Blanchat v. Smash Franchise Partners LLC

CourtDistrict Court, E.D. Washington
DecidedDecember 15, 2020
Docket2:20-cv-00380
StatusUnknown

This text of Blanchat v. Smash Franchise Partners LLC (Blanchat v. Smash Franchise Partners LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blanchat v. Smash Franchise Partners LLC, (E.D. Wash. 2020).

Opinion

1 2

3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6

7 KEVIN BLANCHAT, an individual resident of Washington; NO. 2:20-CV-0380-TOR 8 CHRISTOPHER BLANCHAT, an individual resident of Utah; SHILPI ORDER ON DEFENDANTS’ 9 BLANCHAT, an individual resident MOTIONS TO SEAL, EXPEDITE, of Utah; GORDON RUPP, an AND COMPEL ARBITRATION AND 10 individual resident of Alberta Canada; PLAINTIFFS’ MOTION FOR and SMASH HIT LLC, an Arizona PROTECTIVE ORDER 11 limited liability company,

12 Plaintiffs,

13 v.

14 SMASH FRANCHISE PARTNERS, LLC, d/b/a SMASH MY TRASH, an 15 Indiana limited liability company; JUSTIN HASKIN, an individual; and 16 FRANCHISE FASTLANE, INC., a Nebraska corporation, 17 Defendants. 18

19 BEFORE THE COURT are Defendants Smash Franchise Partners, LLC and 20 Justin Haskin’s Motion to Seal Complaint and First Amended Complaint and 1 Strike Unsealed Filings (ECF No. 13), Motion to Expedite Hearing for Motion to 2 Compel Arbitration and Motion to Seal (ECF No. 14), and Motion to Compel

3 Arbitration and Dismiss Case (ECF No. 15). These matters were submitted for 4 consideration with oral argument on December 3, 2020. Brian J. Janura and J. 5 Michael Keyes appeared on behalf of Plaintiffs. Daniel Kittle, Per de Vise Jansen,

6 and Pilar C. French appeared on behalf of Defendants. Following oral argument, 7 Plaintiffs filed a Motion for Protective Order (ECF No. 27). 8 The Court has reviewed the record and files herein, heard from counsel, and 9 is fully informed. For the reasons discussed below, Defendants’ Motion to Seal

10 Complaint and First Amended Complaint and Strike Unsealed Filings (ECF No. 11 13) is DENIED, Defendants’ Motion to Expedite Hearing for Motion to Compel 12 Arbitration and Motion to Seal (ECF No. 14) is GRANTED, Defendants’ Motion

13 to Compel Arbitration and Dismiss Case (ECF No. 15) is GRANTED, and 14 Plaintiffs’ Motion for Protective Order (ECF No. 27) is DENIED as moot. 15 BACKGROUND 16 This case concerns a franchise agreement regarding a trash compaction

17 business in Arizona. On October 16, 2020, Plaintiffs filed a Complaint against 18 Defendant Smash Franchise Partners LLC. ECF No. 1. On November 11, 2020, 19 Plaintiffs filed the First Amended Complaint which added Defendants Justin

20 Haskin and Franchise Fastlane Inc. and alleged the following causes of action: (1) 1 violation of the Washington Franchise Investment Protection Act, (2) violation of 2 the Washington Consumer Protection Act, (3) Negligent Misrepresentation, (4)

3 Fraud/Intentional Misrepresentation, (5) Unjust Enrichment, (6) violation of 4 Washington’s Noncompetition Covenants, (7) violation of the Lanham Act 43(a), 5 and (8) Declaratory Judgment. See ECF No. 8.

6 Defendants Haskin and Smash Franchise Partners LLC then filed the instant 7 sealed Motions to Seal, Expedite, and Compel Arbitration and Dismiss Case. 1 8 FACTS2 9 Plaintiff Kevin Blanchat is a resident of the State of Washington with his

10 primary residence located in Spokane. ECF No. 8 at 3, ¶ 3. Plaintiffs Christopher 11 Blanchat and Shilpi Blanchat are residents of the State of Utah. ECF No. 8 at 3, ¶ 12 4. Plaintiff Gordon Rupp is a resident of Canada. ECF No. 8 at 3, ¶ 5. Plaintiff

13 Smash Hit LLC is an Arizona limited liability company whose members include 14 Plaintiffs Kevin Blanchat, Christopher Blanchat, Shilpi Blanchat, and Gordon 15 Rupp. ECF No. 8 at 3-4, ¶ 6. The individual Plaintiffs are all small-business 16 owners. ECF No. 8 at 6, ¶ 13.

