Cluck-U Chicken, Inc. v. Cluck-U Corp., Case No.: 8:15-CV-2274-T-MAP

CourtUnited States District Courts. 11th Circuit. United States District Court of Middle District of Florida
Writing for the CourtMARK A. PIZZO, UNITED STATES MAGISTRATE JUDGE
Citation358 F.Supp.3d 1295
Parties CLUCK-U CHICKEN, INC., et al., Plaintiffs, v. CLUCK-U CORP., et al., Defendants.
Docket NumberCase No.: 8:15-CV-2274-T-MAP
Decision Date06 June 2017

358 F.Supp.3d 1295

CLUCK-U CHICKEN, INC., et al., Plaintiffs,
v.
CLUCK-U CORP., et al., Defendants.

Case No.: 8:15-CV-2274-T-MAP

United States District Court, M.D. Florida, Tampa Division.

Signed June 6, 2017


358 F.Supp.3d 1302

Mary M. Clapp, Clapp Business Law, LLC, Springfield, MO, for Plaintiffs.

Constantine John Themelis, Thomas J. Cullen, Jr., Pro Hac Vice, Goodell, DeVries, Leech & Dann, LLP, Baltimore, MD, Michael Correnti, Sarah Anne Long, McDonald Toole Wiggins, PA, Orlando, FL, Paul N. Rouhana, Pro Hac Vice, Seigel Tully Rouhana & Tully, LLC, Towson, MD, for Defendants.

ORDER

MARK A. PIZZO, UNITED STATES MAGISTRATE JUDGE

This is a breach of franchise agreement case involving a Maryland-based chicken wing franchise (Defendant franchisor Cluck-U Corp. and its sole shareholder, Defendant Pierre Haddad), a franchisee's attempt at a Florida location (Plaintiff Cluck-U Chicken, Inc. and its owner, Anthony Tartaglia), and the undoing of their business relationship. The parties have litigated in Maryland, where Defendants sued Plaintiffs, and in this Court, where Plaintiffs sued Defendants. The Maryland district court transferred its case here; then this Court consolidated the two cases, and the parties consented to my jurisdiction. Now, both sides have moved for summary judgments on the dozen-plus claims that are outstanding with both sides complaining about each other's conduct and egging each other on by hurling a hodgepodge of legal and equitable actions against each other (docs. 129, 130, 140, 142). The Plaintiffs say the Defendants breached the franchise agreement, committed business torts, and violated assorted statutes regulating such business transactions. The Defendants say the Plaintiffs violated the franchise agreement and then infringed their intellectual property rights during a limited temporal period after the two sides parted ways. And importantly, both sides say the other side made misrepresentations or material omissions leading up to their failed relationship. Having considered all the motions and responses, I grant Defendants' summary judgment motion (doc. 129) as to Plaintiffs' Florida Franchise Act claim (count two) and Florida Sale of Business Opportunities Act claim (count three). I also grant Defendant Haddad summary judgment on Plaintiffs' negligent misrepresentation and breach of contract claim. I also find that Plaintiffs' request for a declaratory judgment concerning the franchise agreement's non-compete provisions is moot, as are Defendants' claims for injunctive relief; otherwise,

358 F.Supp.3d 1303

the motions are denied given the disputed factual landscape.1

A. Standards

Motions for summary judgment should only be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a), (c) ; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Jackson v. BellSouth Telecomm. , 372 F.3d 1250, 1279-80 (11th Cir. 2004). The existence of some factual disputes between the litigants will not defeat an otherwise properly supported summary judgment motion; "the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original). The substantive law applicable to the claimed causes of action will identify which facts are material. Id. at 248, 106 S.Ct. 2505. Essentially, an issue of fact is "material" if, under the applicable substantive law, it might affect the outcome of the case, and an issue of fact is "genuine" if the record taken as a whole could lead a rational trier of fact to find for the non-moving party. Hickson Corp. v. N. Crossarm Co. , 357 F.3d 1256, 1259-60 (11th Cir. 2004).

