Coryell, C. v. Morris, J.

2023 Pa. Super. 232

• Court: Superior Court of Pennsylvania
• Decided: November 8, 2023
• Docket: 1977 EDA 2021
• Status: Published

Opinion

J-A26040-22

2023 PA Super 232

CLARENCE DAVID CORYELL, AND : IN THE SUPERIOR COURT OF SANDRA CORYELL, H/W : PENNSYLVANIA : : v. : : : STEVEN MORRIS, JASON DAWSON, : ROBIZZA, INC., AND DOMINO'S : No. 1977 EDA 2021 PIZZA LLC : : : APPEAL OF: DOMINO'S PIZZA LLC :

Appeal from the Judgment Entered September 21, 2021 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 180602732

BEFORE: BOWES, J., KING, J., and PELLEGRINI, J.*

OPINION BY PELLEGRINI, J.: FILED NOVEMBER 8, 2023

Domino’s Pizza LLC (Domino’s) appeals from the judgment entered in

the Court of Common Pleas of Philadelphia County (trial court) after a jury

found it vicariously liable for the negligence of a delivery driver for one of its

franchises. Before trial, Domino’s moved for summary judgment, arguing that

it could not be held vicariously liable because under its franchise agreement,

its relationship with the franchisee was that of an independent contractor-

contractee rather than master-servant. The trial court, however, found that

there was a genuine issue of material fact and denied the motion, and the jury

found Domino’s vicariously liable and awarded damages.

____________________________________________

* Retired Senior Judge assigned to the Superior Court. J-A26040-22

There are two central issues in this appeal. First, we must determine

what we are reviewing: the denial of the summary judgment motion or the

denial of the post-trial motion for judgment notwithstanding the verdict

(JNOV). Both involve the question of whether the trial court or the jury should

have determined vicarious liability. At the summary judgment stage, the

parties agreed that the franchise agreement was unambiguous and controlled

the franchisor-franchisee relationship. As a result, the parties merely

disagreed over the construction of the franchise agreement and whether it

created a master-servant relationship. Similarly, at trial there was no

disagreement over whether the franchise agreement was unambiguous.

Because the franchise agreement was unambiguous, vicarious liability was a

legal issue rather than a factual one, and the trial court was obligated to

determine that issue.

That does not end the matter, though. Because vicarious liability should

have been determined as a matter of law, our second issue is whether the

franchise agreement created a master-servant relationship between Domino’s

and the franchisee. To answer this, we review the agreement under the

standard for franchisor-franchisee vicarious liability recognized in

Myszkowski v. Penn Stroud Hotel, Inc., 634 A.2d 622 (Pa. Super. 1993).

There, we held that our inquiry in such cases focuses on “whether the alleged

master has day-to-day control over the manner of the alleged servant’s

performance.” Id. at 626. After review, we conclude that the franchise

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agreement did not give Domino’s day-to-day control over the franchisee.

Accordingly, we reverse and remand with instructions.

Now to a more detailed discussion of those issues.

I.

A.

On August 15, 2006, Domino’s entered into a Standard Franchise

Agreement under which Robizza, Inc. (Robizza) was to operate a store (the

Store) in Souderton, Montgomery County, Pennsylvania. The Store was

operated by Jason Dawson (Dawson), Robizza’s owner. The Standard

Franchise Agreement authorized Robizza to operate under Domino’s name,

marks, trade dress, and logos and specified operating and product standards

for the Store. Robizza was required to comply with the terms and conditions

of Domino’s Standard Franchise Agreement, Product Standards and Operating

Standards, and the agreement set forth when franchise licensing fees had to

be paid to Domino’s.

On July 26, 2016, Steven Morris (Morris) was working as a delivery

driver for Robizza and driving a car leased by Dawson. While returning from

a delivery, Morris collided with a motorcycle driven by Clarence Coryell

(Coryell), who was ejected and suffered substantial injuries. On June 22,

2018, Coryell and his wife (the Coryells) filed an action raising claims of

negligence and loss of consortium against Morris, Dawson, Robizza and

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Domino’s. Relevant here, the Coryells alleged that Domino’s was vicariously

liable for Morris’s negligence.1

At the end of discovery, Domino’s and the Coryells both moved for

summary judgment on vicarious liability. While disagreeing over the

construction of the franchise agreement and what kind of relationship it

created, they agreed that the franchise agreement was unambiguous and

controlling. Both also asserted that the trial court and not a jury should

determine vicarious liability, since the matter was essentially one of contract

interpretation. The trial court, however, denied both motions for summary

judgment, stating simply, without explanation, that there was a genuine issue

of material fact as to the extent of control asserted by Domino’s.

B.

At trial, witnesses testified as to the nature of the relationship created

by the Standard Franchise Agreement, including testimony based on specific

sections in these documents. Because they were testifying about what the

Agreement and Operating Standards said, their testimony was consistent.

The Coryells called Roy Jones (Jones), a former Domino’s executive who

had served in various executive capacities for 30 years. In that time, he was

involved with running Domino’s corporate-owned stores and in assisting and

1 The Coryells also alleged direct negligence on the part of Dawson, Robizza

and Domino’s but later withdrew that claim at trial.

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overseeing between 1,200 and 2,000 franchised stores for compliance with

the Standard Franchise Agreement.

Jones testified2 regarding mandatory requirements in Domino’s

Standard Franchise Agreement, Operating Standards, and Product Standards

that franchisees such as Robizza were required to meet:

• Follow hours of operation set by Domino’s.

• Comply with Section 15.6 of the Standard Franchise Agreement that states that Domino’s had the right to set the specifications regarding the equipment, fixtures, furniture, signs, and decorations allowed in the store.

• Comply with standards for quality of ingredients and supplies used in preparation and sale of food products.

• Conform the franchise lease for the store to meet the standards set by Domino’s.

• Keep financial records in a manner set by Domino’s.

• Follow Domino’s Operating Standards which specified how its employees had to act, their demeanor, and how to handle customer complaints; provided how long employees’ fingernails and facial hair could be; the size and amount of employees’ jewelry; when the store must be cleaned and what types of supplies were permitted; methods of acceptable payment by customers; what topics must be covered in employee training; how much cash, including personal funds, drivers were permitted to carry in the delivery vehicles; and prohibited drivers from carrying mace or other types of personal protection in the delivery vehicles.

• Allow Domino’s to inspect store premises any time during open hours. ____________________________________________

2 R. 1859-1911a. For ease of reference, we cite to the reproduced record.

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He stated that every store was audited by an independent team roughly

four times a year. Every store would usually be visited one to two times per

year by the business franchise consultant. If any issues developed out of the

inspections, he and his team would follow up with the franchisees to ensure

that they corrected the issues and became compliant with the Operating

Standards. If a franchisee did not comply with the Standard Franchise

Agreement, Operating Standards or Product Standards, it was required to

remedy the violation within thirty days. If the violation was not corrected

within 30 days, Domino’s had the right to terminate the franchise agreement.

Jones acknowledged that consistency standards are inherent in any

franchise relationship in which the franchisee creates and assembles a product

that is purchased by the customer under the franchisor’s brand. In his words,

“a brand is a promise of consistency.” (R. 1879a). Jones further

acknowledged that all franchisors strive to ensure consistency of customer

experience through such standards. The goal of uniform standards is to

protect the value of the Domino’s brand for the benefit of all stakeholders,

including franchisees such as Robizza. Jones testified that how each

franchisee meets those standards, and the supervision of the franchisee’s

employees, is left to the discretion of the franchisee. In this case he

recognized that no one from Domino’s instructed Dawson or the Robizza

employees on how to meet or exceed those standards on a daily basis, and

Dawson and his wife alone supervised Robizza’s employees.

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Also testifying3 was Joseph Deveraux (Deveraux), Domino’s Director of

Franchise Services from 1997 to present. His job duties included enforcement

of the Standard Franchise Agreement with franchisees who were not in

compliance. He also signed the Standard Franchise Agreement with Robizza

on behalf of Domino’s on August 15, 2006. He stated that in some respects

the Standard Franchise Agreement gave Domino’s the right to create, at any

time, specifications, standards and operating procedures and rules for

franchises. However, he noted that provisions in the franchise agreement

specify that any determinations that Domino’s makes under the Standard

Franchise Agreement must be reasonable ones.

