Opinion
F074262
12-19-2019
MAXCO SUPPLY, INC., Plaintiff, Cross-defendant and Respondent, v. JOSE BARAJAS et al., Defendants, Cross-complainants and Appellants.
Henry D. Nunez and Alaina N. Ybarra for Defendants, Cross-complainants and Appellants. Koch, Degn & Gomez, Steven M. Koch; Law Offices of Thomas J. Burns and Robert D. Bassett, for Plaintiff, Cross-defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 14CECG01781)
OPINION
APPEAL from a judgment of the Superior Court of Fresno County. Kristi C. Kapetan, Judge. Henry D. Nunez and Alaina N. Ybarra for Defendants, Cross-complainants and Appellants. Koch, Degn & Gomez, Steven M. Koch; Law Offices of Thomas J. Burns and Robert D. Bassett, for Plaintiff, Cross-defendant and Respondent.
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Plaintiff Maxco Supply, Inc. (Maxco) sued defendants Jose Barajas (Barajas) and J.A.B.H. Investments, LLC (JABH) (collectively appellants) for breach of contract and common counts. Appellants cross-complained against Maxco for breach of contract and fraud. After a court trial, the trial court found in Maxco's favor on the complaint and cross-complaint. The trial court subsequently granted Maxco attorney fees based on an attorney fees provision in the contract.
On appeal from the resulting judgment, appellants (1) raise the sufficiency of the evidence to support the trial court's findings; (2) contend the trial court erred in rejecting Barajas's testimony and requiring expert testimony to prove the boxes were defective or that any deficiencies caused any monetary damages; and (3) argue they pled and proved claims for breach of the implied warranties of merchantability and fitness for a particular purpose. Finding no merit to appellants' contentions, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Consistent with the standard of review, we set out the facts in the light most favorable to the judgment. (People v. Ochoa (1993) 6 Cal.4th 1199, 1206; see 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 370, pp. 427-428 [" 'All of the evidence most favorable to the respondent must be accepted as true, and that unfavorable discarded as not having sufficient verity to be accepted by the trier of fact' "].)
Barajas was in the business of growing and exporting fruit. In late 2012, he came to Maxco's offices to ask about purchasing packing boxes for tree fruit. He met with Maxco sales manager Eric Champion and told Champion he wanted to purchase custom print boxes, sized seven and one-eighth inches. Barajas pointed to one of the boxes in the room and said he wanted a "print just like that." Barajas asked for a specific design—a scorpion. Maxco subsequently created artwork for Barajas's approval. According to Champion, they did not talk about where Barajas did business or why he wanted the boxes, other than for packing of tree fruit. Maxco does not offer a guarantee on their boxes. Barajas did not tell Champion he wanted the highest quality boxes that would be able to withstand the export shipment process, and they did not discuss whether Maxco stood behind the quality of their boxes. Barajas never said he intended to use the boxes for export, although Maxco does not have a different tree fruit box for domestic versus export shipping.
The Credit Application
In order for Maxco to extend credit, a potential customer must complete and sign a Maxco credit application. Maxco did not complete credit applications for their customers.
On March 6, 2013, Barajas personally handed a completed and signed Maxco credit application to Rose Marie Mejia, Maxco's accounts receivables and credit manager. While Mejia did not see Barajas fill out or sign the application, Barajas told Mejia that he completed it. Barajas told Mejia he wanted Maxco to bill the invoices to JABH, which was not an unusual request.
On the application, entitled "CUSTOMER INFORMATION AND AGREEMENT," Barajas's name is listed as the "Firm Name" and only his name is listed under "Name of Owners or Officers." JABH is listed in the upper right-hand corner next to "Customer Number." A Wells Fargo Bank account is listed on the application, as are three trade references. The application provides, in pertinent part: "The undersigned agrees to pay in full and in accordance with the terms of sale as indicated on Maxco's invoices. . . . If the undersigned's account or any other accounts owing Maxco are not paid in accordance with Maxco's terms, the undersigned agrees to pay delinquency charges on such past due amounts . . . . The undersigned agrees to pay Maxco's reasonable attorney's fees and costs in connection with the collection of all past due account balances, or any other amounts owing to Maxco by the undersigned." The signature on the application is illegible, but it appears to be signed in an individual capacity. A California resale certificate attached to the application lists Barajas's name as "NAME OF PURCHASER" and that "JOSE ANGEL BARAJAS" is the name of the person signing.
Mejia contacted Wells Fargo and learned the account was for Barajas as an individual. Using the information Wells Fargo provided, Mejia found that JABH "came back to us as Jose Barajas." Mejia then submitted the application to a business Maxco uses to evaluate credit applications. Based on the credit application and investigation, Maxco extended credit to Barajas as an individual, with JABH to be billed at Barajas's direction.
The Boxes Are Ordered and Delivered
Barajas made a down payment for the design and assembly of die cut plates in May 2013, and began purchasing the seven and one-eighth-inch size boxes the following month. Sometime in June 2013, Barajas told Maxco's box salesman, David Miller, he wanted to order seven and one-half-inch size boxes (the larger boxes), and he wanted more venting on the bottom of them. Barajas told Miller to run 15,000 boxes. Miller wrote up the order and submitted it for the boxes to be manufactured.
At some point, Maxco began shipping the seven and one-half-inch size boxes to JABH. Barajas complained to Miller about ink coming off the boxes, which Miller determined occurred because the ink had not dried before the order shipped. To correct the problem, the manufacturing department ensured the ink was dry before the next order left the department. Barajas never made any other complaints to Miller about the boxes.
Miller went to Barajas's packing facility in Parlier to inventory empty boxes two or three times per week from when Barajas started buying boxes through August 2013. Miller was not aware the boxes were being used to ship fruit to Mexico and no one told him the boxes were not holding up. Barajas did not tell Miller he wanted the highest quality boxes or a box that would withstand the export shipment process. Miller never told Barajas that Maxco provided a warranty or guarantee on its boxes.
Appellants Fail to Pay the Invoices
Maxco sent invoices to JABH for boxes delivered to it from August 7 through September 18, 2013, but the invoices were not paid. Mejia called Barajas about the past due account twice between July 31 and October 1, 2013. During that time frame, Barajas never mentioned to Mejia that he was having problems with the boxes. In early October, Barajas's then girlfriend, who sometimes helped with Barajas's business, came into Maxco and asked Mejia for additional time to pay because the fruit had not turned out well that year. At some point after November 1, 2013, Maxco referred Barajas's account, which had an outstanding past due balance of about $96,000, to a collection agency, but Maxco later took the account back. Mejia never told Barajas that Maxco's boxes had any warranties or guarantees, and Barajas never told her they were being used to export fruit.
