Airparts Express v. Aircraft Connection





















Filed 3/1/13 Airparts Express v. Aircraft Connection CA4/3















NOT TO BE PUBLISHED IN OFFICIAL REPORTS



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opinion has not been certified for publication or ordered published for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.







IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA



FOURTH APPELLATE
DISTRICT



DIVISION THREE




>

AIRPARTS EXPRESS CORP., Plaintiff and Respondent, v. AIRCRAFT CONNECTION CORP. et al., Defendants and Appellants.

G046345 (Super. Ct. No. 30-2009-00121892) O P I N I O N

Appeal from a judgment
of the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Orange
County, Andrew P. Banks, Judge. Affirmed.

Rogers, MacLeith &
Stolp and Douglas R. MacLeith for Defendants and Appellants.

Affeld Grivakes Zucker,
David W. Affeld and Loren J. Beck for Plaintiff and Respondent.



Defendants
Aircraft Connection Corp., Gustav Cardenas and Cesar Cardenas appeal from a
judgment for breach of contract and
conversion entered in favor of Airparts Express Corp. (Airparts.) Their primary contention is that the evidence
is insufficient to support the judgment.
However, several of defendants’ claimed facts are unsupported by any
citation to the record and we consequently disregard them. Further, as Airparts points out, defendants
have not provided us with a fair summary of all the evidence bearing upon the
findings they claim are unsupported and thus have failed to sustain their burden
of demonstrating the evidence is insufficient.


Defendants also contend
the court erred by awarding Airparts breach of contract damages based on their
failure to return Airparts’ inventory.
They argue Airparts did not allege that failure qualified as a breach of
contract, and thus they were deprived of proper notice of the specific relief
sought. We are unpersuaded. Defendants’ argument confuses the >relief sought by Airparts with the >legal theory pleaded. The relief Airparts sought against defendants
was money damages, including an amount sufficient to compensate Airparts for
the value of its inventory which defendants allegedly sold to third parties
while it was stored at their facility.
That is the relief the court ordered.
In any event, the issue is moot, because the court found that relief to
be proper based on both a breach of contract theory and a conversion theory, and defendants do not challenge the latter
as a basis for the recovery.

Finally, defendants
contend the trial court erred in denying their motion for new trial on the
ground of newly discovered evidence.
Despite acknowledging their bare bones approach to defending the case,
which eschewed conducting any pre-trial discovery, defendants assert the court
erred by concluding they failed to demonstrate the newly discovered evidence
could not have been discovered prior to trial with reasonable diligence. We affirm the judgment.





FACTS



Airparts filed its
complaint in April 2009, seeking relief based on theories of breach of contract,
conversion, deceit, unfair competition, an open book account. In support of its claims, Airparts alleged it
entered into a written “Strategic Alliance and Confidentiality Agreement” with
defendants and a related entity called Aerospace Parts.

The agreement, the
written portion of which is attached as an exhibit to the complaint, identifies
defendant Aircraft Connection, Corp., as a manufacturer of aircraft parts. It then specifies that all three defendants,
along with Aerospace Parts, will be referred to collectively as “ACI” and are
each bound by the terms of the agreement.
ACI then agrees “to sell all of its [a]ircraft [p]arts exclusively and
solely through” Airparts.

Airparts, in turn, is
identified as a “distributor [of] aircraft parts,” and the owner of both “a
network of sales outlets” and “a proprietary database of information which
allows [it] to compare prices and availability of parts in the [a]ircraft
[p]arts industry.”

The agreement defines,
in broad terms, “[p]roprietary [i]nformation” and “[c]ompany [m]aterials” owned
by Airparts. The latter is defined to
include “samples, prototypes, models, products and the like.” The agreement then specifies that both the
proprietary information and the company materials will remain forever the sole
property of Airparts. Defendants agree
they will not remove any “[c]ompany [m]aterials” from Airparts’ premises, and
will not deliver them to any person or entity outside of Airparts.

