HP HOLDING LLC v. RED ROOF INNS, INC.

CourtDistrict Court, D. New Jersey
DecidedFebruary 26, 2025
Docket1:23-cv-20907
StatusUnknown

This text of HP HOLDING LLC v. RED ROOF INNS, INC. (HP HOLDING LLC v. RED ROOF INNS, INC.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HP HOLDING LLC v. RED ROOF INNS, INC., (D.N.J. 2025).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY CAMDEN VICINAGE

HP HOLDING LLC, et al.,

Plaintiffs,

v. Civil No. 23-20907 (RMB/MJS)

RED ROOF INNS, INC., et al.,

Defendants.

OPINION AND ORDER

This matter comes before the Court on the motion by Plaintiffs HP Holding LLC (“Holding”) and HP Holding Hospitality LLC (“Hospitality”) (together “Plaintiffs”) for leave to file a second amended complaint. ECF No. 23. This Court previously denied a motion by Plaintiffs to amend the complaint on May 28, 2024, but allowed Plaintiffs to refile if certain deficiencies were cured. ECF No. 21. Pursuant to Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1(b), the Court decides this motion without oral argument. For the reasons that follow, Plaintiffs’ renewed motion to amend the complaint is GRANTED. I. Background Plaintiffs owned and operated a Red Roof Inn franchise in Absecon, New Jersey, pursuant to an arrangement with defendants Red Roof Inns, Inc. (“RRI”), and Red Roof Franchising, LLC (“RRF”) (together “Defendants”), the parent company and franchisor, respectively, of Plaintiffs’ hotel. ECF No. 8 at 2-3, ¶¶ 10-21.1

1 The Court adopts and incorporates the factual background detailed in Judge Kugler’s May 28, 2024 Opinion. ECF No. 21. Citations to page numbers in documents referenced in this On October 5, 2023, Plaintiffs filed a complaint alleging Defendants effectively shut down the hotel intermittently to force Plaintiffs to invest in improving the hotel. ECF No. 1 at 3-6, ¶¶ 15-45. Specifically, Plaintiffs alleged (1) breach of contract against RRF; (2) interference with contract against RRI; (3) restraint of trade by both Defendants; and (4)

violation by both Defendants of the New Jersey Franchise Practices Act (“NJFPA”), N.J.S.A. 56:10-1 to -15. Id. at 6-9, ¶¶ 46-76. On November 21, 2023, Defendants moved to dismiss the complaint as untimely and deficient as a matter of law. ECF No. 5. Plaintiffs thereafter filed an amended complaint on December 12, 2023, alleging (1) tortious interference brought by Holding against RRI; (2) tortious interference brought by Hospitality against RRI; (3) breach of contract brought by Hospitality against RRF; and (4) violation of the NJFPA brought by both Plaintiffs against both Defendants. ECF No. 8 at 9-13, ¶¶ 62-105. Defendants filed a renewed motion to dismiss on January 9, 2024. ECF No. 12. Plaintiffs filed a cross-motion to amend on February 7, 2024, seeking to reinforce the complaint against defects the Court might recognize in its review of

Defendants’ motion to dismiss. ECF No. 16. On May 28, 2024, the Court denied the first motion to dismiss as moot, granted the second motion to dismiss, and denied Plaintiffs’ cross-motion to amend. ECF No. 21. The Court dismissed all of Plaintiffs’ claims, but dismissed counts 1 and 4 without prejudice “to provide Plaintiffs with a final opportunity to cure their defective pleadings.” Id. at 14. This renewed motion to amend by Plaintiffs follows.

