Opinion
NOT TO BE PUBLISHED
Contra Costa County Super. Ct. No. C03-00204
Kline, P.J.
Shaw Environmental, Inc. (Shaw) appeals from a judgment in favor of Double D Transportation (DD) on a cross-complaint for indemnity. Shaw contends the trial court erred in granting DD’s motion for a directed verdict after the jury returned special verdicts in favor of Shaw. We agree and reverse the judgment.
STATEMENT OF THE CASE AND FACTS
This case arises from a collision between a freight train operated by Burlington Northern Santa Fe Railway Company and a truck hauling dirt to a construction site. The dirt had been ordered by Shaw from DD. The truck driver was killed and the conductor and engineer of the train were injured.
Complaints were filed by the conductor and engineer against Burlington, the truck driver, DD, Pacific Gas and Electric ((PG&E), the owner of the construction site) and Shaw (the general contractor), and by the truck driver’s estate and family against PG&E, Shaw, Burlington, DD and other defendants. The actions were consolidated by the trial court.
Shaw cross-complained for indemnity against the truck driver’s estate, then amended its cross-complaint to add DD as a cross-defendant. The cross-complaint alleged that Shaw entered into a written purchase order agreement with DD for DD to deliver dirt to the construction site. It further alleged that the written agreement contained an indemnity provision requiring DD to indemnify and hold harmless Shaw from all liabilities and claims arising out of DD’s performance of the contract.
DD filed a motion in limine seeking to preclude Shaw from asserting the existence of an express indemnity agreement. According to DD, it formed an oral contract with Shaw covering all the essential terms (type and quantity of material, price, time and location of delivery) during telephone conversations on August 13, 2002, after which Shaw faxed to DD a one-page purchase order containing the agreed upon terms. No one at DD saw or read the additional three pages that allegedly accompanied the purchase order, and no one from DD signed the purchase order’s space for acknowledgement and acceptance.
Applying provisions of the California Commercial Code, DD maintained the purchase order sent by Shaw should be viewed as a written confirmation of the existing oral contract, with the attached “terms and conditions” (including the indemnity provision) a proposal for additional contract terms that DD was not aware of and never accepted. Alternatively, DD suggested the transaction might be viewed as an oral offer (the telephone call) followed by written acceptance (the purchase order) with proposed additional terms. Although the California Commercial Code provides for additional terms to become part of a contract between merchants in some situations, DD argued this was not the case here because the indemnity clause materially altered the original contract. Finally, DD stated the transaction could be viewed as an oral offer followed by written acceptance conditioned on an express acceptance of additional terms, and that DD’s delivery of the fill material did not constitute express acceptance of the additional terms because DD was not aware of the additional terms. As a result, DD maintained, the only contract between the parties was that based on their conduct, which reflected an agreement for sale and delivery of the fill material but nothing about indemnity.
Shaw’s opposition to the motion in limine reflected a very different view of the transaction. According to Shaw, its employee, Benedicto Coloma, discussed a possible purchase and delivery of fill material with a representative of DD on August 13, but did not—and did not have the authority to—enter into an oral contract. Coloma told the DD representative that he would fax a purchase order containing terms and conditions of an agreement, and did so shortly after the telephone conversation. According to Shaw, the telephone conversation was only a negotiation, and the parties’ contract was the written purchase order containing the indemnity provision. Shaw further argued that if the court found the parties entered an oral agreement, the “additional terms” supplied by the purchase order were enforceable under the Uniform Commercial Code and California Commercial Code as part of the parties’ contract.
At a hearing on DD’s motion to confirm a settlement it had reached with the plaintiffs, DD asked the court to rule on its motion regarding the indemnity claim because the settlement was contingent on a ruling that Shaw did not have a valid claim for express contractual indemnity. The court questioned whether it could decide the indemnity issue as a matter of law, stating that the indemnity issue hinged on whether the court determined the parties formed an oral contract, to which the purchase order attempted to add terms and conditions, or determined the purchase order was the contract, which DD accepted by its subsequent job order. Shaw’s attorney objected to the procedure by which DD was attempting to have the indemnity issue decided and was not prepared to say whether Shaw believed there were relevant disputed factual issues. The court set a hearing date for a few days later.
