Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Fresno County Super. Ct. No. 04CECG02821. Alan M. Simpson, Judge.
Sagaser, Jones & Hahesy and Scott D. Laird for Defendant, Cross-complainant and Appellant.
Wild, Carter & Tipton and Lenden F. Webb for Plaintiff, Cross-defendant and Respondent.
OPINION
DAWSON, J.
A raisin packer sued an organic food wholesaler for failing to pay for organic raisins delivered and accepted by the wholesaler. The wholesaler filed a cross-complaint alleging the raisin packer repudiated their contracts by failing to deliver raisins after the wholesaler made written demands for performance. Based on this allegation, the wholesaler argues California Uniform Commercial Code section 2609 authorized it to withhold payment as an offset against market price damages and potential cover costs resulting from the packer’s failure to perform.
After a bench trial, the trial court ruled in favor of the packer. No statement of decision was requested or issued. On appeal, the wholesaler contends that the undisputed evidence establishes that the packer repudiated the contract and, consequently, was liable for damages. The packer argues this court must conclude that (1) the trial court impliedly found that the wholesaler breached the contracts first and (2) the implied finding is supported by substantial evidence.
The parties presented different interpretations of the conflicting evidence contained in the record. This case illustrates how an ongoing relationship between merchants can deteriorate when they do not share the same understanding of their respective obligations under their contracts and their mutual misunderstandings compound themselves over time.
The evidence is such that the trial court could have resolved the cross-complaint in favor of either party. Under the substantial evidence standard of review and the doctrine of implied findings of fact, we must uphold the trial court’s determination that the wholesaler did not prove its claims. Accordingly, the judgment will be affirmed.
FACTS AND PROCEEDINGS
Appellant Global Organics, Ltd. (Global), is a Delaware corporation with its principal place of business in Arlington, Massachusetts. Global acts as a wholesaler in the business of importing and exporting organic commodities. Dave Alexander is the chief executive officer of Global.
Respondent Marvin Horne does business as Raisin Valley Farms (RV Farms) in Kerman, California. He is engaged in the business of farming and packing organic fruit. He admits that he was a merchant for purposes of the sale of organic Thompson Seedless raisins to Global.
Pacific/Atlantic Crop Exchange (PACE) of Burlingame, California acted as the broker that arranged the contracts in which Global agreed to purchase organic raisins from RV Farms. RV Farms’ answer to Global’s verified cross-complaint admitted that Horne and “[RV Farms]’ sales agent, Steve Clendenin of [PACE,] acted as agents of [RV Farms].”
RV Farms and Global entered into four contracts in which RV Farms agreed to supply organic raisins to Global. The four contracts covered a total of 13 truck loads of raisins. Typically, a truck load contains 1,400 cases that weigh 30 pounds each, or a total of 42,000 pounds. The terms of each of the contracts are described in more detail later in this opinion.
To understand the contracts and transactions, one must be familiar with the following acronyms.
“TS” means Thompson Seedless, a type of grape used to make raisins.
“FOB” means free on board at the specified location. (Cal. U. Com. Code, § 2319, subd. (1)(a) [defining FOB place of shipment].)
“NOP” refers to the National Organic Program. The United States Department of Agriculture (USDA) regulates the certification of organically grown food through the NOP. (7 U.S.C. §§ 6501-6522.) USDA approves certifying organizations under the NOP and, once approved, those organizations act as agents for the USDA in certifying farmers that produce organic food. Food cannot be labeled organic in the United States unless it is certified by an NOP certifying agent. There are approximately 56 certifying agents approved under the NOP.
“CCOF” refers to California Certified Organic Farmers, an organization that is a certifying agent under the NOP. CCOF is one of approximately 11 certifying agents in California that are qualified under the NOP.
The record in this case contains a certificate issued by CCOF. The certificate states M-C Farms, Inc. of Kerman, California was certified according to CCOF’s International Federation of Organic Agricultural Movements accredited program during the period November 12, 2003, to April 30, 2004. The certificate identifies the location of the parcel, the parcel’s size (57 acres), and the 2003 crop (table grapes). A problem arose with this certificate because it covered grapes and not raisins. Oil is used to control diseases, insects and mites in grapevines, as well as to control moisture loss in raisins, and the oil also must be certified as organic.
“IFOAM” refers to the International Federation of Organic Agricultural Movements. (See [as of Nov. 21, 2007].) CCOF is a member of IFOAM. (Ibid.)
