Free Amended Complaint - District Court of California - California

Case 5:07-cv-04808-JF

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Filed 10/18/2007

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KURT OSENBAUGH (State Bar No. 106132) DEBORAH YOON JONES (State Bar No. 118127) SA YAKA KARITANI (State Bar No. 240122) WESTON, BENSHOOF, ROCHEFORT, RUBALCA V A & MacCUISH LLP 333 South Hope Street Sixteenth Floor Los Angeles, California 90071
Telephone: (213) 576-1000

Facsimile: (213) 576-1100

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EmaIl: kosenbaugh(£wbcounse1.com

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skari tann(£wbcounse1. com

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Attorneys for Plaintiffs BP WEST COAST PRODUCTS LLC and ATLANTIC RICHFIELD COMPANY

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA
BP WEST COAST PRODUCTS LLC, a Delaware Limited Liability Company; and ATLANTIC RICHFIELD COMPANY, a
Delaware Corporation,

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Case No.: C07 04808 RS

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FIRST AMENDED COMPLAINT FOR:

Plaintiff,
v.

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(1) DECLARATORY RELIEF UNDER THE PETROLEUM MARKTING PRACTICES ACT
rrs U.S.C. && 2801, et seq.l;

STTN ENTERPRISES, INC., a California C01)oration~ NAZIM F AgUIRY AN, an

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individual; ~A YED F AQl IRY AN, an individual; and MAGHVL F AQUIRY AN, an individual; and A V A GLOBAL

(2) BREACH OF CONTRACT GASOLINE AGREEMENT; (3) BREACH OF CONTRACT -

MINI MARKT AGREEMENT;

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ENTERPRISE, LLC, a California limited liability company,
Defendants.

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(4) BREACH OF FRANCHISE GUARANTIES; (5) COMMON COUNT - GOODS SOLD AND DELIVERED; (6) UNJUST ENRICHMENT; (7) BREACH OF CONTRACT MINI MARKT LOAN AGREEMENT; (8) BREACH OF MINI MARKET LOAN GUARANTIES;

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(9) JUDICIAL FORECLOSURE;

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(10) FEDERAL TRADEMARK, TRADE NAME, AND SERVICE MARK INFRINGEMENT AND DILUTION. (11) COMMON LAW UNFAIR COMPETITION; (12) TRADEMARK INFRINGEMENT UNDER
FIRST AMENDED COMPLAINT

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PROFESSIONS CODE § 14320 AND § 14330. and

CALIFORNIA BUSINESS &

(13) VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS
CODE && 17200 ET SEQ. & 17500 ÈT SEQ.

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Filing Date: September 17, 2007

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Plaintiffs BP West Coast Products LLC ("BPWCP") and Atlantic
Richfield Company ("ARCO") allege as follows:

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SUMMARY OF CLAIMS
1.

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This suit involves BPWCP's former gasoline station and mmi

market franchise located in Hollister, California. BPWCP and ARCO seek damages,

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declaratory relief and injunctive relief based upon Defendants' breaches of the
applicable franchise agreements, breaches of a related loan agreement, breaches of
individual guaranties, and ongoing trademark violations.
2. The Defendants breached the franchise agreements by failing to

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pay for over $126,000 worth of ARCO-branded gasoline and failing to operate the
station and sell gasoline product for approximately 15 consecutive days. BPWCP

bent over backwards to give Defendants multiple opportunities to correct the defaults.

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Defendants acknowledged their obligation to pay for the gasoline and BPWCP even
agreed to a payment plan. Nonetheless, Defendants failed to pay for the gasoline and

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failed to operate the station and sell gasoline product for at least 15 consecutive days

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in violation of the franchise agreements. As such, BPWCP terminated the franchise
agreements.
3.
By virtue of the franchise breaches, the Defendants have also

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defaulted on a $150,000 loan that was given by BPWCP to the franchisee for purposes

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of refurbishing the mini market store. The loan was secured by the real property on
which the gasoline station and mini market were located as well as the fixtures located
thereon. Given the franchise termination and Defendants' loan defaults, the entire
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loan indebtedness has accelerated and is now due. Defendants are required to pay the

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$150,000 loan balance to BPWCP and, to date, they have refused to do so.
Accordingly, BPWCP moves for judicial foreclosure on the $150,000 loan and seeks
damages for breach of the loan agreement and guaranties.
4. Finally, in addition to their breaches of the franchise agreements,

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loan agreements, and related guaranties, Defendants have been infrnging upon
registered trademarks, trade names, and service marks by continuing to use and
display BPWCP and ARCO proprietary logos, graphics and branded products and
trade names (as well as those belonging to BP Products North America, Inc. and BP,

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P.L.C.). ARCO is the registered owner of these marks. BPWCP is ARCO's
transferee of the marketing and refining assets, which include these marks.

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Defendants have blatantly ignored the demands to cease the trademark violations and
as a result, BPWCP and ARCO continue to be damaged. Thus, in addition to the

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damages, BPWCP and ARCO seek a restraining order and permanent injunction: (a)
requiring Defendants to return or destroy trademarked products, (b) preventing

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Defendants from using the am/pm and ARCO trademarks, trade names, service marks
and proprietary materials, and (c) requiring an equitable accounting and equitable

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disgorgement of all wrongfully obtained revenues and/or profits. BPWCP and ARCO

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seek an order imposing treble damages, exemplary damages, and attorneys' fees and
costs against Defendants.

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5.

THE PARTIES
Plaintiff BPWCP is qualified to do business in California and is a

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limited liability company organized and existing under the laws of the State of
Delaware. BPWCP was, at all relevant times hereto, the franchisor for ARCO-

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branded service stations and am/pm mini market convenience stores including the
facility at issue in this litigation. In addition, BPWCP is a subsidiary of BP Products
North America, Inc., which is a registered owner of one of the trademarks at issue in
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this litigation. BPWCP has the right to utilize these trademarks in connection with its ARCO-branded gasoline station and am/pm mini market franchises, has a cognizable

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interest in the infringed upon mark, and therefore has a right to bring the trademark
infringement action.
6.

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Plaintiff ARCO is qualified to do business in California, and is a

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corporation organized and existing under the laws of the State of Delaware. ARCO is

the registered owner of the "ARCO" and "am/pm" trade names, trademarks, and
service at issue in this lawsuit. As ARCO's transferee of the marketing and refining
assets, which includes ARCO's registered trademarks, trade names and service marks,

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BPWCP has the authority to license to its franchisee dealers the right to use ARCO's

trade names, trademarks, and service marks in connection with the resale of ARCObranded motor fuels and the operation of the am/pm mini market convenience stores.
Collectively, BPWCP and ARCO are referred to hereinafter as "Plaintiffs."
7. Plaintiffs are informed and believe that defendant STTN
Enterprises, Inc. ("STTN") is, and at all relevant times hereto was, a California

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corporation, which has offices and does business in San Benito County, California.

STTN is the former franchisee for the facility located at 631 San Felipe Road,
Hollister, California 95035 (the "Station").
8.
Plaintiffs are informed and believe that defendant N azim

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Faquiryan and Sayed Faquiryan are individuals residing in the City of Hollister,
County of San Benito, State of California. BPWCP is informed and believes that, at
all relevant times hereto, Nazim Faquiryan and Sayed Faquiryan were and are the sole

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shareholders of STTN and individual guarantors for the Station franchise. BPWCP is
also informed and believes that Sayed Faquiryan is the father of

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Nazim Faquiryan.

