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Lane Supply, Inc v. Ameri Oil Company

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT Yolo


January 13, 2011

LANE SUPPLY, INC., PLAINTIFF AND RESPONDENT,
v.
AMERI OIL COMPANY, INC., ET AL., DEFENDANTS AND APPELLANTS.

Super. Ct. No. CVG072702

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

Lane Supply v. Ameri Oil CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Having found that plaintiff Lane Supply, Inc.'s inexperienced salesman failed to obtain an original signed written contract for renovating defendant Kang Property, Inc.'s (Kang) Chevron gas station, the trial court awarded plaintiff a quantum meruit recovery for the reasonable value of the products and services it provided. Defendants Kang and Ameri Oil Company, Inc., contend on appeal there is insufficient evidence to support the trial court's finding. We disagree and affirm the judgment.

FACTS

Plaintiff is a supplier of canopies used in the construction of gas stations and convenience stores. Salesman Steve Giorgetti's deal for plaintiff to refurbish a canopy at Kang's Chevron station was his first and only "image refresh" contract. Following up on leads in his predecessor's file, he contacted Azad Amiri. Amiri, who later testified he had retired before meeting with Giorgetti, claimed he was a consultant/contractor assisting Sarbjit Kang, the owner of a Chevron gas station in Dunnigan, with participating in a Chevron reimbursement program to renovate the station. Yet he insisted he was not an agent for Kang; he merely "coordinated" the refresh project. Although Amiri had been in the gas station business for 35 years, Kang's station was his first foray into consulting.

In February or March 2007 Giorgetti met Amiri at the Ameri Oil offices where Amiri either was or had been employed. Amiri's testimony about his relationship with Kang was slippery at best. He claimed he was retired, but neither Giorgetti nor Kang seemed aware of the fact. Giorgetti testified that he met Amiri at the Ameri Oil office, and Amiri never told him he did not work for Ameri Oil or that he was no longer employed by Ameri Oil. Amiri used the Ameri Oil address as his personal address and provided that address to plaintiff. The trial court found that Ameri Oil and Amiri of Ameri Oil were agents of Kang, acting as the manager of the Chevron station's renovation and improvement.

Giorgetti discussed the renovation with Amiri. Amiri referred him to Chevron to research the details about the refresher program it offered gas station owners to renovate their stations. Giorgetti contacted Chevron as requested and reviewed the terms of the letter Chevron had sent Kang describing the refresh program. Chevron's letter explained that a "Level 3" refresh, which Kang's station needed, included changes to the signage, canopy, and fueling stations. Meanwhile, Amiri obtained other bids for the job, including one for $38,000 and another for $35,500. Chevron would reimburse the station a maximum of $34,200 for the Level 3 refresh it required.

Giorgetti testified he had several face-to-face meetings with Amiri before presenting a proposal. The written proposal limited the scope of the work to the canopy. The agreed price of the work was $31,140. Robert Shepard, plaintiff's director of sales and marketing, testified plaintiff received a faxed copy of the contract signed by Kang. The contract, however, provided that plaintiff required a signed original. The contract also required a 25 percent down payment. Giorgetti picked up a check from Amiri for $8,000 with a notation on the check, "canopy."

The canopy renovation was only part of the renovation required by Chevron. As a result, once plaintiff completed the project Chevron refused to sign off and reimburse Kang for the full amount of the contract. Amiri was very upset. He testified he did not sign plaintiff's proposal, he told Giorgetti he needed a bid on the whole refresh project, and he had not entered into a contract with plaintiff. Rather, he claimed he entered into an oral agreement with Giorgetti to complete the entire renovation according to Chevron's specifications.

Giorgetti insisted he read the terms of the contract, which expressly limited the scope of the project to the canopy, to Amiri line by line, and he never represented that plaintiff would completely renovate the station, including changes to the signage and fueling stations. Giorgetti testified that Amiri was going to fax the signed contract to him, and he ultimately received the faxed agreement.

Plaintiff manufactured the materials and hired a subcontractor to complete the installation. Plaintiff paid the subcontractor $8,400. After the job was done, defendant refused to pay, asserting that plaintiff failed to honor the oral agreement to meet Chevron's specifications for a Level 3 refresher. There is no dispute over the quality of the work.

Defendant's designated expert on damages was barred from testifying at trial because he failed to appear at his deposition. According to Amiri, Chevron would not reimburse Kang for plaintiff's work because the job was not complete. Amiri testified he hired another firm to finish the project for a fee of $28,793.59. Defendant presented no other evidence as to the reasonable value of the benefit it received from plaintiff's services.

The court found plaintiff "entitled to recover under a quantum meruit theory. Lane Supply is entitled to recover the reasonable value of services rendered by the plaintiff to defendants Kang an[d] Ameri Oil for services requested by the defendants. The Court finds Lane Supply provided services in good faith and the services were accepted by the defendants to their benefit." The trial court found plaintiff's witnesses, namely, Shepard and the subcontractor, credible and their testimony "persuasive that the value of the work performed by Lane Supply was $31,140.00, to re-image the existing canopy to Chevron Refresh Level 3 image."

The court therefore determined that the reasonable value of the work performed by plaintiff was $31,140. That amount was reduced by the $8,000 down payment and a $3,000 credit to fix the color of a panel. Plaintiff was entitled to recover a total of $20,140 with interest at the rate of 10 percent per annum from October 18, 2007.

