RAMON PEREDA v. ATOS JIU JITSU LLC et al.
B313718
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO
Filed 11/23/22
(Los Angeles County Super. Ct. No. 19STCV23693)
CERTIFIED FOR PUBLICATION
Fraceschi Law, Decker Law, and James D. Decker for Plaintiff and Appellant.
Tyson & Mendes, Susan L. Oliver, Emily S. Berman, and JiEun Choi for Defendants and Respondents.
* * * * * *
A 49-year-old jiu-jitsu student injured during a sparring match sued the studio where he was taking lessons as well as the national jiu-jitsu association under whose auspices the studio‘s students could compete. The trial court granted summary judgment for the national association (as well as the association‘s founder) on the ground that the association was not liable for the student‘s injury because it had no actual control over the studio‘s sparring practices and the association‘s conduct did not give rise to a reasonable belief in the student that it had such control. The student appeals. His appeal raises two questions, one procedural and one substantive. First, did the trial court violate the student‘s right to due process by granting summary judgment on the issue of lack of control, when it was the student who first explicitly raised and briefed that issue in his opposition to summary judgment? Second, is the student‘s beliеf that the association had control over the studio‘s sparring practices “reasonable” by virtue of the franchise-type relationship between the association and studio? We conclude that the answer to both questions is “no,” and accordingly affirm the grant of summary judgment.
I. Facts
A. Plaintiff
In 2017, Ramon Pereda (plaintiff) was 49 years old. He was a former competitive bodybuilder who was familiar with sports that involved grappling: He was a wrestling celebrity at his high school; he kickboxed; he knew judo; and he had nearly achieved a brown belt in Taekwondo.
B. Plaintiff joins a local jiu-jitsu studio
In the summer of 2017, plaintiff decided he wanted to learn Brazilian jiu-jitsu. A subset of jiu-jitsu generally, Brazilian jiu-jitsu is a sport in which competitors spar with one another on a mat and, through various grappling-type maneuvers, attempt to get one another into a chokehold; the match ends when the competitor who ends up in a chokehold submits, typically by “tapping out.” As this description implies, “choking” is a “major” and “integral” part of Brazilian jiu-jitsu.
Plaintiff‘s neighbor told him about The Jiu Jitsu League (the League), which is a Brazilian jiu-jitsu studio where the neighbor was a part-timе instructor. Plaintiff also visited a website for Atos Jiu Jitsu, LLC, which does business as Atos Jiu-Jitsu Association (Atos). Atos‘s website listed its various “affiliates,” of which the League was one; clicking on the link for the League—which was identified on the website as “Atos Long Beach“—jumps to a separate website dedicated to the League.1 Plaintiff then went to the League‘s studio in Signal Hill, California, three or four times over the course of a week to watch
the students sparring. The League‘s studio had a banner indicating that it was affiliated with “Atos.”
On July 18, 2017, plaintiff signed a membership agreеment with the League. The agreement contained no reference to Atos.
C. Plaintiff is injured
On August 15, 2017, plaintiff attended what was his tenth training session at the League‘s studio. During the 30-minute portion of the session that
D. The relationship between the League and Atos
Atos was founded by Andre Galvao (Galvao), who is a world-renowned Brazilian jiu-jitsu champion. Galvao founded Atos, which is “a collection of independent, individually owned and operated [Brazilian] jiu-jitsu studios throughout the nation.” Galvao owns and operates his own studio in San Diego, California. Kevin and Haley Howell (the Howells) independently own and operate a separate Atos-affiliated studio—the League—in the Long Beach area. As an “affiliate” of the national Atos association, the League‘s students may compete in national Brazilian jiu-jitsu competitions as part of the Atos-brand team. The League is also given Atos‘s teaching curriculum and its code of conduct, although the League is not required to implement either. Otherwise, Galvao and Atos have no further control over the League or the Howells: Neither Galvao nor Atos have any ownership interest in the League; neither employed the Howells;
and neither supervises the League‘s day-to-day operations, including the classes where the students spar. Galvao is not on the Lеague‘s roster of instructors, but he teaches individual classes at studios around the world and thus has on a few occasions taught at the League as a “guest instructor“; Galvao has also presided over belt promotion ceremonies for the League‘s students.