During the course of the business dealings between Global and RV Farms, various problems arose. The first load delivered included lizard parts and most of the cases were rejected by Global. (See part II.H.2, post.) The next three loads went smoothly—RV Farms delivered the raisins and received payment from Global. (See part II.F.2.a. & b. and part II.G.2.a., post.) Subsequent loads had problems. In particular, certification problems occurred with loads that Global intended to send to customers in the European Union because the certification requirements are different from the certification requirements imposed in the United States under the NOP.
A lesser problem arose in connection with the last load delivered to Global. It contained two lots and the European customer that received it complained that one lot was significantly lighter in color. (See part II.G.2.b., post.) Global did not pay the invoice on this last load of raisins based on its theory that the funds were used to offset the damages resulting from RV Farms’ failure to deliver other loads required by the contracts.
Global contends that RV Farms breached the contracts so it could take advantage of a significant jump in the market price of raisins that occurred in June 2004. The jump in market price also meant it was more expensive for Global to obtain raisins to replace the contracts that RV Farms did not fulfill. With respect to loads for which it did not obtain cover, Global contends it suffered damages calculated on the difference between the contract price and the market price.
Global’s nonpayment for the last load caused RV Farms to file a complaint for breach of contract in September 2004. The complaint alleged Global was liable for $27,959.40, which was the total price listed on the invoice for that load.
Global answered the complaint with a general denial and 48 affirmative defenses. Global also filed a verified cross-complaint that contained 15 counts, including a count for breach of contract that alleged RV Farms failed to deliver the amount of raisins specified in the contracts and, as a result, Global was forced to cover on the open market at a higher price.
A four-day court trial was held in January 2006. Neither party requested a statement of decision. On April 4, 2006, the trial court filed a written decision in which it held (1) Global liable in the amount of $27,959.40 for the unpaid raisins and (2) Global would take nothing by way of its cross-complaint.
A hearing was held on April 18, 2006, in which counsel for Global asked for a clarification of the trial court’s decision. The trial court provided a short oral explanation of its conclusion that Global had not proven its cross-complaint.
Judgment awarding RV Farms $27,959.40 plus interest of $4,128.80 was filed on April 24, 2006. Global filed a notice of appeal on June 21, 2006.
DISCUSSION
I. Standard of Review
Generally, appellate courts independently review questions of law and apply the substantial evidence standard to a superior court’s findings on questions of fact. (See Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 801 [questions of law are subject to independent review]; Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429 [substantial evidence rule].)
This case was tried to the court and neither party requested a statement of decision from the trial court. Consequently, all intendments favor the ruling below, and this court must infer every finding of fact supporting the judgment so long as that finding is supported by substantial evidence. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134.)
The substantial evidence standard for review has been described by our Supreme Court as follows:
“Where findings of fact are challenged on a civil appeal, we are bound by the ‘elementary, but often overlooked principle of law, that … the power of an appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted,’ to support the findings below. (Crawford v. Southern Pacific Co.[, supra,] 3 Cal.2d 427, 429.) We must therefore view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor in accordance with the standard of review so long adhered to by this court.” (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660.)
Evidence is “substantial” for purposes of this standard of review if it is “of ‘ponderable legal significance,’ ‘reasonable in nature, credible, and of solid value’ .… [Citation.]” (Grappo v. Coventry Financial Corp. (1991) 235 Cal.App.3d 496, 507.)
II. Who Breached the Contracts First?
The parties disagree on many points. This opinion will not discuss many of these points because Global cannot prevail in this appeal unless it prevails on the fundamental question of which party breached the contracts first.
A. Contentions of the Parties
Global contends that RV Farms’ own evidence establishes that “the Trial Court abused its discretion by not finding that [RV Farms] was in material, primary first breach and that GLOBAL was eligible for damages as alleged in its cross-complaint for market price and cover damages.” Global contends RV Farms breached the contracts by sending an e-mail on June 21, 2004, that repudiated the remainder of the installment contracts without sending Global a prior written demand for performance in accordance with California Uniform Commercial Code section 2609.
RV Farms, in turn, contends that Global breached the contract before June 21, 2004, by not submitting purchase orders in accordance with the schedules established by the contracts. RV Farms argues that Global’s actual breach (as opposed to an anticipatory breach) meant that RV Farms had no legal obligation to send written demands for performance to Global.
