Snowcreek IV Owners' Assn. v. Amerigas Propane CA3 ( 2021 )


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  • Filed 6/29/21 Snowcreek IV Owners’ Assn. v. Amerigas Propane CA3
    NOT TO BE PUBLISHED
    California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
    publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
    or ordered published for purposes of rule 8.1115.
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    THIRD APPELLATE DISTRICT
    (Mono)
    ----
    SNOWCREEK IV OWNERS’ ASSOCIATION et al.,                                                C090163, C091254
    Plaintiffs and Respondents,                                   (Super. Ct. No. CV190026 )
    v.                                                                      ORDER MODIFYING
    OPINION AND DENYING
    AMERIGAS PROPANE, LP,                                                                PETITION FOR
    REHEARING
    Defendant and Appellant.
    [NO CHANGE IN
    JUDGMENT]
    THE COURT:
    It is ordered that the nonpublished opinion filed herein on June 9, 2021, be
    modified as follows:
    1.        On page 8, the second sentence beginning with “Also the court reasoned
    that propane was not a “critical necessity,” delete the word “not.”
    1
    The sentence will now read:
    Also, the court reasoned that propane was a “critical necessity,” and given
    the underground propane distribution system, customers could not shop for
    alternative propane suppliers.
    This modification does not change the judgment. Appellant’s petition for
    rehearing is denied.
    FOR THE COURT:
    /s/
    BLEASE, Acting P. J.
    /s/
    MURRAY, J.
    /s/
    HOCH, J.
    2
    Filed 6/9/21 Snowcreek IV Owners’ Assn. v. Amerigas Propane CA3 (unmodified opinion)
    NOT TO BE PUBLISHED
    California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
    publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
    or ordered published for purposes of rule 8.1115.
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    THIRD APPELLATE DISTRICT
    (Mono)
    ----
    SNOWCREEK IV OWNERS' ASSOCIATION et al.,                                               C090163, C091254
    Plaintiffs and Respondents,                                   (Super. Ct. No. CV190026 )
    v.
    AMERIGAS PROPANE, LP,
    Defendant and Appellant.
    After plaintiffs Snowcreek IV Owners’ association et al. sued defendant AmeriGas
    Propane, LP for declaratory relief, AmeriGas brought several motions to compel
    arbitration. In this consolidated appeal, AmeriGas appeals from the denial of those
    motions. AmeriGas contends the evidence demonstrated plaintiffs accepted the
    1
    agreement to arbitrate, and a prior agreement from 1987 was immaterial to its motion to
    compel.1
    We affirm.
    FACTUAL AND PROCEDURAL BACKGROUND
    The Complaint
    In early 2019, plaintiffs sued AmeriGas seeking declaratory relief as to their rights
    under a contract governing the sale of propane to their residences. As alleged, the
    Snowcreek Resort is a development near Mammoth Lakes. In 1987, the original owner
    and developer, Dempsey Construction Company, was developing the fourth phase of the
    Snowcreek condominiums. During that phase, Dempsey chose to depart from the “all
    electric” approach used in prior phases, opting instead to use propane for cooking and
    heating in Phase IV condominiums.
    That choice led Dempsey to negotiate a contract with Turner Propane for the
    permanent supply of propane to Snowcreek Resort properties (“the 1987 Agreement”).
    Under the agreement, Turner would receive hundreds of new customers on a “captive and
    permanent basis,” but would be limited in what it could charge for propane. The contract
    provided that Turner would own the infrastructure for storing the propane and delivering
    it to the homes.
    According to the complaint, the Agreement was recorded, and Dempsey created
    the Snowcreek homeowners associations, assigning them and their members Dempsey’s
    rights under the Agreement. In 1996, Turner sold its business to Heritage Propane, which
    honored the pricing formula under the 1987 Agreement.
    1 AmeriGas also contends the arbitration agreement is not unconscionable, the trial
    court’s order was impermissibly premised on rules singling out arbitration agreements for
    disfavored treatment in violation of the Federal Arbitration Act, and remand is not
    required to determine if plaintiffs rejected the arbitration agreement. We need not reach
    these contentions as we conclude AmeriGas failed to establish an agreement to arbitrate.
