Summary of Arguments

A. Summary of Arguments

1) Ben & Jerry’s Duty to Mitigate:
Ben & Jerry’s had obligation and duty to mitigate its damages and failed to uphold
this duty [Docket No. 219]. That Ben & Jerry’s filed the present action secretively and prior to
mediation ADR ever taking place as required by the terms of the Three (3) Franchisee
Agreements should be barred or stopped from proceeding on its claim because it did not mediate in Good Faith. Ben & Jerry’s further made no efforts to mitigate its claims; therefore there is no
genuine issue of material fact as to whether Ben & Jerry’s had satisfied its duty to mitigate. Ben
& Jerry’s claimed that it filed its lawsuit(s) against Porghavami and his company (MPA) but it
did not serve it until after the mediation fell apart, does not relieve Ben & Jerry’s of its obligation to mediate openly and without controversies [Docket No. 236]. In particular when the mediation took place on or about July 17, 2007 (almost a month after Ben & Jerry’s had secretively filed its lawsuits against Porghavami and his Company MPA), Porghavami was not aware of any claims
by Ben & Jerry’s against it. Porghavami was not aware that Ben & Jerry’s had any claims against
it let alone mediating it in the mandatory ADR (Alternative Dispute Resolution) as parties were
obligated under the Three (3) Franchise Agreements. It is obvious that Porghavami could not
mediate a dispute without knowing that such claim(s) or ground for any such claim existed. The
mediation that took placed, on or about July 17, 2007 was as the direct result of Porghavami’s
initiating ADR and he was unaware of any genuine claims by Ben & Jerry’s. He attended the
mediation in compliance with his obligations under the franchise agreements and to resolve the
accounts that he had brought against Ben & Jerry’s conducts. Porghavami was unaware that Ben & Jerry’s had despitefully used the ADR process that Porghavami had initiated to lunch its own lawsuit against Porghavami in secret. As the result Ben & Jerry’s could not claim that it had a real intention of resolving the issues and the accounts. There were no incentives, because the
lawsuit(s) was already filed and Ben & Jerry’s could serve its lawsuit if the outcome of its liking
was not achieved, and that is precisely what it had occurred. Therefore Ben & Jerry’s claimed of
complying with its mitigation’s obligations for each of the Three (3) Franchise Agreements are
unfounded and should be denied.

2) Porghavami’s Standing:
Porghavami submits that in addition to the sole officer of the MPA he is also the
Franchisee of Ben & Jerry’s and the Principal Investor and the party in this matter. That
Porghavami is entitled to bring its claims asserted against Ben & Jerry’s as outlined in its Second Amended Counterclaim [Docket No. 73]. Ben & Jerry’s own conduct including filing the
Contract Related Claims [Docket No. 65] not only against Porghavami’s company MPA
GROUP, but also against Porghavami, with Five (5) out of Seven (7) claims jointly against his
and his company (MPA), two of which against him in his personal capacity confirms
Porghavami’s entitlement to bring its claims against Ben & Jerry’s and its distributor Wonder.
Porghavami’s standing not only as the officer of MPA GROUP, but that of Ben & Jerry’s
Franchise in its personal capacity as defined by Ben & Jerry’s own First Amended Complaint
stating [Docket No. 65] that; “Ben & Jerry’s Franchising, Inc. grants franchises to qualified
persons to own and operate Ben & Jerry’s shops at specific locations.” That as such in
Porghavami’s interpretation and understanding of the franchisee agreements, and as he was left
to believe by Ben & Jerry’s own conducts, that his Company MPA was the appointed Operator
under the agreements but Porghavami in his personal capacity was the Franchise, Operator,
Manager and responsible for the day to day operation of his Three (3) Scoop Shops in Roseville,
Sacramento and Concord for the period of 2002 through 2008.

