Filed 6/4/98 CERTIFIED FOR PARTIAL PUBLICATION* IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT ALL WEST ELECTRONICS, INC. F025915 Plaintiff and Appellant, (Super. Ct. No. 509153-3) v. M-B-W, INC. et al., OPINION Defendants and Appellants. APPEAL from a judgment of the Superior Court of Fresno County. Lawrence J. O'Neill, Judge. J. Steven Lempel for Plaintiff and Appellant. Marderosian, Swanson & Oren, Warren R. Paboojian and Steven C. Clark for Defendants and Respondents. -ooOoo- A concrete contractor leased a curb and gutter machine through an equipment company who assigned its lease to a financing agency. Suffice it to say, the machine did not work properly and the contractor alleged he suffered damage. The contractor sued the equipment company and the manufacturer of the curb and gutter machine based on various theories which ultimately included implied warranty. Unfortunately for the * Pursuant to California Rules of Court, rule 976.1, this opinion is certified for publication with the exception of Parts II, III and IV. contractor, prior to trial the equipment company filed for bankruptcy. We publish to reiterate that the holding of U.S. Roofing, Inc. v. Credit Alliance Corp. (1991) 228 Cal.App.3d 1431, has not eroded the contractual privity requirement set out in Burr v. Sherwin Williams Co. (1954) 42 Cal.2d 682. PROCEDURAL AND FACTUAL HISTORY Bill Russell (Russell) and his son, Don Russell, a licensed general contractor, formed All West Electronics, Inc. (All West) in 1990 as a concrete contracting company. Russell was responsible for administration and financing, and Don Russell directed operations. By 1992, All West was doing numerous residential and commercial concrete jobs including single family housing and apartment projects, parking lots, and shopping centers. They primarily did slab work and occasionally curb and gutter work. On smaller jobs All West‟s crew formed the curb and gutter by hand, and on larger projects it hired a subcontractor who used a curb and gutter machine. In the hope of increasing profits on curb and gutter work, Russell became interested in purchasing a curb and gutter machine. Russell learned about slipform pavers produced by M-B-W, Inc. (MBW), a Wisconsin corporation, through an industry publication. Russell contacted C&R Parts and Equipment, Inc. (C&R), a California corporation, and spoke to C&R representative Gary Paschal. In May of 1992, Russell accompanied Paschal to Vacaville and observed an MBW paver in operation. Prior to this date, Russell had never used an MBW paver. Russell also saw an MBW demonstration paver operate at an All West job site in Tulare. The demonstration was conducted by Paul “Bud” Noble, MBW‟s western regional manager. Russell believed the output looked good, but noticed the curb was slightly “weavy.” The paver stopped operating after 50 feet because of what Noble described as a loose or broken wire. Russell gave Noble information describing the project for which he needed the 2. paver.1 According to Russell, Noble stated that MBW‟s slipform paver would perform as stated in MBW‟s brochure,2 and offered to sell All West his demonstrator model. Russell declined the offer, opting instead to purchase a new machine. Russell then began to negotiate the purchase of an MBW slipform paver from C&R. C&R quoted Russell a price of $53,129, plus freight, for a new machine. However, Russell decided to lease rather than buy the paver, and C&R arranged for Agri- Credit to provide financing. After leasing the paver to All West, C&R assigned the lease to Agri-Credit. The machine was delivered to All West on June 8, 1992. Ed Taylor, MBW‟s field representative, went to the job site in Clovis to train All West‟s crew. The paver‟s output was uneven, and Taylor showed the crew how to straighten it by using a two-by-four board. Taylor operated the paver when they poured the tight radius turn planter boxes. He also showed the crew how to fill voids in the concrete by manually using concrete mud and hand trowels. The training lasted about 15 hours over 2 days. All West began to have problems at the Clovis job with the MBW paver. Much of the curb and gutter poured with the use of the paver had to be pulled out and replaced manually. During the year and a half that All West worked on the Clovis job, the paver was used only one and one-half months. On its best day All West was able to do 645 lineal feet of curb and gutter using the paver. Russell testified the paver‟s output required more hand-work than he expected in order to correct the “undulating pattern” of the curb 1 All West had contracted to do concrete work for Clovis East High School (presumably Buchanan High School), which included curb and gutter work with tight radius curves. Russell intended to obtain a paver machine so he would not have to subcontract the work out. At that time, the Clovis project was the largest concrete job All West had contracted to perform. 2 The brochure stated MBW‟s slipform paver provided “STATE-OF-THE-ART SLIPFORM PAVING;” that it was able to perform “at rates equal to BIG MACHINES with no sacrifice in the quality;” and that it “OUT PERFORMS big machines on small jobs…any jobs with tight radius work.” 3. and gutter. Problems experienced by All West with the paver included erratic performance on the string line; the potentiometers and connectors repeatedly failed; and the paver dug into the ground and stopped. These problems required the All West crew to finish the work by hand. In a letter dated August 14, 1992, Russell complained to Gary Paschal at C&R about the problems All West had been experiencing with the paver. At some point, Russell was told by Bud Noble that a short radius adapter would be installed, which was subsequently installed at C&R. Russell also requested that Gary Paschal add an auto slope control to the paver to address other problems. After these modifications were made, All West tried to use the paver on the Takahashi Farms project. The paver