Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—N.J. Super. App. Div.: Kiddie Academy franchisee’s fraud, misrepresentation claims devoid of factual support, (Oct 23, 2014)

By Greg Hammond, J.D.

The owner of a Kiddie Academy childcare learning center franchise was unable to demonstrate that his loan servicer misrepresented or fraudulently represented material information concerning his $475,000 Small Business Administration (SBA) loan. In affirming the lower court’s grant of summary judgment in favor of the loan servicer, the court determined that there were no genuine issues of material fact, and the franchisee’s claims were totally devoid of factual support (CIT Small Business Lending Corp. v. Meade, October 22, 2014, Per Curiam).

Mark Meade and his company, Dasoda Corporation, entered into a franchising agreement with Kiddie Academy Domestic Franchising to open a childcare learning center franchise in New Jersey. He then obtained, and personally guaranteed, a $475,000 SBA loan from CIT Small Business Lending Corp., to finance the opening and operation of the franchise. After defaulting on the loan, Meade filed various complaints alleging—in part—that CIT and other defendants made false and misleading statements or omissions that he relied on to enter into the franchise agreement, and made false and misleading statements in the preparation of the SBA business loan, among other arguments. Meade lacked standing, however, because all of his claims involved injuries to Dasoda, stemming from the franchise agreement, and he failed to allege any actions against him in his individual capacity. CIT subsequently filed suit against Meade on the SBA loan, and Meade counterclaimed, arguing that the previous grant of summary judgment in favor of CIT was erroneous.

The court disagreed with Meade’s arguments, finding that his claims of fraud and misrepresentation were totally devoid of factual support and insufficient to create a question of material fact that would defeat a summary judgment motion. Additionally, it was found that the trial court did not abuse its discretion in awarding summary judgment prior to Meade receiving certain discovery, as there was no reasonable indication that the discovery would have shown his claims had legal merit. The trial court’s order granting summary judgment was therefore affirmed.

The case number is A-4154-12T1.

Attorneys: Mark C. Meade, pro se. Craig L. Levinsohn (Aronsohn Weiner Salerno & Bremer, P.C.) for CIT Small Business Lending Corp. Kenneth H. Silverberg (Nixon Peabody LLP) for Kiddie Academy Domestic Franchising.

Companies: CIT Small Business Lending Corp.; Kiddie Academy Domestic Franchising

Cases: FranchisingDistribution NewJerseyNews