Deveraux also testified that the Operating Standards issued in July 2016

created mandatory rules for the preparation and sale of all pizza by

franchisees. Regarding delivery drivers, he stated that the Operating

Standards provided that before a franchisee could hire or train a delivery

driver, that driver would have to meet the requirements set forth by the

Operating Standards.

January Shook (Shook), an area leader for Domino’s Pizza LLC in 2016,

also testified.4 One of her responsibilities was to make sure that the

franchisees complied with the Standard Franchise Agreement. It was also her

3 R. 1925-61a.

4 R. 1925-2113a.

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job to understand the Standard Franchise Agreement and ensure that

franchisees like Robizza complied with its terms. Her testimony was consistent

with that of other witnesses.

Shook testified that, under Section 15.1(d) of the Standard Franchise

Agreement, Domino’s had the right to create mandatory rules on the methods

and procedures relating to receiving, preparing and delivering customer

orders. Under Section 15.1(e), (f) and (g), Domino’s had the right to create

mandatory rules that franchisees, including Robizza, had to follow regarding

store hours, the appearance of the interior and exterior of the store and

handling of customer complaints. Moreover, if Domino’s changed its

Operating Standards or Product Standards, she stated that the franchisee

would be required to comply with the new standards even though they were

not in place when they signed the agreement. She also testified that no one

from Domino’s visits a franchisee store on a daily, weekly or monthly basis.

Although she knew that this case involved a Robizza employee who was

involved in an accident, she never met or spoke to him. She did not know

who trained the employee, how deliveries were assigned to Morris, or how

routes or deliveries were selected for him.

Dawson, the owner of the franchise, testified5 that he operated Robizza

as an independent business. He stated that Robizza was solely responsible

5 R. 1691-1751a; R. 1757-1808a.

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for running, managing, supervising, and controlling the methods, means and

details of the Store’s day-to-day operations. He stated that Robizza

independently leased the Store premises, owned or leased all of the equipment

used in the Store, and purchased its own ingredients and supplies. The Store’s

food products were made in ovens and other equipment that it owned and

were sold at prices it set. He stated that Robizza paid all of its own bills,

expenses and taxes without any involvement of Domino’s.

Regarding employment and supervision of employees, Dawson testified

that under the Standard Franchise Agreement, Robizza was solely responsible

for recruiting, hiring, training, scheduling, supervising, and paying all of its

employees, and that Domino’s had no contractual right to supervise or direct

Robizza’s employees. Dawson also testified that a Domino’s representative

was present in the Store only three to five times a year for approximately an

hour at a time for a quality review. During those three to five hours per year,

Domino’s did not direct, supervise, or correct Robizza’s employees.

As to the delivery operation, he stated that Domino’s did not monitor

the orders that Robizza accepted for delivery, which employees of Robizza

were assigned for delivery, or the routes taken by Robizza’s employees to

complete a delivery. Rather, Domino’s merely required that, at a minimum,

Robizza take steps to ensure that its employees make all deliveries in

compliance with all applicable laws and rules of the road and with due care

and caution. Robizza was responsible for training and supervising its

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employees to meet or exceed that standard. He stated that the vehicle

involved in the accident was leased to him individually and was operated by

Morris with his permission. Domino’s never inspected, drove, or maintained

that vehicle, nor did it train or test any of Robizza’s drivers.

C.

Domino’s moved for compulsory nonsuit at the close of the Coryells’

evidence, reasserting that the trial court should determine vicarious liability

as a matter of law. Again, however, the trial court denied the motion and

submitted to the jury whether Domino’s should be held vicariously liable. The

jury found that (1) Morris negligently caused the accident, (2) Domino’s was

vicariously liable, and (3) Coryell sustained damages in the amount of

$2,009,553 and that his wife was entitled to $100,000.

Domino’s subsequently moved for JNOV. The trial court denied the

motion and granted delay damages, bringing the total award to

$2,337,279.14. Domino’s then filed post-trial motions which argued, in

relevant part:

11. Thus, the question presented to the jury was whether the written provisions of the parties’ Standard Franchise Agreement gave Domino’s the right to exercise such control.

12. When the Court denied Domino’s motion for nonsuit, the jury was left to engage in the construction of the franchise agreement without the benefit of having (a) the franchise agreement to review, (b) the relevant legal authorities setting forth the standard for vicarious liability in the franchise context, or (c) the legal training to make such a determination of law.

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13. The jury was thus asked to make a ruling on a pure question of law that it was ill-equipped to do, and which was within the sole province of the Court to decide. See Nat. Prods. Co. v. Atlas Fin. Corp., 364 A.2d 730, 733 (Pa. Super. 1975) (“The function of contract interpretation and construction is a question of law peculiarly within the province of the court”).

14. Plaintiffs have taken the position throughout this case that the construction of the agreement is a function that should be exclusively performed by the Court, and Plaintiffs themselves moved for summary judgment on the grounds that the interpretation of the franchise agreement is a question of law for the Court to decide.

(R. 1489-90a).

Following entry of judgment on the verdict, Domino’s filed this appeal

challenging the trial court’s denial of its (1) motion for summary judgment,

(2) motion for compulsory nonsuit6 and (3) post-trial motion for JNOV.

II.

The first issue we must decide is what decision of the trial court we are

reviewing: the denial of the motion for summary judgment or the denial of

the post-trial motion for JNOV. At the core of this issue is whether the denial

of a summary judgment motion can be addressed after the case has

proceeded to trial and a judgment has been entered.

6 Domino’s challenge to the denial of compulsory nonsuit is moot because it

presented evidence after its motion was denied. See Tong-Summerford v. Abington Mem. Hosp., 190 A.3d 631, 640 (Pa. Super. 2019) (“[W]here a defendant presents evidence following the denial of a motion for nonsuit, the correctness of the trial court’s denial is rendered a moot issue and unappealable.”) (citation omitted).

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While this issue had not been directly addressed, we note that there

have been several times when we have reviewed the merits of challenges to

the denial of summary judgment after trial has been held. See Windows v.

Erie Ins. Exch., 161 A.3d 953, 957 (Pa. Super. 2017) (reviewing merits of

denial of pretrial motion for summary judgment after jury verdict); Krepps v.

Snyder, 112 A.3d 1246, 1257-60 (Pa. Super. 2015) (same); see also Hempt

Bros. v. Allan A. Myers, L.P., 266 A.3d 661, 2021 WL 5013745, *5 n.11

(Pa. Super. Oct. 28, 2021) (unpublished memorandum) (citing Windows as

support for reviewing merits of challenge to pretrial denial of summary

judgment); Brownlee v. Home Depot U.S.A., Inc., 241 A.3d 455, 2020 WL

6197405, *3-4 (Pa. Super. Oct. 22, 2020) (unpublished memorandum)

(declining to find challenge to pretrial denial of summary judgment was

moot).7

Very recently, though, a panel of this Court held that “where summary

judgment is denied and the same claim then proceeds to trial, post-trial and

appellate review must focus on whether [JNOV] is required, not on whether

summary judgment or nonsuit were improperly denied.” Turnpaugh

Chiropractic Health & Wellness Ctr., P.C. v. Erie Ins. Exch., 297 A.3d

404, 412 (Pa. Super. 2023) (emphasis in original) (citing Yoder v. McCarthy

7 See Pa. R.A.P. 126(b) (non-precedential decisions filed after May 1, 2019

may be cited for their persuasive value).

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Constr., Inc., 291 A.3d 1, 13 n.15 (Pa. Super. 2023)). Yoder, however, did

not hold that review of a denial of summary judgment order was never

available. Turnpaugh though suggests that Yoder created a hard and fast

rule when it did not.

Identifying disparate treatment of this issue in cases such as Windows

and Yoder, we stated in Turnpaugh that the inconsistency in our review of

a denial of a summary judgment motion following a trial should be resolved.