II. Procedural Background
In July 2019, plaintiff sued the League, the Howells, and Nadow for negligence related to the injury he suffered during the August 2017 sparring session. After substituting Atos and Galvao for “Doe” defendants, plaintiff filed the operative first amended complaint. In that complaint, plaintiff alleges that the League‘s use of “the Atos name, . . . Atos logo and trade dress,” as well as the Atos teaching curriculum renders Atos and Galvao liable for plaintiff‘s injury for “fail[ing] to adequately supervise or monitor” the League or the Howells’ operation of the League.
Atos and Galvao (collectively, defendants) moved for summary judgment. In their moving papers, defendants sought summary judgment on two grounds—namely, that (1) plaintiff assumed the risk of a choking injury by voluntarily participating in jiu-jitsu classes, and (2) nothing defendants did “increased the risk” of injury to plaintiff (and hence plaintiff could not escape the assumption-of-risk bar).
In their reply, defendants briefly responded that the “doctrine of ostensible agency” did not “app[ly]” to them in order to render them liable for the “acts and/or omissions” of the
Howells and that the “doctrine . . . is completely irrelevant” to whether plaintiff assumed the risk of injury.
After a hearing, the trial court issued its ruling granting defendants summary judgment. The court started by noting that the papers raised three issues—namely, (1) did Nadow‘s chokehold increase the risk of injury to plaintiff in a way that exceeds the risk he assumed by participating in Brazilian jiu-jitsu, (2) were the Howells liable for Nadow‘s conduct in choking plaintiff, and (3) were Atos and Galvao liable to “the same extent as the Howells[] due to an ostensible agency relationship“? The court started with the third issue and found it to be dispositive. Specifically, the court found that the relationship between Atos and the League was “very similar to [an] оrdinary franchise relationship“; that an “ordinary franchise relationship does not give rise to liability on the part of the franchisor for the acts of the franchisee unless the franchisor is involved in the specific acts that caused the plaintiff‘s injury“; and that Atos and Galvao were not involved in the specific acts of overseeing the League‘s training and sparring, which are what allegedly caused plaintiff‘s injury. Thus, the court found “no basis for imposing liability on Atos and/or Galvao on an ostensible agency theory.”
Following the entry of judgment in dеfendants’ favor, plaintiff filed this timely appeal.
DISCUSSION
Plaintiff argues that the trial court erred in granting summary judgment because (1) he was denied due process when the court granted summary judgment on the ground that the League was not defendants’ ostensible (or, by implication, actual) agent, and (2) the court‘s conclusion that the League was not defendants’ ostensible agent was wrong on the merits, although
plaintiff concedes that the League was not defendants’ actual agent. We independently review claims involving the denial of due process based on undisputed facts as well as challenges to the grant of summary judgmеnt. (People v. Seijas (2005) 36 Cal.4th 291, 304 [constitutional questions where facts undisputed]; Hampton v. County of San Diego (2015) 62 Cal.4th 340, 347 [summary judgment].)
As a general matter, a trial court hearing a summary judgment motion is only obligated to consider the grounds for summary judgment that are “identified in the moving papers.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67-68 (Juge).) A trial court nevertheless has the discretion to consider other grounds for summary judgment if (1) the evidentiary basis for those grounds otherwise appears in the record presented with the moving papers (id. at pp. 68-69; Y.K.A. Industries, Inc. v. Redevelopment Agency of City of San Jose (2009) 174 Cal.App.4th 339, 366), and (2) doing so does not deny the opposing party due process because that party “has notice of and an opportunity to respond to th[ose] ground[s]” (Noe v. Superior Court (2015) 237 Cal.App.4th 316, 335-336; Bacon v. Southern California Edison Co. (1997) 53 Cal.App.4th 854, 860 (Bacon); Kramer v. State Farm Fire & Casualty Co. (1999) 76 Cal.App.4th 332, 335); see generally Today‘s Fresh Start, Inc. v. Los Angeles County Office of Education (2013) 57 Cal.4th 197, 212 [“The essence of due process is the requirement that ‘a person in jeopardy of serious loss [be given] notice of the case against him and opportunity to meet it.‘“].)
