discovered during that inspection. On April 24, 1998, Dean
Marino inspected the Lake Ronkonkoma Shop and determined that
many of the sanitation and food preparation violations that had
been cited by Robinson on April 13 remained unremedied.
On June 1, 1998, Dunkin Donuts commenced this action alleging
breach of the franchise agreement, and seeking injunctive relief
requiring Priya to cure the alleged health, sanitation, and
safety violations. In addition, Dunkin' Donuts sought an award
of attorneys' fees and costs for the action pursuant to Section
9.3 of the franchise agreement.
Marino re-inspected the Lake Ronkonkoma Shop on August 6,
1998, at which time it was found to be "in substantial
compliance with Dunkin' standards."
The Coram Shop
Marino inspected the Coram shop on May 3, 1998, and on May 11,
1998 issued a Notice to Cure to Priya citing numerous sanitation
and physical plant violations. Marino re-inspected the Coram
Shop on May 27, 1998 and found the violations remained uncured.
On June 15, 1998, Dunkin Donuts amended its complaint in this
case to allege that Priya breached the franchise agreement for
the Coram shop as well. The amended complaint again sought an
injunction directing Priya to cure the violations and attorney's
fees and costs for bringing the action. Priya answered the
amended complaint and interposed a counterclaim, alleging that
Dunkin Donuts' lawsuit instituted maliciously to injure Priya's
reputation. Priya requested $5,000,000 in damages on the
On July 17, 1998, Marino inspected the Coram Shop once more at
which time he found it to be "in substantial compliance with
As a result of Priya curing the standards violations at both
stores, it appears that Dunkin Donuts has abandoned its request
for injunctive relief. However, Dunkin Donuts now moves for
summary judgment awarding it attorneys' fees and costs under
Section 9.3 of the franchise agreements. Priya opposes and
cross-moves for summary judgment on the grounds that any
violations of Dunkin Donuts standards were de minimis and not
grounds for an action under Section 9 of the Franchise Agreement
because they did not rise to the level of posing a danger to
health or safety. Priya also asserts that all violations were
cured between April 24, 1998 and the filing of the lawsuit on
June 1, 1998.
Priya contends that shortly after Dunkin Donuts filed the
complaint, its attorney contacted Priya's attorney. According to
Priya, Dunkin Donuts' attorney advised its counsel that only two
violations were at issue in Ronkonkoma: two leaky pipes under a
sink and the use by customers of cream in its original container
rather than in a cream dispenser. Priya's attorney contends that
he advised counsel for Dunkin Donuts that these violations did
not merit a lawsuit, and was told that Dunkin Donuts would
discontinue the lawsuit if Priya paid $2,000 in attorney's fees.
Dunkin Donuts admits the general contents of that conversation
took place, but contends that its attorney merely recited the
few violations he could recall from memory and directed Priya's
attorney to the Notices to Cure for full details on all of the
Summary judgment is appropriate where the record "show[s] that
there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law."
Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett,
477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden
of showing that no genuine factual issue exists rests on the
moving party. See Gallo v. Prudential Residential Servs., Ltd.
Partnership, 22 F.3d 1219, 1223 (2d Cir. 1994). All ambiguities
must be resolved
and all inferences must be drawn in favor of the party against
whom summary judgment is sought. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986);
D'Amico v. City of New York, 132 F.3d 145, 149 (2d Cir. 1998).
The non-moving party may not rely on mere conclusory allegations
nor speculation, but instead must offer some hard evidence
showing that its version of the events is not wholly fanciful.
D'Amico, 132 F.3d at 149; Podell v. Citicorp Diners Club,
Inc., 112 F.3d 98, 101 (2d Cir. 1997).
Before granting summary judgment in an action on a contract,
the court must find that the contract terms are "wholly
unambiguous." See Schering Corp. v. Home Ins. Co., 712 F.2d 4,
10 (2d Cir. 1983). Unless the movant can demonstrate that the
contractual language is not "susceptible of at least two fairly
reasonable meanings" summary judgment will not be granted. Id.
at 9. However, summary judgment is appropriate where the
language of the contract is clear on its face, even though the
movant proffers a different interpretation of the contract
language. See Harris Trust & Savings Bank v. John Hancock Mut.
