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Noble Roman's, Inc. v. Hattenhauer Distributing Co.

United States District Court, S.D. Indiana, Indianapolis Division

July 27, 2015

NOBLE ROMAN'S, INC., Plaintiff,
v.
HATTENHAUER DISTRIBUTING COMPANY, Defendant.

ENTRY ON VARIOUS MOTIONS

WILLIAM T. LAWRENCE, District Judge.

Before the Court are two motions: the Defendant's Motion to Deny Plaintiff's Motion for Partial Summary Judgment as Premature or, in the alternative, to Continue or Stay the Motion Until Completion of Discovery Pursuant to Rule 56(d) (Dkt. No. 57); and the Plaintiff's Motion for Leave to File Amended Reply to Hattenhauer's Counterclaims (Dkt. No. 66). The motions are fully briefed, and the Court, being duly advised, resolves them as follows.

I. Motion to Deny Plaintiff's Motion for Partial Summary Judgment as Premature or, in the alternative, to Continue or Stay the Motion Until Completion of Discovery Pursuant to Rule 56(d)

Plaintiff Noble Roman's, Inc. ("Noble Roman's") entered into franchise agreements with Defendant Hattenhauer Distributing Company ("Hattenhauer"), the owner and operator of convenience stores and gas stations in Goldendale, Washington and Wasco, Oregon, for the sale of Noble Roman's pizza and Tuscano's sandwiches. Under the franchise agreements, Hattenhauer agreed to pay a seven percent weekly royalty fee to Noble Roman's and agreed to only use ingredients that conform to Noble Roman's standards and specifications, among other things.

At some point in 2014, Noble Roman's performed an audit of Hattenhauer's franchises and allegedly found that it under-reported sales at both the Washington and Oregon locations from January 2011, through February 2014. Noble Roman's notified Hattenhauer of this in April 2014; Hattenhauer disputed the audits and refused to pay the royalty fees. Expanded audits conducted by Noble Roman's-from the time the locations opened through August 2014- revealed the same. In addition to the unpaid royalty fees, Noble Roman's also alleges that since January 2011, Hattenhauer has been using an inferior-quality cheese on its pizzas, not the Noble Roman's proprietary pizza cheese.

In October 2014, Noble Roman's filed suit in this Court alleging unfair competition (Count I) and breach of contract (Count II). A case management plan was entered on February 10, 2015, providing a discovery deadline of August 23, 2015, and a summary judgment deadline of October 23, 2015. See Dkt. No. 40. Less than ten weeks after entry of the CMP and four months before the close of discovery, Noble Roman's filed a motion for partial summary judgment, requesting "summary judgment on the liability question on its Lanham Act claim, " summary judgment on its "right to audit using purchase records" and "summary judgment as to its breach of contract" claim premised on the use of inferior-quality pizza cheese. Dkt. No. 55 at 11, 15, 16.

Hattenhauer moves, pursuant to Federal Rule of Civil Procedure 56(d), for a "sufficient and meaningful opportunity to conduct discovery to refute the allegations in Plaintiff's Motion." Dkt. No. 58 at 4. Rule 56(d) provides that "[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order." The Court completely agrees with Hattenhauer that additional time is needed to conduct discovery in order for Hattenhauer to properly respond to the allegations in Noble Roman's motion.

Moreover, Noble Roman's partial motion for summary judgment is against the policy of this Court. As Hattenhauer notes, the CMP provides the following: "Absent leave of court, and for good cause shown, all issues raised on summary judgment under Fed.R.Civ.P. 56 must be raised by a party in a single motion." Dkt. No. 40 at 5. Noble Roman's motion for partial summary judgment clearly contemplates filing additional motions with this Court, see Dkt. No. 55 at 15 ("Establishing by summary judgment Noble Roman's right to audit using purchase records and the consequences to Hattenhauer of that audit will simplify the issues remaining in Noble Roman's breach of contract claim moving forward."), yet it did not seek leave of court to file multiple summary judgment motions nor establish any good cause for doing so. Serial summary judgment motions are at least discouraged, if not prohibited, by this Court's policy.

Accordingly, the Court GRANTS Hattenhauer's Motion to Deny Plaintiff's Motion for Partial Summary Judgment as Premature (Dkt. No. 57). Noble Roman's Motion for Partial Summary Judgment (Dkt. No. 54) is DENIED WITHOUT PREJUDICE. Noble Roman's may refile its motion after discovery is completed in this case. If the discovery deadlines need to be adjusted in light of this Entry, the parties should request a conference with Magistrate Judge Lynch.

II. Plaintiff's Motion for Leave to File Amended Reply to Hattenhauer's Counterclaims

Previously, Hattenhauer moved to dismiss any claims based on alleged underreported sales prior to October 23, 2010, arguing that the franchise agreements-the contracts at issue in this cause-were predominantly for the sale of goods and thus governed by the UCC's four-year statute of limitations. Noble Roman's disagreed, arguing that the franchise agreements were contracts in writing other than those for the payment of money and subject to a ten-year statute of limitations. The Court agreed with Noble Roman's, noting the following:

[I]t appears clear to the Court that the predominate thrust of the franchise agreements was the granting of the Noble Roman's and Tuscano's franchises.
Specifically, the purpose was to allow and enable Hattenhauer to set up and operate a Noble Roman's and/or Tuscano's franchise and to use its marks and products. Of course, the franchise agreements contemplated that Hattenhauer would sell Noble Roman's pizza and Tuscano's Italian-style submarine sandwiches, but the agreements primarily involve the granting, development, and operation of the two franchises. The Court agrees with Noble Roman's that "[t]he Franchise Agreements... address the sale of goods only indirectly and focus heavily on the service aspect' of ...

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