9. Plaintiffs are informed and believe that defendant Maghul

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Faquiryan is an individual residing in the City of Hollister, County of San Benito,
State of California. BPWCP is informed and believes that, at all relevant times hereto,
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Maghul Faquiryan was and is the spouse of Sayed Faquiryan and an individual

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guarantor for the loans related to the Station franchise.
10.

Plaintiffs are informed and believe that defendant AVA Global

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Enterprises, LLC ("A V A Global") is, and at all relevant times hereto, was and is a

California limited liability company, which has offices and does business in San

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Benito County, California. AVA Global's address, according to the California
Secretary of State business search website, is 631 San Felipe Road, Hollister,

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California (which is the same address as the Station). At all relevant times, STTN
leased the real property upon which the Station is located ("Real Property") from

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A VA Global Enterprise, LLC ("AVA Global"). AVA Global is the fee simple owner
of the Real Property. Plaintiffs are informed and believe that individual Defendant

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Nazim Faquiryan is one of the two equal shareholders of AVA GlobaL. The other
50% shareholder of AVA Global is not named individually in this action.
11. Plaintiffs are informed and believe that STTN, Nazim Faquiryan,

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Sayed Faquiryan, Maghul Faquiryan, and AVA Global, (collectively, "Defendants"),
and each of them, in committing the acts and omissions alleged in this First Amended
Complaint acted as agents and servants of the other Defendants, acted within the
scope of their authority as agents and servants of the other Defendants, acted in

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concert with the other Defendants with a design and for the purposes of injuring
BPWCP and ARCO and of unlawfully benefiting some or all of

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Defendants, or, in the

alternative, approved and ratified the acts and omissions of the other Defendants or

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third parties, such that each of the Defendants is jointly and severally liable for the
acts and omissions of each other Defendants.

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JURISDICTION AND VENUE
12.

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This action concerns, inter aha, the termination of a service station

franchise relationship, which is governed by the Petroleum Marketing Practices Act,
15 U.S.C. §§ 2801, et seq. (the "PMPA"). Accordingly, this Court has jurisdiction
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over BPWCP's and ARCO's claims, by virtue of 28 U.S.C. § 1331 and 15 U.S.C. §
2805(a), and this Court's pendent jurisdiction. Furthermore, this Court has

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jurisdiction pursuant to 28 U.S.C. § 1331, 28 U.S.C. §§ 1338(a) and (b), and 28
U.S.C. § 2201, because this is a civil action seeking declaratory relief under the

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PMP A. In addition, given the infringement and dilution claims, this Court also has
subject matter jurisdiction over this action pursuant to the Lanham Act, 15 U.S.C. §§

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1051-1127. The amount in controversy exceeds the sum or value of$75,000.00.
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Venue is proper in the Northern District of California pursuant to
the events or omissions giving rise

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28 D.S.C. § 1391(b) because a substantial part of

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to BPWCP's and ARCO's claims occurred in this District; because the subject
franchise is located in this District; and because BPWCP and ARCO are informed and
believe that the individual Defendants reside in this District.

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GENERAL ALLEGATIONS
The Franchise A2reements

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14. BPWCP is engaged in the marketing and distribution of motor fuel
in the State of California and elsewhere in the United States. BPWCP currently has

ARCO-branded gasoline stations with am/pm mini market convenience stores located
throughout the Western States. Among its activities, BPWCP sells ARCO-branded

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motor fuels to franchisees and, at certain of its properties, BPWCP offers am/pm mini

market convenience store franchises to be operated concurrently with the gasoline
stations. Pursuant to franchise agreements, BPWCP licenses to its franchisee dealers

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the right to use ARCO's trade names, trademarks, and service marks in connection
with the resale of ARCO-branded motor fuels and the operation of the am/pm mini

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market convenience stores; Franchisee dealers pay a royalty for use of this right.
ARCO is the registered owner of these trademarks, service marks, and trade names
and has the right to enforce any violations thereof. BPWCP has the right to utilize

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these marks in connection with its ARCO and am/pm franchises.
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15.

The franchise relationship between STTN and BPWCP is governed

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by written agreements, principal among them are: (1) a Contract Dealer Gasoline
Agreement, which includes any and all amendments and addendums ("Gasoline

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Agreement"), and (2) an am/pm Mini Market Agreement, which includes any and all

amendments and addendums ("Mini Market Agreement"). The Gasoline Agreement
and Mini Market Agreement are each effective as of July 11, 2006. True and correct
copies of the Gasoline Agreement and Mini Market Agreement are attached hereto as

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Exhibit A and Exhibit B, respectively, and are incorporated herein as though fully set

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forth at length. The Gasoline Agreement and Mini Market Agreement contain an
expiration date of July 12, 2026.
16. On June 20, 2006, Defendants Sayed Faquiryan and Nazim

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Faquiryan each signed a Guaranty Agreement and individually guaranteed the

obligations owed by STTN to BPWCP under the Mini Market Agreement and
Gasoline Agreement ("Franchise Guaranties").

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True and correct copies of the

Franchise Guaranties are collectively attached hereto as Exhibit C, and are
incorporated herein as though fully set forth at length. The Mini Market Agreement,
the Gasoline Agreement, and the Franchise Guaranties shall be referred to collectively
as the "Franchise Agreements."
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The purposes of the Franchise Agreements are to provide locations

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at which ARCO-branded petroleum products can be sold to the public by franchisees

such as STTN, and to provide locations where customers of the service stations may
purchase store goods.

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18. The Franchise Agreements set forth the obligations and
undertakings required of STTN, which are material to the operation of a BPWCP

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franchise. The pertinent provisions of the Franchise Agreements provide, inter aha,
that:
(a) The franchisee must "exert good faith efforts to carr out the

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provisions of this Agreement following wrtten notice to Buyer from BPWCP of such
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failure and fifteen calendar days to cure such failure." (See Gasoline Agreement,
~ 17.1 (a), Exhibit A.J;
(b)

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The franchisee is also required to "order and make available

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for retail sale all grades of Gasoline which BPWCP offers to Buyer (hereinafter
collectively, "Product"), in amounts sufficient to satisfy all foreseeable retail customer

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demand for Product at the Premises and will at all times have available for sale some
of each grade of

Product . . .." (See Gasoline Agreement, Article 2, Exhibit A.J;

(c)

The franchisee is also required to "pay the price specified by

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BPWCP in effect at the time and place of delivery for purchasers of Buyer's class of
trade" and by "electronic funds transfer initiated by BPWCP, wire transfer, cashier's

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check or business check, whichever BPWCP directs, delivered by Buyer at the time
and place as designated by BPWCP." (See Gasoline Agreement, Articles 5 and 6,

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Exhibit A.J; and

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(d) The franchisee is also required to conduct all of its
operations of the Station, including the Mini Market, under the terms and conditions
of each of the Franchise Agreements. (See Mini Market Agreement, Section 4.05,
Exhibit B.J

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The Loan A2reements
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In addition to the requirements concerning operation of

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the Station,

the Franchise Agreements also required STTN to complete a remodel or retrofit of the

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Station within nine (9) months of the commencement of the franchise relationship.