    2
    In 2012, AmeriGas acquired Heritage Propane. As alleged, AmeriGas raised
    prices and fees in breach of the 1987 Agreement. And following a dispute, in September
    2017, AmeriGas notified customers that, since 2012, it had ignored the 1987 Agreement
    pricing formula and would issue credits in compensation.
    In August of 2018, AmeriGas told the homeowners associations it had made a deal
    with a real estate developer, the Chadmar Group, to terminate the 1987 Agreement.
    Chadmar had purchased undeveloped portions of Snowcreek from Dempsey and had
    continued development. AmeriGas claimed the agreement was terminated not only as to
    Chadmar and future property purchasers’ rights, but as to Snowcreek owners associations
    and their members, whose rights had already been assigned.
    That same month, AmeriGas told the homeowners associations they would have to
    sign new contracts and forgo the permanent favorable pricing if they wanted propane to
    heat their homes after April 1, 2019. Plaintiffs brought this suit in response.2
    The 1987 Agreement
    A copy of the 1987 Agreement was attached to the complaint, and as pertinent to
    this appeal, it recited that Dempsey sought to “secure a permanent propane gas
    distribution supply system” for undeveloped portions of Snowcreek. Turner would
    provide and operate a “permanent propane gas distribution service” and would retain
    ownership of the distribution system, including tanks, pipelines, and meters.
    The Agreement recited that Dempsey intended to create a non-profit homeowners
    association for each subdivision, which would “assume legal and financial responsibility
    2 The complaint also attached an August 2018 order from a small claims court, finding
    for the plaintiff homeowner against AmeriGas. The homeowner had sued AmeriGas over
    the collection of an unauthorized fee. AmeriGas argued, inter alia, that neither the
    individual homeowner nor the residential Snowcreek project he lived in had standing to
    enforce the 1987 Agreement. The small claims court rejected those arguments, finding
    the homeowner and the residential project were third party beneficiaries of the 1987
    Agreement.
    3
    for the administration, management, and operation of the commonly owned areas of the
    projects . . . .” Dempsey was required to “endeavor to do whatever acts and execute
    whatever documents which may be required to assign to such HOMEOWNERS
    ASSOCIATIONS the Benefits, obligations, and duties as contemplated hereunder.” And
    “[u]pon completion of such assignment and delegation, such HOMEOWNERS
    ASSOCIATION shall be deemed in privity of contract with TURNER, thereby relieving
    DEMPSEY of any further responsibility or obligation for such specific projects as
    provided for herein.”
    The agreement also provided that: “Each successor homeowner’s association is
    expressly intended to be and is hereby made an intended third-party beneficiary to the
    provisions of this Agreement.” And “[t]his Agreement is binding on the heirs, assigns,
    executors, administrators, agents, personal representatives, and other lawful successors of
    the parties.” The Agreement also stated: “The parties agree that this Agreement shall be
    recorded and shall run with the land to bind those portions of the Snowcreek Master Plan
    not now developed with real property improvements.”
    Finally, as to modifications, the Agreement stated: “This is the entire agreement
    of the parties. It may be modified only by an instrument in writing signed by all of the
    parties, or, in the case of successor parties, by such successor parties.”
    4
    The Motion to Compel Arbitration as to the Original Plaintiffs
    After answering the complaint,3 AmeriGas moved to compel arbitration against all
    but three plaintiffs.4 It argued its relationship with plaintiffs was governed by the most
    recent “Terms and Conditions,” sent to plaintiffs in 2018. Those Terms and Conditions
    contained an arbitration clause, to which plaintiffs did not opt out.
    AmeriGas stated that as early as 2014, it had sent Terms and Conditions, with each
    iteration modifying the prior version. It argued, “the present action seeks a judicial
    declaration of rights concerning a propane distribution agreement entered into in 1987
    …. However, because Plaintiffs have agreed to arbitrate disputes such as this which
    concern Plaintiffs’ relationship with AmeriGas, the present action should be resolved in
    binding arbitration.”
