GUARANTEE FORKLIFT, INC., Plaintiff and Appellant, v. CAPACITY OF TEXAS, INC., Defendant and Respondent.
No. A147954
Court of Appeal, First District, Division Five, California
May 2, 2017
11 Cal. App. 5th 1066
MLG Automotive Law, Jonathan A. Michaels, Kristen R. Rodriguez and Kathryn J. Harvey for Plaintiff and Appellant.
Waits, Brownlee, Berger, Hoop and Johnston, Timothy R. Brownlee; Baker & Hostetler and Maurice Sanchez for Defendant and Respondent.
Opinion
NEEDHAM, J.—Plaintiff Guarantee Forklift, Inc. (GFL), appeals from a summary judgment granted in favor of defendant Capacity of Texas, Inc. (Capacity), on GFL‘s statutory claim for the termination of a vehicle franchise without good cause in violation of
I. Statutory Backdrop
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II. Factual and Procedural History
A. Franchise Agreement
Capacity is a Texas company that manufactures semi-tractors under the trade name “Trailer Jockey.” GFL is an Oakland, California company that became an authorized dealer of Capacity products under a franchise agreement executed in July of 1995. At the time of the summary judgment motion in this case, GFL did not have a motor vehicle dealer‘s license.2
On February 5, 2013, Capacity sent GFL and the Board written notice of its intent to terminate GFL‘s franchise, alleging GFL had (1) misrepresented the employment status of a former GFL employee who went to work for Capacity‘s chief competitor and (2) allowed the employee to continue accessing Capacity‘s online parts ordering system while working for the competitor. (See
In March 2014, following a December 2013 hearing on the protest, an administrative law judge (ALJ) issued a written opinion on the matter. The ALJ made factual findings that GFL‘s principal had misrepresented the status of the former employee and had provided him with the password to access Capacity‘s website after the employee went to work for a competitor of Capacity‘s. Nonetheless, the ALJ concluded Capacity had not established good cause for terminating the franchise because GFL had not violated the express terms of its written franchise agreement. In April 2014, the Board adopted the ALJ‘s proposed decision in a two-to-one vote.
C. Petition for Writ of Administrative Mandamus—Sacramento County
Capacity filed a petition for writ of administrative mandamus in the Sacramento County Superior Court seeking to set aside the Board‘s decision. (Capacity of Texas v. New Motor Vehicle Bd. (Super. Ct. Sacramento County, 2015, No. 34-2014-80001848).) In a decision issued August 3, 2015, the Sacramento County Superior Court issued a written order granting the petition, and on September 1, 2015, it issued a peremptory writ of mandamus directing the Board to set aside its decision and enter a new decision overruling GFL‘s protest to the termination of its franchise.
D. Appeal from Judgment Issuing Administrative Writ
In November 2015, GFL and the Board filed notices of appeal from the Sacramento County Superior Court‘s order granting the writ. This appeal was handled by the Third District Court of Appeal. (Capacity of Texas v. New Motor Vehicle Bd. (Aug. 25, 2016, C080679) app. dism.)
E. Alameda County Action for Damages (The Instant Lawsuit)
On August 8, 2014, during the pendency of the writ proceeding in Sacramento County, GFL filed the instant action against Capacity in the
F. Capacity‘s Motion for Summary Judgment
Capacity filed a motion for summary judgment in the Alameda County Superior Court on the grounds that (1) GFL could not recover damages for the termination of its franchise in violation of
In its opposition to the motion for summary judgment, GFL acknowledged it did not have a motor vehicle license, but argued it was entitled to bring a statutory claim under the authority of
On January 19, 2016, while the appeal from the judgment in the Sacramento County case was still pending, the Alameda County Superior Court granted Capacity‘s motion for summary judgment and dismissed the action for damages. The court concluded GFL did not have standing to bring a cause of action for damages under
On March 21, 2016, GFL filed the instant appeal from the order granting summary judgment. In its opening brief filed on August 30, 2016, GFL acknowledged it is not a licensee under
On September 29, 2016, Capacity filed its respondent‘s brief, which included as attachments copies of court orders showing that the appeals filed by GFL and the Board from the Sacramento County Superior Court case had been dismissed. GFL filed its reply brief on October 19, 2016.
