US-DIST-CT,
FRANCHISE-GUIDE ¶12,015, Russell W. Zeidler,
Nancy Zeidler and R. W. Hospitality Corporation v. A & W Restaurants, Inc.,
(Jan. 25, 2001)
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Russell W. Zeidler, Nancy Zeidler and R. W. Hospitality
Corporation v. A & W Restaurants, Inc.
U.S.
District Court, Northern District of Illinois, Eastern Division. Case No.
99-C-2591. Filed January 25, 2001. 2001 U.S. Dist. Lexis 653.
Illinois Franchise Disclosure Act
Common Law--Breach of Contract--Failure to Obtain Liability
Insurance--Justified Termination.--A fast food franchisor was justified in terminating
a franchisee which did not procure liability insurance for its franchise as
required by the license agreement. Failure to obtain the required insurance was
a clear violation of the agreement and a valid reason for termination. It was
irrelevant that the franchisor had not terminated any other franchise for
failure to procure insurance, and that it had an ulterior motive for the
termination. Back reference: ¶1220
.
Common Law--Breach of Contract--Failure to Meet Quality
Standards--Justified Termination.--A fast food franchisor was justified in terminating
a franchisee which did not meet the franchisor’s quality insurance standards
set forth in the license agreement between the two. The franchisor’s evidence
showed a large number of violations of quality standards by the franchisee. Back
reference: ¶1220 .
Common Law--Breach of Contract--Abandonment of
Restaurant--Justified Termination.--A fast food franchisor was justified in terminating
a franchisee which abandoned its restaurant prior to the final notice of
termination. The franchisee’s argument that it did not abandon the store, but
rather had no choice other than to close because termination by the franchisor
was a foregone conclusion, was contradicted by the franchisee’s own deposition
and other evidence. Back reference: ¶1220
.
Relationship/Termination--Cause for Termination--Failure to Obtain
Liability Insurance--Justified Termination.--A
fast food franchisor had good cause for terminating a franchisee under the
Illinois Franchise Disclosure Act based upon the franchisee’s failure to
obtain liability insurance as required under the contract. Back
reference: ¶825 .
Common Law--Breach of Contract--Franchisor’s Failure to Update
Operations Manual--Continued Performance--Rescission.--A
fast food franchisee was barred from seeking rescission of a license agreement
between it and a franchisor for the franchisor’s failure to provide updates
and amendments to the Operations Manual because the franchisee continued
performing under the agreement despite being on notice that they were not
receiving updates to the manual. Back reference: ¶1240
.
Common Law--Breach of Contract--Franchisor’s Failure to Update
Operations Manual--Causal Relationship--Failure to Show Damages.--A
fast food franchisee could not show that the franchisor’s failure to provide
it with the updates and amendments to the Operations Manual caused it any
damages. There was no evidence that would permit a jury to conclude that the
franchisee suffered damages due to the failure to receive manual updates. Back
reference: ¶1240 .
MEMORANDUM OPINION AND ORDER
[In full text]
Kennelly, D.J.: In March 1998, A&W Restaurants, Inc.
terminated the franchise held by Russell Zeidler, Nancy Zeidler and R.W.
Hospitality Corporation. Plaintiffs have sued A&W for breach of contract and
violation of the Illinois Franchise Disclosure Act based on a claim of wrongful
termination. Plaintiffs have also sued for breach of contract based on
A&W’s purported failure to provide updates to operating manuals. This case
is before the court on A&W’s motion for summary judgment and plaintiffs’
cross-motion for partial summary judgment with respect to the claims concerning
the manual updates. Plaintiffs have also moved to strike the affidavit of their
former expert, Andrew Hester, which A&W has submitted in support of its
motion for summary judgment. For the reasons that follow, the Court denies
plaintiffs’ motion for partial summary judgment and grants summary judgment in
favor of A&W. Because the Court did not consider or rely upon Hester’s
affidavit in reaching its conclusions, plaintiffs’ motion to strike is denied
as moot.
