Carlock v. Pillsbury Co., Civ. No. 4-87-517

CourtUnited States District Courts. 8th Circuit. United States District Court of Minnesota
Writing for the CourtMacLAUGHLIN
Citation719 F. Supp. 791
PartiesJerry CARLOCK, Gerald Sullivan, Sullock Corporation, Jerrold Crawford, Mary Crawford, John Emry, Marjorie Goldfine, Sander Goldfine, Henry Goldfine, Sacramento Mighty Good Ice Cream, Inc., Dorothy Kranhold, Lester Kranhold, Steven Kranhold, Mark Reiff, Jeffrey Dilson, Jacqueline Dilson, Barry Dumont, Connie Dumont, Caledonia Ice Cream, Inc., Abby Goodman, Robert Goodman, Foothills Ice Cream Works Limited, Edwin Hines, Jennifer Wein, Green Mountain Ice Cream Co., Inc., John Fulton, Sharon Fulton, Frances Fulton, David Fulton, Frances T. Ellsworth, Roy Ellsworth, Howard Belodoff, Idaho Ices, Inc., Janet Drago, Noel Drago, Marsha McCroskey, Christine Curtis, Timothy Curtis, The Inside Scoop, Inc. and I.C.E., Inc., Plaintiffs, v. The PILLSBURY COMPANY, The Haagen-Dazs Shoppe Company, Inc., The Haagen-Dazs Co., Inc., HDF Liquidating Corporation, HDI Liquidating Corporation, WSC Liquidating Corporation, and Doris Mattus-Hurley, Defendants. Thomas DWYER, Tivoli Enterprises, Inc., Vanilla Chip Ice Cream, Co., Aaron Pinkus and Marcia Pinkus, Plaintiffs, v. The PILLSBURY COMPANY, The Haagen-Dazs Shoppe Company, Inc., The Haagen-Dazs Co., Inc., HDF Liquidating Corporation, HDI Liquidating Corporation, WSC Liquidating Corporation, and Doris Mattus-Hurley, Defendants.
Decision Date09 August 1989
Docket NumberCiv. No. 4-87-517,4-87-586.

719 F. Supp. 791

Jerry CARLOCK, Gerald Sullivan, Sullock Corporation, Jerrold Crawford, Mary Crawford, John Emry, Marjorie Goldfine, Sander Goldfine, Henry Goldfine, Sacramento Mighty Good Ice Cream, Inc., Dorothy Kranhold, Lester Kranhold, Steven Kranhold, Mark Reiff, Jeffrey Dilson, Jacqueline Dilson, Barry Dumont, Connie Dumont, Caledonia Ice Cream, Inc., Abby Goodman, Robert Goodman, Foothills Ice Cream Works Limited, Edwin Hines, Jennifer Wein, Green Mountain Ice Cream Co., Inc., John Fulton, Sharon Fulton, Frances Fulton, David Fulton, Frances T. Ellsworth, Roy Ellsworth, Howard Belodoff, Idaho Ices, Inc., Janet Drago, Noel Drago, Marsha McCroskey, Christine Curtis, Timothy Curtis, The Inside Scoop, Inc. and I.C.E., Inc., Plaintiffs,
v.
The PILLSBURY COMPANY, The Haagen-Dazs Shoppe Company, Inc., The Haagen-Dazs Co., Inc., HDF Liquidating Corporation, HDI Liquidating Corporation, WSC Liquidating Corporation, and Doris Mattus-Hurley, Defendants.

Thomas DWYER, Tivoli Enterprises, Inc., Vanilla Chip Ice Cream, Co., Aaron Pinkus and Marcia Pinkus, Plaintiffs,
v.
The PILLSBURY COMPANY, The Haagen-Dazs Shoppe Company, Inc., The Haagen-Dazs Co., Inc., HDF Liquidating Corporation, HDI Liquidating Corporation, WSC Liquidating Corporation, and Doris Mattus-Hurley, Defendants.

Civ. Nos. 4-87-517, 4-87-586.

United States District Court, D. Minnesota, Fourth Division.