On January 11, 2017, this Court sent the parties the following request for supplemental briefing: “In its respondent‘s brief filed on September 29, 2016, Capacity of Texas has provided copies of August 2016 orders issued by the Third District Court of Appeal in case number C080679, dismissing the appeals filed therein by the New Motor Vehicle Board and Guaranteed Forklift, Inc. [¶] This court requests supplemental briefing on the following issues: [¶] (1) Should this court take judicial notice of those dismissal orders? [¶] (2) Is the judgment issuing a writ of mandamus in Sacramento County Superior Court Case Number 34-2014-80001848[] now final? [¶] (3) If final, does the Sacramento County Superior Court‘s judgment, which necessarily determined that good cause existed for the termination of the franchise agreement, bar the action by Guaranteed Forklift, Inc., in the instant case? (See, e.g., Bronco Wine Co. v. Frank A. Logoluso Farms (1989) 214 Cal.App.3d 699 [262 Cal.Rptr. 899].) [¶] (4) Assuming the Sacramento County Superior Court‘s judgment has preclusive effect over the claims in this case, does this render the instant appeal moot? (See Simi Corp v. Garamendi (2003) 109 Cal.App.4th 1496, 1503 [1 Cal.Rptr.3d 207] [‘case becomes moot when a court ruling can have no practical impact or cannot provide the parties with effective relief‘].)”
GFL has filed a supplemental brief in which it acknowledges the Sacramento County Superior Court judgment is now final, but argues “the issue of [its] lost profits as a result of Capacity improperly terminating the franchise agreement between Capacity and GFL prior to a final decision on the issue by the [Board] has not actually been litigated.” Capacity has filed a supplemental brief arguing the instant appeal should be dismissed because the final
III. Request for Judicial Notice
Capacity has filed a request asking this Court to take judicial notice of documents filed in the Sacramento County Superior Court and the Third District Court of Appeal to establish that (1) the Sacramento County Superior Court necessarily determined the issue of good cause in granting Capacity‘s petition for writ of administrative mandamus and (2) that decision is now final. GFL does not challenge the authenticity of these documents, but argues they should not be considered because (1) they are not admissible to prove the truth of their contents and (2) they are not relevant to the instant appeal. We disagree, and grant the request for judicial notice.
The documents submitted by Capacity are as follows: (1) An order issued on August 25, 2016, by the Third District Court of Appeal, granting the Board‘s request to voluntarily dismiss its appeal from the Sacramento County Superior Court‘s order granting Capacity‘s petition for writ of administrative mandamus, and issuing a partial remittitur forthwith. (2) An order issued on August 17, 2016, by the Third District Court of Appeal, dismissing GFL‘s appeal from the Sacramento County Superior Court‘s order granting Capacity‘s petition for writ of administrative mandamus, based on its failure to file an opening brief pursuant to California Rules of Court, rule 8.220(a), and the remittitur issued on October 18, 2016. (3) A new decision by the Board, issued January 18, 2017, overruling GFL‘s protest to the termination of its franchise, in compliance with the now-final order of the Sacramento County Superior Court. (4) The Board‘s return to the writ of administrative mandamus, filed January 20, 2017, in the Sacramento County Superior Court. (Capacity of Texas v. New Motor Vehicle Bd., supra, C080679; Capacity of Texas v. New Motor Vehicle Bd., supra, No. 34-2014-80001848.)
On appeal, we may take judicial notice of any matter specified in Evidence Code section 452, including court records and official acts of state agencies. (Evid. Code, § 452, subds. (c) & (d)(1); Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482 [104 Cal.Rptr.3d 545].) This rule is subject to the qualification that we generally do not take judicial notice of the truth of the matter asserted in such documents, and may decline to take judicial notice of matters not relevant to dispositive issues on appeal. (Ibid.)
The documents submitted by Capacity are relevant to whether GFL‘s action is barred by collateral estoppel principles, which, in turn, is relevant to
We therefore grant Capacity‘s request for judicial notice. (Evid. Code, §§ 452, subds. (c) & (d)(1), 459, subds. (a) & (c).)
IV. Discussion
A. Collateral Estoppel
Collateral estoppel, or issue preclusion, “prohibits the relitigation of issues argued and decided in a previous case, even if the second suit raises different causes of action. [Citation.]” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824 [189 Cal.Rptr.3d 809, 352 P.3d 378].) Collateral estoppel applies “(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” (Id. at p. 825.)
The Board initially sustained GFL‘s protest to Capacity‘s proposed termination of its franchise, concluding there was no good cause for that termination within the meaning of
However, we agree with GFL that the good cause determination does not render this appeal moot because it does not dispose entirely of its claim
GFL alleged in its complaint that Capacity “unilaterally terminated the franchise relationship between Capacity and GFL, and refused to recognize GFL as a Capacity dealer” shortly after GFL filed its protest on February 27, 2013. In support of its opposition to summary judgment, GFL submitted the declaration of Denise Rosen-Kendrick, the owner and president of GFL, stating: “On February 28, 2013, the day after GFL‘s protest was filed, [Capacity] terminated GFL as a Capacity dealer. From February 28, 2013 to April 10, 2014, [Capacity] refused to recognize [GFL] as a Capacity dealer, refused to sell or ship [GFL] Capacity parts or vehicles, and refused to give [GFL] referrals to parts.” To the extent GFL‘s claim against Capacity is based on Capacity‘s alleged de facto termination of the franchise during the pendency of its protest, it is not precluded by the Sacramento County Superior Court judgment. We therefore consider the appeal on its merits.
