Fresno Motors, LLC v. Mercedes-Benz USA, LLC
852 F. Supp. 2d 1280
E.D. Cal.2012Background
- Plaintiffs Fresno Motors, LLC and Selma Motors, Inc. sue MBUSA for tortious interference, UCL, Vehicle Code violations, and fraudulent concealment related to the Fresno Dealership asset sale from Asbury.
- MBUSA allegedly exercised its right of first refusal (ROFR) to purchase the assets, blocking Plaintiffs’ APA closing.
- An Acknowledgment Agreement stated MBUSA would be “primarily responsible” for performance of the sublease and APA if MBUSA’s rights were assigned, but Plaintiffs allege a guaranteed commitment to the Landlord.
- Asbury terminated the APA after failed negotiations; Fresno Motors later sought arbitration against Asbury and MBUSA, with MBUSA not party to the arbitration.
- The Court converted MBUSA’s Rule 12 motion to a summary judgment proceeding and granted MBUSA judgment on all claims.
- Key underlying documents include the Dealer Agreements (ROFR and transfer restrictions), the APA, the Lease, and the Acknowledgment Agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MBUSA was a stranger to the contract thus liable for tortious interference | Plaintiffs contend MBUSA’s ROFR and involvement make it a not-a-stranger; liabilities extend to nonparties | MBUSA had substantial, continuing economic interest and involvement; not a stranger | MBUSA was not a stranger; no tortious interference liability against MBUSA |
| Standing to sue under Vehicle Code 11713.3(t) | Plaintiffs, as prospective transferees, seek damages under §11713.3(t)(2)(6) | §11713.3(t) provides protection to licensees/dealers, not prospective transferees; no private action | Plaintiffs lack standing; no private right of action for prospective transferees under §11713.3(t) |
| Fraudulent concealment from disclosure of the Acknowledgment Agreement | MBUSA concealed an agreement guaranteeing the sublease, causing unnecessary costs | No concealment; term primarly responsible does not create a landlord guarantee; agreement context shows no duty to disclose | No concealment; no duty to disclose; fraudulent concealment fails |
| Unfair Competition Law (UCL) viability given underlying claims | UCL based on tortious interference, Vehicle Code violations, and concealment | MBUSA prevails on substantive claims; standing issues bar UCL relief | UCL claim fails; no standing and underlying claims fail |
Key Cases Cited
- Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503 (Cal. 1994) (not-a-stranger principle; liability for interference with own contract)
- Marin Tug & Barge, Inc. v. Shell Oil Co., 271 F.3d 825 (9th Cir. 2001) (not-a-stranger principle; economics can create direct interest)
- Woods v. Fox Broadcasting Sub., Inc., 129 Cal.App.4th 344 (Cal.App.4th 2005) (revisits Applied Equipment; limits immunity for ownership interest cases)
- Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (Cal. 2003) (interference with prospective economic advantage; wrongful conduct element)
- G & C Auto Body, Inc. v. Geico Gen. Ins. Co., 552 F. Supp. 2d 1015 (N.D. Cal. 2008) (distinguishes insurer-interference context from manufacturer-dealer)
- LiMandri v. Judkins, 52 Cal.App.4th 326 (Cal.App. 1997) (duty to disclose; fiduciary and other circumstances)