United States District Court, D. New Jersey, Camden Vicinage
B. KUGLER UNITED STATES DISTRICT JUDGE
matter arises out of Meineke Car Care Centers, LLC's
(“Meineke” or “Plaintiff”) claims
against James Juliano, Sr., Nicholas Juliano, James Juliano,
Jr., JNMVR Enterprises, Inc., (“JNMVR”) and My
Family Car Care, LLC, (“MFCC”) (collectively,
“Defendants”) for allegedly breaching a franchise
agreement, among other things. (Doc. No. 1.)
Defendantsasserted six Amended Counterclaims against
Meineke. (Doc. No. 18 (“Countercl.”).) Pursuant
to Federal Rule of Civil Procedure 12(b)(6), Meineke now
moves to dismiss each counterclaim but the first. (Doc. No.
19.) Although Defendants had ample opportunity to oppose the
motion, they did not do so. For the following reasons,
Meineke's motion is GRANTED in part and
DENIED in part.
February 2011, Meineke entered into a Franchise Agreement
(the “Agreement”) with JNMVR.
(Countercl. at ¶ 3.) The Agreement, guaranteed
by Juliano, Sr., granted JNMVR the right to operate a
franchise at 912 Haddonfield Road in Cherry Hill, New Jersey.
(Id. at ¶¶ 3-4.) Among its many
provisions, the Agreement prohibited Juliano, Sr. from
operating the franchise elsewhere without Meineke's
consent. (Agreement at § 2.1.) It also required Juliano,
Sr. to obtain approval before relocating the franchise,
(e.g., id. at §§ 2.2, 2.6) and
before selling or transferring it (id. at art. 12).
And importantly, the Agreement contained a territorial
protection clause. (Id. at § 2.3.) In that
clause, Meineke promised, among other things, not to grant
others the right to operate a franchise within a 3-mile
radius of JNMVR without first giving the JNMVR Defendants a
30-day right of first refusal. (Id.) This same
protection was also afforded to another franchisee in
Cinnaminson (the “Cinnaminson franchisees”) in
their franchise agreement. (See Pl. Br., Ex. A.)
August 2013, JNMVR learned that its landlord intended to sell
its property by 2016 and terminate JNMVR's lease early.
(Countercl. at ¶¶ 5-7.) Thereafter, the landlord
made an offer to buy the franchise, but Meineke's
representative, Mr. Fillman, notified Juliano, Sr. that the
landlord was not approved as a franchisee. (Id. at
¶¶ 9-10.) Although for the next two years, the
landlord maintained interest in buying the franchise,
(id. at ¶ 11), this relationship eventually
soured; both parties sued each other over the property's
proposed sale, and they reached a settlement requiring JNMVR
to leave 912 Haddonfield Road by August 1, 2017.
(Id. at ¶¶ 18- 20.) The relocation process
Juliano, Sr. found a potential purchaser and a new location
on Route 70 in Cherry Hill, New Jersey, that Meineke
approved, but the lease and purchase both fell through.
(Id. at ¶¶ 13-17, 22.) In May 2017,
“Plaintiff insisted on payment of all unpaid royalty
and advertising fees before they would approve relocation of
JNMVR's franchise location.” (Id. at
¶ 23.) JNMVR paid these fees (id.), and
Juliano, Sr. found a second relocation option at 326
Haddonfield Road in Cherry Hill. (Id. at ¶ 24.)
Meineke approved that property soon after, (id. at
¶ 25), but the lease again fell through. (Id.
at ¶ 26.) At this point, Juliano, Sr. “requested
help from the Plaintiff to find a new location, ” but
“never received a response.” (Id. at
¶ 27.) Juliano, Sr. would continue requesting
Meineke's help, but Meineke “never substantively
responded to” Juliano, Sr.'s “multiple
emails.” (Id. at ¶ 58.)
10, 2017, Juliano, Sr. found a third option at 54 Haddonfield
Road in Cherry Hill. (Id. at ¶ 28.) With
JNMVR's August 1, 2017 move-out deadline approaching,
(id. at ¶ 20), Juliano, Sr., notified Mr.
Fillman that if this relocation failed, JNMVR would close.
(Id. at ¶ 29.) Accordingly, Juliano, Sr.
requested expedited approval from Mr. Fillman and began lease
negotiations. (Id. at ¶¶ 29-30.) A month
later, Mr. Fillman responded to Juliano, Sr. and requested
that Juliano, Sr. provide more information about the proposed
relocation site. (Id. at ¶ 33.) “On
August 14, 2017, more than six (6) weeks after it was first
proposed, JNMVR was notified by the Plaintiff that the
proposed location at 54 Haddonfield Road was .2 of a mile
within another Meineke franchisees' territory in
Cinnaminson, New Jersey, even though it was only 800 yards
from the approved location at 326 Haddonfield Rd. and 1.2
miles from the original location at 912 Haddonfield
Road.” (Id. at ¶ 34.) This triggered
the Cinnaminson franchisees' rights under their
territorial protection clause. (Id. at ¶ 35.)
Mr. Fillman informed Juliano, Sr. that “before
Plaintiff could approve the relocation, [the Cinnaminson
franchisees] would be entitled to a right of first
refusal” under their franchise agreement, which
permitted them “to purchase a new franchise license and
negotiate a lease with the landlord at the proposed location,
within 30 days.” (Id.) On August 18, 2017,
Juliano, Sr. asked Meineke to initiate “the supposed
30-day right of first refusal processes” with the
Cinnaminson franchisees for 54 Haddonfield Road.