3) The Material Breach of the Franchise Agreements:
Ben & Jerry’s claims that Porghavami’s Counterclaims should be dismissed, on
the assumption that Porghavami and or his company (MPA GROUP, INC.) was in materially
breach of the Franchisee Agreements is also totally fictitious, fabricated and has no ground. In
July 1, 2006 that Ben & Jerry’s failed to renew the Roseville shop agreement, or the August 25,
2006 when Ben & Jerry’s and its designated distributor (Wonder) declined to deliver products to the Porghavami’s Roseville shop. Porghavami was in full compliance of its Franchise
Agreements including payments to its suppliers including Wonder. As Wonder had made no
other demand for payment(s), including invoices of July 2006. Porghavami had just paid the June invoices in full that Wonder had specifically requested days earlier. The payments for the July invoices were not yet due, as [Docket No. 244, Ex. C] there was no payment terms outlined or defined on the invoice (the picking ticket is not an invoice) itself (it was always discretionally
between Wonder and its customers. Some Scoop Shop operators paid in 30 days and some in 90
days, but Wonder never took actions against anyone. Porghavami had never disputed any of his
invoices and he had always paid in full, what he was asked for at the time, the June invoices).
Wonder had made no other request for payments and Porghavami was unaware of any immediate payment being due, and all his taxes were paid including the 2nd and 3rd quarters of 2006. However, he fell behind his rents, taxes and the other payments once the supply of products were disrupted (for the second time in as many months) and the shipment of August 25, 2006 was denied causing Porghavami’s (Defendants’) loss of sales due to lack of products and in the cancellations of number of revenue making events including number of caterings and other long term commitments that would have earned Porghavami substantial income (in traditionally busiest time of the year for Ice Cream business) and all was lost as the result of the lack of products and Wonder/Ben & Jerry’s denial of shipment, and in addition to years of neglect and various shortcoming. Porghavami first stayed behind in his shops’ rent in September 2006 and his taxes in early 2007. However, none of these same issues existed in July and or August of 2006. That the materially breach of the Franchise Agreements if any, happened long after closure of the shops in Roseville and Sacramento California and after he had sustained losses in hundreds of thousands of dollars, and as the direct result of Plaintiffs and its distributors Wonder actions and shortcoming and it should not be given any weight to the Plaintiffs’ arguments here. To this day Porghavami and or his company MPA GROUP, has yet to receive a demand for payment(s), or has yet to receive a statement or an invoice indicating the terms of payment from Wonder and or Ben & Jerry’s and or any offer of settlement for his loses as the result of Wonder refusal to deliver his shipment on the August 25, 2006.

4) The item 19 Earning Claim:
The Uniform Franchise Offering Circular (“UFOC”) that Ben & Jerry’s’ had
provided to Porghavami for the Roseville Franchisee Agreement did not elaborate on the Item
19, the earning claims. However, both agreements for Sacramento and Concord shops included
an elaborate Earning Claims [Docket No. 236]. According to the governing FTC rules then Ben
& Jerry’s must had reasonable bases and as required Ben & Jerry’s could not pick and choose the information and the terms (once it select UFOC v. Rule). Plaintiffs claimed that Porghavami did not relay on the Item 19 when he purchased the shops and or when he entered into agreements to purchase the shops prior to receiving his UFOC, it is not the argument here. Porghavami’s argument here is, if Ben & Jerry’s have submitted the “Item 19 Earning Claim” as a part of its UFOC’s for Sacramento and Concord agreements (as they did) then they must produce sufficient data on how they have reached those conclusions and the information must be readily available to Porghavami and Ben & Jerry’s should not be able to pick and choose the information. Furthermore, despite the Ben & Jerry’s claims Porghavami have identified damages in response to its losses including that of the item 19, in its Counterclaims and the 2nd Amended Counter-claims totalling sum of $4,700,000.

