Micro Technology Concepts v. Shih

Filed 5/2/06 Micro Technology Concepts v. Shih CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

APPEAL from a judgment of the Superior Court of Los Angeles County. R. Bruce Minto, Judge. Affirmed.

Leo Pelletier & Wu and Miriam L. Wu for Defendant and Appellant.

Creim, Macias & Koenig, Stuart I. Koenig and Richard C. Macias for Plaintiff and Respondent.

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Appeal is taken from a judgment of $321,309 against defendant and appellant, Phoebe Shih (Shih) after a court trial. The court found that Shih was liable on a personal guarantee for the purchase of computer equipment by her former company, defendant Computrend, Inc. from plaintiff and respondent Micro Technology Concepts, Inc. (MTC). Because we find that substantial evidence supports the trial court's findings that Computrend ordered and received the disputed merchandise, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Pursuant to the substantial evidence standard of review discussed infra, we state the facts in the manner most favorable to the judgment, resolving evidentiary conflicts in its favor. (Kotler v. Alma Lodge (1998) 63 Cal.App.4th 1381, 1383, fn. 1.)^[1]

Computrend purchased computer parts from MTC and others and resold them on the Internet. Shih was the president of Computrend until August 2000. On July 27, 2000 Shih executed a credit application enabling Computrend to purchase from MTC. The application contained a personal guarantee that Shih separately signed. Shortly thereafter, Shih transferred ownership of Computrend to a third party but did not revoke her personal guarantee. Shih remained with Computrend for three months after the transfer of ownership. Computrend continued to do business under the same name after the transfer.

Roy Han, president and CEO of MTC and one of two people at MTC principally involved with the Computrend account, worked with two individuals at Computrend, Shih and her ex-husband, Steven Yu. Han knew both Shih and Yu socially, understood that they had a child together and saw them together at social events during the relevant time period. Yu was Han's main contact at Computrend during MTC's relationship with Computrend. Han was never told that Yu lacked authority to act on Computrend's behalf. Nor was Han ever informed of Shih's transfer of ownership of Computrend.

The other person at MTC principally involved in the Computrend account was Helena Cheung, MTC's accounts receivable manager. Shih told Cheung that Yu represented Computrend and had the authority to place orders on behalf of Computrend. Cheung spoke with Yu at least 30 times in her dealings with Computrend.

MTC first did business with Computrend in the summer of 2000. Yu communicated with MTC about the products being purchased, pricing and shipping arrangements. Prior to the orders in dispute, Yu placed orders with MTC on behalf of Computrend for which MTC was eventually paid by Computrend. Prior to the orders in dispute, Computrend placed orders with MTC for goods to be delivered to a warehouse in Miami, Florida operated by CIF Group International, Inc. (CIF). Between July 5, 2001 and November 21, 2001, Yu ordered the disputed merchandise from MTC for delivery to the CIF warehouse in Miami. MTC delivered the disputed goods to the warehouse and ordered CIF to release the goods. CIF released the merchandise.

When payment for the goods became overdue, Cheung discussed the outstanding obligations with Shih over 10 times. In the course of those discussions she informed Shih that MTC was working with Yu on the disputed transactions. Shih never questioned Yu's authority on Computrend's behalf. Shih aided Cheung in contacting Yu about the disputed transactions by giving her Yu's telephone number and the company's number in Columbia where he was doing business. Han demanded payment on the disputed invoices from Yu, who said he would do his best to render payment.

MTC sued Computrend and Shih in Los Angeles Superior Court for goods allegedly delivered to and received by Computrend and for attorney fees pursuant to a provision in the credit application. MTC sued Shih on the personal guarantee contained in the credit application. Shih answered with a general denial and affirmative defenses, including the statute of frauds. Computrend, which had ceased doing business, defaulted.^[2]

The case was tried to the court, which found that MTC proved that conforming goods were delivered to Computrend pursuant to the instructions of Computrend's agent and that Shih was bound by the personal guarantee of the debt incurred by Computrend.^[3] The court also found that MTC's partial performance in delivering and releasing the goods placed the transactions outside the operation of the statute of frauds. Judgment was entered against Shih for $238,897.18 plus $74,047.09 in interest, and attorney fees of $8,047.94 based on the court's default schedule.

Shih timely appealed.

DISCUSSION

I. Contentions on Appeal and Standard of Review.

Shih contends the evidence did not support the trial court's factual findings that Computrend ordered and received the disputed goods. In particular, she challenges the finding that Yu acted as Computrend's agent in placing the orders and the finding that Computrend's receipt of the goods placed the purchase and sale contracts within the partial performance exception to the statute of frauds. Shih also contends the trial court's admission of certain business records violated the hearsay rule.

Shih's challenges to the trial court's factual findings and conclusions are reviewed under the substantial evidence standard of review. (Nichols v. Arthur Murray, Inc. (1967) 248 Cal.App.2d 610, 614 (Nichols) [agency an issue of fact]; Mason v. Home Ins. Co. (1935) 10 Cal.App.2d 696, 697 [partial performance an issue of fact].) Under this standard â€