United States District Court, E.D. California
MEMORANDUM OPINION AND ORDER ON DEFENDANT'S
MOTION FOR SUMMARY JUDGMENT OR SUMMARY ADJUDICATION DOC. #
an action in diversity by plaintiff Pride Packaging
Corporation ("Plaintiff") for breach of contractual
and quasi-contractual warrantees against defendant MAF
Industries, Inc. ("Defendant"). Currently before
the court is the Defendants motion for summary judgment or
summary adjudication as to all claims alleged in
Plaintiff's complaint. The parties do not dispute that
the court has diversity jurisdiction pursuant to 28 U.S.C.
§ 1332. Venue is proper in this court.
complaint in this action was filed on April 18, 2013.
Defendant filed an answer on June 5, 2013. The trial date,
which was originally set for February 27, 2014, was continued
by successive stipulations to April 26, 2016. The parties
filed a joint pretrial statement on January 21, 2016, and the
court issued a pretrial order on February 1, 2016, and
motions in limine were filed by both parties on February 29,
2016. After review of the joint pretrial statement and the
motions in limine, the court observed that a number of purely
legal issues had been raised in motions in limine that could
be more productively raised in a motion for summary judgment.
This observation was communicated to the parties by the
court's order of March 25, 2016, setting a telephonic
conference for March 31, 2016, to explore the possibility of
scheduling briefing for dispositive motions. At the
telephonic conference the court vacated the trial date and
all trial-associated dates and set a briefing schedule for
further dispositive motions. Pursuant to that order,
Defendant filed its motion for summary judgment on May 16,
2016. Plaintiff's opposition was filed on June 6, 2016,
and Defendant's reply was filed on June 20, 2016. The
matter was taken under submission as of July 5, 2016.
action arises out of Plaintiff's efforts to enforce the
terms of what both parties understand is a written contract
for the sale and installation of a cherry packing line
manufactured by Defendant to and for use by Plaintiff
(hereinafter, the "Contract"). There is no dispute
as to what is written in the Contract; only dispute as to its
legal significance. The parties do not materially dispute
that "[t]he purchase agreement for the cherry line
between Defendant and Plaintiff consists of a six-page parts
list and a double-sided, one page document that lists the
price and representations on one side and the ‘Terms
and Conditions' on the other." Doc. # 73 at ¶
2. Plaintiff's opposition quotes extensively and
accurately from the portion of the Contract that is referred
to as "Terms and Conditions." While Plaintiff
acknowledges that the provisions in the Terms and Conditions
contain an integration clause, disclaim any warranty other
than what is expressly stated and deny liability for special,
incidental or consequential damages; Plaintiff contends these
provisions are unenforceable because: (1) the Contract is not
fully integrated, (2) the Terms and Conditions portion of the
Contract constitutes a contract of adhesion, and (3) the
Terms and Conditions are unconscionable.
action arises out of the failure of the cherry packing line
to process cherries at a rate Plaintiff alleges was agreed
upon and represented as achievable by Defendant.
Specifically, Plaintiff alleges it was promised that the
processing line would process cherries at a rate of six tons
per hour. Plaintiff alleges that a six-ton-per-hour
processing rate is achievable only for batches containing the
largest cherries and that rates closer to one to two tons per
hour are achieved for more a more normal distribution of
cherry sizes. Based on its contentions that the provisions of
the Terms and Conditions Defendants might rely upon to deny
or limit liability due to failure of the cherry line to
perform as promised are unenforceable, Plaintiff alleges a
total of five claims for relief. There are, in order, breach
of express warranty, breach of implied warranty, and a single
claim for relief alleging negligence, fraud and
judgment is appropriate when it is demonstrated that there
exists no genuine issue as to any material fact, and that the
moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c); Adickes v. S.H. Kress & Co., 398
U.S. 144, 157 (1970); Poller v. Columbia Broadcast
System, 368 U.S. 464, 467 (1962); Jung v. FMC
Corp., 755 F.2d 708, 710 (9th Cir. 1985); Loehr v.
Ventura Count y Community College Dist., 743 F.2d 1310,
1313 (9th Cir. 1984).
