This action was filed in federal court in the Central District of California by Chevron, USA Inc. against our defendant client. Essentially, the plaintiff alleged that it was entitled to terminate our client’s Chevron gasoline service station lease and franchise because our client allegedly failed to cooperate with an audit of her station and produce all books and records so that the Chevron audit could be conducted. Chevron gave the client a notice of termination accusing her of underpayment of rent, fraud, failure to maintain books and records and to cooperate in the audit process. Chevron then shortly thereafter filed and served on a the client a complaint for breach of lease, fraud and declaratory relief to terminate the client’s franchise, for damages, attorney’s fees and costs of suit.
The complaint contains the same allegations alleged against the client that were contained in the notice of termination. The defendant then paid the initial audit fee of $1,800 through an automatic withdrawal request which was granted by Chevron. We then requested on behalf of the defendant that the audit be reopened because when she received the notice of the audit only 24 hours in advance from Chevron’s auditor, she was unable to prepare for it because she had to tend to her mother who is blind and her son who is mentally handicapped. Chevron then agreed to reopen the audit.
The client produced all requested books, records and her station’s financial statements for review and audit by Mario Oseguera, CPA who is Chevron’s auditor. He determined that the defendant had passed the audit and all books and records were in proper order. After the defendant had prepared her answer to the complaint and attempted to file it, the answer was rejected by the court because Chevron without notice to the defendant had dismissed this lawsuit.