Coryell v. Morris

Docket Number1977 EDA 2021,J-A26040-22
Decision Date08 November 2023
Citation2023 PA Super 232
PartiesCLARENCE DAVID CORYELL, AND SANDRA CORYELL, H/W v. STEVEN MORRIS, JASON DAWSON, ROBIZZA, INC., AND DOMINO'S PIZZA LLC APPEAL OF: DOMINO'S PIZZA LLC
CourtPennsylvania Superior Court

Appeal from the Judgment Entered September 21, 2021 In the Court of Common Pleas of Philadelphia County Civil Division at No(s) 180602732

BEFORE: BOWES, J., KING, J., and PELLEGRINI, J. [*]

OPINION

PELLEGRINI, J.

Domino's Pizza LLC (Domino's) appeals from the judgment entered in the Court of Common Pleas of Philadelphia County (trial court) after a jury found it vicariously liable for the negligence of a delivery driver for one of its franchises. Before trial, Domino's moved for summary judgment arguing that it could not be held vicariously liable because under its franchise agreement, its relationship with the franchisee was that of an independent contractor-contractee rather than master-servant. The trial court, however, found that there was a genuine issue of material fact and denied the motion, and the jury found Domino's vicariously liable and awarded damages.

There are two central issues in this appeal. First, we must determine what we are reviewing: the denial of the summary judgment motion or the denial of the post-trial motion for judgment notwithstanding the verdict (JNOV). Both involve the question of whether the trial court or the jury should have determined vicarious liability. At the summary judgment stage, the parties agreed that the franchise agreement was unambiguous and controlled the franchisor-franchisee relationship. As a result, the parties merely disagreed over the construction of the franchise agreement and whether it created a master-servant relationship. Similarly, at trial there was no disagreement over whether the franchise agreement was unambiguous. Because the franchise agreement was unambiguous, vicarious liability was a legal issue rather than a factual one, and the trial court was obligated to determine that issue.

That does not end the matter, though. Because vicarious liability should have been determined as a matter of law, our second issue is whether the franchise agreement created a master-servant relationship between Domino's and the franchisee. To answer this, we review the agreement under the standard for franchisor-franchisee vicarious liability recognized in Myszkowski v. Penn Stroud Hotel, Inc., 634 A.2d 622 (Pa. Super. 1993). There, we held that our inquiry in such cases focuses on "whether the alleged master has day-to-day control over the manner of the alleged servant's performance." Id. at 626. After review, we conclude that the franchise agreement did not give Domino's day-to-day control over the franchisee. Accordingly, we reverse and remand with instructions.

Now to a more detailed discussion of those issues.

I.
A.

On August 15, 2006, Domino's entered into a Standard Franchise Agreement under which Robizza, Inc. (Robizza) was to operate a store (the Store) in Souderton, Montgomery County, Pennsylvania. The Store was operated by Jason Dawson (Dawson), Robizza's owner. The Standard Franchise Agreement authorized Robizza to operate under Domino's name, marks, trade dress, and logos and specified operating and product standards for the Store. Robizza was required to comply with the terms and conditions of Domino's Standard Franchise Agreement, Product Standards and Operating Standards, and the agreement set forth when franchise licensing fees had to be paid to Domino's.

On July 26, 2016, Steven Morris (Morris) was working as a delivery driver for Robizza and driving a car leased by Dawson. While returning from a delivery, Morris collided with a motorcycle driven by Clarence Coryell (Coryell), who was ejected and suffered substantial injuries. On June 22, 2018, Coryell and his wife (the Coryells) filed an action raising claims of negligence and loss of consortium against Morris, Dawson, Robizza and Domino's. Relevant here, the Coryells alleged that Domino's was vicariously liable for Morris's negligence.[1]

At the end of discovery, Domino's and the Coryells both moved for summary judgment on vicarious liability. While disagreeing over the construction of the franchise agreement and what kind of relationship it created, they agreed that the franchise agreement was unambiguous and controlling. Both also asserted that the trial court and not a jury should determine vicarious liability, since the matter was essentially one of contract interpretation. The trial court, however, denied both motions for summary judgment, stating simply, without explanation, that there was a genuine issue of material fact as to the extent of control asserted by Domino's.

