Filed 11/25/13 Westamerica Bank v. Madjlessi CA1/5
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                  DIVISION FIVE


WESTAMERICA BANK,
         Plaintiff and Respondent,
v.                                                                   A136084
BIJAN MADJLESSI,                                                     (Sonoma County
         Defendant and Appellant.                                     Super. Ct. No. SCV249030)



         Between 2007 and 2008, Bijan Madjlessi entered into or guaranteed repayment of
three loans from Sonoma Valley Bank (SVB). Following SVB’s closure and takeover by
the Federal Deposit Insurance Corporation (FDIC), the loans were acquired by
Westamerica Bank (Westamerica) in August 2010. Madjlessi failed to repay those loans
or make good on his guaranties, and Westamerica filed suit for breach of contract. The
trial court granted Westamerica’s motion for summary judgment. On appeal from the
judgment against him, Madjlessi challenges the evidence submitted by Westamerica in
support of its motion and the trial court’s rulings admitting that evidence. We affirm.
                              I. FACTUAL AND PROCEDURAL BACKGROUND
         Westamerica filed an action against Madjlessi, stating three causes of action for
breach of contract. After Madjlessi answered, Westamerica filed its motion for summary
judgment.
         In support of the motion, Westamerica submitted the declaration of Scott Power
(Power Declaration), its assistant vice president and commercial loan adjustment officer.


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Pursuant to his knowledge of Westamerica’s and SVB’s records, his own responsibility
for “managing and handling the Loans and documents related to the Loans since they
were acquired from the FDIC,” and his position as the “authorized custodian of records
for the Loans’ files,” Power testified to the existence of the subject loans and Madjlessi’s
failure to honor them. Attached as exhibits to Power’s declaration were copies of the
relevant loan documents.
       Specifically, Power declared the following: On January 5, 2007, 132 Village
Square, LLC (132 Village Square) executed a promissory note in SVB’s favor in the
principal amount of $3,345,000.00 (the 132 Village Note). On February 21, 2008,
April 23, 2008, June 12, 2008, January 28, 2009, March 26, 2009, June 22, 2009 and
September 21, 2009, 132 Village Square executed change in terms agreements regarding
the 132 Village Note, which extended the maturity date. On January 5, 2007, Madjlessi
executed a commercial guaranty pursuant to which he “absolutely and unconditionally
guarantee[d] full and punctual payment and satisfaction” of the 132 Village Note. The
132 Village Note provides that an event of default occurs when 132 Village Square fails
to make a required payment.
       Power further declared: “Pursuant to SVB’s loan files, on or about January 5,
2010, 132 Village Square failed to make the required monthly payment due under the
132 Village [Note]. [¶] . . . Since then, 132 Village Square and Madjlessi have repeatedly
failed and refused to make the required payments under the 132 Village [Note]. . . .
[¶] . . . [¶] The total amount of outstanding principal on [the] 132 Village [Note] is
$2,244,998.00 . . . . The total amount of outstanding interest . . . is $293,370.94. The
total late fees due on the 132 Village [Note] are $7,700.00. The per diem interest
accruing to Westamerica on the 132 Village [Note] is $311.80.”
       On February 9, 2007, Menlo Oaks Corp. (Menlo Oaks) executed a promissory
note in SVB’s favor in the principal amount of $200,000.00 (Menlo Oaks Note). On
February 9, 2007, and May 27, 2008, Menlo Oaks executed change in terms agreements
regarding the Menlo Oaks Note, restating the amount of Menlo Oaks’s indebtedness to
$100,000.


