Paramount Farms International LLC v. Ventilex B.v.

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PARAMOUNT FARMS
INTERNATIONAL LLC,
Plaintiff - Appellant,
v.
VENTILEX B.V.,
Defendant - Appellee.
No. 11-15518
D.C. No. 1:08-cv-01027-LJO-SKO
MEMORANDUM*
PARAMOUNT FARMS
INTERNATIONAL LLC,
Plaintiff - Appellee,
v.
VENTILEX B.V.,
Defendant - Appellant.
No. 11-15670
D.C. No. 1:08-cv-01027-LJO-SKO
Appeal from the United States District Court
for the Eastern District of California
Lawrence J. O’Neill, District Judge, Presiding
FILED
NOV 21 2012
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Argued and Submitted November 6, 2012
San Francisco, California
Before: FARRIS, FERNANDEZ, and BYBEE, Circuit Judges.
Paramount Farms International LLC appeals the district court’s decision
dismissing its ostensible authority and implied warranty claims as legally
insufficient, and excluding certain testimony elicited from a compound question
and hearsay evidence. “We review the district court’s conclusions of law
following a bench trial de novo and its findings of fact for clear error.” Navajo
Nation v. U.S. Forest Serv., 535 F.3d 1058, 1067 (9th Cir. 2008) (en banc); see
also Price v. U.S. Navy, 39 F.3d 1011, 1021 (9th Cir. 1994) (“In reviewing a
judgment following a bench trial, this court reviews the district court’s findings of
fact for clear error and its legal conclusions de novo. The same standard applies to
the district court’s involuntary dismissal of a claim under Rule 52(c).” (internal
citations omitted)). We review the district court’s evidentiary rulings for “abuse of
discretion, and the appellant is additionally required to establish that the error was
prejudicial.” Tritchler v. Cnty. of Lake, 358 F.3d 1150, 1155 (9th Cir. 2004).
“When the trial court excludes evidence, failure to make a timely invocation of the
grounds for the admission of the evidence renders the issue reviewable only for

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plain error.” Hudspeth v. Comm’r, 914 F.2d 1207, 1215 (9th Cir. 1990). The facts
are known to the parties. We affirm.
First, Paramount Farms argues that the district court erred by concluding that
ostensible authority could not be established, based on its proffer of evidence. We
disagree. In its proffer, Paramount Farms provided meager circumstantial evidence
that one of Ventilex B.V.’s officers had knowledge of email traffic between
Ventilex USA and Paramount Farms. No direct evidence showed that Ventilex
B.V.’s officer had actual knowledge of the guarantee contained in the email.
Moreover, the proffer was devoid of evidence regarding Ventilex B.V.’s prior
practice of providing guarantees that would have signaled to Paramount Farms that
Ventilex USA could bind Ventilex B.V. to such a guarantee. Thus, the evidence
supporting Paramount Farm’s ostensible agency claim was insufficient. See C.A.R.
Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480–81 (9th Cir.
2000); Am. Cas. Co. v. Krieger, 181 F.3d 1113, 1121–23 (9th Cir. 1999).
Second, Paramount Farms argues that the district court abused its discretion
by excluding testimony elicited from a compound question, because the question
was neither compound nor ambiguous and confusing, and only a general objection
as to form was lodged during the deposition. We disagree. The question was
compound and the district court did not abuse its discretion by finding that the

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question was ambiguous and confusing, especially since the witness was
unavailable to testify. Likewise, the district court did not abuse its discretion by
excluding the testimony because the specific ground for objection was apparent
from the context, even though at the deposition only a general objection as to form
was lodged. See United States v. O’Brien, 601 F.2d 1067, 1071 (9th Cir. 1979)
(citing Fed. R. Evid. 103(a)(1)(B)).
Third, Paramount Farms argues that the district court erred by excluding
certain evidence as hearsay, because the statements were not hearsay, but rather
constituted a verbal act, and regardless were subject to the hearsay exception for
party admissions or statements relevant to a party’s state of mind. We disagree.
At trial, Paramount Farm’s counsel admitted that the evidence was hearsay.
Furthermore, even if it was not hearsay, the trial judge—presiding over the bench
trial—found that the evidence was only valuable if admitted for the truth-of-the-
matter; thus, the decision was not prejudicial. See Harper v. City of L.A., 533 F.3d
1010, 1030 (9th Cir. 2008). Likewise, it was not plain-error for the court to fail to
provide Paramount Farms with potential exceptions for its hearsay evidence. See
In re Oracle Corp. Secs. Litig., 627 F.3d 376, 386 (9th Cir. 2010) (“We cannot
declare that the district court reached an illogical or implausible result by excluding
apparent hearsay or documents without sufficient foundational support as the rules

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of evidence prescribe, or that the district court otherwise exceeded the permissible
bounds of its discretion by failing to comb through the voluminous record
searching for evidentiary bases to introduce the evidence at issue. That was
Plaintiffs’ obligation.”).
Fourth, Paramount Farms argues that the district court erred by dismissing
its implied warranty claim as legally insufficient, because the district court failed to
consider the direct dealings that Paramount Farms had with Ventilex B.V. We
disagree. Vertical privity, or in other words, privity of contract, is required to
sustain an implied warranty claim in California. Cardinal Health 301, Inc. v. Tyco
Elecs. Corp., 87 Cal. Rptr. 3d 5, 23 (Cal. Ct. App. 2008); U.S. Roofing, Inc. v.
Credit Alliance Corp., 279 Cal. Rptr. 533, 538 (Cal. Ct. App. 1991); Burr v.
Sherwin Williams Co., 268 P.2d 1041, 1048 (Cal. 1954). In some circumstances,
“direct dealings” can satisfy the vertical privity requirement. Cardinal Health, 87
Cal. Rptr. 3d at 23–25. Ventilex B.V., however, never assumed the position of
Ventilex USA, entered into a contract with Paramount Farms, nor engaged in
significant “direct dealings” with Paramount Farms before it contracted with
Ventilex USA to purchase a Ventilex system. The district court did not err;
Paramount Farms’ implied warranty claim was legally insufficient.

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Finally, Ventilex B.V. cross appeals the district court’s denial of its motion
for attorneys’ fees. Ventilex B.V. concedes, however, that its cross appeal was
filed late. We do not exercise our discretion to hear Ventilex B.V.’s untimely cross
appeal. See Mendocino Envtl. Ctr. v. Mendocino Cnty., 192 F.3d 1283, 1298–1300
(9th Cir. 1999).
Therefore, in appeal No. 11-15518 we AFFIRM the district court’s decision
and we DISMISS as untimely cross-appeal No. 11-15670.

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