However, this is not the case for that resolution. It would be unfair to the

instant parties to decline to consider the appeal from the improper denial of

the summary judgment when our case law is admittedly inconsistent and

confusing. This is especially true since the Motion for Summary Judgment was

denied on May 26, 2020, the appeal docketed on October 7, 2021, and

Domino’s brief was filed June 14, 2022. Thus, Domino’s developed its

argument on this issue well before Turnpaugh and Yoder were decided in

2023, which together added to and highlighted the confusion and

inconsistency in this area. Domino’s should not be held to a recently-emerging

standard on when this Court should review the denial of a motion for summary

judgment when, at the time of the relevant proceedings here, cases such as

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Windows and Krepps allowed it to defer an appeal of the denial of summary

judgment until after the case proceeded to trial.8

8 The dissent finds that the majority’s position that it would be unfair to deny

review of the denial of summary judgment because existing case law permitted such review is baseless because (1) no right to review is lost here and (2) it encourages litigants to ignore countervailing precedent. However, that reasoning is fundamentally flawed. First, under the dissent’s position, the right to review the denial of summary judgment as a legal issue is lost. Second, ignoring that we created the problem with our inconsistent case law, Domino’s did not ignore countervailing case anymore that we did in issuing purportedly inconsistent opinions, especially when that inconsistency was not highlighted until Turnpaugh and Yoder, both of which were decided after the summary judgment motion was decided and the briefs in this appeal were filed. Finally, in Yoder, we did not find that all summary judgment denials could not be reviewed, only those involving sufficiency of the evidence. This case, however, does not involve a sufficiency of the evidence claim.

The dissent also posits that because Domino’s did not seek permission to appeal the denial of summary judgment under 42 Pa.C.S, § 702(b) and proceeded to trial, that made Domino’s pretrial claim became moot. This is wrong for so many reasons.

First, to reiterate, this is not a sufficiency claim which involves evidence; this is a claim that the contract should be decided by the judge as a matter of law and over which we have plenary review.

Second, an appeal under 42 Pa.C.S, § 702(b) is a permissive appeal and, by definition, only allowed if it involves an important issue and will aid in determination of the case. No one has ever suggested that because a party does not seek to appeal under § 702(b), that the issue for which an appeal could have been sought somehow becomes moot. The consequence of the dissent’s position is that an appeal of an adverse interlocutory order would have to be sought to avoid an issue becoming moot.

Third, the dissent seems to infer that if a § 702(b) appeal is sought and denied, then the issue is not waived and we can the address the denial of summary judgment once a final judgment has been entered. This would only add to the confusion of what we can review, however.

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III.

Whether we review this appeal from the denial of the summary

judgment motion or from the denial of the post-trial motion is of no moment

if the question of whether Domino’s was vicariously liable should have been

decided as a question of law by the trial court. Unlike the issue of whether

denial of a summary judgment can be reviewed after trial, the law is clear and

well-settled on how to review disputes involving contracts.9

Fourth, in the alternative, if we cannot address the issue if a § 702(b) appeal is denied, then that makes the summary judgment denial a collateral order which allows for an appeal as of right under Pa.R.A.P 313 since the issue will be irreparably lost if review is postponed until final judgment because, in the dissent’s view, it is moot.

In any event, because the contract is unambiguous, the trial court should have decided whether Domino’s was vicariously liable as a matter of law and not allowed the issue to go to the jury.

9 Notwithstanding the well-settled principle that the interpretation of an unambiguous contract is legal question, the dissent, to achieve its outcome, creates a new standard that contract review in the franchisor-franchisee context is a mixed question of fact and law. None of the cases the dissent cites on this point involve contract interpretation. It compounds that error by misapplying that standard by saying the issue of vicarious liability here leans to being a factual issue when there are no facts in dispute in this case. Not surprisingly, just like the cases involving its mixed question of fact and law, none of the cases the dissent cites involving when vicarious liability was determined by the factfinder deal with whether the contract creates the master-servant relationship but even those cases provide that ”where the facts giving rise to the relationship are not in dispute, the question of the relationship between the parties is one which is properly determined by the court.” Breslin v. Ridarelli, 454 A.2d 80, 82 (1982). The terms of the Standard Franchise Agreement are not in dispute.

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In Kripp v. Kripp, 849 A.2d 1159 (Pa. 2004), our Supreme Court

reiterated that when a contract is unambiguous it must be interpreted as a

matter of law:

In cases of a written contract, the intent of the parties is the writing itself. If left undefined, the words of a contract are to be given their ordinary meaning. Pines Plaza Bowling, Inc. v. Rossview, Inc., 394 Pa. 124, 145 A.2d 672 (1958). When the terms of a contract are clear and unambiguous, the intent of the parties is to be ascertained from the document itself. Hutchison v. Sunbeam Coal Corp., 513 Pa. 192, 519 A.2d 385, 390 (1986). When, however, an ambiguity exists, parol evidence is admissible to explain or clarify or resolve the ambiguity, irrespective of whether the ambiguity is patent, created by the language of the instrument, or latent, created by extrinsic or collateral circumstances. Steuart v. McChesney, 498 Pa. 45, 444 A.2d 659, 663 (1982); Herr’s Estate, 400 Pa. 90, 161 A.2d 32, 34 (1960). A contract is ambiguous if it is reasonably susceptible of different constructions and capable of being understood in more than one sense. Hutchison, 519 A.2d at 390. While unambiguous contracts are interpreted by the court as a matter of law, ambiguous writings are interpreted by the finder of fact. Community College v. Society of the Faculty, 473 Pa. 576, 375 A.2d 1267, 1275 (1977).

Id. at 1163; see also Nat. Prods. Co. v. Atlas Fin. Corp., 364 A.2d 730,

733 (Pa. Super. 1975) (“The function of contract interpretation and

construction is a question of law peculiarly within the province of the court”).

Accord Green v. Independent Oil Co., 201 A.2d 207, 211 (Pa. 1964);

Myszkowski v. Penn Stroud Hotel, Inc., 634 A.2d 622, 625 (Pa. Super.

1993); Mitch v. XTO Energy, Inc., 212 A.3d 1135, 1138 (Pa. Super. 2019)

(“It is settled that because contract interpretation is a question of law, our

review of the trial court’s decision is de novo and our scope of review

plenary.”); Mutual Benefit Ins. Co. v. Politopoulos, 75 A.3d 528, 535 n.5

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(Pa. Super. 2013) (“In resolving a duly raised question of contract

interpretation, we face a question of law, which triggers our de novo standard

of review.”); Juarbe v. City of Philadelphia, 431 A.2d 1073, 1076 (Pa.

Super. 1981). Moreover, “the issue as to whether there are no genuine issues

as to any material fact presents a question of law, and therefore, on that

question [the reviewing court’s] standard of review is de novo.” Summers

v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010).

In an appeal involving the review of trial court’s summary judgment10

motion involving vicarious liability, we stated:

In an action to recover damages vicariously for injuries resulting from an automobile accident, it is necessary for the plaintiff to prove not only that the driver was the defendant’s servant, but that such servant was at the time engaged in his master’s ____________________________________________

10 When reviewing such a ruling by the trial court on summary judgment:

[O]ur scope of review is plenary, and our standard of review is the same as that applied by the trial court.

***

[O]ur responsibility as an appellate court is to determine whether the record either establishes that the material facts are undisputed or contains insufficient evidence of facts to make out a prima facie cause of action, such that there is no issue to be decided by the fact-finder. If there is evidence that would allow a fact-finder to render a verdict in favor of the non-moving party, then summary judgment should be denied. With respect to the denial of summary judgment, we review the trial court’s denial of summary judgment for an abuse of discretion or an error of law.

Windows v. Erie Ins. Exch., 161 A.3d 953, 956-57 (Pa. Super. 2017) (alterations in original) (internal quotations omitted).

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business. A servant, in law, is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other’s control or right to control. It is not. . . the fact of actual interference or exercise of control by the employer, but the existence of the right or authority to interfere or control, which renders one a servant rather than an independent contractor. It is the exclusive function of the jury to determine, from the evidence, the precise nature of the relationship, except where the facts are not in dispute, in which latter event the question becomes one for determination by the court.

