Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-00665/USCOURTS-casd-3_12-cv-00665-9/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:2801 Petroleum Marketing Practices Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

BP WEST COAST PRODUCTS, LLC,

Plaintiff and Counter-Defendant,

v.

CROSSROAD PETROLEUM, INC., ET 

AL.,

Defendants and Counter-Claimants.

AND RELATED CONSOLIDATED 

ACTIONS

Case No.: 12cv665 JLS (JLB) (Lead 

Case) 

ORDER (1) GRANTING BP’S PMPA 

MOTION FOR SUMMARY 

JUDGMENT; (2) DENYING BP’S 

INDEMNITY MOTION FOR

SUMMARY JUDGMENT; 

(3) DENYING AS MOOT BP’S 

MOTION FOR SUMMARY 

JUDGMENT AGAINST PACIFIC 

EXPOTECH; (4) DENYING BP’S 

MOTION TO STRIKE UNTIMELY 

FILINGS; AND (5) DENYING AS 

MOOT BP’S MOTION TO STRIKE 

SCHILLER DEFENDANTS’

OPPOSITIONS

(ECF Nos. 492, 493, 494, 518, & 519)

Presently before the Court are three motions for summary judgment filed by plaintiff 

and counter-defendant BP West Coast Products (BP): BP’s Motion for Partial Summary 

Judgment on the PMPA Claims (PMPA MSJ), (ECF No. 492-2); BP’s Motion for Partial 

Summary Judgment Re Indemnity Obligations (Indemnity MSJ), (ECF No. 493-2); and 

/ / /

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BP’s Motion for Summary Judgment Against Pacific Expotech and Its Guarantors 

(Expotech MSJ), (ECF No. 494-1). 

In its Expotech MSJ, BP seeks summary judgment against defendant and counterclaimant Pacific Expotech and its Guarantors. These Defendants/Counter-Plaintiffs1

reached a settlement agreement with BP at a June 8, 2016 Mandatory Settlement 

Conference with Magistrate Judge Jill L. Burkhardt. (See ECF No. 530.) Accordingly, the 

Court DENIES AS MOOT BP’s Expotech MSJ. 

Although several other Defendants have reached settlement agreements with BP, BP 

initially directed its PMPA MSJ against 53 Defendants2and its Indemnity MSJ against two 

groups of Defendants: 53 against whom it seeks to enforce franchise indemnity agreements 

and 79 against whom it seeks to enforce guaranty agreements.

3

 

 

1 The Court refers to the Defendants and Counter-Plaintiffs in this matter generally as “Defendants” for 

simplicity. 

2 For purposes of these Motions, the Defendants, operate in three groups: the “Meetra Defendants,” who 

are Meetra, Inc. (Meetra), Medhi Behmard, and Farideh Behmard; the “Schiller Defendants,” who are the 

116 Defendants represented by attorney David Schiller; and the “Crossroad Defendants,” who are 

Crossroad Petroleum, Inc. (Crossroad) and Ahd Haddad. The PMPA MSJ seeks partial summary 

judgment against the following Defendants who have not settled:

 Meetra Defendants: Meetra;

 Schiller Defendants: 2 United Oil, LLC; Sharina Alloush; Khaja Ansari; Salman D. Barbat; Big 

Daddy’s Oil 14, Inc.; Denise M. Brown; Cal Coast, Inc.; California Fuel Dispensing, Inc.; Rafael 

Castillo/ Basel Hassounch; Chase Products, Inc.; Daisie Enterprises, Inc.; Issa T. Demes; Dream 

Petroleum, Inc.; Ghallab Brothers, Inc.; H&O, Inc.; Hadaf, Inc.; HRMP Corp.; Kulwant Singh Jafal; 

K&T Park 79, Inc.; Parshotam Kamboj; MDA Fuel, Inc.; Monteagudo Enterprises, Inc.; Gagan Natt; 

NP Petroleum Corp.; NRRM Corp.; PB, Inc.; Perfect Fuel, Inc.; Rasna, LLC; RP Oil, Inc.; Ruchisys, 

Inc.; Susan Shen Chin; Shomers Group, LLC; SMO Oil, Inc.; South West Petroleum, LLC; Taftan, 

Inc.; Brittany Torres; Vasaya Oil Co., Inc.; West Coast Petroleum Services; Toros Zorenkelian; and

 Crossroad Defendants: Crossroad. 

The PMPA MSJ was originally directed toward the following Defendants who have now settled: 3 

Interstellar Management, Inc.; Awans Enterprises, Inc.; Battir Oil, Inc.; Big Daddy’s Oil 15, Inc.; 

Crestview Consolidated, Inc.; MK Oil Inc./Kaskas Enterprises Inc.; Hamlet Enterprises, Inc.; Rahgozar, 

Inc.; Shamaah, Inc.; Southland Petroleum, Inc.; Westminster Mini Market, Inc.; United Family, LLC. 

(See ECF No. 534.)

3 The Indemnity MSJ seeks partial summary judgment against the following Defendants who have not 

settled:

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Three opposition briefs were filed in response to BP’s PMPA MSJ: Meetra’s 

Opposition, (Meetra PMPA Opp’n, ECF No. 504); the Schiller Defendants’ Opposition,4

(Schiller Opp’n, ECF Nos. 506 & 507); and Crossroad’s Opposition, (Crossroad PMPA 

Opp’n, ECF No. 509). BP filed a single reply in support of its PMPA MSJ. (PMPA Reply, 

ECF No. 515.) 

/ / /

 

 Meetra Defendants: (for indemnity) Meetra, (for guaranties) Farideh Behmard; Medhi Behmard;

 Schiller Defendants: (for indemnity) 2 United Oil, LLC; Sharina Alloush; Khaja Ansari; Salman D. 

Barbat; Big Daddy’s Oil 14, Inc.; Denise M. Brown; Cal Coast, Inc.; California Fuel Dispensing, Inc.; 

Rafael Castillo/ Basel Hassounch; Chase Products, Inc.; Daisie Enterprises, Inc.; Issa T. Demes; 

Dream Petroleum, Inc.; Ghallab Brothers, Inc.; H&O, Inc.; Hadaf, Inc.; HRMP Corp.; Kulwant Singh 

Jafal; K&T Park 79, Inc.; Parshotam Kamboj; MDA Fuel, Inc.; Monteagudo Enterprises, Inc.; Gagan 

Natt; NP Petroleum Corp.; NRRM Corp.; PB, Inc.; Perfect Fuel, Inc.; Rasna, LLC; RP Oil, Inc.; 

Ruchisys, Inc.; Susan Shen Chin; Shomers Group, LLC; SMO Oil, Inc.; South West Petroleum, LLC; 

Taftan, Inc.; Brittany Torres; Vasaya Oil Co., Inc.; West Coast Petroleum Services; Toros 

Zorenkelian; (for guaranties) Sharina Alloush; Habib Alam; Manal Alam; Natalie Alvandi; Fazilath 

Ansari; Khaja Ansari; Rajesh Arora; Heidi Bahmani; Mohammad Bahmani; Bahman Baktar; Nesrin 

Barbat; Salman D. Barbat; Paul Baskaron; Younes Dobli Bennani; Rafael Castillo; Issa T. Demes; 

Ibrahim Ghallab; Maret Golnazarian; Razmik Golnazarian; Basel Hassounch; Kulwant Singh Jafal; 

Rafwant Jafal; Parshotam Kamboj; Omer Kassa; Bahman Kianmahd; Behzad Kianmahd; Sahar 

Kirmiz; William Kirmiz; Kalur Kishan; Tarun Maitra; Ani P.K. Mirzaian; Liliana Monteagudo; Senan 

Naoum; Anit Natt; Gagan Natt; David Parker; Anup Patel; Soma Prasad; Nader Sahih; Payam Sahih;

Himanshu Sarvaiya; Sonal Shah; Yogesh Shah; Aly Shakankiry; Ruchira Sharma; Susan Sen Chin; 

Hamza Shilleh; Vache Simonyan; Kevin Tapia; Tracy Tapia; Seyed Majid Tavabi; Brittany Torres; 

Jerry Zomorodian; Rebecca Zomorodian; Marie Zorenkelian; Toros Zorenkelian; and

 Crossroad Defendants: (for indemnity) Crossroad; (for guaranties) Ahd Haddad.