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(See Gasoline Agreement, Section 1.2, Section 5.03(a), Exhibit A; Mini Market Agreement, Exhibit B.J BPWCP assists its franchisees in complying with these
"remodel and retrofit" requirements by offering a special loan program to provide

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funds specifically for completing constrction and remodeling at its franchise
locations. Specific details of the loan program are described below, however,

generally, under BPWCP's loan program if a franchisee meets certain yearly
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gallonage and store sale requirements a portion of the loan is deemed repaid at the end
of each year term. Thus, as long as a franchisee sells a specified amount of gasoline

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product and/or store products each year for the duration of the loan term, the loan
payments for that year are deemed repaid. Furthermore, the franchisee enjoys the use

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of a remodeled and retrofitted station which, in turn, attracts more customers and
therefore generates more income and profit for the franchisee.
20. On February 12, 2007, BPWCP and STTN entered into two Loan

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Agreements, whereby BPWCP agreed to loan STTN the total sum of $475,000 to be
used toward BPWCP-approved capital improvements for the Station.

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The am/pm Mini Market Loan A2reement

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21 . The first loan agreement - - the "am/pm Mini Market Loan
Agreement" - - provided a base loan in the amount of $150,000 to fund the costs
associated with pre-approved modifications and/or equipment and improvements to

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the am/pm Mini Market (hereinafter, "Store Loan Agreement"). The Store Loan
Agreement also included an additional $75,000 that BPWCP could elect to disburse
for refreshing and refurbishing the am/pm Mini Market on the eleventh anniversary of
the base loan disbursement. A tre and correct copy of the Store Loan Agreement is

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attached hereto as Exhibit D, and is incorporated herein as though fully set forth at
length.
22.

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Pursuant to the Store Loan Agreement, the loan was interest-free

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but was conditioned upon Defendants' agreement to pay five percent (5%) of the
loaned amount each year over the course of 20 years, or alternatively, sell
merchandise in the am/pm Mini Market in the Annual Guaranteed Amount of at least
$960,000 each year. If Defendants sold $960,000 in gross sales of merchandise in the
am/pm Mini Market in a year, BPWCP would deem the loan payment for that year as
repaid.

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23.

In addition, pursuant to the terms of the Store Loan Agreement, the

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loan funds were to be disbursed directly to the third parties who were retained to
complete the constrction, remodeling and retrofitting. To ensure that all conditions

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for disbursement were met, STTN and BPWCP entered into a Disbursement
Agreement that sets forth the terms and conditions governing disbursements of

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funding. The Disbursement Agreement is specifically referenced in the Store Loan
Agreement, and a true and correct copy is attached hereto as Exhibit E, and is

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incorporated herein as though fully set forth at length. The Disbursement Agreement
provides, in pertinent part, that:

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"Construction Loan Proceeds wil be disbursed from time to

time upon receipt by BP West Coast Products LLC or its
designee of Pay Vouchers, executed by (STTNJ and
Contractor, accompanied by original detailed invoices, . . .

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and BP West Coast Products LLC or its designee have the

right to withhold payment on any and all Pay Vouchers if
supporting documentation reasonably requested is not

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provided. This may include original invoices, job inspection

card copy, IRS form W-9, appropriate lien releases for labor
and/or materials, receipts, photos, revised cost breakdown

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and

Affidavit

and

Certification

of Completion

of

Builder/Contractor."
(See Disbursement Agreement, Paragraph 3, Exhibit E.J As such, the Store Loan

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Agreement did not call for a lump sum payment to the Defendants but rather release
of funds were contingent upon (a) specified work being completed at the Station, and
(b) documentation to support payment of

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that work by STTN.

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24. STTN agreed to the terms of the Store Loan Agreement, and
Nazim Faquiryan and Sayed Faquiryan signed all necessary loan paperwork on behalf

of STTN. The Store Loan Agreement was secured by a recorded Deed of Trust with
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Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") on the

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real property upon which the Station was located ("Real Property"). AVA Global, as
the owner of the Real Property, executed the Deed of Trust dated March 2, 2007 and
recorded on March 9, 2007, which irrevocably granted BPWCP the power of sale of

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all of AVA Global's right, title and interest in the Real Property. A true and correct
copy of the Deed of Trust is attached hereto as Exhibit F, and is incorporated herein as

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though fully set forth at length. AVA Global, BPWCP and STTN also entered into a
"Consent to Encumbrance of Tenant's Interest" dated March 2, 2007 and recorded on

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March 9, 2007 ("Consent to Encumbrance"). The Consent to Encumbrance created a
leasehold mortgage encumbering STTN's leasehold estate in the Lease and Real
Property ("Leasehold Mortgage"). A true and correct copy of the Consent to

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Encumbrance is attached hereto as Exhibit G, and is incorporated herein as though
fully set forth at length. In addition, STTN executed a Promissory Note evidencing
the Store Loan. A tre and correct copy of the executed Promissory Note is attached

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hereto as Exhibit H and is incorporated herein as though fully set forth at length.
25. BPWCP's secured interest in the Real Property is second only to
senior lienholder Excel National Bank who maintains a first deed of trst on the Real
Property in the amount of

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approximately $1,987,000.

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26. In addition, the Store Loan Agreement was secured by a UCC-1

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Financing Statement ("UCC-1 ") on the personal property located on or affixed to the

Real Property or the Improvements and other property more fully described in the
attachments to the UCC-1. A tre and correct copy of the UCC-1 is attached hereto as
Exhibit I, and is incorporated herein as though fully set forth at length.
27. As of

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May 29,2007, the full amount of$150,000 was funded and

disbursed for Defendants' benefit pursuant to the Store Loan Agreement.

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The Gasoline Loan A2reement
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The second loan agreement - - the "Gasoline Loan Agreement" - -

m the amount of $250,000 was to fund costs associated with the pre-approved
modifications and/or equipments and improvements which pertain to the gasoline
sales-related aspects of the Station (i.e., dispensers, canopy, etc.). Disbursement of
the funds under the Gasoline Loan Agreement was contingent upon STTN abiding by
requirements similar to those applicable to the Store Loan Agreement. However,

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STTN failed to provide sufficient financial documents, including proof of any
payment by STTN of any construction-related expenditures, required back-up invoices

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and/or lien releases, all of which are requirements of the Gasoline Loan Agreement
and related Disbursement Agreement. As a result of STTN's failures to abide by the
terms of the Gasoline Loan Agreement and related Disbursement Agreement, BPWCP

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has not disbursed (and will not be disbursing) any monies under the Gasoline Loan to
STTN.

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The Loan Guaranties

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(Sayed Faquiryan's spouse), and Nazim Faquiryan each signed a Guaranty Agreement and

29.

Defendants

Sayed

Faquiryan,

Maghul

Faquiryan

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individually guaranteed the loan obligations owed by STTN to BPWCP under the

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Store Loan Agreement ("Loan Guaranties"). True and correct copies of the Loan
Guaranties are collectively attached hereto as Exhibit J, and are incorporated herein as
though fully set forth at length.

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STTN Breached the Franchise A2reements
30. Among other things, STTN was required, pursuant to the Franchise
Agreement, to maintain adequate supplies of gasoline for sale and make payments for

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gasoline deliveries. (See Gasoline Agreement, Article 2, Exhibit A.J Payment for
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gasoline product was accomplished by way of an electronic funds transfer ("EFT")
from STTN's bank account.
31.

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However, as of January 29, 2007, BPWCP began requiring STTN

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to present a cashier's check in order to receive gasoline product because numerous
EFT requests pertaining to gasoline deliveries were returned for insufficient funds by

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STTN's bank. In other words, STTN failed to pay BPWCP for the gasoline product
that had been delivered.

32.