Melmed v. Motts, 491 A.2d 892, 893 (Pa. Super. 1985) (internal citations

and quotations omitted) (emphasis added).

The issue we must then decide is whether the Standard Franchise

Agreement is unambiguous, requiring the trial court to decide whether

Domino’s was vicariously liable under its provisions.

The answer at the summary judgment stage was easy: all the parties

agreed that the Standard Franchise Agreement was unambiguous. In its

motion for summary judgment, Domino’s attached affidavits from Dawson,

owner of Robizza, and Devereaux, Domino’s Director of Franchise Services.

See Motion for Summary Judgment, 3/2/20, Exhibit D (Devereaux Affidavit,

2/27/20, R. 303a-309a) and Exhibit E (Dawson Affidavit, 2/26/20, R. 379a-

384a). In their affidavits, both Dawson and Devereaux rejected that the

franchise agreement created a master-servant relationship between Domino’s

and Robizza; instead, they stated that the two parties were independent

contractors under the franchise agreement. Domino’s argued that the

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underlying facts were not in dispute because, “[t]he record is driven by the

testimony of the two parties to the franchise relationship (via Mr. Dawson and

Mr. Devereaux) and the terms of the Franchise Agreement.” Memorandum of

Law in Support of Summary Judgment, 3/2/20, at 8, R. 186a. Because the

terms of the underlying agreement were not in dispute, and the agreement

controlled the franchise relationship, Domino’s argued that the trial court and

not a jury should determine vicarious liability. Id. (citations omitted).

The Coryells responded that “[t]he relationship between Robizza and

Domino’s is controlled by their [franchise agreement].” Response to Summary

Judgment Motion, 5/11/20, ¶ 14, R. 392a. They disavowed, however,

Domino’s attempts to rely on affidavits for its construction of the agreement.

As they explained, because the franchise agreement was unambiguous and

controlled the argument, “any affidavit created only for the purpose of this

litigation that attempts to interpret that contract or otherwise characterize

Robizza and Domino’s relationship should be afforded no weight.” Id. While

still asserting that the franchise agreement created a master-servant

relationship as a matter of law, the Coryells nonetheless conceded that

“classifying the relationship formed by the Franchise Agreement is a matter of

contract interpretation for [the trial court].” Memorandum of Law in Response

to Summary Judgment, 5/11/20, at 5, R. 421a.

Moreover, in responding to the motion, the Coryells offered no evidence

outside the agreement about the actual practice of Domino’s and Robizza

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under their franchise agreement. Instead, they attached the deposition of

Shook, a Domino’s corporate employee who used to be the area leader for

Robizza. See Response to Summary Judgment Motion, 5/11/20, Exhibit D

(January Shook Deposition, 1/24/20, R. 579a-602a). They also included an

expert report from Jones, a former Domino’s executive. Id. Exhibit T (Roy

Jones Expert Report, 4/16/20, R.927a-941a). According to the Coryells, both

Shook’s deposition and Jones’s report showed that Domino’s understood that

its franchise agreement with its franchisees gave it the right to create

mandatory rules affecting the daily operations of its stores. Id. ¶¶ 75-81, ¶¶

84-87, R. 411a-413a. In so arguing, however, the Coryells still admitted that

issues of contract interpretation are for the trial court to resolve. Id. ¶ 87, R.

413a.

At this stage of the proceedings, neither Domino’s nor the Coryells

claimed that there was any factual dispute about the nature of the relationship

between Domino’s and Robizza or that the contract was unambiguous.

Rather, the parties simply disagreed over how the franchise agreement should

be construed. Such disagreements about construction of a contract’s terms

should not impede disposition of the parties’ claims on summary judgment.

See Pappas v. UNUM Life Ins. Co. of Am., 856 A.2d 183, 187 (Pa. Super.

2004). As a result, while ambiguous contracts are interpreted by the finder

of fact, unambiguous contracts are interpreted by the trial court as a matter

of law. See Kripp, supra, at 1163.

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Consistent with these principles where the sole evidence of the

relationship between the parties is found in an agreement and where the

terms of the agreement are not in dispute, it is the function of the trial court

and not the jury to determine the relationship between the parties. See

Green, supra, at 210 (holding trial court erred in submitting to the jury the

question of the relationship of the parties where sole evidence was their

agreement). Accordingly, the trial court erred in not deciding the matter at

summary judgment stage as a matter of law.

Unlike their argument at the summary judgment stage, the Coryells now

contend that there was a factual dispute that needed to be resolved by the

jury. They emphasize that Domino’s was given the chance at trial and after

the jury’s verdict to reassert the arguments that it raised at the summary

judgment stage. See Coryells’ Brief at 37. Furthermore, they argue that the

evidence at trial was “extensive and consistent” with the arguments at the

summary judgment stage. Id. They do not mention that at the summary

judgment stage, they stated that the matter should be decided as a matter of

law by the trial court. However, whether the evidence at trial was consistent

with their argument at the summary judgment stage that the franchise

agreement created a master-servant relationship is immaterial. As we have

explained, the issue is whether there was a factual dispute arising out of

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ambiguities about the parties’ relationship in the Standard Franchise

Agreement and Operating Standards.

The Coryells also assert that the imposition of vicarious liability depends

on the underlying facts of the franchisor-franchisee relationship, and that the

franchise agreement does not determine vicarious liability. Id. at 50-51. In

support, they cite Drexel v. Union Prescription Centers, Inc., 582 F.2d

781 (3d Cir. 1978). There, the Third Circuit observed “[w]hether the control

retained by the franchisor is also sufficient to establish a master-servant

relationship depends in each case upon the nature and extent of such control

as defined in the franchise agreement or by the actual practice of the parties.”

Id. at 786.

However, neither party at trial disputed the terms of the Standard

Franchise Agreement or the Operating Standards. As our discussion of their

provisions later in this opinion shows, the testimony of all witnesses merely

recounted what the Agreement stated and what they thought those provisions

meant. Moreover, none of the witnesses testified that the “actual practice of

the parties” varied in any way from the terms of the Standard Franchise

Agreement or Operating Standards. Jones, Devereaux, and Shook all testified

that they believed that Domino’s had the right under the Franchise Agreement

to set standards that Robizza was mandated to follow. Jones testified to the

franchisee’s obligations under the Standard Franchise Agreement and

Operating Standards. His testimony does not vary from the terms of those

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documents and he stated that those terms were enforced. Devereaux and

Shook testified that Domino’s exercised its contractual rights by adopting not

only product standards to ensure the quality of food associated with the

Domino’s brand, but also operating standards that mandated how Robizza

operated its store. Those standards could be changed by Domino’s at any

time and Domino’s issued Operating Standards in July 2016 that governed the

day-to-day operations of the Store. That is certainly what the Standard

Franchise Agreement provides.

The only purpose of presenting that evidence at trial was to present a

narrative of the terms of Standard Franchise Agreement and Operating

Standards and what control those provisions gave Domino’s over Robizza. Just

like at the summary judgment stage, the Coryells did not dispute that the

Standard Franchise Agreements or Operating Standards were unambiguous

but relied on their unambiguous nature to contend that those documents were

sufficient alone to impose vicarious liability. Because the Standard Franchise

Agreement and Operating Standards were unambiguous, the trial court erred,

not only in not deciding the matter on summary judgment, but also in

submitting this question of law to the jury to determine whether Domino’s was

vicariously liable.

IV.

Having determined that the issue of vicarious liability should have been

determined by the trial court as a matter of law, we turn to the second issue:

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whether Domino’s could be held vicariously liable under its Standard Franchise

Agreement.11 Under Pennsylvania law, a franchisor can be held vicariously

liable for the negligence of a franchisee’s employees if it exercises such control

over the franchisee that it is tantamount to a master-servant relationship.

In the context of vicarious liability, a principal is liable to third parties for the frauds, deceits, concealments, misrepresentations, torts, negligent acts and other malfeasances of his agent, even though the principal did not authorize, justify, participate in or know of such conduct or even if he forbade the acts or disapproved of them, as long as they occurred within the agent’s scope of employment.