The Indemnity MSJ was originally directed toward the following parties who have now settled: (for 

guaranties) 3 Interstellar Management, Inc.; Awans Enterprises, Inc.; Battir Oil Inc.; Big Daddy’s Oil 15, 

Inc.; Crestview Consolidated, Inc.; MK Oil Inc./Kaskas Enterprises Inc.; Hamlet Enterprises, Inc.; 

Rahgozar, Inc.; Shamaah, Inc.; Southland Petroleum, Inc.; Westminster Mini Market, Inc.; United Family, 

LLC; (for guaranties) Anita Alvandi; Francois Alvandi; Robert Alvandi; Sylvia Haddadin; Mohammad 

Kaskas; Tahssen Kaskas; Abraham Kurian; Ammar Maaytah; Randa Maaytah; Salah Mazloum; Tigran 

Pogosyan; Muna Quasqas; Mostafa Rahgozar; Hy E. Sao; Meng E. Sao; Claude Shamaah; Sheela Thomas; 

Kotsai Wang; Ara Wansikehian. (See ECF No. 534.)

4 The Schiller Defendants filed two opposition briefs, one short and one long, although it is not clear why. 

The briefs were filed in response to both the PMPA MSJ and the Indemnity MSJ, although they only 

attempt to respond to the PMPA arguments. For lack of better options, the Court construes these 

opposition briefs as a single long opposition for purposes of each MSJ, and deem these papers to be the 

operative opposition brief for each group of Schiller Defendants, depending on which MSJ the Court is 

analyzing. 

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Likewise, three opposition briefs were filed in response to BP’s Indemnity MSJ: 

the Meetra Defendants’ Opposition, (Meetra Indemn. Opp’n, ECF No. 505); the Schiller 

Defendants’ Opposition, (Schiller Opp’n, ECF Nos. 506 & 507); and the Crossroad 

Defendants’ Opposition, (Crossroad Indemn. Opp’n, ECF No. 510). In support of its 

Indemnity MSJ, BP filed three reply briefs, one responding to each opposition brief. 

(Indemn. Reply to Schiller, ECF No. 521; Indemn. Reply to Crossroad, ECF No. 522; 

Indemn. Reply to Meetra, ECF No. 523.)

The briefing on these MSJs elicited yet another round of motions and briefing. In 

response to the Schiller Defendants’ briefing, BP filed a Motion to Strike Evidentiary 

Objections to Schiller Defendants’ Responses to BPWCP’s Motions for Summary 

Judgment (Motion to Strike Schiller Oppositions), (ECF No. 518-1), and in response to the 

Crossroad Defendants’ late-filed oppositions, BP filed a Motion to Strike Crossroad 

Petroleum, Inc.’s Untimely Responses to BPWCP’s Motions for Summary Judgment 

(Motion to Strike as Untimely), (ECF No. 519-1). The Crossroad Defendants filed an 

opposition to, (Strike Opp’n, ECF No. 528), BP’s Motion to Strike as Untimely. The Court 

DENIES BP’s Motion to Strike as Untimely.5

For the reasons stated below, the Court GRANTS BP’s PMPA MSJ, DENIES BP’s 

Indemnity MSJ, and DENIES AS MOOT BP’s Motion to Strike Schiller Oppositions. 

BACKGROUND

The Defendants operated gas stations under franchise agreements with BP on sites 

they leased from BP, and the guarantor Defendants backed these lease and franchise 

agreements. BP did not own the land, but leased the more than 200 gas station sites relevant 

to this litigation as a package deal from Thrifty Oil Co. (Thrifty). 

/ / /

/ / /

/ / /

 

5 The Crossroad Defendants’ counsel accidentally filed one day late and these matters are better resolved 

on the merits.

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Thrifty leased the land to BP under the Agreement to Lease Retail Gasoline 

Facilities (Master Agreement). (Statement of Facts, ¶¶ 1–2, ECF No. 493-3 [hereinafter

“Indemnity SOF”]; Wolfe Decl., Ex. A ¶ 4.) The deal involved more than 200 gas station 

sites in California. BP and Thrifty executed individual lease agreements for each site, 

referred to as “Master Leases,” each of which incorporated the Master Agreement by 

reference. (Indemn. SOF ¶ 2.) By organizing hundreds of gas stations under the Master 

Agreement, Thrifty achieves “(i) benefits of economies of scale, (ii) ease of management, 

and (iii) efficiency of enforcement of master lessee obligations and direct recourse to 

remedy any damages suffered by the master lessor.” (Statement of Facts ¶ 5, ECF No. 

492-3 [hereinafter “PMPA SOF”] (citing Esses Report, Risner Decl. Ex. 139, ECF No. 

492-178).) 

The Master Leases were set to begin expiring in 2012, but gave BP an option to 

extend (Extension Options). (PMPA SOF ¶¶ 1–8, 14.) However, BP had to exercise the 

Extension Options well in advance, by July 1, 2010, or else they would expire. (PMPA 

SOF ¶ 14.) The Extension Options terms provided, “In order to exercise an Extension 

Option under any Lease, [BP] must exercise the corresponding Extension Options of all 

Leases, except those Leases which by their provisions have terminated prior to the date of 

exercise.” (PMPA SOF ¶ 14.) 

Before entering the franchise agreements, each of the Defendants subject to the 

PMPA MSJ acknowledged that the premises they leased were subject to the Master Lease, 

(PMPA SOF ¶ 12 (citing Risner Decl. Exs. 1–52, 127, 128, 131, 132, ECF Nos. 492-6–

492-82, 492-157–492-163, 492-166–492-171)), although they were not actually provided 

a copy of the contract between BP and Thrifty. The acknowledgements stated, for 

example: 

1. The premises are leased to BP West Coast Products LLC by a third party 

pursuant to a lease agreement (“Master Lease”).

2. The Master Lease expires by its express terms on [Applicable Expiration 

Date], with an early out date of [if applicable] and may be terminated prior to 

its expiration date.

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3. The lease pertaining to the premises between the Current franchisee and BP 

West Coast Products LLC is, in accordance with Section 2 thereof, subject to 

the terms and conditions of the Master Lease. The lease may be terminated 

before the above dates if legal grounds exist to do so.

(PMPA MSJ ¶ 5; see also, e.g., Risner Decl., Ex. 1, ECF No. 492-6, at 44.)6 

In May 2010, BP notified Thrifty that it would not exercise the Extension Options. 

(PMPA SOF ¶ 15.) BP had not completely abandoned the leased gas stations, however, 

and attempted to negotiate a new contract with Thrifty. (See PMPA SOF ¶ 17.) These 

negotiations did not lead to a deal and, in September 2011, BP learned that Thrifty had 

agreed to lease these gas stations to Tesoro Refining & Marketing Company (Tesoro). 