The trial court had the discretion to consider the ostensible agency issue in this case. To begin, the evidence supporting a
finding that the League was not defendants’ ostensible agent was included in the evidence accompanying defendants’ motion, including Galvao‘s disclaimer of any authority over the League, the nature of Atos‘s relationship with the League, and plaintiff‘s examination of the Atos‘s website. Moreover, plaintiff was not denied notice or the opportunity to be heard on the issue of ostensible agency because he explicitly raised, and affirmatively and extensively briefed, the issue in his opposition. (Accord, Bacon, supra, 53 Cal.App.4th at p. 860 [no due process violation when party raised issue in opposition to summary judgment]; cf. Luebke v. Automobile Club of Southern California (2020) 59 Cal.App.5th 694, 704 [due process violation where party‘s opposition only briefly touches on the issuе]; Cordova v. 21st Century Ins. Co. (2005) 129 Cal.App.4th 89, 109-110 [due process is denied when sole opportunity to address issue is in motion for reconsideration, which limits the range of issues that can be raised].) Plaintiff undoubtedly did so because the issue of control was raised—albeit “obliquely“—in defendants’ moving papers (Juge, supra, 12 Cal.App.4th at p. 71): The argument defendants raised for purposes of the assumption of risk doctrine that they lacked the authority to increase the risk to plaintiff necessarily encompassed the argument that defendants lacked control over the League‘s conduct attendant to increasing that risk.
multiplicity of such opportunities.“].) Thus, in marshaling evidence in support of his argument in opposition to the summary judgment motion that defendants were liable under a theory that the League was their ostensible agent, it was plaintiff‘s responsibility to pull all of that evidence together at that time; due process does not entitle him to a Mulligan. What is morе, the trial court did allow plaintiff at the hearing to supplement the summary judgment record with additional evidence, and plaintiff does not argue on appeal that any further additional evidence should have been admitted.
In sum, plaintiff was not denied due process.
II. Merits of Summary Judgment
A. Pertinent law
1. The law of summary judgment
Summary judgment is appropriate, and the moving party (typically, the defendant) is entitled to judgment as a matter of law, where (1) the defendant carries its initial burden of showing either the nonexistence of one or more elements of the plaintiff‘s claim or the existence of an affirmative defense, and (2) the plaintiff thereafter fails to show the “existence of a triable issue of material fact” as to those elements or affirmative defense. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, 853 (Aguilar); Huynh v. Ingersoll-Rand (1993) 16 Cal.App.4th 825, 830; Bacon, supra, 53 Cal.App.4th at p. 858;
opposing summary judgment, and resolve all doubts concerning that evidence in favor of that party (ibid.; Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, 874;
2. The law of agency
Plaintiff‘s sole claim is for negligence. To prevail on a claim of negligence, a plaintiff must prove (1) the existence of а duty of care, (2)
As pertinent to this case, a person is liable for the torts committed by her agent within the scope of the agency. (Perkins v. Blauth (1912) 163 Cal. 782, 787; Peredia v. HR Mobile Services, Inc. (2018) 25 Cal.App.5th 680, 691-692.) There are two types of agency—actual and ostensible. Actual agency is based on consent, and turns on whether the principal has the right to control the agent‘s conduct. (Edwards v. Freeman (1949) 34 Cal.2d 589, 592 (Edwards); Malloy v. Fong (1951) 37 Cal.2d 356, 370.) Ostensible agency is based on appearances, and turns on whether the “the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent” even though the third person is not actually an agent. (
A defendant may be held liable as a “principal” for the acts of the defendant‘s ostensible agent (that is, the third party who is not actually his agent) only if (1) the plaintiff, when dealing with the agent, did so “with [a reasonable] belief in the agent‘s authority,” (2) that “belief [was] generated by some act or neglect by the principal,” and (3) the plaintiff was not nеgligent in relying on the agent‘s apparent authority. (Associated Creditors’ Agency v. Davis (1975) 13 Cal.3d 374, 399; Hartong v. Partake, Inc. (1968) 266 Cal.App.2d 942, 960.) Because a principal‘s liability for the acts of an ostensible agent rests on the notion that the principal should be estopped from creating the false impression of agency (Patterson v. Domino‘s Pizza, LLC (2014) 60 Cal.4th 474, 494, fn. 18 (Patterson)), the appearance of agency “must be based on the acts or declarations of the principal and not solely upon the agent‘s conduct.” (Emery v. Visa International Services Assn. (2002) 95 Cal.App.4th 952, 961 (Emery); Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 747 (Kaplan).)
3. The law of franchises
A franchise is a business relationship through which one entity (the “franchisor“) sells a second entity (the “franchisee“) the “right to use [the
trust by ensuring consistency and uniformity in the quality of goods and services . . . .” (Id. at p. 490; People v. JTH Tax, Inc. (2013) 212 Cal.App.4th 1219, 1242-1243 (JTH Tax).)
