Kinnard v. Shoney's, Inc.

39 F. App'x 313
CourtCourt of Appeals for the Sixth Circuit
DecidedJuly 18, 2002
DocketNo. 00-5780
StatusPublished

This text of 39 F. App'x 313 (Kinnard v. Shoney's, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kinnard v. Shoney's, Inc., 39 F. App'x 313 (6th Cir. 2002).

Opinion

SILER, Circuit Judge.

Plaintiffs P. Stephen Kinnard, E. Glyn Kinnard, and their daughter, Stephanie K. Cox (the “Kinnards”), filed suit against Shoney’s, Inc. alleging breach of franchise agreements, violations of Indiana franchise statutes, franchise fraud and common law fraud, breach of fiduciary duty to franchisees, trover and conversion, constructive fraud and breach of fiduciary duty to joint venturers. After the Kinnards’ motion to compel discovery was denied, summary judgment was granted in favor of Shoney’s. For the reasons set forth below, we affirm.

Background

Before becoming a Shoney’s franchisee, Steve Kinnard worked for Shoney’s for fourteen years. He entered into a licensing agreement with Shoney’s in December 1988, permitting him to open a Shoney’s restaurant on Michigan Road in Indianapolis, Indiana (the “Michigan Road license”). He entered into a second licensing agreement with Shoney’s in April 1991, permitting him to open a second Shoney’s restaurant on Greenfield Road in Indianapolis (the “Greenfield license”). In May 1991, Mr. Kinnard assigned both the Michigan Road and the Greenfield licenses to himself, his wife Glyn Kinnard and his daughter Stephanie Cox.

In 1995, the Kinnards fell behind in the payment of their obligations to Shoney’s. Shoney’s notified the Kinnards on October 14, 1996, that because their default had not been cured, the licensing agreements for both restaurants were terminated. On October 30, 1996, the parties agreed to enter into a termination agreement, reinstatement agreement and forbearance agreement. Each of these agreements contained a release provision which extinguished all claims the Kinnards may have had against Shoney’s.

Mr. Kinnard also invested in the 1977 Shoney’s Ownership Plan (“ownership plan” or “joint venture”). Under this plan, officers and employees of Shoney’s could invest in the operations of selected restaurants owned and operated by Shoney’s. The ownership plan did not own any tangible assets of the restaurants, but invested in the restaurants and were to receive profits from them.

On June 27,1997, the Kinnards filed suit in Indiana state court against Shoney’s. The case was removed to the United States District Court for the Southern District of Indiana and transferred to the United States District Court for the Mid-[315]*315die District of Tennessee. Later, the Kinnards filed their first amended complaint alleging breach of franchise agreements, violations of the Indiana franchise statutes, franchise fraud and common law fraud, breach of fiduciary duty to franchisees, trover and conversion, constructive fraud and breach of fiduciary duty to joint venturers.

In the November 1998 case management order, the district court stated that all discovery related matters were to be filed by March 19,1999 and “[n]o motions related to discovery ... shall be filed until a [discovery] order dispute conference has taken place and the attorneys of record shall attend and meet, face to face, in an effort to resolve the dispute and a jointly signed [discovery] order dispute statement is submitted setting forth precisely the remaining issues in dispute and the reasons why those issues remain unresolved.” The Kinnards filed a motion to compel discovery on March 19, 1999. In support of the motion, they filed a certificate of consultation, signed only by their counsel. On April 20, 1999, the district court denied the Kinnards’ motion to compel discovery for failure to submit a jointly signed discovery order dispute statement in direct contravention of the case management order.

On April 2,1999, Shoney’s filed a motion for summary judgment on all claims. The district court granted summary judgment in favor of Shoney’s on April 25, 2000. See Kinnard v. Shoney’s, Inc., 100 F.Supp.2d 781 (M.D.Tenn.2000).

Standard of Review

We review de novo a district court order granting summary judgment. See Brannam v. Huntington Mortgage Co., 287 F.3d 601, 608 (6th Cir.2002). Summary judgment should be granted when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R.Civ.P. 56(c).

“[I]t is well established that the scope of discovery is within the sound discretion of the trial court.” Coleman v. American Red Cross, 23 F.3d 1091, 1096 (6th Cir.1994) (citation omitted). .Accordingly, we review discovery matters under an abuse of discretion standard. See id.

Discussion

The Kinnards assert that the district court abused its discretion by denying their motion to compel discovery based solely on their failure to comply with the case management order. Further, they claim that the district court misinterpreted the Indiana Deceptive Franchise Practices Act. They also argue that the district court erred in holding that Shoney’s was not contractually obligated to maintain certain standards in its company-owned stores. Additionally, Mr. Kinnard asserts that the district court erred in concluding that Shoney’s did not breach its fiduciary duty to the joint venturers. We shall address each argument in turn.

A. Motion to Compel Discovery

The Kinnards claim that they were prejudiced by the enforcement of the case management order because they were unable to obtain opposing counsel’s signature. Although we find that such an order requiring a jointly signed certificate of consultation may be problematic in some instances, the denial of the Kinnards’ motion to compel discovery based on their failure to comply with the case management order was not an abuse of discretion in this case.

[316]*316Counsel for the parties met on March 10, 1999 to discuss unresolved discovery matters. After the meeting, on March 17, 1999, the Kinnards’ counsel sent a letter by facsimile to Shoney’s counsel addressing certain documents or information sought and submitting a proposed certificate of consultation for Shoney’s counsel to sign. On the following day, March 18, counsel for Shoney’s faxed a letter to the Kinnards’ counsel responding in detail to the letter of the previous day. The letter addressed various discovery issues and agreed to further respond to certain interrogatories and to produce additional documents. Counsel for Shoney’s also stated in the letter that he would not sign the proposed certificate of consultation because “a number of issues were left open at the end of our meeting as you had not completed your review of the documents that we had produced; I asked you to clarify and/or limit certain requests following your document review in the event that you still wanted to pursue certain categories of documents.” He, however, explained that he would sign a certificate that appropriately reflected the status of discovery. Without any further contact with Shoney’s counsel, the Kinnards filed their motion to compel on March 19, 1999. They attached to the motion a certificate of consultation signed only by their counsel. The motion failed to acknowledge the March 18 letter from Shoney’s counsel.

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

Related

Meade v. Pension Appeals And Review Committee
966 F.2d 190 (Sixth Circuit, 1992)
Dean Witter Reynolds, Inc. v. McCoy
853 F. Supp. 1023 (E.D. Tennessee, 1994)
Vance v. Schulder
547 S.W.2d 927 (Tennessee Supreme Court, 1977)
Kinnard v. Shoney's, Inc.
100 F. Supp. 2d 781 (M.D. Tennessee, 2000)
Coleman v. American Red Cross
23 F.3d 1091 (Sixth Circuit, 1994)

Cite This Page — Counsel Stack

Bluebook (online)
39 F. App'x 313, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kinnard-v-shoneys-inc-ca6-2002.