(PMPA SOF ¶ 18.) Soon after learning about the Tesoro deal, BP began sending the 

franchisees “Notices of Nonrenewal/Termination of the Franchise Agreements” (Notices). 

(PMPA SOF ¶ 19 (citing Risner Decl. Exs. 1–52, 127, 128, 131, 132, ECF Nos. 492-6–

492-82, 492-157–492-163, 492-166–492-171).) These Notices informed the franchisees 

of the date upon which BP would lose the right to grant them possession of the sites, and 

consequently, when they would have to relinquish control of their gas station premises. 

(See PMPA SOF ¶ 20.) These Notices were sent at least ninety days before each 

termination or nonrenewal took effect. (PMPA SOF ¶ 22.) In February and March 2012, 

BP sent the franchisees additional Notices with “amended termination/nonrenewal dates.” 

(PMPA SOF ¶ 21.) 

Soon before the underlying Master Leases were due to expire, BP learned that many 

of the franchisees were preparing to refuse to leave the gas station properties or to sue BP. 

(Indemn. SOF ¶ 14.) BP preemptively filed lawsuits in March 2012 seeking declaratory 

and injunctive relief affirming the propriety of the terminations and nonrenewals under the 

Petroleum Marketing Practices Act (PMPA) and to ensure the franchisees turned over the

/ / /

/ / /

 

6 Pinpoint citations to docketed materials refer to the CM/ECF page number electronically stamped at the 

top of each page, and do not refer to the page numbering of the original document. 

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properties. (Indemn. SOF ¶ 14.) Several franchisees and guarantors filed their own

lawsuits later that month, suing not only BP, but also Thrifty. (Indemn. SOF ¶ 15.) All of 

these actions were consolidated to this Court. 

The franchisees and Thrifty had no contractual franchise relationship. Although 

they operated gas stations on Thrifty’s land, Thrifty leased the land to BP, and BP subleased the land to the franchisees. The Defendants in April 2012 moved for a temporary 

restraining order and preliminary injunction against BP and Thrifty. (ECF Nos. 17, 24, & 

31.) The Court denied these motions on April 19, 2012. (ECF No. 43.) BP and Thrifty 

all the while urged the Defendants to dismiss their claims against Thrifty. (Indemn. SOF 

¶¶ 19, 22, 23.) The Defendants eventually relented, dismissing their claims against Thrifty 

in May 2012. (ECF Nos. 71, 79.) 

Both the Master Agreement and Master Leases obligated BP to indemnify Thrifty 

for any claims “related to the Gasoline Stations or any Lease Premises” and for Thrifty’s 

“becoming a party to any action instituted by [BP] against any third party . . or by any 

third party against [BP] . . . .” (Indemn. SOF ¶¶ 3–4.) 

The franchise agreements between BP and the franchisees required the franchisees, 

among other things, to maintain the leased premises and equipment in a particular manner, 

perform maintenance in some circumstances, return possession of the stations and leased 

equipment to BP at the expiration of the franchise agreements, and assign permits and 

licenses—such as licenses for alcohol, beer, and wine—to BP at the expiration of the lease. 

(Indemn. SOF ¶ 6.) The franchise agreements also included the following indemnity 

provision: 

Franchisee agrees to indemnify, hold harmless and defend BPWCP, its 

parents, subsidiaries, officers, directors and employees, from . . . any damages, 

claims, costs, expenses, fines or penalties relating to operation(s) . . . on the 

Premises, arising out of or in connection with any failure or breach by or on 

behalf of Franchisee respecting any provision of this Agreement, or arising 

out of Franchisee’s use or occupancy of the Premises, Franchisee’s operation 

of the business(es) or Franchisee’s use, custody or operation of Loaned 

Equipment or any other equipment on the Premises . . . .

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(Indemn. SOF ¶ 7.) The guarantor Defendants executed Franchise Agreement Guaranties, 

backing the franchisee Defendants’ obligations to BP. (Indemn. SOF ¶ 8–9.) 

Thrifty demanded that BP reimburse it for costs paid to defend this action, and BP 

ultimately paid $453,643.15. (Indemn. SOF ¶¶ 25–29.) BP attributes $449,060.50 of those 

costs to the Defendants who were originally subject to the Indemnity MSJ. (Indemn. SOF 

¶ 29.) After the franchisees surrendered possession to BP, and BP in turn surrendered 

possession to Thrifty, Thrifty identified “defective conditions” at various facilities, 

including “(a) graffiti on the building structures, fixtures and equipment; (b) holes in 

building structures that needed repair; and (c) dispenser hoses. Other defective conditions 

that applied to many of the Premises included those concerning costly landscaping and 

interior/exterior/canopy lighting issues.” (Indemn. SOF ¶¶ 33–38.) Thrifty also demanded 

that BP compensate it for failing to timely turn over liquor licenses and for “holdover 

premiums” related to Meetra’s five gas stations and one other site. (Indemn. SOF ¶¶ 39, 

40.) After negotiating these matters for more than a year, BP and Thrifty settled these 

claims, with BP paying $2,120,881.10 for costs relevant here. (Indemn. SOF ¶ 43.) BP 

alleges that $1,908,668.21 of that is attributable to the Defendants subject to the Indemnity 

MSJ. (Indemn. SOF ¶ 43.)

Meanwhile, in August 2012, BP announced the sale of its ARCO brand, which 

included 400 additional ARCO stations throughout Southern California, and nearly all of 

its Southern California assets, including a refinery located in Carson, California, to Tesoro, 

the entity who leased the premises after BP’s Master Leases expired. (PMPA SOF ¶ 23.) 

The BP-Tesoro deal closed on June 1, 2013. (PMPA SOF ¶¶ 24, 26.)

LEGAL STANDARD

Under Federal Rule of Civil Procedure 56(a), a party may move for summary 

judgment as to a claim or defense or part of a claim or defense. Summary judgment is 

appropriate where the Court is satisfied that there is “no genuine dispute as to any material 

fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); 

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Material facts are those that may affect 

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the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A 

genuine dispute of material fact exists only if “the evidence is such that a reasonable jury 

could return a verdict for the nonmoving party.” Id. When the Court considers the 

evidence presented by the parties, “[t]he evidence of the non-movant is to be believed, and 

all justifiable inferences are to be drawn in his favor.” Id. at 255.

The initial burden of establishing the absence of a genuine issue of material fact falls 

on the moving party. Celotex, 477 U.S. at 323. The moving party may meet this burden 

by identifying the “portions of ‘the pleadings, depositions, answers to interrogatories, and 

admissions on file, together with the affidavits, if any,’” that show an absence of dispute 

regarding a material fact. Id. When a party seeks summary judgment as to an element for 

which it bears the burden of proof, “it must come forward with evidence which would 

entitle it to a directed verdict if the evidence went uncontroverted at trial.” See C.A.R. 

Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoting 

Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992)).

Once the moving party satisfies this initial burden, the nonmoving party must 

identify specific facts showing that there is a genuine dispute for trial. Celotex, 477 U.S. 

at 324. This requires “more than simply show[ing] that there is some metaphysical doubt 

as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 

586 (1986). Rather, to survive summary judgment, the nonmoving party must “by her own 

affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ 

designate ‘specific facts’” that would allow a reasonable fact finder to return a verdict for 

the non-moving party. Celotex, 477 U.S. at 324; Anderson, 477 U.S. at 248. The nonmoving party cannot oppose a properly supported summary judgment motion by “rest[ing] 

on mere allegations or denials of his pleadings.” Anderson, 477 U.S. at 256. 