poured only 50-60 feet before it stopped working. Russell had it towed to Ace Hydraulic for repairs. Ace diagnosed the problem and MBW sent the parts by air express to Ace to make the repairs. Russell personally moved the control panel to the rear of the machine in an attempt to improve the operability of the paver. All West also tried to use the paver on the Civic Center project in downtown Fresno, but it produced only 300 of the 2,560 linear feet of curb and gutter required, and still required too much manual work. At some point C&R filed for bankruptcy protection. In March of 1993, Taylor and Noble installed a “cross-slope control” on the paver, which was supposed to reduce the erratic motion problem. Russell wrote to Noble requesting reimbursement for the work done by Ace Hydraulic, and complaining that after the parts were installed the paver would not go in reverse. He also complained about the quality of the paver and that its maximum output was only 600 feet per day. After installation of the flow diverter and the auto slope control devices, All West tried to use the paver on the Kaufman and Broad job. They poured 150 feet but the work was unsatisfactory. Since it would have been too expensive to finish the job by hand, All 4. West subcontracted out the remaining curb and gutter work. Later Russell called Noble to express his dissatisfaction and unwillingness to continue using the paver. Noble asked Russell for another chance to show the paver could work properly. They agreed to a demonstration on March 30, 1993. Ed Taylor operated the paver and poured approximately 100-125 feet. The paver failed to follow the string line. Noble admitted the machine was “faulty” and asked if he could demonstrate his own model. The quality of the output of Noble‟s demonstrator model was better. Noble asked Russell to use it on a regular job to show the paver would produce quality product in a real job situation. All West‟s paver was transported to MBW‟s Corona plant and returned by May 10, 1993. In April of 1993, All West contacted Frank Multerer, MBW‟s president, who prepared and delivered some molds at MBW‟s expense to be attached to the demonstrator paver so that it could be used at the Kaufman and Broad job. Ed Taylor attached the molds and his son operated the paver. On the first day, the paver produced 150 feet of fair output. On the second day, it poured approximately 2,500 feet of median curb. About 10 to 15 percent of the median poured had to be pulled out. Noble told Russell that MBW would pay for tearing out and repouring the concrete. In a letter to Noble dated May 10, 1993, Russell reiterated his displeasure with the paver and requested that MBW pay for the cost of the demonstration. In a second letter written the same day, Russell listed the deficiencies of the paver. Russell never received a response to the letters, and MBW did not reimburse All West for its costs in the Kaufman and Broad job. Frank Multerer testified that C&R was not an exclusive dealer, but one of 1,200 dealers of MBW products. C&R also sold products of MBW‟s competitors. Further, there was no written contractual agreement between MBW and C&R. C&R purchased the paver that was sold to All West from MBW. No one from C&R was ever authorized to negotiate contracts on behalf of MBW. Instead, MBW merely sells the paver to C&R, and then C&R sells it to whoever they want for whatever 5. price they can get. According to Multerer, there were federal laws against his company attempting to influence pricing. Multerer explained that MBW did warranty work for All West on the paver because MBW is a small company, and relies on satisfied customers for future sales. Thus, for common sense reasons, MBW did not have a formal or rigid warranty policy. Multerer testified that Bud Noble was employed by MBW as a sales administration person/salesman. He stated Noble‟s participation as an MBW sales representative was to demonstrate the product if some distributors wanted to sell it to the ultimate buyer. Noble did not get involved in contractual negotiations. In this case, MBW sold its product to C&R, not to All West. Multerer testified that one of the problems with the All West machine was that Russell had spliced 46 to 48 wires on the control panel which contributed to the machine‟s problems. Brad Silva, attorney for Agri-Credit, testified the lease agreement for the paver was originally signed by C&R and All West. The lease was then assigned by C&R to Agri-Credit. Under the lease agreement, Agri-Credit owned the paver. On May 3, 1994, All West filed a complaint for rescission of contract against C&R and MBW alleging breach of lease and fraud. MBW filed an answer on June 7, 1994, generally denying all the allegations and asserting numerous affirmative defenses. C&R did not file an answer. MBW filed a cross-complaint against All West and C&R for monies owed on the sale of unrelated equipment to All West. All West answered the complaint and added Agri-Credit as a defendant to its own complaint. Agri-Credit answered and cross- complained against All West and Bill Russell for monies owed based on the lease agreement entered into between C&R and All West. All West and Bill Russell answered Agri-Credit‟s cross-complaint. After an arbitration decision in favor of MBW and Agri-Credit, All West requested 6. a trial de novo. On October 24, 1995, the court granted All West‟s motion to file a first amended complaint alleging three causes of action: breach of a lease agreement, breach of implied warranty of merchantability, and breach of the implied warranty of fitness for particular purpose. On March 18, 1996, All West and Bill Russell stipulated that a judgment be entered against them on Agri-Credit‟s cross-complaint in the amount of $63,236.60. At the conclusion of All West‟s case-in-chief, MBW filed a motion for nonsuit which was denied. Prior to the jury returning a verdict, MBW made a motion for a directed verdict. In response to this motion, All West made