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       On February 9, 2007, and May 27, 2008, Madjlessi executed commercial
guaranties pursuant to which he “absolutely and unconditionally guarantee[d] full and
punctual payment and satisfaction” of the Menlo Oaks Note. The Menlo Oaks Note
provides that an event of default occurs when Menlo Oaks fails to make a required
payment.
       Power further declared: “Pursuant to SVB’s loan files, on or about November 9,
2008, Menlo Oaks failed to make the required monthly payment due under the Menlo
[Oaks] Note. [¶] . . . Since then, Menlo Oaks and Madjlessi have repeatedly failed and
refused to make the required payments due under the Menlo [Oaks] Note. [¶] . . . The
total amount of outstanding principal on [the] Menlo [Oaks Note] is $100,000.00. The
total amount of outstanding interest . . . is $17,466.67. The total late fees due on the
Menlo [Oaks Note] are $1,553.33. The per diem interest accruing to Westamerica on the
Menlo [Oaks Note] is $16.67.”
       On May 23, 2008, Madjlessi executed a promissory note in SVB’s favor in the
principal amount of $1,250,000.00 (the Madjlessi Note). On June 22, 2009, and
September 21, 2009, Madjlessi executed change in terms agreements regarding the
Madjlessi Note, which extended the maturity date. In August 2010, Madjlessi and SVB
entered into a forbearance agreement (the Forbearance Agreement) pursuant to which
SVB agreed to forbear from filing a notice of default or otherwise take any further action
to realize on any security held by SVB or seek to recover from Madjlessi until
December 31, 2010, with regard to the Madjlessi Note. Madjlessi acknowledged the loan
made to him by SVB in the Forbearance Agreement. The Madjlessi Note provides that
an event of default occurs when Madjlessi fails to make a required payment.
       Power further declared: “Pursuant to SVB’s loan files, on or about January 1,
2011, Madjlessi failed to make the required monthly payment due under the Madjlessi
[Note]. Since then, Madjlessi has repeatedly failed and refused to make the required
payments due under the Madjlessi [Note]. [¶] . . . The total amount of outstanding
principal on [the] Madjlessi [Note] is $1,250,000.00. The total amount of outstanding
interest on [the] Madjlessi [Note] . . . is $240,000.00. The total late fees due on the


                                              3
Madjlessi [Note] are $16,041.67. The per diem interest accruing to Westamerica on the
Madjlessi [Note] is $416.66.”
       Madjlessi opposed Westamerica’s motion for summary judgment, but submitted
no evidence in support of his opposition. Instead, Madjlessi argued that Westamerica
“ha[d] not authenticated any of the Notes,” and “mistakenly relie[d] upon the rebuttable
presumption” of nonpayment provided by Evidence Code section 635 “as the basis for
consideration of the Notes.”1 Madjlessi also submitted evidentiary objections to the
Power Declaration and preemptively objected to consideration of any additional evidence
Westamerica might offer in reply. Madjlessi’s opposition to Westamerica’s separate
statement of undisputed facts relied entirely upon his evidentiary objections.
       Westamerica filed a reply brief and the declaration of Spring Stambaugh
(Stambaugh Declaration), a senior Westamerica financial analyst who had been an
assistant vice president and finance officer at SVB, and a custodian of records for both
banks during the relevant time periods. Westamerica also filed a supplemental
declaration from Power, who relied on Westamerica’s and SVB’s books and records to
provide revised calculations of the amounts due.
       The trial court granted Westamerica’s motion for summary judgment. The trial
court overruled all of Madjlessi’s evidentiary objections, except for Madjlessi’s objection
to Power’s reference to “information obtained from ‘employees that I supervise [or] work
with.’ ” The trial court concluded that Westamerica had established all elements of its
causes of action against Madjlessi, and that Madjlessi had failed to provide evidence
showing a triable issue of material fact to defeat summary judgment. Judgment was
entered against Madjlessi in the amount of $4,298,617.95. Madjlessi filed a timely notice
of appeal from the judgment.2


       1 All further section references are to the Evidence Code unless otherwise
indicated. Section 635 provides: “An obligation possessed by the creditor is presumed
not to have been paid.”
       2Madjlessi’s notice of appeal indicates that the date of the order or judgment
appealed was May 29, 2012. This is the date that the order granting summary judgment,

