Result

New Jersey Office Obtains Summary Judgment Award on Behalf of Real Estate Brokerage Franchisor

March 2010

Franchise Practice Co-Chair Ronald A. Giller and Associate Elior Shiloh of the New Jersey office recently won a motion for summary judgment in Federal Court in Florida against the personal guarantors of a real estate franchise.

Gordon & Rees's client, Century 21, brought this action for unpaid royalties and failure to repay monies owed under a promissory note, as well as for trademark infringement, based upon defendants' failure to remove the franchisor's trademarks following termination of the franchise agreement.  After default was entered against the defendant franchisees, Century 21 sought repayment from the personal guarantors.

The court awarded the full $1.4 million sought, dismissing arguments raised by the guarantors that Century 21 had waived its rights to enforce the guaranty, was barred from doing so under the doctrine of equitable estoppel, or had otherwise failed to mitigate its damages. The court also determined that defendants failed to establish that they had been misled concerning the money they had been loaned by Century 21 to develop their business.