Court Opinion

ID: 2748257
Source: CourtListenerOpinion
Date Created: 2014-11-05 18:02:08.816459+00
Date Added: 2024-06-11T10:16:22.732764
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

 FRESNO MOTORS, LLC, a California                No. 12-15981
 limited liability company and SELMA
 MOTORS, INC., a California                         D.C. No.
 corporation,                                   1:11-CV-02000-
                   Plaintiffs-Appellants,             CJC

                     v.
                                                   OPINION
 MERCEDES BENZ USA, LLC, a
 Delaware limited liability company,
                 Defendant-Appellee.

      On Appeal from the United States District Court
           for the Eastern District of California
       Cormac J. Carney, District Judge, Presiding

                   Argued and Submitted
        January 17, 2014—San Francisco, California

                    Filed November 5, 2014

 Before: J. Clifford Wallace, Jay S. Bybee, Circuit Judges,
        and Robert W. Gettleman, District Judge.*

                 Opinion by Judge Gettleman

  *
    The Honorable Robert W. Gettleman, Senior United States District
Judge for the Northern District of Illinois, sitting by designation.
2            FRESNO MOTORS V. MERCEDES-BENZ

                           SUMMARY**

                          California Law

    The panel affirmed in part, and reversed in part, the
district court’s summary judgment entered in favor of
Mercedes-Benz USA, LLC in a diversity action brought by
plaintiffs whose attempt to purchase a Fresno Mercedes-Benz
dealership was unsuccessful due to Mercedes-Benz’s exercise
of a right of first refusal.

     Applying California law, the panel affirmed the district
court and held that the plaintiffs had no claims for intentional
interference with contract or prospective economic advantage
where Mercedes-Benz timely and lawfully exercised its right
of first refusal (“ROFR”). The panel also held that California
Vehicle Code § 11713.3(t)(2) did not require a franchisor to
send notice of the intent to exercise a ROFR to the
prospective transferee. The panel further held that even if
plaintiffs were entitled to notice from Mercedes-Benz of its
exercise of the ROFR, the notice plaintiffs received was both
timely and in proper form.

    Mercedes-Benz and the existing franchisee entered into
an acknowledgment agreement which set out the parties’
rights and obligations with respect to Mercedes-Benz’s
exercise of its ROFR. The panel affirmed the district court,
and held that plaintiffs’ claim that Mercedes-Benz
fraudulently concealed the existence of the acknowledgment
agreement had no merit.

  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
           FRESNO MOTORS V. MERCEDES-BENZ                     3

    California Vehicle Code § 11713.3(t)(6) provides for a
proposed transferee’s right to recover its expenses from a
franchisor that usurps its contract by exercising a ROFR. The
panel concluded that the plaintiffs, as prospective transferees,
had an implied right of action under section 11713.3(t)(6),
and reversed the summary judgment to Mercedes-Benz on
that count, and remanded for further proceedings.

   Finally, the panel affirmed the district court’s grant of
summary judgment to Mercedes-Benz on plaintiffs’ claim
under the California Unfair Competition Statute.

                         COUNSEL

Alexander F. Stuart (argued) and Ellyn E. Nesbit,
Willoughby, Stuart & Bening, San Jose, California; Oliver W.
Wagner, Wagner Jones Helsley, P.C., Fresno, California, for
Plaintiffs-Appellants.

Gwen J. Young (argued) and Ryan P. Day, Wheeler, Trigg,
O’Donnell LLP, Denver, Colorado, for Defendant-Appellee.

                          OPINION

GETTLEMAN, District Judge:

   Plaintiffs Fresno Motors, LLC (“Fresno”) and Selma
Motors, Inc. (“Selma”) (jointly, “plaintiffs”) signed an Asset
Purchase Agreement to purchase a Mercedes-Benz dealership
from Asbury Fresno Imports, LLC (“Asbury”). Mercedes-
Benz USA, LLC (“MB”), the manufacturer/importer of the
vehicles sold by the dealership, exercised a right of first
4          FRESNO MOTORS V. MERCEDES-BENZ

refusal (“ROFR”) contained in its dealership agreement with
Asbury. After several unsuccessful attempts to resolve
plaintiffs’ objections to MB’s exercise of its ROFR, plaintiffs
brought this action contesting the timeliness and propriety of
that exercise.