Life Ins. Co., 970 F.2d 1138, 1147-48 (2d Cir. 1992), cert.
denied, 507 U.S. 986, 113 S.Ct. 1585, 123 L.Ed.2d 151 (1993).
A. As to Dunkin' Donuts' Motion for Summary Judgment
The undisputed facts establish that Dunkin Donuts inspected
the Lake Ronkonkoma store on April 10, 1998, discovered numerous
sanitation and food preparation violations, and issued a Notice
to Cure to Priya on April 13, 1998. Further, it is undisputed
that Dunkin Donuts re-inspected the Lake Ronkonkoma shop on
April 24, 1998, and the violations noted on April 10 remained
uncured. At this point, under the unambiguous language of
Section 9.1.2 of the franchise agreement, which requires a
franchisee to cure violations within 24 hours, Priya was
undeniably in violation of the franchise agreement. The same is
true with the Coram shop: when Marino inspected the shop on May
11, 1998, and discovered that the violations he had cited in his
May 3, 1998 Notice to Cure had not been remedied, Priya was
breach of Section 9 the agreement. Upon a breach of the
agreement, Section 9.3 authorizes Dunkin Donuts to commence a
lawsuit against Priya to enforce the terms of the franchise
agreement, and to hold Priya liable for the attorney's fees
involved in litigating the case. Dunkin Donuts has therefore
established that, under the clear language of the franchise
agreement, it is entitled to a judgment for the attorney's fees
it has expended in pursuing this case.
Priya raises several defenses. First, it argues that Dunkin
Donuts failed to establish that a Notice to Cure was ever sent
to the Lake Ronkonkoma store. However, a copy of the April 13,
1998 Notice, addressed to Priya, was attached as Exhibit 3B to
Dunkin Donuts' original moving papers. In addition, Dunkin
Donuts submitted the affidavit of Robinson, who affirmatively
states that he sent a copy of that Notice to Priya. Priya does
not assert that it never received the Notice to Cure in the
Lake Ronkonkoma shop; rather, the affidavit of Jiterendra Patel
on behalf of Priya contends only that "there is no allegation
that any notice to cure was ever sent to the Lake Ronkonkoma
store." (Underlining in original, bolding added). Patel's
affidavit cites no source of personal knowledge to rebut
Robinson's contention that he actually sent the Notice to Lake
Ronkonkoma, and thus, any factual dispute on this point by Priya
is based on mere conjecture and insufficient to defeat a motion
for summary judgment. D'Amico, 132 F.3d at 149.
Next, Priya contends that because the violations cited were
de minimis and did not threaten the safety and health of the
patrons, no lawsuit to enforce the franchise agreement was
warranted. In Section 5.1.6 of the franchise agreement, Priya
agreed "to maintain, at all times . . .
the highest degree of cleanliness, orderliness, sanitation and
repair, as reasonably required by Dunkin Donuts." Both Notices
to Cure cite more than 10 areas of violation, at least five of
which are in the area of improper sanitation practices. Among
the cited violations in both shops are "food preparation
equipment not dismantled, cleaned and sanitized regularly,"
"food preparation areas not regularly cleaned with approved
sanitizer," and "no employee sanitation training program in
place." These violations, which Priya does not actually dispute
existed at the time of the inspections, unquestionably amount to
serious breaches of Section 5.1.6 of the franchise agreement.
The Court is not persuaded that unsatisfactory sanitary
practices — such as failing to clean food preparation equipment
— in a business selling food to the public can ever be
considered de minimis. Moreover, the evidence suggests that
Priya ignored the Notices to Cure that were served on it, and
that these unsanitary practices went uncorrected for periods of
at least a week to ten days in two separate stores. Under these
circumstances, the Court finds that, as a matter of law, Dunkin
Donuts' actions in commencing suit to enforce the franchise
agreement, were reasonable.
Finally, Priya contends that no action was warranted because
it corrected the cited defects sometime between the second
inspection in each store and Dunkin Donuts' commencement of the
action on June 1, 1998. Even accepting this fact as true, Priya
fails to demonstrate that this fact is material. The franchise
agreement requires that defects be cured with 24 hours of
notice, and it is undisputed that Priya failed to correct the
cited violations within this time frame as Dunkin Donuts'
subsequent inspections confirmed. The fact that Priya eventually
corrected the defects does not raise a genuine issue of fact, as
Priya was in default on the franchise agreement, and thus
subject to suit under Section 9.3, as soon as the second
inspections confirmed that the violations were not abated within
the cure period. Priya does not allege that, prior to commencing
the action, Dunkin Donuts inspected the shops a third time and
found no violations. To accept Priya's argument as a legitimate
defense, this Court would have to read into the complaint an
obligation upon Dunkin Donuts to inspect the shop immediately
before filing a suit to enjoin violations of the franchise
agreement to determine whether violations that have already gone
uncured after the contractual notice period continue to exist.
