Failure to State a Legal Cause of Action

Tomcat Consulting, LLC v. Play N Trade Franchise, Inc., et al.

By Mulcahy LLP on January 08, 2013

In Tomcat Consulting, LLC v. Play N Trade Franchise, Inc., et al. (Orange County Superior Court and California Court of Appeal, Fourth Appellate District, May 2010), terminated Play N Trade franchisee Tomcat Consulting, LLC (“Tomcat”) initiated a lawsuit against the franchisor asserting various causes of action for: (1) the franchisor’s alleged failure to approve a transfer of Tomcat’s franchise agreement to a prospective franchisee (“Transfer Claims”); and (2) the franchisor’s alleged violations of the California Franchise Investment Laws (“CFIL Claims”).

In response, Mulcahy LLP filed a Demurrer requesting that the CFIL Claims be dismissed for Tomcat’s failure to state a legal cause of action. The Court granted the Demurrer and dismissed the CFIL Claims with prejudice. Subsequently, Mulcahy LLP filed a Motion for Summary Judgment requesting that the Transfer Claims be dismissed in their entirety because, amongst other things, the undisputed evidence showed that the claims lacked merit and because the franchisor did not violate any independent duty that would give rise to such claims. In light of our Summary Judgment Motion, Tomcat voluntarily dismissed all remaining claims against the franchisor with prejudice.

On January 19, 2010, Tomcat filed a Notice of Appeal before the California Court of Appeal, Forth Appellate District, concerning the Superior Court’s dismissal of the CFIL Claims. The appeal was dismissed by Tomcat on May 18, 2010.

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