Opinion ID: 2748257
Heading Depth: 4
Heading Rank: 1

Heading: Terms of Exercise MB will be subject

Text: to the same terms and conditions under the Fresno Motors APA as such terms and 22 FRESNO MOTORS V. MERCEDES-BENZ conditions apply to Fresno Motors. Further, any subsequent assignment by MB of its rights or obligations under any or all of the Fresno Motors APA and the Purchase Documents, including, without limitation, the Sublease shall not operate as a release of MB of its obligations under such Agreements. For avoidance of doubt, MB expressly agrees that it shall be primarily responsible for the performance under the Fresno Motors APA and the Sublease. Asbury acknowledges that MB may assign its rights and obligations under the Fresno Motors APA and the Sublease to a third party provided that MB remain primarily responsible for the performance of any such assignee with respect to the Fresno Motors APA and the Sublease. Construing this provision under the California Rules of Contract Construction as set out in Bank of the West v. Superior Court, 2 Cal. 4th 1254, 1264, 10 Cal. Rptr. 2d 538 (1992), and the California Civil Code, the district court properly concluded that the Acknowledgment Agreement means only that “if [MB] assigns its rights under the APA, it would still remain ‘primarily responsible’ under the APA and sublease as if it were the original buyer, such that the assignment ‘shall not operate as a release of MB of its obligations.’” Fresno Motors, 852 F. Supp. 2d at 1311. As the court noted, the same message was underscored throughout the Acknowledgment Agreement: “that in exercising its right of first refusal, [MB] will take Fresno Motor[s’] place as the buyer and assume all of Fresno Motor[s’] rights and obligations, including those under the sublease, and that by assigning its right, it will continue to FRESNO MOTORS V. MERCEDES-BENZ 23 remain obligated to Asbury for the assignee’s performance of the sublease.” Id. at 1312. Finally, the court concluded that the term “primarily responsible” was not reasonably susceptible to mean a guaranty to the Landlord of plaintiffs’ obligations under a sublease. Id. On appeal, plaintiffs do not challenge the district court’s construction of the Acknowledgment Agreement, only its conclusion that MB had not concealed from plaintiffs any material fact because that agreement could not be interpreted to mean that MB guaranteed to the Landlord plaintiffs’ performance under the Sublease. They contend that the fact that MB “guaranteed” to Asbury plaintiffs’ performance under the Sublease was material, and that had they known of this guaranty they would not have entered negotiations with the Landlord. This argument is belied by the facts. Plaintiffs admit that the Landlord wanted either that Asbury remain on the Lease or that MB issue a guaranty to it. Asbury wanted to be free from any obligation to the Landlord. That is what forced plaintiffs to negotiate either an assumption of the master Lease (releasing Asbury) or a guaranty running from MB to the Landlord, something to which MB had not and would not agree. The fact that MB had “guaranteed” plaintiffs’ payments to Asbury is irrelevant to plaintiffs’ claim on appeal. Such a guaranty did not relieve Asbury from its obligations to the Landlord. At most, it meant that if plaintiffs had failed to pay on the lease, Asbury would have to pay the Landlord and then seek reimbursement from MB. That is not what Asbury wanted; it wanted out. Consequently, plaintiffs’ claim that MB and/or Asbury fraudulently concealed the existence of 24 FRESNO MOTORS V. MERCEDES-BENZ the Acknowledgment Agreement has no merit. We therefore affirm summary judgment on this claim.