B. Summary Judgment—General Principles and Standard of Review
“A trial court will grant summary judgment where there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. A defendant moving for summary judgment must prove the action has no merit. [The defendant] does this by showing one or more elements of plaintiff‘s cause of action cannot be established or [demonstrating] a complete defense to the cause of action. At this point, plaintiff then bears the burden of showing a triable issue of material fact exists as to that cause of action or defense.” (Towns v. Davidson (2007) 147 Cal.App.4th 461, 466 [54 Cal.Rptr.3d 568].)
We review an order granting summary judgment under the de novo standard of review, considering “all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334 [100 Cal.Rptr.2d 352, 8 P.3d 1089].) “In performing our de novo review, we must view the evidence in a light favorable to plaintiff as the losing party [citation], liberally construing [its] evidentiary submission while strictly scrutinizing defendants’ own showing, and resolving any evidentiary doubts or ambiguities in plaintiff‘s favor.” (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768 [107 Cal.Rptr.2d 617, 23 P.3d 1143].) Questions of law and statutory construction are reviewed de novo. (California Public Records Research, Inc. v. County of Yolo (2016) 4 Cal.App.5th 150, 166 [209 Cal.Rptr.3d 26].)
C. Standing Under Section 11726
As previously noted,
Capacity argues that only persons or entities holding a motor vehicle dealer‘s license under
For example,
In reaching this conclusion, the Fresno Motors court relied upon Menke, supra, 171 Cal.App.4th at page 1094, in which an automobile dealer and a prospective purchaser of the dealership sued the manufacturer after the manufacturer refused to approve the sale. They stated a statutory claim under
Implicitly assuming the existence of a private cause of action under the statute, the court concluded the prospective purchaser lacked standing to pursue its claim because
Read together, Fresno Motors and Menke stand for the proposition that, when determining a plaintiff‘s standing to sue under
In the protest proceedings before the Board in this case, Capacity filed a motion to dismiss the protest in which it argued that the Board lacked jurisdiction because the Capacity product sold by GFL (the Trailer Jockey) was not subject to registration under the Vehicle Code. The Board denied the motion, finding the vehicles were subject to registration and that the written agreement between Capacity was a “franchise” agreement pursuant to
Both
Like the court in Menke, we posit a hypothetical to illustrate why it would “defy reason” to conclude that a party‘s licensing status controlled its ability to bring an otherwise valid statutory claim under sections
Unlike the prospective purchaser in Menke, supra, 171 Cal.App.4th 1088, GFL is a member of the class protected by the subdivision of
D. “Termination” of Franchise and Pecuniary Harm
Capacity asks us to affirm on the alternative ground that GFL cannot prove the elements necessary to prevail on a statutory claim under
In support of its claim that the evidence shows there was no termination of the franchise as a matter of law during the protest before the Board, Capacity relies on an e-mail message from the president of GFL complaining that Capacity was “trying” to cancel it as a dealer by not allowing it to purchase
In support of its contention that GFL suffered no pecuniary harm as a result of the alleged de facto termination of the franchise, Capacity relies on GFL‘s response to Capacity‘s request for admissions (First Set), in which GFL admitted that (1) GFL purchased Capacity truck parts from sources other than Capacity between February 27, 2013, and March 28, 2014; (2) GFL received a 30 percent discount on Capacity parts from Capacity from the years 2012 to the present (May 2015); (3) GFL obtained Capacity truck parts from other sources during 2013 and 2014 at a discount equal to or greater than that offered by Capacity; and (4) as of February 27, 2013, GFL owed Capacity $39,571.22 for parts ordered from Capacity but not paid for by GFL. These responses do not demonstrate as a matter of law that Capacity suffered no pecuniary harm. The declaration submitted by GFL‘s owner and president in opposition to summary judgment stated: “While [GFL] may have been able to order and obtain some service parts from a third party at or below the cost it would have to pay for those same parts from [Capacity], this was not the case for every part in 2013–2014. [¶] . . . [¶] [GFL] was averaging approximately $12,000 in profits for 2010 and 2011. In 2013—the year when [Capacity] terminated [GFL] as a Capacity dealer, and refused to sell or ship [GFL] parts or vehicles—[GFL]‘s profits decreased substantially, to –$16,519. . . . It was not until the latter part of 2014, when [GFL] was able to start ordering parts and vehicles again, that [GFL]‘s profits increased.” Pecuniary harm (damages) is a disputed issue of material fact and summary judgment cannot be granted on this basis.
The order granting summary judgment must be reversed. We express no opinion as to the merits of GFL‘s statutory cause of action, concluding only that it is not barred for lack of standing and that triable issues of fact preclude summary judgment.5
The summary judgment is reversed and the case is remanded for further proceedings. Appellant shall recover its ordinary costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
Jones, P. J., and Simons, J., concurred.