    AmeriGas also argued that, “[w]hile the 1987 Agreement contains a clause
    concerning modification,[] as alleged successor and/or related parties to the 1987
    Agreement, Plaintiffs’ actions in accepting AmeriGas’ [Terms & Conditions] through
    their conduct since 2014 was an express modification of the terms of the 1987
    Agreement, rendering arbitration appropriate here.”
    3 In its answer, AmeriGas denied plaintiffs had standing or had stated a claim for
    declaratory relief. AmeriGas also wrote that “Plaintiffs are not entitled to relief requested
    in the Complaint because the parties rescinded the contract under which they claim
    entitlement to relief.” And “Plaintiffs are not entitled to relief requested in the Complaint
    because the contract under which they claim entitlement was superseded by subsequent
    contracts.”
    4 As discussed below, AmeriGas did not believe the other three plaintiffs, Greg Newbry,
    Fairway Ranch Owners’ Association, and Ranch at Snowcreek Owners’ Association,
    were customers and moved for summary judgment on that basis. We sometimes refer to
    the group of plaintiffs not including those three as “the original plaintiffs.”
    5
    Attached to the motion was a declaration, providing in pertinent part that plaintiffs
    became AmeriGas customers “following AmeriGas’ acquisition of Heritage Propane in
    January 2012.”
    It also attached copies of the Terms and Conditions sent in 2014, 2015, 2017 and
    2018. The 2014 Terms and Conditions were captioned: “Revised general terms and
    conditions of AmeriGas Propane, L.P. relating to the supply of propane and lease of
    propane related equipment to residential customers.” (Capitalization and bold omitted.)
    In bold, all caps type it stated: “The company’s revised terms and conditions are set forth
    below. …. This notice will modify all prior agreements and will govern your
    relationship with the company.” (Capitalization and bold omitted.)
    Terms and Conditions sent in 2015, 2017, and 2018 included a nearly identical
    caption and bolded language stating that it “modifies or replaces all prior agreements and
    governs your relationship with the company.” (Capitalization and bold omitted.) The
    2018 terms also stated: “Your signature is not required.”
    Plaintiffs’ Opposition to the Motion to Compel
    Opposing the motion, plaintiffs argued the 1987 Agreement did not require
    arbitration and could be modified, “only by an instrument in writing signed by all of the
    parties,” and “[a]n insert that AmeriGas stuffed into a customer’s bill is not a writing,
    signed by that customer.” Plaintiffs also cited the Agreement’s terms that it “ ‘shall be
    recorded and shall run with the land’” and that each homeowners association will “ ‘be
    deemed in privity of contract with Turner’ and now its successor, AmeriGas.”5
    5 The opposition attached an April 4, 2019 letter from AmeriGas to plaintiff Newbry’s
    wife stating: “As a customer service, we committed to charge you discounted pricing
    through April 1, 2019 based on the pricing terms of an outdated and terminated 1987
    Agreement, and to notify you of any change. AmeriGas has negotiated updated pricing
    and terms of service with several homeowners’ associations in Snowcreek.”
    6
    AmeriGas’s Reply
    In reply, AmeriGas argued, “the 1987 Agreement was terminated pursuant to an
    agreement between AmeriGas and Chadmar as successors in interest to the original
    parties to the 1987 Agreement.” And, “[r]egardless of whether the 1987 Agreement was
    terminated and whether Plaintiffs had any rights under that Agreement, however,
    Plaintiffs agreed to arbitrate disputes concerning their relationship with AmeriGas.”
    Also, noting that contracts requiring written modification can still be modified by
    inconsistent conduct of the parties, AmeriGas argued, “Plaintiffs’ practice of repeatedly
    entering into subsequent contracts with AmeriGas from 2014 until the present constitutes
    a clear and unambiguous waiver of any claimed entitlement to the signed-modification
    clause in the 1987 Agreement.”
    The Trial Court’s Ruling Denying the Arbitration Motion
    The trial court denied the motion to compel arbitration. In a written order, it found
    AmeriGas failed in its burden to show the parties had agreed to arbitrate.
