April 7, 2008
KEITH SIMPKINS, PLAINTIFF-APPELLANT,
7-ELEVEN, INC., A/K/A/ THE SOUTHLAND CORPORATION, SEVEN ELEVEN STORE NO. 23786 AND SAMUEL PASHI, DEFENDANTS-RESPONDENTS, AND OMAR SOSA AND FRANK GUTSCHOW, DEFENDANTS.
On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1910-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 4, 2008
Before Judges Coburn and Fuentes.
Plaintiff Keith Simpkins was a customer in a franchised 7-Eleven convenience store when he was attacked and stabbed by another customer. Plaintiff brought a lawsuit against the 7-Eleven corporation and the individual franchisee who operated the store where he was assaulted. Plaintiff appeals from three orders issued by the Law Division in connection with this suit.
Specifically, plaintiff appeals from the orders: (1) denying his belated application to add Barbara Gutschow, the franchisee at the time of the attack, as a party defendant in the suit; (2) granting defendant Samuel Pashi's motion for summary judgment, based on plaintiff's failure to present sufficient evidence showing that Pashi, the current franchisee, had assumed the liabilities of the prior franchisee; and (3) granting corporate 7-Eleven's summary judgment motion, because plaintiff had not shown that 7-Eleven had exhibited sufficient control over the individual franchisee to render it vicariously liable for plaintiff's injuries.
After reviewing the record, and mindful of controlling legal principles, we affirm. We will recite the salient facts from the record developed before the Law Division.
I. The Assault
The incident that gave rise to this law suit occurred on Saturday June 24, 2000, between 12:30 a.m. and 1:00 a.m. Omar Sosa was standing outside of a Hamilton Township 7-Eleven store when plaintiff and his companion Dennis Sheppard arrived. Sosa had come to the store immediately after being ejected from a nearby bar for rowdiness. Sosa had been inside the store before plaintiff's arrival, and had asked the sole clerk on duty, Stephen Aaron, whether Aaron had seen Sosa's girlfriend.
According to Aaron, Sosa was visibly intoxicated; between 9:00 p.m. and 1:00 a.m., Sosa had consumed "four doubles and . . . two or three beers," and had smoked two or three marijuana cigarettes. In fact, Sosa described himself as being "intoxicated" by the time he arrived at the 7-Eleven. Neither plaintiff nor Sheppard had consumed either alcohol or drugs that night.
When plaintiff and Sheppard entered the 7-Eleven, Sosa followed closely behind them. As plaintiff went to the coffee station, Sosa immediately bumped into Sheppard, who described the bump as "real hard, not a regular you [sic] bump into someone. This was purposely to start a fight." Wishing to avoid a confrontation, Sheppard ignored Sosa's conduct and proceeded to the check-out counter to buy cigarettes. Sheppard stood in front of the counter for approximately a minute waiting for Aaron, the only store-employee on duty, to return from emptying a bucket of water outside.
At this point, Sosa came close to Sheppard and began talking to him. Sheppard described the encounter as follows:
He asked if I had a problem, is that my gray car outside. I was, like, yeah. He said, you want to get in your car and get the f' out of here, you know. He was whispering, like - saying names in my ear, like, you're a coward, a pussy, a faggot, get out of here, blah, blah, blah, you know.
While this was taking place, Sheppard noticed that Sosa was holding what appeared to be "a butcher knife." Sosa tapped Sheppard on the hip with the knife while making the abusive remarks. Frightened by Sosa's behavior, Sheppard motioned to plaintiff that the two of them should leave the store. Sheppard then turned from Sosa and started to walk towards the exit.
As Sheppard turned away from Sosa, plaintiff saw Sosa "tr[y] to lunge after" Sheppard. Plaintiff came from behind Sosa and grabbed him. In the ensuing scuffle, Sosa stabbed plaintiff multiple times. Plaintiff finally broke free from Sosa and ran out of the store. Sheppard drove plaintiff to the hospital.
