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

Heading: Rights Granted.

Text: If a proposal to sell Dealer’s principal assets or transfer the majority ownership in Dealer is submitted by Dealer to [MB], . . . [MB] has a right of first refusal or option to purchase such assets or ownership interest, including any leasehold interest or realty. [MB’s] exercise of its right or option under this Section IX. B supercedes Dealer’s right to transfer its interest in, or ownership of, the Dealership. [MB’s] right or option may be assigned by it to any third party and [MB] hereby guarantees the full payment to Dealer of the purchase price by such assignee. Under Section IX. B. 2., MB had sixty days from its receipt of all data and documentation customarily required by it to evaluate a proposed transfer of ownership within which to exercise its ROFR. The Agreement does not specify any manner by which MB is required to communicate its exercise of its ROFR. Other sections of the contract do specify when notice and/or written notice are required. For example, notice is required under: Section I. A. when MB revises vehicle prices; Section III. E., where the Dealer agrees to provide FRESNO MOTORS V. MERCEDES-BENZ 15 prompt notice to MB of any customer complaints; and Section VIII. C., where the Dealer is required to provide written notice of any dispute over deductions or offsets imposed by MB within ninety days. Other provisions actually indicate that notice shall be in writing and “shall be mailed to the person(s) designated to receive such notice, via overnight mail, or shall be delivered in person.” Section XI. F. Finally, the Dealer Agreement contains a general notice provision (XIV) that provides, “[e]xcept as otherwise specifically provided herein, any notice required to be given by either party to the other shall be in writing, shall be delivered personally or by mail to the party at its address as stated in this Agreement, and shall be effective upon receipt by hand delivery or upon mailing.” MB’s contractual ROFR is tempered by the California Vehicle Code. In particular, Cal. Veh. Code § 11713.3(t)(2) provides that it shall be unlawful for a manufacturer to exercise a right of first refusal unless “[t]he franchisor gives written notice of its exercise of the right of first refusal no later than 45 days after the franchisor receives all of the information required pursuant to subparagraph (A) of paragraph (2) subdivision (d).” That information must include all information generally utilized by the manufacturer in reviewing a prospective franchisee. In the instant case, it is undisputed that MB did not receive the final necessary document, the Wholesale Financing Commitment Form signed by Mercedes-Benz Financial evidencing its commitment to extend floor plan financing to the actual purchaser, Fresno Motors, a requirement under the standard dealer agreement, until May 1, 2009. Indeed, Fresno did not become the actual purchaser until it, Selma, and Asbury executed the second amendment 16 FRESNO MOTORS V. MERCEDES-BENZ to the APA on May 1, 2009. That was the last piece of required information as far as MB was concerned, and that was the trigger date for exercising its ROFR. Any argument to the contrary is simply specious. MB was entitled to the documents establishing Fresno as the purchaser and was entitled to a commitment of Floor Plan Financing by Mercedes-Benz Financial to the actual purchaser. That means that MB had until June 15, 2009, to exercise its ROFR. It is undisputed that it did so by sending a letter to Asbury by both email and facsimile at 5:18 p.m. PDT. It also sent a copy of that letter to Fresno via email and facsimile on that date. Finally, the following day, June 16, it placed the letter with Federal Express for overnight delivery. Plaintiffs argue that MB’s exercise was untimely because it came after 5:00 p.m., and improper because it was transmitted electronically rather than by regular mail. This argument fails for a variety of reasons. First, under the Dealer Agreement, the only party entitled to any form of communication from MB of its exercise of the ROFR was Asbury, which has never complained about the timing or manner of MB’s exercise of the ROFR. The Dealer Agreement is silent as to the manner by which MB was to exercise this right. Certainly, nothing in the provisions granting MB the ROFR requires MB to give formal notice pursuant to the agreement’s notice provision or otherwise. Consequently, the “notices” provision of the Dealer Agreement in section XIV. A., which governs when notice is “required to be given by either party,” does not apply. Plaintiffs argue that regardless of the Dealer Agreement, section 11713.3(t)(2) of the California Vehicle Code requires the franchisor to give forty-five days written notice to lawfully exercise a ROFR. This section does not provide a FRESNO MOTORS V. MERCEDES-BENZ 