    In a first amended complaint (“FAC”) plaintiffs assert
five claims against MB, all brought under California law:
(1) intentional interference with existing contractual
advantage; (2) intentional interference with prospective
economic advantage; (3) violation of California Business and
Professions Code § 17200; (4) violation of California Vehicle
Code § 17133.3(t); and (5) fraudulent concealment. MB
moved to dismiss the FAC under Fed. R. Civ. P. 12(b)(1) and
12(b)(6). Because all operative facts appeared to be agreed,
the district court converted the motion to one for summary
judgment under Fed. R. Civ. P. 12(d) and 56, and allowed the
parties to file supplemental briefs and additional evidence if
needed. In a March 27, 2012, comprehensive opinion, the
court granted defendants summary judgment on all claims.
Plaintiffs timely appealed.

                              I.

     Asbury owned and operated the Fresno Dealership
pursuant to a Passenger Car Dealer Agreement (“PCDA”) and
Light Truck Dealer Agreement (“LTDA”) (jointly, “Dealer
Agreement”) with MB. It operated the dealership on premises
that it leased from CAR AAG CA L.L.C. (the “Landlord”)
under an April 1, 2003, Lease Agreement (“Lease”) with a
fifteen year term and two ten-year renewal options.

   In fall 2008, Selma, owned by Dwight G. Nelson, began
negotiating with Asbury for the purchase of the Fresno
           FRESNO MOTORS V. MERCEDES-BENZ                 5

Dealership. Selma and Asbury executed an initial Asset
Purchase Agreement on December 11, 2008. At that time
Selma began working with MB to become approved as a
Mercedes-Benz dealer, and submitted a completed Dealer
Application Packet on December 28, 2008. Selma and Asbury
mutually terminated the initial agreement on January 16,
2009.

    On March 27, 2009, Selma and Asbury executed a second
Asset Purchase Agreement (“APA”). MB sent Selma a
second dealer application, but on April 3, 2009, Selma
informed MB that all of the requested information was in the
original package. MB requested that Selma confirm that all
information in the original package remained current, and on
April 14 Selma responded by sending MB updated
information including a Commitment Letter covering the
floor plan financing for the proposed dealership, which
Mercedes-Benz Financial confirmed as valid. On April 20,
2009, Selma sent MB a “Wholesale Financing Commitment
Form” executed by Mercedes-Benz Financial.

    On April 23, 2009, Nelson formed Fresno for the sole
purpose of buying the Fresno Dealership from Asbury. The
following day, Selma (through Nelson) informed MB that it
intended to assign the APA to Fresno. On April 30, 2009,
MB informed Nelson that because Fresno was the purchasing
entity it was critical that MB receive a Wholesale Financing
Commitment Form from Mercedes-Benz Financial reflecting
Fresno as the buyer.

    On May 1, 2009, Selma, Asbury and Fresno executed a
second amendment to the APA, completing the assignment to
Fresno. That amendment assigned to Fresno all of Selma’s
rights under the APA, but specifically indicated that it was
6          FRESNO MOTORS V. MERCEDES-BENZ

not intended to operate as release of Selma’s obligations.
That same day, Fresno (through Nelson) sent to MB by
facsimile and overnight mail the Wholesale Financing
Commitment Form signed by Mercedes-Benz Financial
evidencing its commitment to extend floor plan financing to
Fresno.

    Exactly forty-five days later, on June 15, 2009, at 8:18
p.m. EDT (5:18 Pacific Time), MB exercised its contractual
ROFR. MB provided notice to Asbury by sending it a letter
by email and facsimile. Although not contractually required
to do so, MB also sent a copy of the letter to Nelson’s
personal email address and to the email address of Fresno’s
comptroller, Charles Fletcher. MB also sent the letter by
facsimile to a fax machine at Nelson’s business address at
Selma Motors. The letter indicates that it was also sent via
overnight delivery, but apparently was not placed with
Federal Express until the following day, and then delivered
on June 17, 2009.

    On June 19, 2009, MB and Asbury entered into an
agreement (the “Acknowledgment Agreement”), which states
that “[o]n June 15, 2009, MB provided timely written notice
to Asbury of its exercise of its right of first refusal with
respect to the . . . Fresno Motors APA . . . .” The
Acknowledgment Agreement then expressly set out the
parties’ rights and obligations with respect to MB’s exercise
of its right of first refusal. In particular, the Agreement
provides:

       1. Terms of Exercise. MB acknowledges that
       by its exercise of its right of first refusal, MB
       will be subject to the same terms and
       conditions under the Fresno Motors APA as
            FRESNO MOTORS V. MERCEDES-BENZ                     7

        such terms and 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 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 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.

