Court Opinion

ID: 67868
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:26:30+00
Date Added: 2024-06-11T14:58:15.140551
License: Public Domain

[DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT            FILED
                          ________________________ U.S. COURT OF APPEALS
                                                      ELEVENTH CIRCUIT
                                                         JUNE 3, 2009
                                No. 08-15335
                                                       THOMAS K. KAHN
                            Non-Argument Calendar
                                                           CLERK
                          ________________________

                   D. C. Docket No. 07-00303-CV-3-RH/WCS

COLD STONE CREAMERY, INC.,
an Arizona corporation,

                                                        Plaintiff-Counter-
                                                      Defendant-Appellee,

COLD STONE CREAMERY LEASING COMPANY, INC.,

                                                           Plaintiff-Appellee,

                                       versus

LENORA FOODS I, LLC,
a Florida limited liability company,
LENORA FOODS II, LLC,
a Florida limited liability company,
LENORA FOODS III, LLC,
a Florida limited liability company,
CECIL D. ROLLE, individually,
JACQUETTE ROLLE, individually,

                                                      Defendants-Counter-
                                                     Claimants-Appellants.
                               ________________________

                      Appeal from the United States District Court
                          for the Northern District of Florida
                            _________________________

                                        (June 3, 2009)

Before CARNES, MARCUS and ANDERSON, Circuit Judges.

PER CURIAM:

       Cecil Rolle and Jacquatte Rolle, doing business as Lenora Foods LLC,1 are

former franchisees of Cold Stone Creamery. The Rolles took out a promissory

note to fund the cost of their franchise. Cold Stone holds the rights to collect on

that promissory note. After the Rolles failed to make the payments due on the

note, Cold Stone sued to collect the amount owed. The Rolles filed several

counterclaims. The district court granted Cold Stone summary judgment on the

liability on the note and also granted summary judgment against all of the Rolles’

counterclaims. A jury trial was held to determine damages, and the jury returned a

verdict for $800,000. The Rolles contend that the district court erred in: (1)

granting summary judgment to Cold Stone on the Rolles’ counterclaims based on

the Florida Franchise Act and the Florida Deceptive and Unfair Trade Practices

Act (FDUTPA); (2) denying their motion to amend their counterclaim; (3)

       1
        We will refer to the defendants collectively as “the Rolles” unless context requires
otherwise.

                                                2
submitting an improper jury instruction; and (4) denying their motion for a directed

verdict.

                                           I.

      The Rolles first contend that the district court erred in granting summary

judgment to Cold Stone on two of the Rolles’ counterclaims. We review de novo

the district court’s grant of summary judgment on those counterclaims. Houston v.

Williams, 547 F.3d 1357, 1361 (11th Cir. 2008).

                                           A.

      The first counterclaim alleges that Cold Stone violated the Florida Francise

Act. The Rolles contend that Cold Stone violated the FFA by misrepresenting the

franchise’s “prospects or chances for success.” Fla. Stat. § 817.416(2)(a). That

contention fails because the Rolles did not submit evidence creating a genuine

issue of material fact that they relied on any alleged misrepresentations made by

Cold Stone. Although the Rolles argue that they do not need to show reliance, that

argument is contrary to Florida law. See Travelodge Int’l Inc. v. E. Inns, Inc., 382

So. 2d 789, 791 (Fla. 1st DCA 1980) (holding that recovery under the FFA

requires proof of intentional misrepresentations by the franchisor that “were relied

on by the franchisee to his determinant”). On the record in this case, we agree with

the district court that the Rolles cannot establish the requisite detrimental reliance

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necessary to recover under the FFA. Cold Stone’s franchise agreement included a

detailed disclaimer and explanation regarding the risks of owning and operating a

franchise and encouraged franchisees to conduct an independent investigation of

their prospects for success. The franchise agreement did not promise that the

Rolles would profit. The evidence shows beyond dispute that the Rolles

understood the agreement and that they also conducted an independent

investigation of their prospect for success. The district court properly granted

summary judgment to Cold Stone on this counterclaim.

                                          B.

      The district court also granted summary judgment for Cold Stone on the

Rolles’ counterclaim under the FDUTPA. The FDUTPA provides that “unfair

methods of competition, unconscionable acts or practices, and unfair or deceptive

acts or practices in the conduct of any trade or commerce are hereby declared

unlawful.” Fla. Stat. § 501.204(1). This claim is somewhat different from the

Franchise Act claim because the FDUTPA does not require a plaintiff to prove

actual reliance on the alleged conduct. See State, Office of the Att’y Gen. v.

Commerce Comm. Leasing, LLC, 946 So. 2d 1253, 1258 (Fla. 1st DCA 2007).