Global parries as follows:
“[RV Farms] is quick to point out that two loads of raisins (42,000 lbs each) were not ordered as scheduled in the months preceding the June 21, 2004 repudiation date. The answer is crystal clear. First, [RV Farms’] own rule of ‘one PO at a time’ prevented the submittal of any additional POs. Additionally, [RV Farms] apologized numerous times in writing for their certification delays, yet [RV Farms] left buyer GLOBAL with the awkward task of researching and procuring the seller’s organic raisin certification on their behalf.… Finally, GLOBAL was logically reluctant to submit POs at times where [RV Farms] presented ongoing certification issues and delays.” (Fns. omitted.)
B. Applicable Law
In essence, the parties disagree over whether Global established all of the elements of its breach of contract claim. It is well established that the elements to a cause of action for damages for breach of contract are “(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.)
C. Issues Presented for Review
Here, the primary dispute concerns the first and second elements of Global’s breach of contract claim in its cross-complaint. With respect to the first element, the parties disagree over the terms of the contracts—specifically, what contractual obligations were imposed on Global. As to the second element, the parties dispute whether Global performed its contractual obligations and further dispute whether Global was excused from performing those obligations.
D. Global’s Obligation to Submit Orders
The first issue is whether Global had a contractual obligation to submit purchase orders for the loads of raisins covered by its contracts with RV Farms.
The documents that contain the express terms of the contracts do not state that Global, the buyer, was required to submit purchase orders before RV Farms was required to make a load of raisins available to Global at the place specified in the contract for delivery. Nevertheless, the record contains sufficient evidence from which the trial court reasonably could infer that Global was required to place purchase orders. (See Cal. U. Com. Code, § 2202, subd. (b) [terms of writing may be explained or supplemented by “evidence of consistent additional terms”].)
Marvin Horne testified about the role of the purchase order in the process that RV Farms follows to get a load ready for pickup by the buyer. When he receives confirmation of the order from the broker, he calls the farmer to arrange for trucking to bring the raisins to the packing facility. When the product is delivered to the packing facility, it is inspected, precleaned, and then goes through the packing process. When the ordered product is organic, its packing must be coordinated with the packing of conventional product to avoid the conventional product contaminating the organic product. After the product is packed, RV Farms arranges transportation to cold storage in Fresno where it is freeze blasted to eliminate the possibility of infestation. It could take from seven to 14 days to complete the process—that is, from receipt of the purchase order until the product is ready for pickup at cold storage.
Horne also testified that RV Farms does not pack product and maintain it in cold storage prior to receiving a purchase order. Because of the extra expense and risk associated with that approach, the price is higher for product that is ready for pickup at the time a purchase order is received.
Steven Clendenin of PACE testified that generally sellers under a multiple load contract would only pack the product and ready it for shipment or pickup after receiving a purchase order, either oral or written, under the contract.
Based on the foregoing testimony, the trial court reasonably could have found that (1) the contracts between Global and RV Farms required Global to submit purchase orders, and (2) RV Farms’ receipt of a purchase order triggered its obligation to pack the ordered raisins and make them available for pickup by Global. As a result, under the doctrine of implied findings, we must conclude that the trial court made such a finding because such a finding favors the judgment entered and is supported by substantial evidence.
The next questions we will analyze concern Global’s obligations with respect to the timing of its purchase orders and Global’s excuses for not submitting purchase orders. For organizational purposes, these questions will be addressed on a contract-by-contract basis.
E. Contract 402-124x
1. Terms of the contract
On February 6, 2004, PACE sent a confirmation of sale/purchase to RV Farms and Global for a contract it identified with the confirmation number 402-124x. PACE’s confirmation listed quantity at 4,200. It is undisputed that this quantity referred to the number of cases. The unit size, meaning the weight of each case, stated in the confirmation was 30 pounds. The total weight stated was 126,000 pounds. The confirmation identified the product as “RAISINS-ORGANIC T.S.-LITE OIL” and the price as 73 cents per pound. The payment terms were “NET 30 DAYS” and Global, as buyer, was to arrange for freight. The remarks section of the confirmation stated: “PRICE IS FOB SELLER’S FRESNO, CA WAREHOUSE FOR 3 TRUCKLOAD PULLS 1) FEBRUARY, 2004. 2) MAY, 2004 AND 3) JUNE, 2004.”
