Transbay Auto Serv. v. Chevron, No. 13-15439 (9th Cir. 2015)Annotate this Case
Chevron and Transpay dispute a multi-million dollar purchase of a gasoline service station in San Francisco. Chevron argued that the station's $2.375 price constituted a bona fide offer under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. 2802(b)(3)(D)(iii), but Transbay rejected this argument and urged the court to preserve the jury verdict awarding it almost half a million dollars as compensation for overpayment. At issue was whether the district court erred in excluding at trial a third-party appraisal of the property that valued it significantly higher than either of the appraisals commissioned by the parties. The court used the possession plus test and held that when a party acts in conformity with the contents of a document - e.g., by giving an independent appraisal to a lender in support of accomplishing its objective to secure a commercial loan - such an action constitutes an adoption of the statements contained under Federal Rule of Evidence 801(d)(2)(B) even if the party never reviewed the document’s contents; such an action constitutes an adoption even if the third-party never itself uses or relies on the document; and where, however, a party forwards a document while acting as a mere messenger, this does not constitute an adoption. In this case, the PSG Appraisal - the only third-party appraisal available - values the property higher than any other appraisal and remarkably higher than any other going concern appraisal. Because the court cannot say with any degree of confidence that had the jury been presented with the PSG Appraisal, it would have come to the same conclusion, the court concluded that the evidentiary error merits a new trial. Accordingly, the court reversed, vacated, and remanded.