When a franchisee is found to be in violation of the Franchise

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Agreements, BPWCP issues a written "Default Notice" describing the violation
("Default"). The Default is then sent to the franchisee via certified mail, giving the franchisee an opportnity to cure the violation. BPWCP issued a number of Defaults

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based upon STTN's repeat operational violations for failure to accept gasoline
delivery and to make payment for gasoline that was delivered and payable upon
receipt. True and correct copies of all Defaults pertaining to STTN's failure to pay for

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gasoline product deliveries are attached hereto as Exhibit K and are incorporated

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herein as though fully set forth at length.

33. STTN readily admits that they owe the money to BPWCP for

varrous gasoline deliveries. Indeed, Nazim Faquiryan and Sayed Faquiryan
acknowledged and agreed to in writing in a letter dated May 4, 2007, that they will
pay $30,000 per month until the total outstanding balance of the gasoline debt is paid
in full. A tre and correct copy of the letter agreement to pay the gasoline debt signed

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by Nazim Faquiryan and Sayed Faquiryan is attached hereto as Exhibit L and is
incorporated herein as though fully set forth at length.

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34. To date, STTN has failed to pay for the gasoline. The current
outstanding balance for the gasoline product that Defendants failed to reimburse

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BPWCP for gasoline product delivered is One Hundred Twenty-Six Thousand, One
Hundred Ninety-Four Dollars and Seventy-Seven Cents ($126,194.77).

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1

35.

In addition to Defendants' failure to sell gasoline, commencing on

2
3

August 23, 2007 through at least September 6, 2007, STTN failed to operate the
Station and sell gasoline product for at least 15 consecutive days in violation of the
Franchise Agreements.

4
5

6

BPWCP Terminates the STTN Franchise
36.

7
8

Given STTN's continuing breach of the Franchise Agreements,

BPWCP sent a Notice of Termination letter dated September 6, 2007, to STTN,
advising that the Franchise Agreements would be immediately terminated

9

10
11

("Termination Notice").
length.
37.

A true and correct copy of the Termination Notice is

attached hereto as Exhibit M and is incorporated herein as though fully set forth at
The Franchise Agreements provide that BPWCP may terminate the

12
13

14
15

Franchise Agreements for various reasons which include, but are not limited to, the
following:
(a) Failure to exert good faith efforts to carr out the provisions

16 17
18

of the Franchise Agreements following written notice and opportunity to cure (See
Section 17.1(a) of

the Gasoline Agreement, Exhibit A.J;

19

(b)
legally entitled (See Section 17.1(h) of

Failure to timely pay all sums due to which BPWCP is
the Gasoline Agreement, Exhibit A.J;

20
21

(c) Failure to operate the Premises for seven (7) consecutive

22
23

calendar days, or lesser period, which constitutes an unreasonable period of time (See
Section 17.l(i) of

the Gasoline Agreement, Exhibit A.J;

24
25

(d)

Breach of any material provision of the Gas Agreement,

including without limitation, "Buyer's failure to order and make available for sale

26 27
28

quantities of each grade of Product which are sufficient to satisfy foreseeable
customer demand." (See Section 17.1 (0) of the Gasoline Agreement, Exhibit A. J; and

14
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1

(e)

Termination of anyone other franchise agreement (e.g., Gas

2
3

Agreement) when there is "Concurrent Operations at the Premises," in which

"Concurrent Operations" is defined as the operation of the am/pm Mini Market in
conjunction with another or more than one other BPWCP franchise. (See Sections
4.05 and 18.05 of

4
5

the Mini Market Agreement, Exhibit B.J
38.

6 7
8

The pertinent provisions of the Petroleum Marketing Practices Act,

28 U.S.C. §280 1, et seq. ("PMP A") allow, inter aha, for termination upon the

occurrence of the any of the following:
(a) Failure by the franchisee to comply with a reasonable and
material provision of

9 10
11

the franchise (28 U.S.C. § 2802(b )(2)(A)J;

(b)
out the provisions of

Failure by the franchisee to exert good faith efforts to carr

12
13

the franchise (28 U.S.C. § 2802(b)(2)(B)J;

(c)

Occurrence of an event which is relevant to the franchise

14
15

relationship as a result of which termination of the franchise relationship is reasonable
(28 U.S.C. § 2802(b )(2)(C)J; and
(d) Failure by the franchisee to operate the marketing premises

16
17
18

for 7 consecutive days, or such lesser period which under the facts and circumstances
constitutes an unreasonable period of

time (28 U.S.C. § 2802(c)(9)J.

19

39.

Furthermore, given Defendants' long-standing debt owed to

20
21

BPWCP for unpaid gasoline, their failure to operate the Station and sell gasoline for at
least 15 consecutive days, and the numerous opportunities given by BPWCP to

22
23

Defendants to cure the defaults, the termination was effective immediately as it was
not reasonable for BPWCP to provide any additional notice to STTN. (28 U.S.C. §
2804(b).J

24
25

40. The Franchise Agreements provide that STTN will owe BPWCP

26
27
28

certain sums upon termination. Specifically, Article 19.01(d) of the Mini Market

Agreement states that, upon termination, STTN shall owe BPWCP liquidated
damages. (See Exhibit B.J
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1

41.

Accordingly, BPWCP terminated the Franchise Agreements on the

2
3

grounds that STTN:
(a) failed to have any gasoline products available for sale to the

4
5

motoring public for at least 15 consecutive days, despite the fact that BPWCP sent
STTN a total of twelve Defaults for failure to offer all grades of gasoline for sale (tre

6

and correct copies of which are included in Exhibit K and are dated August 24
through 31, 2007 and September 1 through 4, 2007); and

7
8

(b) failed to timely pay BPWCP for gasoline products in a
timely manner, incurring an outstanding balance of $126,194.77, as of September 6,
2007, for gasoline product deliveries that are due and payable at the time of delivery.

9
10
1 1

12
13

STTN Defaulted on the Store Loan A2reement
42. In addition to the Franchise Agreement breaches, STTN also

14
15

defaulted on the Store Loan Agreement. Pursuant to the Store Loan Agreement,

STTN must repay the outstanding balance of the loan in full to BPWCP within 30
days of the occurrence of an "Event of Default." Paragraph 4 of the Loan Agreement

16 17 18

provides the pertinent "Events of Default," which include, but are not limited to, the
following:
(a)

19

"The (Mini Market AgreementJ is terminated by either

20
21

Lender or Borrower prior to the end of its stated term" (See Store Loan Agreement,
Section 4.5, Exhibit D.J;

22
23

(b)
D.J;

A default or "Event of Default" shall have occurred under

any of the other Loan Documents" (See Store Loan Agreement, Section 4.10, Exhibit

24
25

(c) "The Borrower fails to sell Products continuously at the
Facility. . . . " (See Store Loan Agreement, Section 4.4, Exhibit D.J; or
(d) "The failure by the Borrower to make any payments of

26 27
28

principal of or interest and any other indebtedness secured by the Property, or there
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1

shall occur any other event that would permit the holder of such indebtedness to

2
3

accelerate the maturity thereof." (See Store Loan Agreement, Section 4.12, Exhibit

D.l
43. In the Termination Notice, BPWCP demanded that STTN repay
the outstanding balance of the Store Loan within 30 days of the termination

4
5

6 7
8

(October 5,2007), pursuant to the Store Loan Agreement and Promissory Note. As of September 5, 2007, the outstanding balance on the Store Loan Agreement was
$150,000.00. (See Termination Notice, Exhibit M.J

9
10
11

44. To date, STTN has failed and refused to pay the outstanding
balance due pursuant to the Store Loan Agreement.

12
13

Althou2h BPWCP Terminated the Franchise. Defendants Continue to Display

and Use Trademarks and Proprietary Materials
45.