/ / /

/ / /

/ / /

/ / /

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ANALYSIS

I. The PMPA MSJ

In its PMPA MSJ, BP seeks summary judgment:

1. On its First Claim for Relief under the Petroleum Marketing Practices Act (the 

PMPA), 15 U.S.C. § 2801 et seq., in which BP seeks a declaratory judgment that it did not 

violate the PMPA, (BP Fifth Am. Compl. ¶¶ 137–140, ECF No. 296-3);

2. Against Crossroad’s counterclaims, in particular its First, Second, and Third 

Causes of Action, which allege that BP violated the PMPA, 15 U.S.C. § 2801, et seq., as 

set forth in Crossroad’s Second Amended Counterclaim for Injunctive Relief and 

Damages, (Crossroad Second Am. Countercl. ¶¶ 35–72, ECF No. 206); 

3. Against Meetra’s counterclaims, in particular its First and Second Causes of 

Action for violations of the PMPA and Declaratory Relief, respectively, (Meetra Inc.’s 

Third Am. Countercl. ¶¶ 40–49, ECF No. 263); and

4. Against the Schiller Defendants’ counterclaims, in particular their PMPA and 

Declaratory Judgment Causes of Action, (Fourth Am. Answer and Countercl. ¶¶ 217–220, 

ECF No. 257).

One purpose of the PMPA is to protect gas station franchisees in their dealings with 

franchisors, who are typically “large oil corporations and gasoline distributors, and to 

remedy the disparity in bargaining power between parties to gasoline franchise contracts.” 

BP W. Coast Prods. LLC v. May, 447 F.3d 658, 662 (9th Cir. 2006) (quoting DuFresne’s 

Auto Serv., Inc. v. Shell Oil Co., 992 F.2d 920, 925 (9th Cir.1993)). At the same time, 

however, the PMPA is designed to provide “adequate flexibility so that franchisors may 

initiate changes in their marketing activities to respond to changing market conditions and 

consumer preferences.” Unocal Corp. v. Kaabipour, 177 F.3d 755, 762 (9th Cir. 1999) 

(citing S. Rep. No. 95-731, at 18–19 (1978), reprinted in 1978 U.S.C.C.A.N. 873, 877). 

The PMPA achieves these goals by establishing minimum “standards governing the 

termination and non-renewal of franchise relationships for the sale of motor fuel by the

/ / /

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franchisor or supplier.” May, 447 F.3d at 662 (quoting Fresher v. Shell Oil Co., 846 F.2d 

45, 46 (9th Cir. 1988) (per curiam)). 

These minimum standards allow franchisors to terminate or decline to renew an 

existing franchise relationship only if one of the conditions listed in 15 U.S.C. § 2802(b) 

occurs, and even then the termination must follow the notification requirements outlined 

in 15 U.S.C. § 2804. May, 447 F.3d at 662–63. One such condition is the “occurrence of 

an event which is relevant to the franchise relationship and as a result of which termination 

of the franchise or nonrenewal of the franchise relationship is reasonable . . . .” 15 U.S.C. 

§ 2802(b)(2)(C). The statute defines twelve such events in § 2802(c), including “loss of 

the franchisor’s right to grant possession of the leased marketing premises through 

expiration of an underlying lease . . . .” 15 U.S.C. § 2802(c)(4). Thus, one valid ground 

for a franchisor’s termination or nonrenewal of a franchise agreement is the loss of the right 

to grant possession to the franchisee. See id.

If a franchisor terminates a franchise based on loss of its right to grant possession, it 

must have abided by several requirements. First, the franchisee must have received notice 

in writing: 

prior to the commencement of the term of the then existing franchise (i) of the 

duration of the underlying lease; and (ii) of the fact that such underlying lease 

might expire and not be renewed during the term of such franchise (in the case 

of termination) or at the end of such term (in the case of nonrenewal);

15 U.S.C. § 2802(c)(4)(A). Second, the franchisor generally must notify the franchisee of 

the termination or nonrenewal in writing at least ninety days before it takes effect. 15 

U.S.C. § 2804(a). Third, the franchisor must, with a few caveats, offer during the ninetyday notice period “to assign to the franchisee any option to extend the underlying lease or 

option to purchase the marketing premises that is held by the franchisor.” 15 U.S.C. § 

2802(c)(4)(B). 

BP contends that the evidence shows (1) that BP lost its right to grant possession of 

the premises it leased to Meetra, the Schiller Defendants, and Crossroad; (2) that each of 

those Defendants received the statutorily required notice before the franchises commenced; 

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(3) that BP notified these Defendants at least ninety days before the 

termination/nonrenewal took effect; and (4) that it had no renewal option that it could 

assign to these Defendants. Importantly for purposes of this summary judgment motion, 

BP contends that the Defendants cannot identify any contradictory evidence adequate to 

give rise to a genuine dispute of material fact with respect to any of these conditions. 

The Defendants do not argue that BP did not actually lose the right to grant 

possession of the various sites or that BP did not provide notice that the underlying leases 

would expire at least ninety days before they did. Rather, Meetra argues that: (1) BP had 

lease renewal options that it was required to offer to assign; (2) the PMPA required BP to 

notify the Defendants within 120 days after it learned the underlying lease would expire, 

which BP did not do; and (3) there is a dispute over the timing by which BP provided notice 

to Meetra of the underlying Master Lease. (Meetra PMPA Opp’n at 10–17.) Crossroad 

raises similar arguments with respect to BP’s obligation to offer to assign renewal options 

and provide notice 120 days after it knew the underlying lease would lapse. (Crossroad 

PMPA Opp’n at 3–9.) The Schiller Defendants argue that BP engaged in a regional market 

withdrawal, and wastherefore required to follow certain other procedures under the PMPA. 

(See, e.g., Schiller Opp’n at 5–6, 11, 40.)

A. 120 Day Notice

The PMPA did not require BP to notify the franchisees within 120 days of when it 

knew it would lose the right to grant possession of the gas station sites. 

For most events of the events that allow termination or nonrenewal, the franchisor 

must give the franchisee notice of termination or nonrenewal within 120 days of when that 

event occurs. See 15 U.S.C. § 2802(b)(2)(C)(i). The PMPA lists twelve different “events” 

that may justify termination or nonrenewal. See 15 U.S.C. § 2802(c)(1)–(12); Veracka, 

655 F.2d at 449. Of those twelve, “expiration of the underlying lease (and no other) comes 

accompanied with its own special notice requirement.” Veracka, 655 F.2d at 449. ThenCircuit Judge Breyer writing for the First Circuit concluded that, when the basis for 

termination or nonrenewal of a franchise relationship is the loss of the franchisor’s right to 

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grant possession under § 2802(c)(4), the franchisor is only required to follow that section’s 

specific notice provision. See id. at 449–50; 15 U.S.C. § 2802(b)(2)(C)(i). That is, the 

franchisor must have provided the franchisee with adequate prior notice of the terms of the 

underlying lease—but is not required to give notice within 120 days of acquiring “actual 

or constructive knowledge” of the relevant “event.” See Veracka, 655 F.2d at 449–50. 

Although they argue that Veracka contradicts the text of the PMPA, (Meetra PMPA 

Opp’n at 16), Defendants cite no case that breaks with the holding that the 120 day notice 

period does not apply to the loss of the right to grant possession under § 2802(c)(4). On 

the other hand, BP cites to five district court decisions following this rule. (See PMPA 

Reply at 8 (citing Patel v. Sun Co., Inc., 948 F. Supp. 465, 472 n.4 (E.D. Pa. 1996); Atkins 

v. Chevron USA Inc., 672 F. Supp. 1373, 1376 (W.D. Wash. 1987); Zarcone v. Amerada 

Hess Corp., 661 F. Supp. 615, 617 (E.D.N.Y. 1987); Graeber v. Mobil Oil Corp., 614 F. 

