Fieldson Associates, Inc. v. Whitecliff Laboratories, Inc.

Chicago-based packaging firm, commenced this action in the municipal court against appellant Whitecliff Laboratories, Inc. to recover $3,011.14, the contract price for a supply of display cartons for use by Whitecliff in marketing one of its products, a one-cup coffee maker called “Brew-A-Cup.” Whitecliff cross-complained for loss of profits in the amount of $5,359.04, allegedly incurred on Fieldson’s breach of a contract to purchase 100,000 Brew-A-Cup units to be used as premiums in a grocery store bacon promotion being organized by Fieldson for the Armour meat packing firm. The action was'thereupon transferred to the superior court.

It was established at trial that Fieldson completed the purchase of only 35,136 units. The principal issue was whether a written purchase order referring to 100,000 units was intended to be a binding commitment on the part of Fieldson. Mayfield, who was Fieldson’s president; testified that the purchase order was intended only as an “ act of good faith to show that this was the type of volume [Fieldson was] going to try to obtain”; he also testified that Whitecliff’s president, Perlov, told him that he would not hold Fieldson to the 100,000 figure. Perlov directly contradicted Mayfield, testifying that he had insisted on an order from Fieldson for a guaranteed minimum amount, and that it was on this understanding that he obtained the purchase order for 100,000 units. He testified that nothing was said by Mayfield or himself to indicate that the purchase order was other than a binding contract of purchase.

Respondent offered in evidence a collection of letters which had passed between Perlov and Mayfield after transmittal of the purchase order. Appellant objected on the ground that several of the letters written by Perlov contained offers of compromise which, under Evidence Code section 1152, subdivision (a),

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were inadmissible. The Perlov letters were rele

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vaut in that none of them, including those written after the Armour promotion had terminated with disappointing results, referred to lost profits based upon the 100,000-unit purchase order. The court admitted the letters in evidence for the purpose of helping to- determine what the intent of the parties had been at the time the purchase order was transmitted. During later cross-examination of Perlov regarding the letters, the court over objection permitted questions regarding his failure to- assert in the letters claims for lost profits under the purchase order.