    Doing so, it found plaintiffs had not entered into a new bilateral agreement with
    AmeriGas by paying invoices accompanied by the new Terms and Conditions. The court
    explained that cases AmeriGas cited6 to show conduct could bind parties to arbitrate,
    involved the customers initiating a business relationship, the business responding by
    sending a written agreement containing an arbitration clause, and the customer continuing
    to accept the service after receiving the terms. As the trial court explained, those
    businesses were not changing terms of an ongoing relationship but were defining terms at
    the outset. AmeriGas, by contrast, initiated the business relationship by buying Heritage
    6 Wright v. Sirius XM Radio Inc. (C.D.Cal., June 1, 2017, No. SACV1601688JVSJCGX)
    
    2017 WL 4676580
    ; Murphy v. DIRECTV, Inc. (C.D.Cal., Aug. 2, 2011, No. 2:07-CV-
    06465-JHN) 
    2011 WL 3319574
    ; and Bischoff v. DirecTV, Inc. (C.D.Cal. 2002) 
    180 F.Supp.2d 1097
    .
    7
    Propane. And when it sent terms and conditions to plaintiffs, it was not defining terms at
    the outset, but “mid-stream in the business relationship.” Also, the court reasoned that
    propane was not a “critical necessity,” and given the underground propane distribution
    system, customers could not shop for alternative propane suppliers.
    Further, the Terms and Conditions were not enforceable as an express or implied
    modification of an earlier contract. The court noted that a contract requiring written
    modification (such as the 1987 Agreement) can be modified by conduct, if the parties’
    conduct is inconsistent with the written agreement. But there was no evidence that
    plaintiffs’ conduct changed or otherwise became inconsistent with the terms of the 1987
    Agreement. Failing to terminate service after AmeriGas sent new Terms and Conduction
    was not an express or implied acceptance.
    Finally, the court found AmeriGas could not unilaterally add an arbitration clause
    to the existing agreement.7
    The Motion to Compel as to Plaintiff Greg Newbry
    When AmeriGas moved to compel arbitration against the original plaintiffs, it
    moved for summary judgment against plaintiff Greg Newbry averring he was not an
    AmeriGas customer.
    Opposing the motion, Newbry provided a declaration that in 2015, he and his wife
    purchased a home in Snowcreek VI. He also provided a copy of a title report obtained at
    purchase, stating: “An agreement between Turner Gas Company and Dempsey
    Construction Corporation dated June 25, 1987 and recorded August 7, 1987 in book 485
    page 273 of official records. [¶] The interest of Dempsey Construction Corporation was
    7 The trial court also found that even if AmeriGas had met its burden, plaintiffs have
    shown the terms of the arbitration provision are unconscionable and thus unenforceable.
    Although the parties argue unconscionability in the instant appeal, because we conclude
    AmeriGas has failed to show an agreement to arbitrate, we need not address plaintiffs’
    claims of unconscionability.
    8
    assigned to Snowcreek VI Association by assignment dated November 18, 2003 and
    recorded November 18, 2003 as instrument no. 2003012776 of official records. ¶
    Reference is made to said document for full particulars. Said matter affects this and other
    property.” (Capitalization omitted.)
    AmeriGas thereafter withdrew its summary judgment motion as to Newbry, citing
    evidence that Newbry was a customer. AmeriGas then moved to compel Newbry to
    arbitrate, arguing the Terms and Conditions govern their dispute.
    The trial court denied the motion, noting the motion “largely renews the
    arguments made in its earlier motion to compel . . . .” It also rejected an assertion that
    because Newbry bought the home in 2015, he chose to become an AmeriGas customer
    and thus accepted the Terms and Conditions, including the arbitration clause. No
    evidence indicated Newbry had any choice of propane supplier, nor any other option for
    heating the house. And no other factual difference between Newbry and the original
    plaintiffs altered that conclusion.
    The Motion to Compel as to Plaintiffs
    Fairway Ranch Owners’ Association and Ranch at Snowcreek Owners’ Association
    When AmeriGas moved for summary judgment as to Newbry, it also sought
    summary judgment as to plaintiffs Fairway Ranch Owners’ Association and the Ranch at
    Snowcreek Owners’ Association on the same ground: they were not customers and
    therefore lacked standing.