a motion for leave to amend the pleadings to assert theories of negligent misrepresentation or breach of implied warranty based on an oral agreement. The motion for leave to amend was denied, and the motion for directed verdict was granted.3 Judgment was entered in favor of MBW on April 18, 1996. All West filed a timely notice of appeal. DISCUSSION I. Privity of contract vis à vis MBW and All West All West contends the trial court erred by granting MBW‟s directed verdict motion because contrary to the trial court‟s conclusion, there was sufficient direct contact between MBW and All West to support a finding of vertical privity under the case of U.S. Roofing, Inc. v. Credit Alliance Corp., supra, 228 Cal.App.3d 1431. We reject this contention. In U.S. Roofing, U.S. Roofing purchased a crane through lease financing. It stopped making payments on the lease and brought a suit against National Crane (the manufacturer), LAS (the supplier), Steve Jones, LAS‟s president, and LSC (the leasing company). After a jury trial National Crane was not found liable, but judgment was 3 The court was unable to review the motion for directed verdict and rule on it until after the jury had returned a verdict of $68,467.60 in favor of All West. 7. entered in favor of U.S. Roofing, and against LAS and LSC. The pertinent factual background was summarized as follows: “U.S. Roofing is a roofing contracting firm specializing in government roofing jobs. In 1983 U.S. Roofing was awarded a contract for the Alameda Naval Air Station in Oakland. U.S. Roofing determined that a crane would be needed to complete the work and began to contact dealers about purchasing a crane. “Henry Jessup of U.S. Roofing contacted Steve Jones of LAS and discussed his needs for the job. They entered into negotiations for the purchase of a truck-mounted crane. An agreement on the type and price of a crane was reached and U.S. Roofing sent LAS a $1,000 earnest money deposit. This was followed by a second deposit of $7,402.19. U.S. Roofing relied on LAS to arrange financing. LAS suggested a lease arrangement.… Of the two leasing companies to whom LAS referred U.S. Roofing, U.S. Roofing selected LSC and they entered into a lease agreement. Under the lease agreement U.S. Roofing selected the equipment and the supplier (LAS). LSC purchased the equipment and leased it to U.S. Roofing for a period of 57 months. An amendment to the lease gave U.S. Roofing an option to purchase the equipment at the end of the term of the lease for $8,049.… “ ............................................................................................................ “The crane was delivered on August 24, 1983. U.S. Roofing never returned the certificate of acceptance because it did not receive the full roofer's package it ordered. Nonetheless, LSC paid the full purchase price of $116,000, less the two deposits, to LAS.” (U.S. Roofing, Inc. v. Credit Alliance Corp., supra, 228 Cal.App.3d at pp. 1438-1439.) U.S. Roofing immediately began to experience problems with the crane. Its lawsuit against the various defendants was for breach of warranties. In its appeal, LAS contended it could not be liable for any breach of warranty as a matter of law because there was no privity of contract since there was no written agreement between it and U.S. Roofing. “Vertical privity is a prerequisite in California for recovery on a theory of breach of implied warranties of fitness and merchantability. [Citations.]” (U.S. Roofing, Inc. v. Credit Alliance Corp., supra, 228 Cal.App.3d at p. 1441.) The court rejected LAS‟s argument as follows: 8. “This argument focuses solely on the paper contract; it ignores the considerable testimony regarding the direct dealings between LAS and U.S. Roofing for the sale and purchase of the crane. These parties had an oral agreement for the sale of the crane, supported by a deposit of $1,000, followed by a second deposit. LAS admits it made at least one express warranty as to the crane. When U.S. Roofing experienced problems with the crane, it contacted LAS for relief. Repairs on the crane were arranged and paid for by LAS. From this evidence the jury could find the necessary privity to support liability for breach of an implied warranty.” (U.S. Roofing, Inc. v. Credit Alliance Corp., supra, 228 Cal.App.3d at p. 1442.) All West contends its case is virtually identical, and the same result should follow. To the contrary, this case is distinguishable on a very critical matter: there was no agreement between MBW and All West for the sale of the paver. Here, the sale was made by C&R. While the lease contract was between All West and Agri-Credit, the reasoning in U.S. Roofing might apply to C&R making it liable for any implied warranties. However, it would not also extend to MBW, who essentially stood in the shoes of National Crane, not LAS. Here, there simply was no agreement between MBW and All West to support a finding of privity of contract between MBW and All West. Privity of contract is a prerequisite in California for recovery on a theory of breach of implied warranties of fitness and merchantability. “The general rule is that privity of contract is required in an action for breach of either express or implied warranty and that there is no privity between the original seller and a subsequent purchaser who is in no way a party to the original sale.” (Burr v. Sherwin Williams Co. (1954) 42 Cal.2d 682, 695-696; accord U.S. Roofing, Inc. v. Credit Alliance Corp., supra, 228 Cal.App.3d at p. 1441; Osborne v. Subaru of America, Inc. (1988) 198 Cal.App.3d 646, 656.) Although All West claims there was an oral agreement between it and MBW, as will be discussed later, the record does not support this claim. However, MBW was not sued on a theory of breach of an oral agreement. Therefore, even if substantial evidence could support a finding that MBW entered into an oral agreement with All West, the allegations in the complaint required a finding that MBW entered into a written