After plaintiff and Sheppard drove away, Sosa left the store and ran down the street, still in an agitated state. Store-employee Aaron witnessed the struggle between Sosa and plaintiff. Aaron's only reaction was to make several telephone calls from an emergency phone kept behind the counter. He first called his girlfriend's brother, June Figueroa (an individual whom Aaron referred to as his brother-in-law).
Aaron lived with Figueroa directly across the street from the 7-Eleven store. Because Figueroa and Sosa were friends, Aaron hoped that Figueroa would come calm Sosa down. Remarkably, Sosa had been staying with Aaron and Figueroa after Sosa's girlfriend had thrown him out of her apartment. Aaron called the police to report the incident only after he had called Figueroa. Finally, Aaron reported the incident to his employer's spouse, Frank Gutschow, and the assistant manager Donna Brophy.
II. The Litigation
Plaintiff filed this personal injury cause of action on June 7, 2002, twenty-two days before the expiration of the two-year statute of limitations. N.J.S.A. 2A:14-2. The complaint initially named 7-Eleven, Inc., Seven Eleven Store No. 23786, and Omar Sosa as defendants. The complaint also named ABC Corporations 1-99 and John Doe 1-99 as fictitious parties. As to 7-Eleven and the Hamilton store, plaintiff alleged that these two defendants had breached their duty to protect plaintiff, as "a business visitor lawfully on the premises."
Defendant 7-Eleven filed an answer denying any liability. Samuel Pashi responded on behalf of defendant Hamilton store. In his answer, Pashi acknowledged that he was the current franchisee of Seven Eleven Store No. 23786, located in Hamilton, New Jersey. Pashi asserted, however, that at the time of Sosa's attack on plaintiff, the franchisee was Barbara Gutschow.
One year after receiving Pashi's responsive pleading denying liability, and more than three years after the date of the incident, plaintiff moved before the trial court: (1) for leave to file an amended complaint to add Barbara Gutschow as a party defendant; (2) to reinstate his complaint against Sosa, which had apparently been dismissed under R. 1:13-7 for lack of prosecution; and (3) for an extension of the relevant discovery end-date.*fn1
III. Motion to Add Barbara Gutschow as a Party Defendant
At oral argument before the motion judge, plaintiff's counsel conceded that, for over a year, he had known of Barbara Gutschow's identity as the franchisee at the time of the attack on his client. Counsel nevertheless argued that defendants would not be prejudiced by the court allowing plaintiff to amend his complaint at this late hour.
Both 7-Eleven and Pashi argued that plaintiff had failed to sufficiently describe the John Doe defendants to toll the running of the statute of limitations as to Barbara Gutschow. Furthermore, defendants argued that allowing plaintiff to amend his complaint at this juncture would result in undue delay. In response, plaintiff argued that these defendants did not have standing to assert Barbara Gutschow's statute of limitations defense.
The trial court gave the following explanation for denying plaintiff's motion:
[T]his motion to file an amended complaint does not meet the standard for when amendments re[late] back; Rule 4:9-3. While leave to amended [sic] complaints should be fully granted, such relief should not be granted, whereas in this case, the plaintiff has been on notice of the proposed newly-added defendant for more than one year, and failed to seek the appropriate amendment.
[T]he question is that the Court does not have to grant a motion for leave to file an amended complaint when to do so would ultimately result in a dismissal of the complaint as a [matter] of law.
[T]here is no dispute in this matter that you were put on notice. Whether it is true or not, there is no dispute in this matter that the defendants have been on notice for more than a year, that at least there is an allegation that the proposed newly-added party was the owner of the premises. Whether or not that in fact is true, is not the question.
The question is whether or not there was due diligence exercised and whether or not you were put on notice, if you were put on notice more than one year ago, and yet now seek to file an amendment to name this person when it is more than two years after the event is alleged to have occurred.
There is not an allegation here, well, that the discovery [rule] applies, and therefore, although technically more than two years has elapsed, that this should come under [that] doctrine. It does not.