5) Products Quality:
That the obligation of Ben & Jerry’s to its products quality was never questioned, that
Ben & Jerry’s had an absolute obligation to provide its products in the same manner, quality,
creaminess, texture and chunkiness that was always known to its franchisees and its customers
[Docket No. 236]. The brand integrity had to be maintained, in order for Ben & Jerry’s to meet
its obligations to its franchisees. Ben & Jerry’s arguments including its option to so called
“System” change, had nothing to do with the quality of its products and the integrity of the
brand. As the term “system” is so broad that could apply to anything! It could apply to the shop set up, equipments, or any other items that Ben & Jerry’s often exercised. However, it should not and could not ever be applied to something as fundamental as quality and the texture of its
products, a fundamental element of what Ben & Jerry’s is (used to be) known for. Ben & Jerry’s
popularity and good name was known because of the distinguish products, including but not
limited to its premium quality, creaminess, chunkiness, texture and etc. This is what they were
known for. This is why Porghavami and hundreds of other investors bought into the Ben &
Jerry’s Franchisees system. According to Ben & Jerry’s own admission, Ben & Jerry’s has no
obligation to maintain the same standards, qualities, texture, etc, because they have knowingly
and deliberately utilized term “System” change in the Franchise Agreements in order to deceives its own franchisees and with intention of betraying his own franchisee, customers and public at large should not be tolerated and rewarded. If the Products that it was known throughout the previous 25 years (prior to its alteration by the new owners “Unilever”) to its franchisees and its customers have been altered then this is not the same Ben & Jerry’s that the present company is advertising or presenting (then it should be called the Old Ben & Jerry’s (1978-2004) and the New Ben & Jerry’s (2004- to present)). The new Ben & Jerry’s has despitefully and intentionally fooled its customers throughout the past 5-6 years. Ben & Jerry’s has admitted during these proceedings, that it has altered the products formula basically because they could, to cut costs of productions, then the products that was known to Porghavami when he entered the system in 2002 are not the same, then there is no Ben & Jerry’s as we /consumer used to know, there is no “System” and no Agreements. Ben & Jerry’s statements during these proceedings are the complete denial of its obligation to its franchisees, customers and at large to the public. Nothing in the Franchisee agreements that Porghavami along with hundreds of other franchisees entered would indicate that at sometimes (some point) in the future, Ben & Jerry’s would manufacture it products differently and or not in the same manner that it was known for. Or by deteriorating the quality of the new products under the same trade name, or in particular caused the deterioration of the quality and texture and creaminess and or chunkiness of the very products that were always known to millions of people in order to cut costs and bear the same trade name because the products have past a certain lab taste test. As the discovered documents revealed, Ben & Jerry’s own quality control manager revealed in its email dated September 22, 2005 that “the testing was done on a consumer level to gauge the eating experience it did not include testing with product that we make in the scoop shops. It is here were we are having the greatest difficulties. Our operating system is entirely based on weight. With the change to volume we are finding that more products is needed to produce the same high quality menu item” [Docket Nos. 236, and 252, Ex. 14].

6) Ben & Jerry’s Sales of Discounted Products:
Ben & Jerry’s sales of the discounted products to the Non Franchised outlets in
the franchisees market including Porghavami’s, that the same discount was not available to its
franchisees, it is a well established phenomena that only hurts Ben & Jerry’s own franchisees,
and caused along with number of other elements losses of sales, damages, unfair completion,
closure of the Scoop Shops and loss of its own franchisees investments. Never in the over 30
years of its history, that Ben & Jerry’s had so many franchisees going out of business, more than
they did in the past couple of years. Ben & Jerry’s basically admitted that it has sold or caused
to be sold and supplied the products at the discount because, they could and that the franchisee
agreement in their interpretations of its terms basically authorized them to sell and supply on any terms and condition that Ben & Jerry’s saw fit, regardless of the damages that was causing to its own franchisees, regardless to the their obligation as the franchisor to the integrity of the system that it represented [Docket Nos. 236, and 252]. That for period of at least five (5) years
systemically Ben & Jerry’s undercut its own franchisees business, their operation, profits and
business model, should be condemned and it’s argument should be denied. Ben & Jerry’s has
purposely disregarded its own franchisees’ including Porghavami’s right and expectations under
the agreements and deprive Porghavami of the benefits of there under in bad faith due to
creation of an unfair competitions, see- California Unfair Completion Law (UCL) Section 17200
by providing discounts and rebate programs to the other outlets in his territories that the same
was not available to Porghavami and or any other franchisees in the system until early 2009.