agreement with All West to support the requisite finding of privity. All West does not 9. argue MBW was a party to the written agreement. All West does, however, argue that even if the alleged oral agreement were disregarded, the jury could find vertical privity existed based on the direct dealings between MBW and All West. The cases relied upon by All West (Evraets v. Intermedics Intraocular, Inc. (1994) 29 Cal.App.4th 779 and Cedars of Lebanon Hosp. v. European X-ray (Fla.App. 3 Dist. 1984) 444 So.2d 1068) do not support its position. In Evraets, the plaintiff was injured by an intraocular lens that had been surgically implanted in his eye. He sued the manufacturer and distributor of the device for, among other things, breach of implied warranty, and his suit was dismissed by the trial court on defendant‟s demurrer. In discussing the implied warranty theory, the court held: “ „It is settled law in California that privity between the parties is a necessary element to recovery on a breach of an implied warranty of fitness for the buyer's use, with exceptions not applicable here.‟ [Citations.] The notable exception to this rule applies to manufacturers of foodstuffs. [Citations.] “There is no privity between Evraets and respondents. Evraets did not rely on respondents' judgment that an intraocular device was appropriate for him. Rather, he relied upon his physician's skill or judgment to select or furnish a suitable product. Thus, Evraets cannot sue the manufacturers, suppliers or distributors of the lens on an implied warranty of fitness theory.” (Evraets v. Intermedics Intraocular, Inc., supra, 29 Cal.App.4th at p. 788.) All West contends this means “contractual” privity is not required because the court did not mention the nonexistence of an agreement between the parties. Instead, it based its finding of no privity on the absence of direct dealings between the user and manufacturer, and not because there was no oral or written agreement between them. All West is attempting to get more mileage out of the Evraets case than is warranted. It is not surprising the Evraets court did not mention an oral or written agreement between the parties since there is no indication such an agreement was alleged in the complaint. Suffice it to say that “Language used in any opinion is of course to be understood in the 10. light of the facts and the issue then before the court, and an opinion is not authority for a proposition not therein considered.” (Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn., 2.) The Evraets case did not change the law requiring privity of contract for breach of implied warranty liability. Nor could it in light of Burr v. Sherwin Williams Co., supra, 42 Cal.2d at pages 695-696. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.) In Cedars of Lebanon Hosp. v. European X-ray, supra, 444 So.2d 1068, the court noted “courts and jurisdictions differ as to when [a breach of implied warranties] cause of action will be allowed and under what circumstances.” (Id. at pp. 1071-1072.) The court then refused to strictly adhere to the doctrine of privity because requiring the purchaser to go against the seller, who must proceed against the distributor, who must proceed against the manufacturer, “is wasteful and inefficient.” (Id. at p. 1072.) While there may be sound policy reasons for eliminating the doctrine of privity in cases such as here, this argument must be made to the Legislature or the California Supreme Court, because we are bound to follow Burr v. Sherwin Williams Co., supra, 42 Cal.2d at pages 695-696, under Auto Equity Sales, Inc. v. Superior Court, supra, 57 Cal.2d at p. 455. Since All West sued MBW for breach of a lease to which MBW was not a party, and because unlike U.S. Roofing, there was no evidence MBW or its agent negotiated the sale of its paver to All West, the trial court properly granted the motion for directed verdict under the doctrine of privity. Notwithstanding All West‟s argument that “„vertical privity‟” and “„privity of contract‟” are different, the general rule that privity of contract is required for implied warranty liability applies because this case does not come under any recognized exception to this general rule. (Burr v. Sherwin Williams Co., supra, 42 Cal.2d at pp. 695-696; Fundin v. Chicago Pneumatic Tool Co. (1984) 152 Cal.App.3d 951, 956, fn. 1.) Finally, All West‟s reliance on the recent case of Fieldstone Co. v. Briggs Plumbing Products, Inc. (1997) 54 Cal.App.4th 357 is perplexing since that case defeats 11. rather than supports its argument. The Fieldstone court distinguished the U.S. Roofing case for the same reasons we have -- lack of contractual privity. There the court stated: “In U.S. Roofing, Inc. v. Credit Alliance Corp., supra, 228 Cal.App.3d at page 1442, parties were in privity for purposes of implied warranty claims where there was considerable evidence they dealt directly with each other vis-à-vis the purchase .…” (54 Cal.App.4th at p. 371, fn. 12.) Here the evidence establishes MBW did not deal directly with All West regarding the “purchase” of the paver. The sale/lease was negotiated between All West and C&R. Thus, All West‟s reliance on Fieldstone is misplaced. II. The express warranty theory* All West contends vertical privity is required only to enforce implied warranties. It argues that where express warranties are made directly to the buyer by the manufacturer, as was done here, the manufacturer may be directly liable to the buyer even in the absence of a contractual agreement. MBW agrees with All West on these points. MBW did not dispute that it made express statements regarding the quality and suitability of its paving machine to All West. Further, in Burr v. Sherwin Williams Co., supra, 42 Cal.2d at pages 696-697, the court held there is no requirement of privity for recovery on a theory of express warranty where the purchaser of a product relied upon representations made by the manufacturer in labels or advertising