Travelers Cas. & Sur. Co. v. Castegnaro, 772 A.2d 456, 460 (Pa. 2001).

11 This issue implicates a pure question of law for which our standard of review

is de novo. Riemenschneider v. D. Sabatelli, Inc., 277 A.3d 612, 614 (Pa. Super. 2022) (citation omitted).

We note that our review also implicates principles of contract interpretation. “Since contract interpretation is a question of law, our review of the trial court’s decision is de novo and our scope is plenary.” Bair v. Manor Care of Elizabethtown PA, LLC, 108 A.3d 94, 96 (Pa. Super. 2015) (citation and quotation marks omitted). The goal of contract interpretation is to “ascertain the intent of the parties.” Lenau v. Co-eXprise, Inc., 102 A.3d 423, 429 (Pa. Super. 2014).

In the cases of a written contract, the intent of the parties is the writing itself. If left undefined, the words of a contract are to be given their ordinary meaning. When the terms of a contract are clear and unambiguous, the intent of the parties is to be ascertained from the document itself.

Id. at 429 (internal citations omitted). In the absence of any ambiguity in the terms of a contract, a court is not permitted to consider parol evidence, or any other extrinsic evidence, to ascertain the intent of the parties. Id. The dissent in footnote 3 misconstrues the majority position.

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Not all agents, though, are deemed “employees” or “servants.” Rather,

“[a] principal and agent can be in the relationship of a master and servant, or

simply in the status of two independent contractors.” Myszkowski, supra,

at 625 (internal quotation marks omitted). “If a particular agent is not a

servant, the principal is not considered a master who may be held vicariously

liable for the negligent acts of the agent.” Id. (internal quotation marks

omitted).

In deciding whether a relationship is one of master-servant or

independent contractors, our Supreme Court has explained the basic inquiry

is whether such person is subject to the alleged employer’s control or right to control with respect to his physical conduct in the performance of the services for which he was engaged. . . . The hallmark of an employee-employer relationship is that the employer not only controls the result of the work but has the right to direct the manner in which the work shall be accomplished; the hallmark of an independent contractee- contractor relationship is that the person engaged in the work has the exclusive control of the manner of performing it, being responsible only for the result.

Green, supra, at 210 (citation omitted) (emphasis added).

Further, “the mere existence of a franchise relationship does not

necessarily trigger a master-servant relationship, nor does it automatically

insulate the parties from such a relationship.” Drexel, supra, at 786. As the

Third Circuit has noted, no special treatment is given to the franchise

relationship, as a franchisee may be an employee or an independent

contractor depending on the nature of the franchise system controls.

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Williams v. Jani-King of Philadelphia, Inc., 837 F.3d 314, 325 (3d Cir.

2016).

While it has been nearly 30 years, this Court’s decision in Myszkowski

remains our most germane precedent on vicarious liability in the franchisor-

franchisee context. There, the appellant was attacked in the restroom of the

Penn Stroud Hotel (Penn Stroud), a franchisee of Best Western International,

Inc (Best Western). The appellant filed an action alleging that Best Western

was vicariously liable for Penn Stroud’s negligence because it exercised or

retained the right to control the hotel’s operations under their marketing

agreement. Under their agreement, Penn Stroud was permitted to use the

“Best Western” name and participate in its reservation network. Best Western

moved for summary judgment and claimed that it did not have an agency

relationship with Penn Stroud. The trial court agreed and entered summary

judgment in Best Western’s favor. The appellant appealed and argued that

there was an agency relationship because Best Western concerned itself with

Penn Stroud’s operations “through the workshops and programs it conducts,

the rules and regulations it imposes and its ability to sanction for

noncompliance with its quality standards.” Myszkowski, supra, at 625.

On appeal, this Court affirmed the grant of summary judgment. We first

recognized that, as quoted above in Green, “the hallmark of a master-servant

relationship is that the master possesses the right to control the manner in

which the servant’s work shall be accomplished.” Id. at 626 (emphasis in

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original). We found, however, that Best Western did not control how Penn

Stroud accomplished its work simply by having a marketing agreement with

the hotel. Instead, quoting the Second Restatement of Agency, we stated,

“[i]t is the element of continuous subjection to the will of the principal which

distinguishes the ... agency agreement from other agreements.” Id. (quoting

RESTATEMENT (SECOND) OF AGENCY, § 1(1), comment b (1957) (emphasis added

by panel)).

We then observed that there was no Pennsylvania case law defining the

inquiry for determining actual agency “in this context,” presumably meaning

franchisor vicarious liability. As a result, we adopted a standard that several

other states had adopted. Under this standard, the focus of the inquiry is on

“whether the alleged master has day-to-day control over the manner of the

alleged servant’s performance.” Id. (citations omitted).

As support for adopting this standard, we discussed our Supreme

Court’s decision in Green, characterizing it as the seminal case on this issue.

Id. In Green, we noted, the Supreme Court held that a trial court erred in

submitting to a jury the relationship between an oil company and one of its

franchisee/dealers. Id. In so holding, the Supreme Court considered “(1) the

agreement between the parties specifically disclaimed the existence of an

agency relationship; (2) all profits went to the dealer; (3) the sales tax permits

and the electric bills were in the dealer’s name; (4) the dealer hired and fired

his own employees and paid them; (5) all monies were kept in the dealer’s

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personal bank account; and (6) the dealer purchased [the oil company’s]

products.” Id. (citing Green, supra, at 210). By focusing on these facts, we

gleaned that the Supreme Court focused its inquiry “on the extent to which

the purported master controlled the day-to-day operations of the alleged

servant.”

Turning to the agreement between Best Western and Penn Stroud, we

explained why Best Western did not control the hotel’s daily operations:

Here, the owners of Penn Stroud managed the day-to-day operations of the business and made all of the decisions incidental to this operation. The employees of the Inn were hired, fired, paid, and supervised by Penn Stroud managers. Penn Stroud managers set the prices for the various services and accommodations they provide. Best Western has no ownership interest in Penn Stroud. To the contrary, one hundred percent of the stock in Penn Stroud is owned by defendant Lee Andrews and the Inn is run by various members of the Andrews family in Stroudsburg; Best Western is only paid a fixed amount each year ($23,500) for its services. Moreover, the agreement between Best Western and Penn Stroud specifically provides that their relationship is one of independent contractor, and that Best Western has, inter alia, “no responsibility for the ... safety of the premises.” It also affords Penn Stroud the right to voluntarily end its association with Best Western at any time for any reason. For these reasons, there is clearly not the necessary control by Best Western of day-to-day operations to establish a master-servant relationship. See Green, [supra, at 210].

Id. at 626-27.

We also found that no master-servant relationship was created through

Best Western’s quality control program, its rules and regulations, or its

programs and workshops. Id. at 627. We explained that “the fact that Best

Western sets certain standards in order to maintain a uniform quality of inn

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service only addresses the result of the work and not the manner in which it

is conducted.” Id. (emphasis in original). While Best Western set the quality

criteria, Penn Stroud decided how the criteria were met, which suggested an

independent contractor-contractee relationship. Id.

We also attached little import to Best Western’s right to terminate Penn

Stroud’s use of the “Best Western” name if it failed to meet quality control

requirements. Id. That Best Western could impose such a sanction, we held,

“[did] not indicate that there is continuous subjection to the will of the alleged

master so as to constitute a master-servant relationship.” Id. (citation

omitted). Rather, we found that such a sanction merely reemphasized that

Penn Stroud was an independent entity that could voluntarily end its

relationship with Best Western when it wanted. Id. (footnote omitted).

Indeed, we explained that Best Western could either end its relationship with

Penn Stroud or threaten to terminate the relationship—it could not compel

Penn Stroud to alter its conduct. Id. As a result, we held that Penn Stroud

had daily control of the hotel, as Best Western merely had the threat to revoke

use of the trade name. Id. at 628. Thus, as there was no master-servant

relationship, Best Western could not be vicariously liable. Id.

After Myszkowski, we have had few occasions to apply its standard in

the franchisor-franchisee context. One such occasion happened in Smith v.