7) The Shortages of Products:
The shortage of products in particular the featured, popular and seasonal flavors,
undeniably having negative effect on the franchisees business, sales and their operation. In fact
as the documents Porghavami submitted confirms. The Franchisees Advisory Committee (FAC)
representing the franchisee community earlier this year warned Ben & Jerry’s management that they would not tolerate similar shortages any longer and that they may hire a legal representative to represent their interest [Docket Nos. 236, and 252, Ex. AA on Nov. 6, 2009] Ben & Jerry’s own documents revealed that Porghavami shops were shorted 5% percent of products that he had ordered, including featured, popular and seasonal flavors. Porghavami’s own records also confirmed that up to 673 items (including bulk tubs of ice cream, frozen yogurts and sorbets, also batters and pints) were shorted and or denied delivery, during the 2004-2008 period, out of which for period of Thirteen (13) months Ben & Jerry’s and Wonder declined to deliver any products [Docket Nos. 219] to Porghavami’s shops should be condemned and not rewarded.

8) Ben & Jerry’s Under-Weight Bulk Tubs of Products:
Ben & Jerry’s deliberately changed the Bulk Tubs filling process from “fill by
weight” to “fill by volume” in March of 2004 which had a devastating effect on the scoop shops
and franchisees, including Porghavami business. The Bulk Tubs are majority serves the Scoop
Shops and the franchisees and certain entertainments accounts (Cruise liners, Casinos’ and
Hotels) and are not sold to the public. Therefore it affected those businesses that depended on it, and in particular the franchisees, because under the Ben & Jerry’s business model, there are no
other items for the shops to sell and serve other than Ben & Jerry’s products, there are no other
source of revenue. Franchisees, including Porghavami main business were to serve the bulk tubs of products for variety of items served at the shops supplemented by the sale of pints (another
source of complaint here) and despite the cruise liners and hotels or other business that served
bulk tubs products in addition and to complement their main business, franchisees and scoop
shops had no other businesses or source of income to complement their business. Therefore the
underweight tubs and the deteriorating quality had affected the Scoop shops businesses by
raising their costs and affecting their service and menu than any other businesses that served the same products. As shown above, Ben & Jerry’s own quality managers outlined and admitted in its report to Ben & Jerry’s managers, the effect of Fill by Volume v. Fill by Weight and warned the managers of Ben & Jerry’s with the new system (fill by volume) and its negative effect on the franchisees and their business [Docket Nos. 236, and 252, Ex. 14].

9) Renewal of the Roseville Shop Franchise Agreement:
Ben & Jerry’s deliberately failed to renew and or caused to renew or even informed
its intention to renew Porghavami’s Roseville shop franchise agreements on or about July 1,
2006. Ben & Jerry’s claimed that Porghavami was not send a renewal agreement because Ben &
Jerry’s had a backlog at that time and was behind in getting renewal agreement out to
Porghavami as well as to the other franchisees that their renewal was due also has no merit, since Ben & Jerry’s had an obligation to inform its franchisees including Porghavami at least 180 days prior to the expiry of its intention to renew or not renew in particular in light of Porghavami obligation to renew and or declined his Roseville shop lease agreement. Instead, for several months Ben & Jerry’s representative’s threaten and tried to convince and force Porghavami to close the Roseville Shop, despite Porghavami’s unwillingness and confirmation that he had already renewed its lease for additional terms [Docket Nos. 219, 236, and 252].

10) Ben & Jerry’s Failure to Meet its Marketing Obligations:
Ben & Jerry’s failure to meet its marketing obligations and to conduct its
marketing programs that were paid for by the franchisees in more effective manner that would
benefitted the Franchisees instead of its own programs are well documented. Ben & Jerry’s
claim and its own interpretation of the agreement it is contrary to the normal practices as a
franchisor, where its conducts and programs actually failed to benefited the franchisees [Docket
Nos. 236, and 252]. See- California Breach of Implied Covenant of Good Faith and Fair Dealing.