materials. The problem here is that no such theory was pled in the complaint, and the case did not proceed on a theory of recovery based on breach of express warranties. The jury was only instructed on All West‟s claim that MBW breached the implied warranties of merchantability and fitness for a particular purpose. BAJI instructions regarding express warranties, such as Nos. 9.44 “Warranty In General--Sale,” 944.5 “Definition Of Affirmation Of Fact,” 9.50 “Express Warranty,” and 9.51 “Statement Of Opinion,” were not given to the jury. Further, there was no instruction pursuant to BAJI No. 9.85 that “There is a breach of * See footnote *, ante. 12. warranty when the goods sold do not reasonably conform to the expressly warranted or promised quality, characteristic or performance.” Consequently, whether the evidence could have supported a cause of action on the theory of a breach of express warranties is not relevant to any issue on appeal. Further, as noted long ago in Ernst v. Searle (1933) 218 Cal. 233, 240-241: “The rule is well settled that the theory upon which a case is tried must be adhered to on appeal. A party is not permitted to change his position and adopt a new and different theory on appeal. To permit him to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant. (2 Cal.Jur., sec. 68, p. 237.)” The case was tried to the jury on a theory of implied warranties and not on a theory of breach of express warranty. It would be unfair to the trial court and MBW, and wasteful of judicial resources to predicate reversal of the trial court‟s granting of the directed verdict on this new theory raised for the first time on appeal. III. The trial court did not abuse its discretion by denying All West’s motion for leave to amend its complaint to allege the existence of an oral agreement.* All West contends the trial court‟s denial of its motion to amend its complaint to conform to proof in order to allege an oral agreement was error. We reject this contention. At the time of the jury instructions conference, All West conceded there was no evidence that MBW was a party to the written lease agreement involving All West, C&R and Agri-Credit. Thus, the first cause of action for breach of a lease agreement was dropped as a theory of liability. MBW then made a motion for directed verdict on the remaining causes of action on the grounds there was no privity of contract. The court gave an indicated ruling to grant the motion. In order to permit the issue of contractual privity to be preserved, the court directed counsel for All West to fashion a jury instruction and verdicts which encompassed his theory for a finding of privity where the * See footnote *, ante. 13. defendant is not a party to the written contract of sale/lease. Subsequently, in response to the directed verdict motion, All West filed a motion for leave to amend its amended complaint to add a cause of action for negligent misrepresentation and to allege breach of implied warranties of an oral agreement. The trial court denied the motion to amend, finding MBW would be prejudiced by these amendments. “It is the contemporary policy of the law to permit amendments to pleadings even at the commencement of trial so that the litigation may be fully tried, but an amendment is to be granted only if the trial court in the exercise of its discretion finds that it will subserve the interests of justice. If by such amendment, the opposing party requires time for preparation to meet a new issue, a continuance is to be allowed. (Code Civ. Proc., §§ 473, 576.) The ruling of the trial judge will not be disturbed upon appeal absent a showing by appellant of a clear abuse of discretion.… “A long unexcused delay may be the basis for denying permission to amend pleadings [citations], especially where the proposed amendment interjects a new issue [citations], which may require further investigation or discovery procedures [citations].” (Nelson v. Specialty Records, Inc. (1970) 11 Cal.App.3d 126, 139, fn. omitted.) “If new facts are being alleged, prejudice may easily result because of the inability of the other party to investigate the validity of the factual allegations while engaged in trial or to call rebuttal witnesses.” (City of Stanton v. Cox (1989) 207 Cal.App.3d 1557, 1563.) All West fails to establish the trial court abused its discretion by denying its motion. Indeed, the circumstances indicate it would have been an abuse of discretion if the court had granted the motion at such a late stage of the proceedings. Here, All West delayed until closing arguments to the jury were nearly completed before making its motion. In addition, All West offered no excuse or justification for the delay. (City of Stanton v. Cox, supra, 207 Cal.App.3d at p. 1564 [“A party who waits 18 months before attempting to amend, and then does so only after trial has commenced, and who offers no excuse for the failure, can hardly complain when the request to amend is denied”].) All West argues that Russell‟s deposition testimony was sufficient to put MBW on 14. notice that it intended to rely on Noble‟s oral and written representations regarding the reliability and suitability of the slipform paver. All West concludes MBW could not have been prejudiced by the proposed amendments because it could have presented evidence to refute Russell‟s expected testimony, but failed to do so presumably because no such evidence existed. “This argument completely misses the point. The reason for the defense „omission‟ is simple:”4 since MBW was not being sued for breach of express warranties, it was unnecessary for them to refute All West‟s evidence regarding Noble‟s alleged representations. Stated simply, the complaint did not raise any issues regarding conversations between Russell and Noble. “Had it done so, [MBW] would have been expected to present evidence. [MBW‟s] failure to contest an unexpected issue cannot be used by [All West] to justify its tardy attempt to amend.” (City of Stanton v. Cox, supra, 