Olivieri v. McDonald's Corp.

678 F. Supp. 996, 1988 U.S. Dist. LEXIS 896, 1988 WL 7190
CourtDistrict Court, E.D. New York
DecidedJanuary 26, 1988
Docket86 CV 2638
StatusPublished
Cited by15 cases

This text of 678 F. Supp. 996 (Olivieri v. McDonald's Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Olivieri v. McDonald's Corp., 678 F. Supp. 996, 1988 U.S. Dist. LEXIS 896, 1988 WL 7190 (E.D.N.Y. 1988).

Opinion

MEMORANDUM AND ORDER

PLATT, District Judge.

Defendant moves this Court for summary judgment, pursuant to Federal Rule of Civil Procedure 56, for an order dismissing the complaint on the ground that there are no material facts in dispute and defendant is entitled to judgment as a matter of law.

On July 8, 1986, plaintiff Olivieri commenced this action in the Supreme Court of the State of New York, County of Queens, by service of a summons and complaint on the New York Secretary of State pursuant to section 306 of the New York Business Corporation Law. A timely removal petition was filed in this Court on August 7, 1986. The complaint alleged four causes of action: violation of New York General Business Law section 687, fraudulent misrepresentation, negligent misrepresentation, and injurious falsehood. The plaintiff has withdrawn the cause of action for negligent misrepresentation.

FACTS

McDonald’s Corporation (McDonald’s) represents a world-wide system of restaurants. It owns some of the restaurants, but the majority are franchised to individuals selected by the corporation. McDonald’s has established a program for selecting future franchisees. The program combines classroom, self-directed, and on-the-job training. Each applicant is required to spend a substantial amount of time (usually 1000 plus hours) in a McDonald’s restaurant learning the system of operation and day-to-day management techniques. McDonald’s contends that one of the purposes of the length of the program is to enable the franchise candidate and McDonald’s to evaluate each other in preparation for a business relationship that is intended to last for twenty years.

McDonald’s reserves the right to terminate the program of a particular potential franchisee at any time. Every franchisee is alerted to that fact. For example, on September 27, 1984, Olivieri signed an agreement to return all McDonald’s training materials. The agreement included an *998 acknowledgement that his work for McDonald’s as part of the training program did not commit McDonald’s to award him a franchise. Also, every franchise applicant signs a written agreement by which s/he acknowledges that s/he understands that McDonald’s is not making a commitment to sell him/her a franchise merely by accepting him/her into the training program. Olivieri signed such an agreement on July 1, 1985, when he entered the McDonald’s program. In addition, on July 19, 1985, Olivieri acknowledged receipt of the New Jersey Franchise Offering Circular for Prospective Franchisees. That acknowledgement stated that no one had made any promises or assurances to the candidate that a franchise would be granted to him and acknowledged that no franchise would exist without a written agreement. However, in his deposition taken in connection with this action on October 29, 1986, Olivieri stated affirmatively that he had not read the prospectus or any other papers given to him by McDonald’s in connection with the prospective franchise. Deposition of Israel Olivieri, at 13-14 (Oct. 29, 1986).

Olivieri participated in the franchise program for nearly three years. McDonald's claims that Olivieri was told that he would have to successfully complete the McDonald’s program and that he would be continually evaluated during the program. Olivieri agrees that he was told that he would have to successfully complete the program to be considered for a franchise; however, he contends that the requirements of the program were never made clear to him and were changed from a requirement that he complete the Basic Operations Course to a requirement that he complete the Intermediate Operations Course.

John Baratta, a National Field Licensing Manager for McDonald’s, stated in his affidavit in support of this motion that Olivieri completed the initial period successfully, but that his progress slowed when he began the self-directed program. Further, Baratta stated that he became concerned about Olivieri’s attitude as he progressed through the program. Baratta and Dwight Miller, McDonald’s Operations Manager for the Connecticut Market, met with Olivieri in October 1984 with the intention of terminating him from the program, because of his “attitude, lack of initiative, and poor rate of progress in his training.” Affidavit of John Baratta in Support of McDonald’s Corporation’s Motion for Summary Judgment, at 7 (Sept. 17, 1987). In contrast, Olivieri contends that he was never given reason to believe that he was not progressing satisfactorily in the program. Affidavit of Israel Olivieri in Opposition to Motion for Summary Judgment, at 2 (Nov. 3, 1987).

In November 1985 McDonald’s decided to terminate Olivieri from its training program. The decision was based, in part, on Olivieri’s interview with Ruth Anderson, at that time McDonald’s Licensing Manager for the Fort Lauderdale Region. As a result of the interview, McDonald’s officers decided that Olivieri was not an individual with whom it wanted to enter into a twenty-year business relationship.

Since the memo resulting from this interview is the basis for Olivieri’s claim of injurious falsehood, the details are relevant. (Memo is attached to this Memorandum as Appendix A.) On November 5, 1985, Ruth Anderson reported to Dwight Miller about the October 24, 1985, interview with Olivieri. The purpose of the interview was to evaluate Olivieri for a franchise in Puerto Rico in 1986. Anderson stated that her perception of Olivieri prior to the interview was positive in that she viewed “[h]is application ... as solid and his training level appeared to be very good____” According to the memo, Anderson told Olivieri during the interview that McDonald’s had made no commitment to give him a restaurant. Anderson was extremely disappointed in Olivieri’s performance during the interview. She concluded that his attitude was poor and that he had not learned sufficient management or other skills during his training to run a McDonald’s franchise. Plaintiff contends that the Anderson memo inaccurately represented the meeting. He stated that only general matters were discussed and that there were no technical discussions of Me- *999 Donald’s systems. Olivieri Affidavit, at 2. Anderson reported that Olivieri repeatedly answered questions in a flip manner; plaintiff contests this and states that Anderson’s report is false.

Olivieri was terminated when McDonald’s officers concluded that he demonstrated no ability to become a McDonald’s franchisee. In particular, it alleged that he could not run a shift or schedule employees, that he was not familiar with profit and loss statements, and that he was progressing very slowly on the self-directed part of the training program. Further, McDonald’s alleged that Olivieri had no initiative, no spirit of cooperation, or appreciation for the McDonald’s system. Baratía Affidavit, at 8.

DISCUSSION

Federal Rule of Civil Procedure 56 allows a Court to grant summary judgment when there is no dispute of material fact and the moving party is entitled to judgment on the law. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The Supreme Court has recently expanded the concept of summary judgment. See Celotex,

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Bluebook (online)
678 F. Supp. 996, 1988 U.S. Dist. LEXIS 896, 1988 WL 7190, Counsel Stack Legal Research, https://law.counselstack.com/opinion/olivieri-v-mcdonalds-corp-nyed-1988.