Exxon Corp., 647 A.2d 577 (Pa. Super. 1994). There, the appellant was

assaulted while working in a mini-mart. Id. at 578. Besides suing the min-

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mart’s parent company, the appellant also sued Exxon, which had a distributor

agreement with the parent company. Id. Responding to the allegation that

it negligently failed to implement safety measures, Exxon filed preliminary

objections asserting that it owed no legal duty to the appellant. Id. After the

trial court sustained preliminary objections, the appellant appealed. Id.

On appeal, the appellant argued that the distribution agreement’s

provision gave Exxon control over the mini-mart’s daily operations. Those

provisions included: (1) that the parent company would provide qualified

attendants with appropriate uniforms as well as keep the restrooms clean,

orderly and sanitary and to render appropriate, prompt, efficient and

courteous customer service; (2) Exxon could sample at any time the gasoline

stored in the parent company’s tanks; (3) the parent company had to use the

trademarks in a certain way, protect their identity from non-Exxon products

and submit to several courses of action if the trademarks were misused; and

(4) the parent company had to comply with a marketing plan to optimize

effective distribution of gasoline with Exxon giving comments. Id. at 581-82.

In light of our then-recent decision in Myszkowski, though, we found

that the agreement did not create a master-servant relationship.

In Myszkowski, the marketing agreement afforded quality control requirements for the protection of Best Western’s tradename and services. The Distributor Agreement herein provides similar provisions for the purpose of preserving the integrity of Exxon’s trademark and the quality of its gasoline, i.e., samples taken from tanks. As in Myszkowski, here, standards were implemented to maintain a uniform quality of service. We are of the opinion that the standards concerning the appearance

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of personnel and restrooms and the response to customer complaints do not amount to Exxon having control over the manner in which the work is accomplished. Under the guidance of our Court’s decision in Myszkowski, we also reject appellant’s assertion that a marketing plan, as mentioned in [the Distributor Agreement], is indicative of Exxon’s control over [the parent company’s] business. In comparison to the facts in Myszkowski, we find that Exxon’s involvement in the operation of [the parent company’s] mini-mart is exponentially less than Best Western’s involvement with the operation of Penn Stroud. There, the circumstances reveal that Penn Stroud’s inn was engaged exclusively in hotel services. The inn obtained guidance from Best Western on how to conduct its business through regulations, programs and workshops that were set up by Best Western. Here, on the other hand, [the parent company’s] mini-mart is a convenience store and not merely a gas station. Exxon is only one of many suppliers of products to that store. The record is devoid of facts that even suggest that Exxon played a role in any day-to-day operational decisions of the mini-mart.

Id. at 582-83. We thus held that Exxon and the parent company were in an

independent contractor-contractee relationship. Id. at 583.12

V.

We now turn to the Standard Franchise Agreement between Domino’s

and Robizza to determine whether, under that agreement, Domino’s exercised

12 We have found no other precedential opinions applying Myszkowski in a

franchisor-franchisee context. Domino’s cites as support our unpublished memorandum in Galeone v. Rodeway Inn Ctr. City, 2021 WL 3126754 (Pa. Super. 2021). There, we found that the appellant waived his challenge to the trial court’s vicarious liability determination by failing to cite any pertinent authority. Id. at *10-11. However, the franchise agreement in that case not only disavowed any agency relationship but also clarified that the franchisor’s oversight was limited to end-result standards and not the manner in which the franchisee conducted the work. Id. at *11. As this was the extent of the discussion of the merits of the issue, Galeone has no persuasive value here.

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such control that a master-servant relationship was created. As we discuss,

the franchise agreement between Domino’s and Robizza included not only the

Standard Franchise Agreement dated August 15, 2006, but also the

concomitant Operating Standards issued under that agreement in July 2016.

A. Standard Franchise Agreement

In its introduction, the Standard Franchise Agreement states that

Domino’s “has developed and operates retail outlets specializing in the sale of

pizza and other authorized food and beverage products and featuring carry-

out and delivery services.” Standard Franchise Agreement (SFA), 8/15/16, ¶

1, R. 466a. These stores conduct business under a “uniform business format,

with specially designed equipment and specifications for the preparation and

sale of pizza and other authorized food products.” Id. By entering the

franchise agreement, Robizza received a ten-year license to operate a

Domino’s franchise at the location identified in the franchise agreement. Id.

¶¶ 2.1-2, R. 466a-467a. Related to its location, Robizza had a geographic

area of responsibility for delivery services. Id. ¶¶ 4.1-4.2, R. 468a-469a.

When making deliveries, delivery drivers had to “strictly comply with all laws,

regulations and rules of the road and due care and caution in the operation of

delivery vehicles.” Id. ¶ 4.2, R. 468a-469a.

During the franchise’s term, Robizza paid Domino’s a royalty fee of 5

1/2 percent of its weekly sales and contributed three percent for advertising.

Id. ¶¶ 6.1, 13.1, R. 469a, R.476a. Robizza made these payments from its

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own bank account unless Domino’s made it participate in a program under

which payments were automatically withdrawn from Robizza’s account. Id.

at ¶ 6.4, R. 470a. Robizza also had its own bookkeeping system and retained

all business records and reports for the store, id. ¶ 14.1, R. 478a, and filed

its own tax returns, id. ¶ 15.2, R. 481a.

Robizza leased and obtained the store’s premises, although all leases

had to be approved by Domino’s. Id. ¶¶ 7.1, 7.4, R. 471a-472a. Robizza

obtained all zoning changes and building permits; purchased or leased the

store’s equipment, fixtures, furniture and signs; and would also construct the

store. Id. ¶ 8.1, R. 472a-473s. Robizza could buy the store’s equipment

“from any source,” as long as it met with Domino’s specifications. Id. ¶ 8.2,

R. 473a. Robizza also obtained and maintained its own property and liability

insurance. Id. ¶ 15.7, R. 482a-483a.

As for employment matters, Robizza hired, trained, scheduled,

supervised and paid the store’s employees. Id. ¶ 15.6, R. 482a. These

employees, the franchise agreement stated, were not Domino’s “agents or

employees.” Id. Domino’s had “no legal right to direct [Robizza’s] employees

in the operation of the Store,” as “[t]hose functions remain [Robizza’s] sole

responsibility and duty.” Id. ¶ 11.1, R. 475a. For employee training, Robizza

had to implement its own program for “training the employees to legally,

safely and perform his or her duties while inside the Store and while outside

Store for business purposes[.]” Id. ¶ 10.2, R. 474a.

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Robizza would offer for sale “all pizza and other authorized food and

beverage products” and provide carry-out and delivery services. Id. ¶ 12.1,

R. 475a-476a. To make the food, however, Robizza was responsible for

buying all “food ingredients, beverage products, cooking materials,

containers, packaging materials, utensils, uniforms, menus, forms, and

cleaning and sanitation materials.” Id. ¶ 12.2, R. 476a.

The store always had to be under the “direct, on-premises supervision”

of the franchise owner (Dawson) or an approved properly-trained manager.

Id. ¶ 15.6, R. 482a. Domino’s could inspect the store at any time during

business hours without notice. Id. ¶ 17, R. 485a. Domino’s also could also

terminate the franchise agreement under certain enumerated conditions with

written notice, though Robizza could correct the condition within a specified

period. Id. ¶ 18.2.1-18.2.2, R. 485a-487a.

Finally, as mentioned, the franchise agreement provided that Domino’s

and Robizza “are independent contractors” and that no training, assistance or

supervision that Domino’s gave would “be deemed to negate such

independence or create a legal duty on our part.” Id. ¶ 22.8, R. 499a-500a.

To that end, Domino’s would not be liable for “any damages to any person or

property arising directly or indirectly out of the operation of the Store,

including but not limited to those damages which may occur while your

employees are making or returning from making deliveries[.]” Id. R. 499a.