After receiving the declarations of Benedicto Coloma and Pat Perreira regarding the August 13 telephone call, the court concluded there was a contested factual issue as to whether an agreement was reached during the conversation. The court explained that if an oral contract was formed, the terms and conditions attached to the purchase order would have been a proposed modification that would require express acceptance, not just acceptance by performance by DD; if, however, the contract was formed by the purchase order and DD’s acceptance by performance, the terms and conditions would be included unless DD rejected them or provided a conditional acceptance.
The court set the matter for a jury trial on the question, “is there or isn’t there a contract?”
Prior to jury selection on March 28, 2005, the court identified the issues for the jury to decide as whether an oral contract was formed during the August 13 telephone conversation and whether DD agreed to and accepted the terms and conditions in Shaw’s purchase order. The court noted that the jury would also have to decide whether the purchase order was received by DD.
At trial, Shaw’s project manager, Don Robinson, testified he made inquiries of several trucking companies to find a source for fill material needed at Shaw’s construction site. A few days before August 13, he asked Mr. Perreira at DD if he court get 700 tons of clean fill dirt delivered to the job site quickly, and Perreira confirmed he could provide the material in the time Robinson stated, and gave Robinson a price. Robinson testified he did not negotiate prices with Perreira. Although in a deposition he had stated that he had “negotiated the rate” with Perreira, Robinson testified he meant only that he was gathering information from DD. Robinson never indicated to Perreira that the deal was closed because he did not have “that type of authority.” To Robinson’s knowledge, no one at Shaw had authority to bind the company to a contract by telephone. Robinson never discussed the terms and conditions of the job with Perreira or anyone else at DD. After the telephone call, Robinson completed a procurement requisition, identifying the quantity of material needed, price and vendor. He submitted the requisition to procurement officer Ben Coloma on August 13, and Coloma issued a purchase order to DD on the same date. At the time he provided the requisition to Coloma, Robinson had decided he wanted to use DD for the job, but he did not recall whether he had communicated this to Perreira.
Robinson testified that he solicited prices from three vendors and got prices from two in order to comply with Shaw’s procurement standard operating procedure of demonstrating competition. If this had been a larger contract and there had been more time, Robinson would have solicited bids and kept a formal job log.
Benedicto Coloma testified that after he received the requisition from Robinson, he contacted other vendors to determine whether he could purchase the necessary material for a lower price. He concluded that DD offered the lowest price and contacted DD. Coloma did not recall the name of the man he spoke with at DD. In response to Coloma’s inquiry, the man said he could provide the fill material and stated the price per load and hourly rate for truck service. Coloma said he “was going to cut a purchase order and make the commitment” and would fax the purchase order including Shaw’s terms and conditions as well as directions to the worksite. Coloma specifically mentioned that he would attach the terms and conditions to the purchase order, which was the standard operating procedure at Shaw at that time. He did not specifically discuss any of the terms and conditions during the telephone conversation. Coloma faxed five pages to DD: the one-page purchase order, three pages of terms and conditions, and one page of directions to the worksite. The terms and conditions were listed as an attachment on the purchase order. No one from DD ever told Coloma they had not received the terms and conditions he faxed. Coloma also mailed the original of the documents to DD. Coloma denied that his call to DD was simply to confirm the information Robinson had obtained, and testified that he did not have authority to enter an oral agreement with a vendor.
Pat Perreira, vice president and general manager of DD, testified that he was the only person at DD authorized to enter into contracts such as the one with Shaw. DD had not done business with Shaw prior to the present transaction. When Robinson called about obtaining fill material, he and Perreira did not discuss any terms and conditions other than amount of fill, price and whether the material was clean fill. Robinson never said that an additional set of terms and conditions would follow the telephone conversation. Perreira testified that he did not remember whether he just quoted Robinson prices or in fact entered into an agreement with Robinson during the telephone conversation. Perreira did not discuss the job with Coloma or anyone else at Shaw. Perreira stated that if he had been told Shaw wanted DD to agree to indemnify it, DD would not have done the job because, for a $5,000 job, it “wouldn’t be worth it.”