The agreement also
obligates defendants to refrain from engaging in any acts which are competitive
with Airparts’ business during its term, and precludes them from assisting any
other person or organization in competing with Airparts. It also specifies that defendants may not
improperly use or distribute Airparts’ database to third parties or release any
of its trade secrets.

What the agreement does
not do is reveal the nature of the parties’ “[s]trategic [a]lliance,” or
specify their obligations with respect to it.
To the contrary, the agreement frankly acknowledges it “does not purport
to set forth all of the terms and conditions of this [s]trategic [a]lliance and
that [defendants have] obligations to [Airparts] which are not set forth in
this [a]greement.”

Airparts alleged that in
about November 2008, defendants began circumventing the agreement by using
Airparts’ computer database to contact its customers. Moreover, it claimed defendants also “entered
into contracts with various entities, in violation of the [a]greement.”

Airparts also alleged
that “[a]s part of the [a]greement,” it has “stored numerous aircraft parts at
[defendants’] facility and placed some of the parts on consignment with
[defendants.]” Defendants allegedly
“sold aircraft parts and other property owned by [Airparts] without paying sums
due to [it.]” Defendants are alleged to
“have taken [a]ircraft parts and other personal property owned by [Airparts]
and converted the same to their own use, possession and control,” “retained . .
. money and property to the exclusion of [Airparts] which rightfully belong[s]
to [it],” and “not provided any accounting of [Airparts’] parts which
[defendants] sold.”

According to the
complaint, defendants “entered into the [a]greement with [Airparts]
specifically to obtain [its] aircraft parts and database of customer contacts
so as to usurp control over [its] property and customer base.”

Defendants filed an
answer to the complaint, but apparently conducted no discovery. They were sanctioned for failing to properly
respond to Airparts’ discovery. In May
2011, the case was tried to the court, without a jury. Airparts’ principal, Robert Prestwood,
testified on its behalf. Among other
things, he explained the primary goals sought to be achieved by the parties’
agreement. According to Prestwood,
because defendant Aircraft Connection was a government licensed and bonded
aircraft repair facility, associating with it would allow the existing
inventory Airparts owned to be sold for higher prices; and defendants would, in
turn, be able to expand their customer base for the aircraft parts they
manufactured, by selling them through Airparts.
Defendants would retain 30 percent of the price of any of Airparts’
inventory they sold, and Airparts would retain 30 percent of the price of
defendants’ parts it sold.

Prestwood also testified
that approximately a month after the parties entered in to their written
agreement, Airparts closed down its existing warehouse and shipped its
inventory of parts to defendants’ warehouse in Miami,
Florida.
As Prestwood explained: “because
we were partnering with Cesar and Gus’s organizations, and they’re an FAA 8130
repair station, at their suggestion and our agreement, it was better to have
everything at their location because things could be inspected and retagged to
a higher degree, which adds value, and that we could both sell them out of the
same warehouse down in Miami. And we’d
all be there, and we’d all have access to this inventory, and it would be more
profitable for everybody concerned.”

When the parts arrived
at what was characterized as the “Miami
warehouse of Aircraft Connection,” Prestwood was there to help unload it. He testified that he was joined in that
effort by both defendants Cesar and Gustav Cardenas, along with employees of
both Airparts and defendant Aircraft Connection. He later testified Airparts leased the
warehouse space “from the Cardenases,”
but then acknowledged the space might have been subleased from Aerospace Parts
– the other entity identified as bound, alongside defendants, by the parties’ written
agreement.

Although the Airparts
inventory appeared to be intact when Prestwood left Florida
to spend Christmas in California,
the parties’ relationship soured shortly thereafter, and in February or March
2009, Prestwood discovered a substantial portion of the inventory was
missing. He immediately called
defendants to inquire about what happened to it, and they denied knowing
anything about it. They refused to
provide any accounting of the missing inventory.

