MTR Capital, LLC v. Lavida Massage Franchise Dev., Inc.

MTR Capital, LLC v. Lavida Massage Franchise Dev., Inc.

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Joaquin Esquivia, an engineer from Colombia, aspired to open a business in the United States. Through his company, Plaintiff MTR Capital ("MTR"), Esquivia and his wife invested in a franchise opportunity with Defendant LaVida Massage Franchise Development, Inc. ("LaVida"). After the venture failed, MTR brought this lawsuit against LaVida, its President Peggy Davis, and its Area Developer Duane Goodwin, claiming that they induced MTR to invest in a LaVida spa franchise by making false statements and fraudulent omissions. The parties were unable to settle their dispute and opted instead for a bench trial, which was held before the Court over four days between January 27-31, 2020.

After the evidence closed, the parties requested the opportunity to submit proposed findings of fact and conclusions of law. After carefully considering [*2]  all of the testimony and documentary evidence presented at trial, as well as the detailed post-trial submissions and exhibits filed by both parties, and the governing law in the area, the Court concludes that the preponderance of evidence supports Plaintiff's claim of a violation of the Florida Deceptive and Unfair Trade Practices Act, and Plaintiff is entitled to damages in the amount of the initial $39,000 franchise fee. As to all other claims, Plaintiff failed to meet its burden, and judgment must be entered in favor of Defendants.

INTRODUCTION

LaVida Massage Franchise Development, Inc. is a franchisor located in Brighton, Michigan. Defendant Peggy Davis is LaVida's President. Defendant Duane Goodwin is LaVida's Area Developer for the southeast United States.

On February 17, 2015, Plaintiff MTR Capital Inc., through its owner Joaquin Esquivia, entered into a Franchise Agreement with LaVida for the operation of a "LaVida Massage" center to be located in Kendall, Florida. Joint Final Pretrial Order, ECF No. 70, PageID.1123. Plaintiff alleges his decision to invest approximately $450,000 into his LaVida franchise was based on misrepresentations made by the Defendants and that he was eventually [*3]  forced to shutter the business due to poor performance after only a year and a half. Id. Plaintiff seeks to recoup his entire investment, which amounts to $541,644.82 after operating costs and salaries. Id. at PageID.1121.

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