So, the Court, as a [matter] of law where on the face of the pleadings, it is clear that no cause of action could be asserted against the proposed newly-added party, the Court may grant the relief that is sought. The Court may deny the motion for leave to file an amended complaint. The Court being persuaded that there's no basis to grant the relief sought in the motion for leave to file an amended complaint naming an additional party is denied.
Against this backdrop, we will now address the propriety of the court's ruling. Leave to amend a pleading "shall be freely given in the interest of justice." R. 4:9-1. Our review on appeal, however, is limited. See Cutler v. Dorn, 390 N.J. Super. 238, 258 (App. Div.), certif. granted, 192 N.J. 595 (2007). "The determination of a motion to amend a pleading is generally left to the sound discretion of the trial court . . . and its exercise of discretion will not be disturbed on appeal, unless it constitutes a 'clear abuse of discretion.'" Franklin Med. Assocs. v. Newark Pub. Sch., 362 N.J. Super. 494, 506 (App. Div. 2003) (citations omitted).
We will reverse a trial court's exercise of discretion only "if the discretionary act was not premised upon consideration of all relevant factors, was based upon consideration of irrelevant or inappropriate factors, or amounts to a clear error in judgment." Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005). Stated differently, a trial court abuses its discretion where its decision is arbitrary or capricious, is "made without a rational explanation, inexplicably depart[s] from established principles, or rest[s] on an impermissible basis." Ibid. (quoting Flagg v. Essex County Prosecutor, 171 N.J. 561, 571 (2002)).
In discussing leave to amend pleadings, the Supreme Court has held that:
"Rule 4:9-1 requires that motions for leave to amend be granted liberally" and that "the granting of a motion to file an amended complaint always rests in the court's sound discretion." Kernan v. One Washington Park Urban Renewal Assocs., 154 N.J. 437, 456-57, 713 A.2d 411 (1998). That exercise of discretion requires a two-step process: whether the non-moving party will be prejudiced, and whether granting the amendment would nonetheless be futile. [Notte v. Merchants Mut. Ins. Co., 185 N.J. 490, 501 (2006).]
Applying this two-step approach to the facts here, we need not reach the issue of prejudice. It is clear to us, as it was to the motion judge, that plaintiff's efforts against the franchisee Barbara Gutschow would be futile, because the cause of action against her would be barred by the two-year statute of limitations. N.J.S.A. 2A:14-2. In this light, we discern no legal basis to overturn the judge's decision denying plaintiff's motion to add Barbara Gutschow as a party defendant.
IV. 7-Eleven's Motion for Summary Judgment
Before addressing the arguments raised by 7-Eleven in support of its summary judgment motion, we first need to review the relationship established by the franchise agreement. On May 20, 1983, Frank and Barbara Gutschow entered a franchisee agreement with 7-Eleven. The agreement contained the following provision:
20. Independent Contractor. FRANCHISEE shall be an independent contractor and shall control the manner and means of the operation of the store and exercise complete control over and responsibility for all labor relations and the conduct of FRANCHISEE's agents and employees. FRANCHISEE and FRANCHISEE's agents and employees shall not be considered or held out to be agents or employees of 7-ELEVEN and shall not negotiate or enter any agreement or incur any liability in the name or on behalf of, or that purports to bind, 7-ELEVEN.
On July 31, 1993, with the consent of all involved, Barbara Gutschow became the sole franchisee of the Lalor Street 7-Eleven. Aaron, the employee present during plaintiff's attack, began working for the Lalor Street 7-Eleven in January 2000. In his deposition, Aaron testified that both Frank and Barbara Gutschow participated in hiring and supervising him. Aaron indicated that Frank Gutschow "handled most of the operation of the store . . . . Like the money, any orders, and stuff like that, that needed to be done; paying the bills . . . ." According to Aaron, both Frank and Barbara Gutschow worked in the store's office, though Aaron did not know precisely what duties each performed.
In her deposition, Barbara Gutschow acknowledged that her husband Frank had interviewed Aaron; Mrs. Gutschow was the one, however, who made the decision to hire Aaron. Both Gutschows gave Aaron verbal instructions on general security procedures when they hired him.
