Marane, Inc. v. McDonald's Corp., 83-2663

• Decision Date: 19 February 1985
• Docket Number: No. 83-2663,83-2663
• Citation: 755 F.2d 106
• Parties: MARANE, INC., an Illinois corporation, Plaintiff-Appellant, v. McDONALD'S CORPORATION & McDonald's System, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 106

755 F.2d 106

1 Fed.R.Serv.3d 757

MARANE, INC., an Illinois corporation, Plaintiff-Appellant, v. McDONALD'S CORPORATION & McDonald's System, Inc.,

Defendants-Appellees.

No. 83-2663.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 3, 1984.

Decided Feb. 19, 1985.

Robert Ahern, Glenview, Ill., for plaintiff-appellant.

Alan H. Silberman, Sonnenschein, Carlin, Nath & Rosenthal, Chicago, Ill., for defendants-appellees.

Before CUMMINGS, Chief Judge, CUDAHY, Circuit Judge, and FAIRCHILD, Senior Circuit Judge.

CUDAHY, Circuit Judge.

This is an appeal in a case involving allegations of conduct constituting antitrust violations and business torts. Plaintiff Marane, Inc. ("Marane"), is an Illinois corporation which used to operate a franchised restaurant in the McDonald's chain. Defendant McDonald's Corp. ("McDonald's") is the successor in interest by merger to defendant McDonald's System, Inc., and is a Delaware corporation. The gist of Marane's action is a claim that McDonald's violated antitrust law and committed tortious interference with prospective advantage by the manner in which it failed to renew Marane's restaurant franchise or to allow Marane to sell its franchise before it expired. Marane's appeal centers around two major contentions. First Marane claims that the district court abused its discretion by allowing Marane's counsel to withdraw under the circumstances of this case. Marane's second contention is that the district court erred in granting summary judgment for McDonald's. Before we can consider these contentions, however, we must examine the confused, though not complex, procedural history of this case to determine whether we have jurisdiction over any part of this appeal.

I.

Marane entered into a franchise agreement with McDonald's in 1957. Under the franchise agreement, Marane was authorized to use the McDonald's trade name and business methods at a restaurant that was owned by Marane's then principals. The agreement had a ten-year term, with a single ten-year renewal option. The option was exercised, and the franchise continued until it expired in 1978.

In those cases in which McDonald's wants to continue a franchise relationship with the holder of an expiring franchise, it offers the franchisee a new agreement, called a "rewrite." In July 1976 McDonald's advised Marane of its decision not to "rewrite" Marane's franchise upon its expiration in 1978. At the same time, McDonald's advised Marane that if the franchise were sold prior to expiration to a purchaser approved by McDonald's, McDonald's would commit itself to give the buyer a new franchise for a term of twenty years. Marane contended, however, that the franchise agreement granted a perpetual franchise to Marane.

In the final months of Marane's franchise, McDonald's brought a declaratory judgment action in state court. The court entered summary judgment for McDonald's, holding that the franchise agreement expired at midnight on May 31, 1978, that Marane had no option to renew or extend the contract beyond that time and (by implication) that Marane had no right to sell the franchise after that time. McDonald's Corp. v. Marane, Inc., No. 78 L 2790 (Cir.Ct. of Cook County, Aug. 17, 1978).

Although Marane had discussions with several potential purchasers of the franchise, and received offers from some of them, no sale was closed prior to the expiration of the franchise.

On March 2, 1979, Marane filed in the district court the complaint commencing this litigation. Count I of Marane's complaint alleged that McDonald's had committed antitrust violations by refusing to allow Marane to transfer its franchise unless McDonald's obtained the right to lease the underlying real estate to the new franchisee. Count II alleged that by unreasonably withholding approval of any prospective transferee, McDonald's had committed tortious interference with the contractual undertakings or with the advantageous business relationships between Marane and the potential purchasers.

Discovery was pursued in a mutually acceptable manner until September 1980, at which time McDonald's objected to further discovery requests filed by Marane. At a hearing on June 30, 1982, the scope of this further discovery was determined. Marane did not proceed with any of the allowed further discovery, even though an order was entered directing it to examine by a specified date the documents which it sought, and on December 13, 1982, discovery was closed. Also on that date an order was entered scheduling the filing of a summary judgment motion by McDonald's for early February 1983.

