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DUNKIN' DONUTS INC. v. S. PATEL

October 31, 2001

DUNKIN' DONUTS INCORPORATED, PLAINTIFF,
V.
ANAND S. PATEL, DIPAK R. PATEL, KELIDO, INC., ANUJA, INC., AND KVELL, INC. DEFENDANTS.



The opinion of the court was delivered by: Greenaway, District Judge.

  This matter having come before the Court on Plaintiffs motion for summary judgment on Counts I, II, and III of Plaintiffs Complaint; and the Honorable G. Donald Haneke, United States Magistrate Judge, having issued a Report and Recommendation, pursuant to Fed.R.Civ.P. 72(b) and L. Civ. R. 72.1(a)(2), recommending that Plaintiffs motion be granted; and said Report and Recommendation having been filed on September 18, 2001; and the time in which to object to the Report and Recommendation having expired; and no objection having been filed by either party; and it appearing that the recommended disposition of a dispositive motion such as a motion to remand is reviewed de novo, see In re U.S. Healthcare, 159 F.3d 142, 145-46 (3d Cir. 1998); Temptations, Inc. v. Wager, 26 F. Supp.2d 740, 743 (N.J. 1998); see also Fed.R.Civ.P. 72(b); and this Court having conducted a de novo review of the parties' submissions and the Report and Recommendation; and good cause appearing,

IT IS on this 31st day of October, 2001,

ORDERED that the Report and Recommendation of Magistrate Judge Haneke is adopted as the opinion of this Court;

IT IS FURTHER ORDERED that Plaintiffs motion for summary judgment on Counts I, II, and III is GRANTED;

IT IS FURTHER ORDERED that a copy of this Order be served on all parties within seven (7) days of the date of this Order.

REPORT AND RECOMMENDATION

Presently before the Court is Plaintiff's Motion for Summary Judgment on Counts I, II, and III of the Complaint.*fn1 Also before this Court is Plaintiffs Motion to Strike the Certification and Memorandum of William James filed by Defendants in opposition to Plaintiffs Motion for Summary Judgment. These matters have been referred to me by the Honorable Joseph A. Greenaway, Jr. for an appropriate Report and Recommendation pursuant to Loc. Civ. R. 72.1(a)(2) and Fed.R.Civ.P. 72(b). I have considered all the papers. Oral argument has not been requested by counsel. For the reasons expressed below, I respectfully recommend that both the Motion for Summary Judgment and the Motion to Strike the Certification and Memorandum of William James be granted.

Background

Motion for Summary Judgment

This is a Motion filed by the Plaintiff, Dunkin' Donuts Incorporated ("Dunkin'") seeking summary judgment on Counts I, II, and III of the Complaint. These counts allege that Defendants breached their respective Franchise Agreements with Plaintiff by violating Plaintiffs standards for health, sanitation, and safety as set forth in the Franchise Agreements between the parties. Subsequent to suit being filed, Defendants cured the violations that existed at their respective Dunkin' Donut shops. In that regard, Plaintiff now seeks payment of its attorneys' fees and costs under the terms of the Franchise Agreements which Plaintiff alleges Defendants have refused to pay.

a. Statement of Material Facts as to which there is no genuine issue.

Plaintiff is the franchiser of the Dunkin' Donuts franchise system. Dunkin' franchisees are licensed to operate under the Dunkin' Donuts systems, which involves the production, merchandising, and sale of doughnuts and related products using a specially designed building with special equipment, layouts, products, standards, and specifications.

Defendant, Anuja, Inc., is a Dunkin' Donut franchisee for a doughnut shop located at 752 Hamilton Street, Somerset, New Jersey (the "Hamilton Street Shop") pursuant to a franchise agreement dated June 1, 1998 (the "Hamilton Street Franchise Agreement").

Defendants, Anand S. Patel, Dipak R. Patel, and Kelido, Inc., are Dunkin' Donuts franchisees for a doughnut shop located at 30 Lafayette Avenue, Morristown, New Jersey (the "Lafayette Street Shop") pursuant to a franchise agreement dated October 12, 1989 (the "Lafayette Avenue Franchise Agreement").

Defendant, Kvell, Inc., is a Dunkin' Donuts franchisee for a doughnut shop located at 135 West Main Street, Somerville, New Jersey (the "West Main Street Shop") pursuant to a franchise agreement dated August 21, 1998 (the "West Main Street Franchise Agreement").

Plaintiff provides each of its franchisees a set of manuals and guidelines (the "Manuals") which set forth in detail the procedures, methodology, and standards applicable to the operation of a Dunkin' Donuts shop. These documents provide detailed and specific guidance and standards for shop maintenance and appearance; food preparation, presentation, and service; customer service standards; and cleanliness and sanitation.

The Franchise Agreements between the parties contain language as well as acknowledgments and agreements by Defendants concerning the maintaining of Dunkin's standards for health, sanitation and safety. The applicable paragraphs of the Hamilton Street and West Main Street Franchise Agreements state:

5.0 FRANCHISEE understands and acknowledges that every detail of the Dunkin' Donuts System is important to DUNKIN' DONUTS, to FRANCHISEE and to other Dunkin' Donuts franchisees, in order to develop and maintain high and uniform standards of quality, cleanliness, appearance, service, facilities, products and techniques to increase the demand for Dunkin' Donuts products and to protect and enhance the reputation and goodwill of DUNKIN' DONUTS. . . .
5.1 . . . FRANCHISEE shall operate the Dunkin' Donuts Shop so as to maximize Gross Sales and maintain all standards of the Dunkin' Donuts system. In connection therewith, FRANCHISEE further agrees:
5.1.1 To use all materials, ingredients, supplies, papers goods, uniforms, fixtures, furnishings, signs, equipment, methods of exterior and interior design and construction and methods of product preparation and delivery prescribed by or which conform to DUNKIN' DONUTS' standards and specifications; and to carry out the business covered by this Agreement in accordance with the operational standards and specifications established by DUNKIN' DONUTS and set forth in DUNKIN' DONUTS' operating manuals and other documents as they presently exist or shall exist in the future or as may be otherwise disclosed to DUNKIN' DONUTS franchisees from time to time.
5.1.6. To maintain, at all times and at FRANCHISEE'S expense, the interior and exterior of the Dunkin' Donuts Shop and all fixtures, furnishings, signs and equipment in the highest degree of cleanliness, orderliness, sanitation and repair, as reasonably required by DUNKIN' DONUTS.

The Lafayette Avenue Franchise Agreement contains provisions substantively identical to these provisions.

The Franchise Agreements provide also for a twenty-four hour cure period for any violation of Plaintiffs standards for health, sanitation, and safety.*fn2 The Franchise Agreements also specify that the Franchisee shall pay to Dunkin' all damages, costs, and expenses, including attorneys' fees, incurred by Dunkin' as a result of any ...


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