FACTUAL BACKGROUND
In 1991, A&W and plaintiffs entered into a written License Agreement
under which A&W granted them a license to operate an A&W restaurant in
the Stratford Square Mall in Bloomingdale, Illinois. The License Agreement was
to last until December 31, 2011, unless otherwise terminated in accordance with
the terms of the agreement. A&W was entitled to terminate the License
Agreement if, among other things, plaintiffs defaulted “in the performance or
observance of any of [their] obligations . . . and such default continued for a
period of thirty (30) days after written notice to the Licensee.” License
Agreement, P 17.0.
Under the relevant terms of the License Agreement, A&W was required
to provide plaintiffs with a Restaurant Operations Manual and any amendments or
supplements to the Manual. License Agreement P 3.0. Plaintiffs’ failure to
“faithfully and completely follow and observe all standards, specifications,
requirements, instructions and procedures contained [in the Restaurant
Operations Manual] and in any amendments and supplements thereto” constituted
a material breach of the License Agreement. Id.
at PP 3.2-3.4. Further, plaintiffs were required to “comply with all
applicable governmental laws and regulations, including health, sanitation and
environmental codes,” id. P 3.9, and
to maintain liability insurance for the premises, id.
P 12.0.
To assist plaintiffs in obtaining financing for the franchise, A&W
provided them with a pro forma financial statement reflecting anticipated annual
sales. The pro forma was prepared at plaintiffs’ request, and it expressly
stated that actual results would differ. As the years passed, the restaurant
consistently lost money. Early in 1997, Russell Zeidler complained to A&W
about the restaurant’s failure to attain the financial goals set forth in the
pro forma. See Plfs.’ 12(n) Stmt., Ex.
2.
Plaintiffs’ relationship with A&W deteriorated further in late
1997. On November 25, 1997, A&W’s Franchise Area Manager, David Martin,
visited the restaurant. In a memorandum sent to Russell Zeidler, Martin
enumerated several areas of concern regarding the cleanliness and management of
the restaurant. Plf.’s 12(n) Stmt., Ex. 6. Martin advised Zeidler that his
concerns were serious, and he directed Zeidler to remedy the defects within 30
days, at which time Martin would come in to perform a Quality Assurance Report
(“QAR”) on the restaurant. Id.
Zeidler did not respond to the November 1997 memorandum. R. Zeidler Dep. at 19.
On December 30, 1997, Martin returned to the restaurant to perform the
QAR. Neither Russell nor James Zeidler, Russell’s brother and also an A&W
franchisee in a different location, was present. 1 Martin gave the
restaurant a score of 59%, far below the passing grade of 80%. Plf.’s 12(n)
Stmt., Exs. 9 & 10. 2 Additionally, the mall manager informed
Martin that the restaurant’s sliding glass door had fallen off its rails the
day before and that Zeidler had been unable to provide proof of insurance. Id.,
Ex. 10. Martin also took photographs depicting dirty restrooms, trash on the
floor, and other generally unsanitary conditions. Id.,
Ex. 20. Martin sent Zeidler a detailed memorandum dated December 31, 1997
informing him of A&W’s concerns regarding the condition of the restaurant.
Id., Ex. 10. Martin also informed
Zeidler that his failure to carry insurance constituted a violation of Section
12.0 of the License Agreement, and he invited Zeidler to call if he required any
assistance remedying the problems. Id.,
Ex. 10. Zeidler did not respond. See R.
Zeidler Dep. at 24. Six days later, on January 6, 1997, Martin returned to the
restaurant and found no improvement. Martin Dep. at 101-106; Martin Decl. P 15.
