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Jazayeri v. Mao

May 27, 2009

MASHID JAZAYERI ET AL., PLAINTIFFS AND APPELLANTS,
v.
DENNIS MAO ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County, Paul Gutman, Judge. Reversed and remanded for retrial. (Los Angeles County Super. Ct. No. BC322383).

The opinion of the court was delivered by: Manella, J.

CERTIFIED FOR PUBLICATION

INTRODUCTION

In this action brought by appellants for breach of contract and fraud, the trial court excluded the bulk of appellants‟ documentary evidence on grounds of lack of authentication and hearsay. Concluding that appellants had failed to meet their burden of proof, the court then entered judgment for respondents. We conclude that the blanket exclusion was error, and that much of the evidence offered was adequately authenticated and was not subject to any legitimate hearsay objection. As set forth in greater detail below, certain documents qualified for admission as official records under Evidence Code section 1280, others as business records under Evidence Code section 1271, and still others as admissions under Evidence Code section 1220 or adoptive admissions under Evidence Code section 1221.*fn1

FACTUAL AND PROCEDURAL BACKGROUND

A. Claims Presented

Appellants Mahshid Jazayeri and her husband David Rashidian, doing business as R&A Ranch, brought suit against respondents Susan Mao, her sons Dennis and Eric Mao, and their company, Mao Foods, Inc. The complaint alleged that appellants were in the business of raising chickens for sale and that they and respondents entered into an agreement under which appellants were to deliver a certain number of "live healthy" chickens weighing between five and six pounds, and respondents were to pay 50 cents per pound for the live healthy chickens delivered. According to the complaint, the overall weight of the chickens delivered was to be determined by weighing the delivery trucks and cages before and after the chickens were loaded. The complaint further alleged that the parties understood that some chickens would be dead on arrival (DOA) or otherwise unusable as food. The number of dead or unusable chickens was recorded on poultry condemnation certificates (PCCs) issued by food safety inspectors working for the United States Department of Agriculture (USDA). Appellants alleged that the parties‟ contract permitted Mao Foods to deduct from the calculated weight of the delivered chickens the estimated weight of the DOA or otherwise unusable chickens. However, Mao Foods allegedly altered PCCs to show more dead or unusable chickens than were found by the USDA inspectors and, using the altered PCCs to justify their actions, deducted excessive amounts.

As separate claims, the complaint alleged that: (1) respondents had at times unilaterally paid appellant less per pound for the chickens delivered than called for by the parties‟ agreement; and (2) after the weight of the live healthy chickens had been calculated in accordance with the procedures described above, respondents arbitrarily reduced it by deducting a percentage before calculating the payment due appellants. Appellants sought damages for both breach of contract and fraud.*fn2

Shortly before trial, appellants filed an amended complaint clarifying that the parties‟ agreement was formalized in a series of written contracts covering the period between 2001 and 2004, the first signed in July 2001 and the last signed in April 2004. The amended complaint further stated that respondents wrongfully refused to accept additional deliveries after September 20, 2004, resulting in a further loss to appellants of approximately $100,000 because appellants were unable to sell thousands of chickens they had purchased and fed in reliance on the agreement.

At trial, counsel for appellants represented to the court that appellants suffered five categories of losses, all essentially arising from respondents‟ alleged failure to pay the agreed price per pound for the chickens R&A Ranch delivered to Mao Foods between 2001 and 2004. First, appellants claimed damages based on the use of forged or altered PCCs to calculate the payments due. Second, appellants claimed damages based on the difference between the DOA count made by Mao Foods and R&A Ranch employees when the chickens were delivered and the count used by Mao Foods to calculate deductions.*fn3 Third, appellants sought damages based on Mao Foods‟ alleged unilateral decision to deduct a percentage from the weight of the chickens delivered before computing the amount due. Fourth, appellants contended that Mao Foods sometimes unilaterally reduced the price per pound it paid R&A Ranch from the agreed price to a lesser price. Fifth, appellants sought damages based on deliveries made for which no payments whatsoever were received.*fn4 Totaling the claims in all these categories, appellants estimated their economic damages at $67,879.74.*fn5

B. Evidence at Trial

Jazayeri testified that she or her husband entered into a series of contracts on behalf of R&A Ranch to sell live healthy chickens to Mao Foods. The contracts, which were admitted into evidence, covered the period from September 2001 to December 2004. The first agreement contained a provision which stated: "Downgrade or [p]arts missing after processing percentage not to exceed 15%."*fn6

The other contracts did not include that provision. All of the agreements specified that the chickens were to weigh between five and six pounds, but none specified the price to be paid per pound.*fn7

Jazayeri testified that she was present on nearly every occasion when R&A Ranch chickens were delivered to Mao Foods‟ processing plant, which occurred approximately three times per week during the period the agreements were in effect. Jazayeri and/or the delivery truck driver brought with them at the time of delivery copies of weight slips -- documents showing the laden and unladen weights of the delivery trucks, from which the weight of the chickens could be calculated -- and purchase orders.*fn8 The purchase orders were prepared by Rashidian. On them, he wrote the date of the delivery, the number of cages and the number of chickens, which he had personally counted.