    The Acknowledgment Agreement also provides that
Asbury would terminate the Fresno APA with respect to
Fresno Motors, but that the termination would “not be
deemed a termination of the Fresno Motors APA as such
terms and conditions now apply to MB as a result of its
exercise of its right of first refusal as well as to any proposed
assignee of MB.” MB agreed to continue to be bound by the
terms and conditions of the APA as if it were the original
party.

    Asbury did in fact terminate the APA with Fresno that
same day, June 19, 2009. Fresno challenged MB’s exercise of
its ROFR as untimely. After MB’s attempts to assign the
APA to a third party failed, MB agreed to mediate its dispute
with Fresno. That mediation took place on July 30, 2009, at
which time MB agreed to assign its rights under the APA
8          FRESNO MOTORS V. MERCEDES-BENZ

back to Fresno under certain conditions. Neither Asbury nor
MB had yet informed Fresno of the Acknowledgment
Agreement. Fresno did not receive that information until
August 31, 2009.

    MB’s counsel memorialized the conditions of the
assignment in an email to Fresno’s counsel immediately after
the mediation. MB and Fresno negotiated and finalized the
terms of an “Assignment and Assumption Agreement” by
August 28, 2009. Fresno did not sign, however, and
negotiations reached an impasse when MB would not provide
the Landlord with a guaranty of Fresno’s obligations under
the Sublease. Still unaware of the Acknowledgment
Agreement, Fresno attempted to negotiate with the Landlord
an assumption of Asbury’s lease or a new lease with an
option to purchase. These negotiations were ultimately
unsuccessful, and in mid-October Asbury terminated the
APA.

                             II.

    We review de novo a district court’s order granting
summary judgment. In re Oracle Corp. Sec. Litig., 627 F.3d
376, 387 (9th Cir. 2010). We may affirm “on any ground
supported by the record, regardless of whether the district
court relied upon, rejected, or even considered that ground.”
In re ATM Fee Antitrust Litig., 686 F.3d 741, 748 (9th Cir.
2012) (citation omitted).

    Summary judgment is appropriate where “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). The court views the evidence in the light most
favorable to the non-moving party to determine if there are
           FRESNO MOTORS V. MERCEDES-BENZ                     9

any genuine issues of material fact and whether the moving
party is entitled to judgment as a matter of law. Cnty. of
Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th
Cir. 2001). The court draws all justifiable inferences in favor
of the non-moving party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986). A fact is “material” only if it
might affect the outcome of the case, and a dispute is
“genuine” only if a reasonable trier of fact could resolve the
issue in the non-movant’s favor. Id. at 248. Summary
judgment is improper “where divergent ultimate inferences
may reasonably be drawn from the undisputed facts.” Miller
v. Glenn Miller Prods., Inc., 454 F.3d 975, 988 (9th Cir.
2006).

                              III.

A. Tortious Interference

     Plaintiffs assert that by exercising its ROFR in an
“untimely” and therefore “unlawful” manner, MB tortiously
interfered with plaintiffs’ contractual relationship with
Asbury and their prospective economic advantage in the
Fresno Dealership. Under California law, the elements of the
tort of intentional interference with contractual relations are:
“(1) a valid contract between plaintiff and a third party;
(2) defendant’s knowledge of this contract; (3) defendant’s
intentional acts designed to induce a breach or disruption of
the contractual relationship; (4) actual breach or disruption of
the contractual relationship; and (5) resulting damage.” Pac.
Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal. 3d 1118,
1126, 270 Cal. Rptr. 1, 3–4, 791 P.2d 587, 589–90 (1990).
Tortious interference with prospective economic advantage
is similar, protecting “the same interests and stable economic
relationships as does the tort of interference with contract,”
10         FRESNO MOTORS V. MERCEDES-BENZ

with the chief practical distinction being that “a broader range
of privilege to interfere is recognized when the relationship
or economic advantage interfered with is only prospective.”
Id. In addition, a claim for interference with prospective
economic advantage requires proof that the defendant “not
only interfered with the plaintiff’s expectancy, but engaged
in conduct that was wrongful by some legal measure other
than the fact of interference itself.” Della Penna v. Toyota
Motor Sales, USA, Inc., 11 Cal. 4th 376, 393, 45 Cal. Rptr. 2d
436, 447, 902 P.2d 740, 751 (1995).