Perreira testified that he never received the faxed purchase order from Shaw. The date stamp on the envelope containing the purchase order and terms and conditions mailed by Shaw showed that the documents were received by DD on August 16, 2002, the day after DD had completed its work on the project. Perreira testified he did not see the directions to the job site that Coloma testified he faxed along with the purchase order. Asked how his personnel got to the worksite if he did not see the directions, Perreira testified the dispatcher might have seen them. Perreira stated that DD sometimes performed work without a purchase order in place.
At the conclusion of the testimony, DD moved for a directed verdict, arguing that DD did not receive the terms and conditions—including the indemnity provision—until after it completed the job, and could not have agreed to something of which it was not aware. Shaw argued there was a triable issue of fact because Robinson and Coloma testified they did not enter into an agreement with DD by telephone and the fact DD performed the job the day after the phone call showed DD had received the purchase order and directions to the job site. The court took the motion under submission.
The jury was given a special verdict form requiring it to answer two questions: (1) “Was there an oral contract agreed upon between plaintiff, Shaw Environmental, and defendant Double D Transportation Co.?” and (2) “Did the plaintiff and defendant mutually consent to the Terms & Conditions that are attached to plaintiff Shaw Environmental’s Purchase Order?” The court instructed the jury that the first question “really refers to the conversation on August 13th.”
Counsel for Shaw urged the jury to find there was no oral agreement and the parties’ contract was formed when Shaw faxed the purchase order and DD’s conduct demonstrated assent to the contract terms. DD’s attorney, by contrast, argued that an oral contract was formed because the parties agreed upon the essential terms during the phone conversations, DD did not receive the purchase order until after it delivered the fill, and DD could not have agreed to the additional terms and conditions because it was not aware of them.
During the jury’s deliberations, the court and counsel further discussed the motion for a directed verdict. The court stated that the only basis upon which it could grant a directed verdict would be if it could “determine as a matter of law based on the objective conduct of the parties that there was an oral contract as a result of this telephone conversation.” The court noted that while Robinson testified he did not intend to form a contract in that conversation, the objective manifestations were that he agreed upon price, quantity, and terms of delivery.
The jury, by special verdict, found no oral contract was formed between the parties and the parties mutually consented to the terms and conditions attached to Shaw’s purchase order.
At this point, a third question was submitted to the jury: “Did the plaintiff and the defendant bargain for and exchange consideration for the Terms & Conditions?”
Just before the verdict form was read to the jury, DD’s attorney had indicated to the court that DD wanted the jury to answer this third question. The court declined to modify the verdict form at that point. In discussing the matter after the jury began deliberations, the court and counsel agreed that if the jury answered question two in the affirmative, it would be asked to return to deliberate the new third question.
While the jury deliberated, the court returned to the motion for a directed verdict. The court stated its view that this was a “classic 2207 Commercial Code case” because uncontradicted testimony showed the parties agreed on all the material terms, the purchase order was, as a matter of law, an expression of acceptance or written confirmation of the terms, and the terms and conditions were “additional terms that materially altered those that were discussed in the only negotiations between the parties,” and “because it was a material alteration, that express acceptance would be required.” The court recognized that the jury had found Perreira and Robinson did not reach an oral agreement during their telephone conversation, although it questioned whether this conclusion was supported by the evidence. In the court’s view, assuming there was not an oral contract, “clearly every material term in that purchase order, with the exception of the supplemental terms and conditions, was negotiated and agreed. All Mr. Coloma did was incorporate those terms in a purchase order and sent it on to Double D, which I have difficulty seeing as anything other than a written confirmation under 2207, sub-section 1. [¶] If that’s correct, then clearly the terms and conditions are in addition to those that had been discussed between the parties. It’s uncontradicted that those terms were not discussed between the parties. So these are additional terms contained in the acceptance. [¶] The acceptance is not, according to the term, expressly made conditional on assent to the additional terms. [¶] Under 2207(2) the additional terms are construed as proposals for addition to the contract, and they become part of the contract unless they materially alter it. [¶] I’ve already found as a matter of law that they materially alter the terms. That the indemnity provision clearly materially alters the terms.” The court invited counsel to explain why the undisputed evidence did not establish as a matter of law that “this is a material term for which there was no express acceptance.”
