Fresno Motors v. Mercedes-Benz, No. 12-15981 (9th Cir. 2014)
Annotate this CaseThis case arose when plaintiffs signed an Asset Purchase Agreement to purchase a Mercedes-Benz dealership from Asbury. Plaintiffs filed suit against MB after MB exercised a right of first refusal (ROFR) contained in its dealership agreement with Asbury. The district court granted summary judgment in favor of defendants. The court concluded that, because MB exercised its ROFR, plaintiffs have no claim for intentional interference with prospective economic advantage, which requires plaintiffs to demonstrate that MB committed a legal wrong independent from the interference; nor can MB's conduct be considered wrongful and plaintiffs have no claim for intentional interference with contract; plaintiffs have no claim for fraudulent concealment where plaintiffs misinterpreted the Acknowledgement Agreement as a guaranty and because the purportedly concealed facts of that agreement were not material and had been disclosed already to plaintiffs or were readily discoverable; even if plaintiffs were entitled to notice from MB of its exercise of the ROFR, the notic eplaintiffs received was both timely and in proper form; because plaintiffs have an implied right of action under California Vehicle Code 11713.3(t)(6), the court reversed summary judgment as to this claim; and the court affirmed the grant of summary judgment to MB on plaintiffs' claim under California's Unfair Competition Statute, Cal. Bus. & Prof. Code 17200. Accordingly, the court affirmed in part, reversed in part, and remanded.
Court Description: California Law. The panel affirmed in part, and reversed in part, the district court’s summary judgment entered in favor of Mercedes-Benz USA, LLC in a diversity action brought by plaintiffs whose attempt to purchase a Fresno Mercedes-Benz dealership was unsuccessful due to Mercedes-Benz’s exercise of a right of first refusal. Applying California law, the panel affirmed the district court and held that the plaintiffs had no claims for intentional interference with contract or prospective economic advantage where Mercedes-Benz timely and lawfully exercised its right of first refusal (“ROFR”). The panel also held that California Vehicle Code § 11713.3(t)(2) did not require a franchisor to send notice of the intent to exercise a ROFR to the prospective transferee. The panel further held that even if plaintiffs were entitled to notice from Mercedes-Benz of its exercise of the ROFR, the notice plaintiffs received was both timely and in proper form. Mercedes-Benz and the existing franchisee entered into an acknowledgment agreement which set out the parties’ rights and obligations with respect to Mercedes-Benz’s exercise of its ROFR. The panel affirmed the district court, and held that plaintiffs’ claim that Mercedes-Benz fraudulently concealed the existence of the acknowledgment agreement had no merit. California Vehicle Code § 11713.3(t)(6) provides for a proposed transferee’s right to recover its expenses from a franchisor that usurps its contract by exercising a ROFR. The panel concluded that the plaintiffs, as prospective transferees, had an implied right of action under section 11713.3(t)(6), and reversed the summary judgment to Mercedes-Benz on that count, and remanded for further proceedings. Finally, the panel affirmed the district court’s grant of summary judgment to Mercedes-Benz on plaintiffs’ claim under the California Unfair Competition Statute.
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