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                                     II.    DISCUSSION
       Madjlessi contends the trial court erred in granting summary judgment because
Westamerica failed to meet its burden as the moving party. Specifically, Madjlessi
contends that Power failed to authenticate “the very obligations for which [Westamerica]
was seeking judgment, and lacking such authentication, [Westamerica] should have been
found to have failed to meet its burden of proof.” Madjlessi also complains about the
“various calculations of amounts owing” recited in the Power Declaration. Specifically,
Madjlessi contends: “The Power Declaration truthfully states that [Westamerica] was the
assignee of the documents evidencing the various obligations from the [FDIC].
However, the Power Declaration does not state that Mr. Power had ever been an
employee of SVB. Therefore, the Power Declaration cannot satisfy the foundation for
the business records exception to the hearsay rule, since he is incapable of offering any
evidence regarding the business practices of SVB.” We address each argument in turn.
A.     Summary Judgment and Standard of Review
       “[T]he party moving for summary judgment bears the burden of persuasion that
there is no triable issue of material fact and that he is entitled to judgment as a matter of
law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, fn. 11; accord Code
Civ. Proc., § 437c, subd. (c).) Code of Civil Procedure, section 437c, subdivision (d),
provides in relevant part: “Supporting and opposing affidavits or declarations shall be
made by any person on personal knowledge, shall set forth admissible evidence, and shall
show affirmatively that the affiant is competent to testify to the matters stated [therein.]”
“A plaintiff . . . has met his or her burden of showing that there is no defense to a cause of
action if that party has proved each element of the cause of action entitling the party to



rather than the judgment, was entered. “An order granting summary judgment is not
appealable—it is the later judgment that is appealable. [Citation.]” (Johnson v. Alameda
County Medical Center (2012) 205 Cal.App.4th 521, 531; accord, Code Civ. Proc.,
§ 904.1, subd. (a)(1).) However, because Madjlessi’s notice of appeal was filed after
entry of judgment, we will liberally construe it as an appeal from the judgment. (Johnson
v. Alameda County Medical Center, at p. 531; Cal. Rules of Court, rule 8.100(a)(2).)


                                               5
judgment on that cause of action. . . .” (Code Civ. Proc., § 437c, subd. (p)(1).) There is
no obligation on the opposing party to show that a triable issue of material fact exists
unless and until the moving party has met its burden. (Villa v. McFerren (1995)
35 Cal.App.4th 733, 743–744.)
       “On appeal, we determine de novo whether there is a triable issue of material fact
and whether the moving party is entitled to summary judgment as a matter of law.
[Citations.]” (Republic Indemnity Co. v. Schofield (1996) 47 Cal.App.4th 220, 225.)
“ ‘We review the trial court’s decision de novo, considering all of the evidence the parties
offered in connection with the motion (except that which the court properly excluded)
and the uncontradicted inferences the evidence reasonably supports. [Citation.]’
[Citation.]” (Oldcastle Precast, Inc. v. Lumbermens Mutual Casualty Co. (2009)
170 Cal.App.4th 554, 562.) We resolve any doubts in favor of the party opposing
summary judgment and are not bound by the trial court’s reasons for its summary
judgment ruling. (Conte v. Wyeth, Inc. (2008) 168 Cal.App.4th 89, 97; Knapp v. Doherty
(2004) 123 Cal.App.4th 76, 85.) We will affirm an order granting summary judgment if
it was correct on any ground that the parties had an adequate opportunity to address in the
trial court. (Securitas Security Services USA, Inc. v. Superior Court (2011)
197 Cal.App.4th 115, 120.)
       However, we review a trial court’s rulings on evidentiary objections made in
connection with a summary judgment motion for abuse of discretion. (Carnes v.
Superior Court (2005) 126 Cal.App.4th 688, 694; Walker v. Countrywide Home Loans,
Inc. (2002) 98 Cal.App.4th 1158, 1169.) “ ‘ “The appropriate test for abuse of discretion
is whether the trial court exceeded the bounds of reason. When two or more inferences
can reasonably be deduced from the facts, the reviewing court has no authority to
substitute its decision for that of the trial court.” [Citation.]’ [Citation.]” (Tudor
Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1431.)
B.     Analysis
       We first address Madjlessi’s challenge to Power’s authentication of the loan
documents. Madjlessi suggests that Power could not authenticate the loan documents