Barajas Meets with Maxco
During early November 2013, Barajas requested a meeting with Maxco to complain that the boxes had failed and a meeting was held. Barajas and his female associate were present, as were Mejia, Champion, and another Maxco employee. Barajas brought two boxes and some photographs of boxes. Barajas said the boxes were not maintaining their strength and had crushed. The Maxco employees asked where the photographs were taken, but the location "changed several times."
According to Mejia, Barajas also complained the paint was rubbing off the boxes, but he never said the fruit was contaminated and did not complain that the glue was not staying on the boxes. At the end of the meeting, Barajas said Maxco was trying to ruin him and his company on purpose, and there needed to be a resolution. When Champion asked what that resolution could be, Barajas responded that he would pay his bill and then seek counsel. Champion asked Barajas if he could have some boxes to look at, but Barajas said "No," and he did not leave any boxes. The November 2013 meeting was the first time Barajas complained to anyone at Maxco that the boxes were failing or crushing.
This Lawsuit
In June 2014, Maxco filed this lawsuit against appellants alleging a cause of action for breach of contract and three common counts claims. In the breach of contract cause of action, Maxco alleged it had a written agreement with appellants, namely the credit application, which appellants breached by failing to pay Maxco the balance due and owing.
Appellants filed a cross-complaint against Maxco, asserting causes of action for breach of contract and fraud based on intentional or negligent misrepresentation, concealment, and promise without intent to perform.
In the breach of contract claim, appellants alleged they had a written agreement with Maxco consisting of the following essential terms: "[Maxco] agreed to manufacture boxes for Cross-complainants to use in export shipments of fruit, including peaches and plums and to design a die cut plates to be used for the boxes. It was further agreed the boxes were to be of the highest quality and would be able to withstand the export shipment process. In exchange for the boxes, Cross-complainants agreed to pay [Maxco] the amounts necessary to manufacture said boxes and die cut plates." Appellants alleged Maxco breached the agreement by "failing to manufacture boxes of the highest quality and design sufficient to be used for [their] intended purpose, i.e. for export shipments of fruit (peaches and plums) in a manner to prevent damage to the fruit." Appellants sought to recover for damage to the fruit and all costs associated in the use of the defective boxes, as well as for the failure to return the die cut plates. The fraud claims were based on allegations that Maxco misrepresented or concealed the quality of the boxes manufactured for appellants.
The Court Trial
A three-day court trial was held in December 2015. Mejia, Champion and Miller, who provided the evidence summarized above, testified on Maxco's behalf, while appellants called two witnesses, Barajas and Soloman Rodriguez Mireles, an accountant and company administrator for the buyer of appellant's tree fruit—El Escorpion de A.B.H.S.A. de C.U (El Escorpion). Appellants did not present any expert testimony.
At the outset of the trial, the court granted Maxco's motion to bar appellants from presenting any expert testimony, as appellants did not disclose any experts.
Barajas's testimony contradicted much of the testimony of Maxco's witnesses. Barajas claimed Maxco filled out the credit application, gave it to his son completed, and his son signed it, but only on JABH's behalf. Barajas said that before the boxes were manufactured, he made it clear to Maxco that he intended to use them for export. Barajas decided to buy boxes from Maxco because Champion told him Maxco's boxes were the best, had the most resistance, and he would not have any problems.
At his deposition, however, Barajas testified the application was blank when it was sent to his son for signature. Barajas initially testified at his deposition that his son signed the application, but when asked later what his understanding of the application was when it was signed, Barajas responded: "It was me signing that the design of the box was correct, that the—that the lettering on the boxes were correct because if there was a mistake on the lettering, then the box would not function. That is what I was understanding the agreement to be when I signed." Barajas further testified that was "what they told me" the agreement was about.
Barajas testified he ordered the larger seven and one-half-inch boxes through "Sylvia" or Mejia because he does not speak English and they interpreted for him. Champion and another individual were present when he placed the order. Barajas first started noticing problems with the larger boxes in August 2013, when the ink was rubbing off. Barajas claimed he contacted Mejia about the problem, but got no response. The boxes had other problems—they were bending and crushing the fruit. Barajas said he went to Maxco more than 15 times to complain about the boxes' problems, and either Mejia or Sylvia translated for him.
Barajas, through JABH, shipped fruit packaged in the larger boxes to a buyer in Guadalajara, Mexico, El Escorpion. According to Barajas, JABH sent invoices totaling $392,994 to El Escorpion, but El Escorpion paid only a fraction of that amount, $88,750, because the fruit arrived damaged.
Barajas testified he personally delivered a letter to Maxco when he met with them in November 2013, in which he described four problems with the larger boxes: (1) the side walls were too thin; (2) the glue did not hold the boxes together; (3) the paint faded and discolored when handled; and (4) the boxes were of insufficient strength to hold 25 pounds of peaches or 28 pounds of plums. Barajas claimed he asked Maxco to help resolve the problem, and was told they would review and investigate the matter, but they never got back to him.
In addressing Maxco's objection to admission of these four items from the letter on the ground it was improper expert opinion, the trial court ruled as follows: "Well, No. 1, I don't think it necessarily calls for expert opinion that the box walls were too thin. If they crushed the fruit and fell in, that doesn't have to be expert. That's overruled. Glue did not hold the box together. I don't know. I don't see any boxes that are separated. So I don't know if that is even applicable. [¶] Paint faded and discolored when handled, that wouldn't require expert opinion, because anybody could see that. And the box was of insufficient strength to hold the 25 pounds of peaches or 28 pounds of plums, again, that's kind of an ultimate conclusion, whether it was or not. But if they didn't, that doesn't necessarily call for an expert opinion. They just didn't hold the peaches." When Maxco's attorney objected to Barajas demonstrating what he meant by the boxes being too thin on the ground, as it called for expert opinion, the trial court ruled: "Well, to the extent he's going to say something happened because they were too thin, he can testify as to that: He thinks they're too thin. [¶] But as to the proper thickness of a box to hold fruit, I agree, that would be expert opinion." The trial court later sustained objections to Barajas's and Mireles's testimony, on grounds it called for expert opinion, that the larger boxes were defective because holes were added to them, and the boxes crushed because the cardboard did not have resistance to support the 25 pounds of peaches.
El Escorpion's general accountant and administrator, Soloman Rodriguez Mireles, testified he wrote JABH regarding each invoice sent to El Escorpion. El Escorpion refused to pay the full amount invoiced because the fruit arrived smashed and damaged, which Mireles attributed to the boxes being "destroyed."
The trial court admitted Mireles's letters documenting the alleged monetary losses for that purpose, but refused to consider them to the extent they rendered an expert opinion as to the cause of those monetary damages.
Barajas testified at his deposition El Escorpion belonged to his father a "very long time ago" and he had no personal connection with El Escorpion since 1995 or 1996.
Barajas's deposition testimony on this point was as follows:
"Q. Does J.A.B.H. Investments, LLC have any connection to El Escorpion?
"A: No. One is Mexican and one is American."
"Q: Do you personally have any connection to El Escorpion?