14
15

Despite BPWCP's termination of STTN's franchise and BPWCP's

"debranding" of the Station, Defendants have and continue to violate Federally-

16 17
18

registered trademarks, trade names and service marks and use proprietary materials as
follows:
(a)

Defendants have not altered the Pay Island Cashier Machine

19

screen such that the screen statement displays an "ARCO" logo and name, and states
"Fill Smart," and "Thank you for choosing ARCO." See photograph numbers 1 and 2

20
21

attached hereto under Exhibit N, which is incorporated as though fully set forth at
length;
(b) Defendants continue to sell beverages in fountain cups

22
23

24
25

bearing "am/pm" and "thirst oasis" logos. See photograph numbers 3 and 4 attached

hereto under Exhibit N, which is incorporated herein as though fully set forth at
length;

26
27 28

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(c) Defendants continue to sell Nacho Chips that are contained

2
3

in "am/pm" food wrappers. See photograph number 5 attached hereto under Exhibit
N, which is incorporated herein as though fully set forth at length;
(d) Defendants continue to display the am/pm soda fountain

4
5

"CRUNCH CUBE" machine graphics above the soda dispenser heads. See
photograph number 6 attached hereto under Exhibit N, which is incorporated herein as
though fully set forth at length;
(e) Defendants continue to display the am/pm coffee graphics

6

7
8

9 10
11

above the coffee machine. See photograph numbers 7 and 8 attached hereto under
Exhibit N, which is incorporated herein as though fully set forth at length;
(f)

Defendants continue to display the am/pm coffee price menu

12
13

board that are exclusive to am/pm mini markets. See photograph number 9 attached

hereto under Exhibit N, which is incorporated herein as though fully set forth at
length;
(g) Defendants continue to display a hamburger graphic that is

14
15

16 17
18

exclusive to am/pm mini markets. See photograph number 10 attached hereto under
Exhibit N, which is incorporated herein as though fully set forth at length;

(h) Defendants continue to utilize the ARCO neon blue
illuminated light band on the fuel canopy. See photograph number 1 i attached hereto
under Exhibit N, which is incorporated herein as though fully set forth at length; and
(i) Defendants continue to utilize the am/pm neon orange
iluminated light band in the mini market exterior. See photograph number 12

19

20
21

22
23

attached hereto under Exhibit N, which is incorporated herein as though fully set forth
at length; and
U)

24
25

Defendants have not altered the store cash registers such that

26
27
28

the printed receipts state "Thirst Oas" for a purchase of fountain beverages. See
photograph number 1 3 attached hereto under Exhibit N, which is incorporated herein
as though fully set forth at length.
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1

46. There may be other violations that BPWCP and ARCO are
currently unaware of including the unauthorized use of am/pm trademarked GTG Prep

2
3

Food forms, Bakery Program forms, recipes, instrction manuals, written procedures,
practices and policies, and refillable coffee mugs and fountain drink cups. In addition,

4
5

Defendants are most likely continuing to use the am/pm F AS system in the back
office. As of September 18, 2007 (twelve days after the franchise termination), these

6 7
8

items were stil on display and being used at the Station without BPWCP's or
ARCO's authorization.
47.

9

ARCO is the registered owner of federally registered trademarks

10
1 1

on the following items, which have registration numbers as indicated:

(a) "ARCO" Logo depicted in photograph number 1 in Exhibit
N: Registration Number 1495419;

12
13

14
15

"ARCO" typed words as in "Thank You for Choosing ARCO" depicted in photograph number 2 in Exhibit N: Registration Number
(b)

1496212;
(c)

16 17
18

"am/pm" logo contained on fountain beverage cups depicted

in photograph number 3 in Exhibit N: Registration Number 2821396;
(d)

"am/pm" logo contained on nachos wrappers depicted in

19

photograph number 5 in Exhibit N: Registration Number 1459431;

20
21

48. BP Products North America, Inc. is the registered owner of the

"Thirst Oasis" logo contained on fountain beverage cups and depicted in photograph
numbers 4 and 13 in Exhibit N; the relevant registration number for this logo is
313357.
49.

22
23

24
25

The following designs and marks are proprietary and exclusive to

BPWCP's franchises and BPWCP must authorize their use:
(a)
"Fil Smart" words depicted in photograph number 1 in

26 27
28

Exhibit N;

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1

(b)

Soda Machine Graphics "Crunch Cube" depicted in

2
3

photograph number 6 in Exhibit N;
(c) am/pm Coffee Graphics depicted in photograph numbers 7

4
5

and 8 in Exhibit N;
(d)

am/pm Coffee Menu depicted in photograph number 9 in
am/pm Hamburger Graphics depicted in photograph number

6 7
8

Exhibit N;
(e)

10 in Exhibit N;

9

(f) ARCO Blue Neon Illuminated Light Stripe on Fuel Canopy
depicted in photograph number 11 in Exhibit N; and

10
11

(g) am/pm Orange Neon Illuminated Light Strpe on Mini
Market depicted in photograph number 12 in Exhibit N.
50.

12
13

The trademarks, trade names, and service marks referenced above

14
15

in paragraphs 47 through 49 (collectively referred to as, "Protected Marks") have been

widely and continuously used since they were first used in commerce in connection
with ARCO gasoline stations and am/pm mini market convenience stores throughout
the Western United States in California, Nevada, Washington, Oregon, and Arizona

16 17
18

19

(the "Western States"). Moreover, the "ARCO" and "am/pm" names have been used to identify for consumers the products available at ARCO-branded gasoline stations

20
21

and am/pm mini market convenience stores. The names "ARCO" and "am/pm" are
prominently displayed on ARCO-branded gasoline stations and am/pm mini market

22
23

convenience stores throughout the Western States. BPWCP relies heavily on the
name recognition and good will that BPWCP and ARCO have developed over the
years to attract customers and to make sales of ARCO-branded motor fuels and mini
market convenience store products and services.
51.

24
25

26
27 28

BPWCP and ARCO have invested significant time, money, and

resources to advertise and market these Protected Marks in connection with the sale of
high quality motor fuels and mini market convenience store products and services, and
20
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1

have developed considerable good will in these marks and names among the
consumers of motor fuels and mini market convenience store products and services.
52.

2
3

As discussed above, the Station was an ARCO-branded gasoline

4
5

station and am/pm mini market, however, BPWCP terminated the franchise effective

September 6, 2007. BPWCP "de-branded" the Station on September 17 and 18, 2007,
and advised Defendants to remove all products bearing trademarked and proprietary

6 7
8

displays and products. As of September 11, 2007, the Station was still improperly

displaying these Protected Marks while, at the same time, offering non-ARCO
branded gasoline for sale.

9 10
1 1

53. Defendants are no longer BPWCP franchisees or dealers. The Station does not sell ARCO-branded motor fuels nor is it an am/pm mini market
convenience store. Defendants are not in any way affiliated with, authorized by, or
sponsored by BPWCP or ARCO and therefore has no authority to use the Protected

12
13

14
15

Marks to identify the business Defendants conduct at the Station including, but not
limited to, the goods that are sold, promoted or distrbuted. Moreover, Defendants are

16 17
18

no longer authorized to make use of proprietary materials such as the F AS computer
program and written operating materials and instrctions.
54. In a letter dated September 12, 2007, Plaintiffs advised Defendants

19

that they must immediately discontinue the use of all the Protected Marks. A tre and

20
21

correct copy of the September 12, 2007 letter is attached hereto as Exhibit 0, and is
incorporated herein as though fully set forth at length.
55. Defendants sent a letter dated September 12, 2007 which notably

22
23

failed to address any of the trademark violations and threatened BPWCP with

24
25

litigation. A true and correct copy of this letter is attached hereto as Exhibit P, and is
incorporated herein as though fully set forth at length.