The moving party bears the initial responsibility to inform the court of the basis for its motion and to identify the portions of the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any, which it contends demonstrate the absence of a genuine issue of material fact. Id. at 1260 (citing Celotex , 477 U.S. at 323, 106 S.Ct. 2548 ). For issues on which the non-movant bears the burden of proof at trial, the moving party may show the court that there is an absence of evidence to support the non-moving party's case, or it may support its motion for summary judgment with affirmative evidence demonstrating that the non-moving party will be unable to prove its case at trial. Fitzpatrick v. City of Atlanta , 2 F.3d 1112, 1115-16 (11th Cir. 1993). Once the moving party makes such a showing, the burden shifts to the non-moving party to produce significant, probative evidence demonstrating a genuine issue for trial. Id. at 1116-17. In considering the evidence, the court resolves all reasonable doubts about the facts in favor of the non-moving party and draws all justifiable inferences in its favor. Tolan v. Cotton, 572 U.S. 650, 134 S.Ct. 1861, 1863, 1866, 188 L.Ed.2d 895 (2014) ; Hickson , 357 F.3d at 1260. The court does not, however, weigh the evidence or make findings of fact. Anderson , 477 U.S. at 255, 106 S.Ct. 2505.

B. Undisputed Facts

The Cluck-U brand was created in 1985 by Robert Ilvento, who dropped out of Rutgers University to open his first chicken wing restaurant near that campus in New Brunswick, New Jersey. (doc. 131 at 4 (Ilvento Dep. 14:5-14) ) The concept of locating a fast-food chicken wing restaurant within walking distance of a college campus was a successful one. So successful that in the early 1990s, Ilvento began offering Cluck-U franchises for sale. (Ilvento Dep. 16:17-18) Around that time, Defendant Haddad opened a Cluck-U location in New Jersey with Ilvento as co-owner; Haddad eventually bought out Ilvento's interest in that location. (Ilvento Dep. 16:5-12)

358 F.Supp.3d 1304

He moved up in the pecking order to become Cluck-U's master franchise developer for Maryland and then, in 2000, Haddad bought the Cluck-U franchise rights outright from Ilvento for $ 400,000. (Ilvento Dep. 19:11-21; 25:6-9) As a part of the deal, Ilvento retained the right to sell Cluck-U sauces to grocery stores and restaurants and to receive royalties from then-existing locations. (Ilvento Dep. 13:7-16; 24:21-25:5; doc. 133-11 at 7 (Franchise Disclosure Document (FDD) at Item 1) )

Under Haddad, the brood of Cluck-U restaurants expanded to Maryland, North Carolina, Delaware, New Jersey, Ohio, Pennsylvania, Florida, and Lebanon. (see doc. 133 at 4 (Haddad Dep. at 14:14-15:15) ) In December 2012, at Plaintiff Tartaglia's initiative, Haddad and Ilvento met with Tartaglia (a Florida resident) in Maryland and hatched a plan to open a Florida restaurant. (Ilvento Dep. 26:7-10) Before signing the franchise agreement, Plaintiff Tartaglia traveled from Florida to Maryland to visit Cluck-U's corporate offices; he visited Maryland retail locations; and he recruited three other men – Phil Kahn, David Levine, and Paul DeCosta – to either invest in a Florida location or help him start one. (doc. 140-5, Tartaglia Dep. 109:15-22) At Tartaglia's urging, his ex-wife and employee, Cheryl Tartaglia, toured numerous Cluck-U locations on the east coast. (Tartaglia Dep. 141:24-142:1)

Cluck-U presented Plaintiffs with its standard franchise agreement and most recent franchise disclosure document dated October 2012. (doc. 1, ex. A) The parties executed the franchise agreement on May 21, 2013, with amendments signed in June and July 2013. (doc. 1, ex. A; doc. 133-11 at 238). The agreement includes a Maryland choice of law provision: "This franchise agreement and the construction thereof shall be governed by the laws of the state of Maryland without regard to its conflict of laws provisions." (doc. 1 at 75). Around that time, Tartaglia also signed an Independent Investigation Acknowledgment, which stated:

I have telephone or visited current Cluck-U Chicken restaurant(s). I base the decision to purchase a Cluck-U Corp. franchise solely and completely upon the findings of that independent investigation and the Franchise Disclosure Document provided to me by Cluck-U, Corp. and not on any oral representations whatsoever. I have thoroughly reviewed the Franchise Disclosure Document and all pertinent documents ... Cluck-U, Corp. is not responsible for the financial performance, or overall outcome, of the unit; this is my responsibility alone.

(doc. 129-2). Tartaglia signed a personal guaranty as well. It states:

The Guarantor[ ] hereby unconditionally, irrevocably and directly guarantee to Franchisor the prompt, punctual and full: (a) payment when due ... of all principal and interest, interest or principal, royalties, franchise fees, and of all other monies payable under the Agreement; and (b) performance when due of all covenants, promises, agreements, and the accuracy and completeness of all representations and warranties, contained in the Agreement.