    The district court granted summary judgment to MB,
concluding that because MB “had a substantial, continuing
economic interest and necessary involvement in the APA that
was contractually recognized and statutorily protected,” it
was “not - a - stranger” to the relationship between plaintiffs
and Asbury. Under the district court’s interpretation of
California law, the two interference torts “may only lie
against ‘strangers’ or interlopers who do not have a direct and
significant interest in the plaintiff’s contractual relationship
with another individual or entity.” Fresno Motors LLC v.
Mercedes-Benz USA, LLC, 852 F. Supp. 2d 1280, 1293 (C.D.
Cal. 2012).

    The “not - a - stranger” principle relied on by the district
court is an elusive concept that has spawned much
controversy in both the California courts and this court. It
stems from the statement by the California Supreme Court in
Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th
503, 514, 28 Cal. Reptr. 2d 475, 480, 869 P.2d 454, 459
(1994), that “[t]he tort duty not to interfere with the contract
falls only on strangers – interlopers who have no legitimate
interest in the scope or course of the contract’s performance.”
The issue in Applied Equip. was narrower, however, than the
            FRESNO MOTORS V. MERCEDES-BENZ                      11

Supreme Court’s statement. The only issue was whether “a
contracting party [may] be held liable in tort for conspiracy
to interfere with its own contract.” Id. at 507. Relying on the
long-standing proposition that the tort cause of action for
interference with contract does not lie against a party to the
contract because “[o]ne contracting party owes no general tort
duty to another not to interfere with performance of the
contract; its duty is simply to perform the contract according
to its terms,” the court then concluded that because a
contracting party cannot be liable for the underlying tort of
interference with contract, it also could not be liable for
conspiracy to interfere with the contract. “Because a party to
a contract owes no tort duty to refrain from interference with
its performance, he or she cannot be bootstrapped into tort
liability by the pejorative plea of conspiracy.” Id. at 514.

    It was in this context that the Applied Equip. court defined
the tort duty not to interfere with contract as falling “only on
strangers - interlopers who have no legitimate interest in the
scope or course of the contract’s performance.” Id. This
statement has, not surprisingly, led many courts to hold that
there is also no tort duty not to interfere falling on non-
contracting parties who do have a legitimate interest in the
scope or course of the contract’s performance, concluding, as
did the district court in the instant case, that such third-parties
are not strangers to the relationship. See, e.g. Exxon Corp. v.
Superior Court, 51 Cal. App. 4th 1672, 1688, 60 Cal. Rptr.
195, 205 (1997) (gasoline franchisor “has a clear financial
interest in its dealers and therefore is privileged to ‘interfere’
with the contract”); Kasparian v. Cnty. of Los Angeles,
38 Cal. App. 4th 242, 262, 45 Cal. Rptr. 2d 90, 100 (1995);
Mintz v. Blue Cross of Cal., 172 Cal. App. 4th 1595, 1603,
92 Cal. Rptr. 3d 442, 429 (2009).
12         FRESNO MOTORS V. MERCEDES-BENZ

    This court, too, has addressed the issue, stating that
“California law has long recognized that the core of
intentional interference business torts is interference with an
economic relationship by a third party stranger to that
relationship, so that an entity with a direct interest or
involvement in that relationship is not usually liable for harm
caused by pursuit of its interests.” Marin Tug & Barge, Inc.
v. Westport Petroleum, Inc., 271 F.3d 825, 832 (9th Cir.
2001) (emphasis in original). The principle enunciated in
Marin Tug has been followed by several district courts within
this circuit. See, e.g. ViChip Corp. v. Lee, 438 F. Supp. 2d
1087, 1097 (N.D. Cal. 2006); Nat’l Rural Telecomms. Co-op.
v. DIRECTV, Inc., 319 F. Supp. 2d 1059, 1070–72 (C.D. Cal.
2003).