    In opposition, the Fairway Ranch Owners’ Association provided a declaration of
    its president that it was formed in 1993 by Dempsey and is a successor-in-interest to
    Dempsey under the 1987 Agreement. The association is also empowered to “institute,
    defend, settle or intervene in litigation” on behalf of its members.
    The Ranch at Snowcreek Owners’ Association provided a similar declaration,
    stating the association was formed in 1986 by Dempsey and is a successor-in-interest
    under the 1987 Agreement.
    9
    The trial court denied summary judgment, finding a triable controversy as to
    whether plaintiffs were successors-in-interest or third-party beneficiaries under the 1987
    Agreement and their rights under the agreement.
    AmeriGas then moved to compel arbitration against the two associations, arguing
    their claims were intertwined with AmeriGas’s Terms and Conditions, and as agents of
    their members, the associations were bound by their member’s arbitration commitments.
    The trial court again denied the motion to compel arbitration. It explained that
    having already found that the customer plaintiffs had not agreed to arbitrate, the
    associations of those plaintiffs could not be bound to arbitrate.8
    DISCUSSION
    On appeal, AmeriGas challenges the denial of its motion to compel arbitration as
    to the original plaintiffs, as well as its subsequent motions as to plaintiffs Newbry,
    Fairway Ranch Owners’ Association, and Ranch at Snowcreek Owners’ Association.
    We review the denial of a motion to compel arbitration for substantial evidence.
    (Brown v. Wells Fargo Bank, N.A. (2008) 
    168 Cal.App.4th 938
    , 953.) But if no facts are
    disputed, review is de novo. (Ibid.) Where material facts are disputed, we accept the trial
    court’s resolution of disputed facts if supported by substantial evidence, and we presume
    the court found every fact and drew every permissible inference necessary to support the
    judgment. (Ibid.)
    I. The Challenge as to the Original Plaintiffs
    As to the plaintiffs in the original motion to compel, AmeriGas argues the
    evidence demonstrates plaintiffs accepted the arbitration agreement. It points to the
    updated Terms and Conditions mailed with bills in 2014, 2015, 2017 and 2018, all of
    which included an arbitration clause. It argues that plaintiffs could have rejected the new
    8 It also rejected AmeriGas’s estoppel and agency arguments and concluded the
    arbitration terms were, in any event, unconscionable.
    10
    provisions as a whole by terminating service or as to the arbitration clause alone by
    sending an opt-out notice. But by continuing to use AmeriGas propane, plaintiffs
    accepted the terms, including arbitration. We disagree.
    A. AmeriGas’s Burden to Show an Agreement to Arbitrate
    The trial court properly found that AmeriGas failed to show the parties agreed to
    arbitration. While AmeriGas presented evidence that it sent plaintiffs successive Terms
    and Conditions, it failed to show plaintiffs accepted those terms and conditions, as a
    modification of the 1987 Agreement, by continuing to accept propane and paying bills.
    To be sure, implied acceptance can be found through a customer’s decision to
    continue doing business after the terms of the agreement are modified to include an
    arbitration clause. (See e.g. Serafin v. Balco Properties Ltd., LLC (2015) 
    235 Cal.App.4th 165
    , 176 [“Evidence confirming the existence of an agreement to arbitrate,
    despite an unsigned agreement, can be based, for example, on ‘conduct from which one
    could imply either ratification or implied acceptance of such a provision’”].) But of the
    cases AmeriGas cites for that point, none involves a prior agreement permitting
    modification only with a “writing signed by all of the parties.”9
    Further, while a writing requirement for modification can be waived by
    inconsistent conduct of the parties, no such conduct is present here. (See Daugherty Co.
    v. Kimberly-Clark Corp. (1971) 
    14 Cal.App.3d 151
    , 158 [“[a]n agreement to modify a
    written contract will be implied if the conduct of the parties is inconsistent with the
    written contract so as to warrant the conclusion that the parties intended to modify it”];
    Biren v. Equality Emergency Medical Group, Inc. (2002) 
    102 Cal.App.4th 125
    , 141
    9 AmeriGas cites Craig v. Brown & Root, Inc. (2000) 
    84 Cal.App.4th 416
    , 420;
    Ackerberg v. Citicorp USA, Inc. (N.D.Cal. 2012) 
    898 F.Supp.2d 1172
    , 1173; Cayanan v.