17 ROFR, however; it simply allows a franchisor to exercise a contractual right pursuant to the terms of the contract, and is silent as to whom notice should be given. Nothing in the statute suggests that notice must be sent to the prospective transferee.2 Plaintiffs also argue that their right to notice under the statute can be implied because subsection (t)(6) requires the franchisor to reimburse the proposed transferee for its expenses incurred in evaluating the proposed transfer. But that section has its own notice provision, requiring the proposed transferee to provide the franchisor a written itemization of such expenses within thirty days of receipt of a written request from the franchisor. Cal. Veh. Code § 11713.3(t)(6). Nothing in this section implies that the proposed transferee is entitled to notice of the franchisor’s exercise of a ROFR. Quite the opposite. It demonstrates that the legislature specifically provided for notice to the proposed transferee when it wanted it to be given. The fact that the legislature did not specifically require notice from the franchisor to the proposed transferee of the exercise of a ROFR suggests that it did not see the need for such notice. Finally, even if plaintiffs were entitled to notice from MB of its exercise of the ROFR, the notice plaintiffs received was both timely and in proper form. Nothing in either the Dealer Agreement or section 11713.3(t)(2) requires that notice be received (or sent) by 5:00 p.m. or the close of business. A statement (relied on by plaintiffs) by MB’s Dealer Network Manager that he considered 5:00 p.m. on June 15, 2009, to be 2 When the statute requires any form of communication from the franchisor to the proposed transferee it is specifically spelled out. See Cal. Veh. Code § 11713.3(t)(6). 18 FRESNO MOTORS V. MERCEDES-BENZ their deadline is certainly not legally binding on MB, particularly when plaintiffs have not claimed that they relied to their detriment on that statement. There is no evidence in the record to even remotely suggest that plaintiffs took any detrimental action between 5:00 p.m. and 5:18 p.m. Thus, even if plaintiffs were entitled to receive notice of MB’s exercise of the ROFR, their receipt of that notice on June 15, 2009, was timely. The form of notice was also proper. Section 11713.3(t)(2) requires “written notice.” It does not require any particular form of notice or define the manner by which such written notice must be delivered. When the legislature intended to require written notice be delivered in a specific manner, it specifically did so. For example, section 11713.3(d) expressly states that the notice of the manufacturer’s approval or disapproval of a proposed sale must “be in writing and shall be personally served or sent by certified mail, return receipt requested, or by guaranteed overnight delivery service that provides verification of delivery and shall be directed to the franchisee.” Cal. Veh. Code § 11713.3(d)(2). The legislature provided no such specification of the notice required to lawfully exercise a ROFR. All that is required is some form of written notice. Citing Cal. Civ. Code § 1633.5, plaintiffs argue that electronic notice is insufficient unless agreed upon by the parties. That section is part of the California Uniform Electronic Transactions Act, and specifically indicates that it applies only to a transaction between parties who have agreed to conduct the transaction by electronic means. Cal. Civ. Code § 1633.5(b). Plaintiffs and MB had not engaged in any transaction, electronic or otherwise, when MB exercised its ROFR. Plaintiffs’ right to written notice, if they had any at FRESNO MOTORS V. MERCEDES-BENZ 19 all, comes from the California Vehicle Code. Section 1633.7 of the Electronic Transfer Act provides that if a law requires a record to be in writing, or requires a signature, an electronic record or signature suffices. Cal. Civ. Code § 1633.7(c)–(d). Thus, plaintiffs’ receipt of the notice by electronic mail and facsimile constitutes written notice.3 Because MB lawfully exercised its ROFR, plaintiffs have no claim for intentional interference with prospective economic advantage, which requires plaintiffs to demonstrate that MB committed a legal wrong independent from the interference. Della Penna, 11 Cal. 4th at 393. Nor can MB’s conduct be considered “wrongful.” Even if MB misled plaintiffs by setting a self-imposed deadline to exercise and then missing it by a few minutes, plaintiffs cannot show that they were entitled to notice of MB’s exercise of its ROFR or that they were harmed by the insignificant delay. Thus, plaintiffs also have no claim for intentional interference with contract. As plaintiffs themselves candidly admit, “an auto manufacturer who lawfully exercises an unexpired ROFR is not liable for interference.” Consequently, summary judgment to MB on these claims is affirmed.