B.

At trial, witnesses testified as to the nature of the relationship created by the Standard Franchise Agreement, including testimony based on specific sections in these documents. Because they were testifying about what the Agreement and Operating Standards said, their testimony was consistent.

The Coryells called Roy Jones (Jones), a former Domino's executive who had served in various executive capacities for 30 years. In that time, he was involved with running Domino's corporate-owned stores and in assisting and overseeing between 1,200 and 2,000 franchised stores for compliance with the Standard Franchise Agreement.

Jones testified[2] regarding mandatory requirements in Domino's Standard Franchise Agreement, Operating Standards, and Product Standards that franchisees such as Robizza were required to meet:

• Follow hours of operation set by Domino's.
• Comply with Section 15.6 of the Standard Franchise Agreement that states that Domino's had the right to set the specifications regarding the equipment, fixtures, furniture, signs, and decorations allowed in the store.
• Comply with standards for quality of ingredients and supplies used in preparation and sale of food products.
• Conform the franchise lease for the store to meet the standards set by Domino's.
• Keep financial records in a manner set by Domino's.
• Follow Domino's Operating Standards which specified how its employees had to act, their demeanor, and how to handle customer complaints; provided how long employees' fingernails and facial hair could be; the size and amount of employees' jewelry; when the store must be cleaned and what types of supplies were permitted; methods of acceptable payment by customers; what topics must be covered in employee training; how much cash, including personal funds, drivers were permitted to carry in the delivery vehicles; and prohibited drivers from carrying mace or other types of personal protection in the delivery vehicles.
• Allow Domino's to inspect store premises any time during open hours.

He stated that every store was audited by an independent team roughly four times a year. Every store would usually be visited one to two times per year by the business franchise consultant. If any issues developed out of the inspections, he and his team would follow up with the franchisees to ensure that they corrected the issues and became compliant with the Operating Standards. If a franchisee did not comply with the Standard Franchise Agreement, Operating Standards or Product Standards, it was required to remedy the violation within thirty days. If the violation was not corrected within 30 days, Domino's had the right to terminate the franchise agreement.

Jones acknowledged that consistency standards are inherent in any franchise relationship in which the franchisee creates and assembles a product that is purchased by the customer under the franchisor's brand. In his words, "a brand is a promise of consistency." (R. 1879a). Jones further acknowledged that all franchisors strive to ensure consistency of customer experience through such standards. The goal of uniform standards is to protect the value of the Domino's brand for the benefit of all stakeholders, including franchisees such as Robizza. Jones testified that how each franchisee meets those standards, and the supervision of the franchisee's employees, is left to the discretion of the franchisee. In this case he recognized that no one from Domino's instructed Dawson or the Robizza employees on how to meet or exceed those standards on a daily basis, and Dawson and his wife alone supervised Robizza's employees.

Also testifying[3] was Joseph Deveraux (Deveraux), Domino's Director of Franchise Services from 1997 to present. His job duties included enforcement of the Standard Franchise Agreement with franchisees who were not in compliance. He also signed the Standard Franchise Agreement with Robizza on behalf of Domino's on August 15, 2006. He stated that in some respects the Standard Franchise Agreement gave Domino's the right to create, at any time, specifications, standards and operating procedures and rules for franchises. However, he noted that provisions in the franchise agreement specify that any determinations that Domino's makes under the Standard Franchise Agreement must be reasonable ones.

Deveraux also testified that the Operating Standards issued in July 2016 created mandatory rules for the preparation and sale of all pizza by franchisees. Regarding delivery drivers, he stated that the Operating Standards provided that before a franchisee could hire or train a delivery driver, that driver would have to meet the requirements set forth by the Operating Standards.

January Shook (Shook), an area leader for Domino's Pizza LLC in 2016, also testified.[4] One of her responsibilities was to make sure that the franchisees complied with the Standard Franchise Agreement. It was also her job to understand the Standard Franchise Agreement and ensure that franchisees like Robizza complied with its...

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