Westco Petroleum Distributors, Inc. v. MCW Fuels, LLC CA2/3, B303859

Background

Westco and MCW were Phillips-branded fuel resellers; under a 2012 Master Agreement MCW agreed to buy several Westco reseller contracts; a 2013 Master Assignment Agreement (effective June 1, 2013) covered five remaining contracts for $750,000 (a $200,000 credit applied June 1 and $550,000 due upon Phillips approval).
The 2013 agreement and each assignment had integration/no-oral-modification clauses and a "Voidable Agreement" clause allowing MCW to avoid payment if Phillips did not approve assignments by July 3, 2013.
MCW produced a signed "Cancellation" dated June 24–25, 2013 signed only by MCW’s COO; Westco offered emails, a handwritten note, and declarations claiming MCW canceled the deal and therefore the assignments were void.
In August 2013, after Phillips placed Westco on credit hold, parties sought Phillips’ consent to transfer the five stations; Phillips executed ship-to-transfer forms and amended MCW’s reseller agreement to add the five stations; MCW assumed unamortized liabilities to Phillips.
Westco later sued/cross-complained claiming the five assignments were void for failure of delivery, failure of consideration, and cancellation; the trial court granted MCW’s summary adjudication that the assignments were valid and dismissed MCW, Blyumkin, Boyett, and Phillips; Westco appealed.

Issues

Issue	Plaintiff's Argument (Westco)	Defendant's Argument (MCW/Boyett/Phillips)	Held
Whether MCW validly canceled the 2013 Master Agreement so assignments were never delivered	MCW cancelled June 24–25, 2013 (emails, signed cancellation by MCW COO, handwritten note) so assignments were void ab initio	Cancellation was ineffective: contract required a signed writing by all parties and parol evidence is barred; parties’ later conduct shows no cancellation	Court: No valid cancellation. Writing unsigned by Westco required; parol evidence excluded; no triable issue of fact
Whether failure of Phillips to approve by July 3, 2013 made assignments automatically void	July 3 deadline was a condition precedent; lack of timely Phillips approval rendered assignments ineffective	The agreement was effective on June 1; the Voidable Agreement made the deal avoidable at MCW’s election, not automatically void; parties waived/accepted delay and Phillips later consented	Court: Condition was for MCW’s benefit; agreement/assignments were not automatically void; Phillips consent and subsequent transfers support validity
Whether failure of MCW to pay $550,000 (concurrent condition) voided the assignments for lack of consideration	MCW’s failure to pay the $550,000 means no consideration, so assignments are void	MCW partially performed (200k credit, $100k wire) and assumed substantial Westco liabilities to Phillips; failure of consideration, if any, makes contract voidable, not void; Westco accepted the consideration	Court: No total failure of consideration; assumption of debt and payments constituted consideration; any defect renders contract voidable, not void ab initio; no triable issue
Appealability / scope of review for defendants other than Blyumkin	Westco appealed dismissal of all cross-defendants	Respondents argued order was final only as to Blyumkin; appeal as to others is nonappealable	Court: Affirmed dismissal as to Blyumkin; treated appeal as writ petition as to MCW/Boyett/Phillips and denied petition

Key Cases Cited

Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (Cal. 2001) (summary judgment/ adjudication standard)
Saelzler v. Advanced Group 400, 25 Cal.4th 763 (Cal. 2001) (de novo review of summary judgment; view evidence favorable to nonmoving party)
Pacific Gas & Elec. Co. v. G. W. Thomas Drayage & R. Co., 69 Cal.2d 33 (Cal. 1968) (extrinsic evidence admissible to show a contract term is reasonably susceptible to another meaning)
Yvanova v. New Century Mortgage Corp., 62 Cal.4th 919 (Cal. 2016) (distinguishing void and voidable transactions)
Versaci v. Superior Court, 127 Cal.App.4th 805 (Cal. Ct. App. 2005) (several instruments in one transaction may be construed together under Civ. Code §1642)
Daugherty Co. v. Kimberly-Clark Corp., 14 Cal.App.3d 151 (Cal. Ct. App. 1971) (writing requirement may be waived by inconsistent conduct)
Lopez v. Baca, 98 Cal.App.4th 1008 (Cal. Ct. App. 2002) (failure to challenge trial court’s evidentiary rulings on appeal forfeits those claims)
Oakland Raiders v. National Football League, 131 Cal.App.4th 621 (Cal. Ct. App. 2005) (appellate court reviews trial court’s ruling, not its stated reasons)