DISCUSSION

The dispositive issue presented by this appeal is whether there is substantial evidence to support the trial court's assessment of damages in quantum meruit. (Watson v. Wood Dimension, Inc. (1989) 209 Cal.App.3d 1359, 1365-1366 (Watson).) Because the trial court is uniquely positioned to assess the credibility of witnesses, its factual determinations must be affirmed if supported by substantial evidence. (Wilson v. County of Orange (2009) 169 Cal.App.4th 1185, 1188.) Such a deferential scope of appellate review thrusts a considerable burden on defendants to demonstrate error on the record before us. Here they fall woefully short of sustaining their burden on appeal.

"Quantum meruit refers to the well-established principle that 'the law implies a promise to pay for services performed under circumstances disclosing that they were not gratuitously rendered.' [Citation.] To recover in quantum meruit, a party need not prove the existence of a contract [citations], but it must show the circumstances were such that 'the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made' [citations]." (Huskinson & Brown v. Wolf (2004) 32 Cal.4th 453, 458.)

"The measure of recovery in quantum meruit is the reasonable value of the services rendered, provided they were of direct benefit to the defendant." (Palmer v. Gregg (1967) 65 Cal.2d 657, 660 (Palmer).) Plaintiff presented evidence that the parties agreed defendants would pay $31,140 for the canopy renovation. "The court may consider the price agreed upon by the parties 'as a criterion in ascertaining the reasonable value of services performed.' (Ferrier v. Commercial Steel Corp. (1956) 142 Cal.App.2d 424, 427 . . . .)" (Watson, supra, 209 Cal.App.3d at p. 1365.) Similarly, "[i]t is settled that in an action for the reasonable value of work and labor, a written contract providing for an agreed price is admissible in evidence." (Parker v. Maier Brewing Co. (1960) 180 Cal.App.2d 630, 635.)

Extracting a brief exchange between the court and defendants' counsel during closing argument, defendants insist there is no evidence to support the court's determination of value. Defense counsel complained of defendants' inability to prove a reasonable value when their expert had been excluded from testifying. The court pointed out defendants had paid $28,000 to complete the work and had received other bids to do the complete refresh in excess of $34,000. The court's comments did not constitute findings; rather, they were a response to the unreasonable proposition there was no evidence of value before the court.

The trial court ultimately found there was no breach of contract because the only copy of the contract plaintiff introduced into evidence was a faxed copy and the contract itself provided that the parties needed to sign the original. Nevertheless, pursuant to the authority cited above, the faxed copy is persuasive evidence of an agreed price and one measure of the reasonable value of the work and services provided.

Defendants certainly had the opportunity to introduce other evidence to demonstrate the agreed price did not reflect the true value of the benefit they received. "As Professor Corbin states, 'the defendant is regarded as a debtor to the extent of the value of something received by him and he is said to be under a legal duty sometimes called 'quasi contractual,' to make restitution of this value. In determining the amount of this value, expenditures made by the injured party are not included unless they [i.e., their benefits] were received by the defendant.' [Citation.]" (Palmer, supra, 65 Cal.2d 657, 660.) Defendants cannot complain that their failure to comply with the rules of discovery hamstrung their defense. In the absence of their expert's testimony, they offered little to substantiate their contention that the agreed price did not represent the true value of the benefits they received.

On appeal, they argue the value of the canopy work was only $6,000 to $8,000, based on evidence that plaintiff paid a subcontractor $8,000 to install the materials, Chevron had valued the complete work for a level three refresh at $34,200, the other bids were in that same neighborhood, and it cost $28,000 to complete the rest of the renovation. Defendants ignore, however, the cost of the canopy manufactured by plaintiff. By including only the out-of-pocket expense of the installation paid to the subcontractor, they fail to acknowledge any benefit from the products manufactured and delivered by plaintiff. Moreover, their argument ignores the limited and deferential scope of our review.

It is true, as defendants suggest, the court was not obligated to accept the agreed price as an accurate measure of the benefit they received. But that is not to say the contract price does not constitute substantial evidence to support the trial court's finding of reasonable value in light of the paucity of evidence offered by defendants and the testimony of plaintiff's witnesses. Amiri testified that, despite the terms of the written agreement and the notation "canopy" on the check, he had an expanded notion of the scope of the work. He did not, however, testify to the value of the services and work actually received.

Plaintiff's witnesses, on the other hand, testified to the exact nature of the materials and the work that was necessary to construct the canopy. Shepard, Giorgetti, and Green explained the breadth of the job, the value of the work, and how plaintiff's estimator had established the price. Plaintiff's evidence need not be overwhelming or even compelling; the quantum of proof necessary for us to uphold the court's findings is much more forgiving. Simply put, on appeal defendants have failed to demonstrate that plaintiff's evidence does not constitute substantial evidence to support the trial court's finding of reasonable value. Because we conclude that the evidence in support of the trial court's findings on a quantum meruit recovery is substantial, we need not address the alternative rationale of recovery under the mechanic's lien law.

DISPOSITION

The judgment is affirmed. Defendants shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)

We concur:

BLEASE,J.

HULL,J.

20110113

© 1992-2011 VersusLaw Inc.



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