207 Cal.App.3d at p. 1564.) As found by the trial court: “Certainly, it is likely that competent counsel would have handled discovery in a completely different mode had the defendant realized that the basis of the second and third causes of action were as a result of an oral contract formed by Mr. Noble. Furthermore, the strategy at the time of trial as to whether or not to produce Mr. Noble, (or at least take his deposition and use it as a result of the legal unavailability of the witness) would have been an obvious consideration if he had been alleged to have been a party to a contract.” Finally, All West argues that there is no requirement that a complaint for breach of implied warranty even allege that the warranty arose under an oral or written contract. Instead, it only requires the allegation of a sale. All West contends that a sale allegation is in the amended complaint, citing paragraphs 6, 7, 24, 30, 31, 32 and 35 of the amended complaint. Even if All West is correct, it still alleged a written contract as the basis for the breach of implied warranties theories. As a result, MBW could justifiably rely on the pleadings in the complaint and defend accordingly. Further, the factual allegations of the paragraphs of the complaint cited by All West are all premised on an agency relationship 4 City of Stanton v. Cox, supra, 207 Cal.App.3d at page 1564. 15. between C&R and MBW. This alleged relationship was never proved. None of the allegations are based on an oral agreement between Russell and Noble or any other MBW representative. Thus, MBW was not on notice that an oral agreement was All West‟s theory of liability. As found by the trial court: “Although it is argued by plaintiff‟s counsel that the first amended complaint gives the defendant enough notice that they are proceeding on not only a written contract but also an oral contract, a clear reading of the pleading indicates otherwise. “Paragraphs 30, 31 and 32 (as to the second cause of action) and paragraph 34 (which incorporates the paragraphs of the second cause of action), make it clear that the contract upon which the implied warranty of merchantability cause of action and the implied warranty of fitness cause of action were based was indeed the written contract („the above-referenced lease agreement‟). Even a strained interpretation of the allegations would not give rise to the belief that the allegations would put any reasonable person on notice that the contractual basis was an oral contract.” In light of our conclusion that the pleadings failed to raise any issues regarding conversations between Russell and Noble, All West‟s motion for an order to transmit the original deposition of Bill Russell is denied as moot. IV. The trial court’s delay in granting the motion for directed verdict did not prejudice All West.* All West also complains the trial court somehow misled it to its detriment by allowing: 1) testimony regarding Russell‟s dealings with Noble; 2) argument of the existence of an oral agreement to the jury; and 3) an instruction that the jury could consider an oral agreement together with the other direct dealings between All West and MBW to justify finding privity of contract. In doing so, All West contends the trial court, in effect, granted the motion for leave to amend and then used the motion for directed verdict to reverse that ruling. The record does not support All West‟s conclusion. The record shows that at the jury instruction conference, the issue of contractual * See footnote *, ante. 16. privity was once again raised. All West conceded MBW was not a contractual party to the sale/lease contract which had been pled in the amended complaint as providing implied warranties. However, All West argued the evidence was sufficient to show an oral contract existed between Noble and Russell. Eventually, the court directly asked whether the oral contract was pled in the amended complaint. All West refused to answer this critical question and attempted to cloud the issue. The colloquy was as follows: “THE COURT: Was this oral -- alleged oral contract ever pled? “MR. DAVIDSON [All West‟s counsel]: The -- the -- I don‟t know if an oral -- I don‟t have the pleadings in front of me. I don‟t believe that an oral contract had to be pled, and I‟ll tell you why. “One, the evidence that‟s come out at -- at trial from the very beginning we have alleged Bud Noble‟s involvement in this case. From the very beginning we have alleged Bud‟s involvement. They have had Bud available to them. Bud didn‟t -- “MR. PABOOJIAN: Your Honor? “THE COURT: Wait a minute. “My question was a breach of the oral contract as a prerequisite for the causes of action that now stand pled? “MR. DAVIDSON: Was it -- I‟m sorry, I don‟t understand the Court‟s question. Was a breach -- “THE COURT: Was a breach of an oral contract -- “MR. DAVIDSON: I don‟t believe -- Your Honor, I‟ll tell you I am not going to get boxed in here into agreeing with -- with either respectfully with the Court‟s reading or with opposing Counsel‟s reading that if you don‟t have an oral contract between the parties you don‟t have -- you -- you don‟t have evidence. In the absence of other elements you don‟t have -- you can‟t make the finding -- the jury can‟t find the finding there isn‟t privity. That‟s not what U.S. Roofing says. It does not say if it was the truth, if it was the case, then they would say, look, there wasn‟t a written agreement, but there was an oral agreement, ignore all the other factors. Counsel would be right. That‟s not what it says. 17. “If the Court is correct that that element alone makes it or that element is a necessary and absolutely necessary element it would have said so. It does not say so. “THE COURT: Okay. Let‟s go off the record for just a second.” It was at this point the court advised the parties of its intended ruling to grant the motion for directed verdict. As noted earlier, the court gave All West some leeway by permitting it to fashion an instruction