Harshad & Nasir Corp. v. Global Sign Sys., Inc.

222 Cal. Rptr. 3d 282, 14 Cal. App. 5th 523
CourtCalifornia Court of Appeal, 5th District
DecidedAugust 15, 2017
DocketNo. B269427; No. B275942; No. B275947
StatusPublished
Cited by20 cases

This text of 222 Cal. Rptr. 3d 282 (Harshad & Nasir Corp. v. Global Sign Sys., Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harshad & Nasir Corp. v. Global Sign Sys., Inc., 222 Cal. Rptr. 3d 282, 14 Cal. App. 5th 523 (Cal. Ct. App. 2017).

Opinion

ROTHSCHILD, P.J.

*526Global Sign Systems, Inc. (Global) sued Friendly Franchisees Corporation (FFC) to recover $114,823.72 allegedly owed on unpaid invoices. A few weeks before trial, the parties agreed to submit the dispute to arbitration. Five years later, the arbitrator, Retired Judge David D. Perez, awarded Global $1,154,793.72 in damages, $702,093.86 in prejudgment interest, and $1,142,596.20 in costs and attorney fees. The arbitrator also added four affiliates of FFC (the Affiliates) as joint and several obligors under the award.1

Global petitioned the superior court to confirm the award, and FFC and the Affiliates petitioned to vacate the award. The trial court confirmed the award as to FFC and vacated the award as to the Affiliates.2 Global then filed a motion in the trial court to recover post-arbitration attorney fees from FFC, and the Affiliates moved to recover attorney fees from Global. The court denied these motions, but ruled that the arbitrator could award such fees.

FFC appealed from the judgment confirming the arbitrator's award, and Global appealed from the part of the judgment vacating the award as to the Affiliates. FFC appealed from the order permitting Global to seek post-arbitration attorney fees from the arbitrator, and the Affiliates appealed from the order denying their motion for attorney fees. We consolidated the appeals for purposes of argument and decision.

We conclude that the trial court prejudicially erred when it failed to apply the correct standards in reviewing the arbitrator's award. On the merits, we hold that substantial evidence does not support the award and that an alleged contract to be performed over a three-year period violated the statute of frauds. Further, the arbitrator exceeded his authority by deciding a claim that FFC had not agreed to arbitrate. We agree with the trial court, however, that the arbitrator exceeded his authority when he added the Affiliates as obligors *527under the award. Lastly, we deem the appeals from the orders denying attorney fees as petitions for writ of mandate and direct the trial court to vacate its orders and to deny the motions. *287FACTUAL AND PROCEDURAL SUMMARY3

A. Background

FFC provides management services to the Affiliates, who own certain Carl's Jr. restaurant franchises, or "stores," in Los Angeles County. Global manufactures and repairs commercial signs. Beginning in April 2007, FFC employee Kimberly Avan and Global employee Mark Chavez engaged in discussions and exchanged emails about a potential business relationship between FFC and Global. These discussions covered possible work related to the replacement of "clearance" signs located above the drive-through lanes at some stores, signs for a possible new Carl's Jr. store in Azusa (which did not materialize), sign repair and maintenance work, and a franchisor-mandated project to remodel-or "reimage"-Carl's Jr. stores.

Global was primarily interested in acquiring FFC's reimaging work. In September 2007, Chavez asked to meet with FFC to discuss the "Carl's Jr.-Sign Service-Sign Program." (Capitalization omitted.) Avan informed Chavez that FFC was "still in the planning stages" and "not ready to move forward with any remodeling" at that time. Avan explained that her "first project" continued to be "finding a cheaper vendor for our sign repair which I recall you sending me your price list. I still need to review that and I will let you know what the outcome. At this time a meeting would be premature since we are not ready to move forward and I don't know when that will be except that it will happen, eventually." When Chavez inquired further, Avan responded: "Rest assured that I will bid out all upcoming projects to you and am confident that you will get our business. There are so many plans in the works that it is hard for me to get a priority on any of them.... Please know that I want to work with you and look forward to the opportunity and I apologize that I cannot give you a definite answer."

Later that month, Avan asked Chavez about Global's hourly sign repair rates, and Chavez responded with a one-page "preliminary pricing sheet" of *528material prices and labor rates for the sign maintenance program. Avan informed Chavez that Global "would have to lower [its] labor rates" "to be competitive," and added that when she is "done with this project, [Global] will be potentially getting all the stores." Chavez sent Avan a revised pricing sheet for the sign maintenance program and informed Avan that Global would modify its prices to "meet [FFC's] budget needs."

Chavez also told Avan that Global planned to conduct site surveys of each FFC-managed Carl's Jr. At the arbitration hearing, Chavez explained that the surveys would allow Global to create an inventory of signs at each site that could be used in the event of a service call. The surveys, Chavez added, would also be beneficial to Global in preparing drawings for new signs.

On October 24, 2007, Avan made a presentation to Harshad Dharod, the Chief Executive Officer of FFC, and seven FFC district managers regarding sign maintenance *288vendors, among other matters. Avan presented a spreadsheet showing the hourly rates for three sign vendors and the savings that would result if FFC replaced its then-current vendor with Global. She did not discuss the reimaging program, and no decision was made at that time as to the reimaging project. Dharod "approved" Avan to "go forward" and choose a vendor. Avan ultimately selected Global to be FFC's "go to sign maintenance company," and informed Chavez of the decision.

On October 29, 2007, Chavez wrote to Avan in response to getting "the go-ahead" from Avan "to do the sign maintenance program," and to confirm that Global would begin conducting "sign and facility surveys as part of the Carl's Jr.-Sign and Facility Survey-Sign Inventory Program." Chavez told Avan that Global would perform the surveys "at no cost to [FFC]." As Global's counsel later explained, the site surveys and Global's initial sign drawings were done "as a means of winning [FFC's] business."

Over the next 18 months, Global performed sign maintenance and repair work at FFC locations and billed FFC for its work. FFC paid Global approximately $160,000 over the course of their relationship. Meanwhile, Global continued to conduct site surveys, prepare sign plans for particular stores, and obtain sign permits for numerous FFC stores in anticipation of their remodeling.

At some point, Avan met with her superior, Dharod (FFC's principal) and "pitched" the reimaging project, and Dharod "approved" it. Avan testified that she could not recall when this meeting occurred. According to Avan, Dharod agreed to "maybe try one store and see how it goes." Dharod testified that FFC sought and considered bids for remodeling individual stores, not bids for the entire reimaging project. Avan would receive bids from vendors and *529present them to Dharod for his approval.

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Cite This Page — Counsel Stack

Bluebook (online)
222 Cal. Rptr. 3d 282, 14 Cal. App. 5th 523, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harshad-nasir-corp-v-global-sign-sys-inc-calctapp5d-2017.