Gladys Fleetwood v. Stanley Steemer International

FILED
NOT FOR PUBLICATION AUG 09 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
ANTHONY and GLADYS No. 10-35922
FLEETWOOD, husband and wife; et al.,
D.C. No. 2:09-cv-00152-LRS
Plaintiffs - Appellants,
v. MEMORANDUM *
STANLEY STEEMER
INTERNATIONAL,
Defendant - Appellee.
Appeal from the United States District Court
for the Eastern District of Washington
Lonny R. Suko, District Judge, Presiding
Argued and Submitted July 15, 2011
Seattle, Washington
Before: GILMAN,** CLIFTON, and N.R. SMITH, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Ronald Lee Gilman, Senior Circuit Judge for the Sixth
Circuit, sitting by designation.
1. The district court did not err in granting summary judgment to Stanley
Steemer International on Appellants’1 claim that Stanley Steemer breached the
implied duty of good faith and fair dealing with regard to its contractual duty to
provide advice, counseling, and management assistance. The covenant of good
faith cannot override the express terms of the parties’ agreement. It does not
“obligate a party to accept a material change in the terms . . . [n]or does it inject
substantive terms into the parties’ contract.” Badgett v. Sec. State Bank, 807 P.2d
356, 360 (Wash. 1991) (internal quotation marks and citations omitted). At most,
Appellants have evidenced only that the advice Stanley Steemer provided was
unsound. See In re Sizzler Rests. Int’l, Inc., 225 B.R. 466, 474-76 (Bankr. C.D.
Cal. 1998) (“actual dishonesty” or actions outside accepted commercial practices
required to show bad faith). The franchise agreement expressly acknowledged that
there were risks involved in purchasing a franchise and advised Appellants to seek
outside advice. There is no evidence in the record that Stanley Steemer knew that
Fleetwood’s franchise was “out of control” or “going to have problems.” Because
Appellants have not pointed to any evidence that Stanley Steemer knew that the
1
Appellants are Anthony and Gladys Fleetwood, Wolverine, Inc., and Rex
and Lucinda Rozmus.
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advice it gave was unsound or that it was given for the purpose of causing the
franchises to fail, summary judgment was proper.
2. Because, as Appellants acknowledge, Washington’s Franchise Investment
Protection Act’s (FIPA) good faith requirement is similar to the duty of an implied
covenant of good faith and fair dealing, the district court did not err in granting
summary judgment to Stanley Steemer on this claim.
3. A violation of FIPA’s good faith requirement in Revised Code of
Washington § 19.100.180(1) is not an unfair or deceptive practice under the
Consumer Protection Act (CPA). See RCW § 19.100.180(2) (listing “unfair or
deceptive act[s]”) and § 19.100.190(1) (providing that “unfair or deceptive acts . . .
prohibited by RCW 19.100.180” are violations of the CPA). Further, there is no
violation of the CPA, because, as experienced businessmen, Appellants cannot
demonstrate the required public interest. Goodyear Tire & Rubber Co. v.
Whiteman Tire, Inc., 935 P.2d 628, 635 (Wash. Ct. App. 1997).
4. The district court did not err in granting summary judgment to Stanley
Steemer on Appellants’ fiduciary duty claims, because any fiduciary relationship
was unambiguously disclaimed by the franchise agreement’s express terms. A
franchise relationship is not a traditional fiduciary relationship, Corp v. Atl.
Richfield Co., 860 P.2d 1015, 1022 (Wash. 1993) (en banc), and Appellants have
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not shown “factual proof” of a fiduciary duty, see Liebergesell v. Evans, 613 P.2d
1170, 1176 (Wash. 1980).
AFFIRMED.
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