"A: Me personally, no."
"Q: Does your son?
"A. No, that I know of, no. It was a company that belonged to us a very long time ago and not to me, but I say to us, my family, my father."
"Q: So you personally have no connection to El Escorpion?
"A. Not since 1995, '96."
At trial, Mireles also denied Barajas had any relationship with El Escorpion in 2013. Barajas, however, gave Mejia a business card in 2013 containing El Escorpion's business names and addresses and listed his email address as escorpionbarajasehijos@hotmail.com. El Escorpion's Guadalajara address listed in the heading on the letters Mireles sent to JABH is the same Guadalajara address listed on Barajas's business card. When Mireles was asked why Barajas would provide a business card with El Escorpion's information and business address if he had no relationship with El Escorpion, Mireles responded there was no relationship, as far as he was aware, and he had never seen the business card before. Mireles also did not know why Barajas would have the email address listed on the business card if Barajas did not have a relationship with El Escorpion, although he believed it was Barajas's personal email. Mireles was shown a second business card, which Maxco's attorney stated Barajas provided at his September 2015 deposition, that identified Barajas as El Escorpion's "Director General," and listed the same Guadalajara address as the 2013 business card and Mireles's letters. Mireles did not know why Barajas presented the card, as he had not seen it before.
The business card listed three businesses: (1) "El Escorpion de Chile Ltda.," with an address in Chile; (2) "El Escorpion de A.B.H. S.A. de C.U.," with an address in Guadalajara, Mexico; and (3) "El Escorpion de Chelo Central de Abastos," with an address in Mexico City.
In rebuttal testimony at trial, Barajas was asked about the business cards. He testified he was only involved with one of the three companies listed on the business card he provided in 2013, El Escorpion de Chile Limited, which he owned. Barajas denied being involved with El Escorpion ABH, which distributes "our fruit in Guadalajara." Barajas said El Escorpion de Chile distributed fruit from Chile, and the business card was 10 or 12 years old. As for the other business card that identified Barajas as director general, Barajas testified a Mexico address was on the card because that was the distributor of the fruit he produced in Chile.
The Posttrial Briefs
Following the close of testimony, the parties submitted posttrial briefs. Appellants asserted they were seeking judgment in their favor on the causes of action in the cross-complaint for breach of contract and fraud. For the first time in this litigation, appellants asserted a claim under the heading "express/implied warranty of merchantability and/or fitness for a particular purpose".
With respect to breach of contract, appellants argued JABH, but not Barajas, contracted with Maxco on March 6, 2013, for the manufacture and delivery of boxes for fruit, which Maxco breached by failing to provide boxes suitable for the export of fruit, changing the structure and design of the boxes without JABH's consent, and failing to surrender the die cut plates after they had been paid in full.
On the fraud claim, appellants asserted they proved the elements of negligent misrepresentation, as Maxco falsely warranted it would properly manufacture boxes to safely export fruit, which would be of high quality, and falsely stated it would give JABH the die cut plates once they were fully paid for and no longer needed to manufacture boxes.
Appellants also argued JABH established the elements of "Implied Warranty of Merchantability and/or Fitness for a Particular Purpose" citing CACI No. 1231.,
Appellants set forth the elements of CACI No. 1231, which is entitled "Implied Warranty of Merchantability—Essential Factual Elements," as follows:
"1. That JABH bought the tree fruit boxes from MAXCO;
"2. That, at the time of purchase, MAXCO was in the business of selling these goods;
"3. That the MAXCO tree fruit boxes were not of the same quality as those generally acceptable in the trade; were not fit for the ordinary purposes for which such goods are used; OR did not conform to the quality established by usage of trade;
"4. That JABH took reasonable steps to notify MAXCO within a reasonable time that the boxes did not have the expected quality;
"5. That JABH was harmed; and
"6. That the failure of the boxes to have the expected quality was a substantial factor in causing JABH's harm."
There are two distinct implied warranties in the California Uniform Commercial Code, applicable to the sale of various products: (1) the Implied Warranty of Merchantability arising from California Uniform Commercial Code section 2314 and CACI No. 1231 and (2) the Implied Warranty of Fitness for a Particular Purpose, arising from California Uniform Commercial Code section 2315 and CACI No. 1232.
In Maxco's reply brief, Maxco objected to appellants' attempt to add an implied warranty of merchantability claim. Maxco asserted the cross-complaint contained only two causes of action—breach of contract and fraud—and appellants never sought leave to amend the cross-complaint to add a product defect or implied warranty of merchantability claim prior to the close of evidence. Maxco argued the attempt to add such a claim in closing argument was an improper and untimely motion for leave to amend to conform to proof, which should be denied because appellants had not shown a reasonable excuse for the delay in seeking leave to amend. Maxco further argued that even if properly pled, appellants failed to present any evidence that the boxes breached the implied warranty of merchantability, since appellants did not present any evidence, expert or otherwise, of the minimum industry standards for stone fruit boxes in 2013 or any actual defect in the boxes.
Request for Statement of Decision
On February 16, 2016, Barajas filed a request for a statement of decision under Code of Civil Procedure section 632. The request did not specify any particular controverted issue on which he was requesting a statement of decision, but rather generally asked the trial court to "include Findings of Fact and Conclusions of Law pertaining to that decision."
JABH is not mentioned in the request.
Tentative Decision
On February 29, 2016, the trial court issued a seven-page detailed tentative decision in favor of Maxco and against appellants. With respect to the breach of contract claim, the trial court determined Maxco established, by a preponderance of the evidence, all of the elements of breach of contract, while appellants failed to establish Maxco breached any agreement they had with Maxco. Specifically, the trial court found a contract was entered into between Maxco and Barajas, as an individual, and regardless of whether Barajas personally signed the credit application or directed his son to do so, both Barajas and JABH accepted the terms of the written agreement to receive and pay for boxes pursuant to the terms of the credit application and Maxco's invoices. The trial court further found Maxco made no written representations, warranties or guarantees regarding the boxes' quality, as Barajas's testimony on this point was not credible, and the Maxco employees' testimony that Barajas did not inform them of the purpose of the boxes, other than to package stone fruit, was "more credible." Thus, the contract's terms were for the delivery of boxes for stone fruit, without any express warranty as to quality or purpose of use.
The trial court next found Maxco did all, or substantially all, of the things the contract required, since it was clear Maxco supplied the boxes, appellants used the boxes, and appellants failed to pay. The trial court explained its decision was based "in no small part" on Barajas's lack of credibility, which was undermined by his testimony regarding his relationship with El Escorpion. The trial court questioned why Barajas would (1) deny a relationship with El Escorpion, as shown by his deposition testimony where he initially denied "any relationship with El Escorpion, followed by an admission of a relationship ending in 1995 or 1996," unless there were ulterior motives, and (2) provide a card identifying himself as El Escorpion's director general if he was not related to El Escorpion and the Mexican El Escorpion was only a distributor. The trial court determined Barajas's "denial of a longstanding and ongoing relationship/ownership interest in El Escorpion . . . completely discredits" his testimony on this or any other issue he testified to during deposition and trial, and created a "clear inference that the mistruth was perpetrated to hide the fact that he manufactured evidence to support claims of loss to avoid paying Maxco for the boxes" supplied during the 2013 season.