Supp. 268, 272–73 (D.N.J. 1985); Gaspar v. Chevron Oil Co., 490 F. Supp. 971, 975 

(D.N.J. 1980)).) While it is true that most of those authorities predate the 1994 

amendments to the PMPA that added the obligation to assign extension options, the text 

governing notice did not change, and at least one district court has explicitly followed the 

rule announved in Veracka since those amendments. See Patel, 948 F. Supp. at 472 n.4.

The Defendants have provided no persuasive reason for the Court to break with the 

reasoning of the courts who have directly addressed this issue. Thus, BP was not obligated 

to provide notice to Defendants within 120 days of realizing its lease with Thrifty would 

expire. 

Crossroad does not take issue with the rule in Veracka, but instead points to an 

alternative “event”—the loss of the use of trademarks—that led to the 

termination/nonrenewal, arguing that this event obligated BP to provide notice within 120 

days. (Crossroad PMPA Opp’n at 9.) Although it is true that termination or nonrenewal 

based on the “loss of franchisor’s right to grant the right to use the trademark which is the 

subject of the franchise” is an event that would require a franchisor to give notice within 

120 days, see 15 U.S.C. § 2802(b)(2)(C)(i) & (c)(6), a “franchisor needs to provide only 

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one valid reason for termination under the PMPA,” PDV Midw. Ref., L.L.C. v. Armada Oil 

& Gas Co., 305 F.3d 498, 508 (6th Cir. 2002). “[N]otice of a legitimate ground for 

termination is not made ineffective by defective notice for additional grounds for 

termination.” Id. (citing Stuart v. Exxon Co., U.S.A., 624 F. Supp. 648, 653–54 (N.D. Tex. 

1985)). Accordingly, because notice was proper with respect to the expiration of BP’s 

lease, it does not matter if notice was improper with respect to BP’s anticipated loss of the 

right to grant use of a trademark. 

B. Notice of the Underlying Lease

There is no genuine dispute that BP gave each defendant subject to the PMPA MSJ 

adequate notice of the underlying Master Leases. 

For termination based on a franchisor’s loss of right to grant possession to be 

reasonable, the franchisor must have given the franchisee notice “in writing, prior to the 

commencement of the term of the then existing franchise (i) of the duration of the 

underlying lease; and (ii) of the fact that such underlying lease might expire and not be 

renewed during the term of such franchise (in the case of termination) or at the end of such 

term (in the case of nonrenewal).” 15 U.S.C. § 2802(c)(4)(A). 

Meetra contends there is a dispute of fact over whether BP complied with this 

requirement. (Meetra PMPA Opp’n at 13–15.) More specifically, Meetra states that the 

“franchise agreements initially did not mention the expiration of any underlying third party 

leases,” (id. at 13 (citing Risner Decl., Ex. 131 pt. 1, ECF No. 492-166, at 9–10), and that 

Meetra was never provided the Master Agreement between BP and Thrifty, (id.). Focusing 

in on one site in particular, 6800 Lankershim Boulevard, also known as Facility No. 9513, 

Meetra points out that the franchise agreement was dated March 11, 2009, and the 

Acknowledgement of Master Lease is dated several months later, November 12, 2009. (Id.

(citing Facility No. 9513 Acknowledgement Form, Risner Decl., Ex. 131 pt. 4, ECF No. 

492-169, 88; Facility No. 9513 Franchise Agreement, Risner Decl. Ex. 131 pt. 1, ECF No. 

492-166, at 9–10, 89).) Meetra also suggests that BP’s execution of “Amendments” to the 

franchise agreements on the same day as notices of non-renewal were delivered, September 

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27, 2011, was basically an attempt to correct inadequate notice of BP’s underlying ground 

lease with Thrifty. (See id. at 14.)

First, there is a simple explanation for why Meetra’s Acknowledgement Form for 

Facility No. 9513 is dated after the franchise agreement: Meetra was not the original 

franchisee. (See PMPA Reply at 9–10.) The Facility No. 9513 agreement was effective 

on March 11, 2009 between BP and Behmard & Associate, Inc. (Facility No. 9513 

Franchise Agreement, Risner Decl. Ex. 131 pt. 1, ECF No. 492-166, at 9.) Behmard & 

Associate, Inc., assigned the franchise to Meetra Inc. on December 10, 2009.7 (Risner 

Decl., Ex. 131 pt. 1, ECF No. 492-166, at 62–63.) Thus, the evidence shows that the 

business entity Meetra, which is the only Meetra Defendant subject to the PMPA MSJ, 

executed the Acknowledgement Form nearly a month before it assumed and therefore 

entered into the franchise agreement for that site. 

Second, Meetra cites no authority, and the Court is aware of none, stating that a 

franchisor is obligated to provide the franchisee a copy of the underlying lease. Rather, 

the statute requires the franchisor to inform the franchisee about certain terms in the lease 

that are relevant to the continuance of the franchise agreement. See 15 U.S.C. § 

2802(c)(4)(A). The Acknowledgement of Master Lease forms summarize those terms. BP 

was not, therefore, legally obligated to provide the Defendants with a copy of the 

underlying lease. 

Third, as BP clarifies in its Reply, the “Amendments” Meetra refers to simply 

“updated the Franchise Agreement termination dates to correspond to the expiration date 

of each Master Lease.” (Reply at 9 n.9 (citing Risner Decl., Ex. 131 pt. 1, ECF No. 492-

166, at 60–61).) In light of the signed forms acknowledging the existence and relevant 

 

7 Mehdi Behmard, one of the so-called “Meetra Defendants,” signed on behalf of both Behmard & 

Associate, Inc. and Meetra Inc. In any event, the business entity Behmard & Associate is not a party to 

this litigation. The Facility No. 9513 Acknowledgement Form Meetra cites was executed by Mehdi 

Behmard on behalf of Meetra, rather than Behmard & Associate, Inc. (See Risner Decl., Ex. 131 pt. 4, 

ECF No. 492-169, at 88.) 

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terms of the Master Lease, this amendment does not give rise to a genuine dispute of fact

over whether BP notified the franchisees of the underlying ground lease. 

In sum, there is no genuine dispute of material fact as to whether BP provided notice 

of the underlying Master Leases as required by 15 U.S.C. § 2802(c)(4)(A). The 

uncontroverted evidence shows that it did. 

C. Renewal Options

There is also no disagreement over whether BP’s Extension Options were still 

exercisable during the ninety day notice period preceding the expiration of the underlying 

leases. They were not. Because BP no longer had the options itself, it had no obligation

under the PMPA to offer to assign them to the franchisees. 

The PMPA requires franchisors to offer extension options to franchisees that they

possess during the ninety-day notice period. See 15 U.S.C. § 2802(c)(4)(B). In this case, 

the renewal options had long since expired when BP gave the Defendants the ninety-day 

notice. BP declined to exercise its options by July 1, 2010, so they lapsed when that date 

passed. 

The Defendants do not argue that BP possessed the Extension Options during this 

time, but instead combine their 120-day notice argument with the obligation to offer to 

assign options under § 2802(c), suggesting that because BP was required to give notice 

within 120 days of learning it would lose the right to grant possession, it also had to offer 

to assign options it had during that time period. As the Court already noted, BP was not

obligated to give the within-120-days notice, so Defendants’ arguments fail to the extent 

they depend on that notice obligation. In any case, the text of § 2802(c)(4)(B) refers to the 

“90-day period after notification was given pursuant to section 2804,” not the within-120-

days notification period, so Defendants’ arguments also fail based on the plain language of 

the statute. 

