Rotan Holdings v. AU Energy CA2/6

CourtCalifornia Court of Appeal
DecidedSeptember 18, 2024
DocketB324832
StatusUnpublished

This text of Rotan Holdings v. AU Energy CA2/6 (Rotan Holdings v. AU Energy CA2/6) 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
Rotan Holdings v. AU Energy CA2/6, (Cal. Ct. App. 2024).

Opinion

Filed 9/18/24 Rotan Holdings v. AU Energy CA2/6 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

ROTAN HOLDINGS, LLC, 2d Civ. No. B324832 (Super. Ct. No. 56-2018- Plaintiff and Appellant, 00516210-CU-OR-VTA) (Ventura County) v.

AU ENERGY, LLC,

Defendant and Respondent.

Rotan Holdings, LLC, (Rotan) appeals from the judgment in favor of respondent AU Energy, LLC (AU Energy), following a court trial. Rotan contends the trial court erroneously ruled that it had not proved slander of its title to a gas station. The ruling was based on insufficiency of the evidence to establish that the slander had caused Rotan to suffer a direct pecuniary loss. Rotan also contends the trial court erroneously sustained, without leave to amend, AU Energy’s demurrers to causes of action for breach of an implied covenant of good faith and fair dealing and for intentional/negligent interference with prospective economic advantage. We affirm. Factual and Procedural Background In its opening brief Rotan expressly accepts the facts as found by the trial court in its 19-page statement of decision. Accordingly, we summarize the facts based on the statement of decision and our review of the record. This case concerns a gas station in Thousand Oaks, hereafter “the property” or “the station.” Jenda, Inc. (Jenda), was the lessee and operator of the station. Jenda was owned by Samuil and Polina Preys. Respondent AU Energy had a “contract with Shell” Corporation whereby Shell would provide fuel to AU Energy, which in turn would sell the fuel to gas stations. In January 2012 AU Energy and Jenda entered into a contract entitled, “Retailer Product Sales Agreement” (RPSA). AU Energy agreed to sell to Jenda, and Jenda agreed to buy, minimum quantities of Shell-branded fuel over a 12-year period ending on January 31, 2024. “The RPSA . . . required the gas station be ‘branded’ as a ‘Shell’ outlet, and Jenda was restricted to selling only fuel purchased from AU [Energy] and bearing the ‘Shell’ identification. The RPSA provided that it could be terminated by the mutual written agreement of the contracting parties. The terms of such an agreement . . . were not specified.” The first amendment of the RPSA contained a liquidated damages clause setting forth a formula for calculating damages payable by Jenda in the event of an early termination of the RPSA. AU Energy agreed to make a “‘$250,000 prepayment of incentive money’” to Jenda. “A condition to the payment . . . was that the station retain the ‘Shell’ identity over the 12-year term of the RPSA.” The liquidated damages payable by Jenda upon

2 early termination of the RPSA included, inter alia, all of the $250,000 incentive money if 48 months or more remained on the contract. When the RPSA was signed, AU Energy did not pay any incentive money to Jenda. Jenda subsequently signed a security agreement, and AU Energy paid Jenda $70,000 of the $250,000 incentive money. In March 2016 appellant Rotan purchased the station for $3.7 million. Rotan’s owner was Roman Preys, the son of Jenda’s owners, Samuil and Polina Preys. The station continued to be leased to and operated by Jenda. In May 2016 Rotan executed a deed of trust (DOT) for the benefit of AU Energy. The DOT encumbered the station and said that it secured Rotan’s obligatory payments to AU Energy under the RPSA. But Rotan was not a party to the RPSA, did not sign it, and did not have any obligations under that contract. The RPSA was signed by Jenda, a separate entity. Kpish Goyal, AU Energy’s attorney who had drafted the DOT, testified that he had committed “a typo” by saying that the DOT secured Rotan’s obligations instead of Jenda’s. “After the DOT was recorded, AU [Energy] paid Jenda the rest of the [$250,000 incentive] money, [i.e.,] $180,000.” When the DOT was being negotiated, Goyal sent an email to Rotan in which he said the DOT “will secure the payment of the $250k ‘upfront’ investment.” But this $250,000 limitation was not incorporated into the language of the DOT. In 2017 Prenton, Inc., (Prenton) “took over . . . Jenda’s position as the operator of the station.” Prenton was owned by Roman Preys’ former wife, Tatiana Linton. Rotan states that

3 Prenton “succeeded to Jenda’s interest as the tenant of the Station.” “In early 2018, Rotan was presented with an opportunity to sell the property to a third party, Moller Investment Group (‘Moller’) for $11 million. . . . One condition of the sale was . . . that the property be delivered with the gas station ‘unbranded.’ This meant terminating the RPSA.”1 Prenton’s owner, Tatiana Linton, was a disbarred attorney. Despite her disbarment, she represented both Rotan and Prenton in negotiations with AU Energy concerning the termination of the RPSA. “Goyal informed Linton that AU [Energy] would agree to terminate the RPSA in exchange for $1.3 million. More than half of that sum was money that AU [Energy] would be required to pay Shell as a penalty. The balance was calculated on the basis of the liquidated damage provision in the amendment to the RPSA. Linton objected to the sum. She expected that Prenton would only be responsible for the liquidated damages.” In its opening brief Rotan claims that the liquidated damages would have been “no more than $524,100[,] not $1.3 million.” On May 9, 2018, Linton emailed Goyal: “I have been authorized to offer a compromise: Rotan will repay the entire [$]180,000.00 [incentive money] advance in return for an immediate re-conveyance of the . . . DOT. . . . [¶] In the event the compromise offer is not accepted, . . . Rotan will initiate legal proceeding[s] to rescind the DOT and will seek damages to the fullest extent allowed by law.” AU Energy did not accept Linton’s

1At trial in June 2022, Roman Preys opined that the market value of the property had declined to between $6 and $6.5 million.

4 offer. It insisted that the DOT secured all of Jenda’s obligations under the RPSA without a dollar limit. Moller “terminated the purchase agreement [of the station] because Rotan could not deliver [the] property ‘unbranded.’” Rotan’s Operative Third Amended Complaint For purposes of this appeal, the only relevant causes of action are the first for declaratory relief and the third for slander of title. The first cause of action sought a judicial declaration that (1) the DOT secures Jenda’s obligations under the RPSA up to a maximum of $180,000, and (2) Rotan “is entitled to a reconveyance of the [DOT] upon payment of the sum of $180,000 to [AU Energy].” The third cause of action alleged that AU Energy had slandered Rotan’s title to the property by wrongfully “contend[ing] that [Rotan] has agreed by entering into the [DOT] to guarantee [without limitation] all of the performance obligations of Jenda under the [RPSA].” Rotan claimed that, as a result of the slander of title, it “has been unable to accept an offer from a ready, willing and able buyer to purchase the [property] for $11 million because the [DOT] encumbers and impairs the title of the [property].” AU Energy’s Cross-Complaint AU Energy filed a cross-complaint. It consisted of two causes of action. The first cause of action sought to reform the DOT so that instead of securing the performance of Rotan’s obligations under the RPSA, the DOT would secure the performance of Jenda’s obligations under the same instrument. The second cause of action sought a judicial declaration that the DOT secures all of Jenda’s obligations under the RPSA with no

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Rotan Holdings v. AU Energy CA2/6, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rotan-holdings-v-au-energy-ca26-calctapp-2024.