A document generated by RV Farms, titled “COTRACT [sic] OF SALE,” and dated February 16, 2004, restated those terms. The “Particulars” section of the February 16, 2004, document stated “30LB CASES ORGANIC TS RAISINS – W/OIL” and “DRAW IN THREE INCREMENTS OF 1400 30LB CASES IN FEBRUARY, MAY & JUNE 2004.” The exact role of this and similar documents generated by RV Farms in the formation of the terms of the contract is not clear. It appears that Horne faxed the document to PACE, did not send it to Global, and did not know whether Clendenin sent it to Global. In any event, for purposes of this opinion, we will assume that this document generated by RV Farms (and similar documents relating to other orders) did not alter the terms of the contract because they were not communicated to Global.
2. Global’s obligation and failure to perform
Global entered into contract 402-124x to fulfill orders that it had received from a particular customer in Europe. The times for the draws or pulls specified in contract 402-124x were scheduled by Global to coordinate with the timing requirements specified in that customer’s orders. Clendenin testified that he specifically discussed the delivery times when he confirmed contract 402-124x with Global.
Clendenin testified that Global did not make any purchase orders under contract 402-124x. He also testified that he contacted Global for each of the three months specified about submitting purchase orders, saying that there was a contract with a date on it and there needed to be a purchase order. Although Dave Alexander of Global testified he did not recall any telephone calls from Clendenin at PACE saying that purchase orders were needed under contract 402-124x, we must resolve any conflict between his testimony and Clendenin’s in favor of the judgment. The record is consistent with the testimony in that it contains no evidence that Global submitted an oral or written purchase order that (1) referenced contract 402-124x or (2) used the 73 cents per pound price that was unique to that contract.
Accordingly, we must conclude that the trial court found that (1) Global was required by contract 402-124x to submit purchase orders for one truckload of raisins in each of the three months stated, and (2) Global failed to perform this contractual obligation.
Next, we consider whether Global had a good reason for not submitting purchase orders as required by contract 402-124x.
3. Global’s excuses for not submitting purchase orders
a. The first installment
During trial, Dave Alexander testified that the first load of organic raisins intended for the European customer that had prompted Global to enter contract 402-124x was ordered under an earlier contract between Global and RV Farms. Global placed that order on March 12, 2004, as purchase order 10433.
Thus, the evidence shows that the reason Global did not submit a purchase order for the first installment under contract 402-124x was its own mistake. As a court of review, we must infer that the trial court found Global’s mistake did not justify or excuse its failure to submit a purchase order for the first installment required by contract 402-124x.
b. Certification problems
With respect to purchase orders for the last two truckloads scheduled under contract 402-124x, Alexander testified that “there was absolutely no point in issuing anymore purchase orders for this particular customer since we didn’t know whether we were going to get fruit that was certified to go to Europe or not.”
Various certifications are needed to export organic raisins to the European Union, and those certifications are more particular than the ones that are acceptable for shipments sent to Canada or elsewhere in the United States. The certification documents provided by RV Farms with the load of raisins that filled Global’s March 11, 2004, purchase order were not adequate for shipping to the European Union, and it took a significant amount of time and effort to resolve the issues and get adequate documentation. The certification issues were not resolved until June 17, 2004.
Global’s concern about the certification problems might have provided a legitimate reason for not submitting orders under contract 402-124x if the terms of that contract had obligated RV Farms to present certification necessary for shipment to the European Union. That contract, however, did not impose any such obligation on RV Farms. In other words, the trial court reasonably could have found that (1) contract 402-124x only required that RV Farms provide NOP certification for the organic raisins purchased and (2) Global was not entitled contractually to demand a higher or more specific level of certification. As a result, the trial court reasonably could have determined that the certification problems did not justify the failure to submit purchase orders under contract 402-124x.
Global also asserted it was precluded from submitting a timely purchase order for the last installment sale (the June truckload) because of the repudiation RV Farms set forth in its June 21, 2004, e-mail. We must reject this argument on appeal, however, because the trial court reasonably could have found that Global’s breach as to the first two installments of contract 402-124x substantially impaired the value of the whole contract and, thus, operated as a breach of the whole contract. (Cal. U. Com. Code, § 2612, subd. (3); cf. Schreidel v. America Honda Motor Co. (1995) 34 Cal.App.4th 1242, 1250-1251 [under California’s lemon law, substantial impairment of value is a question of fact].) We must infer the trial court made this finding because it is supported by substantial evidence—namely, the testimony of Horne about (1) the value of a multiple load contract to the farmer and the packer, (2) the price concessions granted a purchaser that commits to more than one load of raisins in a contract, and (3) the disruption that occurs when purchase orders are not received on the schedule specified in the contract.
c. Policy of one purchase order at a time
Global argued in its trial brief that RV Farms had a rule that, with one specific exception, no purchase order could be submitted until the previous purchase order had been paid. Global argues that it submitted purchase orders consistent with this rule and, therefore, any failure to submit purchase orders in accordance with a contract’s schedule was excused.