On the cross-complaint's breach of contract claim, the trial court found appellants failed to present any admissible evidence of damages, as no experts were disclosed or provided as to the allegedly poor quality of the boxes and their failure, and other than Barajas's self-serving testimony, there was no evidence the fruit was compromised by ink bleeding onto the fruit. The trial court further found: (1) there was no credible evidence that adding holes to the larger boxes, which Barajas requested, caused them to fail due to a defect in the boxes; (2) Barajas did not tell Maxco he was using the boxes for export; and (3) there was no evidence the boxes failed due to a design or manufacturing defect. Accordingly, the trial court found for Maxco on its breach of contract claim in the principal amount of $93,608.76, plus past due finance charges of $508.77. The trial court dismissed the common counts claims as cumulative.
The trial court recognized in a footnote that appellants' closing brief set forth law and argument on an alleged breach of warranty claim, but stated it would ignore the argument, as no such claim was set forth in the cross-complaint and no evidence to support such a claim was adduced at trial. The trial court added that even if a claim were stated, appellants had not met their burden of proof.
On the fraud cause of action, the trial court found the intentional and negligent misrepresentation, and false promise claims failed because appellants did not produce evidence Maxco made any written or oral representations, warranties or guarantees about the boxes and die cut plates. The concealment claim failed because appellants needed to produce evidence the boxes were defective and Maxco concealed the defect, but they did not produce any admissible evidence, via expert testimony, that the boxes were defective.
Finally, with respect to the die cut plates, the trial court found there was no evidence to support the claim the plates were appellants' personal property or Maxco would return the plates to them at the end of the season. Instead, as Maxco stated in its response to form interrogatories, Maxco's policy was that die cut plates were not considered owned by or released to a customer until all debts were paid in full. Consequently, the trial court ruled appellants could have possession of the plates if they paid all debts owing. The trial court directed Maxco's attorney to prepare a proposed statement of decision, to which appellants could file objections.
Statement of Decision
Maxco submitted a proposed statement of decision, but appellants did not file any objections. Accordingly, the trial court accepted the proposed statement and entered it in April 2016. The statement of decision mirrors the tentative decision, but leaves out any mention of appellants' arguments concerning a breach of implied warranty claim.
Maxco subsequently filed a motion for attorney fees based on the credit application's attorney fees provision. The trial court granted the motion and awarded Maxco $69,862.45 in attorney fees. Judgment for Maxco and against appellants, which totaled $168,953.63 in damages, prejudgment interest, attorney fees and costs, was entered in July 2016.
DISCUSSION
I. STANDARD OF REVIEW
While appellants acknowledge the scope and standard of this court's review, in setting forth the trial evidence and throughout their briefs, they skew the facts in favor of their position below. Rather than focusing on the sufficiency of the evidence to support the trial court's judgment, they contend the trial court had "no rational basis . . . to accept [Maxco's] version of events" and urge us to "reconsider and not accept the lower court's determination that . . . [Barajas]'s testimony was not credible, and conclude any perceived lack of credibility did not affect the legal position the Appellant put forward in this Appeal."
Appellants' one-sided account of the events below is "an argumentative presentation that . . . disregards the most fundamental rules of appellate review" and "the admonition that [they are] not to 'merely reassert [their] position at . . . trial.'" (In re Marriage of Davenport (2011) 194 Cal.App.4th 1507, 1531.) "As Justice Mosk well put it, such 'factual presentation is but an attempt to reargue on appeal those factual issues decided adversely to it at the trial level, contrary to established precepts of appellate review. As such, it is doomed to fail.' " (Ibid., quoting Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 398-399.)
Appellants assert in their reply brief that Maxco's brief should be stricken because Maxco failed to include the volume number of the citations from the record used in its brief, in violation of California Rules of Court, rule 8.204(a)(1)(C). Appellants, however, raised this issue via an ex parte application to strike portions of Maxco's brief, which we denied nearly two months before appellants filed their reply brief.
Appellants, however, misconceive our role. The existence of substantial evidence supporting the appellant's position is not sufficient for a reversal of the trial court's decision. We do not reweigh the facts, viewing them in the appellant's favor, nor do we determine whether substantial evidence supported the appellant's factual assertions. On the contrary, "[i]n reviewing a judgment based upon a statement of decision following a bench trial, . . . [w]e apply a substantial evidence standard of review to the trial court's findings of fact. [Citation.] Under this deferential standard of review, findings of fact are liberally construed to support the judgment and we consider the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences in support of the findings." (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981 (Thompson).) "The trial court sits as trier of fact and it is called upon to determine that a witness it to be believed or not believed. That is the nature of factfinding. 'The trier of fact is the sole judge of the credibility and weight of the evidence. . . .' " (In re Marriage of Greenberg (2011) 194 Cal.App.4th 1095, 1099.)
A different standard of review applies, however, when the trier of fact has expressly or implicitly concluded the party with the burden of proof did not carry that burden. When that party appeals, " 'it is misleading to characterize the failure-of-proof issue as whether substantial evidence supports the judgment. . . . [¶] Thus, where the issue on appeal turns on a failure of proof at trial, the question for a reviewing court becomes whether the evidence compels a finding in favor of the appellant as a matter of law. [Citations.] Specifically, the question becomes whether the appellant's evidence was (1) "uncontradicted and unimpeached" and (2) "of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding." ' " (Dreyer's Grand Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th 828, 838 (Dreyer's); accord, In re I.W. (2009) 180 Cal.App.4th 1517, 1528.)
Thus, on the issues where appellants had the burden of proof, it is nearly impossible to prevail on appeal by arguing the evidence compels a judgment in their favor. (Bookout v. State of California ex rel. Dept. of Transportation (2010) 186 Cal.App.4th 1478, 1486.) "That is because unless the trial court makes specific findings of fact in favor of the losing [cross-complainant], we presume the trial court found the [cross-complainant]'s evidence lacks sufficient weight and credibility to carry the burden of proof. [Citations.] We have no power on appeal to judge the credibility of witnesses or to reweigh the evidence." (Ibid.)
"A single witness's testimony may constitute substantial evidence to support a finding. . . . 'A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness.' [Citation.] Specifically, '[u]nder the doctrine of implied findings, the reviewing court must infer, following a bench trial, that the trial court impliedly made every factual finding necessary to support its decision.' " (Thompson, supra, 6 Cal.App.5th at p. 981.)
