Fantastic Sams Salons Corp v Frank Moassesfar et al.

Filing 75

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS MOTION FOR PARTIAL SUMMARY JUDGMENT (SEE DOCUMENT FOR SPECIFICS) 63 by Judge Otis D. Wright, II. (lc). Modified on 3/9/2016 (lc).

O

1
2
3
4
5
6
7

United States District Court
Central District of California

8
9
10
11

FANTASTIC SAMS SALONS CORP.,
Plaintiff,

12
13

Case No. 2:14-cv-06727-ODW(PJWx)

v.

ORDER GRANTING IN PART AND

14

FRANK MOASSESFAR; PARVANEH

DENYING IN PART PLAINTIFF’S

15

MOASSESFAR,

MOTION FOR PARTIAL
Defendants.

16

SUMMARY JUDGMENT [63]

17
18

The Court hereby issues this Order clarifying its ruling on Plaintiff’s Motion for

19

Partial Summary Judgment. See Fed. R. Civ. P. 56(a) (“The court should state on the

20

record the reasons for granting or denying the motion.”). Plaintiff moves for summary

21

judgment on its breach of contract claim against Defendants.

22

discussed below, the Court GRANTS IN PART and DENIES IN PART the Motion.

23

(ECF No. 63.)

For the reasons

24

“[T]he elements of a cause of action for breach of contract are (1) the existence

25

of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3)

26

defendant’s breach, and (4) the resulting damages to the plaintiff.” Oasis W. Realty,

27

LLC v. Goldman, 51 Cal. 4th 811, 821 (2011). Here, Plaintiff Fantastic Sams Salon

28

Corp. entered into two franchise contracts with Defendants Frank Moassesfar and

1

Parvaneh Moassesfar, both of which required Defendants to pay a weekly license fee

2

and a weekly national advertising fee to Plaintiff via electronic draft. In January 2011

3

and February 2012, Defendants closed the bank accounts from which the fees were

4

being withdrawn, and thus ceased making fee payments. Two years later, Plaintiff

5

sent Defendants a notice of default and request to cure. Defendants failed to cure the

6

breach. The failure to pay the license fee and advertising fee is a material breach of

7

the franchise agreements. Moreover, there is no evidence that Plaintiff failed to

8

perform under the agreements. Finally, Plaintiff suffered damages in the form of

9

unpaid fees. Defendants do not dispute any of these facts.

10

The Court therefore concludes that there are no genuine issues of material fact

11

with respect to Plaintiff’s breach of contract claim, and that Plaintiff is entitled to

12

judgment as a matter of law on that claim. Fed. R. Civ. P. 56(a). The Court therefore

13

GRANTS Plaintiff’s Motion with respect to the breach of contract claim.

14

However, the Court concludes that there are genuine issues of material fact with

15

respect to the amount of damages caused by Defendants’ breach based on Plaintiff’s

16

failure to mitigate its damages. “A plaintiff who suffers damage as a result of either a

17

breach of contract or a tort has a duty to take reasonable steps to mitigate those

18

damages and will not be able to recover for any losses which could have been thus

19

avoided.”

20

Defendants ceased paying the fees in January 2011 and February 2012, it was not until

21

May 2014—two years later—that Plaintiff demanded that Defendants cure the breach

22

(and then terminated the contract after Defendants failed to do so). There is no

23

explanation for this significant delay, and had Plaintiff notified Defendants and/or

24

terminated the contract earlier, there is a reasonable possibility that the unpaid fees

25

would not have accumulated to its current amount. Defendants are entitled to have a

26

jury decide whether or not Plaintiff took reasonable steps to limit their damages.

Shaffer v. Debbas, 17 Cal. App. 4th 33, 41 (1993).

Here, although

27

The fact that the Court previously limited Plaintiff’s recoverable damages based

28

on a contractual limitations clause is separate from the issue whether or not Plaintiff

2

1

adequately mitigated its damages by not terminating the agreement and/or filing suit

2

earlier.

3

The Court therefore DENIES Plaintiff’s Motion to the extent that it seeks

4

summary judgment on the amount of damages it suffered as a result of Defendant’s

5

breach.

6
7

IT IS SO ORDERED.

8
9

March 8, 2016

10
11
12

____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

3