26 27
28

56. By way of a letter dated September 13, 2007, Plaintiffs' counsel
demanded that Defendants immediately cease the trademark and trade name violations
and stop using proprietary items.
1056950.2

The letter also advised Defendants that the
21
FIRST AMENDED COMPLAINT

Case 5:07-cv-04808-JF

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1

violations existed as of September 1 1, 2007. A tre and correct copy of the
September 13, 2007 letter is attached hereto as Exhibit Q and is incorporated herein as
though fully set forth at length.

2
3

4
5

57. On September 17 and 18, BPWCP attempted to complete the
"debrand" the Station to ensure that it would no longer be identified as an ARCObranded gasoline station or am/pm mini market and so that BPWCP-owned property

6 7
8

could be returned. As of September 17 and 18, a number of trademark violations at
the Station stil existed, and as of September 28, 2007, Defendants were continuing to
violate BPWCP and ARCO's trademarks and proprietary interests. The violations

9
10
1 1

described above in paragraph 45 existed as of October 12, 2007, just prior to filing
this First Amended Complaint.

12
13

58. Although BPWCP and ARCO made informal attempts to resolve

the dispute prior to filing this First Amended Complaint, Defendants refused to cease

14
15

their violations. Indeed, to date, Defendants continue to use Plaintiffs' famous and

trademarked names, products, and proprietary materials in connection with the
promotion, distribution, and sale of motor fuels and convenience store products.

16 17 18

FIRST CLAIM FOR RELIEF
(Declaratory Relief Under The Petroleum Marketing Practices Act)
(By Plaintiff BPWCP Against STTN Enterprises, Inc.)
59. The allegations of

19

20
21

paragraphs 1 through 58 above are incorporated

22
23

herein by reference as though fully set forth herein.
60.

There presently exists an actual controversy within this Court's

24
25

jurisdiction between BPWCP, on the one hand, and STTN, on the other hand, in that
BPWCP asserts that:
(a)

26 27
28

STTN's franchise and the franchise relationship with

BPWCP were terminated pursuant to Termination Notice dated September 6, 2007
(Exhibit MJ;
22
1056950.2

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1

(b) Pursuant to the Petroleum Marketing Practices Act, 15

2
3

U.S.C. Section 2802, and the terms of the Franchise Agreements between the parties,
BPWCP was entitled to terminate STTN's franchise at the Station;
(c)

4
5

BPWCP's grounds for terminating STTN's franchise were

legitimate and non-discriminatory; and

6
7
8

(d) The Termination Notice was delivered on the earliest date
reasonably practicable, and were otherwise reasonable under 15 U.S.C. § 2804(b).

61. BPWCP is informed and believes and on that basis alleges, that
STTN disputes each ofBPWCP's aforementioned assertions.
62. Defendants disagree with the above, and moreover, threatened to

9 10
1 1

pursue legal remedies against BPWCP. See Exhibit P.
63.

12
13

By reason of STTN's conduct as described above, BPWCP is

entitled to a declaratory judgment under 28 U.S.C. Section 2201, stating that:
(a) The relationship between STTN and BPWCP was that of a

14
15

franchise relationship as defined and provided by Section 2801 of the PMP A;

16
17
18

(b) STTN's failure to discharge and comply with the terms,
conditions and obligations of the Franchise Agreements is detailed in the Termination

Notice (Exhibit MJ, constituted a failure to comply with provisions of the franchise
which were reasonable and materially significant, a failure to carr out the provisions
of the franchise, and constituted events which were relevant to the franchise

19

20
21

relationship, the result of which the franchise termination by BPWCP was reasonable
under the PMP A;

22
23

(c)

Under the PMPA, BPWCP lawfully terminated STTN's

24
25

franchise and franchise relationship concerning the Franchise;

26
27 28

Under the terms of the Franchise Agreements, BPWCP lawfully terminated STTN's franchise and franchise relationship concerning the
(d)

Franchise;

23
i 056950.2

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(e)

Under the terms of the Mini Market Agreement, BPWCP

2
3

lawfully terminated STTN's franchise and franchise relationship concerning the
Station;
(f)

4
5

The Termination Notice was reasonable and appropriate

under 15 U.S.C. § 2802(b)(2)(A) (failure by the franchisee to comply with any

6 7
8

provision of the franchise which is both reasonable and materially significant to the
franchise relationship); Section 2802(b )(2)(B) (failure by the franchisee to exert good
faith efforts to carr out the provisions of the franchise); Section 2802(b )(2)(C) (the

9
10
1 1

occurrence of an event which is relevant to the franchise relationship and as a result of

which termination of the franchise is reasonable); and Section 2802(c)(9) (failure by
the franchisee to operate the marketing premises for 7 consecutive days);
(g)

12
13

Pursuant to 15 USC § 2804(b), BPWCP's Notice of

Termination calling for the termination effective immediately was proper because it
would not have been reasonable for BPWCP to furnish 90 days notification;

14
15

(h) BPWCP is entitled to liquidated damages under Article
19.01(d) of

16 17
18

the Mini Market Agreement; and
(i)

BPWCP is entitled to collect any and all other sums due

pursuant to the Franchise Agreements between the parties.

19

20
21

SECOND CLAIM FOR RELIEF

(Breach of Gasoline Agreement)

22
23

(By Plaintiff BPWCP Against STTN Enterprises, Inc.) 64. The allegations of paragraphs 1 through 63 above are incorporated
herein by reference as though fully set forth herein.
65. BPWCP has fully performed all of its requirements pursuant to the

24
25

26
27
28

parties' Gasoline Agreement.
66.
STTN has breached multiple provisions of

the Gasoline Agreement

by, inter aha:
24
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1

(a) Failing to have any gasoline products available for sale to

2
3

the motoring public for at least 15 consecutive days. In fact, STTN had taped off the

Station dispensers from any use by customers, and did not sell any gasoline from
August 23, 2007 through at least September 6,2007; and

4
5

(b) Failing to timely pay BPWCP for gasoline products in a
timely manner. As of September 6, 2007, STTN had an outstanding balance of One

6

7
8

Hundred Twenty-Six Thousand, One Hundred Ninety-Four Dollars and SeventySeven Cents ($126,194.77) for gasoline product deliveries that were due and payable

9 10
11

at the time of delivery. In fact, STTN issued several checks that were returned by
STTN's bank because STTN had insufficient funds.
67. As a proximate result of STTN's breach, BPWCP has been

12
13

damaged in an amount to be determined at trial, but no less than One Hundred

Twenty-Six Thousand, One Hundred Ninety-Four Dollars and Seventy-Seven Cents

14
15

($ 1 26, 1 94.77), which is the total outstanding amount due for gasoline product
delivered to the Station, and after applying Defendants' security deposit and other
advance payments.

16 17
18

THIRD CLAIM FOR RELIEF
(Breach of Mini Market Agreement)
(By Plaintiff BPWCP Against STTN Enterprises, Inc.) 68. The allegations of paragraphs 1 through 67 above are incorporated
herein by reference as though fully set forth herein.
69. BPWCP has fully performed all of its requirements pursuant to the

19

20
21

22
23

24
25

Mini Market Agreement.
70.

