Union Pacific Railroad Co. v. SFPP, L.P.

Full title: UNION PACIFIC RAILROAD COMPANY, Plaintiff and Respondent, v. SFPP, L.P. et…

Court: California Court of Appeals, Second District, Eighth Division

Date published: Jan 28, 2009

No. B199403 (Cal. Ct. App. Jan. 28, 2009)

Opinion

UNION PACIFIC RAILROAD COMPANY, Plaintiff and Respondent, v. SFPP, L.P. et al., Defendants and Appellants. B199403 California Court of Appeal, Second District, Eighth Division January 28, 2009

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Los Angeles County Super. Ct. No. BC236852

ORDER MODIFYING OPINION AND DENYING REHEARING [NO CHANGE IN JUDGMENT]

THE COURT^[*]:

[*] RUBIN, Acting P. J., BIGELOW, J.

It is ordered that the opinion filed on December 29, 2008, be modified as follows:

(1) On page 12, the following paragraphs are added after the second full paragraph that begins with “Clearly, the trial court did not credit . . . .”

In its argument that the course of performance evidence established the limitation on the Pipeline’s obligation to pay, the Pipeline appears to argue that there was an implied modification of the parties’ agreement. The Pipeline cites to Wagner v. Glendale Adventist Medical Center (1989) 216 Cal.App.3d 1379, 1388 (Wagner) and Warner-Lambert Pharm. Co. v. John J. Reynolds, Inc. (S.D.N.Y. 1959) 178 F.Supp. 655, 667-668 and relies on the following passage from Wagner: “When one party has, through oral representations and conduct or custom, subsequently behaved in a manner antithetical to one or more terms of an express written contract, he or she has induced the other party to rely on the representations and conduct or custom. In that circumstance, it would be equally inequitable to deny the relying party the benefit of the other party’s apparent modification of the written contract.” (Wagner,at p. 1388.) After stating that principle, the Wagner court found no evidence of an implied modification affording an employee permanent employment. (Id. at pp. 1389-1392.)

The Pipeline cites to no evidence in the record in support of its implicit argument that there was an implied modification of the parties’ written agreement. In its trial brief, the Pipeline argued, (1) “the basic tenets of contract interpretation support SFPP’s interpretation of the relocation clause in the AREA;” (2) “the admissions of Union Pacific’s own personnel corroborate SFPP’s interpretation of the relocation clause;” (3) “the parties’ decades-long practice illustrates the limitations on Union Pacific’s ability to ask SFPP to relocate at SFPP’s expense;” and (4) “the Court of Appeal opinion did not limit the evidence.” (Capitalization omitted.) Neither the alleged inequity in denying “the relying party the benefit of the other party’s apparent modification of the written contract” (Wagner, supra, 216 Cal.App.3d at p. 1388) nor an alleged “modification” of the written contract was focused on during trial and neither is supported by the record.

The Pipeline’s reliance on Warner-Lambert Pharm. Co. v. John J. Reynolds, Inc., supra, 178 F.Supp. 655 also is misplaced. In that case, the federal district court was asked to decide whether the defendants were required to make periodic payments for its manufactured and sale of Listerine. (Id. at p. 657.) The court found the language of the parties’ agreement to unambiguously require payments as long as the defendants manufacture and sold Listerine. (Id. at p. 660.) The court also found the conduct of the parties over the term of the contract to be persuasive of the intent of the parties. (Id. at p. 667.) As we have explained, although course of performance evidence often is persuasive, the Pipeline has not shown that in this case it is dispositive.

(2) On page 17, footnote 4 is deleted.

There is no change in judgment.

Appellants’ petition for rehearing is denied.