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FLEMING COS. v. THRIFTWAY MEDFORD LAKES

March 2, 1995

FLEMING COMPANIES, INC., Plaintiff,
v.
THRIFTWAY MEDFORD LAKES, INC., d/b/a Murphy's Market, Defendant. RONALD S. MURPHY, KATHLEEN MURPHY, and THRIFTWAY MEDFORD LAKES, INC., Plaintiffs, v. FLEMING COMPANIES, INC., G. WILLIAM WATSON, JOHN R. TRAUB and WAYNE PENDERGAST, Defendants.



The opinion of the court was delivered by: PARELL

 PARELL, District Judge

 This matter is before the Court on motion for summary judgment by Fleming Companies, Inc., G. William Watson, John R. Traub, and Wayne Pendergast. For the following reasons, the motion is granted.

 FACTUAL BACKGROUND

 This case involves a business relationship that was formed in the Spring of 1978 for the purpose of opening and operating a Supermarket in Medford Lakes, New Jersey. The relevant facts ascertained from the record are as follows:

 Ronald Murphy ("Murphy") is an individual with a high school education who has worked in the grocery or supermarket business since he was approximately twelve or thirteen years old. In 1977, while Murphy was employed as a manager at a Shop N' Bag supermarket in Glenn Oaks, New Jersey, he mentioned to a representative from Fleming Companies, Inc. ("Fleming"), who was at the Shop N' Bag store, that he would be interested in becoming an "equity store" owner. Thereafter, Fleming proposed to Murphy that he seek to participate in a program sponsored by Fleming known as the "Equity Plan." The Equity Plan is a program whereby Fleming provides individuals who show promise and who would otherwise be financially unable to do so, with the opportunity to become owners and operators of a supermarket. *fn1"

 A store site in Medford Lakes, New Jersey was mutually agreed upon by Fleming and Murphy, and thereafter Fleming provided Murphy with a book (the "Equity Plan Book") explaining in general terms how the Equity Plan works. Murphy states that he read this book but that he did not understand the principles and procedures which are set forth therein. The Equity Plan Book provides:

 
After you have been approved for an Equity Store, you are expected to enter into a "participation Agreement," that spells out, in the greatest detail, every single step in the development and operation of both an Equity Corporation and an Equity Store.
 
Because the Participation Agreement is a lengthy, legal document, we do not expect you to understand it on a single reading. We want you to take it home and study it at your leisure. If you wish, you may discuss it with such people as your attorney, banker, accountant, etc., and, by all means, we urge you to go over it with your wife.

 (Defs.' App. at 30a.)

 Murphy states that he did not consult with an attorney or seek the advice of any other type of professional regarding the principles and procedures set forth in the Equity Plan Book because he "took for granted that everything was the way it should be" and because he is "an uneducated person" and "didn't want to make a fool of himself asking stupid questions." (Defs.' App. at 218-19a.)

 Murphy was approved by Fleming as an Equity Store operator for the Medford Lakes location. On April 24, 1978, Murphy met with a representative from Fleming and, at that time, he signed a number of Equity Plan agreements prepared by Fleming, including a lease agreement whereby Fleming subleased the Medford Lakes property to Thriftway Medford Lakes, Inc. ("TML"), the Equity Corporation which was formed as part of the Equity Plan program. Prior to signing these agreements, Murphy did not consult with an attorney or seek the advice of any other type of professional regarding the nature and the extent of the obligations and the rights set forth in these agreements because he did not feel that it was necessary to do so. (Defs.' App. at 229a.) Murphy concedes that neither Fleming nor any representative of Fleming prevented Murphy from asking questions or from seeking outside counsel or advice.

 In April of 1978, the Medford Lakes property was owned by Floharon Properties, Inc. ("Floharon"). On April 24, 1978, Fleming entered Into an agreement (the "Build and Lease Agreement") with Floharon to lease the Medford Lakes property. The Build and Lease Agreement provides:

 
The LESSOR [Floharon] agrees to, and does hereby, lease the premises to the LESSEE [Fleming] for an original term of twenty (20) years, commencing on the first day the premises is open for business. . . .
 
. . .
 
It is further agreed that, at the expiration of the original term, the LESSEE shall have the right, exercisable at its sole option to extend this lease for three (3) additional term(s) of five (5) years each, upon the same terms and conditions.

 (Defs.' App. at 67-68a.)

 The Sublease Agreement between Fleming and ...


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