STTN has breached Section 4.05 of the Mini Market Agreement

26
27 28

by, inter aha, breaching the Gasoline Agreement, as described in full in the second
claim for relief. Section 4.05 requires that all "Concurrent Operations at the

Premises" be conducted and governed by the terms and conditions and provisions of
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1056950.2

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1

the applicable Franchise Agreement, i.e., the Gasoline Agreement. (See Mini Market
Agreement, Section 4.05 Exhibit B.J.
71. As a proximate result of STTN's breach, BPWCP has been

2
3

4
5

damaged in an amount to be determined at triaL.
72. In addition, the Mini Market Agreement contains a liquidated

6
7
8

damages provision. Article 19.01(d) of the Mini Market Agreement provides that
"Operator shall pay to (BWPCPJ at the time of termination, as liquidated damages and
not as penalty, the greater of: (a) the total minimum royalty fee which would have

9

been payable under the (Mini Market AgreementJ from the date of termination of the
(Mini Market Agreement J through the end of the term provided for in the (Mini

10
1 1

Market AgreementJ; or (b) for each month from the date of termination of the (Mini
Market Agreement J through the end of the term provided in the (Mini Market
AgreementJ, the actual average royalty fee for any months that the Store was

12
13

14
15

operational prior to termination of the (Mini Market Agreement)." Given BPWCP's

termination of the Mini Market Agreement effective September 6, 2007, the total
amount due to BPWCP for liquidated damages is Two Hundred Thirt-Five Thousand
and Zero Cents ($235,000.00).

16
17 18

19

FOURTH CLAIM FOR RELIEF
(Breach of Franchise Guaranties)

20
21

22
23

(By Plaintiff BPWCP Against Nazim Faquiryan and Sayed Faquiryan.)
73. The allegations of paragraphs 1 through 72 above are incorporated

24
25

herein by reference as though fully set forth herein.
74. Sayed Faquiryan and Nazim Faquiryan each executed and

26 27
28

delivered to BPWCP the Franchise Guaranties, guaranteeing any and all indebtedness

of STTN with respect to both the Store Loan Agreement and the Gasoline Loan
Agreement. (See Franchise Guaranties, Exhibit C.J
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75.

STTN is currently indebted to BPWCP in an amount of not less

2
3

than $126,194.77. BPWCP has made demands for payment of this sum on Sayed
Faquiryan and Nazim Faquiryan, who have, to date, failed to make these payments.
As such, Sayed Faquiryan and Nazim Faquiryan are in breach of

4
5

the obligations under

the Franchise Guaranties. Sayed Faquiryan and Nazim Faquiryan are also liable for

6
7
8

liquidated damages in the amount of $235,000.00 owed to BPWCP pursuant to the
Mini Market Agreement and according to proof.

9
10
1 1

FIFTH CLAIM FOR RELIEF
(Common Count: Goods Sold and Delivered)
(By Plaintiff BPWCP Against
STTN Enterprises, Inc., N azim Faquiryan, and Sayed Faquiryan.)

12
13

76. The allegations of paragraphs 1 through 75 above are incorporated
herein by reference as though fully set forth herein.

14
15

77. On or about September 5, 2007, at 631 San Felipe Road, Hollister,
California 95035, Defendants became indebted to BPWCP in the sum of

16
17 18

One Hundred

Twenty-Six Thousand, One Hundred Ninety-Four Dollars and Seventy-Seven Cents
($126,194.77) for gasoline sold by BPWCP and delivered to STTN.

19

78. BPWCP has repeatedly demanded payment from Defendants. The
last demand was made on September 6, 2007. (See Exhibit M. J
79. No payment has been made by Defendants to BPWCP, and there is

20
21

22
23

now due BPWCP and owed from Defendants at least the principal sum of One
Hundred Twenty-Six Thousand, One Hundred Ninety-Four Dollars and SeventySeven Cents ($ 126,194.77).

24
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i 056950.2

FIRST AMENDED COMPLAINT

Case 5:07-cv-04808-JF

Document 7

Filed 10/18/2007

Page 28 of 47

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SIXTH CLAIM FOR RELIEF

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(Unjust Enrichment)
(By Plaintiff BPWCP Against STTN Enterprises, Inc., Nazim Faquiryan, and Sayed Faquiryan.)

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80. The allegations of paragraphs 1 through 79 above are incorporated
herein by reference as though fully set forth herein.
81. STTN, as well as Nazim Faquiryan and Sayed Faquiryan as

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guarantors, obtained the benefit of receiving deliveries of gasoline in that they have

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not paid for the gasoline but have been able to sell and profit from the gasoline that
was delivered by BPWCP.

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82. On May 4, 2007, Nazim Faquiryan and Sayed Faquiryan sent a
letter agreement to BPWCP, promising that STTN would make monthly payments of
Thirty Thousand Dollars ($30,000) by certified check payable to BPWCP on or before

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the 15 day of each month beginning June 20, 2007 until the total outstanding balance
owed for the gasoline delivered has been paid off. (See Exhibit L. J
83.

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Despite reaping such benefits and agreeing to make monthly

installments, Defendants stil have not made any payments to BPWCP for the gasoline
product.
84. As set forth in the above-paragraphs, Defendants' failure to

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compensate BPWCP constitutes unjust enrichment and has damaged BPWCP in the
amount of at least One Hundred Twenty-Six Thousand, One Hundred Ninety-Four
Dollars and Seventy-Seven Cents ($ 126, 1 94.77), plus interest.

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1056950.2

FIRST AMENDED COMPLAINT

Case 5:07-cv-04808-JF

Document 7

Filed 10/18/2007

Page 29 of 47

1

SEVENTH CLAIM FOR RELIEF
(Breach of Store Loan Agreement)
(By Plaintiff BPWCP Against STTN Enterprises, Inc., Nazim Faquiryan, and Sayed Faquiryan.)

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85. The allegations of paragraphs 1 through 84 above are incorporated
herein by reference as though fully set forth herein.
86. BPWCP has fully performed all of its requirements pursuant to the

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Store Loan Agreement.
87. STTN breached Article 4 of the Store Loan Agreement by failing

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to repay the outstanding balance of the Store Loan in full to BPWCP within 30 days
of the occurrence of an Event of Default. The Store Loan Agreement requires STTN
to repay the outstanding balance of the Store Loan within 30 days of the occurrence of
an Event of Default. The termination of the Franchise Agreements is an Event of

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Default. (See Store Loan Agreement, Section 4.5, Exhibit D.)

88. As of September 5, 2007, the day before the date of termination,
STTN's outstanding balance due on the Loan was $150,000.00. Pursuant to the Store

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Loan Agreement, the loan balance was due to BPWCP no later than October 5,2007.
To date, the loan balance on the Store Loan has not been repaid by Defendants.
89. As a result of STTN's breach of the Store Loan Agreement,

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BPWCP has been damaged in the amount of $150,000, plus interest. In addition, the
Store Loan Agreement provide that Nazim Faquiryan, Sayed Faquiryan, and Maghul

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Faquiryan will reimburse BPWCP on demand for all expenses, including reasonable

attorneys' fees incurred by BPWCP in collecting or enforcing the Store Loan
Agreement, together with interest thereon. (See Article 9.9 of the Store Loan

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Agreement, Exhibit D.) It has become necessary for BPWCP to engage the law firm

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of Weston, Benshoof, Rochefort, Rubalcava & MacCuish LLP to bring this action,
and BPWCP is entitled to further and additional sums for reasonable attorneys' fees
herein.
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1056950.2

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FIRST AMENDED COMPLAINT

Case 5:07-cv-04808-JF

Document 7

Filed 10/18/2007

Page 30 of 47

1

EIGHTH CLAIM FOR RELIEF
(Breach of Loan Guaranties)

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(By Plaintiff BPWCP Against Nazim Faquiryan, Sayed Faquiryan, and Maghul Faquiryan.)