On or about July 2002, Barbara Gutschow and Samuel Pashi entered into a "Sales Agreement" regarding the store. The agreement provides as follows:
I, Barbara Gutschow the present franchisee of 7-Eleven Store No. 23786 MKT 1404 located in 559 Lalor St Trenton [sic], NJ 08611-3233, am willing to sell my store to Mr. Samuel Pashi for a goodwill fee of US $80,000. It is subject to approval of the 7-Elevn [sic] Corporation. However I will not deal with anybody else unless and until Mr. Samuel Pashi is disqualified by the 7-Eleven Corporation.
On July 19, 2002, Pashi entered into a Store Franchise Agreement with 7-Eleven for the 559 Lalor Street store.
As part of his opposition to 7-Eleven's summary judgment motion plaintiff produced an expert report prepared by David L. Johnston, a Certified Protection Professional and Certified Fraud Examiner. In this report, Johnston opined that 7-Eleven had breached a duty of care to plaintiff by not providing more rigorous security training for Aaron. Johnston's report did not differentiate, however, between the duty owed by the 7-Eleven corporate defendant and that by the individual franchisee.
Plaintiff also presented the deposition testimony of Michael Bergen, 7-Eleven's "Market Manager" and "operation manager [for the] South Jersey area." Bergen described the degree to which corporate 7-Eleven participated in the management of individual franchisees. Specifically, Bergen stated that 7-Eleven calculates its monthly franchise fee based on a percentage of the franchisee's gross profits. All cash received by a franchisee is deposited daily into a bank account maintained by corporate 7-Eleven. Corporate 7-Eleven also prepares and maintains all financial records for the franchisees.
Corporate 7-Eleven owns all fixtures and equipment in the store, directly pays the store's utility bills, and provides a variety of advertising services to the franchisee as part of the franchise agreement. The franchisee, however, is responsible for maintaining and repairing such equipment.
7-Eleven presented Lance Gianquinto, an individual employed by 7-Eleven as a loss prevention specialist, and an expert in "convenience store loss prevention, safety and security." At his deposition, Gianquinto referred to the "Operation Alert Trainer Guide," a security procedure booklet published by 7-Eleven and provided to its franchisees. The Operation Alert Trainer Guide contains the following preface:
The information in this Operation Alert Program is designed to inform the Franchisee and to encourage him/her to operate his/her store in a manner that emphasizes being alert to the surroundings in and around the store, being prepared for what could occur and making the safety of one's store personnel and customers a number one priority. This material cannot cover every emergency situation that could occur while working in a 7-Eleven Store. [7-Eleven] does not represent that by following the advice contained in this program a 7-Eleven Franchisee or his/her employees would not experience a robbery, shoplifting, loitering, gang problems, problem customers, sexual assault, or other emergency situations. The Franchisee is encouraged to use these and any other materials he/she deems appropriate to train his/her employees and to deal with problems in the store. The Franchisee, as an independent contractor, is solely responsible for his/her employees and should evaluate these guidelines and determine if additional efforts or procedures should be implemented. Additionally, nothing in the "Operation Alert" program or materials alters or amends the Franchisee's 7-Eleven Store Franchise Agreement.
Operation Alert sets forth a variety of recommended procedures and actions to be taken by 7-Eleven employees encountering trouble on the job, such as robberies, shoplifting, gang activity, sexual assault, and "problem customers." Gianquinto explained that 7-Eleven required franchisees to become familiar with Operation Alert when first entering the franchise agreement. Thereafter, 7-Eleven offered continuing security training for franchisees and franchisees' employees, which the franchisees were free to reject. According to Gianquinto, there was no corporate-mandated minimum training regimen for a franchisee's employees.
For those franchisees that requested them, corporate 7-Eleven provided closed circuit security cameras to be used to monitor store operations. Additionally, 7-Eleven required each franchisee to use a specific type of safe, called a "Tidel Safe."
