incurred as a result of Defendants' breach and their failure to
cure the violations timely.
As stated, under the Franchise Agreements, Defendants are
required to maintain their shops in compliance with Plaintiffs
standards, including those standards for health, sanitation and
safety. If violations of standards are observed, Defendants are
entitled to written notice and twenty-four hours to cure the
violations, as stated in the Franchise Agreements. If the
violations are not cured after the cure period expires, then
Defendants are in breach of the Franchise Agreements.
In this case, Dunkin' representatives inspected Defendants'
shops and observed numerous standards violations. While some of
these violations have been disputed by the Defendants in their
opposition papers,'*fn10 many have not. Although the
Defendants cured these violations as of August, 2000, Plaintiff
alleges they refused to pay the attorneys' fees and costs
Plaintiff has incurred, and continues to incur, in instituting
and prosecuting this action. The Franchise Agreements expressly
provide that if the franchisee fails to cure a default,
following the appropriate notice and within the applicable time
period, then the franchisee is to pay the attorneys' fees,
costs, and expenses incurred by Dunkin' as a result of the
failure to cure.
As far as Defendants' assertions that they are being unfairly
targeted by Dunkin' in retaliation for their refusal to support
an off-premises bakery, these assertions are based upon hearsay
and speculation. Out-of-court statements offered for the truth
of the matter asserted are "presumptively inadmissible" hearsay.
United States v. Saada, 212 F.3d 210, 221 n. 12 (3d Cir.
2000). Genuine issues of material fact cannot be raised by
speculation and conclusory allegations. Trap Rock Indus., 982
F.2d at 890.
Further, Defendants' claim that Dunkin' inspections were
retaliation for Defendants' refusal to support a
franchisee-owned cooperative off-premises bakery was previously
addressed by this Court when it dismissed Defendants'
Counterclaim with prejudice in March, 2001.*fn11 In addition,
Dunkin's motives in conducting its inspections have no bearing
on whether Defendants' breached their Franchise Agreement with
Plaintiff by failing to properly maintain the three shops. Other
federal courts have addressed and rejected this argument. See,
e.g., McDonald's Corp. v. Robertson, 147 F.3d 1301, 1309 (11th
Cir. 1998) (rejecting the franchisee's argument that McDonald's
termination of the franchise agreement for health and safety
violations was merely an excuse for McDonald's real motive to
relocate the store and declaring that "[e]ven assuming,
arguendo, that this allegation is correct . . ., we find that
the Robertsons' failure to comply with McDonald's QSC and food
safety standards constituted a material breach of the franchise
agreement sufficient to justify termination, and thus, it does
not matter whether McDonald's also possessed an ulterior, or
improper motive for terminating the . . . franchise agreement");
Major Oldsmobile, Inc. v. Gen. Motors Corp., No. 93 Civ. 2189,
1995 WL 326475, 1995 U.S. Dist. LEXIS 7418, at
*26-27 (S.D.N.Y. May 31, 1995) (defendant's alleged ulterior
motive in terminating contract was "legally irrelevant" where it
also had valid grounds for the termination), aff'd,
101 F.3d 684 (2d Cir. 1996); but see Gen. Motors Corp. v. New A.C.
Chevrolet, Inc., 263 F.3d 296, 319 (3d Cir. 2001) (stating that
while Major Oldsmobile states the correct rule regarding
private contracts, the New Jersey Franchise Practices Act,
N.J.S.A. 56:10-1, et seq., requires a franchiser terminate a
franchise agreement with good cause, but that "New Jersey law
offers no clear answer" on whether good cause requires an
inquiry into whether the franchiser acted in good faith and
without a "pretextual motive," and declaring that this argument
was irrelevant anyway since the defendant "failed to furnish
record evidence sufficient to create a genuine issue as to
whether GM acted in good faith").
Certification and Memorandum of William James
Both Mr. James' Certification and the Memorandum of June 26,
2000, fail to comply with Rule 26(a)(2)(B) in numerous ways.
First, neither document sets forth the basis and reasons for the
opinions contained therein. Mr. James' opinion that Dunkin'
representatives did not properly calibrate their thermometers is
based upon observations made by "[f]ranchise management and
employees." Similarly, Dunkin's representative's identification
of mouse feces is based upon what Defendants' employees reported
to be only visual observations of feces. Second, neither of Mr.