We reject this argument because the trial court reasonably could have found that this rule or policy of RV Farms was not a term contained in the contracts between Global and RV Farms. During the examination of Horne, portions of his deposition were read into the record. In that deposition testimony, he indicated that he never communicated the rule to Global or to Clendenin at PACE. Because the rule was never communicated, it could not be a term that the parties had agreed to make a part of their contract. (See Alexander v. Codemasters Group Limited (2002) 104 Cal.App.4th 129, 150 [outward manifestations of assent, not unexpressed subjective intent, are the basis on which a contract is formed].)
Furthermore, if Global agreed to submit an order based on a particular schedule and also agreed to abide by a one-order-until-paid rule, then the trial court could have harmonized those two provisions of the contract by concluding that Global impliedly agreed to pay for its orders soon enough that it could submit timely orders in accordance with the schedule specified in the contracts.
In summary, the policy that RV Farms had about not letting one customer have more than one unpaid shipment outstanding at a time does not provide Global with an excuse for not submitting purchase orders in accordance with the terms of contract 402-124x.
F. Contract 311-025x
1. Terms of the contract
On November 3, 2003, PACE sent a confirmation of sale/purchase to RV Farms and Global for a contract PACE identified with a confirmation number of 311-025x. PACE’s confirmation listed (1) quantity at 9,800, (2) unit size at 30 pounds, and (3) total weight at 294,000 pounds. The confirmation stated the product was “RAISINS-NOP ORGANIC T.S. W/ ORGANIC OIL[,] FRUIT MUST BE GRADE B OR BETTER” and the price was 69 cents per pound. The payment terms were “NET 30 DAYS” and Global, as buyer, was to arrange for freight. The remarks section of the confirmation stated: “PRICE IS FOB SELLER’S FRESNO, CA WAREHOUSE FOR EQUAL DRAWS THROUGH END SEPTEMBER 2004.”
RV Farms generated a document titled “COTRACT [sic] OF SALE,” dated November 4, 2003. The “Particulars” section of this document stated “30 LB CASES ORGANIC TS RAISINS – ORGANIC OIL – GRADE B OR BETTER” and “DELIVERY IN TRUCK-LOAD LOTS FROM NOVEMBER 2003 THRU SEPTEMBER 2004.”
The trial court reasonably could have found that contract 311-025x meant the parties agreed that Global would place seven orders (that is, draw on the contract) for one truck load each (1,400 cases per truck load) at regular intervals over the life of the contract. If the seven loads were spread out evenly from November 2003 through September 2004, then a purchase order would have been due about every month and a half.
2. Global’s orders
a. First order—verbal
On November 11, 2003, Clendenin of PACE generated a document titled “RELEASING/STAGING” that indicated he had received a verbal purchase order from Alexander for one truck load of organic Thompson Seedless raisins at 69 cents per pound. The document listed the existing contract confirmation number as 311-025x.
RV Farms packed the 1,400 cases of raisins ordered and sent Global an invoice dated November 20, 2003. Global paid the $29,080 invoice with a check dated January 8, 2004.
b. Second order—purchase order 10412
On January 28, 2004, Global created a purchase order numbered 10412 for 1,400 cases of organic Thompson Seedless raisins at the price of 69 cents per pound. RV Farms sent a confirmation stating that the packed truck load of raisins would be ready for shipment on February 23, 2004.
RV Farms sent Global a March 10, 2004, invoice for the raisins. Global paid the $29,080 invoice with a check dated April 8, 2004.
c. Third order—purchase order 10484
On June 8, 2004, Global created a purchase order numbered 10484 for 1,400 cases of organic Thompson Seedless raisins at the price of 69 cents per pound. Global’s purchase order 10484 did not reference contract 311-025x, but that reference is implicit in the price of 69 cents per pound because that price was unique to that contract.
