Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-02584/USCOURTS-cand-3_06-cv-02584-22/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

GABANA GULF DISTRIBUTION,

Plaintiff,

 v.

GAP INTERNATIONAL SALES INC.,

Defendant. /

No. C 06-02584 CRB

ORDER

This order summarizes the Court’s rulings on the various motions scheduled to be

heard on November 30, 2007. An order providing a more detailed explanation of the Court’s

analysis will follow at a later date. The parties shall appear on November 30, 2007 at

10:00am for a status conference, but no argument on the motions decided in this order will be

entertained.

A. Gap’s Motion for Summary Judgment

Breach of Contract: Gap’s motion for summary judgment on Gabana’s claim for

breach of contract is GRANTED. The contract expressly permitted Gap to terminate the

contract without cause. Although a “franchise” can only be terminated for cause pursuant to

the California Franchise Relations Act, that protection does not apply. No reasonable juror

could conclude that the contract constituted a franchise because Gabana’s operation was not

substantially associated with Gap’s commercial symbol. Moreover, there is no evidence that

Case 3:06-cv-02584-CRB Document 285 Filed 11/19/07 Page 1 of 3
United States District Court

For the Northern District of California

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Gap sold goods to Al Turki before August 10, 2005. Finally, Gap was expressly authorized

by the ISP Agreement to reject Gabana’s proposals for retailers.

Breach of the Covenant of Good Faith & Fair Dealing: Gap’s motion for summary

judgment on Gabana’s claim for breach of the covenant of good faith and fair dealing is

DENIED. There is a triable issue whether the parties contemplated that Gap could reject

Gabana’s proposals for business reasons other than the merits of the proposal. 

Fraud: Gap’s motion for summary judgment on Gabana’s claim for fraud is

GRANTED. There is no evidence that a Gap official made a false promise that was

knowingly false when made.

California Business & Professions Code § 17200: Gap’s motion for summary

judgment on Gabana’s claim under § 17200 is DENIED. A claim under § 17200 may be

predicated on a breach of the covenant of good faith and fair dealing.

B. Gabana’s Motion for Summary Adjudication

Because no reasonable juror could conclude that Gabana’s operation was substantially

associated with Gap’s commercial symbol, Gabana’s motion for summary adjudication is

DENIED.

C. Gabana’s Motion for Summary Judgment on Gap’s Counterclaims

Breach of Contract: Gabana’s motion for summary judgment on Gap’s counterclaim

for breach of contract is DENIED. There are triable issues that must be decided by the jury,

including whether Gabana breached the contract and whether Gap suffered damages thereby.

Breach of the Covenant of Good Faith & Fair Dealing: Because Gap has merely

alleged that the covenant of good faith and fair dealing was breached when the express terms

of the ISP Agreement were breached, the covenant claim is superfluous. Accordingly, the

claim for breach of the covenant of good faith and fair dealing is DISMISSED without

prejudice.

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Case 3:06-cv-02584-CRB Document 285 Filed 11/19/07 Page 2 of 3
United States District Court

For the Northern District of California

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D. Gabana’s Motion to Strike

The Court arrived at its conclusions without the benefit of the expert report of Michael

Seid. Accordingly, Gabana’s motion to strike the Seid report is DENIED as moot.

IT IS SO ORDERED.

Dated: November 19, 2007 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

Case 3:06-cv-02584-CRB Document 285 Filed 11/19/07 Page 3 of 3