    Citi Holdings, Inc. (S.D.Cal. 2013) 
    928 F.Supp.2d 1182
    , 1189; and Mandel v. Household
    Bank (Nevada) (2003) 
    105 Cal.App.4th 75
    , 81-82 (review granted, then dismissed).
    11
    [where evidence shows it was their intent, parties may, by their conduct, waive provision
    requiring writing for modification]; Garrison v. Edward Brown & Sons (1944) 
    25 Cal.2d 473
    , 479 [same].) Here, continuing to accept and pay for propane is neither inconsistent
    with the 1987 Agreement, nor indicative of intent to waive the modification provision.
    To that point, AmeriGas argues it “has not argued that the parties’ conduct alone
    modified an existing written agreement,” but instead by mailing Terms and Conditions to
    plaintiffs, it was entering into “a separate bilateral contract.” And thus, the court “does
    not need to look for inconsistencies in the parties’ course of performance to infer a
    modification occurred.”
    We find this argument disingenuous in several respects. For one, the Terms and
    Conditions mailed to plaintiffs expressly stated they were modifying an existing contract:
    “The company’s revised terms and conditions are set forth below. …. This notice will
    modify all prior agreements and will govern your relationship with the company.”
    (Capitalization omitted; Italics added.) For another, AmeriGas cannot sidestep a writing
    requirement in a contract by simply deeming a modification a separate bilateral contact
    — particularly where the purported separate bilateral contract governs the same subject
    matter as the original contract and effectively supplants it.
    In sum, the Terms and Conditions mailed to plaintiffs, along with plaintiffs’
    conduct of continuing to accept and pay for propane, did not modify the 1987 Agreement
    because it did not constitute a “writing signed by all of the parties.” The trial court
    therefore properly found AmeriGas had not met its burden.
    B. Plaintiffs’ Burden
    Undeterred, AmeriGas maintains that “no evidence was presented establishing that
    Plaintiffs were parties to the 1987 Agreement, such that AmeriGas’s Terms & Conditions
    would need to modify that earlier agreement.” It reasons that while the petitioner must
    prove the existence of a valid arbitration agreement, the party opposing arbitration bears
    12
    the burden of proving any fact necessary to its defense.10 And AmeriGas maintains that
    plaintiffs introduced no evidence as to their status vis-à-vis Snowcreek developments —
    such as “whether the individuals resided in the Snowcreek developments and whether
    they were owners, tenants, roommates or guests.”11 Similarly, while acknowledging the
    1987 Agreement contemplates the creation of homeowners associations, AmeriGas
    argues it “does not . . . understand such transfers to have occurred,” and maintains
    Chadmar (which acquired Dempsey) is the sole successor to Dempsey’s rights under the
    1987 Agreement.
    Plaintiffs respond that these arguments are forfeited by failing to raise them before
    the trial court. We agree with plaintiffs.
    AmeriGas’s belated contention that plaintiffs are not successors to the 1987
    Agreement is forfeited. “The parties must call the court’s attention to issues they deem
    relevant.” (North Coast Business Park v. Nielsen Construction Co. (1993) 
    17 Cal.App.4th 22
    , 28.) Parties may not change position, adopting new and different
    theories on appeal. (Id. at p. 29.) Doing so is not only unfair to the trial court, but “
    ‘manifestly unjust to the opposing party.’ ” (Ibid.) Accordingly, “points not raised in the
    trial court will not be considered on appeal.” (Dimmick v. Dimmick (1962) 
    58 Cal.2d 417
    , 422.) Otherwise, “ ‘ “ ‘ “ ‘the party would in most cases be careful to be silent as to
    10  AmeriGas cites in support Rosenthal v. Great Western Fin. Securities Corp. (1996) 
    14 Cal.4th 394
    , 413 [“If the party opposing the petition raises a defense to enforcement —
    either fraud in the execution voiding the agreement, or a statutory defense of waiver or
    revocation … that party bears the burden of producing evidence of, and proving by a
    preponderance of the evidence, any fact necessary to the defense”]) and Engalla v.
