                                                                           FILED
                           NOT FOR PUBLICATION                              JUL 07 2011

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



PATRICK CALLIARI,                                No. 10-35736

             Plaintiff-counter-claim-            D.C. No. 2:08-cv-01111-MJP
defendant - Appellee,

  v.                                             MEMORANDUM *

SARGENTO FOODS INC,

              Defendant-counter-claimant-
plaintiff - Appellant,

FLORA DAMASIO; ANTOINE
IOANNIDES; ANDREAS IOANNIDES;
GAYLE K. GOODRICH; GILLIAN
OLSON; RICHARD J. OLSON; BETTY
CROUSE,

              Counter-defendants -
Appellees.



PATRICK CALLIARI,                                No. 10-35788

             Plaintiff-counter-claim-            D.C. No. 2:08-cv-01111-MJP
defendant - Appellant,

  v.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
SARGENTO FOODS INC,

              Defendant-counter-claimant-
plaintiff - Appellee,

FLORA DAMASIO; ANTOINE
IOANNIDES; ANDREAS IOANNIDES;
GAYLE K. GOODRICH; GILLIAN
OLSON; RICHARD J. OLSON; BETTY
CROUSE,

              Counter-defendants -
Appellants.



                   Appeal from the United States District Court
                     for the Western District of Washington
                   Marsha J. Pechman, District Judge, Presiding

                        Argued and Submitted June 7, 2011
                               Seattle, Washington

Before: REINHARDT, W. FLETCHER, and RAWLINSON, Circuit Judges.

      This diversity action arises from the acquisition of Portionables, Inc.

(Portionables), a Washington frozen sauce manufacturer, by Sargento Foods, Inc.

(Sargento), a Wisconsin cheese company. The transaction was governed by two

agreements: the Stock Purchase Agreement (SPA) and the Employment

Agreement (EA).




                                          2
      1.     The district court properly granted summary judgment in favor of the

Shareholders on Sargento’s breach of warranty counterclaims.

      The undisputed facts established that Portionables did not produce or sell

milk products as defined by the South Dakota Department of Agriculture at the

time of the acquisition. The Shareholders therefore were not required by South

Dakota law to obtain a state dairy license and were, as warranted, in compliance

with applicable laws.

      The extrinsic evidence proffered by Sargento failed to raise a triable issue of

material fact regarding the adequacy of Portionables’ equipment, structures, and

capacity. See U.S. Life Credit Ins. Co. v. Williams, 919 P.2d 594, 597-98 (Wash.

1996) (enforcing contract as written).




      2.     The district court correctly granted judgment as a matter of law

pursuant to FRCP 50(a) in favor of Calliari on Sargento’s claim seeking the return

of Calliari’s signing and retention bonus. The court was required to determine the

objective meaning of the parties’ written agreement by interpreting the plain

language of EA § 4(d) and any testimony regarding the parties’ unexpressed

subjective understanding was irrelevant. See Hearst Commc’ns Inc. v. Seattle

Times Co., 115 P.3d 262, 267 (Wash. 2005) (en banc).


                                          3
      3.     The district court properly denied the Shareholders’ motions for

judgment as a matter of law pursuant to FRCP 50(a) and FRCP 50(b) on the claims

alleging that Sargento breached the EA and SPA by interfering with Calliari’s

operational control over Portionables during the earnout period. The operational

control provisions of the parties’ agreements were ambiguous and subject to at

least two reasonable interpretations. See Tanner Elec. Co-op. v. Puget Sound

Power & Light Co., 911 P.2d 1301, 1310-11 (Wash. 1996) (en banc). The jury, by

its verdict, adopted the definition of operational control proffered at trial by

Sargento. Although it may have been possible to draw a contrary conclusion, the

verdict was supported by substantial evidence and the Shareholders’ FRCP 50(b)

motion was properly denied. See First Nat’l Mortg. Co. v. Fed. Realty Inv. Trust,

631 F.3d 1058, 1067-68 (9th Cir. 2011).


      4.     The district court did not abuse its discretion when it awarded trial

costs to Sargento and denied the Shareholders’ motion to retax costs. The district

court recognized that it had discretion to require each party to bear its own costs in

the event of a mixed judgment, but declined to do so. This conclusion was not an

abuse of the district court’s discretion nor an erroneous determination of law. See

Martin v. Cal. Dep’t of Veterans Affairs, 560 F.3d 1042, 1047 (9th Cir. 2009).



                                           4
      5.     The district court did not abuse its discretion when it awarded attorney

fees to the Shareholders as prevailing parties on Sargento’s breach of warranty

counterclaims. See, e.g., Crest Inc. v. Costco Wholesale Corp., 115 P.3d 349, 355

(Wash. Ct. App. 2005).

      AFFIRMED.




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