Gianquinto opined that Aaron did not abide by recommended 7-Eleven security policy during Sosa's attack on plaintiff. Specifically, in Gianquinto's opinion, Aaron should have asked Sosa to leave the store immediately upon exhibiting "disorderly conduct." Gianquinto further stated that Aaron should have then promptly contacted the police.
In support of its summary judgment motion, 7-Eleven argued that, as corporate franchisor, Sosa's assault on plaintiff was not a reasonably foreseeable event. Further, defendant argued that 7-Eleven cannot, as a matter of law, be vicariously liable for the actions or omissions of Barbara Gutschow's employee. In response, plaintiff argued that corporate 7-Eleven exercised sufficient control over the operations of its franchisees to make it liable for the actions of the franchisees' employees.
In rejecting plaintiff's arguments, and granting 7-Eleven's motion, the trial court made the following findings:
Here, defendant Aaron was an 18 year old sales clerk who was not trained in safety protocols and procedures, working an overnight shift at the store on the Hamilton-Trenton border. According to the allegations, Mr. Aaron allowed his visibly intoxicated and agitated friend and roommate to loiter on the premises.
After defendant Sosa became confrontational and [attacked] the plaintiff, Mr. Aaron failed to either call the police or hit the emergency police signal. During the attack, the only efforts undertaken by Mr. Aaron were to contact his brother-in-law to come and retrieve Mr. Sosa.
Plaintiff had submitted an expert report. In that report, the expert, David Johns[t]on states that to determine whether criminal acts were predictable, he uses, "An examination of prior criminal acts and incident histories at the 559 Lalor Street 7-Eleven and its environments."
In the report - in the later part of the report, Mr. Johns[t]on states that at the time that he wrote the report, he had not been furnished with crime and incident data gathered by the Hamilton Township Police Department regarding 559 Lalor Street premises prior to June 24, 2000.
Based upon the facts presented to the Court, the Court finds that there is no reason to believe that the events that led to the injuries suffered by Mr. Simpkins were foreseeable by 7-Eleven. Under the circumstances for all the reasons that I've just given, the motion for summary judgment on [sic] Defendant 7-Eleven is granted.
In reviewing a trial court's decision on a motion for summary judgment, we apply the same standards as those that govern the trial court. Jolley v. Marquess, 393 N.J. Super. 255, 267 (App. Div. 2007).
A trial court should grant a motion for summary judgment only when there is no "genuine issue of material fact" in dispute. Liberty Surplus Ins. Corp. v. Nowell Amorso, P.A., 189 N.J. 436, 446 (2007) (quoting Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995)). In making this determination, the court must view the evidence in the light most favorable to the non-moving party. Brill, supra, 142 N.J. at 540.
Even if the non-moving party presents a factual dispute, the court should still grant summary judgment "[i]f there exists a single, unavoidable resolution of the alleged disputed issue of fact." Ibid. Essentially, the court should grant summary judgment "when the evidence 'is so one-sided that one party must prevail as a matter of law.'" Ibid. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed. 2d 202, 214 (1986)).
The material facts are not disputed. The question before us is purely a legal one. Here, both parties rely on our decision in J.M.L. ex rel. T.G. v. A.M.P., 379 N.J. Super. 142 (App. Div. 2005). In that case, plaintiff J.M.L. was a fourteen-year-old girl who had worked part-time as a karate instructor at a karate studio that operated as a franchisee of a larger chain of studios. Id. at 146. Defendant A.M.P., J.M.L.'s supervisor at the karate studio, and J.M.L. had a seven-month sexual relationship. Ibid. J.M.L. brought a sexual harassment suit against the franchisor of the karate studio, asserting vicarious liability. Ibid.
In finding in favor of defendant franchisor, we noted the following facts:
[The franchisor] conducted monthly members meetings, but provided little or no guidance on the day-to-day operations of the franchises. [The franchisor's owner] and his wife were members of the board that issued black belts to qualifying students from all franchises. [The franchisor] provided marketing and sales guidance to franchisees but franchisees were not required to use a pre-packaged marketing plan or contribute to a marketing plan devised by [the franchisor]. Each franchise was required to carry franchise branded merchandise at each site.
