Cin-Doo v. 7-Eleven

2005 DNH 058

• Court: District Court, D. New Hampshire
• Decided: April 6, 2005
• Docket: 04-CV-050-SM
• Status: Published

Opinion

Cin-Doo v . 7-Eleven 04-CV-050-SM 04/06/05 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Cin-Doo, Inc., Plaintiff

v. Civil N o . 04-cv-50-SM Opinion N o . 2005 DNH 058 7-Eleven, Inc., Defendant

O R D E R

Cin-Doo, a 7-Eleven franchisee, has sued 7-Eleven in four

counts seeking damages and injunctive relief for, among other

things, 7-Eleven’s failure to rebuild Cin-Doo’s leased 7-Eleven

store after having previously stated that it would do s o . Before

the court is 7-Eleven’s motion for summary judgment. Cin-Doo

objects. For the reasons given, 7-Eleven’s motion for summary

judgment is denied.

Summary Judgment Standard

Summary judgment is appropriate when the record reveals “no

genuine issue as to any material fact and . . . the moving party

is entitled to a judgment as a matter of law.” FED. R . CIV. P .

56(c). “The role of summary judgment is to pierce the boilerplate of the pleadings and provide a means for prompt

disposition of cases in which no trial-worthy issue exists.”

Quinn v . City of Boston, 325 F.3d 1 8 , 28 (1st Cir. 2003) (citing

Suarez v . Pueblo Int’l, Inc., 229 F.3d 4 9 , 53 (1st Cir. 2000)).

When ruling on a party’s motion for summary judgment, the court

must view the facts in the light most favorable to the nonmoving

party and draw all reasonable inferences in that party’s favor.

See Lee-Crespo v . Schering-Plough Del Caribe Inc., 354 F.3d 3 4 ,

37 (1st Cir. 2003) (citing Rivera v . P.R. Aqueduct & Sewers

Auth., 331 F.3d 183, 185 (1st Cir. 2003)).

Background

Cin-Doo owns and operates a 7-Eleven franchise at 37 Nashua

Road, Londonderry, New Hampshire, pursuant to a franchise

agreement dated December 2 0 , 1996. (Pl.’s O b j . to Summ. J, Ex. A

(Tibert Aff.) ¶ 2.) Jack Tibert is the president of Cin-Doo.

(Tibert Aff. ¶ 1.) Until approximately 2001 – the record is not

clear on this point – Tibert and his wife also owned an interest

in another 7-Eleven franchise located in Litchfield, New

Hampshire. (Tibert Aff. ¶ 58.) The building in which Cin-Doo

operates its Londonderry 7-Eleven, and the five-acre parcel of

2 real estate on which the building stands, are owned by 7-Eleven.

(Tibert Aff. ¶ 5.)

The penultimate paragraph of the franchise agreement

provides, in boldface type:

Complete Agreement. This Agreement, any other agreements specified in Exhibit D, and the Exhibits, Amendments, and Addenda (which are incorporated herein by this reference and made a part of this Agreement) contain all Agreements between Franchisee and 7-Eleven and cover their entire relationship concerning the Store, all prior or contemporaneous promises, representations, agreements, or understandings being expressly merged and superseded. No Agent or Employee of 7-Eleven is authorized to make any modification, addition, or amendment to or waiver of this Agreement unless in writing and executed by an Assistant Secretary of 7-Eleven. . . .

(Tibert Aff., Ex. 1 ¶ 34.) Exhibit A of the franchise agreement

provides that “FRANCHISEE agrees that 7-ELEVEN may at any time

remodel the Store in accordance with one of 7-ELEVEN’s remodel

programs.” (Tibert Aff., Ex. 1 , Ex. A.)

In 1999, one or more 7-Eleven officials spoke with Tibert

about the possibility of updating Cin-Doo’s store and

constructing an addition. (Tibert Aff. ¶ 11.) By October 2000,

3 7-Eleven had decided to completely reconstruct the store rather

than just updating i t . (Tibert Aff. ¶ 12.) Tibert opposed that

idea and informed 7-Eleven of his opinion. (Tibert Aff. ¶¶ 12-

13.) In Tibert’s words:

In late 2000, my wife and I had a telephone conference with 7-Eleven Market Manager, Paul Donohoe, and 7-Eleven Vice-President / Assistant Secretary, Frank Crivello.

During that telephone conference, Paul Donohoe and Frank Crivello told us about 7-Eleven’s reconstruction plans.

They told us that reconstruction was what 7-Eleven corporate wanted to do and that we needed to support the company.

