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CONTRACT LAW
Contract Law Case Summaries

■ Jazayeri v. Mao, No. B195083

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.[1]

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.[2] 

          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.[3]  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.[4]  Totaling the claims in all these categories, appellants estimated their economic damages at $67,879.74.[5] 

■ HELD:

In a breach of contract and fraud action, trial court's exclusion of plaintiff's documentary evidence and judgment in favor of defendant is reversed where: 1) altered poultry condemnation certificates were authenticated and were not hearsay as they were introduced as the operative documents establishing the fraud perpetrated on plaintiff; 2) the unaltered certificates obtained from the USDA were properly authenticated and admissible as official records; 3) the purchase orders were properly authenticated and admissible as business records; 4) calculation sheets were admissible as admissions by a party opponent; and 5) weight slips were admissible as adoptive admissions.

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