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KNOTT v. MCDONALD'S CORP.

September 30, 1997

ROGER D. KNOTT, JR., et al., Plaintiffs,
v.
McDONALD'S CORPORATION, Defendant.



The opinion of the court was delivered by: WARE

 Defendant's motion for summary judgment was heard by the Court on June 16, 1997. Attorney Robert H. King, Jr. appeared on behalf of Defendant and attorney Robert M. Einhorn appeared on behalf of Plaintiffs. Based on all papers filed to date, as well as on the oral argument of counsel, the Court grants Defendant's motion for summary judgment.

 I. BACKGROUND

 Plaintiffs are former owners and operators of two McDonald's franchises in Santa Clara County. Plaintiff's complaint contains two claims for relief: (1) breach of the franchise agreement and breach of the covenant of good faith and fair dealing and (2) tortious interference with contract. The complaint arises as a result of Plaintiffs' desire to sell its franchises in 1995. Plaintiffs contend that they had reached an agreement with prospective purchasers for the sale of both franchises but that Defendant McDonald's interfered with the prospective sale, causing Plaintiffs to lose the potential buyers. Although the franchises were sold later in 1996 to other buyers, Plaintiffs contend that the sales price was $ 650,000.00 less than the price they could have received from the original prospective purchasers in 1995. Plaintiffs have sued Defendant for loss of these potential "profits".

 Defendant moves for summary judgment as to both claims contained in Plaintiffs' complaint. With respect to the first claim for breach of the franchise agreement and the covenant of good faith and fair dealing, Defendant contends that Plaintiffs lack standing to assert such claim since they assigned all of their rights in the franchise agreement to the now-owners of the franchises. Defendants also contend that there is no admissible evidence which supports Plaintiffs' first claim for relief since the original prospective purchasers' declarations unequivocally state that Defendant McDonald's had nothing whatsoever to do with their decision not to purchase Plaintiffs' franchises.

 With respect to the second claim for relief, Defendant asserts that there is no evidence to support a claim for tortious interference since all the evidence shows that McDonalds had nothing to do with the potential buyers' decision not to purchase Plaintiffs' franchises. The potential buyers' declaration unrefutably establish such facts.

 II. LEGAL STANDARDS

 Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The purpose of summary judgment "is to isolate and dispose of factually unsupported claims or defenses." Celotex v. Catrett, 477 U.S. 317, 323-324, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 The moving party "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any' which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. If he meets this burden, the moving party is then entitled to judgment as a matter of law when the non-moving party fails to make a sufficient showing on an essential element of his case with respect to which he bears the burden of proof at trial. Id. at 322-23.

 The non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). The non-moving party cannot defeat the moving party's properly supported motion for summary judgment simply by alleging some factual dispute between the parties. To preclude the entry of summary judgment, the non-moving party must bring forth material facts, i.e., "facts that might affect the outcome of the suit under the governing law . . . Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 588, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986).

 The court must draw all reasonable inferences in favor of the non-moving party, including questions of credibility and of the weight to be accorded particular evidence. Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 111 S. Ct. 2419, 2434-35, 115 L. Ed. 2d 447 (1991) (citing Anderson, 477 U.S. at 255); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 588, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986); T.W. Elec. Service v. Pacific Elec. Contractors, 809 F.2d 626, 630 (9th Cir. 1987). It is the court's responsibility "to determine whether the 'specific facts' set forth by the nonmoving party, coupled with undisputed background or contextual facts, are such that a rational or reasonable jury might return a verdict in its favor based on that evidence." T.W. Elec. Service, 809 F.2d at 631. "Summary judgment will not lie if the dispute about a material fact is 'genuine,' that is if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248. However, "where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Matsushita, 475 U.S. at 587.

 III. DISCUSSION

 A. Claim One- Breach of Agreement

 As noted above, Plaintiffs' first claim for relief is based on an alleged breach of the franchise agreement between Plaintiffs and Defendant as well as a breach of the covenant of good faith and fair dealing implied in such agreement. Defendant moves for summary judgment as to such claim on the bases that Plaintiffs assigned any and all contract rights in such franchise agreement to the buyers of their franchises ...


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