When a farmer delivered raisins to RV Farms to pack for purchase order 10484, RV Farms discovered that the raisins were infested and had to be fumigated. The fumigation caused the raisins to lose their organic status. As a result, RV Farms sent an e-mail to Clendenin that stated:
“I [am] unable to supply Global with additional organic raisins. [¶] The additional load I had for Global will not pass micro and is failing fruit. I am packing the load for Europe 6-22-04 and will put it in US Cold storage Wednesday 6-23-04. Next year, I want a formal contract with set dates for delivery. It must be signed by each of us. If Global fails to take a load they will be liable. If I fail to deliver, I will be liable.”
RV Farms made no further attempts to fill purchase order 10484.
3. Global’s failure to perform contract 311-025x
RV Farms contends that it is not liable for its failure to fulfill purchase order 10484 because Global breached the contract earlier by not submitting purchase orders on schedule.
We conclude that the trial court reasonably could have found that Global breached contract 311-025x by failing to submit any purchase orders under that contract in February, March, April and May. The gap between purchase order 10412 (Jan. 28, 2004) and purchase order 10484 (June 8, 2004) did not comply with the agreement to draw seven truck loads at regular intervals during the life of the contract.
Furthermore, the failure to submit purchase orders during that period was not justified by the problems in obtaining proper certification for loads intended for the European Union. Nothing in the terms of contract 311-025x stated RV Farms was responsible for providing anything more than NOP certification for the raisins.
Accordingly, we conclude that the trial court reasonably could have found that Global did not perform its obligations under contract 311-025x and was not excused from performing those obligations. Thus, Global did not establish the second element of its breach of contract cause of action of its cross-complaint with respect to contract 311-025x. (See Careau & Co. v. Security Pacific Business Credit, Inc., supra, 222 Cal.App.3d at p. 1388 [second element is “plaintiff’s performance or excuse for nonperformance”].)
G. Contract 311-194x
1. Terms of the contract
On November 11, 2003, PACE sent a confirmation of sale/purchase to RV Farms and Global for a contract that PACE identified with the confirmation number 311-194x. PACE’s confirmation listed (1) quantity at 2,800, (2) unit size at 30 pounds, and (3) total weight at 84,000 pounds. The confirmation identified the product as “RAISINS-CCOF ORGANIC FOR EXPORT LITE ORGANIC OIL-GRADE B OR BETTER FRUIT” and the price as 68 cents per pound. The payment terms were “NET 30 DAYS” and Global, as buyer, was to arrange for freight. The remarks section of the confirmation stated: “PRICE IS FOB SELLER’S FRESNO, CA COLD STORAGE FOR CUSTOMER PICK UP AS NEEDED THROUGH AUGUST 2004.”
The terms of contract 311-194x are unique in that it is the only contract that required the raisins to be certified by CCOF. (See fn. 1, ante.)
RV Farms generated a document titled “COTRACT [sic] OF SALE,” dated November 17, 2003. The “Particulars” section of that document stated “30 LB CASES TS SELECT RAISINS –OILED – CCOF CERTIFIED.” The section also stated “TO BE SHIPPED PRIOR TO APRIL 1, 2004.” This April date does not coincide with the August date specified in PACE’s confirmation. The resulting conflict over the time period covered by the contract, though a point of disagreement between the parties, is not relevant to our analysis of this appeal.
2. Two installments
We recognize there are many points of contention and conflicting views of the evidence regarding what happened under contract 311-194x. The conflicts are such that the trial court could have found RV Farms performed or breached contract 311-194x, and either finding would have been affirmed under the substantial evidence rule of appellate review.
a. The first installment, purchase order 10411
The trial court reasonably could have found that Global submitted purchase order 10411 (Jan. 28, 2004) under contract 311-194x, not contract 310-439 as Global contends. There were no problems with the delivery made under purchase order 10411. As a result, Global paid RV Farms’ invoice for the load of raisins by check dated March 18, 2004. Under these facts, the trial court reasonably could have found RV Farms adequately performed the first of the two installments required by contract 311-194x.
Contracts 311-194x and 310-439 cannot be distinguished from one another by price. Both were priced at 68 cents per pound.
b. The second installment, purchase order 10433
The trial court reasonably could have found that Global’s purchase order 10433 (Mar. 11, 2004) was the second purchase order submitted under contract 311-194x.
On March 12, 2004, Clendenin generated a document titled “RELEASING/STAGING” that indicated he had received purchase order 10433 for 1,470 cases weighing 12.5 kilograms (27.56 pounds) and the price was 68 cents per pound. The document listed the existing contract confirmation number as 311-194x. Because the weight of each case was specified in kilograms, it may be inferred that the cases were destined for the European Union.