"For the doctrine of implied findings to be disabled on appeal," the appellant must, when requesting a statement of decision, specify the controverted issues the party is seeking a statement of decision on (Code Civ. Proc., § 632), and bring any omission or ambiguities in the statement of decision to the trial court's attention (Code Civ. Proc., § 634). (Thompson, supra, 6 Cal.App.5th at p. 983.) "Where a party fails to 'specify . . . controverted issues' or otherwise 'make proposals as to the content' of a statement of decision under section 632 (forcing the trial court to guess at what issues remain live during preparation of the statement of decision), or where a party complies with section 632 but fails to object under section 634 (depriving the trial court of the opportunity to clarify or supplement its statement of decision before losing jurisdiction), objections to the adequacy of a statement of decision may be deemed waived on appeal." (Thompson, supra, 6 Cal.App.5th at p. 983.) "[S]trict adherence to both steps of the process is necessary before we will reverse the presumption of correctness generally accorded trial court judgments on appeal." (Ibid.)
II. THE COMPETING BREACH OF CONTRACT CLAIMS
To establish a cause of action for breach of contract, the plaintiff must plead and prove each of the following elements: (1) the existence of the contract, (2) the plaintiff's performance or excuse for nonperformance, (3) the defendant's breach, and (4) resulting damages to the plaintiff. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
The trial court found (1) Barajas and JABH were both parties to the contract with Maxco, which required Maxco to deliver boxes for packing stone fruit, without any specific warranty as to their quality or purpose of use, and appellants to pay for them; (2) Maxco performed by delivering the boxes, and did not change the design or structure of the boxes without appellants' consent; (3) appellants breached the contract by failing to pay for the boxes; and (4) Maxco suffered damages in the form of unpaid invoices, while appellants failed to present evidence that a defect in the boxes caused them to collapse and damage the fruit.
On appeal, appellants contend substantial evidence does not support the trial court's findings that (1) Barajas was a party to the contract with Maxco, and (2) Maxco performed as required by the contract. As for the cross-complaint's breach of contract claim, they assert in their opening brief that it included a claim for breach of implied warranty of merchantability under section 2314. In their reply brief, they assert a claim for the breach of the implied warranty of fitness for a particular purpose under section 2315. They argue both claims are supported by the evidence.
A. There is Sufficient Evidence That Barajas is a Party to the Credit Application
Contrary to appellants' assertion, there is substantial evidence to support the trial court's finding that Barajas was a party to the credit application. The application was in his name only, the Wells Fargo bank account listed on it was Barajas's individual account, and the signature line does not indicate the application was being signed on JABH's behalf. Mejia testified that, while she did not see Barajas sign the application, he personally delivered the application to her and represented he completed it. Mejia's testimony is supported by Barajas's deposition testimony that "[i]t was me signing" and "[t]hat is what I was understanding the agreement to be when I signed."
Appellants assert this deposition testimony does not contradict the trial evidence, as Barajas was answering the question—"When the agreement was signed, what was your understanding of this contract?"—and his answer was an explanation of what he authorized his son to sign on JABH's behalf. His answer, however, was more than that, as he testified, "[i]t was me signing" and "when I signed."
Even if Barajas's son signed the application, given that the application was in Barajas's name, not JABH's, the trial court reasonably could find his son was signing on his behalf as an individual. Appellants assert, without citation to authority, that in order for Barajas's son to bind him personally, the son had to present a power of attorney or some proof of authority, and no evidence of this was presented. Maxco was not required to seek such authorization, however, given that no one at Maxco interacted with Barajas's son and Barajas told Mejia, when he provided the application to Maxco, that he completed it.
Appellants argue we should disregard Mejia's testimony because: (1) Mejia testified on direct examination Barajas told her he completed it, but on cross-examination the application was not signed in her presence and she "assume[d]" Barajas filled in the information; (2) Mejia testified on direct examination the federal tax identification number listed on the application corresponded to Barajas, but on cross-examination she did not know that number was JABH's number and she did not personally check the number; and (3) Mejia conceded JABH was written on the top right hand corner of the application because Barajas wanted JABH to be billed, and Maxco's invoices all stated the boxes were being sold to JABH and did not list Barajas's name.
We may not reject the testimony of a witness offered in support of a judgment, however, "unless it is physically impossible or inherently improbable and such inherent improbability plainly appears." (Beck Development Co. v. Southern Pacific Transportation Co. (1996) 44 Cal.App.4th 1160, 1204 (Beck).) Here, there is nothing physically impossible or inherently improbable about Mejia's testimony. As we have explained, Mejia testified that while she did not see who completed or signed the agreement, Barajas personally gave her the application and told her he completed it, which is supported by Barajas's deposition testimony that he signed the application.
Finally, appellants contend other evidence "point[s] to the fact that [Barajas] was not responsible as an individual," such as that the federal tax identification number belonged to JABH, Barajas's son signed for JABH, there was no signature for Barajas personally, the credit line was for JABH, and Maxco's invoices all list JABH as the buyer. Despite this evidence, the trial court, as the trier of fact, was entitled to credit Mejia's testimony and consider it in determining whether Barajas was a party to the credit application; it is not for us to decide on appeal that we would have drawn a different conclusion on the evidence presented. Since substantial evidence supports the trial court's determination that Barajas personally completed the application and intended to be bound personally by its terms, he can be held personally liable for his breach of that agreement.
B. Maxco Performed Under the Terms of the Parties' Contract
Appellants contend there is not substantial evidence to support the trial court's finding that Maxco did all, or substantially all, of the things required by the contract. They assert that while the trial court found the contract's terms were for delivery of boxes of stone fruit without specific [or express] warranty or purpose of use, an implied warranty of merchantability applied to the contract, which Maxco breached. They also assert Maxco breached the contract because the boxes failed, Maxco changed the boxes' structure and design without appellants' consent, and failed to surrender the die cut plates.
1. The Implied Warranty of Merchantability
The trial court found in its tentative decision that appellants did not allege a cause of action for breach of implied warranty. Appellants contend this was error, as they pled and proved breach of the implied warranty of merchantability set forth in California Uniform Commercial Code section 2314, which provides, in pertinent part, as follows: "(1) Unless excluded or modified . . . a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. . . . [¶] (2) Goods to be merchantable must be at least such as [¶] (a) Pass without objection in the trade under the contract description; and [¶] . . . [¶] (c) Are fit for the ordinary purposes for which such goods are used; and [¶] . . . [¶] (e) Are adequately contained, packaged, and labeled as the agreement may require; . . .." Appellants argue the evidence shows the boxes did not satisfy these three implied warranties.
Undesignated statutory references are to the California Uniform Commercial Code.
