Opinion
CV196031976S
12-04-2019
Doctor’s Associates, LLC v. Earl F. Brinkley
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Hiller, Arthur A., J.T.R.
MEMORANDUM OF DECISION
Hiller, J.T.R.
STATEMENT OF THE CASE
The plaintiff, Doctor’s Associates, LLC, filed an application to confirm an arbitration award against the defendant, Earl F. Brinkley, on January 25, 2019. The court confirmed the arbitration award on May 20, 2019. The issue presently before the court is post-award damages and facts. The court heard oral argument on the issue of post-award damages and facts on October 7, 2019. The parties both filed posthearing briefs on October 18, 2019.
The court finds the following facts. As of the present date, the defendant has not dis-identified the restaurant associated with Subway franchise agreement #14571 as directed in paragraph 2 of the arbitration award. The defendant continued to use the Subway "trade names, trademarks, service marks signs, colors, structures indicative of [the plaintiff’s] sandwich business, and/or use of the operations manual" every day after the issuance of the arbitration award. Pursuant to paragraph 8.e. of the franchise agreement, the defendant is obligated to pay liquidated damages if he continued to use the Subway System after the termination of his franchise.
Paragraph 2 of the arbitration award provides: "After issuance of this Arbitration Award, [the defendant] must pay to [the plaintiff] ... $250 ... per day for the continued use of the Subway trade names, trademarks, service marks, signs, colors, structures, printed goods and forms of advertising indicative of [the plaintiff’s] sandwich business and/or use of the Operations Manual, as required by Subparagraph 8.e. of the Franchise Agreement."
Paragraph 8.e. of the franchise agreement provides: "Upon termination or expiration of this agreement, all of your rights under this Agreement will terminate ... You must change the appearance of the Restaurant ... You must stop using the System, including the Marks, signs, colors, structures, personal computer based point-of-sale system software developed for Subway ... printed goods and forms of advertising indicative of Subway ... and return all copies ... of the Operations Manual to [the defendant] ... If you breach this provision, you will pay us $250 per day for each day you are in default, as being a reasonable pre-estimate of the damages we will suffer ..."
The franchise continues to be operated by Robert Scott, the defendant’s business partner and/or Brinkley Restaurant Group, Inc. The franchise agreement only allows the transfer of the restaurant with prior approval from the plaintiff. Paragraph 9.a. of the franchise agreement specifically states, "[y]ou may only transfer the Restaurant with this Agreement to a natural person or persons (not a corporation) with our prior written approval ..."
The plaintiff was not allowed to transfer his interest in the restaurant to a corporation. Paragraph 9(b) provides that the franchisee, "may sign your rights under this Agreement to operate the Restaurant (but not this Agreement) to a corporation provided" the defendant takes the steps that are enumerated in paragraph 9.b., which includes that "[the defendant is], and . remains at all times, the owner of the controlling voting interest and majority ownership interest (more than 50%) of the corporation" and "[the defendant] delivers a general release described in subparagraph 9.a., signed by [the defendant], the corporation, and each shareholder of the corporation."
The defendant has failed to properly assign his rights to Robert Scott or the Brinkley Restaurant Group, Inc. Therefore, the defendant remains the only franchisee signatory to the franchise agreement.
As of the present date, the defendant has not paid the plaintiff $250 per day in liquidated damages for each day after issuance of the arbitration award that the defendant continued to use the "Subway trade names, trademarks, service marks, signs, and colors, the structures indicative of [the plaintiff’s] sandwich business, and/or the use of the operations manual." The defendant is ordered to pay the plaintiff $250 per day in liquidated damages to compensate the plaintiff for the defendant’s unauthorized use of the Subway System and the damage to the Subway brand associated with this unauthorized use.
The defendant remains obligated under the post-termination obligations of the provisions of the Franchise Agreement that survive termination and the requirements of the Arbitration Award against him, which has now been entered as a judgment of the court. The defendant is ordered to pay the plaintiff $62,726 in damages, which consists of $114,162.84 offset by $51,436.84 in credits for royalties and advertising paid by the defendant to the plaintiff since the issuance of the arbitration award.
Section 13 of the Federal Arbitration Act (FAA) states, "[t]he judgment shall be docketed as if it was rendered in an action. The judgment so entered shall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered." 9 U.S.C. § 13. "Confirmation of an arbitration award converts it into an enforceable judgment of the Superior Court." Daoud v. Cook, 137 Conn.App. 766, 776, 50 A.3d 340, cert. denied, 307 Conn . 928, 55 A.3d 569 (2012).
CONCLUSION
The court orders the final arbitration award is confirmed in its entirety. Damages shall continue to accrue at a rate of $250 per day, for each and every day that the defendant fails to comply with the court’s order.
The final arbitration award is confirmed in its entirety, and the plaintiff is entitled to the relief as granted therein and to recover from the defendant any and all amounts of money to which it is entitled.