There were problems obtaining the certification necessary for the raisins covered by purchase order 10433 to be shipped to the European Union. The first load shipped to fulfill this order was pulled off the pier in Oakland and returned to RV Farms because it was not CCOF certified. This occurred in early April 2004. Some of the certification problems and the resulting delays may have been caused by RV Farms’ failure to perform in accordance with the contract. By June 17, 2004, the certification issues had been resolved and Global resubmitted purchase order 10433. Subsequently, Global received the load of raisins. It delivered those raisins to a customer, and received payment from the customer. We infer that the trial court found the raisins conformed to the terms of contract 311-194x despite concerns expressed by Global’s customer about variation in color between two lots and an excessive amount of capstems in one of the lots. Thus, the trial court may have determined that there was no basis for awarding lost profits on that particular shipment because a shipment that conformed to the quality requirements of contract 311-194x was received by Global and paid for by Global’s customer.
Raisin capstems are the “small woody stems exceeding 1/8-inch in length which attach the raisins to the branches of the bunch.” (7 C.F.R. § 52.1844(a) (2007).)
Furthermore, it appears that the trial court determined that Global failed to prove any damages resulting from delays or other alleged breaches by RV Farms. At a hearing on April 18, 2006, the trial court stated:
This assumes for the sake of argument that the delays amounted to a breach by RV Farms.
“I was not convinced by the testimony, to the extent that there was evidence offered of what your client allegedly lost in goodwill or in other damages as a result of what was alleged to have been the problem raised by the Cross-Complaint.”
The trial court’s statement implies, among other things, that the trial court found (1) Global did not lose any profit on that particular shipment and (2) the certification and other problems were not shown to be the cause of losses of other business. The evidence referenced by Global is not so overwhelming that the trial court had no choice but to be convinced by it. Thus, we conclude that the trial court did not commit reversible error in determining that Global failed to prove all of the elements of its breach of contract claim concerning contract 311-194x.
For instance, the trial court may have found that the loss of other business was caused by Global’s failure to set forth in sufficient detail the type of certification documents it needed on loads of raisins it intended to sell to European customers. The way the contracts were written, the problems with getting certification acceptable for European delivery only affected the last shipment under contract 311-194x.
H. Contract 310-439
1. Terms of the contract
On October 20, 2003, PACE sent a confirmation of sale/purchase to RV Farms and Global for a contract that PACE identified with the confirmation number 310-439. The confirmation listed (1) quantity at 1,400, (2) unit size at 30 pounds, (3) total weight at 42,000 pounds, and (4) price at 68 cents per pound. The confirmation stated the product was “RAISINS-ORGANIC CALIFORNIA TS WITH LITE ORGANIC SUNFLOWER OIL [¶] *SALE IS SUBJECT C OF A AND 1 CASE SAMPLE APPROVAL.” The payment terms were “NET 30 DAYS” and Global, as buyer, was to arrange for freight. The remarks section of the confirmation stated: “PRICE IS FOB SELLER’S FRESNO, CA PLANT FOR PROMPT SHIPMENT.”
RV Farms generated a document titled “CONFIRMATION OF SALE,” dated October 21, 2003. The “Particulars” section of this document stated “30 LB CASES ORGANIC TS RAISINS –ORGANIC OIL [¶] READY FOR PICK-UP ON 10-23-03.”
2. Shipment and lizard problems
On October 28, 2003, Global sent RV Farms and PACE a document titled “WAREHOUSE Pick-Up # RVF103003” that requested RV Farms to prepare an order for 42,000 pounds of organic Thompson Seedless raisins for pick-up on Thursday, October 30, 2003. On October 30, 2003, RV Farms generated an invoice for 1,400 cases of raisins at $20.40 (68 cents per pound) and identified those raisins as grower organic lot No. 117.
Three weeks into November, Global submitted a quality complaint for the shipment of raisins. Global stated that “4 small dead lizards (2-3” long, 1/2” wide) found in first 200 cases processed at CFS. Lizards found inside bag liner with raisins.” A small portion of the shipment, 210 cases, was delivered to a customer of Global and no problems were identified in those cases. As to the remaining 1,190 cases, Global rejected them. RV Farms had to take possession of those cases and was able to resell them from the Canadian warehouse where they were being stored.