The cross-complaint, however, does not contain any claim for breach of the implied warranty of merchantability. The breach of contract claim alleges only express warranties, namely that Maxco "agreed the boxes were to be of the highest quality and would be able to withstand the export shipment process," which Maxco breached by "failing to manufacture boxes of the highest quality and design sufficient to be used for [their] intended purpose, i.e. for export shipments of fruit (peaches and plums) in a manner to prevent damage to the fruit." Nowhere is it alleged that Maxco breached an implied warranty of merchantability or that the boxes did not "[p]ass without objection in the trade under the contract description," were not "fit for the ordinary purposes for which such goods are used," or were not "adequately contained, packaged, and labeled as the agreement may require." (§ 2314, subd. (2)(a), (c), (e).)
At oral argument, appellants argued for the first time that they alleged breach of the implied warranties of merchantability and fitness for a particular purpose in their answer as the affirmative defense of offset. In that defense, appellants alleged Maxco's claim "is subject to offset for monies due and owing to Defendant as alleged in the Cross-Complaint on file[] and served herewith." As the defense references the cross-complaint's allegations, we look to the cross-complaint to determine whether a breach of warranty claim was stated.
While, as Maxco points out, a party may seek leave to amend its pleadings, even after trial to conform to proof (Code Civ. Proc., §§ 469-470, 473, 576), appellants never sought leave to amend to state a claim for breach of implied warranty of merchantability. "The general and longstanding rule is that a party must recover on the cause of action he has alleged in his complaint and not on another cause of action disclosed by the evidence." (Pierce v. Pacific Gas & Electric Co. (1985) 166 Cal.App.3d 68, 78 (Pierce).) Unless the unpled cause of action was thoroughly explored during a trial on the merits, and counsel and the trial court know of the theory at trial, the failure to plead a cause of action bars recovery on that ground. (Id. at pp. 78, 86.)
Here, appellants argued in their posttrial brief that Maxco breached the implied warranty of merchantability, citing section 2314. In its posttrial reply brief, Maxco objected to reliance on this theory as the implied warranty issue was not timely raised. No evidence was adduced at trial on the merchantable quality of the boxes. Since "[t]he particulars of the implied warranty [of merchantability] issue were neither 'well known to court and counsel' nor 'thoroughly explored during the course of the trial,' " the "failure to plead the implied warranty issue bars recovery on that ground." (Pierce, supra, 166 Cal.App.3d at p. 86.)
To avoid this result, appellants contend they actually and sufficiently alleged a claim for breach of implied warranty of merchantability. Citing cases which applied the statute of limitations for breach of contract to claims for breach of express or implied warranty, appellants contend it is unnecessary to allege a separate cause of action for breach of implied warranty of merchantability when it is the basis for breach of contract. Even so, appellants still must allege the elements of a breach of implied warranty of merchantability claim, which they failed to do. (See, e.g., Rohl v. Van Cleve (1949) 90 Cal.App.2d 317, 321 [rejecting plaintiffs' claim that they were not permitted to prove a breach of implied warranty where complaint "was not based on breach of implied warranty, but was silent on that subject," and the plaintiff did not ask for leave to amend to plead such a breach; in that situation, "[t]he case was not tried on that theory, and the point cannot be raised for the first time on appeal"].)
Appellants cited the following cases: (1) Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Cal.App.4th 116 [applying four-year limitations period of California Uniform Commercial Code section 2725, subdivision (2) to implied warranty claim]; (2) Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 958 [applying same four-year limitations period to breach of express warranty claim]; (3) Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 642 [applying same four-year limitations period to claims for breach of express and implied warranties]; and (4) Voth v. Wasco Public Utility Dist. (1976) 56 Cal.App.3d 353, 359-360 [finding plaintiff's claim for damages resulting from poor alfalfa crop allegedly caused by public utility district's failure to provide water that was fit for irrigation purposes was contractual in nature].
We conclude appellants have not pled and proved a breach of the implied warranty of merchantability.
2. The Implied Warranty of Fitness for a Particular Purpose
In their opening brief, appellants contend, citing section 2314, they stated a "cause of action for merchantability based on fitness of purpose" by alleging in their breach of contract claim that Maxco breached the parties' agreement by "failing to manufacture boxes . . . sufficient to be used for [their] intended purpose." In their reply brief, they assert they pled and proved a claim for breach of the implied warranty of fitness for a particular purpose under section 2315.
To the extent appellants are claiming this was sufficient to state a claim for breach of the warranty of merchantability as described in section 2314, we disagree, as the allegation cannot be construed as alleging the boxes were not "fit for the ordinary purposes for which such goods are used." (§ 2314, subd. (2)(c).)
While appellants argued in their opening brief that the larger boxes "were defectively constructed and fail[ed] to live up to the implied warranty of merchantability and/or fitness for particular purpose," they never cited section 2315 or analyzed the elements of a claim for breach of the implied warranty of fitness for a particular purpose.
Section 2315, which codifies the implied warranty of fitness for a particular purpose provides, in pertinent part: "Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is . . . an implied warranty that the goods shall be fit for such purpose." A claim under section 2315 that a product is not fit for a particular purpose differs from a claim under section 2314 that a product is not fit for the ordinary purpose for which such goods are used, as " 'it envisages a specific use by the buyer which is peculiar to the nature of his business whereas the ordinary purposes for which goods are used are those envisaged in the concept of merchantability and go to uses which are customarily made of the goods in question.' " (American Suzuki Motor Corp. v. Superior Court (1995) 37 Cal.App.4th 1291, 1295, fn. 2 (American Suzuki).) While appellants mentioned the elements of this claim in their trial brief, in their posttrial brief they argued only that they established the elements of a claim for breach of the warranty merchantability under section 2314.
Appellants allege in the cross-complaint's breach of contract and fraud claims that Maxco breached the parties' agreement by "failing to manufacture boxes of the highest quality and design sufficient to be used for its intended purpose, i.e. for export shipments of fruit (peaches and plums) in a manner to prevent damage to the fruit," and failed to "manufacture the boxes for the intended purpose of exporting shipments of fruit." To the extent these allegations may be construed as a claim for breach of the implied warranty of fitness for a particular purpose, the claim necessarily fails because the trial court found Barajas only told Maxco the purpose of the boxes was to use them to package stone fruit. Although Maxco could assume the boxes would be shipped to buyers, it had no reason to assume or anticipate any further particular purpose. (4 Witkin, Summary of Cal. Law (11th ed. 2017) Sales, § 76, pp. 85-86.) Since Maxco did not know appellants had a particular purpose for the boxes, namely to export fruit, it could not have known Barajas was relying on Maxco's skill or judgment. Moreover, the evidence showed Barajas did not rely on Maxco's skill or judgment, as Maxco merely showed Barajas samples of its boxes, and Barajas himself selected the size and design of the boxes, and later decided on his own to purchase larger boxes with more ventilation.