August 9, 1989.


719 F. Supp. 792
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Richard I. Diamond, Jeff Ross and Mitchell Scott Paul, Estes, Parsinen & Levy and Barry G. Reed, Zimmerman & Reed, Minneapolis, Minn., for plaintiffs

David Forsberg, Jeffrey Keyes, Jeffrey Shaw and Sally Scoggin, Briggs & Morgan, St. Paul, Minn. and Jonathan L. Eisenberg, Minneapolis, Minn., for defendants Pillsbury Co., Haagen-Dazs Shoppe Company, Inc. and Haagen-Dazs Co., Inc.

William Z. Pentelovitch, Rebecca Palmer, Virginia Bell and Wayne S. Moskowitz, Maslon, Edelman, Borman & Brand, Minneapolis, Minn. and Yee Wah Chin, Shea & Gould, of counsel, New York City, for defendants HDF Liquidating Corp., HDI Liquidating Corp., WSC Liquidating Corp. and Doris Mattus-Hurley.

 TABLE OF CONTENTS
                INTRODUCTION .................................................. 798
                PARTIES ....................................................... 799
                 A. The Defendants ....................................... 800
                 B. The Plaintiffs ....................................... 800
                FACTUAL BACKGROUND ............................................ 802
                 A. The Haagen-Dazs Franchise ............................ 802
                 B. Plaintiffs' Allegations .............................. 804
                DISCUSSION .................................................... 806
                

719 F. Supp. 798
I. BREACH OF CONTRACT AND THE IMPLIED COVENANTS OF 806 GOOD FAITH AND FAIR DEALING A. Choice of Law ............................................................. 806 B. Governing Law ............................................................. 811 C. Plaintiffs' Specific Allegations of Breach ................................ 816 D. Summary of Disposition of the Contract and Implied Covenant 826 Claims II. FRAUD OR MISREPRESENTATION ................................................... 826 A. Claims of Fraudulent Inducement ........................................... 827 B. Claims Concerning Distribution ............................................ 832 C. Claims of Fraud in the Operation of the Franchise System .................. 834 D. Summary of Disposition of Plaintiffs' Claims for Fraud or Misrepresentation 842 III. MONOPOLIZATION ............................................................... 842 IV. PRICE DISCRIMINATION ......................................................... 843 A. Robinson-Patman Act ....................................................... 843 B. Oregon Price Discrimination Act ........................................... 847 C. Colorado Unfair Practices Act ............................................. 848 D. Idaho Unfair Practices Law ................................................ 848 E. California Unfair Practices Act ........................................... 848 V. STATE CONSUMER FRAUD STATUTES ................................................ 849 A. Minnesota Consumer Fraud Act .............................................. 849 B. Idaho Consumer Protection Act ............................................. 850 C. Washington Franchise Investment Protection Act ............................ 852 VI. STANDING OF PLAINTIFF CORPORATIONS ........................................... 853 VII. STANDING OF DAVID FULTON AND FRANCES FULTON .................................. 854 VIII. STANDING OF JOHN FULTON AND SHARON FULTON .................................... 855 IX. VALIDITY OF RELEASES ......................................................... 856 A. Adequacy of Consideration ................................................. 857 B. Fraud ..................................................................... 858 C. Coercion .................................................................. 858 D. Scope of the Releases ..................................................... 858 CONCLUSION ......................................................................... 859

MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

INTRODUCTION

These two actions have been brought by sixteen groups of Haagen-Dazs franchisees against the franchisors, manufacturers and distributors of that well-known ice cream. The plaintiffs in the Carlock case are franchisees whose Haagen-Dazs "shoppes" are located in California, Colorado, Idaho, Oregon and Washington. The plaintiffs in the Dwyer case are franchisees with shoppes located in Minnesota. One plaintiff in the Dwyer case, Thomas Dwyer, was the local distributor for Haagen-Dazs in the Twin Cities area, as well as a franchisee. In both cases, plaintiffs allege fraud, misrepresentation, breach of contract, breach of the implied covenants of good faith and fair dealing, antitrust violations, and various state statutory claims. Two motions are now before the Court.1 Defendants have moved for summary