On January 7, 1998, A&W sent plaintiffs a Notice of Intent to
Terminate the franchise, citing the 47 operational deficiencies noted in the QAR
and plaintiffs’ failure to carry insurance on the restaurant. Id.,
Ex. 13. The letter gave plaintiffs until February 16, 1998 (approximately 40
days) to get back into compliance with their License Agreement and to avoid
termination. Id. On January 15, 1998,
Russell Zeidler telephoned A&W’s paralegal, who confirmed that unless
plaintiffs corrected the problems identified in the Notice of Intent to
Terminate, A&W would terminate the franchise on or about February 16. Id.,
Ex. 14. On January 12, Paul Neirzwicki, A&W’s Vice President of
Operations, sent plaintiffs another letter detailing the operational defaults,
the steps they needed to take to remedy the defaults and the dates for
compliance, and requesting that Russell Zeidler advise him of the Corrective
Action Plan implemented to correct the problems. See
R. Zeidler Dep. at 27. Russell Zeidler did not follow up with Nierzwicki. Id.
Despite A&W’s warnings, conditions at the restaurant did not
improve. On January 31, 1998, Martin visited the restaurant with Mike Phelan,
another A&W franchisee interested in acquiring plaintiffs’ store. Both
Martin and Phelan testified that the restaurant was dirty and disorganized. See
Phelan Decl. P 4; Martin Decl. P16.
During February, as termination loomed, A&W made several attempts to
reach Russell Zeidler. On February 2, Martin spoke with Zeidler about operations
and suggested that he hire a replacement manager for the restaurant or think
about selling it. See Martin Decl. P 17.
On February 24, 25 and 26, A&W representatives left messages for Zeidler at
the restaurant and at his home. See
Kohler Decl. P 19. Zeidler’s only response was a letter dated February 27, in
which stated that he planned to close the restaurant on March 2 because the tone
and content of the January 7 Notice of Intent to Terminate indicated that
termination was unavoidable. See Plfs.’
12(n) Stmt., Ex. 17.
On March 11, 1998, Martin again visited the restaurant. Martin Decl. P
18. Although Martin noted some improvement in the restaurant’s condition, he
still found some operational defaults, which he documented with a series of
photographs. Martin Decl. P 18; Plfs.’ 12(n) Stmt., Ex. 21. That same day,
after the restaurant closed for the night, Jim Zeidler took his own photographs,
which depict a sparkling clean restaurant. Id.,
Ex. 22. Plaintiffs did not show these photographs to A&W prior to filing
this lawsuit. R. Zeidler Dep. at 46. Plaintiffs did not reopen their restaurant
after March 11, 1998. On March 25, A&W sent plaintiffs a Notice of
Termination.
DISCUSSION
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). A
genuine issue of material fact exists for trial when, in viewing the record and
all reasonable inferences drawn from it in a light most favorable to the non-movant,
a reasonable jury could return a verdict for the non-movant. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202,
106 S. Ct. 2505 (1986). The Court first evaluates A&W’s motion, construing
the evidence in the light most favorable to plaintiffs.
I. Breach of Contract--Wrongful
Termination
A&W claims that it had good cause to terminate plaintiffs’
franchise because (1) plaintiffs abandoned their franchise twelve days before
A&W actually terminated it; (2) plaintiffs failed to procure liability
insurance for their store in violation of Section 12.0 of the License Agreement;
and (3) plaintiffs failed to remedy the serious operational defects identified
in the December 30, 1997 QAR. A&W argues that any one of these reasons
standing alone constitutes lawful grounds for termination and that in any event,
plaintiffs’ claims for lost future profits cannot stand. In response,
plaintiffs argue that A&W forced them to close their store; that failure to
obtain insurance for the restaurant was not a valid reason for termination; and
that the QAR was not a proper basis for termination. The Court finds that
A&W’s termination of the License Agreement was justified on the basis of
the insurance default alone.
A. Plaintiffs’ Failure to
Procure Insurance Provided Adequate Lawful Grounds for Termination.
As we stated earlier in ruling on A&W’s motion to dismiss,
plaintiffs’ failure to obtain insurance for their restaurant constituted a
clear violation of the License Agreement and a valid reason for termination
under Section 17, which permitted termination for violation of “any” of the
provisions of the Agreement. 3 Plaintiffs admit that they did not
maintain liability insurance for their restaurant in 1997 and 1998. Further, it
is undisputed that plaintiffs did not obtain insurance even after they were
informed on January 7, 1998 that this default would result in termination.
