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1-800-Got Junk? LLC v. Superior Court of Los Angeles County

116 Cal. Rptr. 3d 923 (2010)

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1-800-Got Junk? LLC v. Superior Court of Los Angeles County

California Court of Appeal

116 Cal. Rptr. 3d 923 (2010)

Facts

1-800-Got-Junk? LLC (Got Junk) (plaintiff) is a multistate junk-removal franchisor headquartered in Vancouver, British Columbia, Canada. Got Junk entered in a franchise agreement with Millennium Asset Recovery Inc. (Millennium) to operate a Got Junk franchise in Southern California. The franchise agreement specified that it must be construed and interpreted according to the laws of the State of Washington. Subsequently, Got Junk terminated Millenium’s franchise for failing to report and pay a percentage of revenue on certain jobs. Millennium sued Got Junk in California state court, contending that the termination was wrongful under Washington law. Washington law allowed a franchisor to summarily terminate a franchise without affording an opportunity to cure in only four circumstances, apparently not triggered in Millennium’s case. In contrast, Got Junk argued for application of California law, which allowed a franchisor to summarily terminate a franchise without affording an opportunity to cure in 11 circumstances and which prohibited any waiver of statutory protections afforded to franchisees. In support of the application of California law, Got Junk’s founder declared that he was not aware of any reason why the franchise agreement contained a Washington choice-of-law provision. The trial court decided that Washington law should apply. Got Junk filed a petition for writ of mandate to compel the state court (defendant) to apply California law.

Rule of Law

Issue

Holding and Reasoning (Klein, C.J.)

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