Neither [franchisor nor it's owner] had any role in hiring or terminating employees or any other personnel issues at any franchise. Each franchise was individually owned and operated as an individual business. [Id. at 151-52.]
Given these facts, we concluded that "the relationship between . . . the franchisee and . . . the franchisor, does not evince the degree of control that would warrant the imposition of vicarious liability under agency principles . . . ." Ibid.*fn2
Here, there is no evidence that 7-Eleven participated in the day-to-day affairs of the 559 Lalor Street store, other than in respect to certain financial activities. Defendant's loss expert, Mr. Guanquinto, testified that franchisees were free to reject corporate 7-Eleven's supervision in security training for the franchisees' employees. This testimony is unchallenged. Further, the franchise agreement between Defendant 7-Eleven and Barbara Gutschow expressly excluded 7-Eleven's participation in the franchisee's personnel matters:
Independent Contractor. FRANCHISEE shall be an independent contractor and shall control the manner and means of the operation of the store and exercise complete control over and responsibility for all labor relations and the conduct of FRANCHISEE's agents and employees. FRANCHISEE and FRANCHISEE's agents and employees shall not be considered or held out to be agents or employees of 7-ELEVEN and shall not negotiate or enter any agreement or incur any liability in the name or on behalf of, or that purports to bind, 7-ELEVEN.
In this light, there is no legal basis to impose upon 7-Eleven vicarious liability for the event that led to plaintiff's injuries.
We also reject plaintiff's argument based on the theory of apparent authority. The doctrine of apparent authority applies "where the actions of a principal have misled a third party into believing that a relationship of authority existed." Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 497 (App. Div.), certif. denied, 177 N.J. 224 (2003) (quoting Rodriguez v. Hudson County Collision Co., 296 N.J. Super. 213, 221 (App. Div. 1997)). The doctrine looks to the actions of the principal, and not of the alleged agent. Busciglio v. DellaFave, 366 N.J. Super. 135, 140 (App. Div. 2004). The alleged agent cannot create apparent authority on his own accord, but must be held out as having such authority by the principal. Blaisdell Lumber Co. v. Horton, 242 N.J. Super. 98, 103 (App. Div. 1990).
"In addition, the essential element of reliance must be present before apparent authority can be found." Wilzig v. Sisselman, 209 N.J. Super. 25, 36 (App. Div.), certif. denied, 104 N.J. 417 (1986). In Bahrle v. Exxon Corp., plaintiffs' wells were contaminated by seepage from a local gas station. 279 N.J. Super. 5, 15 (App. Div. 1995), aff'd, 145 N.J. 144 (1996). Plaintiffs sought to hold defendant Texaco Corporation liable on a theory of apparent authority: that Texaco Corporation held out all gas stations bearing a "Texaco" sign as being under the control of corporate Texaco and as being of a certain quality. Id. at 24-25.
In rejecting plaintiff's apparent authority argument in Bahrle, we noted that:
[T]his is not a case where a patron had relied on the oil company's insignia or its advertising in seeking out the service of a local station, and was injured as a result of that service being rendered. Plaintiffs produced absolutely no evidence that they in any manner relied upon the fact that [the] station was a Texaco station. Not a single plaintiff testified that they moved into the area ultimately contaminated in reliance on the fact that the station displayed the Texaco insignia. Nor is there any proof that plaintiffs remained residents in the neighborhood . . . because they had relied on the fact that Texaco was in control of the station and would thus prevent it from becoming a source of contamination. Therefore, there was no factual or legal basis to hold Texaco liable on a vicarious liability theory. [Id. at 26-27.]
Here, there is no evidence that plaintiff relied in any way on the fact that Barbara Gutschow's store was a 7-Eleven franchise. Plaintiff made this point clear in the following deposition testimony:
Q: Now, why did you go to the 7-Eleven store?