Prestwood also testified
about both the retail and replacement value of the missing inventory, based on
his expertise derived from 13 years in the industry, his experience with prior
sales and the price paid for the inventory by Airparts. The court also ruled Prestwood could testify
“as an officer of the company in that business as to what the company believed
the value was.”

Defendants were
represented by counsel at trial, but presented no witnesses or evidence. Their defense was confined to cross-examining
Prestwood and offering objections.

Following the trial, the
court issued a tentative decision in favor of Airparts. That tentative decision reflected a finding
in favor of Airparts on theories of breach of contract and conversion. Specifically, it found defendants were liable
on both theories based on their failure to return aircraft parts valued at
$961,575 to Airparts, upon termination of the parties’ agreement. The court also found defendant Aircraft
Connection liable to Airparts for an additional $13,190 in breach of contract
damages “for rejected manufactured parts.”

In October 2011, nearly
four months after the court’s tentative decision, defendants moved for a new
trial based on newly discovered evidence.
Their motion was supported by a one-page declaration from their counsel,
which related he had learned of the new evidence – a series of documents filed
in a bankruptcy case involving Airparts’ principal – as a result of an e-mail
he received from another attorney in June 2011.
Counsel stated, in conclusory fashion, he believed the documents “could not with reasonable diligence have
[been] discovered and produced at trial,” but offered no factual support for
that belief.

Airparts opposed the
motion, pointing out, among other things, that defendants had made no showing
that the evidence they were relying on could not have been discovered earlier
with reasonable diligence. The court
denied the motion on that ground. On October 20, 2011, the court entered
a judgment consistent with its tentative decision.



DISCUSSION



>1.
Insufficiency of the Evidence

Defendants first assert
the evidence submitted at trial was insufficient to support the judgment in
favor of Airparts. However, they fail to
acknowledge the heavy burden imposed on an appellant who attacks a judgment on
that basis.

“An appellate court
‘“must presume that the record
contains evidence to support every finding of fact . . . .”’ (In re
Marriage of Fink (1979) 25 Cal.3d 877, 887, italics added; see >Brown v. World Church (1969) 272
Cal.App.2d 684, 690, [‘“a reviewing court starts with the presumption that the
record contains evidence to sustain every finding of fact”’].) It is the appellant’s burden, not the
court’s, to identify and establish deficiencies in the evidence. (Brown
v. World Church, supra, 272 Cal.App.2d 684, 690.) This burden is a ‘daunting’ one. (In re
Marriage of Higinbotham (1988) 203 Cal.App.3d 322, 328-329.) ‘A party who challenges the sufficiency of
the evidence to support a particular finding must summarize the evidence on that point, favorable and unfavorable, and
show how and why it is insufficient.
[Citation.]’ (>Roemer v. Pappas (1988) 203 Cal.App.3d
201, 208, italics added.) ‘[W]hen an
appellant urges the insufficiency of the evidence to support the findings it is
his duty to set forth a fair and adequate statement of the evidence which is
claimed to be insufficient. He cannot
shift this burden onto respondent, nor is a reviewing court required to
undertake an independent examination of the record when appellant has shirked his
responsibility in this respect.’ (>Hickson v. Thielman (1956) 147
Cal.App.2d 11, 14-15.)” (>Huong Que, Inc. v. Luu (2007) 150
Cal.App.4th 400, 409.)

Instead of summarizing
the entirety of the evidence bearing on any of the court’s factual findings, defendants
simply focus on selected bits of Prestwood’s testimony and argue why those
bits, viewed in isolation, are insufficient to prove various facts. For example, they point to the part of
Prestwood’s testimony where he first states the Miami warehouse space was
leased from “the Cardenases” but then almost immediately acknowledges the space
may have been subleased from Aerospace Parts and that he wasn’t personally
involved with the details of the lease transaction. Defendants argue Prestwood’s admitted lack of
clarity about the identity of Airparts’ lessor is significant, although they
don’t explain why. More significant for
our purposes is the fact defendants themselves fail to acknowledge the record
also establishes that Aerospace Parts is
simply another entity owned by the Cardenases. And having failed to acknowledge this
additional evidence, they also make no effort to explain why the court could
not have reasonably concluded that for purposes of establishing defendants had
control over the Miami warehouse space, it was immaterial whether it was leased
directly from the Cardenases or from Aerospace Parts.