(doc. 1 at 84).

In June 2013, Tartaglia, Kahn, and Levine signed a shareholder's agreement for Cluck-U Chicken, Inc., the company through which the franchise operated, with each shareholder owning...

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7 practice notes
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    • U.S. District Court — Middle District of Tennessee
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    ...with the Franchise Rule is a per se unfair and deceptive act or practice under the TCPA. Cf. Cluck-U Chicken, Inc. v. Cluck-U Corp., 358 F.Supp.3d 1295, 1313 (M.D. Fla. 2017) ("Liability under [the Florida Deceptive and Unfair Trade Practices Act] requires more than a mere technical vi......
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    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
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    ...or unfair practice in the course of trade or commerce; (2) causation; and (3) actual damages. Cluck-U Chicken, Inc. v. Cluck-U Corp., 358 F.Supp.3d 1295, 131213 (M.D. Fla. 2017). Rebotix moves for summary judgment on this counterclaim, arguing that Intuitive lacks evidence of two “critical ......
  • Jia v. Boardwalk Fresh Burgers & Fries, Inc., 8:19-cv-2527-VMC-CPT
    • United States
    • U.S. District Court — Middle District of Florida
    • August 9, 2021
    ...the Court finds that Maryland has the most significant relationship to these fraud claims. See Cluck-U Chicken, Inc. v. Cluck-U Corp., 358 F.Supp.3d 1295, 1309 (M.D. Fla. 2017) (“Plaintiffs' complaint and the record evidence convince me that Plaintiffs' case centers on Defendants' misrepres......
  • MTR Capital, LLC v. LaVida Massage Franchise Dev., Inc., 17-CV-13552-TGB
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • November 6, 2020
    ...and closed at any given time is a material fact about the franchise opportunity. See, e.g., Cluck-U Chicken, Inc. v. Cluck-U Corp., 358 F. Supp. 3d 1295, 1313 (M.D. Fla. 2017) (finding an actionable FDUTPA claim when franchisor failed to provide franchisee with updated disclosure document s......
  • Request a trial to view additional results
7 cases
  • Best Choice Roofing & Home Improvement, Inc. v. Best Choice Roofing Savannah, LLC, No. 3:18-cv-00615
    • United States
    • U.S. District Court — Middle District of Tennessee
    • March 9, 2020
    ...with the Franchise Rule is a per se unfair and deceptive act or practice under the TCPA. Cf. Cluck-U Chicken, Inc. v. Cluck-U Corp., 358 F.Supp.3d 1295, 1313 (M.D. Fla. 2017) ("Liability under [the Florida Deceptive and Unfair Trade Practices Act] requires more than a mere technical vi......
  • Rebotix Repair LLC v. Intuitive Surgical, Inc., 8:20-cv-2274-VMC-TGW
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • August 10, 2022
    ...or unfair practice in the course of trade or commerce; (2) causation; and (3) actual damages. Cluck-U Chicken, Inc. v. Cluck-U Corp., 358 F.Supp.3d 1295, 131213 (M.D. Fla. 2017). Rebotix moves for summary judgment on this counterclaim, arguing that Intuitive lacks evidence of two “critical ......
  • Jia v. Boardwalk Fresh Burgers & Fries, Inc., 8:19-cv-2527-VMC-CPT
    • United States
    • U.S. District Court — Middle District of Florida
    • August 9, 2021
    ...the Court finds that Maryland has the most significant relationship to these fraud claims. See Cluck-U Chicken, Inc. v. Cluck-U Corp., 358 F.Supp.3d 1295, 1309 (M.D. Fla. 2017) (“Plaintiffs' complaint and the record evidence convince me that Plaintiffs' case centers on Defendants' misrepres......
  • MTR Capital, LLC v. LaVida Massage Franchise Dev., Inc., 17-CV-13552-TGB
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • November 6, 2020
    ...and closed at any given time is a material fact about the franchise opportunity. See, e.g., Cluck-U Chicken, Inc. v. Cluck-U Corp., 358 F. Supp. 3d 1295, 1313 (M.D. Fla. 2017) (finding an actionable FDUTPA claim when franchisor failed to provide franchisee with updated disclosure document s......
  • Request a trial to view additional results

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