Food Safety Net Servs. v. ECO Safe Sys. USA, Inc.

• Decision Date: 04 October 2012
• Docket Number: No. B231667.,B231667.
• Citation: 147 Cal.Rptr.3d 634,209 Cal.App.4th 1118
• Parties: FOOD SAFETY NET SERVICES, Plaintiff, Cross–Defendant and Respondent, v. ECO SAFE SYSTEMS USA, INC., Defendant, Cross–Complainant and Appellant.
• Court: California Court of Appeals Court of Appeals

209 Cal.App.4th 1118

147 Cal.Rptr.3d 634

2012 Daily Journal D.A.R. 13,835

FOOD SAFETY NET SERVICES, Plaintiff, Cross–Defendant and Respondent,

v.ECO SAFE SYSTEMS USA, INC., Defendant, Cross–Complainant and Appellant.

No. B231667.

Court of Appeal, Second District, Division 4, California.

Oct. 4, 2012.

McKiernan Law Firm and Stanley W. McKiernan, for Defendant, Cross–Complainant and Appellant.

Lewis Brisbois Bisgaard & Smith, Kenneth D. Watnick and Steven H. Frackman, Los Angeles, for Plaintiff, Cross–Defendant and Respondent.

MANELLA, J.

After respondent Food Safety Net Services (Food Safety) sought to recover its fee from appellant Eco Safe Systems USA, Inc. (Eco Safe) for performing a study of Eco Safe's food disinfection equipment, Eco Safe asserted a cross-complaint against Food Safety for breach of contract, negligence, fraud, and related claims. The trial court granted summary judgment in favor of Food Safety on Eco Safe's claims, concluding that they failed in light of (1) a limitation of liability clause in the parties' contract, (2) Eco Safe's failure to establish fraud or deceit, and (3) the absence of evidence that Eco Safe suffered damages from the study. Following the grant of summary judgment, the court reclassified the action on Food Safety's complaint as a limited civil action and issued an award of attorney fees to Food Safety under Civil Code section 1717. On appeal, Eco Safe challenges the grant of summary judgment and fee award. We affirm.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

There are no material disputes regarding the following facts: Eco Safe markets ozone-based food disinfection equipment. In 2006 and 2007, Eco Safe engaged in preliminary discussions with the Carl's Jr. restaurant chain (Carl's Jr.), which is owned by CKE Restaurants, Inc. Later, Eco Safe entered into an agreement with Food Safety, which is a testing agency. Under the agreement, Food Safety was to perform a “challenge study” of Eco Safe's equipment.

In a report dated May 21, 2008, Food Safety stated that it had examined the efficacy of Eco Safe's equipment in eliminating pathogenic bacteria from lettuce and tomatoes. According to the report, Food Safety compared an ozone wash solution from Food Safety's equipment with a chlorine rinse and a tap water control rinse. Under the testing protocol, Food Safety inoculated samples of lettuce and tomatoes with three kinds of pathogens (E. coli, Salmonella, and Staphylococcus aureus), thereby creating six combinations of produce and pathogen. With respect to each combination, Food Safety gave the pathogen a pre-determined opportunity to incubate on the produce. After ascertaining the “density” of the pathogen, Food Safety washed samples of the produce with each solution and reassessed the pathogen's density. During the tests, Food Safety found that the pre-wash pathogen density was relatively high for only one combination of pathogen and produce (E. coli in lettuce). Regarding this combination, Food Safety determined that the ozone solution was significantly more effective than its competitors in reducing the pathogen's density. In the case of the remaining combinations, which displayed relatively low pre-wash densities, Food Safety found no significant difference in efficacy between the ozone solution and the chlorine rinse.¹

In June 2008, Eco Safe issued a press release describing the challenge study results as “excellent.” The release quoted Michael Elliot, Eco Safe's President, as stating that the study “found significant benefits from using ozone rather than chlorine disinfection.” Eco Safe also told Todd Huetinck, a quality assurance manager for Carl's Jr., that it was “very pleased” with the results. In September 2008, Huetinck responded that Carl's Jr. was not interested in using Eco Safe's equipment in its restaurants.

In September 2009, after Eco Safe failed to pay Food Safety for conducting the challenge study, Food Safety initiated the underlying action, asserting claims for an open book account, account stated, and services rendered. Food Safety alleged that it was entitled to $10,171.26 for conducting the study. In November 2009, Eco Safe filed a cross-complaint against Food Safety. Eco Safe's first amended cross-complaint (FACC) contained claims for negligence, breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, and deceit.