(Id. at ¶ 38.)
same day, the landlord at 54 Haddonfield Road gave JNMVR
permission to move belongings into the premises without a
lease, which they would finalize after Meineke's
approval. (Id. at ¶ 39.) While moving in,
Juliano, Sr. “requested that Plaintiff update their web
site to reflect the new location, until the territorial issue
with the Cinnaminson franchisees was resolved, ” but
“Plaintiff responded that they could not update the
website as requested, at that time.” (Id. at
¶ 41.) Around September 5, 2017, after the move was
complete, Juliano, Sr. “was informed verbally, that the
right of first refusal details that were given to him by Mr.
Fillman, were incorrect, and that the owners of the
Cinnaminson franchise did not have to negotiate a lease at 54
Haddonfield Road, but instead had a year to find another
location within that territory.” (Id. at
days later, Juliano, Sr. received an email “from the
Plaintiff, that they had not approved the relocation to 54
Haddonfield Road, and that JNMVR should close the Center,
until the right of first refusal process was
completed.” (Id. at ¶ 43.) On September
11, 2017, Juliano, Sr. contacted Meineke's general
counsel to clarify the right of first refusal details and
learned that he “was correct in his original
interpretation of the process, but the circumstances in
JNMVR's situation were somehow different.”
(Id. at ¶ 44.) All the while, from August 15,
2017 to September 12, 2017, Juliano, Sr. continued
negotiating-unsuccessfully-with the Cinnaminson franchisees
so JNMVR could relocate to 54 Haddonfield Road. (Id.
at ¶ 45.) Juliano, Sr. “repeatedly requested help
from the Plaintiff's representatives to mediate these
negotiations as they promised to do, ” but
“Plaintiff never complied with those promises.”
(Id. at ¶ 45.) Ultimately, JNMVR rescinded its
relocation request and shut down at 54 Haddonfield Road.
(Id. at ¶¶ 48-49.) Juliano, Sr. also
advised Meineke's representatives that JNMVR was selling
its assets to another entity, My Family Car Care, which would
run an independent car care business at 54 Haddonfield Road.
(Id. at ¶¶ 49-51.) My Family Car Care was
formed by James Juliano, Jr. and Nicholas Juliano, who signed
a lease at 54 Haddonfield Road on September 18, 2017.
(Id. at ¶¶ 50-51.)
September 28, 2017, Juliano, Sr. attended Meineke's
regional sales meeting, when he spoke with Meineke's
President, Mr. Daniel Rivera. (Id. at ¶ 55.)
“Mr. Rivera asked Mr. Juliano, Sr. if he would accept
the Plaintiff as a mediator” in the Cinnaminson
franchisee dispute. (Id. at ¶ 56.) “Mr.
Rivera promised that he would reach out to [them], ”
but “to date, Mr. Rivera has never followed through
with this promise.” (Id. at ¶ 57.) On
November 7, 2017, Juliano, Sr. proposed one final relocation
site to Mr. Fillman, who responded about two weeks later
asking for more information. (Id. at ¶ 60-61.)
Thereafter, Mr. Fillman advised Juliano, Sr. that Meineke
would not approve the proposed site or any other, and around
December 4, 2017, Meineke filed the Complaint in this matter.
(Id. at ¶¶ 63-65.)
suit alleges that when Defendants began operating MFCC, which
it calls a “copy-cat, knock off business offering the
same types of goods and services” as Meineke, they
breached their franchise agreement and infringed
Meineke's trademarks. (Pl. Br. at 1.) The Defendants
filed an Amended Answer and Counterclaims, asserting six
counterclaims for breach of contract, breach of the implied
covenant of good faith and fair dealing, fraudulent
misrepresentation, negligent misrepresentation, tortious
interference with contract/prospective contractual relations,
and unfair competition. (Doc. No. 18.) Meineke now moves to
dismiss each counterclaim but the first. Defendants have not
opposed the motion, but the Court must still analyze whether
they have stated claims on the merits. See Stackhouse v.
Mazurkiewicz, 951 F.2d 29, 30 (3d Cir. 1991).
motion to dismiss a counterclaim is properly evaluated under
the familiar Rule 12(b)(6) standard.” Signature
Bank v. Check-X-Change, LLC, No. 12-2802, 2013 WL
3286154, at *2 (D.N.J. June 27, 2013). Under that standard,
“courts accept all factual allegations as true,
construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable
reading of the complaint, the plaintiff may be entitled to
relief.” Fowler v. UPMC Shadyside, 578 F.3d
203, 210 (3d Cir. 2009) (quoting Phillips v. Cty. of
Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). In other
words, a complaint survives a motion to dismiss if it
contains enough factual matter, accepted as true, to
“state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009); Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007).
this determination, a court conducts a three-part analysis.
Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d
Cir. 2010). First, the court must “tak[e] note of the
elements a plaintiff must plead to state a claim.”
Id. (quoting Iqbal, 556 U.S. at 675).
Second, the court should identify allegations that,
“because they are no more than conclusions, are not
entitled to the assumption of truth.” Id. at
131 (quoting Iqbal, 556 U.S. at 680). Finally,
“where there are well-pleaded factual allegations, a
court should assume their veracity and then determine whether
they plausibly give rise to an entitlement for relief.”
Id. (quoting Iqbal, 556 U.S. at 680). This
plausibility determination is a “context-specific task
that requires the reviewing court to draw on its judicial
experience and common sense.” Iqbal, 556 U.S.
at 679. A complaint cannot survive where a court can only
infer that a claim is merely possible rather than plausible.