The Defendants further suggest that the circumstances of this case make BP’s 

termination and nonrenewal of these franchises unreasonable. In particular, Meetra 

suggests that BP’s decision not to exercise the Extension Options, to allow the Extension 

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Options to lapse, and only later to give the franchisees notice of termination and 

nonrenewal is an “end run” around the PMPA. (See Meetra PMPA Opp’n at 12.) That is, 

BP used its “privileged position in the market” to ensure that it would not have to offer to 

assign these options. (See id. at 12.) Crossroad also suggests that the existence of these 

options and BP’s failure to offer to assign them makes the termination and nonrenewal 

unreasonable. (Crossroad PMPA Opp’n at 7.) 

If a franchisor terminates under 15 U.S.C. § 2802(b)(2)(C) based on the occurrence 

of one of the events listed in 15 U.S.C. § 2802(c), termination is reasonable. See Atl. 

Richfield Co. v. Guerami, 820 F.2d 280, 283 (9th Cir. 1987) (rejecting the argument that 

the court must inquire into whether the occurrence of an event listed in § 2802(c) 

undermined the franchise relationship enough to justify termination/nonrenewal); see also 

Joseph v. Sasafrasnet, LLC, 689 F.3d 683, 690 (7th Cir. 2012) (“Every other circuit court 

that has addressed the matter has held that the occurrence of an event listed in § 2802(c) 

provides a franchisor with a per se reasonable basis for terminating a franchise.”) (citing 

Hinkleman v. Shell Oil Co., 962 F.2d 372, 377 (4th Cir. 1992) (per curiam); Desfosses v. 

Wallace Energy, Inc., 836 F.2d 22, 26 (1st Cir. 1987); Clinkscales v. Chevron U.S.A., Inc., 

831 F.2d 1565, 1573 (11th Cir. 1987); Atl. Richfield Co., 820 F.2d at 283; Russo v. Texaco, 

Inc., 808 F.2d 221, 225 (2d Cir. 1986); Lugar v. Texaco, Inc., 755 F.2d 53, 57–58 & n.3 

(3d Cir. 1985)).

Courts will, however, take a close look at the factual predicates underlying one of 

the events listed in § 2802(c) before concluding that they are established. See, e.g., 

Mustang Mktg., Inc. v. Chevron Prods. Co., 406 F.3d 600 (9th Cir. 2005). For example, in 

Mustang Marketing, the Ninth Circuit concluded that the franchisor possessed an option—

although the franchisor argued it did not—and remanded for the trial court to determine 

whether the franchisor had in fact offered this option. Id. at 607–08. With respect to 

whether the franchisor properly evicted the franchisee based on its purported loss of the 

right to grant possession, the Ninth Circuit indicated that courts should scrutinize “the 

franchisor’s subjective intent, its continuing control over the marketing premises, and its 

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actual or eventual right to continued possession.” Id. at 608 (citing Hifai v. Shell Oil Co., 

704 F.2d 1425, 1429 (9th Cir. 1983); Veracka, 655 F.2d at 448). In other words, courts 

should be wary of attempts by franchisors to “end a franchise relationship with one operator 

while retaining control of the premises.” Id. at 609 (citing Hifai, 704 F.2d at 1429). 

Notably, in Mustang Marketing, the Ninth Circuit reversed the district court’s grant of 

summary judgment because the franchisor’s “actions point[ed] to the fact that [it] never 

intended to leave the premises.” Id.

By contrast, in this case, there is no factual question of whether BP possessed 

extension options during the ninety-day notice period and BP did not retain control over or 

possession of these gas station sites after the underlying leases expired. As for Meetra’s 

assertion that BP positioned itself so that it could not assign these options, Meetra has not 

identified any evidence from which a reasonable fact finder could reach this conclusion

and has not cited any authority explaining the legal significance of structuring a contract 

to avoid the PMPA’s requirement to assign options. 

Accordingly, the Court concludes that undisputed material facts show that BP 

complied with its obligations under the PMPA with regard to its Extension Options and § 

2802(c)(4) more generally. 

D. The Schiller Defendants’ Market Withdrawal Theory and BP’s 

Motion to Strike

Because BP has established that it had a valid reason to terminate these franchises 

under 15 U.S.C. § 2802, the Court does not need to consider the merits of the Schiller 

Defendants’ argument that BP was engaged in a market withdrawal and failed to comply 

with the procedures for market withdrawal. See PDV Midw. Ref., L.L.C., 305 F.3d at 508 

(“A franchisor needs to provide only one valid reason for termination under the PMPA.”). 

The Court therefore rejects the Schiller Defendants’ argument on that basis. 

BP moves the Court to strike the Schiller Defendants’ Opposition for exceeding the 

page limitation and to strike references to record evidence for lack of specificity. (Mot. to 

Strike Schiller Opp’ns, ECF No. 518-1.)

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Rule 56(c)(1)(A) directs parties in summary judgment motion practice to cite “to 

particular parts of materials in the record.” “[W]hen a party relies on deposition testimony 

in a summary judgment motion without citing to page and line numbers, the trial court may 

in its discretion exclude the evidence.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 775 

(9th Cir. 2002); see also Huey v. UPS, Inc., 165 F.3d 1084, 1085 (7th Cir. 1999) (“[J]udges 

need not paw over the files without assistance from the parties.”); Nissho–Iwai Am. Corp. 

v. Kline, 845 F.2d 1300, 1307 (5th Cir.1988) (noting that parties must designate specific 

facts and their location in the record when relying on deposition testimony). 

The Schiller Defendants attached 236 pages of deposition testimony from William 

J. Fry, (see Schiller Defs.’ Exs. A1–A3, ECF Nos. 506-1–506-3), and 128 pages of 

deposition testimony from Don Strenk, (see Schiller Defs.’ Exs. B1–B4, ECF Nos. 506-5–

506-8). The Schiller Defendants submitted 44 pages of briefing, not including tables of 

contents. (See ECF Nos. 506 & 507.) With a few exceptions, where this briefing cites 

evidence in the record, it is inexcusably vague. For example, on page 16 of the second of 

the Schiller Defendants’ two Opposition briefs, the Schiller Defendants assert that BP 

allowed the leases to expire because it “had decided to withdraw from the retail gasoline 

market in [S]outhern California” and that BP never offered to assign to the franchisees its 

extension option. (Schiller Opp’n, ECF No. 507, at 16.) To support this argument with 

evidence, the Schiller Defendants cite the “Declaration of Scherer with attachments, and 

Deposition excerpts of Fry and Strenk.” Id. In other words, to support these factual 

premises, the Schiller Defendants cite generally to more than 350 pages8 of deposition 

testimony and “hundreds of pages of declarations and attachments,” leaving the Court—

and BP—“to guess which evidence supposedly supports the purported fact.” (See Mot. to 

Strike Schiller Opp’ns, ECF No. 518-1, at 7–8.)

/ / /

/ / /

 

8 Documents attached to the Opposition purport to identify the relevant pages, but even those documents 

generally direct the Court to more than eighty pages of testimony. 

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In a rare demonstration of specificity, the Schiller Defendants cite the “excerpt of 

deposition transcript of Brad Lindskog, Divestment Manger in BP’s real estate department, 

depo pp. 1, 5, 23, 25, 28–30, 89–90, 169–170.” (Schiller Opp’n, ECF No. 507, at 11.) As 

it turns out, that is every page of Mr. Lindskog’s deposition testimony submitted in support 

of certain Schiller Defendants’ Answer and Counterclaim, (ECF No. 18). 