    More recently, however, several decisions of the
California Courts of Appeal have rejected Marin Tug’s
interpretation of Applied Equip., concluding that Applied
Equip. should be limited to its specific holding that only
parties to a contract are excluded from asserting an
intentional interference claim. See, e.g., Woods v. Fox Broad.
Sub., Inc., 129 Cal. App. 4th 344, 352–53, 28 Cal. Rptr. 3d
463, 469–70 (2005); Powerhouse Motorsports Grp., Inc. v.
Yamaha Motor Corp., 221 Cal. App. 4th 867, 883–84,
164 Cal. Rptr. 3d 811, 825 (2013); Asahi Kasei Pharma
Corp. v. Actelion Ltd., 222 Cal. App. 4th 945, 959–65,
169 Cal. Rptr. 3d 689, 700–05 (2013).

    Finally, just recently a panel of this court has stated that
Marin Tug’s enunciation of California law is inconsistent
with the later decisions of the California intermediate courts
in Powerhouse and Woods, concluding that only the
contracting parties have a “direct interest or involvement in
that relationship,” thus limiting Applied Equip. to its specific
             FRESNO MOTORS V. MERCEDES-BENZ                         13

holding that only parties to a contract are immune from
claims of intentional interference with existing contractual
relations. United Nat’l Maint., Inc. v. San Diego Convention
Ctr., Inc., 766 F.3d 1002, 1007–08, (9th Cir. 2014) (citations
omitted).1

     As is readily apparent, the viability of the “not - a -
stranger” principle relied on by the district court is in a state
of flux, and there is no indication that the California Supreme
Court will clarify it any time soon. This court need not reach
the issue, however, because, as plaintiffs emphasized
repeatedly in their district court briefs, “an auto manufacturer
who lawfully exercises an unexpired ROFR cannot be sued
for inducing a breach of contract,” and in this court, “Fresno
Motors’ suit is premised on MB’s unlawful and improper
means of interfering with Fresno Motors’ APA” by exercising
its ROFR in an allegedly untimely and unlawful manner.
Notably, even plaintiffs readily admit that both their
intentional interference with prospective economic advantage
claim and their intentional interference with contract claim
fail if MB properly and timely exercised its ROFR.

    The district court, in a brief footnote in an otherwise
lengthy and comprehensive opinion, stated that “the parties
dispute the timing of [MB’s] exercise, and the Court finds
that this issue implicates contested facts that cannot be
resolved on a motion for summary judgment . . . .” Fresno
Motors, 852 F. Supp. 2d at 1302–03 n. 16. The district court,
however, did not identify what facts it viewed as contested,
and our review of the record and the parties’ briefs reveals no
such contest. The date, time, and manner by which MB

  1
    United Nat’l Maint. involved intentional interference with contract
only, and its holding is limited to that tort. 766 F.3d at 1007.
14         FRESNO MOTORS V. MERCEDES-BENZ

exercised the ROFR are all incontestably established by the
documents in the record, and clearly demonstrate that MB
timely and lawfully exercised its ROFR, leaving plaintiffs
with no claim for intentional interference with contract or
prospective economic advantage.

   The ROFR is contained in Section IX. B. of the Dealer
Agreement between MB and Asbury, which provides:

       1. Rights Granted.

       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.

B. Fraudulent Concealment

    Plaintiffs’ claim for fraudulent concealment “arises from
the Acknowledgment Agreement and whether MB promised

 3
   The court notes that during the entire course of events, most, if not all
communications, including submission of documents between plaintiffs,
Asbury, and MB were sent electronically. “Whether the parties agree to
conduct a transaction by electronic means is determined from the context
and surrounding circumstances, including the parties’ conduct.” Cal Civ.
Code § 1633.5(b).
20         FRESNO MOTORS V. MERCEDES-BENZ

it would guarantee a sublease of the Dealership premises in
the event that MB assigned its right to purchase [the Fresno
Dealership] to a third party.” According to plaintiffs, they
incurred unnecessary expenses attempting to get Asbury
released from the Lease, either by assuming the Lease and the
two ten year renewals or by entering a new lease with the
Landlord. These negotiations stalled because the Landlord
would not accept any lease without Asbury’s or MB’s
guaranty. Plaintiffs claim that had they known that MB had
already guaranteed their performance under a sublease, they
would not have needed to enter those negotiations. The
district court granted summary judgment to MB, concluding
that plaintiffs misinterpreted the Acknowledgment
Agreement as a guaranty and because the purportedly
concealed facts of that agreement were not material and had
been disclosed already to plaintiffs or were readily
discoverable. We agree and affirm.