But the plaintiff must prove that “the alleged practice was likely to deceive a

consumer acting reasonably in the same circumstances.” Id. The alleged conduct

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at issue does not meet that standard.

      Viewing the evidence in the light most favorable to the Rolles, two other

franchisees that appeared to be acting as agents of Cold Stone made statements to

the Rolles about their prospects for success in operating a Cold Stone Creamery

store. Those statements must be viewed in light of the circumstances as a whole,

however. Some time after the alleged misrepresentations were made, the Rolles

were given and reviewed Cold Stone’s franchise agreement. That agreement

clearly states that the Cold Stone franchisees did not have the authority to make

representations on Cold Stone’s behalf about profit margins. The agreement also

provides a detailed discussion of financial information, including the average gross

revenues from Cold Stone franchises, but notes that “[a]ctual results vary from unit

to unit, and we cannot estimate the results of any particular Franchise.” It further

warns that “[i]f you rely upon the [provided] figures, you must accept the risk of

not doing as well.” As we have noted, the agreement also encourages potential

franchisees to “conduct an independent investigation of the cost and expenses you

will incur in operating a Cold Stone Creamery,” which the Rolles did. Under these

circumstances, it is not likely that a consumer acting reasonably would have been

deceived by the alleged statements made by the two Cold Stone franchisees.

                                          5
                                          II.

      Next, the Rolles contend that the district court erred in denying their motion

for leave to amend their pleadings to add a antitrust counterclaim. We review the

district court’s denial of that motion for abuse of discretion. See Green Leaf

Nursery v. E.I. DuPont De Nemours and Co., 341 F.3d 1292, 1300 (11th Cir. 2003).

Because the Rolles filed their motion six weeks after the scheduling order’s

deadline for amending pleadings, they were required to show “good cause” for their

delay. See Fed. R. Civ. P 16(b); Oravec v. Sunny Isles Luxury Ventures, L.C., 527

F.3d 1218, 1231–32 (11th Cir. 2008). Although the Rolles argue that their delay

was caused by Cold Stone’s alleged misconduct during discovery, they admit that

they had a basis to allege their antitrust claim before the discovery squabbles began.

We are therefore convinced that the district court did not abuse its discretion in

finding that the Rolle’s excuse did not amount to good cause for their delay. We

affirm the district court’s denial of the Rolles’ motion to amend their pleadings.

                                          III.

      The Rolles also contend that the district court erred in its jury instruction

regarding the offset due on the promissory note based on the collateral recovered

from the Rolles’ franchises. The district court has “wide discretion as to the style

and wording employed in its [jury] instruction.” McCormick v. Aderholt, 293 F.3d

                                           6
1254, 1260 (11th Cir. 200) (citation omitted). “We will only reverse the lower

court because of an erroneous instruction if we are left with a substantial and

ineradicable doubt as to whether the jury was properly guided in its deliberations.”

Id. (internal quotation marks and citation omitted). Here the district court instructed

the jury to reduce the amount due on the promissory note based on the reasonable

market value of the collateral that Cold Stone recovered. The Rolles argue that

because Cold Stone did not provide them with notice of the sale of the collateral at

issue, there is a rebuttable presumption that the collateral seized satisfies the full

value of the debt owed, and that the district court should have instructed the jury

about that presumption. We disagree.

      The presumption is rebuttable, and the district court properly found that it

was rebutted by proof that the note covered more than just the collateral at issue;

that the Rolles had removed a significant amount of equipment from one of the

stores before it could be recovered by Cold Stone; and that the equipment had

depreciated in value over time. The district court was not required to leave the

determination regarding the presumption up to the jury when the evidence in this

case was so overwhelming. The district court instructed the jury to determine the

reasonable value of the collateral that was recovered by Cold Stone and to offset the

amount due on the promissory note by that amount. That instruction was correct.

                                             7
We are not “left with a substantial and ineradicable doubt” that the jury was

misguided. Id.

                                          IV.

      The Rolles’ motion for a directed verdict fails for a similar reason. They

contend that Cold Stone disposed of the collateral in a commerically unreasonable

manner, and for that reason the collateral should be presumed equal to the total

amount of the debt owed. That presumption, however, is also rebuttable. See

Weiner v. Am. Petrofina Mktg. Inc. 482 So. 2d 1362, 1365 (Fla. 1986). Because

Cold Stone proved that the “fair market value of the collateral was less than the

debt,” it was entitled “to recover a deficiency judgment in an amount equal to the

total debt minus the fair market value of the collateral as ultimately determined.”

Id. The district court properly denied the Rolles’ motion for a directed verdict.

      AFFIRMED.

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