11) Micro’s:
Ben & Jerry’s own study in 2004 confirmed that due to the high costs of acquisitions
and operations of Micro’s, the system would be feasible for businesses with annual sales of
$363,000.00 (the report became available in response to Porghavami’s discovery request and was not available to Porghavami and or any other franchisees at the time), it must be noted that
Porghavami’s Sacramento shop sales (his highest gross sales shop) did not exceeded 240,000
range at the time. There were very few shops that exceeded $300,000., annual sales let alone
$360,000.00 bench mark as it was outlined by Ben & Jerry’s own expert. That despite Ben &
Jerry’s assertion that it had at its discretion to select any equipment they deem fit for the system. Ben & Jerry’s had an absolute obligation to its own franchisees to protect their investment, to protect the integrity of the system by performing a proper feasibility study, and to make the study and report available to its franchisees. In doing so, Ben & Jerry’s purposely disregarded Porghavami’s rights and expectations under the agreements and deprived him of the benefits of his own investment there under in bad faith [Docket Nos. 252 and 236 Ex 22].

12) Porghavami’s alleged failure to mitigate:
Ben & Jerry’s claim that Porghavami failed to mitigate its damages is based on
hypothetical conclusion and has no bases here to be considered. Porghavami for over a year was
in direct communication with Ben & Jerry’s management in Vermont, had made numerous
complaint, letters, emails and left messages for it managements on verity of the operations
problems. Porghavami informed Ben & Jerry’s upon failure of Wonder to deliver its shipment in
August 25, 2006. He followed up with phone calls, emails and letters [Docket Ns. 219]. He
further informed Ben & Jerry’s with his intention to closed down Roseville and Sacramento shop
prior to closing due to lack of products and mounting losses. Porghavami requested Ben &
Jerry’s assistance to keep the Roseville and Sacramento shops open, while he was still trying to
sell the shops [Docket Nos. 236 and 252]. Porghavami, endured 13 months of denied delivery of
the products to his shops. Initiated the ADR in February 2007 and tried to reach to Ben & Jerry’s and to end the dispute. Attended the mediation session in Vermont in July 2007 at his own costs and expenses, complied with its every obligation that was expected of him under the terms of the franchisee agreements. Ben & Jerry’s instead, used the ADR process to lunch and file its own lawsuit against Porghavami and his company prior to ADR ever taking a place is a disregard for the very purpose of the ADR terms.

13) The Time Limitation:
Time Limitation if any should have run from the date that Porghavami initiated its
ADR (February 2007) and putting Ben & Jerry’s on notice. Ben & Jerry’s claim that all
Porghavami’s claims arose prior to August 29, 2005 have been released has no merit. The
release by its terms does not bar all claims of Porghavami and or his company (MPA). The word
of the general release is limited to the particular claim to which reference is made, where
releasing party was unaware of other claims [Docket Nos. 219, 236 and 252].

14) Barred by Contractual Limitation:
Ben & Jerry’s assumption that Porghavami’s claims that occurred prior to August 15,
2005 are barred by the contractual limitations is also without merit. Since the time limitation if
any should have run from the date that Porghavami initiated its ADR (February 2007) and
putting Ben & Jerry’s on notice, so the Two (2) years time limitation should run from February
2005 and not August 2005. In addition the limitation period will run from the date when the
contract was breached and or the date of the knowledge of the loss or the date when Porghavami ought reasonably to have known of his losses. Accordingly, Porghavami should still be able to
pursue his claims including the UFOC’s item 19, the under filled tubs that continued to the
closing of his last shop in August of 2008, shortages and lack of deliveries, started in mid 2005
and continued and documented to the closing of his last shop in August of 2008. And claims
such as deteriorating quality of the products delivered, sales of discounted products to non-
franchisees, failed marketing campaigns and other issues that continued to the closing of
Porghavami’s last shop in August of 2008 [Docket Nos. 236 and 252].

