United States District Court, D. New Hampshire
STEVEN J. MCAULIFFE UNITED STATES DISTRICT JUDGE
This action arises out of the alleged breach of a franchise agreement between two limited liability companies: The Flying Butcher, LLC (as franchisee) and Meat House Franchising, LLC (as franchisor). In April of 2014, Meat House Franchising found itself in financial distress and the defendants, PCPA and Prime Choice Brands, acquired the rights to enforce its franchise agreements against its franchisees. Having acquired those rights, the defendants, in March of 2015, asserted breach of contract claims against the Flying Butcher and Allan Bald, its principal.
Defendants invoked arbitration provisions included in both The Flying Butcher’s franchise agreement and a related “area development agreement, ” as the appropriate process to resolve its claims. The Flying Butcher acknowledges that it is contractually obligated to arbitrate the parties’ disputes. But, Allan Bald, the sole member of The Flying Butcher, LLC, denies that he is a party (in his personal capacity) to either the Franchise Agreement or the Area Development Agreement. Accordingly, Bald brought this action, seeking a declaratory judgment that he is not legally bound to arbitrate any disputes that may exist between him and defendants.
Pending before the court is Bald’s motion for summary judgment. Defendants object, saying there are genuinely disputed material facts bearing on the dispositive questions posed, that is, whether Bald, in his personal capacity, is a party to the Franchise Agreement and/or the Area Development Agreement and, if so, whether the mandatory arbitration provisions, as worded, apply to him.
For the reasons discussed, Bald’s motion for summary judgment is granted.
Standard of Review
When ruling on a motion for summary judgment, the court must “constru[e] the record in the light most favorable to the non-moving party and resolv[e] all reasonable inferences in that party’s favor.” Pierce v. Cotuit Fire Dist., 741 F.3d 295, 301 (1st Cir. 2014). Summary judgment is appropriate when the record reveals “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In this context, “a fact is ‘material’ if it potentially affects the outcome of the suit and a dispute over it is ‘genuine’ if the parties’ positions on the issue are supported by conflicting evidence.” Int’l Ass’n of Machinists & Aerospace Workers v. Winship Green Nursing Ctr., 103 F.3d 196, 199-200 (1st Cir. 1996) (citations omitted). See also Nolan v. CN8, 656 F.3d 71, 76 (1st Cir. 2011). Nevertheless, if the non-moving party’s “evidence is merely colorable, or is not significantly probative, ” no genuine dispute as to a material fact has been proved, and “summary judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986) (citations omitted).
The key, then, to defeating a properly supported motion for summary judgment is the non-movant’s ability to support his or her claims concerning disputed material facts with evidence that conflicts with that proffered by the moving party. See generally Fed. R. Civ. P. 56(c). It naturally follows that while a reviewing court must take into account all properly documented facts, it may ignore a party’s bald assertions, speculation, and unsupported conclusions. See Serapion v. Martinez, 119 F.3d 982, 987 (1st Cir. 1997). See also Scott v. Harris, 550 U.S. 372, 380 (2007) (“When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.”).
In 2011, Bald formed The Flying Butcher, LLC, a New Hampshire limited liability company. Bald is the sole member of that business organization. On April 20, 2012, The Flying Butcher entered into a franchising agreement with Meat House Franchising (“MHF”). See generally Franchise Agreement (document no. 15-3). At some point in 2014, MHF began to experience financial distress and franchisees started closing their stores. In April of 2014, defendants entered into an agreement with MHF’s secured creditors, pursuant to which defendants apparently acquired all of the rights that MHF held under the Franchise Agreement with The Flying Butcher, as well as certain intellectual property that once belonged to MHF.
According to Bald, The Flying Butcher terminated its Franchise Agreement on April 2, 2014 - approximately two weeks before defendants acquired MHF’s assets. Defendants dispute that, asserting that Bald continued “advertising” using the Meat House name on a Facebook page until at least May 10, 2014. But, for purposes of resolving Bald’s pending motion, that dispute is not important.
On March 16, 2015, defendants filed a statement of claim with the American Arbitration Association (“AAA”), asserting that both Bald and The Flying Butcher are parties to, and breached, the Franchise Agreement and Area Development Agreement, both of which contain mandatory arbitration provisions. Bald objected, asserting that he was not personally bound by the arbitration provisions. According to defendants, the AAA determined on April 21, 2015, that defendants met the filing requirements for arbitration against Bald by reason of the arbitration provision contained in the Franchise Agreement (it seems the AAA did not address the arbitration provision said to be included in the Area Development Agreement). Shortly thereafter, Bald filed this suit in state court, seeking a judicial declaration that he is not contractually bound by the arbitration provisions in the referenced contracts. That action was removed to this court and Bald subsequently filed the pending motion for summary judgment.
I. Who Decides Whether a Party is Obligated ...