Amin Salkhi v. Bp West Coast Products LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 22, 2020
• Docket: 19-17028
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 22 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

AMIN SALKHI, ET AL., No. 19-17028

Plaintiffs-Appellants, D.C. No. 4:18-cv-02676-YGR

v. MEMORANDUM* BP WEST COAST PRODUCTS, LLC,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Yvonne Gonzalez Rogers, District Judge, Presiding

Submitted October 19, 2020** San Francisco, California

Before: HAWKINS, N.R. SMITH, and R. NELSON, Circuit Judges.

Amin Salkhi, et al. (“Salkhi”) appeals the adverse grant of summary judgment

to BP West Coast Products LLC (“BP”) on his claim that the deed restrictions,

contained in the grant deeds for the two gas stations that he purchased from BP, are

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). invalid. The deed restrictions provide in relevant part that “no person may construct

or operate on this Real Estate (i) a convenience food store other than a convenience

food store operated under a franchise or other agreement with BP, (ii) a fast food

takeout restaurant, or (iii) a facility selling motor fuel other than a facility selling

motor fuel under a supply or other agreement with BP.” We have jurisdiction under

28 U.S.C. § 1291, and we affirm.

Salkhi argues that because the deed restrictions are personal to him and

intended to restrain competition, they are invalid under Cal. Bus. & Prof. Code §

16600, which states “[e]xcept as provided in this chapter, every contract by which

anyone is restrained from engaging in a lawful profession, trade, or business of any

kind is to that extent void.” Restrictive covenants imposed on the use of the land,

however, do not implicate § 16600. Edwards v. Arthur Andersen LLP, 189 P.3d

285, 293 (Cal. 2008). The deed restrictions here are covenants running with the land

because they “shall be enforceable during this full term against anyone who acquires

the Real Estate.” See Citizens for Covenant Compliance v. Anderson, 906 P.2d 1314,

1318 (Cal. 1995) (“A covenant is said to run with the land if it binds not only the

person who entered into it, but also later owners and assigns who did not personally

enter into it.”). The deed restrictions therefore do not implicate § 16600.

Nor do the deed restrictions violate other law. Under the “settled law of

California” a land use restriction “prohibiting the carrying on of a particular business

2 upon property conveyed is valid and will be upheld where the question of monopoly

is not involved or the purpose of the condition is not unlawful.” Boughton v. Socony

Mobil Oil Co., 41 Cal. Rptr. 714, 715 (Cal. App. 1964), disapproved of on other

grounds by Edwards v. Arthur Andersen LLP, 189 P.3d 285 (Cal. 2008).

The deed restrictions are not monopolistic or unlawful. Salkhi does not

contend that the deed restrictions create a monopoly, and similar restrictive

covenants have been upheld by California courts. See, e.g., Boughton, 41 Cal. Rptr.

at 715–16 (upholding a land use restriction in a deed which provided that the title to

the property would be revested and revert to the seller if, within twenty years of its

sale, the property was used “for the dispensing of petroleum products”); Doo v.

Packwood, 71 Cal. Rptr. 477, 479–80 (Cal. App. 1968) (upholding a restrictive

covenant that provided the property sold “was not to be used for retail grocery

business” because the sellers wanted to protect themselves against competition in

that market). Salkhi also does not argue that the deed restrictions are invalid because

they have some other unlawful purpose—he argues only that the deed restrictions

are more like employee noncompetition agreements and are thus unlawful under §

16600, an argument that Edwards forecloses. See Edwards, 189 P.3d at 293. A

recent decision interpreting § 16600 in another context does not alter this analysis.

3 See Ixchel Pharma, LLC v. Biogen, Inc., 470 P.3d 571 (Cal. 2020). Accordingly,

the deed restrictions are valid.1

AFFIRMED.

1 Based on the foregoing, there is no need to certify the issues presented in this case to the California Supreme Court or to stay the proceedings.