719 F. Supp. 799
judgment on all but one of plaintiffs' claims.2 Plaintiffs have moved for summary judgment on their claim that the royalty and advertising contributions collected by defendants exceeded the amounts provided by the franchise agreement

PARTIES

A. The Defendants

There are seven defendants in each case. Three of the defendants are the corporations which originally developed and marketed Haagen-Dazs ice cream, now titled the WSC Liquidating Corporation, the HDF Liquidating Corporation, and the HDI Liquidating Corporation. The operations of those corporations were sold to the Pillsbury Company on July 11, 1983. The Pillsbury Company and the two subsidiaries responsible for its Haagen-Dazs operations are also defendants in these cases. In addition, there is one individual defendant, Doris Mattus-Hurley.

1. Doris Mattus-Hurley (Mattus-Hurley)

Mattus-Hurley is the daughter of Reuben Mattus and Rose Mattus, the founders of the Haagen-Dazs ice cream business. Mattus-Hurley opened the first Haagen-Dazs Shoppe in 1976, founded the franchise system in 1978, and served as president of the franchisor corporations from 1978 to 1985.

2. WSC Liquidating Corporation (WSC)

Originally named the Woodbridge Sweets Company, WSC was founded by Reuben Mattus and Rose Mattus. WSC manufactured Haagen-Dazs ice cream at its plant in Woodbridge, New Jersey and sold the ice cream to approximately 150 distributors who in turn sold the ice cream to retailers. WSC also sold ice cream to Mattus-Hurley's franchise company, which in turn sold the ice cream to its franchisees. The business and affairs of WSC have been wound up and liquidated.

3. HDF Liquidating (HDF)

HDF was founded in 1978 by Mattus-Hurley under the name Haagen-Dazs Franchise, Inc. HDF franchised about 300 Haagen-Dazs Shoppes around the country.

719 F. Supp. 800
HDF purchased ice cream from WSC and resold it to franchisees. HDF is now an inactive corporation.

4. HDI Liquidating Corporation (HDI)

HDI, originally known as Haagen-Dazs, Inc., distributed ice cream in metropolitan New York. It purchased ice cream from WSC and resold it to retailers in the New York area. HDI has been liquidated.

5. The Pillsbury Company (Pillsbury)

Pillsbury, a diversified international food and restaurant company, purchased the assets of WSC, HDF, and HDI and related entities on July 11, 1983.

6. The Haagen-Dazs Company, Inc. (HDC)

HDC is a wholly-owned subsidiary of Pillsbury which was created to manufacture Haagen-Dazs ice cream. HDC operates the original Woodbridge, New Jersey plant as well as a newer plant in Tulare, California. Like WSC before it, HDC sells ice cream to distributors for resale to retailers and to the franchise company (the Haagen-Dazs Shoppe Company, Inc., discussed below) for resale to franchisees.

7. The Haagen-Dazs Shoppe Company, Inc. (HDSC)

HDSC, a wholly-owned subsidiary of Pillsbury, operates the franchise shoppe business. It is the assignee of the franchise agreements to which HDF was a party. HDSC purchases ice cream from HDC and resells it to franchisees.

B. The Plaintiffs

The claims in the Carlock case involve eighteen shoppes; the Dwyer claims involve five shoppes. The chart below summarizes, for each plaintiff, the date each franchise agreement was signed, the location of each franchise, and whether the franchise remains open.

 SUMMARY OF PLAINTIFFS
                 Date of City in Which
                 Franchise Franchise Status of
                Plaintiffs Agreement Located Franchise
                Thomas Dwyer 6/9/80a Minneapolis, Closed
                 Minnesota 12/31/88
                 6/9/80b Minneapolis, Closed
                 Minnesota 11/88
                 5/17/82 Minneapolis, Closed
                 Minnesota 11/84
                 10/4/84c Minnetonka, Closed
                 Minnesota
...