    Permanente Medical Group, Inc. (1997) 
    15 Cal.4th 951
    , 972 [“a party opposing the
    petition bears the burden of proving by a preponderance of the evidence any fact
    necessary to its defense”] citing Rosenthal, at p. 413.
    11 It similarly argues that the party assignee asserting rights has the burden of proving
    the assignment.
    13
    his objections until it would be too late to obviate them, and the result would be that few
    judgments would stand the test of an appeal.’ ” ’ ” ’ ” (Keener v. Jeld-Wen, Inc. (2009)
    
    46 Cal.4th 247
    , 265.)
    Here, AmeriGas not only failed to raise challenges to plaintiffs’ status as
    successors below, it provided evidence implying the opposite. In moving to compel
    arbitration, AmeriGas provided a declaration that the original plaintiffs became
    AmeriGas customers “following AmeriGas’ acquisition of Heritage Propane in January
    2012.” AmeriGas also provided copies of mailed Terms and Conditions purporting to
    “modify all prior agreements . . . .” (Capitalization omitted.) Indeed, the thrust of
    AmeriGas’s arguments in the trial court was not that the 1987 Agreement never applied
    to plaintiffs, it was that the agreement was either terminated by Chadmar or modified or
    replaced by the Terms and Conditions.
    And one need only look to plaintiff Newbry to see how this belated challenge has
    sandbagged the original plaintiffs. When AmeriGas timely claimed that Newbry was not
    a customer and moved for summary judgment on that ground, Newbry provided a copy
    of a 2015 title report, providing that: “An agreement between Turner Gas Company and
    Dempsey Construction Corporation dated June 25, 1987 and recorded August 7,
    1987 . . . . [¶] The interest of Dempsey Construction Corporation was assigned to
    Snowcreek VI Association by assignment dated November 18, 2003 and recorded
    November 16, 2003 . . . .”12 This example illustrates that timely challenges can be
    answered. But having not made the challenge in the trial court, the original plaintiffs can
    no longer do so here on appeal.
    12 As noted, plaintiffs Fairway Ranch Owners’ Association and Ranch at Snow Creek
    Owners’ Association similarly provided declarations that they were formed by Dempsey
    and are successors in interest.
    14
    Because plaintiffs were deprived of the opportunity to respond in the trial court,
    we conclude that the challenge forfeited. (See Imagistics Internat., Inc. v. Department of
    General Services (2007) 
    150 Cal.App.4th 581
    , 584 fn. 2 [“Pursuing reversal on a basis
    that might have been timely resolved in the trial court is a disapproved tactic that wastes
    the resources of the litigants and this court, and we generally do not permit it”].)
    C. Substantial Evidence
    In its reply brief, AmeriGas argues that it is in fact raising a substantial evidence
    challenge to the fact that plaintiffs are successors under the 1987 Agreement. And it
    notes that a substantial evidence challenge is not subject to waiver. (Tahoe National
    Bank v. Phillips (1971) 
    4 Cal.3d 11
    , 23 fn. 17 [“The contention that a judgment is not
    supported by substantial evidence … is an obvious exception to the rule”].)
    While a substantial evidence challenge is indeed not subject to forfeiture, this
    principal cannot resurrect an argument not raised below. Still, to the extent, AmeriGas
    challenges the material facts supporting the trial court’s ruling, we review the record in
    that regard and conclude substantial evidence supports the trial court’s ruling. (See
    Brown v. Wells Fargo Bank, N.A., supra, 168 Cal.App.4th at p. 953 [Where material facts
    are disputed, we accept the trial court’s resolution of disputed facts if supported by
    substantial evidence, and we presume the court found every fact and drew every
    permissible inference necessary to support the judgment].)