Similarly, defendants
selectively quote a dozen questions and answers found within eight pages of the
reporter’s transcript to support their contention “there was no evidence that
the defendants even had access to the space during the time that inventory
allegedly disappeared . . . .” And
again, defendants fail to acknowledge other evidence bearing on that point;
i.e., Prestwood’s earlier testimony that the primary reason for moving the
inventory to the Miami warehouse was so that “we could both sell [it] out of
the same warehouse . . . . >And we’d all be there, and we’d all have
access to this inventory . . . .”

Finally, defendants
assert there is insufficient evidence to support the court’s award of damages,
but do so without even acknowledging the court’s explicit ruling that
Prestwood, as an officer of Airparts, was competent to testify to the company’s
own valuation of its property. If defendants
wished to dispute that ruling, it was incumbent upon them to offer legal
authority demonstrating it was incorrect.
They have not. Moreover,
defendants give obvious short-shrift to the foundation Prestwood offered for
that valuation, claiming he simply “obtained his numbers from a place called
“‘I.L.S.’” But that is not what
Prestwood said. He explained his numbers
were based on valuations provided by “Inventory
Locator Service owned by Boeing,” which he characterized as “the most
respected source in the business.” If
defendants wished to cross-examine Prestwood about the bona-fides of that
service, they were free to do so. But as
it stands, our record establishes (1) that Airparts supported its damage claim
with valuations provided by a highly respected resource in the airplane parts
industry, and (2) defendants failed to mention that while attacking the
sufficiency of the evidence.

As all of these examples
illustrate, defendants failed satisfy their obligation to “summarize the
evidence [both] favorable and unfavorable, and show how and why it is
insufficient” to support the trial court’s findings. (Roemer
v. Pappas, supra, 203 Cal.App.3d at p. 208.) We consequently reject their claim that the
evidence was insufficient to support the judgment.



>2.
Breach of Contract Damages for Lost Inventory

Defendants also briefly
challenge the court’s decision to hold them liable for breach of contract based
on their failure to return Airparts’ lost inventory. They argue Airparts did not allege that
failure to be a breach of the parties’ contract, and thus they were deprived of
proper notice of the specific relief sought.
We are unpersuaded.

Initially, we note that >In re Marriage of Lippel (1990) 51
Cal.3d 1160, the authority defendants rely upon to establish their right to
“notice of [the] lawsuit and notice of [the] specific relief which is sought,”
reflects the due process requirements for a judgment entered >by default, and thus has no application
here. Because defendants answered the
complaint and participated at trial, there is simply no question they had
“notice of the lawsuit.”

Moreover, it is also
clear defendants had notice of the specific relief sought by Airparts, which
included money damages in an amount
sufficient to compensate for the value of the inventory it alleged defendants
had wrongfully taken. That is the >relief the court granted. (Conservatorship
of Kayle (2005) 134 Cal.App.4th 1, 5 [“[t]he complainant sought
compensatory and punitive damages, costs, and other relief”].) “Breach of contract” is a legal theory
supporting recovery, not a category of relief.
(Rowe v. Exline (2007) 153
Cal.App.4th 1276, 1286, fn. 4 [distinguishing among legal theories of “breach
of contract,” “tort” and “violation of a statute”]); and a cause of action is
properly stated “if facts were alleged showing entitlement to relief under any
possible legal theory.” (>Roman v. County of Los Angeles (2000) 85
Cal.App.4th 316, 321-322.) Defendants
have failed to demonstrate any failure of due process.