15) Unjust Enrichment – Balance to Wonder:
Ben & Jerry’s is not entitle to Summary Judgment against Porghavami for the
$12,757., as shown earlier, Ben & Jerry’s and or Wonder had made no attempts at any time to
collect payments, and prior to the decline of delivery to Porghavami Roseville shop, never issued an statement demanding payments (prior to the decline of delivery), Wonder own statement for
the shipment on July 2006, bears no terms, Ben & Jerry’s [Docket Nos. 244 Ex. C] that there
was no deadline provided, the invoices for the month of July 2006 had no terms specifying on
them. That the payments of the invoices issues was brought up only after Wonder had denied the shipment of products on the August 25, 2006 despite its earlier confirmation and by then he had already suffered substantial financial losses, and when Porghavami initiated the ADR. That Ben & Jerry’s/Wonder had made no attempt to collect any other invoices prior to the August 25, 2006, and had made no demand prior to August 25, 2006, including prior to filing its lawsuit
against Porghavami. As the result Porghavami had no obligation to comply with its own once
Ben & Jerry’s and Wonder had failed in complying with their own obligations toward
Porghavami. By banning shipments of products to his shop in Roseville with no prior warning,
or provocation and despite the earlier confirmation that Wonder had made for the delivery of the same shipment on the August 25, 2006 [Docket Nos. 219, 236 and 252].

16) Wonder’s Obligations:
That Wonder’s distribution agreement with Unilever-Ben & Jerry’s also obligated
Wonder for the supply and support of Ben & Jerry’s Scoop Shops in the region, including
Porghavami’s shops in Roseville, Sacramento and Concord, California. [Docket No. 238].

17) Distribution Handbook:
That the “Scoop Shop Distribution Handbook, A guide to Serving Ben & Jerry’s
Franchising” consist of the terms, services and the prices that the Ben & Jerry’s published
annually was the governing agreement, a contract that bounded the parties and defined their
obligation toward each other [Docket Nos. 219, 236 and 238].

18) Floor Stock:
That Wonder failed to maintain Adequate Floor Stock listing as per the terms of the
governing Distribution Handbook to ensure that the supply pipeline to the franchisees are filled, including Porghavami’s shops [Docket Nos. 219, 236 and 238].

19) Failure to Plan Inventory Level:
Distributor Wonder failed to plan inventory level ahead to meet the top selling flavors
and/or promotional flavors. Wonder and Ben & Jerry’s failed meeting this particular obligation and failed to maintain inventory level sufficient to avoid constant shortages. Wonder asserts that because Porghavami has not signed a direct agreement with Wonder therefore, Wonder had no obligation to Porghavami does not have a merit. The parties were in a supplier end-user relationship, Porghavami had purchased thousands of dollars of products from Wonder. Even if there was no direct contract, Wonder does not and could not deny its agreement with Ben & Jerry’s and or its appointment as the sole distributor for the region with Ben & Jerry’s, similarly Porgahavmi has no direct agreement with Emergency Service providers in the City of Sacramento, but if his house is on fire the city is obligated to provide the emergency services, to him. Porghavami does not know his emergency service representatives, but he knows they are there. The same rule applies to Wonder, by the virtue of appointment as the sole distributor of Ben & Jerry’s and for the Ben & Jerry’s products, Wonder was obligated to Porghavami and for the service to his shops, Porghavami did not have to have a direct agreement with Wonder, Wonder was the sole designated supplier of the region and as such they were/are obligated to serve Porghavami’s shops in the same manner as to others [Docket Nos. 219, 236, 238 and 252].

20) Wonder’s Denial of Shipments:
Nowhere in the agreement and or the application Porghavami has signed and or
submitted allowed Wonder to deny shipments on its own accord. There were no provisions on any such actions. The application Porghavami has signed with Wonder and the subsequent guaranteed he submitted, did allow Wonder to charge for any remaining balance(s) owing to them, but it did not authorize Wonder to ban of shipments on its own accord and at least without notifying Porghavami of its intention and or giving him a chance to remedy the situation. Wonder and Ben & Jerry’s in their responses are also missing the point, as once Wonder had banned the delivery on its own accord and without prior notice and or giving Porghavami a chance to rectify and pay whatever outstanding invoices they may have, Wonder breached its obligation and upon Ben & Jerry’s failure to rectify Wonder’s lack of delivery(s), then both Wonder and Ben & Jerry’s are responsible to Porghavami for his losses. [Docket Nos. 219, 236, 238 and 252]. See- California Breach of Implied Covenant of Good Faith and Fair Dealing.