                                              6
because he was never an employee of SVB. “Authentication of a writing is required
before it may be received in evidence” or “before secondary evidence of its content may
be received in evidence.” (§ 1401.) “Authentication of a writing means (a) the
introduction of evidence sufficient to sustain a finding that it is the writing that the
proponent of the evidence claims it is or (b) the establishment of such facts by any other
means provided by law.” (§ 1400.)
       Madjlessi is correct that “[Westamerica] could have offered declarations from
former employees of SVB that witnessed the execution of the documents,” but he has not
cited any authority suggesting that such is required. In fact, the authority is to the
contrary. (See §§ 1411 [“[e]xcept as provided by statute, the testimony of a subscribing
witness is not required to authenticate a writing”], 1413 [“[a] writing may be
authenticated by anyone who saw the writing made or executed, including a subscribing
witness”], 1410 [“[n]othing in this article shall be construed to limit the means by which
a writing may be authenticated or proved”].) Authentication may be established by
circumstantial evidence. (People v. Valdez (2011) 201 Cal.App.4th 1429, 1435.) For
instance, the contents of documents themselves and their physical location are valid
means of authentication. (People v. Smith (2009) 179 Cal.App.4th 986, 1001–1002;
People v. Olguin (1994) 31 Cal.App.4th 1355, 1372–1373.)
       Here, it is reasonable to infer that the original loan documents were in SVB’s, and
then Westamerica’s, possession (as the lender). Power specifically declared that “[t]he
business records of SVB, including those involving the Loans, were delivered to
Westamerica after the purchase and have, since then, been kept in the ordinary course of
Westamerica’s business.” Power declared, under penalty of perjury, that he “ha[s] been
responsible for managing and handling the Loans . . . since they were acquired from the
FDIC,” had reviewed the loan files, and then stated that the attached exhibits were “true




                                               7
and correct cop[ies]” of the respective loan documents. Madjlessi never suggested, and
offered no evidence, that the loan documents were not genuine.3
       In similar circumstances, the Second District Court of Appeal concluded that the
assignee of a promissory note had submitted sufficient evidence to authenticate loan
documents when the litigation manager of a third bank, which acted as loan service agent
for the assignee, declared that the loan records “ ‘[were] kept and maintained in the
ordinary course of business under my supervision and control.’ ” (LPP Mortgage, Ltd. v.
Bizar (2005) 126 Cal.App.4th 773, 776–777.) Here, too, Power was the custodian of
Westamerica’s and SVB’s records of the subject loans and, as such, he was competent to
establish the authenticity of the loan documents. The trial court did not abuse its
discretion in overruling Madjlessi’s authentication objections.
       We are likewise unpersuaded by Madjlessi’s hearsay argument. “ ‘Hearsay
evidence’ is evidence of a statement that was made other than by a witness while
testifying at the hearing and that is offered to prove the truth of the matter stated. . . .
Except as provided by law, hearsay evidence is inadmissible.” (§ 1200, subds. (a), (b).)
One exception to the hearsay rule is for business records. Section 1271 provides:
“Evidence of a writing made as a record of an act, condition, or event is not made
inadmissible by the hearsay rule when offered to prove the act, condition, or event if:
[¶] (a) The writing was made in the regular course of a business; [¶] (b) The writing was
made at or near the time of the act, condition, or event; [¶] (c) The custodian or other
qualified witness testifies to its identity and the mode of its preparation; and [¶] (d) The
sources of information and method and time of preparation were such as to indicate its
trustworthiness.”


       3 And, in fact, one of Madjlessi’s other arguments on appeal—in which he argues
that the Menlo Oaks Note and the Madjlessi Note were actually lines of credit and,
accordingly, section 635 does not apply—presumes that the loan documents attached to
the Power Declaration are authentic. (§ 1414 [“[a] writing may be authenticated by
evidence that: [¶] (a) The party against whom it is offered has at any time admitted its
authenticity; or [¶] (b) The writing has been acted upon as authentic by the party against
whom it is offered”].)


