the trial court had to decide in the first instance whether it was enforceable. When objecting to CACI Nos. 303 and 322, Chino's only argument was that Poolmart had an "independent obligation," which stood "on its own" and was "not conditioned on anything," to provide Chino with "accurate, complete, and sufficient" information on how to safely store Poolmart's products. We therefore address only this argument.
We review de novo whether jury instructions accurately state the law. (Douglas v. Fidelity Nat'l Ins. Co. (2014) 229 Cal.App.4th 392, 407.) The plain language of the condition-precedent provision does not support Chino's interpretation of it.
The provision states that (1) "[Poolmart] will provide [Chino] with information concerning the stored goods which is accurate, complete, and sufficient to allow [Chino] to comply with all laws and regulations concerning the storage, handling and transporting of the stored goods," (2) "[Poolmart] will indemnify and hold [Chino] harmless from all reasonable loss, cost, penalty and expense (including reasonable attorney's fees) which [Chino] pays or incurs as a result of [Poolmart] failing to fully discharge this obligation," (3) "provided [Chino] notifies [Poolmart] in writing of any deficiency in the information provided by [Poolmart]." According to this straightforward language, Poolmart agreed (a) to provide Chino accurate, complete, and sufficient information about storing its products and (b) would indemnify Chino for if its failure to perform "this obligation" (to provide adequate information to Chino) damaged Chino, (c) "provided"-only if-Chino notified Poolmart in writing that the information it provided was deficient. (See https://www.merriam-webster.com/dictionary/provided ["on the condition that"].)
CACI Nos. 302 and 322 accurately reflected the parties' unambiguous agreement. They did not improperly "provide argument" for Poolmart, as Chino contends. CACI No. 302 properly told the jury that, to succeed on its breach-of-contract claim, Chino had to prove that it "notified [Poolmart], in writing, that there were deficiencies in the information provided by [Poolmart] for it to perform under contract." CACI No. 322 similarly explained that "[t]he parties agreed in their contract that [Poolmart] would not have to indemnify [Chino] unless it was provided with written notice of deficiency in the information that it provided to [Chino]." Consistent with Poolmart's correct interpretation of the condition-precedent provision, CACI No. 322 went on: "[Poolmart] contends that this condition did not occur and that it did not have to indemnify [Chino]," and correctly explained that "[i]f [Chino] does not prove that it provided [Poolmart] with written notice of deficiency in the information that it provided to [Chino], then [Poolmart] was not required to perform by contract." Because CACI Nos. 302 and 322 accurately reflected the condition-precedent provision, the trial court did not err in giving those instructions.
B. Excluded Witness
A key issue to be decided at trial was whether Poolmart satisfied its contractual obligation to provide Chino with "accurate, complete, and sufficient" information about the storage of its chlorine products. To support its position that Poolmart did not do so, Chino called Poolmart employee Blake Geiger. Geiger testified about the information he provided Chino about the storage of Poolmart's chlorine products. Among other things, he testified that he gave a tour of Poolmart's storage facility to Chino employee Jim Marcoly. Geiger claimed that, while giving the tour, he pointed out rusting issues associated with storing chlorine and claimed he had already given Marcoly and Chino employee Mark Burks information about how to properly store it.
Marcoly disputed Geiger's testimony at trial. Marcoly testified that he met with Geiger along with Chino employee Tony Gurolla around the time Geiger claimed to have given the tour, but that Geiger did not discuss proper chlorine storage during the meeting.
About a week after Geiger testified, Chino told the trial court that it wanted to call Gurolla as a witness. Chino explained that Gurolla's testimony would rebut Geiger's testimony that he discussed chlorine storage during a tour of Poolmart's storage facility while confirming Marcoly's testimony that Geiger did not discuss the issue during their meeting. Poolmart objected on several grounds, including that Chino never identified Gurolla as a potential witness during discovery, did not disclose him as a witness on the parties' pretrial witness list, and his testimony would be cumulative of Marcoly's testimony. The trial court agreed with Poolmart and did not allow Gurolla to testify.
The trial court has wide discretion to determine the scope of rebuttal, and we will not reverse its ruling admitting or excluding rebuttal evidence absent a clear abuse of discretion. (Diamond Springs Lime Co. v. American River Constructors (1971) 16 Cal.App.3d 581, 604.) Chino contends the trial court erred in excluding Gurolla's testimony because he was a "rebuttal" witness who did not need to be disclosed before trial. We disagree.