Global did not pay for the 210 cases. Instead, Global calculated the expenses it incurred in dealing with the lizard problems and subtracted that amount from the price of the 210 cases and concluded it was owed a credit of $487.57.
In Horne’s view, Global did not resubmit a purchase order under contract 310-439 for the remaining balance of the contract—that is, the 1,190 cases. In contrast, Global takes the view that purchase order 10411 fully utilized the raisins available under contract 310-439.
In any event, this court cannot conclude that RV Farms repudiated its obligation to deliver raisins under contract 310-439 because the trial court reasonably could have found that Global did not submit a purchase order under that contract for the undelivered balance. Even though contract 310-439 did not specify a date by which a purchase order for that single load had to be submitted, the trial court reasonably could have found that (1) the contract required Global to submit a purchase order for the balance of the contract within a reasonable time and (2) Global never submitted such a purchase order. It is reasonable for the trial court to infer contract 310-439 would not stay open indefinitely because the price was based on existing market conditions, and it would be unreasonable to conclude a farmer or packer locked in a particular price without any restriction as to when the raisins had to be ordered. (See Cal. U. Com. Code, § 2309 [absence of specific time provision in a sales contract].)
I. Summary
Global’s theory that RV Farms’ June 21, 2004, e-mail amounted to a repudiation of its remaining contractual obligations is not a theory that the trial court was required to accept. The evidence is sufficient to support findings that (1) Global had failed to perform as required by contract 311-025x and contract 402-124x before that date and those failures to perform substantially impaired the value of those contracts, (2) RV Farms delivered and Global accepted both of the loads required by contract 311-194x, (3) Global failed to submit a sufficiently specific purchase order or demand for performance of the remaining balance of contract 310-439, and (4) Global failed to prove damages resulting from the certification issues that delayed the delivery of the last load required by contract 311-194x.
Therefore, we conclude the trial court did not commit error in ruling against Global on its cross-complaint.
III. Written Demand for Performance by Repudiating Party
Global suggests that RV Farms was required to submit a written demand for performance to Global before RV Farms could claim that Global had breached the contracts by failing to submit purchase orders. California Uniform Commercial Code section 2609 gives certain parties to a contract (those concerned the other party will not perform when performance is due) the right to demand adequate assurance from the other party.
California Uniform Commercial Code section 2609 provides in full:
We conclude that the provisions of California Uniform Commercial Code section 2609 did not impose an obligation on RV Farms to submit a written demand for performance to Global. The trial court impliedly found that Global was in actual breach of the contracts when Global failed to submit timely purchase orders. Thus, there was no concern about whether Global would render performance due at a future date because there was an actual existing breach of a contractual obligation when Global failed to submit a required purchase order.
In addition, California Uniform Commercial Code section 2609 does not provide Global with grounds for suspending its performance of contracts 402-124x and 311-025x (i.e., suspend sending purchase orders). From April through mid-June 2004, Global may have been insecure about RV Farms’ ability to deliver raisins with certifications that would allow them to be shipped to the European Union. This insecurity, however, is not relevant to the terms of those two contracts because they did not require RV Farms to provide certification acceptable to the European Union.
IV. Request to Strike Attachments to Global’s Brief
Respondent’s brief includes a section in which he objects to the attachment of exhibits to Global’s opening brief as improper and asks that the attachments be stricken. Respondent contends the attachments are versions of demonstrative exhibits used at trial and the attachments “represent argument and not facts.” The attachments are (1) a one-page timeline and (2) a one-page color-coded outline that correlates purchase orders and shipments to each of the four contracts. We recognize them for what they are—a synthesis of Global’s interpretation of the facts and an attempt to organize a large volume of detailed information in a small space. We have treated the attachments as pieces of advocacy and not as misstatements of the implied findings of fact rendered by the trial court. Accordingly, we deny the request to strike the attachments.
DISPOSITION
The judgment is affirmed. Respondent shall recover his costs on appeal.
WE CONCUR: VARTABEDIAN, Acting P.J., GOMES, J.
“(1) A contract for sale imposes an obligation on each party that the other’s expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return.
“(2) Between merchants the reasonableness of grounds for insecurity and the adequacy of any assurance offered shall be determined according to commercial standards.
“(3) Acceptance of any improper delivery or payment does not prejudice the aggrieved party’s right to demand adequate assurance of future performance.
“(4) After receipt of a justified demand failure to provide within a reasonable time not exceeding 30 days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract.”