We now turn to the crucial events of the first eight months of 1983. On January 21, 1983, counsel for Marane filed motions for leave to withdraw from the case. The motions mentioned serious and long-standing differences between counsel and Marane, both over the payment of expenses and over the conduct of the case. These motions were heard on February 7th. On that date the district court entered an order allowing Marane until February 17th to respond to the motions for leave to withdraw. Counsel were given until the 22nd to reply. McDonald's was granted leave to file its summary judgment motion and memorandum.

On February 10th the district court entered its next order. This order granted the motions for leave to withdraw. Marane was given until April 11th to respond to McDonald's motion for summary judgment, and McDonald's was given until April 25th to file its reply. On February 17th Marane filed a "Memorandum in Opposition to Motion to Withdraw." This was filed after entry of the order of February 10th, now conceded by McDonald's to be premature, but within the period set in the order of February 7th for responding to the motion to withdraw. The district court indicated it would rule on the memorandum as though it were a motion to reconsider the order of February 10th. On February 23rd Marane's present counsel sent a letter to former counsel and to counsel for McDonald's, enclosing the memorandum in opposition. The letter indicates that Marane's present counsel was aware of the order of February 10th. On April 14th Marane's present counsel was served with a copy of a letter from McDonald's to the district judge stating that Marane had not responded to the summary judgment motion although such response was due on April 11th.

On May 13th the motion to reconsider the February 10th order was denied by the district court. Two weeks later, on May 27th, a status hearing was held. Because Marane had not responded to McDonald's motion for summary judgment, the court granted the motion, and judgment was entered on May 31st. Subsequently, costs were taxed to Marane.

On June 29th Marane filed a "Motion to Reconsider." This motion asked the court to reconsider its orders of February 10th and May 31st. The motion asserted that the court had not ruled on the memorandum in opposition deemed to be a motion to reconsider, and that it was improper to rule on the summary judgment motion while the motion to reconsider was pending. The motion did not assert lack of notice as a reason for reconsidering the summary judgment by default, nor did it contest the underlying merits of summary judgment.

McDonald's filed its response to the June 30th motion to reconsider on July 12th. The response stated that the motion to reconsider was not timely under Rule 59, FED.R.CIV.P., because it has not been filed within ten days of the entry of summary judgment on May 31st. The response went on to argue that even if the court were to ignore the question of timeliness, the court had ruled on May 13th on the earlier motion to reconsider the order allowing counsel to withdraw, and thus there were no grounds for Marane's motion.

In an order dated August 12th the district court ruled on the motion to reconsider. That order is as follows.

The motion to reconsider is denied. Even if timely, the motion is predicated upon the premise that an earlier motion to reconsider an order permitting withdrawal of counsel should have been acted upon prior to any ruling upon a motion for summary judgment, and that procedure was not followed. Plaintiff is in error. The earlier motion was denied May 13, 1983, well before the ruling on the summary judgment motion.

On September 12th, Marane filed its notice of appeal "from the order of summary judgment ... entered in this action on the 12th day of August, 1982 [sic]." This appeal, and our possible jurisdiction, arise from this notice of appeal.

II.

The time limits for filing a notice of appeal are specified by Rule 4, FED.R.APP.P., and 28 U.S.C. Sec. 2107. ¹ Rule 4(a)(1) and section 2107 require that, except where the government is a party, the notice of appeal be filed within thirty days after the date of entry of the judgment appealed from. "This 30-day time limit is 'mandatory and jurisdictional.' " Browder v. Director, Dept. of Corrections, 434 U.S. 257, 264, 98 S.Ct. 556, 560, 54 L.Ed.2d 521 (1978) (quoting United States v. Robinson, 361 U.S. 220, 229, 80 S.Ct. 282, 288, 4 L.Ed.2d 259 (1960)). Rule 4(a)(4) provides that if certain post-judgment motions are timely filed in the district court, the time for appeal runs from the entry of the order disposing of the motion (except in the case of an order granting a new trial, which is not appealable). Among the motions listed in Rule 4(a)(4) are motions under Rule 59(e), FED.R.CIV.P., to alter or amend the judgment.

If Marane's "Motion to Reconsider" was a timely Rule 59(e) motion, then the period for filing an appeal did not start to run until August 12, 1983, the day after entry of the order denying the motion. (The order was entered in the docket August 11th, though it was dated August 12th.) Marane filed its notice of appeal on September 12th. This was timely because September 10, 1983, the final day of the thirty-day period, was a Saturday. FED.R.CIV.P. 6(a). Thus if Marane's motion was timely, we would have jurisdiction over...