United States District Court, D. Colorado
ORDER GRANTING SUMMARY JUDGMENT AND TERMINATING
a dispute between a franchisor and a former franchisee.
Plaintiff QFA Royalties, LLC, “is the franchisor of the
network of franchised Quiznos Sub restaurants.” (ECF
No. 36 at 3, ¶ 1.) Plaintiff The Quiznos Master, LLC,
“owns and licenses to QFA the intellectual property
used in connection with QFA's franchising program.”
(Id. ¶ 2.) The Court will refer to the two
Plaintiffs collectively as “Quiznos.” The
Defendants are ZT Investments, LLC (“ZTI”), a
Missouri limited liability company, and its owner, Thomas
outset of this lawsuit, Quiznos accused Defendants of
operating a restaurant that was, in effect, an unauthorized
Quiznos franchise. Pending before the Court, however, is
Quiznos' Partial Motion to Dismiss Pursuant to Rule
41(a)(2) (“Rule 41 Motion”). (ECF No. 62.) In
that filing, Quiznos announces that Defendants have closed
the infringing restaurant, thus mooting all of Quiznos'
claims for prospective relief. (Id. ¶ 5.) Given
this, and in light of the Court's previous default
judgment against ZTI (see ECF No. 55), Quiznos
requests dismissal of all of its causes of action asserted
against Kamau save for Claim VI, which alleges breach of a
guaranty agreement. (ECF No. 62 ¶ 7; see also
ECF No. 1 ¶¶ 72-75.) Claim VI, as it turns out, is
also the only claim at issue in Quiznos' other pending
motion, i.e., its Motion for Partial Summary
Judgment Against Defendant Thomas Kamau (“Summary
Judgment Motion”). (ECF No. 57.)
reasons stated below, the Court will grant both the Rule 41
Motion and the Summary Judgment Motion, direct entry of final
judgment against Kamau, and direct the Court to terminate
SUMMARY JUDGMENT MOTION
arcane procedural reasons explained in Part II, below, the
Court will resolve the Summary Judgment Motion before it
resolves the Rule 41 Motion.
filed no response to the Summary Judgment Motion. The Court
must nonetheless satisfy itself that Quiznos is entitled to
judgment as a matter of law. See Reed v. Bennett,
312 F.3d 1190, 1194-95 (10th Cir. 2002) (“If the
nonmoving party fails to respond [to a summary judgment
motion], the district court may not grant the motion without
first examining the moving party's submission to
determine if it has met its initial burden of demonstrating
that no material issues of fact remain for trial and the
moving party is entitled to judgment as a matter of law. If
it has not, summary judgment is not appropriate, for no
defense to an insufficient showing is required.”
(internal quotation marks omitted; alterations
incorporated)). Accordingly, the following findings of
fact and conclusions of law result from the Court's
independent review of the record.
Summary Judgment Standard
judgment is warranted under Federal Rule of Civil Procedure
56 “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a);
see also Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248-50 (1986). A fact is “material” if,
under the relevant substantive law, it is essential to proper
disposition of the claim. Wright v. Abbott Labs.,
Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). An issue
is “genuine” if the evidence is such that it
might lead a reasonable trier of fact to return a verdict for
the nonmoving party. Allen v. Muskogee, 119 F.3d
837, 839 (10th Cir. 1997).
analyzing a motion for summary judgment, a court must view
the evidence and all reasonable inferences therefrom in the
light most favorable to the nonmoving party. Adler v.
Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir.
1998) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986)). In addition, the
Court must resolve factual ambiguities against the moving
party, thus favoring the right to a trial. See Houston v.
Nat'l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir.
24, 2013, Kamau executed a series of contracts by which he
became Quiznos' new authorized franchisee for an existing
Quiznos restaurant in St. Louis, Missouri. (ECF No. 57 at
2-4, ¶¶ 9, 14-18.) The contracts became effective
June 5, 2013, when Quiznos countersigned. (Id.
those contracts, two are most relevant here. The first
relevant contract is the Franchise Agreement. (ECF No. 6-2 at
2-48.) Under the Franchise Agreement, Kamau himself
(i.e., not a business entity) became the Quiznos
franchisor. (See id.
The second relevant contract is the “Guaranty and
Assumption of Franchisee's Obligations”
(“Guaranty”). (ECF No. 6-2 at 59-60.) There,
Kamau agreed to “personally and unconditionally”
guarantee the franchisee's obligations-that is, his own
obligations-including agreeing to be “personally ...