    According to the FAC, after the conclusion of the
mediation, MB’s counsel sent an email to plaintiffs’ then
counsel setting forth the general terms of their agreement to
assign MB’s rights under the APA back to Fresno. Plaintiffs’
counsel replied by indicating that one issue was assuring that
plaintiffs would acquire the balance of the Lease plus the two
ten-year extensions, so that plaintiffs would have sufficient
time to make certain improvements that MB required.
Plaintiffs’ counsel indicated that he thought MB would
execute its ROFR and obtain a lease assignment from the
Landlord, and that plaintiffs would then get an assignment or
sublease from MB. This was necessary because the Landlord
was not comfortable with an assignment to a small dealer but
would be comfortable with MB on the lease.
           FRESNO MOTORS V. MERCEDES-BENZ                  21

    MB’s counsel responded by informing plaintiffs’ counsel
that MB would not enter into a sublease of the premises with
the Landlord and would not guarantee Fresno’s performance
of a sublease of the premises. According to plaintiffs, MB
intentionally withheld the fact that in the Acknowledgment
Agreement it had already agreed to be primarily responsible
for any sublease of the premises, leaving plaintiffs to
negotiate with the Landlord on the terms of an assumption by
Fresno of Asbury’s lease or a new lease with an option to
purchase. MB did this, according to plaintiffs, because the
Landlord would not agree to any form of lease without a
guaranty from MB or Asbury and, knowing that Asbury
would not agree to remain obligated to the Landlord without
a guaranty from MB, MB wanted to force plaintiffs to
negotiate terms that would release Asbury from the lease.

    Under California law, the elements of a claim for
fraudulent concealment are: (1) the defendant concealed or
suppressed a material fact; (2) the defendant was under a duty
to disclose the fact to the plaintiff; (3) the defendant
intentionally concealed or suppressed the fact with the intent
to defraud the plaintiff; (4) the plaintiff was unaware of the
fact and would not have acted as he did if he had known of
the concealed or suppressed fact; and (5) the plaintiff was
damaged by the concealment. Jones v. ConocoPhillips,
198 Cal. App. 4th 1187, 1198, 130 Cal. Rptr. 3d 571, 579
(2011).

   The operative provision of the Acknowledgment
Agreement provides:

       1. Terms of Exercise . . . . MB will be subject
       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.

C. California Vehicle Code § 11713.3(t)(6)

    In Count IV of the FAC, plaintiffs seek reimbursement for
expenses incurred in negotiating the APA that was usurped
when MB exercised its ROFR. The count is brought under
Cal. Veh. Code § 11713.3(t)(6), which provides in relevant
part that:

       It is unlawful and a violation of this code for
       a manufacturer . . . to do . . . any of the
       following:

           (t) [t]o exercise a right of first refusal or
           other right requiring a franchisee . . . to
           sell, transfer, or assign to the franchisor,
           all or a material part . . . of the franchised
           business unless . . .

           (6) [t]he franchisor shall reimburse the
           proposed transferee for expenses paid or
           incurred by the proposed transferee in
           evaluating . . . and negotiating the
           proposed transfer . . . . The proposed
           transferee shall provide the franchisor a
           written itemization of those expenses . . .
           within 30 days of the proposed
           transferee’s receipt of a written request
           from the franchisor for that accounting.
           The franchisor shall make payment within
           30 days of executing the right of first
           refusal.
            FRESNO MOTORS V. MERCEDES-BENZ                     25

    MB argues, and the district court held, that plaintiffs have
no standing to pursue this claim because the statute provides
no private right of action to proposed transferees. We
disagree.

    Not every violation of a state statute gives rise to a private
cause of action. Whether a party has a right to sue depends
on “whether the Legislature has ‘manifested an intent to
create such a private cause of action’ under the statute.” Lu
v. Hawaiian Gardens Casino, Inc., 50 Cal. 4th 592, 596,
236 P.3d 346, 348, 113 Cal. Rptr. 3d 498, 501 (2010)
(quoting Moradi-Shalal v. Fireman’s Fund Ins. Cos., 46 Cal.
3d 287, 305, 250 Cal. Rptr. 116, 126, 758 P. 2d 58, 69
(1988)). The legislature’s intent is revealed through the
language of the statute and its legislative history. Id. Some
statutes contain “‘clear, understandable, unmistakable terms’
which strongly and directly indicate” an intent to create a
private cause of action, such as when the statute expressly
states “that a person has or is liable for a cause of action for
a particular violation.” Id. at 597 (quoting Moradi-Shalal,
46 Cal. 3d at 295). More commonly, a statue may refer to a
remedy or means of enforcing its substantive provisions.
When a statute does not contain such obvious language, the
legislative history must be examined. Id.