The Court's function in construing a contract is to give effect
to the clear agreement made by the parties, not to fashion a new
set of obligations. Slatt v. Slatt, 64 N.Y.2d 966, 967,
488 N.Y.S.2d 645, 646, 477 N.E.2d 1099 (1985); see also Wallace v.
600 Partners Co., 86 N.Y.2d 543, 548, 634 N.Y.S.2d 669, 671,
658 N.E.2d 715 (1995) (unambiguous contract must be enforced
according to the terms used); In re Ambassador Group, Inc.
Litigation, 738 F. Supp. 57, 62 (E.D.N.Y. 1990) (same). Once
aware of Priya's violation of the franchise agreement, nothing
required Dunkin Donuts to re-reinspect the shops before filing
suit, and the Court will not read such a requirement into the
Thus, this Court holds that Priya has failed to demonstrate
any genuine issue of material fact exists, and grants summary
judgment to Dunkin Donuts. Dunkin Donuts is entitled to a
reasonable attorney's fee as provided for in Section 9.3 of the
B. As to Defendant Priya's Motion for Summary Judgment
Priya has cross-moved for summary judgment to dismiss the
complaint on the grounds that the alleged violations of the
Franchise Agreement were de minimis. As discussed above, this
Court finds that the cited — and undisputed — violations were
material, and thus, the Plaintiff's cross-motion is denied.
Moreover, in considering Priya's cross-motion for summary
judgment, the Court
is entitled to search the record and granted summary judgment to
the non-movant if warranted. See generally Fed.R.Civ.P. 56(c);
Coach Leatherware Co., Inc. v. AnnTaylor, Inc., 933 F.2d 162,
167-68 (2d Cir. 1991). In its answer, Priya asserted a
counterclaim that Dunkin Donuts was seeking to injure Priya's
reputation and good will and that the amended complaint had been
filed and served against Priya without due process of law and
for malicious purposes.
In order to make out a claim for abuse of process, three
essential elements must be shown: (1) regularly issued process
(civil or criminal); (2) an intent to do harm without excuse or
justification; and (3) use of the process in a perverted manner
to obtain a collateral objective. See Curiano v. Suozzi,
63 N.Y.2d 113, 116-17, 480 N.Y.S.2d 466, 468, 469 N.E.2d 1324
(1984). The requirements for a claim for malicious prosecution
include proof that: (1) the action was commenced with malice;
(2) the prior proceeding lacked any probable cause; and (3) the
plaintiff suffered special injury. See Engel v. CBS, Inc.,
182 F.3d 124, 128-30 (2d Cir. 1999).
The second element of both causes of action require the
plaintiff to demonstrate that the defendant's resort to the
legal system was unjustified. Because this Court grants summary
judgment to Dunkin Donuts on its claim for attorney's fees,
finding that it was justified in bringing this action in the
first place, the Court finds that Priya cannot, as a matter of
law, establish the necessary elements of a claim for abuse of
process or malicious prosecution. Therefore, upon searching the
record on Priya's cross-motion to dismiss, the Court determines
that summary judgment on Priya's counterclaim should be granted
to Dunkin Donuts.
For the foregoing reasons, Dunkin Donuts' motion for summary
judgment on its claim for attorney's fees is GRANTED. Priya's
cross-motion for summary judgment is DENIED, and summary
judgment dismissing Priya's counterclaim is GRANTED. Dunkin
Donuts is directed to serve an application for attorney's fees
and costs, supported by appropriate documentation, on counsel
for Priya and this Court within 30 days of the date of this
order. Priya's objections to the requested fees, if any, shall
be served on counsel for Dunkin Donuts and this Court within 20
days of Dunkin Donuts' service of its application. Dunkin Donuts
may serve a reply within 10 days of the service of Priya's
opposition. Oral argument on the application will be scheduled
by the Court if deemed necessary.
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