Opinion ID: 586986
Heading Depth: 2
Heading Rank: 5

Heading: New York Franchise Sales Act

Text: 39 The Dubravetzes contend the district court improperly granted summary judgment on their claim brought under the New York Franchise Sales Act, New York General Business Law § 680 et seq. (the Act). 40 By its terms, the Act applies only when a person offers to sell or sells a franchise in New York. N.Y.Gen.Bus.Law § 683(1) (1991). The Act defines an offer or sale made in the state: 41 (a) An offer or sale of a franchise is made in this state when an offer to sell is made in this state, or an offer to buy is accepted in this state, or, if the franchisee is domiciled in this state, the franchised business is or will be operated in this state. 42 (b) An offer to sell is made in this state when the offer either originated from this state or is directed by the offeror to this state and received at the place to which it is directed. An offer to sell is accepted in this state when acceptance is communicated to the offeror from this state. 43 N.Y.Gen.Bus.Law § 681(12). 44 The parties agree that no part of their transaction occurred in New York, that the Dubravetzes are California residents, and that their franchised ice cream shop was located in California. The offeror, Haagen Dazs, was a New York corporation, but under the Act this circumstance is irrelevant. Thus, based on these facts, it would appear that the New York Franchise Sales Act has no application to this case. But there is more. The franchise agreement provides: 45 It is mutually understood and agreed that this Franchise shall be deemed to have been made in the State of New York, County of Bronx, and that any and all performance thereunder, or breach thereof shall be interpreted, governed and construed pursuant to the laws of the State of New York, and that the parties consent that New York State shall be a forum where any cause of action arising under this franchise may be instituted. 46 Franchise Agreement (emphasis added). 47 The interpretation of the parties' franchise agreement is governed by New York law. Under New York law, when parties set down their agreement in a clear and complete manner, it should be enforced according to its terms. Serna v. Pergament Distribs., 582 N.Y.S.2d 550, 552 (App.Div.1992). Extrinsic evidence is generally inadmissible to add to or vary the agreement. Id. 48 Haagen Dazs and the Dubravetzes deemed their agreement to have been made in New York. It is a fundamental premise of contract law that contracts should be enforced according to their terms. Id. There is nothing ambiguous about the deemed language. Thus, under New York law extrinsic evidence of the parties' intent is inadmissible. 49 The defendants argue that the deemed language is boilerplate language which was inserted in the franchise agreement merely to express the choice of law provision. Cf. Mon-Shore Management, Inc. v. Family Media, Inc., 584 F.Supp. 186, 193 (S.D.N.Y.1984) (nearly identical language in choice of law provision). But, even if this were so, New York law prohibits us from looking beyond the plain words of the contract to construe this unambiguous language. Moreover, the franchisor was a New York corporation. It drew the contract. It is disingenuous for it now to argue that a provision it inserted into the agreement deeming the contract to have been made in New York does not mean what it plainly says. 4 50 We conclude that the New York Franchise Sales Act applies to the Dubravetzes' purchase of their franchise. Applying our analysis of the successor liability doctrine, however, neither Pillsbury nor its subsidiaries, the Haagen Dazs Shoppes Company, Inc. or the Haagen Dazs Company, Inc., is liable for the alleged violation of the Act. See Carlock, 719 F.Supp. at 813. Because we can affirm the district court on any ground having support in the record, Kruso, 872 F.2d at 1421, we affirm the district court's summary judgment in favor of these Pillsbury defendants on the Dubravetzes' New York Franchise Sales Act claim. As to HDF Liquidating Corp. and Doris Mattus Hurley, the district court's summary judgment in their favor on this claim is reversed.