and verdict form based on its reading of the U.S. Roofing case to preserve the issue for appeal. (“[B]oth the instructions and the verdict itself would be consistent with your reading, Mr. Davidson, of the U.S. Roofing case so that if it is necessary that you will have an appellate issue preserved.”) We fail to see how All West could have been prejudiced by this procedure. While it is true the trial court should have granted the motion for nonsuit following presentation of All West‟s case-in-chief, it is unclear how All West was prejudiced by the court‟s indulgence in allowing All West to argue its theory of liability to the jury. Although it disagreed with All West on the requirements of the doctrine of privity, the trial court gave All West the benefit of the doubt to preserve the issue for appeal. The court can hardly be faulted by All West for the court‟s indulgence in All West‟s favor. All West also contends that after a jury returns a special verdict consistent with the evidence and jury instructions, a trial court may not use the directed verdict procedure when it results in the jury‟s verdict being rendered inconsistent with the court‟s revised rulings. The applicable standards for review of the court‟s ruling are as follows: “It has become the established law of this state that the power of the court to direct a verdict is absolutely the same as the power of the court to grant a nonsuit. A nonsuit or a directed verdict may be granted „only when, disregarding conflicting evidence and giving to plaintiff's evidence all the value to which it is legally entitled, herein indulging in every legitimate inference which may be drawn from that evidence, the result is a determination that there is no evidence of sufficient substantiality to support a verdict in favor of the plaintiff if such a verdict were given.‟ [Citations.] Unless it can be said as a matter of law, that, when so considered, no other reasonable conclusion is legally deducible from the evidence, and that any 18. other holding would be so lacking in evidentiary support that a reviewing court would be impelled to reverse it upon appeal, or the trial court to set it aside as a matter of law, the trial court is not justified in taking the case from the jury. [Citation.] A motion for a directed verdict „is in the nature of a demurrer to the evidence, and is governed by practically the same rules, and concedes as true the evidence on behalf of the adverse party, with all fair and reasonable inferences to be deduced therefrom. ... In other words, the function of the trial court on a motion for a directed verdict is analogous to and practically the same as that of a reviewing court in determining, on appeal, whether there is evidence in the record of sufficient substance to support a verdict.” (Estate of Lances (1932) 216 Cal. 397, 400-401.) All West contends the order granting directed verdict was erroneous because the trial court disregarded evidence of the “oral agreement” between All West and MBW. All West is in error in concluding that the court disregarded evidence of an oral agreement. In fact, no matter how much weight is given to this alleged oral agreement, it has no probative value to the key issue: whether MBW was a party to the only alleged contract or agreement in the amended complaint. In other words, even if an oral agreement existed, it was still legally insufficient to prove MBW was a party to the written sale/lease agreement which was the only alleged basis for a breach of the implied warranties. Again, All West misses the point. As discussed earlier, it may be that All West presented sufficient evidence to prove that MBW breached an express warranty. However, that issue was never resolved by the jury because MBW was not sued on a breach of express warranty theory. All West‟s reliance on Estate of Callahan (1967) 67 Cal.2d 609 at page 609, is misplaced for the same reason. The trial court granted a motion for nonsuit in a will contest case. A handwriting expert‟s testimony that part of the will was executed during a time of possible testamentary incapacity was admitted into evidence over objection. The California Supreme Court found the expert‟s testimony combined with testimony of other medical experts provided a valid basis for the will contest. On appeal, the respondents argued the handwriting expert‟s testimony purporting to fix the time of the execution of the document was erroneously admitted because it was beyond his expertise. Since there 19. was no other evidence purporting to place the execution of the document within the critical time period, the respondents argued the nonsuit was properly granted regarding this ground of the contest. The court rejected this argument as follows: “This contention ignores the well-settled rule that, upon a motion for nonsuit, „Evidence, whether erroneously admitted or not, if relevant to the issues joined, must be given the credit and benefit of its full probative strength, ...‟ (Italics added.) [Citations.]” (Estate of Callahan, supra, 67 Cal.2d at p. 617.) As discussed above, the issue of whether MBW breached the implied warranties of an oral agreement was never joined because no such oral agreement had been pled in the amended complaint. Any purported oral agreement was and is irrelevant to All West‟s causes of action as pled. Even if evidence of an oral agreement between Noble and Russell were relevant, the directed verdict was proper because there is no substantial evidence to support a finding that Noble and Russell entered into an oral agreement for All West‟s purchase/lease of the paver. All West relies for support on the following testimony by Russell : “Q Okay. Uhm -- at that time did Mr. Noble offer to sell you an M- B-W paver? “A Yes. “Q Which one? “A He offered to sell the demonstrator machine that he -- he brought with him to demonstrate. “Q Did you -- did you accept that offer? “A No. “Q What did you tell him? “A We‟d prefer a new machine. “Q You told him you wanted to buy a new machine? 