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       Madjlessi contends that Remington Investments, Inc. v. Hamedani (1997)
55 Cal.App.4th 1033 (Remington Investments) is on “ ‘all fours’ ” with this case.
Remington Investments, like the instant case, concerned the requirements for proving a
debt owing to a bank taken over by the FDIC. The failed bank’s assets, including the
lender’s position in a revolving line of credit, were assigned to the plaintiff. The line of
credit was evidenced by a document inaccurately entitled “Promissory Note.” Despite its
title, it was not a promissory note for a specific sum, but rather provided that defendant
was liable for all sums which might either be “ ‘advanced’ ” to defendant or “ ‘credited to
any of [defendant’s] accounts with [the bank].’ ” (Id. at p. 1035.) The promissory note
itself did not reveal exactly how much was advanced or how much was repaid. (Ibid.)
The plaintiff sued the defendant, moved for summary judgment, and offered a copy of a
note ledger to show the amount claimed to be owing on the line of credit. To lay a
foundation for admission of the note ledger, the plaintiff presented the declaration of its
vice-president who declared his familiarity with the plaintiff’s records of commercial
paper, including the promissory note and the note ledger. He declared that he found the
note ledger in the records received from the FDIC. However, the plaintiff presented no
evidence of the recordkeeping practices of the failed bank during the period allegedly
recorded on the note ledger. There was also no evidence of the manner in which the note
ledger was prepared or the origin of the information it contained. (Id. at p. 1036.) The
trial court sustained the defendant’s hearsay objection to the note ledger and denied the
plaintiff’s summary judgment motion. (Id. at pp. 1036–1037.)
       On appeal, the Second District Court of Appeal observed that the plaintiff bore the
burden of proving the amount defendant owed. The plaintiff “attempted to meet that
burden by attempting to prove the content of the bank’s records through an offer of the
[n]ote [l]edger. The [n]ote [l]edger was hearsay, and its offer into evidence raised the
question of its admissibility to prove the truth of its contents. . . . [¶] . . . [¶] . . . The
[n]ote [l]edger was claimed to record advances, payments, interest accruals, etc. It was
submitted to prove the factual accuracy of the periodic events it allegedly recorded. It
was therefore not admissible over a hearsay objection unless supported by the foundation


                                                  9
specified in Evidence Code section 1271 . . . .” (Remington Investments, supra,
55 Cal.App.4th at pp. 1038–1039, 1043.)
       Here, too, the Power Declaration, in stating the amounts due under each note,
offered the contents of out-of-court statements for their truth. There was no note ledger
before the court, but it appears that Power merely restated the contents of bank
documents showing amounts paid, balances, and interest accrued on the notes. The
contents of the documents not before the court were hearsay. (§ 1200.) Arguably the
Power Declaration did not establish the foundation for the business records exception
because it did not identify the documents relied upon, much less establish the time and
circumstances of the documents’ creation. (§ 1271.) (But see People v. Lugashi (1988)
205 Cal.App.3d 632, 642 [bank computer records admitted without specific testimony
regarding the method of preparation]; People v. Dorsey (1974) 43 Cal.App.3d 953, 960
[“we believe that bank statements prepared in the regular course of banking business and
in accordance with banking regulations are in a different category than the ordinary
business and financial records of a private enterprise”].)
       We need not decide whether the Power Declaration standing alone establishes the
foundation necessary for the business records exception because the Stambaugh
Declaration unquestionably does. Stambaugh, a former SVB employee, clearly stated: “I
worked with and on SVB’s books and records and know that they were made and created
by persons with knowledge of the relevant facts at or near the time of the transactions
reflected in the books and records. SVB’s books and records, including all documents
related to its loans, were maintained by SVB in the ordinary course of business. [¶] . . .
When loan documents were prepared and signed for a loan at SVB, the documents were
immediately thereafter placed into a computerized reporting system. . . . The loan
transactions were also recorded, and thereafter processed, in a computerized accounting
system called Fiserv CBS . . . . The CBS was used in the ordinary course of SVB’s
business to record and account for payments and disbursements of loans and other loan-
related business transactions, including accounting for interest and fees due. [¶] . . .
[Westamerica] received from the FDIC SVB’s books, records and computer systems,