Shaw’s attorney argued that because Shaw never entered an oral agreement with DD, “there can be no confirmation” and “without confirmation, 2207 doesn’t apply.” Contrary to the court’s view, counsel argued the evidence showed Perreira did not make an offer during the telephone call but only answered Robinson’s questions about the availability of material, price and delivery. Since no offer was made by DD, Shaw’s purchase offer did not constitute an acceptance. DD’s attorney argued that both Robinson and Coloma had testified they were obtaining bids for the projects, a bid is an offer to do work for a set price and, therefore, Shaw accepted an offer from DD and then added additional terms and conditions.
The court concluded that the motion for a directed verdict had to be granted because the undisputed testimony established that there was a bid or offer from DD which was accepted or confirmed by the purchase order, that the additional terms were proposals for additions to the contract, and that the indemnity provision was a material term which was not negotiated between the parties. Nevertheless, the court felt it should get the jury’s decision on the third question in the event the case was appealed and the appellate court disagreed with the trial court’s view. The court stated, “[W]e will receive the verdicts of the jury in this matter and the Court will at that point direct entry of judgment for the defendant on the Cross-Complaint for express indemnity.”
The jury’s supplemental special verdict found that the parties bargained for and exchanged consideration for the terms and conditions. The court directed the clerk to “enter the verdict as received.”
After the jury was discharged, the court returned to the subject of the directed verdict, explaining its reasons for granting the motion as follows:
“The Court’s finding is that under 2207 of the California Commercial Code on the undisputed evidence, and crediting the testimony of both Dr. Robinson and Mr. Coloma that the facts establish as a matter of law that the communication, whether by fax or by mail, from Shaw to Double D constituted an expression of acceptance or a written confirmation of the terms, all of which had been expressed by Double D in the telephone conversation or conversations, depending on which versions you believe; [¶] That the terms and conditions attached to the purchase order unquestionably in my view contained additional terms which materially altered those terms previously discussed between the parties; [¶] That nothing in the transmission from Shaw Environmental to Double D expressly made conditional the acceptance of the additional terms. While they were referenced, the acceptance by Shaw was not conditioned upon acceptance of those additional terms; [¶] That the additional terms are not incorporated in the contract, other than by express acceptance by Double D. And the evidence is undisputed that there was no such express acceptance; [¶] And that in the Court’s view performance of those—of that contract did not constitute acceptance of those additional terms and conditions. [¶] I’m making those determinations as a matter of law which, of course, is entitled to de [n]ovo review.”
In response to a question from Shaw’s attorney, the court stated that it was not making an express finding as to whether it was construing the purchase order as an acceptance or a written confirmation because in either event “it is within the ambit of 2207 of the Commercial Code. [¶] . . . [V]iewing it in either context as a matter of law this is precisely the circumstance which 2207 contemplates.” The court stated that the grounds upon which it was granting the motion for directed verdict were limited to those stated; it was not making findings regarding the fax transmission.
The court directed entry of judgment for DD and against Shaw on Shaw’s cross-complaint for express indemnity. It further held that its finding that the additional terms and conditions were not part of the parties’ agreement also disposed of Shaw’s cause of action for breach of contract based upon obligations other than the indemnity provision that were included in the terms and conditions.
Shaw subsequently moved for an order vacating the trial court’s order for a directed verdict, arguing that the trial court lost jurisdiction to grant a directed verdict once the jury returned its verdict, and the court had no authority to grant a judgment notwithstanding the verdict following the first phase of the bifurcated trial. DD opposed the motion.
Judgment in favor of DD was filed on May 11, 2005. Shaw filed a timely notice of appeal on June 30, 2005.
