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Sir Speedy, Inc. v. L&P Graphics, Inc.

Sir Speedy, Inc. v. L&P Graphics, Inc.

United States Court of Appeals for the Second Circuit

November 18, 1991, Argued ; February 24, 1992, Decided

Docket No. 91-7699

Opinion

 [*1035]  KEARSE, Circuit Judge:

Defendants Neil H. Blatte and his wholly owned corporation Business Services Centers, Inc. (collectively "Blatte"), appeal from so much of a final judgment entered in the United States District Court for the District of Connecticut, following a jury trial before Ellen Bree Burns, Chief Judge, as (1) set aside the jury's award to them of $ 35,000 on their counterclaims against plaintiff Sir Speedy, Inc. ("Sir Speedy"), in [**2]  connection with its breach of a franchise agreement, and (2) denied defendants punitive damages, attorneys' fees, and costs. On appeal, defendants contend principally (1) that the district court's grant of judgment notwithstanding the verdict ("n.o.v.") was premised on both an erroneous legal premise and a view of the evidence that did not meet the appropriate standard, (2) that under California law they were entitled to an award of attorneys fees as the prevailing party in the litigation, and (3) that under Connecticut law they were entitled to recover punitive damages. For the reasons below, we affirm the denial of punitive damages but reverse the granting of judgment n.o.v. and the denial of costs and attorneys' fees.

I. BACKGROUND

Sir Speedy is a nationwide franchisor of printing and document reproduction centers. From November 1979 to June 1985, Blatte was a Sir Speedy franchisee. The events leading to the present suit by Sir Speedy and counterclaims by Blatte, viewed in the light most favorable to defendants, were as follows.

A. The Beginning and End of the Franchise Relationship

In 1979, Blatte was, interested in setting up a business in Connecticut. He saw an advertisement [**3]  for Sir Speedy printing franchises and sought additional information. After receiving promotional materials, Blatte met with a Sir Speedy representative in October 1979 to discuss the costs and potential benefits of becoming a Sir Speedy franchisee. As discussed in greater detail in Part II.A. below, during that meeting Sir Speedy gave Blatte two documents describing the financial performances of its printing centers, stating that the documents reflected what Blatte could expect to earn if he purchased a franchise.

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957 F.2d 1033 *; 1992 U.S. App. LEXIS 2408 **

SIR SPEEDY, INC., Plaintiff-Appellee, -v.- L&P GRAPHICS, INC., Defendant, NEIL H. BLATTE and BUSINESS SERVICE CENTERS, INC., Defendants-Appellants.

Prior History:  [**1]  Appeal from so much of a judgment of the United States District Court for the District of Connecticut, Ellen Bree Burns, Chief Judge, as (1) granted judgment to plaintiff notwithstanding jury verdict awarding defendants lost profits on breach-of-contract counterclaim, and (2) denied defendants' request for punitive damages, costs, and attorney's fees.

Disposition: Affirmed in part, reversed in part, and remanded.

CORE TERMS

franchise, franchise agreement, damages, sales, punitive damages, lost profits, documents, costs, attorney's fees, district court, projections, Estimated, printing, settlement, directed verdict, advertising, earnings, figures, profits, inter alia, jury award, franchisee, calculate, royalties, expenses, light most favorable, counterclaims

Evidence, Admissibility, Procedural Matters, Rulings on Evidence, Governments, Legislation, Statute of Limitations, Extensions & Revivals, General Overview, Statute of Repose, Securities Law, Postoffering & Secondary Distributions, Scope of Provisions, Limitations on Remedies, Civil Procedure, Jury Trials, Jurors, Misconduct, Trials, Judgment as Matter of Law, Weight & Sufficiency, Business & Corporate Law, Duties & Liabilities, Causes of Action & Remedies, Punitive Damages, Remedies, Damages, Torts, Types of Damages, Punitive Damages, Aggravating Circumstances, Business Torts, Unfair Business Practices, Costs & Attorney Fees, Costs & Attorney Fees, Distributorships & Franchises, Franchise Relationships, Franchise Agreements, Contracts Law