    Section 11713.3(t)(6) does not specifically state that a
prospective transferee has a cause of action to recover unpaid
expenses, nor does it specifically refer to a remedy or means
of enforcement. It does, however, indicate the legislature’s
intent that a proposed transferee have a right to recover its
expenses from a franchisor that usurps its contract by
exercising a ROFR. The creation of this right to recovery,
which did not previously exist, distinguishes this section from
those, as in Lu, that merely codify existing rights. In Lu, for
26         FRESNO MOTORS V. MERCEDES-BENZ

example, a casino’s mandatory tip pooling policy required
dealers to contribute a percentage of their tips to a pool to be
shared with other casino employees. 50 Cal. 4th at 595. The
dealers sued, alleging a violation of California Labor Code
§ 351, which provided that “[n]o employer . . . shall collect,
take, or receive any gratuity or a part thereof that is paid,
given to, or left for an employee by a patron . . . . Every
gratuity is hereby declared to be the sole property of the
employee or employees to whom it was paid, given, or left
for.” Id. at 597–98.

    The California Supreme Court, after reviewing the statute,
the entire statutory scheme, and the legislative history, held
that the section did not create a private cause of action,
concluding that it simply afforded what courts had long held:
“that gratuities ordinarily belonged to the waiter or waitress
absent a contrary agreement . . . [and] did not reflect a
legislative intent to give employees a new statutory remedy
to recover any misappropriated gratuities.” Id. at 601.

    Unlike the statute in Lu, the California Vehicle Code, and
in particular subsection (t)(6), did create new rights and
remedies for displaced prospective buyers. Prior to
enactment, such buyers had no right to recoup their expenses
from the proposed seller unless they had contractually
arranged to do so.

    To this end, MB argues that the California Vehicle Code
creates new rights and obligations between manufacturers and
dealers only, but not for proposed transferees. It suggests that
subsection (t)(6) is designed to protect the franchisee from
suit by the proposed buyer for the unnecessary expenses. For
example, the instant Dealership Agreement provides that if,
as a result of MB’s exercise of its ROFR, the dealer (Asbury)
           FRESNO MOTORS V. MERCEDES-BENZ                    27

is contractually obligated to reimburse the initial buyer for
expenses incurred in connection with the Buy/Sell
Agreement, MB shall reimburse the dealer for such costs in
an amount “up to but not exceeding Fifty Thousand Dollars
($50,000.00).” Under MB’s theory, subdivision (t)(6) would
trump the contract and allow payment to the initial buyer of
all its fees.

    This argument is belied by the plain language of the
statute, which requires the manufacturer to pay all of the
proposed buyer’s reasonable expenses directly to that party.
Had the legislature wanted to protect only the dealer as MB
has suggested, it would have simply required the
manufacturer to reimburse the dealer for all expenses it was
contractually obligated to pay to the initial buyer. It did not
do so. Instead it gave the initial buyer a statutory right to
recover its reasonably incurred expenses from the
manufacturer, even in the absence of a contractual right.

    MB also argues that the only private cause of action
created by the Vehicle Code is contained in section 11726,
which provides that any licensee suffering pecuniary loss
because of a willful failure by another licensee to comply
with any provisions of the Code may recover damages and
attorney’s fees in court. MB argues that because the cause of
action in section 11726 is limited to licensees, the legislature
intended no private cause of action for proposed transferees.
Section 11726 is a remedial section, however, not a standing
section, and it “merely specifies the remedy available for
violations of subsection (e) and does not expand or restrict the
scope of those entitled to sue under it.” Larry Menke, Inc. v.
DaimlerChrysler Motors Co., 171 Cal. App. 4th 1088, 1094,
90 Cal. Rptr. 3d 389, 394 (2009).
28         FRESNO MOTORS V. MERCEDES-BENZ