In July 2010, Food Safety sought summary judgment or adjudication on the FACC. Food Safety contended, inter alia, that (1) a contract term limiting Food Safety's liability barred the claims for breach of contract, breach of the implied covenant, and negligence, (2) there was no actionable fraud or deceit, and (3) Eco Safe could demonstrate no damages from the misconduct alleged against Food Safety.

After granting the motion for summary judgment, the trial court awarded $56,100 in attorney fees to Food Safety under a contractual fee provision. On January 19, 2011, judgment was entered in accordance with these rulings, and Food Safety's complaint was transferred to a court of limited jurisdiction.²

DISCUSSION

Eco Safe contends the trial court erred in granting summary judgment and awarding attorney fees to Food Safety. For the reasons explained below, we disagree.

A. Standard of Review

“A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff's asserted causes of action can prevail. [Citation.]” ( Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107, 252 Cal.Rptr. 122, 762 P.2d 46.) Generally, “the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” ( Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, 107 Cal.Rptr.2d 841, 24 P.3d 493.) In moving for summary judgment, “all that the defendant need do is to show that the plaintiff cannot establish at least one element of the cause of action—for example, that the plaintiff cannot prove element X.” ( Id. at p. 853, 107 Cal.Rptr.2d 841, 24 P.3d 493.)

“ ‘Review of a summary judgment motion by an appellate court involves application of the same three-step process required of the trial court. [Citation.]’ ” ( Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1662, 42 Cal.Rptr.2d 669.) The three steps are (1) identifying the issues framed by the complaint, (2) determining whether the moving party has made an adequate showing that negates the opponent's claim, and (3) determining whether the opposing party has raised a triable issue of fact. ( Ibid.)

Although we independently review the grant of summary judgment ( Lunardi v. Great–West Life Assurance Co. (1995) 37 Cal.App.4th 807, 819, 44 Cal.Rptr.2d 56), our inquiry is subject to two constraints. First, we assess the propriety of summary judgment in light of the contentions raised in Eco Safe's opening brief. ( Christoff v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125–126, 36 Cal.Rptr.3d 6). Second, to determine whether there is a triable issue, we review the evidence submitted in connection with summary judgment, with the exception of evidence to which objections have been appropriately sustained. ( Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 711, 81 Cal.Rptr.3d 406;Code Civ. Proc., § 437c, subd. (c).) Here, Food Safety raised several evidentiary objections to Eco Safe's showing, which the trial court sustained in part and overruled in part. Because Eco Safe does not attack the rulings on appeal, it has forfeited any contentions of error regarding them. ( Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1181, 80 Cal.Rptr.3d 6.)

B. Eco Safe's Claims

In assessing the propriety of summary judgment, we look first to Eco Safe's allegations in the FACC, which frame the issues pertinent to a motion for summary judgment. ( Bostrom v. County of San Bernardino, supra, 35 Cal.App.4th at p. 1662, 42 Cal.Rptr.2d 669 [“ ‘ “[I]t is [the complaint's] allegations to which the motion must respond by establishing ... there is no factual basis for relief on any theory reasonably contemplated by the opponent's pleading.” [Citation.]’ ”].) Here, the FACC alleged that in 2006, Eco Safe's president Elliot met with representatives of Carl's Jr. to discuss the placement of Eco Safe's equipment in Carl's Jr. restaurants, which used chlorine-based food disinfection. On behalf of Carl's Jr., Huetinck proposed procedures for a comparative study of Eco Safe's equipment and chlorine-based disinfection. Further preparations for the study were made by Eco Safe and Food Safety, which the complaintcharacterized as an “independent testing laboratory.”

Regarding Eco Safe's contract with Food Safety, the FACC alleged that on December 4, 2007, Food Safety presented Eco Safe with a written offer entitled “Draft Proposal Challenge Study” (Draft Proposal), which Elliot reviewed in conjunction with another document entitled “Laboratory Testing Standard Terms and Conditions” (Standard Terms), which Food Safety also submitted. Copies of both documents were attached to the complaint as Exhibits A and B and incorporated by reference. The FACC stated: “Eco Safe accepted the offer and commissioned the [study] pursuant to the written terms provided in [the exhibits].” Under the term of the Draft Proposal, Food Safety agreed to conduct six separate tests. In each test, samples were to be inoculated with a specified number of “Colony Forming Units” (CFUs), which would be allowed to incubate for a set period before being treated with a water, chlorine, or ozone rinse.

The FACC further alleged that Food Safety failed to conduct the tests as specified. Only one test displayed the...