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Danforth & Assocs. v. Coldwell Banker Real Estate, LCC

United States District Court for the Western District of Washington

February 2, 2011, Decided; February 3, 2011, Filed

CASE NO. C10-1621

Opinion

ORDER

This matter comes before the Court on Defendant's motion to dismiss (Dkt. No. 13), Plaintiff's response (Dkt. No. 16) and Defendant's reply. (Dkt. No. 19.) Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion in part and DENIES the motion in part for the reasons explained herein.

I. BACKGROUND

This case concerns a series of franchise agreements between the parties. In 2001, Defendant granted Plaintiff the right to operate a Coldwell Banker franchise in Federal Way, Washington ("2001 Agreement"). (2001 Agreement  [*2] (Dkt. No. 13 at Ex. A).) In 2008, Plaintiff acquired an existing Coldwell Banker franchisee, Del Bianco Realty, Inc. ("Del Bianco"). As a result of this acquisition, Del Bianco and Coldwell Banker entered into a second agreement ("2008 Agreement"), granting Plaintiff the right to open a second franchise on 156th Street in Seattle, Washington. (2008 Agreement (Dkt. No. 13 at Ex. B).) An addendum to the 2008 Agreement granted Plaintiff the right to open a third franchise on North Way, in Seattle. (Id.) In 2009, the 2008 Agreement was assigned from Del Bianco to Plaintiff ("Assignment Agreement"). (Assignment Agreement (Dkt. No. 13 at Ex. C).) As a condition for the opening of this franchise, Plaintiff agreed to a no-hire provision, by which Plaintiff is prevented from hiring or recruiting former agents from Landover Corporation, a Coldwell Banker franchisee operating under the name Coldwell Banker Bain ("Bain").

Throughout the duration of the agreements, Plaintiff has been required to comply with a set of franchisee standards governing matters such as office décor, marketing, and signage. (See 2001 Agreement ¶ 8.10 (Dkt. No. 13 at Ex. A).) Plaintiff alleges that Bain has been permitted  [*3] to depart from those standards. (Complaint ¶¶ 37-39 (Dkt. No. 1).) In 2010, Plaintiff sought to open a fourth franchise in Bellevue, Washington. (Complaint ¶¶ 27 & 28 (Dkt. No. 1).) Defendant denied this request. (Id. at ¶¶ 29 & 30.)

Plaintiff filed an action in this Court alleging breach of contract as well as violation of the Sherman Act, the Washington Franchise Investor Protection Act, and the Washington Consumer Protection Act. (Id. at ¶¶ 43-54.)

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2011 U.S. Dist. LEXIS 10882 *; 2011-1 Trade Cas. (CCH) P77,347; 2011 WL 338798

DANFORTH & ASSOCIATES, INC., Plaintiff, v. COLDWELL BANKER REAL ESTATE, LCC, Defendant.

CORE TERMS

franchise, franchisees, no-hire

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Requirements for Complaint, Antitrust & Trade Law, Sherman Act, Scope, General Overview, Business & Corporate Law, Distributorships & Franchises, Franchise Relationships, Franchise Agreements, Consumer Protection, Deceptive & Unfair Trade Practices, State Regulation