7-Eleven, acting through Paul Donohoe and Frank Crivello, convinced me that reconstruction of the store made sense for the site because it would provide a state of the art building, gas pumps and layout.

After my discussions with Paul Donohoe and Frank Crivello, I supported the reconstruction plans.

(Tibert Aff. ¶¶ 15-19.)

At some point in 2001, construction was begun on a Home

Depot store located several hundred yards down Gilcreast Road

from Cin-Doo’s 7-Eleven store. (Tibert Aff. ¶ 20.) Tibert

expressed concerns to 7-Eleven that the new Home Depot store, and

4 associated changes to Gilcreast Road, would cause traffic and

accessibility problems for his store. (Tibert Aff. ¶ 23.) 7-

Eleven officials told Tibert not to worry, because those problems

would be resolved by the planned reconstruction of his store.

(Tibert Aff. ¶ 24.) In July 2001, 7-Eleven provided Cin-Doo with

engineering drawings related to the proposed reconstruction, as

well as post-construction financial projections of Cin-Doo’s

potential earnings from the new store. (Tibert Aff. ¶¶ 2 5 , 27.)

7-Eleven also represented that construction would take

approximately ninety days, and would begin as soon as 7-Eleven

received the necessary local permits and approvals. (Tibert Aff.

¶ 29.)

In September of 2001, 7-Eleven’s senior real-estate

representative, Don Caren, told Tibert and his wife that the

reconstruction of their store was a 2002 project. (Tibert Aff. ¶

41.) At a meeting in December of 2001, Caren’s supervisor, Ken

Barnes, assured the Tiberts that the reconstruction was going to

happen. (Tibert Aff. ¶ 43.) In 2002, the nearby Home Depot

construction project was begun. (Tibert Aff. ¶ 59.) Roadway

reconstruction undertaken as a part of the Home Depot project

5 diminished access to Cin-Doo’s 7-Eleven, and its business

suffered as a consequence. (Tibert Aff. ¶ 61.)

Despite having told Tibert that it would reconstruct his

store, 7-Eleven has never done s o . (Tibert Aff. ¶ 62.) In June

2004, Tibert asked the president and CEO of 7-Eleven, Jim Keyes,

about its failure to follow through on its previously expressed

intention to reconstruct the Londonderry store, and Keyes

replied: “We made a mistake.” (Tibert Aff. ¶ 65.)

Back in September of 2001, Tibert was informed that someone

in 7-Eleven’s corporate office in Dallas had agreed to give Home

Depot a portion of the real estate on which Cin-Doo’s store

stands, to facilitate improvements to Gilcreast Road and its

intersection with Nashua Road. (Tibert Aff. ¶ 57.) It is unclear

precisely when Tibert learned of the real estate transfer, but he

states that at the time of the transfer, he “took no action to

stop or seek an injunction because [he] relied upon the explicit

representations by 7-Eleven, Inc. that it was going to

reconstruct [his] 7-Eleven store.” (Tibert Aff. ¶ 52.)

Furthermore, “[b]ased upon 7-Eleven’s promises concerning the

6 reconstruction of the Londonderry store and the revenues expected

from the new design, [Tibert and his wife] sold [their other]

interest in the 7-Eleven store in Litchfield, New Hampshire for

less than its market value.” (Tibert Aff. ¶ 58.)

Based upon the foregoing, Cin-Doo filed suit against 7-

Eleven, seeking damages and injunctive relief. In Count I ,

plaintiff asserts a claim of breach of contract, based upon 7-

Eleven’s transfer of part of Cin-Doo’s leasehold to Home Depot

and 7-Eleven’s failure to reconstruct Cin-Doo’s store. Count II

also asserts a claim for breach of contract, based upon 7-

Eleven’s failure to reconstruct the entrances and exits to the

property, as well as its failure to remedy other deficiencies in

the property regarding roofing, signage, and general

deterioration.1 Count III is captioned “Estoppel,” and asserts

that 7-Eleven is estopped from denying the existence of an

agreement to reconstruct the store due t o : (1) Cin-Doo’s lack of

opposition to the Home Depot construction project, or the

transfer of part of the leasehold; and (2) the Tiberts’ sale of

1 Count II also asserts that 7-Eleven breached the implied covenant of good faith and fair dealing in seven enumerated ways.

7 their interests in the Litchfield 7-Eleven. Count V – there is

no Count IV in the complaint – is Cin-Doo’s request for

preliminary and permanent injunctive relief.