    Menke demonstrates the error in MB’s position. In
Menke, an automobile dealer and its proposed transferee sued
the manufacturer for violations of § 11713.3(e) after the
manufacturer refused to approve the dealer’s application to
transfer its dealership. Subsection (e) makes it unlawful and
a violation of the Vehicle Code for any manufacturer “[t]o
prevent, or attempt to prevent, a dealer from receiving fair
and reasonable compensation for the value of the franchised
business,” and further provides that “[t]here shall not be a
transfer or assignment of the dealer’s franchise without the
consent of the manufacturer or distributor, which consent
shall not be unreasonably withheld or conditioned upon the
release . . . of a claim or defense by the dealer.” Cal. Veh.
Code § 11713.3(e). Concluding that the prospective
transferee lacked standing under subsection (e), Menke held
that the terms of the section could not be clearer: “it protects
franchise owners against manufacturer conduct that would
prevent the dealer from receiving fair and reasonable
compensation for the value of the franchised business. The
statute says nothing about potential purchasers.” Menke,
171 Cal. App. 4th at 1093. Notably, despite the lack of any
specific language strongly creating a right of action, the court
did not conclude that there was no right of action under the
statute, simply that a prospective transferee or purchaser had
no right to sue the manufacturer for failure to approve the
sale. Indeed, it specifically affirmed and quoted the trial
court’s holding that “[t]he plain language of the code section
makes clear that it is the dealer selling the franchise who has
standing to sue, and not a prospective buyer.” Id. (emphasis
added).

    In contrast to subsection (e), the plain language of
subsection (t)(6) speaks entirely to the right of the proposed
transferee, and says nothing about current franchisees. Thus,
            FRESNO MOTORS V. MERCEDES-BENZ                     29

following the reasoning in Menke, the plain language makes
clear that it is the proposed transferee that has standing to sue,
and not the current franchisee. Any other construction
renders the subsection meaningless. It would grant a
proposed transferee the right to receive payment for its
expenses without the ability to enforce that right in any
meaningful manner. Because we conclude that plaintiffs
have an implied right of action under section 11713.3(t)(6),
we reverse the summary judgment to MB on Count IV, and
remand for proceedings consistent with this conclusion.

D. Unfair Competition (UCL)

    Finally, we affirm the district court’s grant of summary
judgment to MB on plaintiffs’ claim under the California
Unfair Competition Statute, which prohibits an entity from
engaging in “unfair competition,” defined as “any unlawful,
unfair or fraudulent business act or practice.” Cal. Bus. &
Prof. Code § 17200. Section 17200 “borrows violations of
other laws and treats these violations, when committed
pursuant to business activity, as unlawful practices
independently actionable under Bus. & Prof. Code §17200 et
seq. and subject to the distinct remedies provided
thereunder.” Farmers Ins. Exch. v. Superior Court, 2 Cal. 4th
377, 383, 6 Cal. Rptr. 487, 491, 826 P.2d 730, 734 (1992)
(internal quotation marks omitted).

    In the FAC plaintiffs based their UCL claims on the
alleged claims for tortious interference, providing unlawful
notice under section 11713.3(t)(2), and fraudulent
concealment. Because the court has affirmed summary
judgment to MB on all those claims, MB is entitled to
summary judgment on the UCL claims as well.
30         FRESNO MOTORS V. MERCEDES-BENZ

     Additionally, the remedy for a UCL violation is either
injunctive relief or restitution. See Cal. Bus. & Prof. Code
§ 17203. The restitutionary relief is limited to money or
property lost by the plaintiff and acquired by the defendant.
Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 335–36,
120 Cal. Rptr. 3d 741, 761–62, 246 P.3d 877, 894 (2001).
“Restitution under § 17203 is confined to restoration of any
interest in money or property, real or personal, which may
have been acquired by means of such unfair competition.”
Id. (emphasis in original) (internal quotation marks omitted).
As Kwikset noted, the economic injury caused by an unfair
business practice may often involve a loss by the plaintiff
without any corresponding gain by the defendant. Such is the
instant case, at least as to plaintiffs’ remaining claim under
section 11713.3(t)(6). Under these circumstances, injunctive
relief is the only available remedy. Kwikset, 51 Cal. 4th at
336.

    Because plaintiffs do not seek injunctive relief and have
no claim for restitution under section 17203, MB is entitled
to summary judgment on the UCL claims.

   AFFIRMED IN PART, REVERSED IN PART and
REMANDED for proceedings consistent with this opinion.
Each party shall bear its own costs on appeal.