Jack in the Box, Inc. v. Deepak Mehta

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 18, 2018
• Docket: 17-15336
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION JUN 18 2018 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

JACK IN THE BOX, INC., a Delaware No. 17-15336 corporation, AKA Foodmaker, Inc., D.C. No. 5:13-cv-04444-EJD Plaintiff-Appellee,

v. MEMORANDUM*

DEEPAK MEHTA, an individual; et al.,

Defendants-Appellants.

Appeal from the United States District Court for the Northern District of California Edward J. Davila, District Judge, Presiding

Submitted June 12, 2018** San Francisco, California

Before: SILER,*** PAEZ, and IKUTA, Circuit Judges.

* 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). *** The Honorable Eugene E. Siler, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. Kirin and Deepak Mehta appeal the district court’s grant of summary

judgment in favor of Jack in the Box on its breach of contract, trademark

infringement, and unfair competition claims as well as on the Mehtas’

counterclaims against Jack in the Box. We have jurisdiction under 28 U.S.C.

§ 1291 and we affirm.

Taking the facts in the light most favorable to the Mehtas, see Frudden v.

Pilling, 877 F.3d 821, 828 (9th Cir. 2017), there is no genuine issue of material

fact regarding whether the parties entered into an oral modification of their

contract. No reasonable juror could conclude from Kirin Mehta’s testimony or

Stephen Brigandi’s letter to Bank of America that Jack in the Box intended to

modify the franchise and lease agreements, rather than merely communicate its

expectations for repayment. See Cal. Civ. Code § 1550. Nor could any reasonable

juror conclude that Jack in the Box waived the franchise agreement’s express

provision that the agreement could be modified “only in writing, signed by both

parties.” See Biren v. Equal. Emergency Med. Grp., Inc., 102 Cal. App. 4th 125,

141 (2002). Therefore, the district court did not err in granting summary judgment

in favor of Jack in the Box on both its breach of contract claim and the Mehtas’

breach of contract counterclaim.

2 The district court also did not err in granting summary judgment to Jack in

the Box on the Mehtas’ promissory estoppel counterclaim, given the Mehtas’

failure to raise a triable issue regarding whether Jack in the Box had clearly and

unambiguously promised to modify the franchise agreement. See Garcia v. World

Sav., FSB, 183 Cal. App. 4th 1031, 1044 (2010). Because the Mehtas base their

trademark infringement and unfair competition claims on their theory that Jack in

the Box had modified and extended the franchise agreement, we likewise affirm

the grant of summary judgment to Jack in the Box on these claims.

We reject the Mehtas’ claims regarding Jack in the Box’s alleged accounting

deficiencies. The record shows that Jack in the Box applied the Mehtas’ $180,000

payment to the balance due on the 2012 Note, as allowed by the franchise

agreements. Likewise, the record shows that the Mehtas’ debt to Jack in the Box

under the franchise agreement increased each month due to the accrual of monthly

rent, royalty fees, and marketing payments. Accordingly, Jack in the Box did not

err in demanding a larger amount in September 2013 than in August 2013.

Because the Mehtas’ debt had increased pursuant to the terms of the franchise

agreement, the district court did not err in rejecting the Mehtas’ counterclaim for

negligent interference with contract and economic advantage.

3 Because the Mehtas were represented by counsel when they signed the

General Release in 2012 and have not presented any evidence that the negotiations

regarding the release were marked by coercion or grossly manipulative behavior,

see Starr v. Starr, 189 Cal. App. 4th 277, 284 (2010), there is no genuine issue of

material fact as to the release’s enforceability.

Finally, because Jack in the Box had no obligation to give the Mehtas

invoices or more time to cure the default, the district court did not err in granting

summary judgment to Jack in the Box on the Mehtas’ counterclaim for breach of

the implied covenant of good faith and fair dealing. See Racine & Laramie, Ltd. v.

Dep’t of Parks & Recreation, 11 Cal. App. 4th 1026, 1031 (1992).

AFFIRMED.