Discussion

7-Eleven moves for summary judgment, arguing that it is not

liable for breach of contract because it entered into no

enforceable agreement to reconstruct the store operated by Cin-

Doo. 7-Eleven’s argument rests upon paragraph 34 of the

franchise agreement (the integration/no-oral-modification

provision quoted above) and the lack of any writing memorializing

the promise Cin-Doo seeks to enforce. Defendant does not,

however, address plaintiff’s estoppel argument, nor does it

address any of the other acts which, in Cin-Doo’s view,

constituted breaches of the franchise agreement. Cin-Doo

counters by arguing that: (1) the promise to reconstruct its

store was not a modification or amendment of the franchise

agreement but was, instead, a separate oral agreement between

itself and 7-Eleven; (2) the promise to reconstruct was made with

either the actual or apparent authority of 7-Eleven; (3) 7-Eleven

waived the provisions of paragraph 3 4 ; and (4) 7-Eleven is

8 estopped from denying the existence of an enforceable agreement

to reconstruct Cin-Doo’s store.

This i s , to be sure, a somewhat curious breach of contract

action. Plainly, the promise Cin-Doo seeks to enforce is not one

for which it bargained. According to Tibert’s affidavit, 7-

Eleven initially announced its reconstruction plan – as it was

entitled to do under the franchise agreement – and pressed that

plan in the face of the Tiberts’ objections. If anything, the

object of Cin-Doo’s initial bargaining was to convince 7-Eleven

not to reconstruct its store, and, instead, to implement a less

intrusive remodeling plan. S o , rather than being something Cin-

Doo bargained for, the proposed reconstruction was something to

which Cin-Doo acquiesced. (Of course, under the franchise

agreement, Cin-Doo’s acquiescence was immaterial; 7-Eleven had

the contractual right to implement, or not implement, any

[reasonable] remodeling plan it chose.)

However, it does not necessarily follow, from the fact that

Cin-Doo did not bargain for 7-Eleven’s agreement to reconstruct

the store, that 7-Eleven is not bound by its representations that

9 it would do s o . Specifically, 7-Eleven’s statements might prove

enforceable under the theory of promissory estoppel. According

to the Restatement, which the New Hampshire Supreme Court

generally considers authoritative in this area of the law, see

Marbucco Corp. v . City of Manchester, 137 N.H. 629, 633 (1993),

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy for breach may be limited as justice requires.

RESTATEMENT (SECOND) OF CONTRACTS § 90(1) (1981). Because the

undisputed facts, viewed in the light most favorable to Cin-Doo,

could, arguably, support a finding that an enforceable promise

arose by virtue of estoppel (based upon the Tiberts’ act of

selling their interest in the Litchfield store, and their

forbearance from challenging the Home Depot construction

project), and because defendant does not address plaintiff’s

estoppel theory, defendant cannot be found to be entitled to

summary judgment as a matter of law.

10 As noted, defendant’s motion for summary judgment relies

exclusively upon paragraph 34 of the franchise agreement, the

integration/no-oral-modification provision. However,

[p]arties to a contract can not, even by an express provision in that contract, deprive themselves of the power to alter or vary or discharge it by subsequent agreement. An express provision in a written contract that no rescission or variation shall be valid unless it too is in writing is ineffective to invalidate a subsequent oral agreement to the contrary.

Prime Fin. Group, Inc. v . Masters, 141 N.H. 3 3 , 37 (1996). While

an “in-writing clause” must be overcome by the factfinder’s

determination that the parties intended to waive i t , id. (citing

C.I.T. Corp. v . Jonnet, 214 A.2d 6 2 0 , 622 (Pa. 1965); Menard &

C o . Masonry Bldg. Contractors v . Marshall Bldg. Sys., 539 A.2d

523, 526-27 (R.I. 1988)), “[t]he waiver of the in-writing clause

. . . may itself be implied from the conduct of the parties,” id.

(citing Freeman v . Stanbern Constr. Co., 106 A.2d 5 0 , 54-55 (Md.

1954); Menard & Co., 539 A.2d at 5 2 7 ) . The foregoing principle

would appear particularly relevant where, as here, plaintiff

relies upon an estoppel theory, to be proven, in part, by

evidence of plaintiff’s conduct in response to 7-Eleven’s

statements about reconstructing Cin-Doo’s store. It is not a

11 particularly strong or well-supported theory, perhaps, but on

this undeveloped record, it is sufficient to avoid summary

judgment at this juncture.

Conclusion

For the reasons given, 7-Eleven’s motion for summary

judgment (document n o . 20) is denied.

SO ORDERED.

Steven J. McAuliffe Chief Judge

April 6, 2005

cc: Joshua L. Gordon, Esq. Gordon J. MacDonald, Esq. Arthur L. Pressman, Esq. Rory A . Valas, Esq.