But even if the court
had erred by awarding compensation for the lost inventory based upon a breach
of contract theory, it would not warrant any change in the judgment. The court found defendants liable for >the same damages on a conversion theory
as well and they do not challenge the propriety of recovery under that
theory. Only one theory of recovery is
required to uphold the award.



>3.
Denial of New Trial

Defendants also
challenge the court’s order denying their motion for a new trial. However, their argument, which spans only one
page of their brief, is unsupported by authority. As this court has previously explained, an
appellant’s “failure to provide us with any cogent analysis of his argument
waives his claim on appeal.” (>Gunn v. Mariners Church, Inc. (2008) 167
Cal.App.4th 206, 218; People ex rel.
Dept. of Alcoholic Beverage Control v. Miller Brewing Co. (2002) 104
Cal.App.4th 1189, 1200 [“It is an established rule of appellate procedure that
an appellant must present a factual analysis and legal authority on each point
made or the argument may be deemed waived.]; In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814,
830 [“absence of cogent legal argument or citation of authority allows this
court to treat the contentions as waived”].)

But even if the
assertion were not waived entirely, it fails.
“A party moving for a new trial on the ground of newly discovered
evidence must show that he could not, with reasonable diligence, have
discovered or produced the evidence at the trial.” (Santillan
v. Roman Catholic Bishop of Fresno (2012) 202 Cal.App.4th 708, 730-731;
Code Civ. Pro. § 657, subd. 4.)
“Generally, a party seeking a new trial on this basis must show that
‘(1) the evidence is newly discovered; (2) he
or she exercised reasonable diligence in discovering and producing it; and
(3) it is material to the [ ] party’s case.’”
(Wall Street Network, Ltd. v. New
York Times Co. (2008) 164 Cal.App.4th 1171, 1192, italics added.)

Here, defendants’ new
trial motion was based on documents filed in a different litigation in 2009,
which came to light as a result of the bankruptcy case filed by Prestwood. One of the few things our record establishes
clearly is that defendants were aware
of Prestwood’s bankruptcy, which was filed in December 2010. According to a minute order filed herein on
May 23, 2011, one consequence of that bankruptcy was severance of a
cross-complaint filed by defendants against Prestwood individually for purposes
of trial.

However, defendants make
no claim they paid even minimal attention to that bankruptcy case prior to
trial herein or that they conducted even minimal discovery. Nor do they point to any evidence suggesting
that had they done so, they would have nonetheless remained ignorant of the
2009 case or its alleged relevance to the claims asserted by Airparts herein.

Rather than making one
of those expected claims, defendants simply rely on the novel assertion that
they “should not be expected to spend money and time to do discovery in a case
they know is baseless.” But that simply
begs the question; one of the purposes of discovery is to investigate the
merits of the opposing party’s claims.
And of course, we cannot accept the premise the case was baseless, since
the trial court found to the contrary.
“[T]he trial court’s judgment is presumptively correct, such that error
must be affirmatively demonstrated, and where the record is silent the
reviewing court will indulge all reasonable inferences in support of the
judgment . . . .” (Yield Dynamics, Inc., v. Tea Systems Corp. (2007) 154 Cal.App.4th
547, 556-557.)

By their own admission,
defendants simply made a strategic decision not to conduct pre-trial discovery
or to offer any evidence at trial. While
that decision apparently offered some immediate financial benefit, it also
carried some risks. One obvious risk is
that it will almost certainly render more difficult any post-trial effort to
convince the judge that defendants’ earlier failure to discover relevant
evidence did not stem from a lack of diligence.
Another is that it becomes nearly impossible to convince an appellate
court that the trial court abused its discretion by rejecting such a
claim.



DISPOSITION



The judgment is
affirmed. Airparts is to recover its
costs on appeal.









RYLAARSDAM,
ACTING P. J.



WE CONCUR:







BEDSWORTH, J.







THOMPSON, J.

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