Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—Del. Super.: Subway franchisor blocked from reopening judgment, fully calculating damages, (Aug 27, 2014)

By Greg Hammond, J.D.

Doctor’s Associates, Inc.—the owner and franchisor of Subway restaurants—was denied its request to fully calculate damages under a July 14, 2010 arbitration award involving a terminated Delaware franchise agreement. In denying its motion to hold an inquisition hearing at bar for the calculation of damages, the Superior Court of the State of Delaware in Dover determined that Subway failed to establish any ground for reopening a judgment (Doctor’s Associates, Inc. v. Windham, August 25, 2014, Vaughn, J.).

Background. Subway entered into a franchise agreement with Tory Windham for a restaurant location in Delaware. After finding that Windham violated the terms of his franchise agreement with regard to certain décor upgrades, Subway attempted to terminate the agreement. The dispute was subsequently settled by arbitration, wherein an arbitrator ruled in favor of Subway and deemed the franchise agreement terminated. The trial court granted Subway’s application for prejudgment remedy to secure its rights with respect to an award of damages against Windham, and the Appellate Court of Connecticut affirmed the order for prejudgment remedy (PJR) against Windham in the amount of $145,000. Subway subsequently filed the PJR as a foreign judgment in the superior court in Dover, Delaware, and requested a hearing to fully calculate damages under the 2010 arbitration award.

Reopen judgment. To reopen a judgment, Subway was required to show: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment; (5) satisfaction of the judgment; or (6) extraordinary circumstances justifying relief from the operation of the judgment. The court determined that Subway failed to demonstrate that its case fell into any of the grounds to reopen the judgment. Further, it noted that it was “not aware of any precedent for holding an inquisition at bar on an existing judgment,” and it was “not persuaded that any such procedure exists.” Consequently, Subway’s motion was denied.

The case number is K13J-00403 JTV.

Attorneys: Josiah R. Wolcott (Connolly Gallagher, LLP) for Doctor’s Associates, Inc. Patrick Scanlon for Troy W. Windham.

Companies: Doctor’s Associates, Inc.

Cases: FranchisingDistribution DelawareNews