[PLAINTIFF]: To get cigarettes and coffee and something to eat.
Q: Why did you choose 7-Eleven?
[PLAINTIFF]: It was the closest store around from my sister's house.
There is simply no evidence to establish the essential element of reliance, without which a claim of apparent authority cannot be sustained as a matter of law. See Bahrle, supra, 279 N.J. Super. at 26-27; Wilzig, supra, 209 N.J. Super. at 36.
For the reasons stated in subsection IV ante, we are satisfied that the trial court correctly granted corporate 7-Eleven's motion for summary judgment.
V. Pashi's Motion for Summary Judgment
Plaintiff argues that the trial court erred in granting Pashi's motion for summary judgment. Specifically, plaintiff argues that there existed a genuine issue of material fact as to whether Pashi assumed Barbara Gutschow's liabilities when he bought the Hamilton 7-Eleven from Gutschow. Plaintiff's argument is without merit.
In New Jersey, the general rule is that "'where one company sells or otherwise transfers all its assets to another company the latter is not liable for the debts and liabilities of the transferor, including those arising out of the latter's tortious conduct.'" Ramirez v. Amsted Indus., Inc., 86 N.J. 332, 340 (1981) (quoting Menacho v. Adamson United Co., 420 F. Supp. 128, 131 (D.N.J. 1976)). There are only four specific exceptions to this rule; a successor company will be found liable if:
(1) the purchasing corporation expressly or impliedly agreed to assume such debts and liabilities; (2) the transaction amounts to a consolidation or merger of the seller and purchaser; (3) the purchasing corporation is merely a continuation of the selling corporation, or (4) the transaction is entered into fraudulently in order to escape responsibility for such debts and liabilities. [Id. at 340-41.]
Here, plaintiff argues that Barbara Gutschow's statement in her deposition, that Pashi bought "[e]verything in the business[, that] [h]e got it all," creates a genuine issue of material fact as to whether Pashi impliedly agreed to assume Gutschow's liabilities under the first Ramirez exception. Ibid. We disagree. As noted by Judge Hochberg,
In determining whether a successor corporation implicitly assumed an obligation of its predecessor, the following factors are relevant: (a) whether the successor's conduct indicated its intention to assume the debt; (b) whether the creditor relied on the conduct and the effect of any reliance; and (c) whether the successor's representatives admitted liability. [Portfolio Fin. Serv. Co. v. Sharemax.com, Inc., 334 F. Supp. 2d 620, 625 (D.N.J. 2004).]
Here, there is no evidence of Pashi's intent to assume Barbara Gutschow's debts and liabilities as franchisee. Pashi was never deposed; the only evidence supporting plaintiff's argument is Gutschow's general statement that Pashi took "[e]verything in the business. He got it all." Such a vague and inscrutable statement falls far short of establishing the evidence necessary to support plaintiff's claim.
By contrast, there is strong evidence in the plain language of the Gutschow-Pashi sales agreement supporting the argument that Pashi did not assume any responsibility for Gutschow's liabilities. The following passage from the agreement illustrates the point:
I, Barbara Gutschow the present franchisee of 7-Eleven Store No. 23786 MKT 1404 located in 559 Lalor St Trenton [sic], NJ 08611-3233, am willing to sell my store to Mr. Samuel Pashi for a goodwill fee of US $80,000. It is subject to approval of the 7-Elevn [sic] Corporation. However I will not deal with anybody else unless and until Mr. Samuel Pashi is disqualified by the 7-Eleven Corporation. [(Emphasis added).]
If the parties intended the agreement to convey anything other than "good will," they would have so stated. Given the total absence of evidence that Pashi either expressly or impliedly assumed the liabilities of Barbara Gutschow when he purchased the 559 Lalor Street franchise, the trial court correctly granted Pashi's motion for summary judgment.
For the reasons stated herein, we affirm the trial court's orders denying plaintiff's application to add Barbara Gutschow as a party defendant, and granting defendants Pashi's and 7-Eleven's respective motions for summary judgment.