Dameshghi v. Texaco Refining & Marketing, Inc.

• Decision Date: 25 February 1992
• Docket Number: Nos. D013074,D014129 and D014481,s. D013074
• Citation: 3 Cal.App.4th 1262,6 Cal.Rptr.2d 515
• Parties: Michael DAMESHGHI, Plaintiff and Appellant, v. TEXACO REFINING AND MARKETING INC. et al., Defendants and Respondents. Michael DAMESHGHI, Plaintiff and Appellant, v. BUSINESS OPPORTUNITIES UNLIMITED, INC. et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

Page 515

6 Cal.Rptr.2d 515

3 Cal.App.4th 1262

Michael DAMESHGHI, Plaintiff and Appellant, v. TEXACO REFINING AND MARKETING INC. et al., Defendants and Respondents.

Michael DAMESHGHI, Plaintiff and Appellant, v. BUSINESS OPPORTUNITIES UNLIMITED, INC. et al., Defendants and Respondents.

Nos. D013074, D014129 and D014481.

Court of Appeal, Fourth District, Division 1, California.

Feb. 25, 1992.

Rehearing Denied March 13, 1992.

Review Denied May 13, 1992.

Kindel & Anderson, David Laufer and David Gurnick, Woodland Hills, for plaintiff and appellant.

Latham & Watkins, Deanne P. George, Matthew L. Lalli, Solomon, Ward, Seidenwurm & Smith, William O. Ward, III, San Diego, Robert E. Fuller, White Plains, N.Y., Cynthia M. Tausch, San Diego, and John L. Odell, Glendora, for defendants and respondents.

HUFFMAN, Associate Justice.

Plaintiff Michael Dameshghi appeals the judgments separately entered in favor of two groups of defendants and respondents, (1) Texaco Refining and Marketing, Inc. et al. (Texaco), its individual employees Gary Kirner and C.T. Trammell, and its franchisee, Gilbert Peet, and (2) the real estate brokers and escrow agents, Business Opportunities Unlimited, Inc. (B.O.U.), Joseph Tausch, Cynthia Tausch, and Ghassan El-Khoury (the broker/escrow defendants), who were involved in Dameshghi's failed attempt to purchase Peet's Texaco service station. The trial court granted a motion for summary judgment brought by Texaco and its employees, as well as a similar motion by Peet, on the grounds that there were no triable issues of fact as to the contractual rights claimed by Dameshghi. (Code Civ.Proc., § 437c.) At later proceedings, the trial court granted a motion for nonsuit in favor of the broker/escrow defendants and awarded attorney's fees and costs in their favor. (Code Civ.Proc., § 581c; Civ.Code, § 1717.)

Dameshghi argues on appeal that Texaco unlawfully exercised a right of first refusal that it was not entitled to or, alternatively, that it waived under BUSINESS AND PROFESSIONS CODE SECTION 21148¹, subdivision (a)(5). Dameshghi also contends the trial court erred in granting summary judgment on his causes of action against Texaco alleging violation of the Franchise Investment Law (Corp.Code, § 31000 et seq.), and claims he is entitled to standing to pursue such claims as an offeree of the franchise, even though he never achieved the status of franchisee. Dameshghi further claims that because Texaco bought the station from Peet, Peet thereby breached his contract to sell the station to Dameshghi.

In related contentions against the broker/escrow defendants, Dameshghi argues his opening statement at trial contained sufficient reference to proximate causation of his damages by the acts of the brokers and escrow officers so as to overcome their nonsuit motion. Dameshghi also contends the trial court erred in granting that motion by making erroneous rulings on contractual law, and abused its discretion by refusing to hear Dameshghi's proposed testimony about his contractual intent.

Correctly interpreted, neither section 21148 nor the provisions of the Franchise Investment Law (Corp.Code, § 31000 et seq.) support Dameshghi's claims. We conclude the trial court appropriately entered summary judgment for the Texaco group and Peet, and was justified in granting nonsuit and awarding fees to the broker/escrow defendants. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In 1986, Peet decided to sell his Texaco gasoline station which he operated pursuant to a franchise lease for a three-year period. He listed the business for sale with B.O.U., a real estate brokerage which also performed escrow services, and Dameshghi's brother-in-law (not a party to this action) made an offer to purchase. On August 1, 1986, Dameshghi's brother (also a non-party here) signed Dameshghi's name to the escrow instructions (without disclosing his own identity). ² The instructions provided that Dameshghi would purchase Peet's interest in the station for $53,200. They were prepared by B.O.U. and its employee Cynthia Tausch, and provided that "[t]he consummation of this escrow is contingent upon the approval of buyer by [Texaco] and the transfer of the lease to buyer by Texaco." Peet, as seller, further agreed "to personally effect transfer of lease to buyer and to deliver the lease and assignment into escrow." The escrow defendants also prepared a form assignment of lease for Texaco's signature, which was never executed. Both the original offer to purchase and the escrow instructions (superseding the offer) contained attorney's fees and indemnity clauses benefiting the broker/escrow defendants. At all times, the parties and the trial court treated the escrow instructions as the operative contract.