The evidence provided by A&W shows that the insurance default alone
provided grounds for termination. The insurance default was listed as grounds
for termination in both the January 7 Notice of Intent to Terminate and the
March 25, 1998 Notice of Termination. Further, Larry Kohler, A&W’s Vice
President of Franchise Contract Administration, testified that plaintiffs’
failure to procure liability insurance was serious enough by itself to
constitute grounds for termination, especially because the restaurant’s glass
door had fallen off its railings. Kohler Decl. P 21.
In response, plaintiffs argue that termination for the insurance default
was unlawful because A&W had not terminated any other franchise on that
basis. This argument is unpersuasive. A&W’s treatment of its other
franchisees is irrelevant to its treatment of plaintiffs. See
The Original Great American Chocolate Chip Cookie Co., Inc. v. River Valley
Cookies, Ltd., 970 F.2d 273, 279 (7th Cir. 1992) (fact that company
may have treated other franchisees more leniently was “no more a defense to a
breach of contract than laxity in enforcing the speed limit is a defense to a
speeding ticket”).
Plaintiffs also argue that the insurance default was merely a pretext
for termination, and that A&W had ulterior motives, namely, that it wished
to retaliate against plaintiffs for complaining about the allegedly inaccurate
financial data that A&W had provided or that it wanted to sell plaintiffs’
franchise to another franchisee without consulting plaintiffs. Aside from the
fact that insufficient evidence of improper motives exists even when viewed in
the light most favorable to plaintiffs, A&W’s motives for terminating
plaintiffs’ franchise are immaterial because, as discussed above, the
insurance default was a sufficient and legitimate ground for termination. See
Dayan v. McDonald’s Corp., 125 Ill. App. 3d 972, 993, 466 N.E.2d
958, 973-74, 81 Ill. Dec. 156 (1984) (ulterior motive for franchise termination
irrelevant as long as legitimate grounds for termination exist); Tuf
Racing Products, Inc. v. American Suzuki Motor Corp., 223 F.3d 585,
589 (7th Cir. 2000) (emphasizing that “if a party has a legal right to
terminate [a] contract . . . its motive for exercising that right is
irrelevant”).
Finally, plaintiffs argue that A&W waived the insurance default as
grounds for termination. In an affidavit, Russell Zeidler says that in a January
15, 1998 telephone conversation with A&W’s paralegal, Cindy Michalski,
Michalski orally “withdrew [the insurance default] as a termination criteria
[sic].” R. Zeidler Aff. P 26. But Michalski’s follow-up letter to Zeidler,
though it did not specifically reference the insurance violation, attached and
expressly referred to the original January 7 Notice of Intent to Terminate,
which informed plaintiffs that their failure to obtain liability insurance
warranted termination. Zeidler’s uncorroborated statement is insufficient
under the circumstances to support a claim of waiver. The Seventh Circuit has
held that an uncorroborated claim of oral waiver of a significant contract term
is insufficient under Illinois law. Cole Taylor
Bank v. Truck Insurance Exchange, 51 F.3d 736, 739-40 (7th Cir.
1995).
In sum, plaintiffs have not introduced evidence sufficient to create a
genuine issue of material fact as to A&W’s right to terminate the License
Agreement based on the insurance default. See
Original Great American Chocolate Cookie Co., 970 F.2d at 278-79; McDonald’s
Corp. v. C.B. Management Co., 13 F. Supp. 2d 705, 712 (N.D. Ill.
1998). Summary judgment in A&W’s favor on the wrongful termination
contract claim is therefore proper.
B. The Operational Deficiencies
and Plaintiffs’ Abandonment of the Restaurant Also Constituted Grounds for
Termination.
Even if the insurance default did not provide sufficient lawful grounds
for the termination, the termination was justified because plaintiffs failed to
meet A&W’s quality assurance standards and because plaintiffs abandoned
their restaurant prior to the final notice of termination.
1. Plaintiffs’ Restaurant Fell Short of
A&W’s Quality Assurance Standards.
Although plaintiffs maintain that their restaurant was clean and that
the December 30, 1997 QAR was fraudulent, the record tells a different story.