90. The allegations of paragraphs 1 through 89 above are incorporated
herein by reference as though fully set forth herein.
91 . N azim F aquiryan, and Sayed F aquiryan, and Maghul F aquiryan (as

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Sayed Faquiryan's spouse), each executed and delivered to BPWCP the Loan
Guaranties, guaranteeing any and all indebtedness of STTN with respect to the Loan

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Agreements. (See Loan Guaranties, Exhibit 1.) As such, Nazim Faquiryan, Sayed
Faquiryan, and Maghul Faquiryan, as individual guarantors, are liable for damages as
provided by the Store Loan Agreement in the amount of $150,000.00 plus interest.

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92. STTN is currently indebted to BPWCP in an amount of not less
than One Hundred Fifty Thousand Dollars ($ 1 50,000). BPWCP has made demands
for payment of this sum on Sayed Faquiryan, Nazim Faquiryan, and Maghul

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Faquiryan, who have, to date, failed to make these payments. As such, Sayed
Faquiryan and Nazim Faquiryan are in breach of the obligations under the Loan

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Guaranties. Moreover, Sayed Faquiryan and Nazim Faquiryan are liable for
liquidated damages owed to BPWCP pursuant to the Mini Market Loan Agreement at

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the time of the occurrence of an Event of Default and according to proof. Nazim
Faquiryan, Sayed Faquiryan, and Maghul Faquiryan have breached the Loan
Guaranties.
93. As a result of the breaches of the Loan Guaranties, BPWCP has

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been damaged in an amount of not less than $150,000 plus interest.
94.

In addition, the Loan Guaranties provide that Nazim Faquiryan,

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Sayed Faquiryan, and Maghul Faquiryan wil reimburse BPWCP on demand for all
expenses, including reasonable attorneys' fees incurred by BPWCP in collecting or

enforcing the Loan Guaranties, together with interest thereon. (See Article 7 of the
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1056950.2

FIRST AMENDED COMPLAINT

Case 5:07-cv-04808-JF

Document 7

Filed 10/18/2007

Page 31 of 47

1

Loan Guaranties, Exhibit J. J It has become necessary for BPWCP to engage the law

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firm of Weston, Benshoof, Rochefort, Rubalcava & MacCuish LLP to bring this
action, and BPWCP is entitled to further and additional sums for reasonable attorneys'
fees herein.

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NINTH CLAIM FOR RELIEF
(Unified Judicial Foreclosure)

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(By Plaintiff BPWCP Against STTN Enterprises, Inc., and AVA Global Enterprise, LLC.)
95. The allegations of paragraphs 1 through 94 above are incorporated

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herein by reference as though fully set forth herein.
96.

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To secure, in part, Defendants' obligations under the Store Loan

Agreement (Exhibit D), Promissory Note (Exhibit H), and Loan Guaranties (Exhibit
D, and as part of the same transaction, AVA Global, as the owner of the Real
Propert, executed the Deed of Trust dated March 2,2007 and recorded on March 9,

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2007, which irrevocably granted BPWCP the power of sale of all of ABA Global's

right, title and interest in the Real Propert. A tre and correct copy of the Deed of
Trust is attached hereto as Exhibit F, and is incorporated herein as though fully set

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forth at length. A V A Global, BPWCP and STTN also entered into a "Consent to
Encumbrance of Tenant's Interest" dated March 2,2 007 and recorded on March 9,
2007 ("Consent to Encumbrance"). The Consent to Encumbrance created a leasehold
mortgage encumbering STTN's leasehold estate in the Lease and Real Property

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("Leasehold Mortgage"). A true and correct copy of the Consent to Encumbrance is attached hereto as Exhibit G, and is incorporated herein as though fully set forth at
length. In addition, STTN executed a Promissory Note evidencing the Store Loan. A
true and correct copy of the executed Promissory Note is attached hereto as Exhibit H
and is incorporated herein as though fully set forth at length.

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1056950.2

FIRST AMENDED COMPLAINT

Case 5:07-cv-04808-JF

Document 7

Filed 10/18/2007

Page 32 of 47

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97. In addition, Defendants made, executed and delivered to BPWCP,

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as beneficiary, a UCC- 1 (Exhibit I), by the terms of which Defendants conveyed a
security interest in the personal property located on or affixed to the Real Propert or
the Improvements thereon for the benefit of

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BPWCP, as beneficiary. The UCC-l was

filed on May 7, 2007 with the California Secretary of State.
98.

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BPWCP is now, and at all times material to this action was, the

lawful beneficiary of the Promissory Note, the holder of the beneficial interest under
the Deed of Trust, and the holder of the beneficial interest under the UCC- 1.

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99.

Excel National Bank, has, or claims to have, some interest in the

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Real Property or some part of it by reason of a senior lien.

100. The Store Loan Agreement provides that Defendants must repay
the outstanding balance of the loan in full to BPWCP within 30 days of the occurrence

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of an "Event of Default."

(See Store Loan Agreement, ~ 4, Exhibit D.)

The

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termination of the franchise relationship between STTN and BPWCP on September 6,
2007 constituted such a defined "Event of Default." (See Store Loan Agreement,

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§ 4.5.)

101. The Promissory Note provides that, if a default or "Event of
Default" (as defined in the Store Loan Agreement, Exhibit D) occurs, then the Note
"shall become immediately due and payable without notice of default, presentment or

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demand for payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character." (See Promissory Note, ~ 9, Exhibit H.)

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102. The Loan Guaranties provide that, if the Defendants default in the

full and timely payment of any installment due under the Loan Agreement, the entire
amounts owed to BPWCP will become immediately payable and due upon demand by BPWCP. (See Loan Guaranties, ~ 6, Exhibit J.).

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103. BPWCP has fully performed under the Loan Obligation
Agreements. On or about September 6,2007 and September 12,2007, BPWCP made
a demand upon Defendants for the payment of these amounts due on October 6, 2007,
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FIRST AMENDED COMPLAINT

Case 5:07-cv-04808-JF

Document 7

Filed 10/18/2007

Page 33 of 47

1

but Defendants have wholly failed, neglected, and refused to make those payments.
(See Exhibits M and 0.)
104. As a result of such failure and default under Store Loan

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Agreement, Promissory Note, and the Loan Guaranties by Defendants, BPWCP has
exercised its right to declare the entire sum due from Defendants immediately due and
payable. The total amount now due under the Store Loan Agreement, Promissory

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Notes, and Loan Guaranties consists of the principal sum of at least One Hundred and
Fifty Thousand Dollars ($150,000), excluding interest and attorneys' fees with respect
thereto.
105. Furthermore, by the provisions of the Loan Guaranties (Exhibit J;

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Paragraph 1), the Store Loan Agreement (Exhibit D), and the Secured Promissory
Note (Exhibit H), Defendants agreed that, if any action were initiated to enforce the

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Loan Guaranties or Loan Agreement, Defendants would pay the sum fixed by the
Court as BPWCP's attorneys' fees and court costs, and that these charges would also
be secured by the Deed of Trust recorded against the Real Property and by the UCC- 1

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filed against the personal property located on the Real Property. Because of the
defaults by the Defendants, it has become necessary for BPWCP to emplo