When the delivery trucks arrived at Mao Foods‟ processing plant, the cages containing the chickens were unloaded by an R&A Ranch employee. A Mao Foods employee -- often Juan Mendes, the plant foreman -- counted the cages and randomly counted the chickens in some of the cages to confirm the numbers on the purchase orders. Mao Foods employees then took the chickens from the cages and hung them for slaughter and processing on the production line. Chickens found already dead were put to one side and later counted by a Mao Foods employee in the presence of an R&A Ranch employee. The Mao Foods employee performing the count wrote the number of DOA chickens on a piece of paper -- generally the purchase order, but sometimes on a blank piece of paper or on the freight bills or other documentation provided by the trucking company -- and generally also wrote or signed his name.*fn9

Jazayeri understood from her conversations with Susan Mao that Mao Foods would deduct the weight of dead or otherwise unusable chickens from the amount owed R&A Ranch. Jazayeri further understood that Mao Foods would deduct the weight of some of the chickens condemned by USDA inspectors.

Before leaving the processing plant, Jazayeri or the delivery truck driver gave copies of the purchase orders and the weight slips to a Mao Foods employee.*fn10 A few days after each delivery, Susan Mao would give to Jazayeri:

(1) a copy of a calculation sheet showing the amount due R&A Ranch for each delivery; (2) a copy of the PCC showing the number of DOA and condemned chickens; and (3) a check in payment for the live healthy chickens delivered.*fn11

Susan Mao told Jazayeri she prepared the calculation sheets and Jazayeri recognized her handwriting on them. Jazayeri also recognized much of the information on the calculation sheets, including the date of the delivery, the number of chickens delivered and their total and average weight -- based on the weight slips and purchase orders given to Mao Foods at the time of delivery -- and the number of DOA and unusable chickens -- based on the numbers on the PCCs given to Jazayeri by Susan Mao.*fn12 The calculation sheets included a computation of the total amount due, which was derived by multiplying the "billable weight" of the chickens delivered by a specified price per pound, which varied, but was generally in the 44 to 53 cents range.

When Jazayeri received the calculation sheets, she did not check the calculations and Susan Mao did not explain them to her. Jazayeri put the copies of the calculation sheets and PCCs given to her by Susan Mao and the weight slips and purchase orders or other document indicating the number of DOA chickens in the files for R&A Ranch. The files were arranged by date of delivery.

In late 2003, Jazayeri asked the USDA inspectors who worked at the Mao Foods plant why the count for dead and condemned chickens was so high. The inspectors allowed her to compare a few of her copies of the PCCs provided by Susan Mao with the USDA "originals."*fn13 Jazayeri noted that the PCCs given her by Susan Mao showed higher numbers of DOA and condemned chickens than the USDA originals. Jazayeri confronted Susan Mao‟s son, Dennis Mao. Dennis spoke to Susan Mao outside Jazayeri‟s presence. Jazayeri overheard Dennis yelling and heard Susan say: "Dennis, Dennis, don‟t worry. I‟ll pay. I‟ll pay."*fn14

Jazayeri then spoke with Susan privately. Susan admitted she had altered USDA documents for all the growers and promised to reimburse R&A Ranch. A few days later, Jazayeri was called into a meeting with Susan, Dennis and Eric Mao. Eric said: "I‟m sorry. My mom, she did that." Dennis promised to obtain unaltered copies of the PCC‟s from the USDA. A few months later, Dennis told Jazayeri she would have to make the request of the USDA.

In March 2004, January 2005 and November 2005, Jazayeri requested from the USDA under the Freedom of Information Act (FOIA) copies of all the PCCs reflecting R&A Ranch deliveries to Mao Foods.*fn15 In 2004, when the first batch arrived, she compared them with the documents for each delivery given her by Susan Mao and found many discrepancies.*fn16 For example, the PCC for the December 26, 2003 delivery (Exhibit 5) showed 40 DOA chickens; the USDA PCC showed 20 DOA chickens. The USDA PCC for the October 20, 2003 delivery (Exhibit 7) showed 37 condemned chickens, including 9 suffering from septicaemia and toxemia; on the PCC obtained from Susan Mao, the "3" in 37 was changed to a "5" and and the number "2" was placed before the number "9," creating the impression that 57 chickens had been condemned, including 29 suffering from septicaemia and toxemia. Jazayeri discussed her findings with Dennis Mao.

Shortly after Jazayeri‟s discussion with Dennis Mao, by letter dated August 18, 2004, Mao Foods terminated the contract with R&A Ranch. The letter stated that Mao Foods would accept no further deliveries from R&A Ranch after November. After Mao Foods cancelled the contract, R&A Ranch was left with approximately 32,000 chickens it had purchased and fed but could not sell. To support these damages, appellants offered into evidence copies of the invoices for the purchase of chicks, which totaled approximately $16,000. Jazayeri estimated the cost of feeding the chicks at $40,000.

Jazayeri testified that she personally prepared the appellants‟ trial exhibits using the calculation sheets and PCCs given her by Susan Mao, the weight slips and purchase orders in her files, and the copies of ...


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