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Howell v. Advantage Payroll Services Inc.

United States District Court, D. Maine

December 11, 2017

JAMES HOWELL et al., Plaintiffs,
v.
ADVANTAGE PAYROLL SERVICES, INC. et al., Defendants. PRECISION PAYROLL SERVICES, INC., Plaintiff,
v.
ADVANTAGE PAYROLL SERVICES, INC., Defendant.

          ORDER ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

          Nancy Torresen United States Chief District Judge.

         Before me is Defendant Advantage Payroll Services, Inc.'s (“Advantage”) motion for partial summary judgment on four counts. (ECF No. 43, Docket No. 16-cv-438). Advantage requests summary judgment on Count One of the Amended Complaint filed by Plaintiffs James Howell (“Howell”), Ronald Rode (“Rode”), Chase, Mozzicato, Patz, Inc. (“CMP”), and Payroll, Etc., Ltd. (“Payroll”), all of whom are Advantage franchisees. Amended Complaint (ECF No. 42, Docket No. 16-cv-438). Advantage also requests summary judgment on Count One of the separate, but related Complaint filed by Plaintiff Precision Payroll Services, Inc. (“Precision”), a fifth Advantage franchisee. Complaint (ECF No. 1, Docket No. 16-cv-439). These two counts are nearly identical requests for declaratory judgment that the Plaintiffs (collectively, “the Associates”) have contractual rights to renew their franchise agreements and that Associates' recent attempts to renew are valid. Advantage finally seeks summary judgment on Count One of its counterclaims in both cases, requesting declaratory judgment that the Associates do not have a right to renew their franchise agreements and that attempts to renew are invalid. Answer and Counterclaims (ECF No. 32, Docket No. 16-cv-438; ECF No. 6, Docket No. 16-cv-439).

         For the following reasons, the motion is GRANTED.

         LEGAL STANDARD

         Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). A fact is material where it could influence the outcome of the litigation. Oahn Nguyen Chung v. StudentCity.com, Inc., 854 F.3d 97, 101 (1st Cir. 2017). A dispute is genuine where a reasonable jury could resolve the point in favor of the non-moving party. Id. In deciding a motion for summary judgment, the court must construe “all the facts in the light most flattering to the nonmoving party, resolving any evidentiary conflicts in that party's favor, and drawing all reasonable inferences therefrom to his behoof.” Id. (quoting Gomez v. Stop & Shop Supermkt. Co., 670 F.3d 395, 396 (1st Cir. 2012)).

         BACKGROUND

         Between 1986 and 1997, each of the Associates entered into substantially identical contracts with Advantage to operate an Advantage franchise (the “license agreements”). JSMF ¶ 63. These license agreements granted the Associates a ten-year term, with an option to renew the license agreement for one additional ten-year term.[1] JSMF ¶¶ 3 (Howell), 9 (CMP), 14 (Payroll), 25 (Rode), 29 (Precision). The License Agreements provide, in relevant part:

         II. Term and Renewal

A. Except as otherwise provided herein, the term of this Agreement shall expire ten (10) years from the date of execution of the License Agreement.
B. Associate may, at its option, renew this Agreement for one (1) additional term of ten (10) years . . .
1. Associate shall give Company written notice of Associate's election to renew not less than six (6) months nor more than twelve (12) months prior to the end of the initial term; . . . .
5. Associate shall execute Company's then-current form of renewal license agreement, which agreement shall supersede this Agreement in all respects, and the terms of which may differ from the terms of this Agreement, including, without limitation, a higher fee for company services . . .

See, e.g., Payroll-Midland License Agreement (ECF No. 45-5).

         Each of the Associates exercised its option and entered into substantially identical renewal addenda to extend their contracts for an additional ten-year term. JSMF ¶ 63. Each renewal addenda was a one-page document that consisted of four numbered paragraphs. JSMF ¶ 68. In relevant ...


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