Martin’s photographs of the restaurant taken on December 30, 1997 and March
11, 1998 depict unsanitary conditions. 4 Notably, the December 30
photographs show food stored on the floor of the walk-in refrigerator, filthy
sinks, and dirty bathrooms. Plfs.’ 12(n) Stmt., Ex. 20. The March 11
photographs show little improvement in the restaurant’s condition. Plfs.’
12(n) Stmt, Ex. 21. These photographs provide contemporaneous support for
plaintiffs’ failing score on the December 30 QAR.
Plaintiffs have not produced evidence that would permit a reasonable
jury to conclude either that the QAR was fraudulent or that Martin’s
photographs do not accurately depict the conditions of the restaurant. Neither
Russell nor James Zeidler was present at the restaurant on the days that the QAR
was conducted or the photographs were taken; thus neither has personal knowledge
of the restaurant’s conditions on those dates. Plaintiffs have failed to
produce an affidavit of any other employee or manager who has personal knowledge
of the conditions of the restaurant on the days of Martin’s visits. The only
evidence plaintiffs have offered in opposition is a series of photographs taken
on March 11 after the restaurant was closed. See
Plfs.’ 12(n) Stmt., Ex. 22. Although these photographs depict the restaurant
to be clean and in good condition at that time, they do nothing to show that the
restaurant met A&W’s quality requirements when Martin visited the
restaurant or during periods when the restaurant was open to the public.
Plaintiffs also argue, relying on Martin’s testimony that a failing
QAR should not by itself mandate termination, that the December 30 QAR could not
form the basis for termination. If the QAR were the only evidence of operational
deficiencies in plaintiffs’ restaurant, and if A&W had terminated the
franchise based on the QAR without making any attempt to work with plaintiffs,
the Court might be inclined to agree. The record, however, is replete with
evidence of repeated quality violations by plaintiffs between November 1997 and
March 1998. A&W sent numerous detailed notices to plaintiffs to inform them
of the specific problems to be remedied, and it repeatedly offered its help in
getting plaintiffs’ restaurant back into compliance to avert termination. Even
if plaintiffs believed that A&W’s concerns were false, they failed to make
any effort to disabuse A&W of that notion. Based on the evidence of the
restaurant’s operational deficiencies and plaintiffs’ apparent failure to
cure them or work with A&W, a reasonable jury could conclude that A&W
had sufficient lawful grounds for the termination.
2. Plaintiffs Abandoned the Restaurant
Prior to Final Termination.
A&W also argues that no wrongful termination occurred because
plaintiffs abandoned the restaurant prior to the termination of the franchise.
It is undisputed that the Notice of Termination was sent out on March 25, 1998.
It is also undisputed that plaintiffs had closed the restaurant twelve days
earlier, on March 13, 1998. A franchisee’s voluntary abandonment of its store
defeats a claim of wrongful termination. See Moro
v. Shell Oil Co., 91 F.3d 872, 875 (7th Cir. 1996) (no wrongful
termination under the Petroleum Marketing Practices Act where franchisee
abandoned franchise after receiving notices of license agreement violations); Derson
Group, Ltd. v. Right Management Consultants, Inc., 683 F. Supp. 1224,
1228 (N.D. Ill. 1988) (granting summary judgment on wrongful termination charge
where franchisee formally dissolved relationship following receipt of two
notices of termination but before the termination was effectuated).
Plaintiffs argue in response that they did not abandon the restaurant
but rather had no choice but to close because the Notice of Intent to Terminate
indicated that termination was a foregone conclusion. For support, plaintiffs
rely on Section 17.0 of the License Agreement, which states that “[a]
repetition of within a one-year period of any such default shall justify the
Company in terminating this Agreement upon written notice to the Licensee
without allowance for any curative period.” Plaintiffs’ argument fails
primarily because it is contradicted by Russell Zeidler’s deposition
testimony, in which he admitted that he understood the difference between a
Notice of Intent to Terminate and a Notice of Termination. R. Zeidler Dep. at
30. Further, the argument fails because the Notice of Intent to Terminate
expressly gave plaintiffs more than 30 days to cure the defects described
therein. No reasonable person could read this Notice as indicating that
termination was inevitable. Plaintiffs have cited no authority to support the
proposition that the Notice of Intent to Terminate effectuated a termination
under these circumstances.
