Barja Inc. v. Equilon Enterprises, Llc

FILED

NOT FOR PUBLICATION MAY 16 2013

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS

FOR THE NINTH CIRCUIT

BARJA INC., a California Corporation; No. 11-56156

FRY’S 710 FREEWAY INVESTMENT

INC., a California Corporation, D.C. No. 2:10-cv-06936-ODW-

PLA

Plaintiffs - Appellants,

v. MEMORANDUM *

EQUILON ENTERPRISES, LLC, a Delaware limited liability company,

Defendant - Appellee.

Appeal from the United States District Court for the Central District of California Otis D. Wright, District Judge, Presiding

Argued and Submitted April 9, 2013 Pasadena, California

Before: BERZON, TALLMAN, and M. SMITH, Circuit Judges.

Barja Inc. and Fry’s 710 Freeway Investment, Inc. (“Appellants”) appeal the

district court’s summary judgment in favor of Equilon Enterprises, LLC.

Appellants operated Shell-brand service stations in California pursuant to Retail

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. Facility Lease and Retail Sales Agreements with Equilon. They…

*542 MEMORANDUM *

Barja Inc. and Fry’s 710 Freeway Investment, Inc. (“Appellants”) appeal the district court’s summary judgment in favor of Equilon Enterprises, LLC. Appellants operated Shell-brand service stations in California pursuant to Retail Facility Lease and Retail Sales Agreements with Equilon. They allege that Equilon failed to comply with California Business & Professions Code § 20999.25 when it decided to sell the service stations as part of a bulk transaction but did not properly extend right of first refusal offers (“ROFRs”) to appellants. We have jurisdiction under 28 U.S.C. § 1291 , and we affirm.

Parties to a bulk purchase transaction may allocate a portion of the total purchase price to a single site in order to allow an existing franchisee to exercise a right of first refusal, as long as the valuation of the individual property is readily apparent from the bulk offer and the valuation has not been manipulated to the franchisor’s advantage. Forty-Niner Truck Plaza, Inc. v. Union Oil Co. of Cal., 58 Cal.App.4th 1261, 1279-80 , 68 Cal.Rptr.2d 532 (Cal.Ct.App.1997) (citing Arnold v. Amoco Oil Co., 872 F.Supp. 1493, 1499 (W.D.Va.1995)). Appellants have failed to…

dissenting:

I respectfully dissent. The record reflects a disputed issue of material fact as to whether the right of first refusal offers (ROFRs) Equilon extended to Barja and Fry’s provided the recipients of the offers with an opportunity to purchase the same assets as the third party bidder, Apro, would acquire for the same price. A question remains whether, for the offer price, Apro was buying something that Barja and Fry’s were not. Summary judgment was therefore inappropriate.

The record indicates that if Apro purchased the franchisees’ stations from Equi-lon, it would acquire not only the land, improvements, and equipment at each station site, but also the right to supply the stations with fuel, as the exclusive wholesale distributor, for at least ten years. In contrast, the record suggests that if Barja and Fry’s exercised their rights of first refusal and purchased their respective stations at the prices identified by Apro, they would obtain no such wholesale distribution rights, only the station property and its accouterments.

Specifically, the record permits an inference that there was a value attributed to the acquisition of the fuel supply rights, independent of the…