We note the cross-complaint does not contain any allegation appellants provided reasonable notice to Maxco of the purported breach, which is an element of any breach of warranty claim. (§ 2607, subd. (3)(A); Cardinal Health 301, Inc. v. Tyco Electronics Corp., supra, 169 Cal.App.4th at p. 135; Vogel v. Thrifty Drug Co. (1954) 43 Cal.2d 184, 187-188 [the burden is on the one claiming breach of warranty to plead and prove notice of such breach was provided to the seller within a reasonable time].)
Appellants asserted in their briefs and at oral argument that it did not matter whether the boxes were to be used domestically or for export, as the "real issue" was "whether the boxes failed in their purpose of carrying stone fruit." If appellants are not claiming a particular purpose for which they obtained the boxes, however, their claim cannot be for breach of the implied warranty of fitness. (American Suzuki, supra, 37 Cal.App.4th at p. 1295, fn. 2 [where class-action plaintiffs failed to identify any legally cognizable particular purpose for which they supposedly obtained their vehicles, other than the general purpose of providing transportation, no implied warranty of fitness claim was stated against vehicle manufacturer].) Instead, the alleged claim is one for breach of the implied warranty of merchantability which, as we have discussed, they have not alleged.
We reject appellant's contention that they pled or proved a claim for the implied warranty of fitness for a particular purpose.
3. Maxco Did Not Breach the Contract
Recognizing the trial court's finding that the parties' contract required Maxco to deliver boxes for stone fruit, without any specific warranty as to quality or purpose of use, appellants contend they established "the boxes failed in their purpose of carrying stone fruit." They also claim Maxco breached the contract by changing the structure and design of the boxes without their consent or approval, and failing to surrender the die cut plates after Barajas's initial down payment.
a. Appellants Failed to Prove the Boxes were Defective
Contrary to appellants' assertion, it was their burden to prove any breach with respect to the boxes. (§ 2607, subd. (4) ["The burden is on the buyer to establish any breach with respect to the goods accepted."]; Carpenter Steel Co. v. Pellegrin (1965) 237 Cal.App.2d 35, 41-42 [in action on a dishonored check given in payment for steel wire and buyer's cross-complaint for breach of express and implied warranty, buyer had the burden of proving the wire did not conform to his specifications]; Dougherty v. Lee (1946) 74 Cal.App.2d 132, 135 [buyer had the burden of proving the hay he purchased from seller contained poison which killed his cows]; Ice Bowl, Inc. v. Spalding Sales Corp. (1943) 56 Cal.App.2d 918, 922-923 [it is buyer's burden to plead and prove goods were unmerchantable]; Alvernaz v. H.P. Garin Co. (1932) 127 Cal.App. 681, 687-688 [warranties that are not pleaded cannot be relied upon either in support of an action or as a defense, and the person relying on a warranty has the burden of proving breach].)
Thus, appellants were required to show that the boxes were defective. Appellants contend they did so by: (1) in-court demonstrations that a Maxco box crushed when Barajas stood on it and ink rubbed off another box; (2) photographs of crushed boxes; and (3) the testimony of Barajas and Mireles. The trial court, however, rejected this evidence, instead finding appellants failed to meet their burden because (1) Barajas and Mireles were not credible; (2) they did not disclose or provide any expert testimony regarding the allegedly poor quality of the boxes and their failure; and (3) they did not provide any evidence the fruit was compromised by ink bleeding onto it.
At trial, Barajas brought Maxco boxes into court to demonstrate what was wrong with them. Barajas testified the boxes were too thin and to demonstrate what he meant, he stood on one of the boxes and it crushed. He also showed the court that when he rubbed one of the boxes, the paint came off. The trial court admitted the demonstration boxes into evidence, although it did not know how much weight it would give them, as it found the relevance to be "extremely tangential, at best, only because I don't know where they've been stored for the last few years."
Appellants contend the trial court erred when it rejected Barajas's testimony, as it lacked substantial evidence to do so. As we have explained, it is not our role to "reweigh the evidence or to assess witness credibility." (Thompson, supra, 6 Cal.App.5th at p. 981.) Rather, " ' "it is the exclusive province of the trial judge or jury to determine the credibility of a witness . . . . We [do not] resolve . . . credibility issues [or] evidentiary conflicts; we look for substantial evidence." ' " (People v. Harris (2013) 57 Cal.4th 804, 849.) "[I]f the verdict is supported by substantial evidence, we must accord due deference to the trier of fact and not substitute our evaluation of a witness's credibility for that of the fact finder." (People v. Jones (1990) 51 Cal.3d 294, 314.) "[S]o long as the trier of fact does not act arbitrarily and has a rational ground for doing so, it may reject the testimony of a witness even though the witness is uncontradicted. [Citations.] Consequently, the testimony of a witness which has been rejected by the trier of fact cannot be credited on appeal unless, in view of the whole record, it is clear, positive, and of such a nature that it cannot rationally be disbelieved." (Beck, supra, 44 Cal.App.4th at p. 1204.)
Thus, while appellants claim the trial court's credibility determination must be supported by substantial evidence, what actually must be supported by substantial evidence is the factual determination that supports the verdict, which in turn can be supported by witness testimony. The case appellants cite, People v. Brooks (2017) 3 Cal.5th 1, does not lead to a different conclusion. There, in setting forth the standard of review for a claim of juror misconduct, our Supreme Court explained the verdict would not be disturbed if a reviewing court concludes " 'there is no substantial likelihood the juror in question was actually biased against the defendant. [Citations.] Our inquiry in this regard is a "mixed question of law and fact" subject to independent appellate review. [Citation.] But " 'we accept the trial court's credibility determinations and findings on questions of historical fact if supported by substantial evidence.' " ' " (Id. at p. 99.) From this last statement, it is apparent it is the trial court's factual findings that must be supported by substantial evidence, not its credibility determinations.
Here, the trial court had a rational ground for disbelieving Barajas's testimony. First, most of his testimony was contradicted by Maxco's witnesses. For example, while Barajas claimed he complained to Maxco numerous times that the boxes had failed, Maxco's employees testified they did not receive any complaints, other than the single complaint about ink rubbing off the boxes, until the November 2013 meeting. In addition, the evidence showed that Barajas and El Escorpion, the buyer in Mexico that claimed the fruit arrived damaged, had a relationship that both Mireles and Barajas denied existed. The relationship was shown by the business cards Barajas produced—one in 2013, which identified Barajas as a representative of El Escorpion and listed an email address with the word "escorpion" in it, and the other in 2015, which identified Barajas as El Escorpion's director general. Based on Barajas's initial denial of a relationship with El Escorpion at his deposition, followed by an admission that there was a relationship that ended in 1995 or 1996, the trial court reasonably could question why Barajas would deny the relationship, unless there were ulterior motives. The trial court also reasonably could find the denial created a clear inference Barajas perpetrated "the mistruth" to "hide the fact that he manufactured evidence to support claims of loss to avoid paying for the boxes," particularly in light of the testimony of Maxco's witnesses that Barajas did not complain about the boxes failing until after appellants' account was past due.