II. Illinois Franchise Disclosure
Act--Wrongful Termination
Plaintiffs also claim that A&W’s termination of the franchise
violated the Illinois Franchise Disclosure Act (“IFDA”), which provides that
a franchisor may not effect a termination without “good cause.” See
815 ILCS §705/19(a). “Good cause” under the IFDA includes the
franchisee’s failure to comply with a lawful contract provision. See
815 ILCS 715/19(b). The requirement that the franchisee supply insurance is a
lawful contract provision. Cf. Lulich v.
Sherwin-Williams Co., 799 F. Supp. 64, 69 (N.D. Ill. 1992) (provision
in construction contract requiring contractor to obtain liability insurance is
lawful). As discussed above, it is undisputed that plaintiffs failed to carry
insurance on the restaurant in 1997 and 1998 despite A&W’s warnings that
this violated the License Agreement and could result in termination. Also as
discussed above, A&W has demonstrated that the insurance default alone
constituted sufficient grounds justifying termination. Accordingly, summary
judgment in favor of A&W is proper on plaintiffs’ IFDA claim.
III. Breach of Contract--Failure to
Provide Operations Manual Updates
The Court next considers plaintiffs’ breach of contract claim based on
A&W’s alleged failure to provide updates to its Operations Manuals. This
claim is the subject of cross-motions for summary judgment. The Court will first
deal with A&W’s motion, thereby viewing the evidence in the light most
favorable to plaintiffs.
The License Agreement required A&W to supply plaintiffs with a
Restaurant Operations Manual and “all amendments or supplements” thereto
throughout the term of the Agreement. License Agreement, §3.0. A&W concedes
that a genuine issue of material fact exists as to whether plaintiffs actually
received the numerous updates to the Manual. The issue is whether plaintiffs
sustained any damages resulting from A&W’s alleged failure to provide the
updates. A&W argues that summary judgment in its favor is proper because the
damages plaintiffs seek are barred on equitable principles and in any event are
not causally connected to the alleged breach.
Plaintiffs are essentially seeking rescission. They seek the return of
their $15,000 initial license fee, $54,739 in monthly license fees, and $15,680
in monthly advertising fees. A&W asserts that plaintiffs’ claim for
rescission is stale because plaintiffs had learned of the manual updates through
A&W correspondence and elected to perform their contractual obligation even
though they had not received the updates. Plaintiffs do not dispute that they
were members of the National A&W Franchise Association (“NAWFA”), and
they do not contest that they received NAWFA minutes discussing proposed changes
and amendments to the Operations Manual, but they nevertheless claim that they
did not know of the existence of the manual updates until discovery in this
suit. See Plf.’s Reply to A&W’s
12(n) Stmt., P16.
Assuming without deciding that A&W’s failure to provide updates
and amendments to the Operations Manual would constitute grounds for rescission,
plaintiffs’ concessions of fact are fatal to their claim for rescission
damages. A party that wishes to rescind a contract must do so promptly, and an
election to proceed with performance on the contract is inconsistent with the
remedy of rescission. See generally Diedrich v.
Northern Illinois Publishing Co., 39 Ill. App. 3d 851, 855, 350
N.E.2d 857, 864 (1976) (party’s delay barred it from seeking rescission); Lichter
v. Goss, 232 F.2d 715, 720 (7th Cir. 1952) (party could not rescind
construction contract after electing to proceed with the contract); Swartz
v. Schaub, 826 F. Supp. 274, 277 (N.D. Ill. 1993) (party seeking to
rescind contract on grounds of fraud must act upon rescission promptly).
Plaintiffs continued performing under the License Agreement despite being on
notice that they were not receiving updates to the Operations Manual.
Accordingly, plaintiffs are barred from seeking rescission.