Under summary judgment practice, the moving party always
bears the initial responsibility of informing the district
court of the basis for its motion, and identifying those
portions of "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, " which it believes demonstrate the
absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Although the party moving for summary judgment always has the
initial responsibility of informing the court of the basis
for its motion, the nature of the responsibility varies
"depending on whether the legal issues are ones on which
the movant or the non-movant would bear the burden of proof
at trial." Cecala v. Newman, 532 F.Supp.2d
1118, 1132-1133 (D. Ariz. 2007). A party that does not have
the ultimate burden of persuasion at trial - usually but not
always the defendant - "has both the initial burden of
production and the ultimate burden of persuasion on the
motion for summary judgment." Nissan Fire & Marine
Ins. Co., Ltd. v. Fritz Companies, Inc., 210 F.3d 1099,
1102 (9th Cir. 2000). "In order to carry its burden of
production, the moving party must either produce evidence
negating an essential element of the nonmoving party's
claim or defense or show that the nonmoving party does not
have enough evidence of an essential element to carry its
ultimate burden of persuasion at trial." Id.
moving party meets its initial responsibility, the burden
then shifts to the opposing party to establish that a genuine
issue as to any material fact actually does exist.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986); First Nat'l Bank of Arizona
v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968);
Ruffin v. County of Los Angeles, 607 F.2d 1276, 1280
(9th Cir. 1979). In attempting to establish the existence of
this factual dispute, the opposing party may not rely upon
the mere allegations or denials of its pleadings, but is
required to tender evidence of specific facts in the form of
affidavits, and/or admissible discovery material, in support
of its contention that the dispute exists. Rule 56(e);
Matsushita, 475 U.S. at 586 n.11; First
Nat'l Bank, 391 U.S. at 289; Strong v.
France, 474 F.2d 747, 749 (9th Cir. 1973). The opposing
party must demonstrate that the fact in contention is
material, i.e., a fact that might affect the outcome of the
suit under the governing law, Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986); T.W. Elec. Serv.,
Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d
626, 630 (9th Cir. 1987), and that the dispute is ge nuine,
i.e., the evidence is such that a reasonable jury could
return a verdict for the nonmoving party, Anderson,
477 U.S. 248-49; Wool v. Tandem Computers, Inc., 818
F.2d 1433, 1436 (9th Cir. 1987).
endeavor to establish the existence of a factual dispute, the
opposing party need not establish a material issue of fact
conclusively in its favor. It is sufficient that "the
claimed factual dispute be shown to require a jury or judge
to resolve the parties' differing versions of the truth
at trial." First Nat'l Bank, 391 U.S. at
290; T.W. Elec. Serv., 809 F.2d at 631. Thus, the
"purpose of summary judgment is to ‘pierce the
pleadings and to assess the proof in order to see whether
there is a genuine need for trial.'"
Matsushita, 475 U.S. at 587 (quoting Fed.R.Civ.P.
56(e) advisory committee's note on 1963 amendments);
International Union of Bricklayers v. Martin Jaska,
Inc., 752 F.2d 1401, 1405 (9th Cir. 1985).
resolving the summary judgment motion, the court examines the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any.
Rule 56(c); Poller, 368 U.S. at 468; SEC v.
Seaboard Corp., 677 F.2d 1301, 1305-06 (9th Cir. 1982).
The evidence of the opposing party is to be believed,
Anderson, 477 U.S. at 255, and all reasonable
inferences that may be drawn from the facts placed before the
court must be drawn in favor of the opposing party,
Matsushita, 475 U.S. at 587 (citing United
States v. Diebold, Inc., 369 U.S. 654, 655 (1962)(per
curiam); Abramson v. University of Hawaii, 594 F.2d
202, 208 (9th Cir. 1979). Nevertheless, inferences are not
drawn out of the air, and it is the opposing party's
obligation to produce a factual predicate from which the
inference may be drawn. Richards v. Nielsen Freight
Lines, 602 F.Supp. 1224, 1244-45 (E.D. Cal. 1985),
aff'd, 810 F.2d 898, 902 (9th Cir. 1987).
Enforceability of Contract Terms
core, this action is predicated on the extent to which the
Contract, and specifically the Terms and Conditions portion
of the Contract is enforceable. The court will consider each
of Plaintiff's three arguments for unenforceability of
the Contract listed above in order.
Integration of Contractual Terms
opposition quotes the integration clause from the Contract as
This order constitutes the entire agreement between the
parties, representations, commitments or statements made by
Seller or any of its agents, servants of employees except as
provided herein. No terms or conditions other than those
contained herein, whether contained in Purchaser's
purchase order, acknowledgement or elsewhere can vary or add
to these terms and conditions, and no written or oral
agreement which purports to alter these Terms and Conditions
shall be binding upon Seller unless set forth in writing and
signed by an authorized representative of Seller.
Doc. # 76 at 4:20-26.
parties dispute to some extent the standard by which courts
are to determine whether a written agreement is integrated,
partially integrated or not integrated. Plaintiff contends
that a court's determination of whether a contract is
integrated is based on the consideration of five factors, in
support of which Plaintiff cites Stevenson v. Oceanic
Bank, 223 Cal.App.3d 306, 316 (1990). See Doc.
# 76 at 7:3-9 (listing five factors). Defendant contends that
Plaintiff has misstated the holding in Stevenson and
that the integration of a contract is to be determined by its
own terms and nothing else. See Doc. # 80 at 2:19-25
(citing Masterson v. Sine, 68 Cal.2d 222, ...