United States District Court, N.D. Alabama, Northeastern Division
MEMORANDUM OPINION AND ORDER
K. KALLON UNITED STATES DISTRICT JUDGE.
Fabbro operates an urgent care franchise on behalf of AFC
Franchising, and is purportedly in breach of the franchise
agreement for refusing to use the franchise name. Doc. 1. AFC
Franchising filed this lawsuit to enforce the agreement.
Id. Presently before the court is Fabbro's
motion to dismiss the case, arguing that AFC waited too late
to file. Doc. 24. Although AFC Franchising filed
the claim within the relevant statute of limitations, the
current motion centers on whether it filed this lawsuit
within the abbreviated period provided for in the franchise
agreement. More specifically, the issue is choice of law:
Maryland law, which the parties agreed would govern the
contract, would honor the contract's abbreviated period,
but Alabama law, the law of the forum, would not. For the
reasons stated below, the motion to dismiss is due to be
amount in controversy exceeds $75, 000, and the parties are
completely diverse, as AFC Franchising is a citizen of
Alabama and Fabbro is a citizen of New Jersey. Doc. 1 at 1;
see also Docs. 20, 21-1. Consequently, diversity
jurisdiction exists because “the matter in controversy
exceeds the sum or value of $75, 000” and is between
“citizens of different States.” 28 U.S.C. §
1332(a)(1); see also Underwriters at
Lloyd's, London v. Osting-Schwinn, 613 F.3d 1079,
1085 (11th Cir. 2010).
STANDARD OF REVIEW
complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). A defendant may move to
dismiss a complaint that fails “to state a claim upon
which relief can be granted.” Fed.R.Civ.P. 12(b)(6).
“To survive a motion to dismiss, ” and to meet
the pleading requirements of Rule 8(a)(2), “a complaint
must contain sufficient factual matter, accepted as true, to
state a claim that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citation omitted). A “complaint does not need detailed
factual allegations, but the allegations must be enough to
raise a right to relief above the speculative level.”
Speaker v. U.S. Dep't of Health & Human Servs.
Centers for Disease Control & Prevention,
623 F.3d 1371, 1380 (11th Cir. 2010) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)). Mere
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action” are
insufficient. Iqbal, 556 U.S. at 678 (citation
omitted). In reviewing a motion to dismiss under Rule
12(b)(6), the court “must accept all facts in the
complaint as true and view those facts in the light most
favorable to the plaintiff.” Sun Life Assurance Co.
v. Imperial Premium Fin., LLC, 904 F.3d 1197, 1207 (11th
underlying dispute is a curious case of a franchisee refusing
to use the franchise name. Fabbro operates an urgent care
facility pursuant to a franchise agreement with AFC
Franchising. The agreement grants Fabbro a license to own and
manage an urgent care facility, and in exchange Fabbro agrees
to operate the facility consistent with AFC Franchising's
rules and to pay an annual royalty. See doc. 1-1 at
6-7, 13. Under the agreement, Fabbro consents to use the
franchise's “Marks” as the “sole
identification” of the business. Doc. 1-1 at 18.
Fabbro first executed the agreement in 2009, it was with
Doctors Express Franchising, a limited liability company
based in Maryland. Doc. 1 at 2; Doc. 1-1 at 6. The mark for
Doctors Express Franchising was “Doctors Express,
” and Fabbro used this mark when she opened her
facility in 2010. Doc. 1 at 2; Doc. 1-1 at 6.
franchise later changed hands beginning in 2012, when DRX
Urgent Care, LLC acquired the Doctors Express system. Doc. 1
at 3. Then, in 2013, “an affiliate” of AFC
Franchising acquired the Doctors Express system from DRX.
Id. These acquisitions included the assignment of
the Doctors Express franchise agreements, including the
agreement with Fabbro. Id. As a result, AFC
Franchising assumed the rights of the franchisor under the
agreement with Fabbro. Id.
2015, AFC Franchising decided to discontinue the use of the
“Doctors Express” name and mark. Doc. 1 at 5. As
an interim measure, AFC Franchising directed its franchisees
to change their names to “AFC Doctors Express.”
See Id. Shortly thereafter, AFC Franchising directed
its franchisees to complete the transition to the names and
marks “American Family Care” and “AFC
Urgent Care.” See Id. Both times, Fabbro
refused. Id. at 7. Nearly 200 clinics operate under
the “American Family Care” or “AFC Urgent
Care” name, id. at 3, and apparently
Fabbro's “clinic is the only former
‘Doctor's Express' clinic nationwide that is
still using the ‘Doctors Express' name and mark,
” id. at 8.
franchise agreement permits the franchisor to order the
franchisee to change its name:
If it becomes advisable at any time for us and/or you to
modify or discontinue using any Mark and/or to use one or
more additional or substitute trade or service marks, you
agree to comply with our directions within a reasonable time
after receiving notice.
Doc. 1-1 at 18. The agreement continues in broad terms:
Our rights in this [section] apply to any and all of the
Marks (and any and all portion of any Mark) that we authorize
you to use in this Agreement. We may exercise these rights at
any time and for any reason, business or otherwise that we
think best. You acknowledge both our right to ...