Robinson v. U-Haul Co. of California

4 Cal. App. 5th 304, 209 Cal. Rptr. 3d 81, 2016 Cal. App. LEXIS 874
CourtCalifornia Court of Appeal
DecidedOctober 18, 2016
DocketA141396, A145828
StatusPublished
Cited by38 cases

This text of 4 Cal. App. 5th 304 (Robinson v. U-Haul Co. of California) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robinson v. U-Haul Co. of California, 4 Cal. App. 5th 304, 209 Cal. Rptr. 3d 81, 2016 Cal. App. LEXIS 874 (Cal. Ct. App. 2016).

Opinion

Opinion

STREETER, J.—

I. INTRODUCTION

Nearly 10 years ago, appellant U-Haul Company of California (UHC) 1 sued respondent Leigh Robinson, one of UHC’s independent dealers, for breach of contract and unfair competition after he terminated their contract and began renting Budget trucks from what was formerly a UHC dealership (Robinson I). UHC alleged a covenant not to compete in the UHC dealer contract prohibited Robinson from offering the products of UHC’s competitors while a Yellow Pages ad, running at UHC’s expense, was still promoting Robinson’s business as a U-Haul dealership. Robinson filed a cross-complaint seeking to “avoid enforcement of the covenant not to compete by, among other things, seeking a judicial declaration that it was void due to fraud in the inducement. 2

After UHC lost its request for a preliminary injunction and dismissed its complaint, Robinson filed a separate action alleging malicious prosecution by UHC in the prior lawsuit and violation by U-Haul of Business and Professions Code 3 section 17200 et seq., also known as the unfair competition law (UCL) (Robinson II). He based his UCL cause of action on UHC’s inclusion of the covenant not to compete in its dealer contracts, which he alleged was illegal, and its aggressive enforcement of that provision through litigation and threats of litigation. A jury awarded Robinson more than $195,000 in compensatory damages for malicious prosecution. The trial court later issued a permanent injunction prohibiting U-Haul from initiating or threatening to initiate judicial proceedings to enforce the noncompetition covenant in California. It awarded *309 Robinson more than $800,000 in attorney’s fees as a private attorney general on his UCL cause of action.

In their consolidated appeals from Robinson II, the U-Haul defendants argue (1) the trial court committed reversible error in issuing a permanent injunction because UHC had voluntarily abandoned enforcement of the covenant not to compete in California, and (2) the court abused its discretion in awarding attorney’s fees to Robinson as a private attorney general because Robinson’s request for fees was filed late. We conclude the injunction was properly entered and the court did not abuse its discretion in allowing Robinson to file a late motion for attorney’s fees. We therefore affirm the judgment and the award of fees.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The Relationship Between the Parties

In 2001, Robinson purchased Downtown Self Storage, a self-storage business in Fairfield, California. On August 1, 2001, he signed a standard form dealer contract with UHC and renewed the contract three years later. Under the dealer contract, UHC and Robinson agreed that he would rent U-Haul vehicles and equipment at his storage facility and they would share the rental income. UHC also agreed to promote and advertise Robinson’s storage business as a U-Haul rental location, including Yellow Pages advertisements using the U-Haul trademark.

UHC’s standard dealer contract included a “Noncompetition Covenant” requiring Robinson to refrain from competing with UHC by representing U-Haul’s competitors while the Yellow Pages ad remained in print: “Dealer warrants, covenants and agrees that. . . Dealer . . . shall not represent or render any service either on its own behalf or in any capacity ... for the duration of the then-existing or contracted-for telephone directory listing(s) for the Dealer Location.” An addendum to the contract extended the “Non-competition Covenant” for another year after expiration of the advertising, which could leave a dealer unable to rent competitors’ trucks for two years or more. Covenants not to compete are, with limited exceptions, illegal under California law. (§ 16600 et seq.; see Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 945 [81 Cal.Rptr.3d 282, 189 P.3d 285].)

Between 2001 and 2006, UHC advertised Downtown Self Storage in the Fairfield and Vacaville area Yellow Pages as a place where consumers could find U-Haul rental vehicles and equipment. UHC paid for the dealer ads on an annual basis, placing the orders several months before the directory listings were published.

*310 On September 6, 2006, a month after UHC had renewed the annual Yellow Pages advertising (and after it was too late to cancel the ads), Robinson sent a letter to UHC terminating their dealer contract. A few days later, Robinson opened a Budget rental truck dealership at Downtown Self Storage. UHC responded by writing to Robinson, warning him not to compete with UHC while the Yellow Pages ad was running. In the letter UHC said it was the “policy of U-Haul to aggressively protect its legitimate business interests by seeking to enforce the non-competition provisions” of the dealer contract, and that it would, “without hesitation, . . . consider any and all remedies available to it at law and in equity.”

B. The Proceedings in Robinson I

In December 2006, UHC filed its complaint in Robinson I in Solano County Superior Court against Robinson in docket No. FCS028840. UHC asserted causes of action for unfair competition, breach of contract, and specific performance. UHC’s lawsuit alleged that Robinson was impermissi-bly offering Budget trucks for rent at the same time that UHC’s Yellow Pages ad identified Robinson’s business as a U-Haul dealership. In addition to damages, restitution, an accounting, attorney’s fees and costs, UHC sought preliminary and permanent injunctions requiring Robinson to discontinue his relationship with Budget and to refrain from entering into business with any other competitor of UHC until a year after the Yellow Pages ads expired.

Robinson filed a cross-complaint for declaratory relief and breach of contract. He alleged UHC had breached the dealer contract in various material ways, relieving him of the obligation to comply with the covenant not to compete. He further alleged the covenant not to compete was void based on fraud in the inducement, and he sought a judicial declaration to that effect.

In June 2007, UHC filed a motion for a prelintinary injunction, and Robinson opposed it, primarily based on the theory that the noncompetition covenant was void under section 16600. The court denied UHC its requested preliminary injunction. Approximately three weeks later, UHC dismissed its complaint in Robinson I. According to a declaration by Robinson’s lawyer, UHC dismissed its complaint in an effort to avoid having to pay Robinson’s attorney’s fees. In mid-November 2007, UHC filed a motion for summary judgment on Robinson’s cross-claims, together with the supporting declaration of Jeff Singleton (a UHC management-level employee). Singleton stated under oath that UHC had dismissed its complaint against Robinson and would not “re-file or reinitiate any proceedings against Downtown [Self Storage] seeking to enforce the noncompetition provisions.” UHC’s motion for summary judgment argued that the cross-claims were therefore moot.

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Bluebook (online)
4 Cal. App. 5th 304, 209 Cal. Rptr. 3d 81, 2016 Cal. App. LEXIS 874, Counsel Stack Legal Research, https://law.counselstack.com/opinion/robinson-v-u-haul-co-of-california-calctapp-2016.