Patrick Calliari v. Sargento Foods Inc

FILED
NOT FOR PUBLICATION JUL 07 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
PATRICK CALLIARI, No. 10-35736
Plaintiff-counter-claim- D.C. No. 2:08-cv-01111-MJP
defendant - Appellee,
v. MEMORANDUM *
SARGENTO FOODS INC,
Defendant-counter-claimant-
plaintiff - Appellant,
FLORA DAMASIO; ANTOINE
IOANNIDES; ANDREAS IOANNIDES;
GAYLE K. GOODRICH; GILLIAN
OLSON; RICHARD J. OLSON; BETTY
CROUSE,
Counter-defendants -
Appellees.
PATRICK CALLIARI, No. 10-35788
Plaintiff-counter-claim- D.C. No. 2:08-cv-01111-MJP
defendant - Appellant,
v.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
SARGENTO FOODS INC,
Defendant-counter-claimant-
plaintiff - Appellee,
FLORA DAMASIO; ANTOINE
IOANNIDES; ANDREAS IOANNIDES;
GAYLE K. GOODRICH; GILLIAN
OLSON; RICHARD J. OLSON; BETTY
CROUSE,
Counter-defendants -
Appellants.
Appeal from the United States District Court
for the Western District of Washington
Marsha J. Pechman, District Judge, Presiding
Argued and Submitted June 7, 2011
Seattle, Washington
Before: REINHARDT, W. FLETCHER, and RAWLINSON, Circuit Judges.
This diversity action arises from the acquisition of Portionables, Inc.
(Portionables), a Washington frozen sauce manufacturer, by Sargento Foods, Inc.
(Sargento), a Wisconsin cheese company. The transaction was governed by two
agreements: the Stock Purchase Agreement (SPA) and the Employment
Agreement (EA).
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1. The district court properly granted summary judgment in favor of the
Shareholders on Sargento’s breach of warranty counterclaims.
The undisputed facts established that Portionables did not produce or sell
milk products as defined by the South Dakota Department of Agriculture at the
time of the acquisition. The Shareholders therefore were not required by South
Dakota law to obtain a state dairy license and were, as warranted, in compliance
with applicable laws.
The extrinsic evidence proffered by Sargento failed to raise a triable issue of
material fact regarding the adequacy of Portionables’ equipment, structures, and
capacity. See U.S. Life Credit Ins. Co. v. Williams, 919 P.2d 594, 597-98 (Wash.
1996) (enforcing contract as written).
2. The district court correctly granted judgment as a matter of law
pursuant to FRCP 50(a) in favor of Calliari on Sargento’s claim seeking the return
of Calliari’s signing and retention bonus. The court was required to determine the
objective meaning of the parties’ written agreement by interpreting the plain
language of EA § 4(d) and any testimony regarding the parties’ unexpressed
subjective understanding was irrelevant. See Hearst Commc’ns Inc. v. Seattle
Times Co., 115 P.3d 262, 267 (Wash. 2005) (en banc).
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3. The district court properly denied the Shareholders’ motions for
judgment as a matter of law pursuant to FRCP 50(a) and FRCP 50(b) on the claims
alleging that Sargento breached the EA and SPA by interfering with Calliari’s
operational control over Portionables during the earnout period. The operational
control provisions of the parties’ agreements were ambiguous and subject to at
least two reasonable interpretations. See Tanner Elec. Co-op. v. Puget Sound
Power & Light Co., 911 P.2d 1301, 1310-11 (Wash. 1996) (en banc). The jury, by
its verdict, adopted the definition of operational control proffered at trial by
Sargento. Although it may have been possible to draw a contrary conclusion, the
verdict was supported by substantial evidence and the Shareholders’ FRCP 50(b)
motion was properly denied. See First Nat’l Mortg. Co. v. Fed. Realty Inv. Trust,
631 F.3d 1058, 1067-68 (9th Cir. 2011).
4. The district court did not abuse its discretion when it awarded trial
costs to Sargento and denied the Shareholders’ motion to retax costs. The district
court recognized that it had discretion to require each party to bear its own costs in
the event of a mixed judgment, but declined to do so. This conclusion was not an
abuse of the district court’s discretion nor an erroneous determination of law. See
Martin v. Cal. Dep’t of Veterans Affairs, 560 F.3d 1042, 1047 (9th Cir. 2009).
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5. The district court did not abuse its discretion when it awarded attorney
fees to the Shareholders as prevailing parties on Sargento’s breach of warranty
counterclaims. See, e.g., Crest Inc. v. Costco Wholesale Corp., 115 P.3d 349, 355
(Wash. Ct. App. 2005).
AFFIRMED.
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