DISCUSSION
Appellant contends that although the trial court purported to direct entry of a verdict in DD’s favor, because the jury had already returned its verdict, the court in fact entered a judgment notwithstanding the verdict. Whether a directed verdict or a judgment notwithstanding the verdict, however, the standards for the trial court and for this court are the same:
“ ‘ “The trial judge’s power to grant a judgment notwithstanding the verdict is identical to his power to grant a directed verdict [citations]. The trial judge cannot reweigh the evidence [citation], or judge the credibility of witnesses. [Citation.] If the evidence is conflicting or if several reasonable inferences may be drawn, the motion for judgment notwithstanding the verdict should be denied. [Citations.] ‘A motion for judgment notwithstanding the verdict of a jury may properly be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence to support the verdict. If there is any substantial evidence, or reasonable inferences to be drawn therefrom, in support of the verdict, the motion should be denied.’ [Citation.]” ’ (Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 877-878.) The trial court cannot consider witness credibility. (Id. at p. 877.) [¶] On review of an order granting JNOV, we ‘ “must resolve any conflict in the evidence and draw all reasonable inferences therefrom in favor of the jury’s verdict. [Citation.]” ’ (Teitel v. First Los Angeles Bank [(1991)] 231 Cal.App.3d [1593,] 1603.)” (Hansen v. Sunnyside Products, Inc. (1997) 55 Cal.App.4th 1497, 1510.)
Appellant contends that because substantial evidence supported the jury’s verdict, the trial court erred in granting DD’s motion. As described above, the jury determined that the parties did not enter an oral contract and did mutually consent to, and exchange consideration for, the terms and conditions attached to Shaw’s purchase order. The questions before us are whether substantial evidence supported the jury’s determination that the parties’ contract included the terms and conditions or the trial court correctly determined as a matter of law under Commercial Code section 2207 (section 2207) that the contract did not include the terms and conditions.
Section 2207 provides as follows:
“(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
“(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
“(a) The offer expressly limits acceptance to the terms of the offer;
“(b) They materially alter it; or
“(c) Notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
“(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this code.”
Section 2207 was intended to address a “ ‘battle of the forms’ [situation] in which contracting parties exchange pre-printed forms that attempt to cast liability for certain categories of damage on the other party to the transaction.” (Frank M. Booth, Inc. v. Reynolds Metals Co. (E.D.Cal. 1991) 754 F.Supp. 1441, 1445.) It does so “by providing ‘rules of contract formation in cases . . . in which the parties exchange forms but do not agree on all the terms of their contract.’ ” (Ibid., quoting Diamond Fruit Growers, Inc. v. Krack Corp. (9th Cir. 1986) 794 F.2d 1440, 1443.) The statute “establishes a legal rule that proceeding with a contract after receiving a writing that purports to define the terms of the parties’ contract is not sufficient to establish the party’s consent to the terms of the writing to the extent that the terms of the writing either add to, or differ from, the terms detailed in the parties’ earlier writings or discussions. In the absence of a party’s express assent to the additional or different terms of the writing, section 2-207 provides a default rule that the parties intended, as the terms of their agreement, those terms to which both parties have agreed, along with any terms implied by the provisions of the UCC.” (Step-Saver Data Systems, Inc. v. Wyse Technology (3d Cir. 1991) 939 F.2d 91, 99, fns. omitted [discussing section 2-207 of the Uniform Commercial Code].)
“Under traditional common law, no contract was reached if the terms of the offer and the acceptance varied. ‘In order to make a bargain it is necessary that the acceptor shall give in return for the offeror’s promise exactly the consideration which the offeror requests.’ (1 Williston, The Law of Contracts (1st ed. 1920) § 73, p. 128 [italics added].) This ‘mirror image’ rule of offer and acceptance was plainly both unfair and unrealistic in the commercial context. ‘The fact that the parties did intend a contract to be formed and both had a reasonable commercial understanding that the deal was closed, is ignored.’ (Murray, Intention Over Terms: An Exploration of UCC 2-207 and New Section 60, Restatement of Contracts (1969) 37 Fordham L.Rev. 317, 319.)
“Section 2207 rejects the ‘mirror image’ rule. (See e.g., Roto-Lith, Ltd. v. F. P. Bartlett & Co. (1st Cir. 1962) 297 F.2d 497, 500.) ‘This section of the Code recognizes that in current commercial transactions, the terms of the offer and those of the acceptance will seldom be identical.’ (Dorton v. Collins & Aikman Corp. (6th Cir. 1972) 453 F.2d 1161, 1166.)