Appellants claim in their reply brief that the trial court made this inference only in the tentative decision, and the inference was omitted from the statement of decision "[i]n an apparent attempt to remove the appearance of bias." Appellants are mistaken, as the inference appears in both the tentative decision and statement of decision.
Appellants argue the trial court abused its discretion in rejecting Barajas's testimony because it expanded "an insignificant discrepancy to discredit an entire offer of proof." They further argue that even if Barajas had a personal connection to El Escorpion, "it did not automatically follow that he fabricated every single piece of evidentiary support presented, including Mireles's testimony and the document and physical evidence." The discrepancy, however, was hardly insignificant, as it went to the heart of Barajas's credibility. It was within the trial court's discretion to accept or reject both Barajas's and Mireles's testimony. We cannot say that it did not have a rational basis for rejecting both.
Appellants next contend the trial court erred in requiring expert testimony to prove the boxes were defective. Appellants' evidence on the issue of defectiveness consisted of the demonstration boxes, photographs of crushed boxes, and the circumstances under which the boxes were used. They did not offer any expert testimony regarding the condition of the boxes or whether they had a defect that caused them to collapse.
Appellants filed a motion to augment the record, or take judicial notice, of a purported expert report, and accompanying materials, from an entity named Westpak, which they obtained after this appeal commenced. We denied the motion to augment, as appellants failed to demonstrate the documents were filed or lodged in the superior court, as required by California Rules of Court, rule 8.155(a). We also denied the alternative request for judicial notice, as appellants had not demonstrated the matters sought to be judicially noticed were permissible pursuant to Evidence Code sections 451 or 452.
If an issue is not within the common knowledge of persons of ordinary education, it must be established with expert opinion testimony. (Miller v. Los Angeles County Flood Control Dist. (1973) 8 Cal.3d 689, 702.) Whether a box being used to ship fruit is properly constructed, and the circumstances under which a box might collapse, is not a subject within the common knowledge of laypersons. The case appellants rely on to argue expert testimony was not required, Raven's Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114 Cal.App.3d 783, is distinguishable. There, the defects in the landscaping, paint and exterior trim of the plaintiffs' homes were so obvious that no expert testimony was necessary to establish the developer's standard of care. (Id. at pp. 796-797.) In contrast here, whether the boxes' purported failure was attributable to defects in manufacturing is not obvious to a layperson. Accordingly, expert testimony was required to establish the boxes were defective. In addition, the trial court properly ruled that expert testimony was required to show that any alleged defective box caused the damage to the boxed fruit, which led to a loss of profit. (See fn. 5, ante.)
Moreover, even if expert testimony was not required, the trial court rejected Barajas's testimony and evidence when it found him not to be credible. While appellants assert the "weight of the evidence supports the Appellant's claim for damages," that assertion evinces a fundamental misunderstanding of the law. As the party bearing the burden of proof, the issue is whether the evidence compelled a finding in appellants' favor as a matter of law. (Dreyer's, supra, 218 Cal.App.4th at p. 838.) Given the trial court's credibility findings, there is no evidence to support appellants' claim that the boxes were defective. Accordingly, the trial court did not err in finding appellants failed to carry their burden of proof on this issue.
b. Appellants Approved the Structure and Design of the Boxes
Appellants contend Maxco breached the agreement by changing the structure and design of the boxes without their consent or approval. Appellants argue the trial court erred in finding that Barajas specifically requested additional venting holes on the bottom of the larger boxes. Appellants essentially assert the evidence on which the trial court relied, particularly Miller's testimony that it was Barajas who asked for the larger boxes with additional venting, conflicted with other evidence and should be disregarded. But this argument asks us to reweigh the evidence, which, as discussed above, is beyond the scope of our review. Indeed, under the substantial evidence standard, we must disregard the evidence that conflicts with the trial court's finding. (In re Michael G. (2012) 203 Cal.App.4th 580, 595.) It is for the trial court to determine matters of credibility, not us.
Appellants also argue the evidence they presented demonstrated the weak resistance of the larger box. But as we have discussed above, expert testimony was required to establish that the boxes were deficient, which includes whether the additional holes weakened the boxes' resistance, and in light of the trial court's credibility findings, there is no evidence to support appellants' claim that the boxes were defective. Accordingly, the trial court did not err in finding appellants failed to carry their burden of proof on this issue.
c. The Die Cut Plates
Appellants lastly contend Maxco breached the agreement "by failing to surrender the die cut plates to [them] after they had been paid in full." They assert that because Mejia testified the plates had been paid in full, they were entitled to have them returned. Appellants, however, point to no evidence suggesting that the plates were appellants' personal property or they would become the owner of the die cut plates upon payment for them. Instead, as the trial court found, Maxco's policy was that the die cut plates were not considered owned by a customer, and would not be released to the customer, until all debts were paid in full. Thus, the trial court's ruling is supported by the evidence. Again, appellants ask us to reweigh the evidence, which we will not do.
III. APPELLANTS' FRAUD CLAIM
Appellants contend substantial evidence does not support the trial court's determination that they failed to satisfy their burden of proof on their fraud claim. As the party with the burden of proof, however, the question before us is whether the evidence compels a finding in appellants' favor as a matter of law. (Dreyer's, supra, 218 Cal.App.4th at p. 838.) We conclude it does not.
According to Maxco's witnesses, Maxco never knew the boxes were being used to export fruit, never made a representation regarding the quality of the boxes, and never guaranteed the boxes. Appellants contend Maxco guaranteed the boxes because "the box itself states that it [is] suitable for 25 to 28 pounds of fruit," and when Maxco entered into the contract, "it agreed to deliver boxes suitable for this purpose." Appellants assert "courtroom testimony to the contrary must be viewed at le[a]st as self-serving statements which are contradicted by the weight of other evidence."
Once again, appellants are asking us to reweigh the evidence, which is beyond the scope of our review. Given the testimony of Maxco's witnesses, we cannot say that the evidence compels a finding in favor of appellants on their fraud claim as a matter of law.
IV. ATTORNEY FEES
Appellants do not challenge the trial court's award of attorney fees. The credit application allows Maxco to recover its "reasonable attorney's fees and costs in connection with the collection of all past due account balances, or any other amounts owing to Maxco by the undersigned." Maxco requests an award of its attorney fees on appeal. A contractual authorization for recovery of attorney fees incurred in trial court proceedings includes attorney fees incurred on appeal. (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 250.) We conclude Maxco is entitled to an award of appellate attorney fees and remand the matter to the trial court for a determination of the appropriate amount of fees.
DISPOSITION
The judgment is affirmed. The matter is remanded to the trial court for a determination of the amount of an award of attorney fees to Maxco as the prevailing party on this appeal. Maxco shall recover its costs on appeal.
/s/_________
FRANSON, Acting P.J. WE CONCUR: /s/_________
MEEHAN, J. /s/_________
SNAUFFER, J.