                                              10
including the CBS. . . . [¶] . . . I have worked with and on [Westamerica’s] books and
records and know that they were made and created by persons with knowledge of the
relevant facts at or near the time of the transactions reflected in [Westamerica’s] books
and records. [Westamerica’s] books and records were and are maintained by
[Westamerica] in the ordinary course of its business. [¶] . . . SVB’s books and records . . .
have been incorporated into and are now part of [Westamerica’s] books and records
maintained by [Westamerica] in the ordinary course of business.”
       Madjlessi does not argue that the Stambaugh Declaration fails to satisfy the
requirements of section 1271. Nor does he continue to assert a best-evidence rule
objection because the underlying bank records were not offered into evidence.4 Instead,
Madjlessi maintains that the trial court should have stricken Stambaugh’s Declaration as
untimely. A party moving for summary judgment generally may not submit new
evidence on reply. (San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002)
102 Cal.App.4th 308, 315.) However, “the trial court’s consideration of such additional
evidence is not an abuse of discretion so long as the party opposing the motion for
summary judgment has notice and an opportunity to respond to the new material.”
(Plenger v. Alza Corp. (1992) 11 Cal.App.4th 349, 362, fn. 8 [trial court had discretion to
consider new evidence in summary judgment reply papers when plaintiffs did not object
to the new evidence, did not request a continuance, or suggest that additional evidence
could be presented]; see also Alliant Ins. Services, Inc. v. Gaddy (2008) 159 Cal.App.4th
1292, 1308 [trial court did not abuse discretion to consider new evidence in preliminary
injunction reply papers when defendant had opportunity to testify at hearing].)



       4  Madjlessi does refer to the best evidence rule in passing, but he has forfeited the
argument by failing to include reasoned analysis and a separate heading in his opening
brief. (See People v. Stanley (1995) 10 Cal.4th 764, 793 [if no legal argument with
citation to authority “ ‘is furnished on a particular point, the court may treat it as waived,
and pass it without consideration’ ”]; 300 DeHaro Street Investors v. Department of
Housing & Community Development (2008) 161 Cal.App.4th 1240, 1257 [argument not
set forth under separate heading may be disregarded].)


                                              11
       Here, the supplemental Power declaration and the Stambaugh Declaration were
filed and served on April 27, 2012. The hearing on the motion for summary judgment
occurred approximately two weeks later, on May 12, 2012. At the hearing, despite his
preemptive objection to any additional evidence Westamerica might offer in reply,
Madjlessi did not request any further opportunity to respond to these declarations. Likely
this was because the Stambaugh Declaration did not really present any “new” evidence in
support of the motion. Rather, the Stambaugh Declaration merely sought to fill the
foundational gaps from the original Power Declaration. Madjlessi was on notice, from
the time the moving papers were filed, on September 2, 2011, that the amount he owed
was at issue. Nonetheless, Madjlessi never filed a declaration, nor did he request
additional time to submit a declaration or other evidence, disputing Westamerica’s
calculations. For these reasons, the trial court did not abuse its discretion in considering
the declarations submitted with Westamerica’s reply.
       Finally, we reject Madjlessi’s contention that the loan documents themselves are
hearsay. The sustained hearsay objection, in Remington Investments, was to the note
ledger only. (Remington Investments, supra, 55 Cal.App.4th at pp. 1036–1037, 1042.)
As the Remington Investments court observed: “The [p]romissory [n]ote document itself
is not a business record as that term is used in the law of hearsay, but rather is an
operative contractual document admissible merely upon adequate evidence of
authenticity. Sufficient evidence of authenticity to support admission of the [p]romissory
[n]ote document could be supplied by numerous means, at least some of which would
likely be available even to the FDIC or its assignees. (See . . . § 1400 et seq.)”
(Remington Investments, at p. 1042.) The trial court did not abuse its discretion in
overruling Madjlessi’s hearsay objections.5




       5 Given our resolution of the authentication and hearsay issues, we need not resort
to section 635 or address Madjlessi’s argument that it does not apply.


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      The evidence properly considered by the trial court in support of Westamerica’s
motion for summary judgment established that there was no triable issue of material fact
and that Westamerica was entitled to judgment as a matter of law.
                                  III.   DISPOSITION
      The judgment is affirmed. Westamerica is entitled to its costs on appeal.




                                                _________________________
                                                Bruiniers, J.


We concur:


_________________________
Jones, P. J.


_________________________
Simons, J.




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