“Under section 2207, for example, the parties may conclude a contract despite the fact that, after reaching accord, they exchanged forms which purport to memorialize the agreement, but which differ because each party has drafted his form ‘to give him advantage.’ (White & Summers, Uniform Commercial Code (1972) p. 23; see, e.g., Rite Fabrics, Inc. v. Stafford-Higgins Co., Inc. (S.D.N.Y. 1973) 366 F.Supp. 1.) Similarly, the parties may form a contract even if the terms of offer and acceptance differ because one or the other party, in stating its initial position, relies upon ‘forms drafted to cover the majority of [its] transactions in a uniform, standard manner’ (Duesenberg & King, Sales and Bulk Transfers under the Uniform Commercial Code (1976) § 3.02, p. 3-9), and subsequently fails to amend its form to reflect the deal which the other party claims was actually negotiated. (See, e.g., Ebasco Services Inc. v. Pennsylvania Power & L. Co. (E.D.Pa. 1975) 402 F.Supp. 421, 434-435.)
“In place of the ‘mirror image’ rule, section 2207 inquires as to whether the parties intended to complete an agreement: ‘Under this Article a proposed deal which in commercial understanding has in fact been closed is recognized as a contract.’ (§ 2207, Cal. U. Com. Code, com. 2.) If the parties intend to contract, but the terms of their offer and acceptance differ, section 2207 authorizes a court to determine which terms are part of the contract, either by reference to the parties’ own dealings (see § 2207, subds. (1), (2)), or by reference to other provisions of the code. (See § 2207, subd. (3).)
“Section 2207 is thus of a piece with other recent developments in contract law. Instead of fastening upon abstract doctrinal concepts like offer and acceptance, section 2207 looks to the actual dealings of the parties and gives legal effect to that conduct. Much as adhesion contract analysis teaches us not to enforce contracts until we look behind the facade of the formalistic standardized agreement in order to determine whether any inequality of bargaining power between the parties renders contractual terms unconscionable, or causes the contract to be interpreted against the more powerful party, section 2207 instructs us not to refuse to enforce contracts until we look below the surface of the parties’ disagreement as to contract terms and determine whether the parties undertook to close their deal. Section 2207 requires courts to put aside the formal and academic stereotypes of traditional doctrine of offer and acceptance and to analyze instead what really happens.” (Steiner v. Mobil Oil Corp. (1977) 20 Cal.3d 90, 99-100.)
In the present case, the jury was presented with two theories regarding the formation of a contract. Shaw argued that there was no oral agreement and the contract was formed when Shaw faxed the purchase order and DD’s conduct demonstrated assent to the contract terms. DD, by contrast, argued that an oral contract was formed because the parties agreed upon the essential terms during the phone conversations, DD did not receive the purchase order until after it delivered the fill, and DD could not have agreed to the additional terms and conditions because it was not aware of them. The jury was instructed that in order to prove the existence of a contract including the additional terms and conditions, Shaw was required to prove that DD “agreed to be bound by the terms and conditions either expressly or by its conduct” and “communicated its agreement to Shaw Environmental either expressly or by its conduct.” It was instructed that mutual consent was an essential element to the existence of a contract and that mutual consent “arises out of the reasonable meaning of the words and acts of the parties and not from any secret or unexpressed intention or understanding,” considering “the circumstances under which the words were used and the conduct occurred,” and that “[c]onduct alone is not effective as an expression of consent unless that person intends to engage in the conduct and knows or has reason to know that the other party may infer consent from such conduct.” It was further instructed, in accordance with section 2207, subdivision (3): “Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms upon which the writings of the parties agree.”
The jury’s special verdicts demonstrate that it believed the parties’ transaction was governed by a written contract—the purchase order—containing the additional terms and conditions. To reach this conclusion, the jury could only have viewed the transaction as consisting of oral negotiations, an offer by Shaw in its purchase order and formation of a contract by DD’s acceptance of the offer by performance. The jury necessarily rejected DD’s contentions that the parties entered an oral contract during their telephone communications and that DD was not aware of the terms and conditions attached to the purchase order. While the trial court ultimately took the view that DD made a bid or offer which Shaw accepted by its purchase order, this theory was not suggested to the jury.