18 1 Defendant Franchise Fastlane Inc. has yet to appear in this matter. 19 2 The following facts are principally drawn from Plaintiffs’ First Amended 20 Compliant. ECF No. 8. 1 Defendant Smash Franchise Partners, LLC (“SMT”) is an Indiana limited 2 liability company whose sole member is Defendant Justin Haskin, also a resident

3 of the State of Indiana. ECF No. 8 at 4, ¶¶ 7-8. SMT is a franchisor that licenses 4 waste compaction service businesses under the trade name “Smash My Trash.” 5 ECF No. 8 at 6, ¶ 14.

6 Defendant Franchise FastLane is a Nebraska corporation with its principal 7 place of business located in Omaha, Nebraska. ECF No. 8 at 4, ¶ 9. Franchise 8 FastLane, a franchise broker, performs due diligence and closes on sales of 9 franchises, earning a “success fee” for every new franchisee it enlisted with SMT.

10 ECF No. 8 at 8, ¶¶ 20, 22. 11 On or about February 2020, third-party broker Marilyn Imparato introduced 12 a franchise opportunity with SMT to Plaintiff Kevin Blanchat. ECF No. 8 at 8, ¶

13 21. Ms. Imparato submitted a summary of Mr. Blanchat’s experience to Franchise 14 Fastlane; this summary provided an Idaho address for Mr. Blanchat. ECF No. 8 at 15 8, ¶ 22. Franchise Fastlane did not request any further information, including Mr. 16 Blanchat’s residence. ECF No. 8 at 8, ¶ 23.

17 For several weeks, the individual Plaintiffs, Franchise Fastlane, and SMT 18 discussed a franchise opportunity, including information on training programs, 19 costs, and fees. ECF No. 8 at 9, ¶ 25. During negotiations, Plaintiffs alleged that

20 Mr. Blanchat informed Defendants Franchise FastLane and SMT that he was a 1 resident of Washington State. ECF No. 8 at 19, ¶ 63. The individual Plaintiffs 2 were provided a Franchise Disclosure Document (“FDD”) and Franchise FastLane

3 broker Jennifer Cain provided the explanations regarding various provisions of the 4 FDD. ECF No. 8 at 10, ¶ 30. 5 On April 27, 2020, the individual Plaintiffs entered into a franchise

6 agreement with SMT, purchasing eleven territories in the State of Arizona for 7 $304,500. ECF No. 8 at 9, ¶ 26. The franchise agreement did not include a 8 Washington State rider, even though Plaintiffs allege that Defendants knew Mr. 9 Blanchat was a Washington resident. ECF No. 8 at 19, ¶¶ 64-65. The Summary

10 Page of the franchise agreement listed Mr. Blanchat’s Idaho address as the “notice 11 address.” ECF No. 8 at 20, ¶¶ 66-67. The only place in writing that Mr. Blanchat 12 personally represented his address in Washington was on the Guaranty and Non-

13 Compete Agreement, an attachment to the Franchise Agreement. ECF No. 8 at 19, 14 ¶ 63. 15 Approximately three months after entering into the franchise agreement, 16 Plaintiffs and SMT entered into an Entity Transfer Addendum that transferred the

17 individual Plaintiff’s rights, interest, and obligations to Plaintiff Smash Hit LLC. 18 ECF No. 8 at 9, ¶ 27. 19 Plaintiffs allege that Defendants made oral and written misrepresentations

20 and omissions regarding the franchise, including that the FDD was out-of-date, 1 contained numerous misrepresentations, and failed to disclose information required 2 by law regarding financial performance data, self-dealing, franchise fees, referral

3 fees, and training requirements. See generally ECF No. 8 at 10-16, ¶¶ 31-53. 4 Defendants refused to refund or rescind the franchise agreement. ECF No. 8 5 at 20-21, ¶ 70. Plaintiffs also allege that Defendants “stonewalled” prospective

6 buyers of the franchise agreement when Plaintiffs sought to transfer the franchise. 7 ECF No. 8 at 21, ¶¶ 71-73. The present lawsuit and motions followed. 8 DISCUSSION 9 A. Motion to Seal

10 Defendants seek to seal the Complaint and Second Amended Complaint and 11 strike unsealed filings on the grounds that they contain confidential information 12 regarding “confidential fees and contents of internal memoranda relating to

13 business practices.” ECF No. 13 at 5. Defendants also allege that redaction is 14 insufficient where they have suffered harm from a third-party competitor posting 15 the complaint a website. ECF No. 13 at 7. Plaintiffs argue that there is no 16 confidential information in the complaints where such information is publicly

17 available. ECF No.

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Blanchat v. Smash Franchise Partners LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blanchat-v-smash-franchise-partners-llc-waed-2020.