Century 21 Real Estate LLC v. All Professional Realty, Inc.

600 F. App'x 502
CourtCourt of Appeals for the Ninth Circuit
DecidedJanuary 15, 2015
Docket12-17073
StatusUnpublished
Cited by4 cases

This text of 600 F. App'x 502 (Century 21 Real Estate LLC v. All Professional Realty, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Century 21 Real Estate LLC v. All Professional Realty, Inc., 600 F. App'x 502 (9th Cir. 2015).

Opinion

MEMORANDUM **

Carol and Steve Wright appeal the district court’s judgment in favor of Century 21 Real Estate LLC (“Century 21”). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

1. The district court did not err in finding the New Jersey choice-of-law provisions in the franchise agreements enforceable. Century 21 has its principal place of business and headquarters in New Jersey. Thus, the chosen state has both a substantial relationship with the transaction, and a reasonable basis exists for the parties’ choice of law. ABF Capital Corp. v. Osley, 414 F.3d 1061, 1065 (9th Cir. 2005). Moreover, the application of New Jersey law here is not contrary to a fundamental policy of California. See Nedlloyd Lines B.V. v. Superior Court, 3 Cal.4th 459, 11 Cal.Rptr.2d 330, 834 P.2d 1148, 1152 (1992). The franchise agreements already incorporate the good cause provision found in the California Franchise Relations Act. Cal. Bus. & Prof.Code § 20020. Although New Jersey appears not to have an unfair competition law similar to that of California, “[t]he mere fact that the chosen law provides greater or lesser protection than California law, or that in a particular application the chosen law would not provide protection while California law would, are not reasons for applying California law.” Medimatch, Inc. v. Lucent Tech. Inc., 120 F.Supp.2d 842, 862 (N.D.Cal.2000) (citing Wong v. Tenneco, 39 Cal.3d 126, 216 Cal.Rptr. 412, 702 P.2d 570, 576-77 (1985)).

*505 2. The district court did not err in granting summary judgment to Century 21 on the parties’ cross-claims for breach of contract. A New Jersey breach of con-, tract claim requires a contract, breach of that contract, damages and that Century 21 performed its obligations under the contract. Frederico v. Home Depot, 507 F.3d 188, 203 (3d Cir.2007).

The Wrights’ companies breached the franchise agreements by not paying required fees, not paying principal due on the note and by abandoning the Folsom office.

Century 21 did not breach the franchise agreements when it took no action to stop the recruiting of sales associates and employees by other franchisees. Per the franchise agreements, Century 21 had no right to meddle in issues relating to franchisees’ sales associates or employees.

Century 21 also did not breach the agreements by divulging confidential information, as the agreements stated that any information provided to Century 21 was not confidential.

Century 21 did not breach the agreements by choosing not to address the unauthorized use of its marks by third parties. Century 21 had the sole option whether to enforce its marks against third party infringers. Its choice not to enforce the marks is not a breach of the agreements.

Century 21 also did not breach the agreements by approving a franchise to operate out of the Folsom office that the Wrights abandoned. Because the Wrights’ companies breached the franchise agreement for the Folsom office, there is no valid claim that Century 21 unlawfully facilitated a new franchise out of the same location.

Century 21 did not breach the agreements by allegedly failing to provide new tools and systems, and the Wrights’ performance under the note was not excused. It is undisputed that Century 21 provided the Wrights’ companies with access to the Century 21 system defined in the franchise agreements. Moreover, the franchise agreements specifically stated that the success of the franchise depended on the Wrights’ efforts and that Century 21 made no guarantee or warranty that the Wrights would be successful. The Wrights have not created a triable issue that Century 21 failed to perform on the contract and that any such failure excused payment on the note.

Century 21 did not breach the agreements by preventing the Wrights from curing their defaults. Although the Wrights now claim they have the funds to pay Century 21, they testified repeatedly before the district court that they did not have the financial ability to cure their defaults.

Century 21 did not terminate the franchise agreements in bad faith. As discussed, Century 21 had a legal right to terminate all four franchise agreements.

Century 21 did not breach the agreements by failing to provide relocation referrals. The franchise agreements do not require such referrals.

Finally, Century 21 did not breach the franchise agreements by failing to use national advertising fees to promote the Wrights’ companies. The agreements specifically state that Century 21 had the sole discretion to manage the advertising fees and was not required to use the franchisees’ contributions to benefit any particular franchise.

3. The district court did not err in granting summary judgment to Century 21 on its breach of note claim. The Wrights did not satisfy the requirements for forgiveness of the loan, and they did *506 not pay the principal amounts due. The Note specifically stated that if the Wrights’ companies did not meet certain benchmarks each year, one-ninth of the principal would be due. Any oral representations by Century 21 did not excuse the Wrights from repaying the note.

4. The district court did not err in finding the Wrights liable as guarantors. The Wrights signed personal guaranties for all of the franchise agreements. Those guaranties required the Wrights to be responsible for their companies’ obligations. The Wrights’ companies were liable under the franchise agreements, and, thus, the Wrights were personally liable for those debts. See N'at’l Westminster Bank N.J. v. Lomker, 277 N.J.Super. 491, 649 A.2d 1328, 1332 (App.Div.1994).

5. The district court did not err in granting summary judgment to Century 21 on the Wrights’ unfair competition claim brought pursuant to California law. New Jersey law applies to this action, thus a California claim is unavailable. See Medimatch, 120 F.Supp.2d at 861-62 (dismissing California unfair competition claim as inconsistent with the enforceable New Jersey choice-of-law provision).

Even if the court found a California unfair competition claim viable here, it would fail on the merits. California prohibits “any unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof.Code § 17200. To the extent that the Wrights’ unfair competition claims are du-plicative of their breach of contract and other claims, they fail, as discussed. The Wrights also contend that Century 21 unfairly terminated their access to the Century 21 database on the same day the Sacramento and Hawaii franchises were terminated.

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Bluebook (online)
600 F. App'x 502, Counsel Stack Legal Research, https://law.counselstack.com/opinion/century-21-real-estate-llc-v-all-professional-realty-inc-ca9-2015.