4. The intersection of agency law and franchise law
“The law is clear that a franchisee may be deemed to be an agent of the franchisor.” (Kuchta v. Allied Builders Corp. (1971) 21 Cal.App.3d 541, 547 (Kuchta).) Where, for instance, a business labeled as a “franchisor” nevertheless retains “the right оf complete or substantial control over the franchisee” or is reasonably perceived as having that right, then the business labeled as the “franchisee” may be deemed to be the actual or ostensible agent of the “franchisor.” (Cislaw v. Southland Corp. (1992) 4 Cal.App.4th 1284, 1288 (Cislaw); Patterson, supra, 60 Cal.4th at pp. 497-498; see Kuchta, at pp. 547-548 [franchisee is actual and ostensible agent of franchisor when franchisor used the exact same business name, when franchisor and franchisee had mixed finances, when franchisor had control over the location of the franchisee‘s business, over the materials the franchisee usеd, and over the franchisee‘s power to approve construction designs it would be building].)
But what if the two businesses have a bona fide franchisor relationship as described above, rather than one in name only? Because, in such a relationship, the franchisor by definition controls the franchisee‘s use of the franchisor‘s trademark and business plan, a finding of actual or ostensible agency based on that type of control alone would effectively render franchisees the agents of franchisors in every case, thereby “disrupt[ing]” and “turn[ing] . . . ‘on its head‘” one of the key aspects of the franchise business format—the ability of the franchisor to share its
goodwill with its franchisees without assuming all responsibility for how they operate their otherwise independent businesses. (Patterson, supra, 60 Cal.4th at pp. 497-498, 499 [franchisor‘s “control” over its “comprehensive operating system alone“—that is, its business model—is insufficient to create agency].)
To avoid this result, courts must be “mindful” when “applying agency theory in the context of a franchisor-franchisee relationship.” (JTH Tax, supra, 212 Cal.App.4th at p. 1242.) Thus, a franchisor is liable for the conduct of the franchisеe only if the franchisor actually exercises control—or is reasonably believed to exercise control—over the “means and manner” of the franchisee‘s operation that caused the plaintiff‘s alleged injury. (Patterson, supra, 60 Cal.4th at 478, 498; Cislaw, supra, 4 Cal.App.4th at p. 1288; Kaplan, supra, 59 Cal.App.4th at p. 745; Wickham v. Southland Corp. (1985) 168 Cal.App.3d 49, 59 (Wickham).)
To avoid having the doctrine of ostensible agency swallow up this carefully balanced principle, courts have limited what can give rise to a reasonable belief that a franchisor is controlling the portion of the franchisee‘s operation that caused the plaintiff‘s alleged injury. It is not enough to show that the franchisor and franchisee have “some relationship.” (J.L. v. Children‘s Institute, Inc. (2009) 177 Cal.App.4th 388, 406.) It is not enough to show that the franchisor has allowed the franchisee to use its trade name and good will (Cislaw, supra, 4 Cal.App.4th at p. 1288; Beck v. Arthur Murray, Inc. (1966) 245 Cal.App.2d 976, 981 (Beck) [“the mere licensing of trade names does not create agency relationship either ostensible or actual“]), or, relatedly, that the franchisor‘s name appears on some of the materials used by the franchisee (Taylor v. Financial Casualty & Surety, Inc. (2021) 67 Cal.App.5th 966, 999;
Emery, supra, 95 Cal.App.4th at pp. 961-962). But in a case alleging fraud, it is reasonable for a plaintiff to believe that the franchisee is the ostensible agent of the franchisor when the franchisor‘s affirmative “advertising campaign” to the public conveyed that it “stood behind” all of its franchisees. (Kaplan, supra, 59 Cal.App.4th at pp. 747-748.) And in a case alleging violations of an administrative statute, it is reasonable for a plaintiff to believe that the licensee is the ostensible agent of the licensor when the licensor was supervising the licensee‘s operations closely enough to know that the licensee was violating the statute and did nothing to stop those violations. (Beck, at pp. 977-981.)
B. Analysis
Whether defendants are liable for the League‘s failure to properly supervise the sparring that gave rise to plaintiff‘s injury turns on whether the League is their agent. As noted above, plaintiff concedes that there is no triable issue of material fact when it comes to whether defendants had actual control over the League‘s supervision of its students, and hence no triable issue of material fact as to actual agency.2 (Edwards, supra, 34 Cal.2d at