Peet told Texaco's local representative, defendant and respondent Gary Kirner, that he had a prospect for the purchase of his business. Dameshghi submitted a credit application to Kirner, which showed he had no prior experience owning or operating a service station. The credit application was approved. Dameshghi sent his brother (the one who had originally signed the papers) to Texaco's two-week station manager school, which he completed in September 1986.

In late September 1986, on behalf of Texaco, Kirner sent Dameshghi a package of papers concerning the Peet sale, care of the escrow defendants. Included were a proposed one-year trial franchise lease, a proposed fuel supply agreement and a credit card agreement.

Dameshghi went to the escrow office to review and sign the papers, but when he realized that a one-year lease, rather than a three-year lease, had been submitted, he objected to the broker El-Khoury that he had expected to assume Peet's existing three-year lease. ³ Dameshghi asked El-Khoury to call Kirner to indicate that he did not want the one-year lease, and sought to enter into the three-year lease. At his deposition, El-Khoury described that conversation with Kirner as follows:

"I asked him what he wanted to do to assume the exisiting [sic] lease, how it would affect the time table, possessions. And he informed me that, then we'll have to send him the whole package that we had, and he would have to run it by their marketing and have a different package sent to us. And I inquired on the time that that would take, and he then informed me it would take a couple of weeks. I relayed the message to Mr. Dameshghi, and he approved. He said, go ahead with assuming, the process to assume the existing lease."

Dameshghi's version of this conversation, as found in his declaration in support of his motion for summary judgment, recounted that when El-Khoury entered the room after talking to Kirner, he told Dameshghi that Texaco informed him "that I could accept the one-year lease or wait for a new three-year lease to be prepared. [p] [ ] Because I wanted a three-year lease on Gilbert Peet's Texaco as ... originally agreed, I did not sign the one-year lease presented to me at that September 26, 1986 meeting." At Dameshghi's deposition, he testified he did not want a one-year lease because he believed it would give him insufficient protection. ⁴

Kirner asked Peet to send him a letter requesting Texaco's permission to assign his lease to Dameshghi. On October 8, 1986, Peet did so, giving the selling price and terms of the sale. On October 10, 1986, Kirner forwarded Peet's letter with a cover memorandum to his superiors at Texaco's Los Angeles office. Kirner's cover memorandum stated he was returning the trial lease package and requested that the existing lease assignment be approved effective November 1, 1986. Kirner's superior then directed him to obtain the terms of Dameshghi's escrow offer to Peet. The escrow instructions were sent to Kirner's superior in Los Angeles on October 22, 1986.

The Los Angeles office recommended that Texaco withhold its consent to Peet's assignment of the lease to Dameshghi, and purchase the business itself. Texaco's division manager, defendant and respondent C.T. Trammell, adopted that recommendation and on November 11, 1986, sent a letter to Peet notifying him Texaco elected to purchase the business. The escrow instructions for Dameshghi's offer to purchase Peet's station were accordingly amended to substitute Texaco in place of Dameshghi. Dameshghi did not learn of the amendment or the sale to Texaco until sometime after the sale had been completed.

Approximately one year after Texaco bought Peet's station, Dameshghi filed his civil complaint in sixteen causes of action against Texaco, its employees Kirner and Trammell, the broker/escrow defendants B.O.U., Joseph Tausch, Cynthia Tausch, and El-Khoury, and the seller Peet. As against Texaco and its employees, Dameshghi pled the lease documents provided to him were unsatisfactory, and alleged the following causes of action: statutory violation of section 21148, breach of oral contract (to supply the three-year lease documents), interference with contract, and conversion. Additional claims under the Franchise Investment Law (Corp.Code, § 31000 et seq.) were pled as follows: misrepresentation under Corporations Code section 31201, failure to provide a franchise offering circular as required by Corporations Code section 31119, violation of registration or exemption requirements under Corporations Code sections 31101 and 31114, and a claim that Texaco failed to file a required notice of exemption or to register to offer or sell franchises as required by Corporations Code section 31110. ⁵

As against Peet, the seller, three specific causes of action were pled: breach of written sales contract, conversion, and interference with prospective advantage.

As against the broker/escrow defendants, Dameshghi brought two causes of action for negligence, as well as pleading negligent misrepresentation. He also sued these defendants for breach of fiduciary duty and intentional interference with prospective business advantage.

After answers were filed, ⁶...