There is no question substantial evidence supported the jury’s determination that the parties did not form an oral contract. Shaw’s project manager, Robinson, testified that he discussed with DD’s Perreira having the fill delivered but did not enter a binding agreement with Perreira and in fact lacked authority to do so. Shaw’s Coloma testified that after receiving Robinson’s procurement order, he contacted other vendors, then determined DD was offering the lowest price and sent the purchase order. Coloma further testified that he told his contact at DD that he would be faxing the purchase orderincluding Shaw’s terms and conditions and directions to the worksite. DD’s Perreira testified that he did not remember whether he just quoted Robinson prices or in fact entered into an agreement with Robinson during the telephone conversation. This testimony permitted the jury to conclude that the telephone conversations between Shaw and DD were preliminary to formation of a contract and did not themselves result in an oral contract.
There was also substantial evidence to support the jury’s determination that the parties mutually consented to the additional terms and conditions in the purchase order. Coloma testified that he told the person with whom he spoke at DD that he would fax the purchase order with Shaw’s terms and conditions, that he did in fact send this fax, and that no one from DD ever indicated they had not received the fax. Coloma testified that he faxed directions to the worksite along with the purchase order, and it is undisputed that DD delivered the specified fill to the designated location. The jury was instructed that “[i]f a party provided weaker evidence when it could have provided stronger evidence, you may distrust the weaker evidence,” yet despite the absence of the faxed form of the purchase order, apparently chose to believe that DD received the fax from Shaw.
“Evidence of even one credible witness ‘is sufficient for proof of any fact.’ (Evid. Code, § 411.)” (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 334.) The evidence that DD was told to expect the fax with Shaw’s terms and conditions and in fact received the document clearly permits the inference that DD’s subsequent performance operated as acceptance of all the terms contained therein. There was no evidence DD in any way expressed objection to any terms in the purchase order. Rather, DD’s prompt performance could reasonably be viewed as communicating consent to Shaw. (Civ. Code, § 1584 ; Comm. Code, § 2206 .)
Civil Code section 1584 provides: “Performance of the conditions of a proposal, or the acceptance of the consideration offered with a proposal, is an acceptance of the proposal.”
Commercial Code section 2206 provides in pertinent part: “(1) Unless otherwise unambiguously indicated by the language or circumstances [¶] (a) An offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances; [¶] (b) An order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods . . . .”
Since substantial evidence supported the jury’s determinations, there was no basis for the trial court to enter a judgment conflicting with those determinations. DD contends that the trial court did not contradict the jury’s findings but merely applied statutory rules of construction (section 2207) to the written contract to determine the contract’s terms. According to DD, under section 2207, the indemnity provision did not become part of the contract because undisputed evidence showed the indemnity provision was “part of an offer that did not expressly limit the acceptance to the terms of the offer,” DD did not accept the terms, and the indemnity provision “materially altered the written confirmation.” The trial court, as indicated above, considered the present case as presenting a “classic” section 2207 situation.
By its terms, section 2207 applies to a “definite and seasonable expression of acceptance or a written confirmation.” Accordingly, to find section 2207 applicable, the trial court had to view the purchase order as either accepting an offer made by DD or confirming an agreement previously reached by the parties. The latter option necessarily conflicts with the jury’s determination, supported by the evidence, that the parties did not form an oral contract. The former may be supported by the evidence—but, as discussed above, the evidence also supports a determination that the purchase order was the initial offer. The question thus becomes whether the trial court properly could hold as a matter of law that DD made an offer during the telephone conversations which Shaw’s purchase order served to accept.