While this lack of specificity would warrant granting BP’s motion to strike, it does 

not affect the resolution of BP’s PMPA MSJ, and is therefore moot. Accordingly, the 

Court DENIES AS MOOT BP’s Motion to Strike Schiller Oppositions, (ECF No. 518).

E. Conclusion

There is no genuine dispute that (1) BP lost its right to grant possession of the 

premises it leased to Meetra, the Schiller Defendants, and Crossroad; (2) each of those 

Defendants received the statutorily required notice before the franchises commenced; (3) 

BP notified these Defendants at least ninety days before the termination and nonrenewal 

took effect; and (4) during the relevant time period, BP had no renewal options it could 

offer to assign to these Defendants. Accordingly, the Court GRANTS BP’s PMPA MSJ 

as to the remaining active Defendants. 

II. The Indemnity MSJ

In its Indemnity MSJ, BP moves for summary judgment on its Fourth Claim for 

Breach of Defendants’ Indemnity Obligations and its Fifth Claim for Breach of the 

Franchise Agreement Guaranties. (Fifth Am. Compl. ¶¶ 155–162, ECF No. 296-3). BP 

contends that franchisees and guarantors are liable for damages related to the various 

indemnity agreements and guaranties between BP and each defendant identified in 

Appendix A to the Indemnity MSJ. (See Indemnity MSJ at 5; Indemnity MSJ, App’x A, 

ECF No. 493-1.) BP paid Thrifty Oil Co. more than $2.3 million pursuant to their lease 

and indemnity agreements. BP now seeks to recover $2,357,728.71 from the franchisee 

and guarantor Defendants against whom it brought this MSJ, alleging that uncontroverted 

evidence establishes that these damages are attributable to their breach of the indemnity 

and guaranty agreements. (See Indemn. MSJ at 5.)

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The claimed damages come in two varieties. First, BP seeks to recover $449,060.50 

that it says it was required to pay Thrifty related to the Defendants’ inappropriately 

involving Thrifty in this lawsuit. (Indemn. MSJ at 5, 10.) Second, BP seeks to recover 

$1,908,668.21 related to “site condition costs, holdover rent, and ABC license delays 

directly attributable to Defendants.” (Id. at 11–12.)

A breach of indemnity agreement claim is essentially the same as a breach of 

contract claim. See Cal. Civ. Code § 2772 (“Indemnity is a contract by which one engages 

to save another from a legal consequence of the conduct of one of the parties, or of some 

other person.”). The plaintiff must prove: (1) the existence of an indemnity agreement; (2) 

plaintiff’s performance; (3) “the facts showing a loss within the meaning of the parties’ 

indemnification agreement”; and (4) resulting damage. See Four Star Elec., Inc. v. F & H 

Constr., 7 Cal. App. 4th 1375, 1379 (1991); Travelers Cas. & Sur. Co. of Am. v. Highland 

P’ship, Inc., No. 10CV2503 AJB DHB, 2012 WL 5928139, at *4 (S.D. Cal. Nov. 26, 2012) 

(citing First Nat’l Ins. Co. of Am. v. Hunt, 2011 WL 2173765 *3 (E.D. Cal. 2011)).

The indemnity provisions in the franchise agreements provide: 

Without limitation of any other right or any remedy of BPWCP, whether 

arising under this Agreement or otherwise, Franchisee agrees to indemnify, 

hold harmless and defend BPWCP, its parents, subsidiaries, officers, directors 

and employees, from . . . any damages, claims, costs, expenses, fines or 

penalties relating to operation(s) . . . on the Premises, arising out of or in 

connection with any failure or breach by or on behalf of Franchisee respecting 

any provision of this Agreement, or arising out of Franchisee’s use or 

occupancy of the Premises, Franchisee’s operation of the business(es) or 

Franchisee’s use, custody or operation of Loaned Equipment or any other 

equipment on the Premises . . . .

(Indemn. MSJ SOF ¶ 6.) 

Where contracts use the “arising from” language, as the relevant franchise 

agreements do, “liability will attach if the indemnitor’s performance under the contract is 

‘causally related in some manner to the injury for which indemnity is claimed.’” S. Cal.

Gas Co. v. Syntellect, Inc., No. 08-CV-941-BEN MDD, 2014 WL 334462, at *2 (S.D. Cal. 

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Jan. 28, 2014) (citing St. Paul Fire & Marine Ins. Co. v. Am. Dynasty Surplus Lines Ins. 

Co., 101 Cal. App. 4th 1038, 1050 (2002)), aff’d, 593 F. App’x 732 (9th Cir. 2015).

A. Thrifty Legal Defense Costs

BP has not established that the indemnity terms in the franchise agreements 

encompass Thrifty’s legal costs. 

BP argues the Defendants are liable for the Thrifty defense costs because the 

indemnity agreements use the language “arising from,” and the Thrifty legal costs are 

causally related9to the franchisees’ “use or occupancy” of the leased premises. The Court 

is not convinced, however, that as a matter of law the contract term “arising under” is as 

broad as BP suggests. The fundamental problem is that there is nothing about the 

indemnity term BP relies upon or the construction BP proposes that would limit its ability 

to recover costs related to this litigation in any reasonable manner. For example, nothing 

in the indemnity term would allow BP to recover Thrifty’s litigation costs and attorneys’ 

fees where there is no “factual or legal basis to hold Thrifty accountable,” but would 

prohibit BP from recovering Thrifty’s fees if the franchisees’ claims were meritorious. 

Similarly, this construction would entitle BP to recover its own costs and attorneys’ fees

even if the franchisees proved BP violated the PMPA. It seems unlikely the parties 

intended for the franchisees to finance all PMPA-related litigation regardless of who 

prevailed. 

The primary case upon which BP relies, Southern California Gas Co., involved an 

indemnity term that much more clearly contemplated the type of reimbursement sought in 

that suit. See 2014 WL 334462, at *1. The plaintiff sought indemnification for costs 

associated with a patent infringement lawsuit and settlement. Id. at *1–2. The term at 

issue specifically stated that the defendant would indemnify the plaintiff for costs “arising 

 

9 Although BP’s brief repeatedly cites the standard as “casually related,” (see, e.g., PMPA MSJ at 14, 18; 

Reply to Crossroad at 4), the primary case upon which it relies, Southern California Gas Co., states that 

standard for this language as “causally related,” see 2014 WL 334462, at *2. The Court therefore assumes 

that is the construction BP urges. 

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from (1) actual or alleged infringement . . . of any patent . . . in connection with” the product 

defendant sold to the plaintiff. See id. at *1. 

The causal relationship in this case is more attenuated. In moving for summary 

judgment, BP has the burden of presenting evidence that, if uncontroverted at trial, would 

entitle it to a directed verdict. The mere existence and language of this term is not evidence 

that would entitle BP to a directed verdict, and BP has identified no evidence suggesting 

the parties intended this term to have the broad application BP now asserts. 

Additionally, the public policy behind the PMPA suggests the Court should hesitate 

to read the indemnity term as BP suggests. Courts may deem terms that contravene the 

statutory rights granted by the PMPA invalid. See Graham Oil Co. v. ARCO Prods. Co., 

43 F.3d 1244, 1248 (9th Cir. 1994) (holding that an arbitration clause limiting the 

franchisee’s ability to recover exemplary damages and reasonable attorneys’ fees and 

shortened the time in which the franchisee could sue to less than the statute of limitations 

contravened the PMPA and was therefore invalid) as amended (Mar. 13, 1995). Meetra 

argues that because the PMPA only allows a franchisor to recover fees if the court finds 

that the suit was frivolous, the construction of the indemnity term BP proposes would make 

the term invalid. (Meetra Indemn. Opp’n at 8 (citing 15 U.S.C. § 2805(d)(3)).) The fact 

that the contractual construction BP urges would make the Defendants liable for BP’s own 

attorneys’ fees but does not require a finding of frivolousness suggests the parties did not 

intend for the term to make franchisees liable for any attorneys’ fees that would not have 

been incurred but for the franchisees’ use or occupancy of the premises. 