First, the limited authority Chino relies on does not support its position that it did not have to disclose Gurolla. Chino first relies on Code of Civil Procedure section 2034.310, subdivision (b), which pertains to expert witnesses. (See Green v. Healthcare Services, Inc. (2021) 68 Cal.App.5th 407.) Because Gurolla would have not have testified as an expert, the statute is inapplicable.
Code of Civil Procedure section 2034.310, subdivision (b) provides that "[a] party may call as a witness at trial an expert not previously designated by that party if . . . [t]hat expert is called as a witness to impeach the testimony of an expert witness offered by any other party at the trial."
The only case Chino cites, Rangel v. Graybar Electric Co. (1977) 70 Cal.App.3d 943, also does not apply here. That case involved the trial court's exclusion of a rebuttal expert witness at trial as a discovery sanction. (Id. at p. 949.) It was undisputed that the plaintiff had not contacted the expert before trial, did not intend to call him as a witness before trial, and did not want to retain him as an expert witness "'until it became necessary for rebuttal'" after the defendant presented its case at trial. (Ibid.) The trial court granted the defendant's motion to exclude the expert because the plaintiff did not identify him in her interrogatory responses. (Id. at p. 948.)
Rangel does not apply here for at least three reasons. First, the Rangel court was not "consider[ing] a situation," like the one presented here, "in which the name of a person to be used as a rebuttal witness is omitted from a witness list on the ground that only those witnesses to be used in presentation of the case in chief need be listed." (Rangel v. Graybar Electric Co, supra, 70 Cal.App.3d at p. 949.) Second, Rangel predates Code of Civil Procedure section 2034.310, subdivision (b), enacted in 2005, which expressly provides that rebuttal expert witnesses need not be designated before trial. Third, it was undisputed that the plaintiff in Rangel did not willfully conceal "the identity of an intended witness," but rather did not think the expert's testimony was necessary until the defense presented its case-in-chief.
The trial court here did not preclude Gurolla from testifying at Poolmart's urging solely as a sanction for Chino's inadequate discovery responses made long before trial. Instead, the trial court excluded Gurolla, whom Chino identified as a percipient witness for the first time more than a week after trial had begun, because he "was not disclosed, was never identified, shows up at the 11th hour, never been deposed, never showed up at anything . . . ." Excluding his testimony was well within the trial court's broad discretion to ensure a fair trial for Poolmart. (See Castaline v. City of Los Angeles (1975) 47 Cal.App.3d 580, 592 [trial court properly excluded trial testimony from "surprise" witness "to insure that all parties receive a fair trial"]; Reales Investment, LLC v. Johnson (2020) 55 Cal.App.5th 463, 469-475.)
Chino provides no authority that suggests otherwise. Chino first points to Code of Civil Procedure section 607, subdivision (6), but that provision says only that the presentation of evidence at trial should conclude with rebuttal evidence. It provides no guidance on whether the trial court properly excluded Gurolla's testimony.
Chino then cites three inapplicable cases. In re Marriage of Carlsson (2008) 163 Cal.App.4th 281, involved "an unusual and perhaps unprecedented fact situation" where a trial judge abruptly ended trial in the middle of a party's case-in-chief. Rucker v. Workers' Compensation Appeals Bd. (2000) 82 Cal.App.4th 151, dealt with an administrative law judge resolving an issue neither party raised without allowing either of them to offer rebuttal evidence. And Chino only quotes Kelly v. New West Federal Savings (1996) 49 Cal.App.4th 659, for the general proposition that "[d]enying a party the right to testify or to offer evidence is reversible per se," but that did not occur her. None of these cases provides guidance on whether the trial court here properly excluded Gurolla for Chino's failure to disclose him as a trial witness.
C. Sanctions
In its respondent's brief, Poolmart asks us to sanction Chino for taking a frivolous appeal. A request for appellate sanctions requires a separate motion with a supporting declaration. (Cal. Rules of Court, rule 8.276(b); FEI Enterprises, Inc. v. Yoon (2011) 194 Cal.App.4th 790, 807.) Because Poolmart did not comply with that requirement, we decline to consider imposing sanctions on Chino.
IV. DISPOSITION
The judgment is affirmed. Poolmart may recover its costs on appeal.
We concur: RAMIREZ P. J., MILLER J.