    As we have explained, the trial court properly found AmeriGas failed to carry its
    burden of establishing an agreement to arbitrate. That finding was supported by ample
    evidence. A copy of the 1987 Agreement, governing the sale of propane to Snowcreek
    residence by Turner Propane, is part of the record. Its terms provide that it “shall run
    with the land to bind those portions of the Snowcreek Master Plan not now developed
    with real property improvements.” No party disputes that Turner sold its business to
    Heritage Propane, which began supplying propane to Snowcreek residents.
    15
    Consistent with that, AmeriGas provided a declaration that the original plaintiffs
    became AmeriGas customers “following AmeriGas’ acquisition of Heritage Propane in
    January 2012.” In its motion to compel, AmeriGas referred to itself (along with
    Chadmar), as “successors in interest to the original parties to the 1987 Agreement.” And
    the Terms and Conditions AmeriGas sent customers, between 2014 and 2018, purported
    to, “modif[y] or replace[] all prior agreements”
    Tellingly, while AmeriGas moved for summary judgment against several plaintiffs
    on the ground that they were not customers, it did not do so for the original plaintiffs.
    Nor did AmeriGas point to anything other than the 1987 Agreement that might have
    governed the sale of propane to those plaintiffs prior to 2014, when AmeriGas began
    mailing terms and conditions purporting to modify the agreement.
    Given this evidence and permissible inferences drawn therefrom, we accept the
    trial court’s resolution of disputed facts and accordingly conclude the trial court’s ruling
    was supported by substantial evidence.
    II. The Challenge as to Newbry
    In a separate appeal we have consolidated, AmeriGas contends plaintiff Greg
    Newbry is bound to arbitrate for the same reasons as the original plaintiffs. AmeriGas
    also argues the case is even stronger as to Newbry because he did not own the property
    when AmeriGas acquired Heritage in 2012. Instead, Newbry, who bought the property in
    2015, had to take affirmative steps in reaching out to AmeriGas to sign up for service,
    and therefore there was an explicit acceptance of AmeriGas’s Terms & Conditions.13 We
    disagree.
    The evidence shows that when Newbry purchased his home, the sale of propane
    was governed by the 1987 agreement, as exhibited in the title report obtained at purchase.
    13 Newbry’s wife opened the AmeriGas account. The parties agree this does not alter
    the analysis: “if his wife must arbitrate, so must he.”
    16
    Thus, Newbry was in the same position vis-à-vis AmeriGas as the original plaintiffs.
    And as we have rejected the argument that the original plaintiffs expressly or impliedly
    accepted the arbitration provision, we reach the same conclusion as to Newbry.14
    III. The Challenge as to Fairway Ranch Owners’ Association &
    Ranch at Snow Creek Owners’ Association
    Finally, as to Fairway Ranch Owners’ Association and Ranch at Snow Creek
    Owners’ Association, AmeriGas contends these associations are agents of their members
    and thus bound to arbitrate. But as we have held that AmeriGas has failed to show any
    agreement to arbitrate as to any plaintiff, we need go no further than to conclude that with
    no members of these two associations bound to arbitrate, and no indication the
    associations themselves separately agreed to arbitrate, the trial court properly concluded
    AmeriGas had failed to show an agreement to arbitrate as to these associations.15
    *****
    14 AmeriGas also challenges the trial court’s ruling that “ ‘it is not clear that Newbry
    “chose” to become an AmeriGas customer.’ ” We need not reach that specific
    contention, in light of our holding.
    15 Having so concluded, we do not address AmeriGas’s contentions regarding equitable
    estoppel and agency, and whether those doctrines compel the associations to arbitrate on
    behalf of their residents.
    17
    DISPOSITION
    The judgment is affirmed. Plaintiffs shall recover their costs on appeal. (Cal.
    Rules of Court, rule 8.278(a)(1).)
    /s/
    MURRAY, J.
    We concur:
    /s/
    BLEASE, Acting P. J.
    /s/
    HOCH, J.
    18
    

Document Info

Docket Number: C090163M

Filed Date: 6/29/2021

Precedential Status: Non-Precedential

Modified Date: 6/29/2021