BP points out that it is not seeking to recover fees for this litigation and that it is only 

seeking to recover fees because Thrifty was improperly included. To have a contractual 

right to recover these fees, there would need to be a contractual term providing such a right. 

The indemnity provision BP cites says nothing about improperly including Defendants, 

and BP offers no construction of this term that would encompass attorneys’ fees incurred

/ / /

/ / /

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by Thrifty because it was “improperly” sued, but that would not also encompass BP’s and 

Thrifty’s attorneys’ fees even in a meritorious suit by the franchisees. 

Accordingly, the Court DENIES BP’s Indemnity MSJ with respect to Thrifty’s 

attorneys’ fees. 

B. Site Condition and Holdover Costs

BP has not met its burden of identifying evidence entitling it to judgment as a matter 

of law with respect to the site condition and holdover costs related to BP’s settlement with 

Thrifty. 

BP argues that the Defendants against whom it brought the Indemnity MSJ are liable 

for damages BP incurred related to its Master Leases with Thrifty. After the franchisees 

vacated the premises, Thrifty sought reimbursement from BP for holdover rent, the 

franchisees’ failure to timely transfer liquor licenses, and the costs it or its new lessee paid 

related to “graffiti on the building structures, fixtures and equipment, holes in building 

structures, damaged dispenser hoses, costly landscaping . . . , and broken 

interior/exterior/canopy lighting.” (Indemn. MSJ at 15–16 (citing SOF ¶¶ 36–38).) BP 

paid $2,120,881.10 to settle these claims with Thrifty, of which BP contends that these 

Defendants are liable for $1,908,668.21. 

An indemnitee must show that it was liable for the amount for which it seeks 

indemnification, the liability is covered by the indemnity contract, and the extent of liability 

for which it seeks indemnification is appropriate. Peter Culley & Assoc. v. Super. Court, 

10 Cal. App. 4th 1484, 1497 (1992), as modified on denial of reh’g (Dec. 16, 1992). An 

indemnitor is liable to the indemnitee for good faith settlements within the scope of an 

indemnity agreement. See Lincoln Gen. Ins. Co. v. Access Claims Adm’rs, Inc., 596 F. 

Supp. 2d 1351, 1374 (E.D. Cal. 2009) (“California has long applied the rule that when there 

is an agreement to indemnify for liability, the party seeking indemnification need not wait 

for judgment against it, but may be indemnified for payments made in satisfaction of a 

settlement.”); see also Mabie & Mintz v. B & E Installers, 25 Cal. App. 3d 491 (1972).

/ / /

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A settlement is presumptive evidence that the indemnitee was liable, but this 

presumption “may be overcome by proof from the indemnitor that the settlement was 

unreasonable (e.g., unreasonable in amount, entered collusively or in bad faith, or entered 

by an indemnitee not reasonable in the belief that he or she had an interest to protect).” 

Peter Culley & Assoc., 10 Cal. App. 4th at 1497. When the settling indemnitee 

unreasonably pays too much, “thereby acting as a volunteer,” the settlement may be 

deemed unreasonable. See Clayton Ford v. Ford Motor Co., 104 Cal. App. 4th 46, 58 

(2002).

Understandably, given the sheer number of Defendants in this action and subject to 

the Indemnity MSJ, BP’s motion works in broad generalities, making it difficult to examine 

on a defendant-by-defendant basis whether BP was liable for each portion of the settlement 

amount it paid to Thrifty and whether those losses were covered by the indemnity 

agreements between BP and the franchisors in the first place. 

The first of those difficulties is not fatal to BP’s Indemnity MSJ. Following 

California law, the Court begins with the presumption that BP was liable based on the fact 

that it settled. The burden therefore lies with the Defendants to identify evidence showing 

the settlement was unreasonable, see Peter Culley & Assoc., 10 Cal. App. 4th at 1497, 

which the Defendants have not done. Importantly, however, this presumption applies to 

the question of whether the indemnitee was liable to a third party for the amount for which 

it seeks indemnification. See id. This presumption does not, therefore, save BP with 

respect to the second difficulty identified—whether each loss was covered by the 

agreement between BP and the franchisees. 

BP attempts to demonstrate the liability of the dozens of Defendants subject to the 

Indemnity MSJ by using examples of things that may support findings that the losses were 

covered by the indemnity agreements. (See Wolfe Decl., ECF No. 439-179 (“Thrifty sent 

site-specific letters to BPWCP identifying items that were not in ‘good working order’ . . . 

As an exemplar of the types of letters that BPWCP received from Thrifty, attached as 

Exhibit D is a true and accurate copy of one of the site-specific letters (for Facility No.

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9554) that Thrifty sent to BPWCP in the Fall of 2011.”) (emphasis added).) The Court 

cannot determine the liability of each of these individual Defendants by way of exemplars. 

BP needs to identify each item of loss for which each franchisee is purportedly liable to 

even give them a meaningful chance to dispute the facts alleged against them and whether 

that particular item falls within the indemnity agreement. For example, BP might have 

reimbursed Thrifty for a site condition that predated or postdated the franchisee’s 

occupancy, such that it would not actually arise from its use or occupancy of the premises. 

BP seeks to hold dozens of Defendants liable and must therefore identify facts that 

entitle it to summary judgment with respect to each defendant. Exhibit I to the Wolfe 

Declaration does not accomplish this task. (Wolfe Decl., Ex. I, ECF No. 493-238.) Exhibit 

I simply lists each property and the total amount BP says is owed from defective conditions, 

holdover rent, or delays in turning over alcohol licenses. (See id.) It does not demonstrate 

that the facts or conditions upon which those figures are based necessarily arise from the 

franchisees’ use or occupancy of the gas station sites. 

BP’s burden of showing that a loss is covered by an indemnity agreement is not 

lessened because it sued a lot of Defendants. Indeed, one of the reasons BP offers to 

explain why Thrifty leased these gas station sites as a bundle is “efficiency of enforcement 

of master lessee obligations and direct recourse to remedy any damages suffered by the 

master lessor.” (PMPA SOF ¶ 5 (citing Esses Report, Risner Decl. Ex. 139, ECF No. 492-

178).) The implication is that it is difficult to recover from many franchisees in an efficient 

manner, an implication that is born out in the shortcomings of BP’s Indemnity MSJ despite

BP’s having submitted thousands of pages of evidence in support. 

In sum, because BP does not identify particular facts entitling it to judgment as a 

matter of law, the Court DENIES BP’s Indemnity MSJ. 

/ / /

/ / /

/ / /

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CONCLUSION

For the foregoing reasons, the Court: 

1. GRANTS BP’s PMPA MSJ; 

2. DENIES BP’s Indemnity MSJ WITH PREJUDICE as to the Thrifty legal 

costs and WITHOUT PREJUDICE as to the site condition and holdover costs;

3. DENIES AS MOOT BP’s Pacific Expotech MSJ; 

4. DENIES BP’s Motion to Strike re Timeliness; and

5. DENIES AS MOOT BP’s Motion to Strike Schiller Oppositions. 

IT IS SO ORDERED.

Dated: July 18, 2016

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