Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—W.D. N.C.: Maaco granted default judgment, fees from terminated franchisee, (Jun 15, 2015)

By Michael Menzhuber, J.D., LL.M.

In an action by a vehicle painting and auto body repair franchisor against a terminated franchisee, the federal district court in Charlotte, North Carolina granted the franchisor’s motion for a default judgment and awarded unpaid fees, plus interest (Maaco Franchising, LLC. v. BTTP Enterprises, Inc., June 12, 2015, Conrad, R.).

Background. Maaco Franchising, LLC, a vehicle painting and auto body repair franchisor, entered into a franchising agreement with BTTP Enterprises, Inc., a presently inactive Florida corporation, to operate a franchised Maaco vehicle painting and auto body repair business. Bernard Polidore and Theresa Polidore, were, respectively, president and vice-president of BTTP and were both guarantors of BTTPS’s obligations under the agreement.

The agreement required BTTP and the Polidores to pay Maaco a weekly royalty and advertising fee, as well as for the cost of paint and other supplies. The defendants failed to pay the fees which resulted in a default under the agreement. Maaco provided the defendants notice of the default and provided them an opportunity to cure, as provided for in the agreement. The defendants failed to cure and Maaco sent them a Notice of Termination in which it requested unpaid fees and the defendant’s compliance with several post-termination covenants contained in the agreement.

The defendants failed to comply with the notice of termination demands, and Maaco filed a complaint. The complaint sought damages, plus interest, for unpaid royalties, advertising contributions, and paint supply costs. The complaint also sought additional costs pursuant to the agreement. The defendants did not respond to the complaint, and Maaco’s allegations in its complaint were deemed admitted.

Maaco filed a motion for entry of default judgment. The defendants did not oppose the motion, and the timing for doing so expired. Based on the affidavits and evidence submitted by Maaco and the complaint, the court: (1) ordered the entry of default judgment and (2) granted Maaco a default final judgment against the defendants for the requested damage award amount, plus interest.

The case is No. 3:14-cv-452-RJC-DSC

Attorneys: David L. Tkach (David L. Tkach, PLLC) for Maaco Franchising, LLC.

Companies: Maaco Franchising, LLC; BTTP Enterprises, Inc.

Cases: FranchisingDistribution NorthCarolinaNews