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76 practice notes
  • Nedlloyd Lines B.V. v. Superior Court
    • United States
    • United States State Supreme Court (California)
    • August 31, 1992
    ...f [substantial relationship present when "one of the parties is domiciled" in the chosen state]; Carlock v. Pillsbury Co. (D.Minn.1989) 719 F.Supp. 791, 807 ["A party's incorporation in a state is a contact sufficient to allow the parties to choose that state's law to govern their contract.......
  • ABC Internat. Traders, Inc. v. Matsushita Electric Corp., No. S051417
    • United States
    • United States State Supreme Court (California)
    • February 27, 1997
    ...MECA also cites Plotkin v. Tanner's Vacuums (1975) 53 Cal.App.3d 454, 125 Cal.Rptr. 697, and Carlock v. Pillsbury Co. (D.Minn.1989) 719 F.Supp. 791. Plotkin did not involve unearned discounts or any form of discriminatory pricing, and discussed only sections 17040 and 17043. The discussion ......
  • Curtis 1000, Inc. v. Youngblade, No. C 94-4117.
    • United States
    • United States District Courts. 4th Circuit. Northern District of West Virginia
    • January 27, 1995
    ...sufficient to sustain the choice of law when company also did a substantial amount of business there); but see Carlock v. Pillsbury Co., 719 F.Supp. 791, 807 (D.Minn.1989) ("A party's incorporation in a state is a contact sufficient to allow the parties to choose that state's law to govern ......
  • CARIBE BMW v. Bayerische Motoren Werke, Civ. No. 91-1156 (RLA).
    • United States
    • U.S. District Court — District of Puerto Rico
    • May 13, 1993
    ...Video Dist., Inc. v. Vestron Video, Inc., 1990-1 Trade Cas. ¶ 68, 986 at 63, 348, 1990 WL 58463 (D.P.R. 1990); Carlock v. Pillsbury Co., 719 F.Supp. 791, 845 8 This lumping together of the defendants is so indiscriminate and confusing as to constitute an attempt to make BMW AG and BMW NA lo......
  • Request a trial to view additional results
76 cases
  • Nedlloyd Lines B.V. v. Superior Court
    • United States
    • United States State Supreme Court (California)
    • August 31, 1992
    ...f [substantial relationship present when "one of the parties is domiciled" in the chosen state]; Carlock v. Pillsbury Co. (D.Minn.1989) 719 F.Supp. 791, 807 ["A party's incorporation in a state is a contact sufficient to allow the parties to choose that state's law to govern their contract.......
  • ABC Internat. Traders, Inc. v. Matsushita Electric Corp., No. S051417
    • United States
    • United States State Supreme Court (California)
    • February 27, 1997
    ...MECA also cites Plotkin v. Tanner's Vacuums (1975) 53 Cal.App.3d 454, 125 Cal.Rptr. 697, and Carlock v. Pillsbury Co. (D.Minn.1989) 719 F.Supp. 791. Plotkin did not involve unearned discounts or any form of discriminatory pricing, and discussed only sections 17040 and 17043. The discussion ......
  • Curtis 1000, Inc. v. Youngblade, No. C 94-4117.
    • United States
    • United States District Courts. 4th Circuit. Northern District of West Virginia
    • January 27, 1995
    ...sufficient to sustain the choice of law when company also did a substantial amount of business there); but see Carlock v. Pillsbury Co., 719 F.Supp. 791, 807 (D.Minn.1989) ("A party's incorporation in a state is a contact sufficient to allow the parties to choose that state's law to govern ......
  • CARIBE BMW v. Bayerische Motoren Werke, Civ. No. 91-1156 (RLA).
    • United States
    • U.S. District Court — District of Puerto Rico
    • May 13, 1993
    ...Video Dist., Inc. v. Vestron Video, Inc., 1990-1 Trade Cas. ¶ 68, 986 at 63, 348, 1990 WL 58463 (D.P.R. 1990); Carlock v. Pillsbury Co., 719 F.Supp. 791, 845 8 This lumping together of the defendants is so indiscriminate and confusing as to constitute an attempt to make BMW AG and BMW NA lo......
  • Request a trial to view additional results

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