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B. Operating Standards

The Standard Franchise Agreement also contained a section on

“Operating Requirements.” Under this section, Robizza had to comply with

Domino’s “specifications, standards and operating procedures” concerning

various aspects of the store’s operations. Id. ¶ 15.1, R. 480a-481a. These

included (but were not limited to) the following:

(a) the safety, maintenance, cleanliness, sanitation, function and appearance of the Store premises and its equipment, image, fixtures, furniture, décor and signs;

(b) qualifications, dress, grooming, general appearance and demeanor of [Robizza’s employees];

(c) quality, taste, portion control and uniformity, and manner of preparation and sale, of all pizza and other authorized food and beverage products sold by the Store and of all ingredients, supplies and materials used in the preparation, packaging and sale of these items;

(d) methods and procedures relating to receiving, preparing and delivering customer orders;

(e) the hours during which the Store will be open for business;

(f) use and illumination of exterior and interior signs, posters, displays, menu boards and similar items;

(g) the handling of customer complaints;

(h) advertising on the internet or other electronic media, including websites, homepages and the use of domain names;

(i) e-mail capabilities of the Store and other electronic communication devices to facilitate communication with [Domino’s]; and

(j) the method and manner of payment which will be accepted from customers.

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Id. ¶ 15.1(a)-(j), R. 480a-481a. Robizza agreed “to abide by these

specifications, standards, operating procedures and rules and to fully adopt

and implement them.” Id. R. 481a.

These standards were laid out in more detail in a separate manual, the

provisions of which were considered as if contained in the franchise

agreement. Id. ¶ 15.4, R. 481a-482a. At the time of the accident, the most

current version of the operating standards had just been issued in July 2016.

In its introduction, the standards state that they set minimum guidelines

under which all Domino’s pizza stores will operate in order to assure a uniform, high-quality customer experience, regardless of where the store is located, that promotes and protects the Domino’s Pizza brand and trademarks for the mutual benefit of all stakeholders and, in other cases suggested procedures which franchisees may choose to use in operating their stores. . . . As independent business owners, franchisees have both the right and responsibility to establish policies and procedures that meet the Standards. Further, franchisees may choose, from time to time, to establish and follow procedures that are more strict than the Standards.

Operating Standards at 1, R. 556a.

The standards then set guidelines for an array of areas involving how

franchise stores operate. Focusing first on those provisions relating to hiring

employees, the standards provided that “[i]n order to protect the integrity,

public perception, and reputation of the Domino’s brand, trademarks, and

goodwill,” franchisees needed to follow a “minimum standard” on conducting

criminal background checks. Id. at 11, R. 566a. In so doing, franchisees

were “solely responsible for making hiring and other employment decisions

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for their stores and should consider all relevant factors prior to making an

employment decision based upon a criminal history report[.]” Id. at 12, R.

567. Beyond this, though, the standards merely required that the franchisee

make all employment decisions “in accordance with applicable laws, statutes,

codes, ordinances, regulations and rules.” Id. After hiring its employees,

franchisees were “solely responsible for. . . all employment practices and

policies, all safety and security issues, and all other workplace issues.” Id.

Consistent with that, franchisees agreed to implement their own training

program for their employees with certain minimum topics, including delivery

safety. Id.

Turning to delivery services, the standards contained a similar provision

to that in the Standard Franchise Agreement requiring that “[a]ll deliveries

must be made in strict compliance with all applicable laws, statutes, code,

ordinances, regulations, rules of the road, and due care and caution in the

operation of delivery vehicles.” Id. at 17, R. 572a. Stores had to offer

delivery service during approved hours of operation to all customers within

the store’s service area. Id.

The standards set out “minimum motor vehicle record standards” for

franchisees to follow in hiring delivery drivers. Id. at 20, R.575a. These

minimum standards included that the driver have a valid state driver’s license;

proof of automobile liability insurance meeting state minimum requirements;

and that their motor vehicle record be evaluated at the start of employment

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and every six months after hiring. Id. For the driver’s motor vehicle records,

the standards disqualified certain persons to be delivery drivers who had some

driving-related violations (such as speeding, failure to stop or obey traffic

signal/device) or at-fault accidents. Id. at 21, R. 576a. Similarly, the

standards prohibited delivery drivers from having more serious violations in

the three years before being hired; these violations included, among others,

leaving the scene of an accident, reckless driving, DUI or vehicular assault.

Id. The standards also provided that delivery vehicles needed to be inspected

periodically and could not show excessive damage or wear and tear, with the

interior being kept reasonably clean. Id. at 21-22, R. 576a-577a. When

making deliveries, drivers had to wear seat belts and could not use a cell

phone while driving. Id. at 22, R. 577a. Drivers also could not have

passengers with them on deliveries unless that passenger was approved store

personnel. Id.13

13 Besides the operating standards, the franchise agreement included a document entitled Domino’s Product Standards, dated September 1, 2015. See R. 505a-551a. Whereas the operating standards involved the store’s operations, the product standards gave specific instructions about not only the storage and handling of food products but also how the food products should be prepared. Concerning the latter, the product standards provided step-by- step instructions to the store’s employees about how to make the pizza and food products, detailing even what fingers and movements should be used in making the food.

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VI.

We finally come to our discussion of whether the franchise agreement

created a master-servant relationship between Domino’s and Robizza, thus

making Domino’s vicariously liable for the Coryells’ damages.

Domino’s contends that the relationship between it and Robizza under

the franchise agreement is like that in all business-format franchises which

require the franchisee to follow a system of standards and procedures. These

system-wide standards, it argues, provide a way to protect the trademarked

brand at great distance. “The goal—which benefits both parties to the

contract—is to build and keep customer trust by ensuring consistency and

uniformity in the quality of goods and services, the dress of franchise

employees, and the design of the stores themselves.” Domino’s Brief at 34-

35 (citation omitted). It argues that under that arrangement, there is no

evidence that it had daily control of Robizza’s operation of its business. The

Coryells, meanwhile, contend that the franchise agreement and attendant

operating standards were so all encompassing that Domino’s controlled the

day-to-day actions of Robizza and its personnel to such an extent that it

created a master-servant relationship and made it vicariously liable for the

negligence of Robizza’s employees.

At the outset, we reiterate that our standard in this context is whether

the franchisor has day-to-day control over how the franchisee accomplishes

their work. Myszkowski, supra, at 626. As one of our sister jurisdictions

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remarked in adopting this standard, this is the traditional approach for

analyzing franchisor vicarious liability, as it strikes a balance between

vicarious liability and federal trademark analyses.

This approach recognizes that, while the vicarious liability and Lanham Act[14] analyses involve an element of “control,” the inquiries are distinct. To protect its trademark, a franchisor “must retain sufficient control over the licensees’ dealings in the end product to insure that they will apply the mark to either the same product or to one of substantially the same quality with which the public in the past has associated the product.” Conversely, the vicarious liability “right to control” test focuses on a franchisor’s control over a franchisee’s performance of its day-to-day operations.

…The traditional test allows a franchisor to regulate the uniformity and the standardization of products and services without risking the imposition of vicarious liability. If a franchisor takes further measures to reserve control over a franchisee’s performance of its day-to-day operations, however, the franchisor is no longer merely protecting its mark, and imposing vicarious liability may be appropriate.

Rainey v. Langen, 998 A.2d 342, 348-49 (Me. 2010) (internal citations

omitted; footnote added).15

14 15 U.S.C. §§ 1051-1141n.

15 The traditional “right to control” test stands in contrast to narrowly tailored

instrumentality test adopted in other jurisdictions. Under that approach, the franchisor may be held vicariously liable for the tortious conduct of its franchisee only if the franchisor controlled or had a right of control over the daily operation of the specific aspect of the franchisee’s business that allegedly caused harm. See, e.g., Kerl v. Dennis Rasmussen, Inc., 682 N.W.2d 328, 341 (Wis. 2004); Papa John’s Int’l, Inc. v. McCoy, 244 S.W.3d 44, 55 (Ky. 2008); VanDeMark v. McDonald’s Corp., 904 A.2d 627, 636 (N.H. 2006); Lind v. Domino’s Pizza, LLC, 37 N.E.3d 1, 6-7 (Mass. App. Ct. 2015).

