9th Circuit upholds summary judgment for Meineke against franchisee's fraud, good faith, and rescission counterclaims…

Record source: CourtListener

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 16 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT MEINEKE FRANCHISOR SPV, LLC, a No. 25-1142 Delaware limited liability D.C. No. company; MEINEKE REALTY, INC., a 2:23-cv-00374-SPG-JC North Carolina corporation, Plaintiff-ctr-defendants - MEMORANDUM* Appellees, v. CJGL, INC., a California corporation; CARL DOUMA, an individual; JAN DOUMA, an individual, Defendant-ctr-claimants - Appellants, v. ECONO LUBE AND TUNE, INC., Counter-defendant - Appellee. Appeal from the United States District Court for the Central District of California Sherilyn Peace Garnett, District Judge, Presiding Argued and Submitted June 22, 2026 Pasadena, California * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: WARDLAW, OWENS, and DE ALBA, Circuit Judges. CJGL, Inc., Jan Douma, and Carl Douma (collectively, the “CJGL Parties”) appeal the district court’s order granting summary judgment to Meineke Franchisor SPV LLC and Meineke Realty, Inc. (together, “Meineke”) on the CJGL Parties’ counterclaims. We have jurisdiction under 28 U.S.C. § 1291, and we affirm. A district court’s decision to grant summary judgment is reviewed de novo. Desire, LLC v. Manna Textiles, Inc., 986 F.3d 1253, 1259 (9th Cir. 2021). “This court’s review is governed by the same standard used by the trial court under Federal Rule of Civil Procedure 56(c).” Suzuki Motor Corp. v. Consumers Union of U.S., Inc., 330 F.3d 1110, 1131 (9th Cir. 2003). Summary judgment may be affirmed “on any ground supported by the record.” Cruz v. Nat’l Steel & Shipbuilding Co., 910 F.3d 1263, 1270 (9th Cir. 2018). Our “review is limited to the record presented to the district court at the time of summary judgment.” Nat’l Steel Corp. v. Golden Eagle Ins. Co., 121 F.3d 496, 500 (9th Cir. 1997). 1. The CJGL Parties did not waive their right to appeal the dismissal of their counterclaims at summary judgment by stipulating to the final judgment the district court adopted. One exception to the general rule that a party cannot appeal a judgment entered with their consent is “where the party did not actually consent” to the judgment. Tapper v. Comm’r of Internal Revenue, 766 F.2d 401, 403 (9th Cir. 1985). Here, the facts surrounding the stipulation to the final judgment 2 25-1142 demonstrate that the CJGL Parties did not intend to consent to the final judgment itself, but only to its form. Cf. Slaven v. Am. Trading Transp. Co., 146 F.3d 1066, 1069 (9th Cir, 1988) (finding waiver where the stipulation was accompanied by withdrawn objections and a cover letter confirming approval of the proposed judgment’s substance). 2. The district court did not err in granting Meineke summary judgment on the CJGL Parties’ intentional misrepresentation and fraudulent inducement counterclaims. These counterclaims are premised on Meineke’s purported false promises to “assist, ensure, and confirm” that the CJGL Parties secure a direct lease to their existing franchise’s premises for the purposes of inducing the CJGL Parties into renewing the franchise agreement. “An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.” Lazar v. Superior Court, 12 Cal. 4th 631, 638 (1996). Fraudulent inducement based on a false promise requires “that the promisor did not intend to perform at the time he or she made the promise and that it was intended to deceive or induce the promisee to do or not do a particular thing.” Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal. App. 4th 153, 159 (1991). “Affirmative evidence [demonstrating an intent not to perform the promise] is necessary to avoid summary judgment because mere nonperformance is not enough to show intent to defraud.” Fanucchi & Limi Farms v. United Agri 3 25-1142 Prods., 414 F.3d 1075, 1088 (9th Cir. 2005). Here, even assuming Meineke made a promise to secure the direct lease, the CJGL Parties do not point to any affirmative or circumstantial evidence demonstrating Meineke’s intent to defraud. Conversely, the undisputed evidence establishes that Meineke did attempt to assist and arrange a direct lease, searched for alternate locations in Santa Barbara for the CJGL Parties’ franchise during the direct lease negotiations, and ultimately agreed to guaranty a proposed direct lease for three months. Critically, although Jan Douma asserts that she “executed the renewal agreement [on July 12, 2021] . . . so that Meineke would execute the guaranty for the direct lease,” Carl Douma and Meineke executed the renewal agreement on September 29, 2021—five days after Meineke told the CJGL Parties that it “[wa]s exiting the business of guaranteeing its franchisees’ leases and . . . will not change [its] decision even if it results in a loss of the location.” 3. The CJGL Parties failed to present triable issues of fact on their breach of the covenant of good faith and fair dealing counterclaim about whether Meineke prevented the CJGL Parties from receiving the benefits under the sublease and, by incorporation, the master lease. 4 25-1142  This counterclaim fails on the merits, as the CJGL Parties received the benefits of the sublease.1 It is undisputed that the sublease terminated “upon the sooner of (i) June 29, 2021, [or] (ii) the termination or expiration” of the master lease. Thus, even if Meineke had extended the master lease, the sublease terminated no later than June 2021. Yet, the CJGL Parties vacated their franchise’s premises around August 2022—well after the sublease expired. 4. The district court did not err in granting Meineke summary judgment on the recission and restitution counterclaim because the CJGL Parties did not rescind the renewal agreement by prompt notice in accordance with Sections 1691 and 1693 of the California Civil Code. See Citicorp Real Est., Inc. v. Smith, 155 F.3d 1097, 1103 (9th Cir. 1998). The undisputed evidence establishes that on August 6, 2022, without notifying Meineke, the CJGL Parties ceased operating their franchise and vacated the premises. Yet, the CJGL Parties provided notice of recission to Meineke on March 15, 2023, when they filed their counterclaims.2 1 We do not decide whether this counterclaim is barred by the four-year statute of limitations as the merits issue is dispositive. 2 The CJGL Parties contend that their counterclaim “relate[s] back to the filing of Meineke’s complaint,” and therefore the relevant date for the analysis of notice is January 18, 2023—the day the complaint was filed. But even if we accept January 18, 2023, as the date of notice of recission, that date is still long after the CJGL Parties vacated the premises in August 2022. 5 25-1142  In California, “[a] delay of more than one month in serving notice of rescission requires explanation.” Gedstad v. Ellichman, 124 Cal. App. 2d 831, 834 (1954). The CJGL Parties attempt to justify their delay in seeking rescission by asserting arguments for the

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