20. “A That‟s correct. “Q What did Mr. Noble say? “A Well, the transaction was handled through C & R Parts and Equipment. As I recall the concern, of course, that I had at that point was to verify my figures that I had been toying with and make sure this would work out. But for C & R Equipment, Gary [Paschal] would supply me with the quotation. “Q And did Mr. [Paschal] end up supplying you with a quotation? “A Yes, he did. “Q At the time that Mr. Noble offered you this used machine did you tell him in fact that you had made the decision to buy a new machine? “A I believe that‟s correct, yes. “ ............................................................................................................ “MR. DAVIDSON Q Did you communicate to Bud Noble after he offered you a used machine that you wanted a new machine? “A That‟s true. “Q Did Bud Noble say a new machine was available? “A Did he say one was available? “Q Yeah. “ ............................................................................................................ “„Question: At that point did you enter into the lease agreement or was it at some later date? “„Answer: Well, I can‟t without referring to the actual documents recall the exact date. But it was within that time period that we had decided to go with this machine based upon the testimony of Mr. Noble and his explanation of the problem and order a new machine. He had offered to sell us that machine, which was his demonstrator. We elected to go through with a new machine. “„[Q] Do you recall whether the demonstrator model was the same model you ended up leasing? 21. “„Answer: I don‟t know if they were different models or not. To my recollection it was the same. “„Question: From the point that you first contacted C & R until the point that you entered into the lease agreement with C & R did you just have one contact with Bud Noble or had you spoken to him more than once? “„Answer: I don‟t recall. “„Question: How about anyone associated with M-B-W, do you recall any other communications that you would have had with someone else at M-B-W during that initial time frame when you first became interested in the machine until the point you executed the lease? “„I don‟t recall -- “„Answer: I don‟t recall. I don‟t think so. “„Question: What was it that Mr. Noble told you about the machine that indicated to you that this machine is the machine you wanted? “„Answer: He basically explained that it did what his brochure said it did. And the problems we had there were due to his inexperience operating the machine and the broken wire. “„Question: Did you provide Mr. Noble with any information relating to the project that you contemplated for your own company? “„Answer: Yes. You bet.‟” As can be seen, Russell never testified he entered into an agreement with Noble or any other MBW representative for the purchase of the paver. The only offer made by Noble to sell the demonstrator model was rejected by Russell. At best, Russell‟s testimony is evidence that he decided to purchase a new paver and communicated this intention to Noble. However, Russell made it clear his negotiations for the paver were with Gary Paschal of C&R, not Noble. The jury was not instructed on what would constitute an oral agreement. However, it is clear, as a matter of law, that no oral agreement for purchase of the paver was entered into by Russell and Noble. “Where any of the essential terms of an apparent agreement are left for future 22. determination and it is understood by the parties that the agreement is not complete until they are settled, or where it is understood that the agreement is incomplete until reduced to writing and signed by the parties, no contract results until this is done.” (BAJI 10.66.) Here, Russell made it clear he planned future negotiation of the purchase of the paver with Gary Paschal, and he did not agree with Noble on any purchase price. “An expression of willingness to enter into an agreement is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to be bound until he has made a further expression of consent.” (BAJI 10.65.) Here, Russell‟s testimony makes it clear that his expression of willingness to enter into an agreement for the purchase of an MBW paver was not an offer to which he would be bound until further negotiation with Paschal. Finally, even if Russell‟s stated intention to purchase a new paver could be considered a promise to buy an MBW paver, it was insufficient to create an oral agreement or contract because of a lack of consideration. “A promise without consideration cannot be enforced. [¶] Consideration may be either a benefit conferred or agreed to be conferred upon the person making the promise or some other person, or a detriment suffered or agreed to be suffered by the person to whom the promise is made or some other person.” (BAJI 10.61.) There are other applicable legal principles which militate against the notion that Russell‟s communications with Noble were sufficient to constitute an oral agreement for the purchase of the paver. Suffice it to say there was no substantial evidence to support the jury‟s finding that an oral agreement existed between All West and MBW for the purchase of the paver. (Contrast U.S. Roofing, Inc. v. Credit Alliance Corp., supra, 228 Cal.App.3d at pp. 1438, 1442 [substantial evidence of an oral agreement found where plaintiff and defendant agreed on the type and price of the crane; plaintiff paid a $1,000 earnest money deposit to defendant, which was followed by a second deposit of $7,402.19; plaintiff relied on defendant to arrange financing; defendant suggested a lease 23. arrangement; and defendant referred plaintiff to two leasing companies, one of which was selected by plaintiff].) DISPOSITION The judgment is affirmed. Costs are awarded to the prevailing party. _________________________ WISEMAN, J. WE CONCUR: _______________________________ VARTABEDIAN, Acting P.J. _______________________________ BUCKLEY, J. 24.