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Daily control of the franchisee’s operations remains necessary for the

imposition of vicarious liability. Thus, even though a franchise agreement may

have many requirements and standards for operating the store, that is not the

type or degree of “control” necessary to support vicarious liability under the

controlling case law in Pennsylvania. See, e.g., Myszkowski, supra, at 627

(“standards in order to maintain a uniform quality of inn service only

addresses the result of the work and not the manner in which it is conducted”);

Smith v. Exxon Corp., 647 A.2d 577, 582-83 (Pa. Super. 1994) (standards

for product quality, store appearance, appearance of personnel and how to

respond to customer complaints to preserve Exxon’s trademarks did “not

amount to Exxon having control over the manner in which the work [was]

accomplished.”).

As to day-to-day control, we start with looking at employment matters

in the franchise agreement and find that Robizza unmistakably had day-to-

day control over such matters. As detailed above, under the Standard

Franchise Agreement, Robizza recruited, hired, trained, scheduled, supervised

and paid all the store’s employees. On this point, the franchise agreement

stated that the persons who worked in the store were Robizza’s employees,

and that those persons were not agents or employees of Domino’s. Relatedly,

the franchise agreement disclaimed that Domino’s had any legal right to direct

Robizza’s employees in the operation of the store. Even when Domino’s gave

advice or suggestion, the franchise agreement disclaimed that it assumed any

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responsibility or duties allocated to Robizza under the franchise agreement.

The operating standards only reinforced this, providing that Robizza was

responsible for “all employment practices and policies.” This included hiring

decisions, with the standards requiring criminal background checks, but

otherwise giving Robizza discretion in making employment decisions. Taken

together, based on these provisions, we have little difficulty in concluding that

the franchise agreement ceded day-to-day control over all employment

matters to Robizza as the franchisee, thus suggesting an independent

contractor-contractee relationship rather than master-servant.

The same holds true for Robizza’s control over its delivery drivers, from

who could be hired to how they drove their vehicles. As for the former, the

operating standards gave minimum age and experience standards, along with

restrictions on hiring certain persons to be drivers with a history of traffic

violations, at-fault accidents or serious driving-related violations. After drivers

were hired, both the Standard Franchise Agreement and operating standards

provided only that drivers strictly comply with all laws, regulations and rules

of the road and due care and caution when driving their vehicles. Beyond this,

the operating standards added little beyond that already required by the

Vehicle Code about how delivery drivers were to operate their vehicles, merely

requiring that vehicles be periodically inspected; vehicles not show excessive

damage or wear; drivers wear seatbelts and not use their cell phones while

driving; and drivers not having other persons in their vehicles during deliveries

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unless that passenger was approved personnel. While these standards

touched on delivery services, none of them gave Domino’s daily control over

the manner in which those services were accomplished.

After reviewing Domino’s rights relating to Robizza’s employees, under

the franchise agreement, Robizza retained internal day-to-day control over its

employees and delivery drivers. As discussed, other than setting basic

minimum standards for the driver’s qualifications, vehicle and safe operation,

Domino’s had no daily control over the delivery driver that caused the accident

leading to this action. Indeed, Domino’s had no connection or right to control

the driver, as it was Robizza who hired, trained, supervised and paid him. The

franchise agreement shows that Robizza had day-to-day control over the

store’s employees and delivery drivers. See Myszkowski, supra, at 626-27

(finding Penn Stroud managed day-to-day operations of the business, in part,

because it hired, fired, paid and supervised the hotel’s employees); Green,

supra, at 210 (oil company and service station were independent contractors,

in part, because station hired and fired its own employees).

We conclude the same about the other aspects of the franchise

agreement. Moreover, Robizza still had the responsibility of implementing

these standards on a day-to-day business. To that end, Robizza was

responsible for (1) constructing the store or leasing its premises; (2) obtaining

all required permits for the store (building, driveway, utility, health, sanitation,

and sign); (3) buying or leasing equipment, fixtures, furniture and signs; (4)

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buying ingredients, beverages, cooking materials, containers, packaging

materials, paper and plastic products, utensils, uniforms, menus, forms, and

cleaning supplies; (5) having its own bank account and keeping its own books

and records; (6) direct, on-premises supervision of the store at all times; and

(7) obtaining and carrying insurance for the store. Moreover, Domino’s had

no ownership interest in Robizza, nor did it compensate Robizza as its

employee. Concerning the latter, under the franchise agreement, Domino’s

received a royalty fee from Robizza out of its sales to customers. Taken

together, we find that these factors show that Robizza retained day-to-day

control over the operations of the store.

That this was the case, we find, is not diminished by the fact that

Domino’s reserved the right to inspect the store at any time and terminate

the franchise under certain conditions. We note as to inspection, however,

that Domino’s power was not unfettered, as it needed to provide written notice

and an opportunity to cure any alleged defective conditions. In any event, as

we recognized in Myszkowski, the ability to terminate the alleged servant

does not necessarily indicate that there was a continuous subjection to the

will of the alleged master so as to create a master-servant relationship,

especially when the franchisee could seek legal redress for any such

termination. See Myszkowski, supra, at 627; see also Green, supra, at

211 (finding that right to terminate relationship with cause not dispositive of

master-servant relationship).

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Additionally, as noted, the Standard Franchise Agreement disclaimed

any master-servant relationship between Domino’s and Robizza, stating

explicitly that the franchisor and franchisee were “independent contractors.”

Of course, such a statement does not resolve what kind of relationship was

created between the parties. See George v. Nemeth, 233 A.2d 231, 233

(Pa. 1967). That said, while not dispositive, inclusion of this provision is

clearly consistent with what the other provisions show, namely, that Robizza

had control over the day-to-day operations of the store. See Myszkowski,

supra, at 627 (noting that agreement between Best Western and Penn Stroud

specifically provided that their relationship was that of independent

contractors).

Accordingly, after reviewing the franchise agreement, we hold that

Domino’s did not control or have the right to day-to-day control over how

Robizza operated his store. Because Domino’s did not have such control under

the franchise agreement, it could not be held vicariously liable for the

negligence of Robizza’s employees, since the relationship between the two

parties was that of independent contractor-contractee rather than master-

servant.16 In accordance with this finding, we reverse and remand to the trial

16 This outcome is in accord with decisions in other states that Domino’s is not

vicariously liable for the alleged negligence of an employee of one of its franchisees. See, e.g., Lind v. Domino’s Pizza LLC, 37 N.E.3d 1 (Mass. Ct. App. 2015) (affirming grant of summary judgment to Domino’s because it did not control or have the right to control the policy and practice that allegedly

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court for entry of an order that Domino’s did not exercise or have the right to

exercise sufficient control over its franchisee Robizza such that it could be held

vicariously liable for the negligence of Robizza’s delivery driver, Morris.

Judgment reversed. Case remanded with instructions. Jurisdiction

relinquished.

Judge King joins the Opinion.

Judge Bowes files a Dissenting Opinion.

Date: 11/8/2023 ____________________________________________

cause harm to plaintiff); Patterson v. Domino’s Pizza LLC, 333 P.3d 723 (Cal. 2014) (finding summary judgment should have been granted to Domino’s because it did not control the workplace activities of the employees of the franchisee); Bricker v. R&A Pizza, Inc., 804 F. Supp. 2d 615 (S.D. Ohio 2011) (granting Domino’s motion to dismiss harassment and retaliation claims because there was no allegation that Domino’s was the employer of the employees of the franchisee); Rainey v. Langen, 998 A.2d 342 (Me. 2010) (affirming grant of summary judgment to Domino’s on vicarious liability claims because Domino’s quality control requirements and minimum operational standards did not reserve control of the franchisee’s day-to-day operations); Viado v. Domino’s Pizza, LLC, 217 P.3d 199 (Or. App. 2009) (affirming grant of summary judgment to Domino’s on vicarious liability claim because Domino’s did not control the daily performance of the delivery drivers of the franchisee); Bahadirli v. Domino’s Pizza, Inc., 873 F. Supp. 1528 (M.D. Ala. 1995) (granting summary judgment to Domino’s in Title VII case filed by prospective employee of franchisee because Domino's lacked control over the daily operations of the franchisee, including the hiring and firing of employees).

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