Opinion and Order correspond to the page numbers listed at the bottom of documents, not the page number provided by ECF in the blue banner present on some documents, unless the page numbers are not otherwise available. II. Legal Standard Parties may only amend the complaint “with the opposing party’s written consent, or [with] the court’s leave[,]” which should be “freely give[n] when justice so requires.” Fed. R. Civ. P.15(a). “A general presumption exists in favor of allowing a party to amend its

pleadings.” Int’l Union of Operating Eng’rs, Loc. 68, AFL-CIO, et al. v. RAC Atl. City Holdings, LLC, et al., Civ. No. 11-3932, 2013 WL 353211, at *8 (D.N.J. Jan. 29, 2013). “However, a motion to amend a complaint may be denied where there is undue delay, bad faith, dilatory motive, unfair prejudice, or futility of amendment.” Johnson v. Chevron Corp., Civ. No. 21-20548, 2022 WL 4817592, at *7 (D.N.J. Sept. 30, 2022). “Futility ‘means that the complaint, as amended, would fail to state a claim upon which relief could be granted.’” Id. (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997)). “When considering denial of an amendment on the grounds of futility, the facts alleged in the proposed amended complaint, and all reasonable factual inferences drawn from those facts, are construed in the moving party's favor.” Id.

III. Discussion Plaintiffs argue this motion complies with Rule 15(a)(2) and cures the deficiencies identified by the Court in dismissing Plaintiffs’ amended complaint. ECF No. 30 at 3-6. Plaintiffs assert the Court’s opinion demonstrated an “evident intention” to toll the statute of limitations and that as a result, Plaintiffs’ claims and motion are timely. Id. Defendants contend that applicable statutes of limitation render all of Plaintiffs’ claims untimely, and thus amendment under Rule 15 is futile. ECF No. 27 at 1-2. Defendants argue the NJFPA and tortious interference claims—which both are alleged by Plaintiffs to have occurred last on April 30, 2018—fall outside of the six-year limitation period which ended April 30, 2024. Id. at 3-14. Defendants maintain Plaintiffs’ renewed motion to amend is therefore untimely because the Court’s May 28, 2024 Opinion and Order, ECF Nos. 21 and 22, provided neither explicit conditions for reinstatement nor a deadline to satisfy such conditions. ECF No. 27 at 3-5. Defendants claim that the contractually provided three-year

statute of limitations should govern Plaintiffs’ NJFPA claims—and that even under the otherwise applicable six-year statute of limitations—these claims still fail. Id. at 6-14. Defendants also argue that Plaintiffs’ NJFPA claims are facially deficient because they do not meet the statutory requirements for expenditures between a franchisor and franchisee. Id. at 14-21. When dismissing Plaintiffs’ claims in the Court’s review of Defendants’ motions to dismiss, the Court observed Plaintiff Holding “may seek to integrate into a future amended complaint the allegation that its injuries continued through the termination of the Franchise Agreement in April 2018, thereby bringing its tortious interference claim within New Jersey’s six-year statute of limitations. For this reason, we dismiss Count I without prejudice.” ECF

No. 21 at 12 (emphasis added). Similarly, the Court observed count IV failed as articulated by alleging that Defendants “prevented the Inn from generating revenues of $25,000 for a protracted period . . .” instead of the $35,000 threshold required by the NJFPA, so “[l]ike Count I, however, we dismiss Count IV without prejudice to provide Plaintiffs with a final opportunity to cure their defective pleadings.” Id. at 14 (emphasis added). Additionally, after denying Plaintiffs’ motion to amend as premature given the pendency of Defendants’ motions to dismiss, the Court noted “because this Opinion and corresponding Order serve to resolve Defendants’ pending Motions, Plaintiffs may appropriately re-file their motion and again seek the Court’s leave to file their proposed Second Amended Complaint if they wish to do so, provided that they do not re-raise claims that the Court has dismissed here with prejudice.” Id. at 16 (emphasis added). The emphasized text within the preceding excerpts reflects the Court’s intention to allow Plaintiffs to amend their complaint to cure the identified deficiencies with counts I and IV.

Plaintiffs’ proposed second amended complaint attaches the franchise agreement between the parties as an exhibit, ECF No.

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HP HOLDING LLC v. RED ROOF INNS, INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/hp-holding-llc-v-red-roof-inns-inc-njd-2025.