Even if plaintiffs’ claim for rescission damages were not stale,
A&W argues that plaintiffs cannot prove that A&W’s alleged failure to
provide updates to Operations Manuals caused plaintiffs any damages. The Court
agrees with A&W. A plaintiff seeking damages for breach of contract must
establish a causal connection between the alleged breach and the alleged injury.
See Slowiak v. Land O’Lakes, Inc., 987
F.2d 1293, 1296-97 (7th Cir. 1993); Wisconsin Knife
Works v. National Metal Crafters, 781 F.2d 1280, 1289 (7th Cir.
1985). To establish this connection, plaintiffs offer only Russell Zeidler’s
affidavit, which states that the restaurant was unprofitable for five years as a
result of A&W’s failure to provide updates to the Operations Manual. See
Plfs.’ Mot. for Partial Summ. J., Ex. A, P 14. This conclusory and unsupported
statement is not a sufficient basis to permit a jury to decide that plaintiffs
suffered damages arising from A&W’s alleged breach. See
Slowiak, 987 F.2d at 1297-98 (affirming summary judgment because
plaintiff’s unsupported allegation that he could have made more money had
defendant not engaged in price fixing was insufficient to show injury fairly
traceable to defendant’s conduct). Indeed, Zeidler’s affidavit contradicts
other statements in which he attributed the restaurant’s unprofitability to
factors other than A&W’s failure to send the updates to the Operations
Manual. Specifically, in March 1997 Zeidler complained to A&W that the
restaurant was unprofitable because of the “physical capabilities of the
Stratford Square location” and “reduced mall traffic.” Cf.
Slowiak, 987 F.2d at 1297 (affirming summary judgment where
plaintiff’s earlier testimony that market forces controlled prices
contradicted subsequent unsupported affidavit).
Because plaintiffs have failed to produce evidence sufficient to create
a genuine issue of material fact regarding the existence of damages flowing from
A&W’s alleged failure to provide updates to the Operations Manual, summary
judgment in A&W’s favor is proper.
CONCLUSION
For the foregoing reasons, A&W’s motion for summary judgment [Item
36-1] is granted, and plaintiffs’ motion for partial summary judgment [Item
33-1] is denied. Plaintiffs’ motion to strike Andrew Hester’s affidavit
[Item 50-1] is denied as moot. The Clerk is directed to enter judgment in favor
of defendant.
1
Plaintiffs were absentee owners of their franchise, a fact that A&W knew
upon entering the relationship. Plaintiffs hired managers to run the restaurant,
firing the last of those managers in January 1998. During times when no manager
was running the restaurant, James Zeidler came in at least once a week to
oversee the restaurant’s operations. It is uncontested that there was no
permanent manager on duty at plaintiffs’ restaurant from January 1998 until
the restaurant closed in March.
2
Prior to December 30, 1997, the restaurant had received passing grades on all
QARs, most recently in July of 1997.
3
In their opposition to A&W’s motion, plaintiffs essentially invite the
Court to reconsider its earlier ruling, Zeidler v.
A&W Restaurants, Inc., 2000 U.S. Dist. LEXIS 764, No. 99 C 2591,
2000 WL 122616, at *2 (N.D. Ill. Jan. 25, 2000). Plaintiffs, however, present no
new arguments supporting reconsideration, nor do they contend that the Court
misapprehended their earlier arguments. As such, plaintiffs have provided no
proper grounds for reconsideration. See, e.g.,
Jefferson v. Security Pacific Financial Services, Inc., 162 F.R.D.
123, 125 (N.D. Ill. 1995) (motion to reconsider should not seek “instant
replay”); In re Oil Spill by the “Amoco
Cadiz,” 794 F. Supp. 261, 267 (N.D. Ill. 1992) (motion to
reconsider should not “rehash” old arguments).
4
The DuPage County Health Department also found problems with the conditions of
plaintiffs’ store. In February 1998, the health inspector deducted 23 points
from plaintiffs’ overall score on cleanliness grounds. See
Plfs.’ 12(n) Stmt., Ex. 32. Customers also complained about unsanitary
conditions in the restaurant. See Kohler
Decl., Group Ex. 4.