CHONG v. 7-ELEVEN, INC.

District Court, E.D. Pennsylvania·Decided September 3, 2020·No. 2:18-cv-01542·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ANTHONY CHONG et al., : Plaintiffs : CIVIL ACTION ow. : 7-ELEVEN, INC, : No. 18-1542 Defendant : MEMORANDUM PRATTER, J. SEPTEMBER , 2020 MT133132, Inc. (“MT”) and Anthony Chong! seek reconsideration of the Court’s granting of 7-Eleven, Inc.’s motion for summary judgment on MT’s claims and 7-Eleven’s counterclaims. 7-Eleven opposes the motion. For the reasons that follow, the Court denies the motion for reconsideration.” BACKGROUND AND PROCEDURAL HISTORY Former 7-Eleven franchisee MT initially filed a complaint against 7-Eleven alleging breach of the covenant of good faith and fair dealing, breach of contract, unconscionability, unjust enrichment, impracticability, conversion, and fraud. 7-Eleven moved to dismiss the complaint, filed counterclaims against MT and Mr. Chong alleging that they had breached the Franchise Agreements by underreporting sales, and filed a separate motion to stay arbitrable claims, arguing that some of MT’s breach of contract claims concerning vendor negotiating practices needed to be arbitrated under the terms of the Franchise Agreements.

' Anthony Chong was a named plaintiff at the beginning of this case, but the Court dismissed Mr. Chong’s individual claims for lack of standing. However, Mr. Chong remained in the case as a counter- defendant to 7-Eleven’s counterclaims. 2 In a related case brought by another former franchisee, the Court recently issued a separate memorandum and order addressing a similar motion for reconsideration, as well as a motion for leave to amend the complaint. See Takiedine v. 7-Eleven, Inc., Civ. No. 17-4518.

After holding oral argument on the motions, the Court granted 7-Eleven’s motion to stay arbitrable claims, ruling that MT’s vendor negotiating practices claims under Section 15 of the Franchise Agreements, including those concerning 7-Eleven’s proprietary products, fell within the scope of the Franchise Agreements’ arbitration provision. The Court also dismissed two of MT’s breach of contract claims concerning (1) fair and accurate merchandise audits under Section 14 of the Franchise Agreements; and (2) recommended vendors under Section 15(g). Four of MT’s breach of contract claims survived, namely, those relating to (1) failure to provide necessary maintenance under Section 20(d); (2) failure to treat MT as an independent contractor under Section 2; (3) failure to provide advertising reports under Section 22; and (4) no written notice of credit card fees and the increase of said fees under Section 7 of the Credit Card Amendment to the Franchise Agreements. MT’s impracticability, unconscionability, and fraud claims were dismissed, and the parties subsequently stipulated to the dismissal of MT’s conversion claim and breach of contract claims related to credit card and advertising fees. . 7-Eleven then moved for summary judgment on MT’s remaining claims and 7-Eleven’s counterclaims.? Following oral argument, the Court granted the motion in its entirety. In dismissing MT’s independent contractor claim, the Court held that Section 2 of the Franchise Agreements did not impose a duty on 7-Eleven, and even if such a duty did exist, Section 2 did not prohibit 7-Eleven from requiring MT to stock and sell certain products or from interacting with MT’s employees, both of which matters were the gravamen of MT’s claims. The Court also held that 7-Eleven could not be liable for failure to provide necessary maintenance under Section 20(d) □ because, under Pennsylvania law, the standards of good faith and fair dealing apply to franchise relationships only in the context of termination of the agreement, and there was no allegation that

3 MT agreed to the dismissal of its unjust enrichment claim in its response to the summary judgment motion.

7-Eleven had failed to make repairs it deemed subjectively (as it contractually was permitted to do so) necessary as required by the Franchise Agreements. The Court dismissed MT’s breach of the covenant of good faith and fair dealing claim on the grounds that the evidence showed MT had inaccurately reported its financials, giving 7-Eleven the right to terminate the Franchise Agreements. Because 7-Eleven had presented undisputed evidence that MT breached its reporting obligations, the Court also granted 7-Eleven’s counterclaims for breach of contract and breach of guaranty. LEGAL STANDARD To succeed on a motion for reconsideration under Federal Rule of Civil Procedure 59(e), the moving party “must rely on one of three grounds: (1) an intervening change in controlling law; (2) the availability of new evidence; or (3) the need to correct clear error of law [or fact] or prevent manifest injustice.” Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir. 2010) (per curiam); accord Max’s Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). Although Rue 60(b)(6) permits a court to also “grant relief from a final judgment for ‘any other reason that justifies relief,’” courts have adopted a qualitative expectation that a party seeking Rule 60(b)(6) relief “demonstrate the existence of ‘extraordinary circumstances’ that justify reopening the judgment.” Budget Blinds, Inc. v. White, 536 F.3d 244, 255 (3d Cir. 2008) (citations omitted). Accordingly, “[dJisagreement with the Court’s ruling is not proper grounds for a motion for reconsideration.” Smith v. Unilife Corp., No. 13-5101, 2015 WL 115581, at *1 (E.D. Pa. Jan. 7, 2015). Furthermore, “a motion for reconsideration is not an opportunity for a party to present previously available evidence or new arguments.” Federico v. Charterers Mut. Assur. Ass’n Ltd., 158 F. Supp. 2d 565, 578 (E.D. Pa. 2001) (quoting F.D.LC. v. Parkway Exec. Office Ctr., No. 96- 121, 1997 WL 611674, at *1 (E.D. Pa. Sept. 24, 1997)); see also Romero v. Allstate Ins. Co., 170 ° F. Supp. 3d 779, 783 (E.D. Pa. 2016) (“Motions for reconsideration may not be used ‘as a means

Free access — add to your briefcase to read the full text and ask questions with AI

CHONG v. 7-ELEVEN, INC., (E.D. Pa. 2020).

CHONG v. 7-ELEVEN, INC. (CHONG v. 7-ELEVEN, INC.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Anderson v. Liberty Lobby, Inc.
477 U.S. 242 (Supreme Court, 1986)
Giordano v. McCartney
385 F.2d 154 (Third Circuit, 1967)
United States v. Potamkin Cadillac Corporation
697 F.2d 491 (Second Circuit, 1983)
Pharmacy Benefit Managers Antitrust Litigation
582 F.3d 432 (Third Circuit, 2009)
Continental Casualty Co. v. Diversified Industries, Inc.
884 F. Supp. 937 (E.D. Pennsylvania, 1995)
Budget Blinds, Inc. v. White
536 F.3d 244 (Third Circuit, 2008)
Springer v. Durflinger
518 F.3d 479 (Seventh Circuit, 2008)
Brambles USA, Inc. v. Blocker
735 F. Supp. 1239 (D. Delaware, 1990)
Lazaridis v. Wehmer
591 F.3d 666 (Third Circuit, 2010)
Atlantic States Legal Foundation, Inc. v. Karg Bros.
841 F. Supp. 51 (N.D. New York, 1993)
Douris v. Schweiker
229 F. Supp. 2d 391 (E.D. Pennsylvania, 2002)
Federico v. Charterers Mut. Assur. Ass'n Ltd.
158 F. Supp. 2d 565 (E.D. Pennsylvania, 2001)
Sara Lesende v. Arnold Borrero
752 F.3d 324 (Third Circuit, 2014)
Projects Management Company v. DynCorp International LLC
584 F. App'x 121 (Fourth Circuit, 2014)
Projects Management Co. v. DynCorp International, LLC
17 F. Supp. 3d 539 (E.D. Virginia, 2014)