James' documents includes a list of all publications authored by
him over the past ten years; they do not indicate his
compensation for his study and/or testimony; nor do they list
any other cases in which he has testified as an expert or by
deposition within the past four years. Further, the June 26,
2000 Memorandum lacks Mr. James' signature.
Furthermore, the documents are not admissible under Federal
Rule of Evidence 702, which governs the admission of expert
testimony. The two documents, both of which challenge the
validity of Dunkin's inspections, are not "based upon sufficient
facts and data" as required by the Rule, because Mr. James has
not demonstrated knowledge of Dunkin's health, sanitation, and
safety standards. His Certification and Memorandum focus on
whether Defendants' shops were in compliance with the
requirements of New Jersey law. However, the issue is whether
Defendants' shops met Plaintiffs standards. Moreover, as Mr.
James acknowledges, not only was he not present during Dunkin's
inspections, he states that "[b]ased on a review of the reports,
it could not be shown that they [the three shops] were not
operating property [sic], but I was not there at that time and
cannot say that there were no conditions that did not comply."
Moreover, Mr. James' opinions in his Certification and
Memorandum are not supported by any treatises or authoritative
documents in which standard practices are set forth for
thermometer calibrations, determining internal food
temperatures, or that black lights must be used to accurately
determine the existence of mouse feces. Mr. James simply states
in his Certification that he is "fully familar with all form
[sic] of food handling sanitation methodologies and techniques
and have set forth a full listing of my health inspection
credentials." Similarly, Mr. James states in his Memorandum of
June 26, 2000, that in his "professional opinion" the shops in
question "are operating in compliance with New Jersey Law . . .
and [their] operations are conducted in accordance with what is
considered to be good public health
and food safety standards." (emphasis added).
Additionally, although Mr. James does attach a resume to his
Certification listing his health inspector credentials and
employment history, the other requirements of Rule 26(a)(2)(B)
are not met: there are no exhibits identified "to be used as a
summary of or support for the opinions"; there is no list of
publications authorized by Mr. James within the preceding ten
years; there is no mention of the compensation paid to Mr. James
for his study and testimony; and there is no list of any other
cases in which Mr. James testified as an expert within the
preceding four years.
Since discovery closed on February 28, 2001, and given that
Defendants never designated Mr. James an expert, Plaintiff does
not now have an opportunity to learn the factual bases for the
opinions contained in Mr. James' Certification and June 26, 2000
Memorandum. In addition, information concerning Mr. James'
compensation for his study and testimony is relevant regarding
bias. Further, a listing of previous cases in which Mr. James
has testified as an expert would allow Plaintiff to locate that
testimony since it might be relevant to this case.
Mr. James' Certification and Memorandum also do not meet the
requirements of Federal Rule of Evidence 702 because they are
not based upon "sufficient facts or data" in that they fail to
establish that Mr. James has any familiarity with Plaintiff's
health, sanitation, and safety standards. Instead, both
documents focus on whether
Defendants' shops were in compliance with the New Jersey State
Health Code. However, the issue is whether Defendants' shops met
Plaintiffs standards. Defendants, in their opposition papers to
the Motion to Strike, argue that this motion is both
"substantively illogical and procedurally defective." Defendants
argue that the motion is "substantively illogical" because it
was not possible for Mr. James to be present during Plaintiffs
April 2000 inspections of the shops. However, the central issue
in this case is whether Defendants' shops met Dunkin's
standards. Indeed, instead of addressing Plaintiffs arguments
that Mr. James' Certification and Memorandum do not meet the
requirements of Federal Rule of Civil Procedure 26(a)(2)(B) and
Federal Rule of Evidence 702, their opposition papers merely
reiterate Mr. James' findings, which had been set forth in their
opposition papers to the summary judgment motion.
Lastly, Defendants' claim that the Motion to Strike is
procedurally defective in that Plaintiff cannot "piggy-back" it
onto its original Motion for Summary Judgment. Defendants assert
that "[i]nstead of sending its motion [sic] Defendants' counsel
as a new and separate motion, Plaintiff chose to treat the
motion in the nature of a reply, which it cannot do as the
subject of the motion is totally different from its original
summary judgment motion." However, it is this argument that is
illogical and unsupported.
For the foregoing reasons, I recommend that Plaintiffs Motion
for Summary Judgment on Counts I, II, and III and its Motion to
Strike the Certification and Memorandum of William James be
Sept. 18, 2001.