“ ‘ “ ‘An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.’ ” [Citations.]’ (City of Moorpark v. Moorpark Unified School Dist. (1991) 54 Cal.3d 921, 930 . . . .) The determination of whether a particular communication constitutes an operative offer, rather than an inoperative step in the preliminary negotiation of a contract, depends upon all the surrounding circumstances. (1 Corbin, Contracts (rev. ed. 1993) § 2.2, p. 105.) The objective manifestation of the party’s assent ordinarily controls, and the pertinent inquiry is whether the individual to whom the communication was made had reason to believe that it was intended as an offer. (1 Witkin, [Summary of Cal. Law (9th ed. 1987)] Contracts, § 119, p. 144; 1 Farnsworth, Contracts (2d ed. 1998) § 3.10, p. 237.)” (Donovan v. RRL Corp. (2001) 26 Cal.4th 261, 271.) “Contract formation is governed by objective manifestations, not subjective intent of any individual involved. (E.g., Atlas Assurance Co. v. McCombs Corp. (1983) 146 Cal.App.3d 135, 144; Meyer v. Benko (1976) 55 Cal.App.3d 937, 942-943.) The test is ‘what the outward manifestations of consent would lead a reasonable person to believe.’ (Meyer v. Benko, supra, 55 Cal.App.3d at pp. 942-943.)” (Roth v. Malson (1998) 67 Cal.App.4th 552, 557.)
Unquestionably, the evidence would support the trial court’s view that an offer was made by DD. But evidence also supports a contrary view. Robinson and Coloma testified that they solicited information from DD about whether it could provide the material needed and what it would charge, and DD responded to their inquiries. Coloma testified that he told DD he would fax a purchase order with Shaw’s terms and conditions. This testimony supports an inference that the parties’ conversations were simply investigatory discussions and not intended to result in any binding agreement.
In sum, given the jury’s determinations, supported by substantial evidence, that the parties entered a written contract and mutually agreed to its terms and conditions, the trial court erred in granting DD’s motion. The trial court’s application of section 2207 simply cannot be reconciled with the jury’s findings, and the trial court lacked the basis for overriding those findings.
DD urges that, if Shaw prevails on this appeal, we should find the trial court erred in denying DD’s requested special jury instruction based on section 2207 principles. Shaw responds that DD has no right to review of this issue because DD did not file a cross-appeal.
DD’s requested instruction was as follows: “When a party, Shaw Environmental, conditions its acceptance of a contract on the other party’s, Double D Transportation, consent to additional or different terms, Shaw Environmental cannot unilaterally impose the additional or different terms on Double D Transportation. Double D Transportation’s subsequent performance does not constitute consent to those additional or different terms. Diamond Fruit Growers, Inc. v. Krack Corp., 794 F.2d 1440, 1444-1445 (9th Cir. 1986); See also, Frank M. Booth, Inc. v. Reynolds Metals Co., 754 F.Supp. 1441, 1447 (E.D.Cal. 1991).”
“As a general matter, ‘a respondent who has not appealed from the judgment may not urge error on appeal.’ (California State Employees’ Assn. v. State Personnel Bd. (1986) 178 Cal.App.3d 372, 382, fn. 7.) Code of Civil Procedure section 906 provides a limited exception ‘to allow a respondent to assert a legal theory which may result in affirmance of the judgment.’ (178 Cal.App.3d at p. 382, fn. 7.)” (Estate of Powell (2000) 83 Cal.App.4th 1434, 1439.) Here, if we were to agree with DD that the requested instruction should have been given and its absence was prejudicial, the remedy would be a remand for retrial, not affirmance of the trial court’s judgment for DD. Accordingly, this exception does not permit review of the issue.
As we have said, in granting DD’s motion for a directed verdict following receipt of the jury’s first two special verdicts, the trial court effectively entered a judgment notwithstanding the verdict. When a judgment notwithstanding the verdict is reversed on appeal, the original judgment is automatically revived; a protective cross-appeal is necessary, therefore, to ensure the opposing party’s right to appellate review of the original judgment. (Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 910; Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2006) § 3:169, pp. 3-66.2 to 3-66.3.) In the present case, because the trial court only received and never entered a judgment on the jury’s special verdicts, there is no “original judgment” to be automatically revived. Rather, having found the trial court erred in granting DD’s motion, we will reverse and remand for the trial court to enter a judgment consistent with the jury’s special verdicts. (Code Civ. Proc., §§ 624, 628.) Once that judgment is entered, DD will have its opportunity to appeal if it chooses to do so.
The judgment is reversed and the matter remanded for proceedings consistent with the views expressed herein. Costs to Shaw.
We concur: Haerle, J., Richman, J.