Roughton v. Widdicombe Enterprises Inc.
Published: Mar. 30, 2002 | Result Date: Nov. 2, 2001 | Filing Date: Jan. 1, 1900 |Case number: 00CC02510 Bench Decision – $177,908
Facts
On July 14, 1999, the plaintiff in the underlying action allegedly tripped and fell over a mat in a fast food
restaurant. The restaurant was owned by Widdicombe Enterprises Inc. (Widdicombe), a franchisee of
McDonaldÆs Corp. (franchisor). Widdicombe purchased the floor mat from No Fault Industries Inc. (No Fault),
a pre-approved vendor of franchisor.
The plaintiff brought suit against Widdicombe and No Fault. Widdicombe cross-complained against No Fault
for implied indemnity, equitable contribution and declaratory relief.
No Fault then filed its cross-complaint on the same grounds against Widdicombe. No Fault later produced a
facsimile copy of a contract and amended its cross-complaint to add a claim of express indemnity against
Widdicombe. Franchisor then produced a contract signed by No Fault that Widdicombe was an intended third
party beneficiary of an agreement whereby No Fault would indemnify FranchiserÆs franchisees.
Widdicombe amended its cross-complaint adding a claim for express indemnity as a third party beneficiary.
According to FranchiserÆs "Business Relationship" letter, No Fault was required to indemnify franchisees from
all claims, damages and lawsuits caused by No FaultÆs products. No Fault faxed Widdicombe a "SAF DEK"
contract which included indemnity language, requiring Widdicombe to indemnify No Fault for strict liability
and active negligence.
Widdicombe claimed that it could not read several terms of the faxed form contract, but executed it because of
its belief that any such terms would reflect franchiserÆs business relationship letter, and as a franchisee,
Widdicombe alleged that she could not amend pre-approved agreements.
On May 14, 2001, Widdicombe settled with plaintiff for $87,500, while maintaining its position that the mat
was not dangerous or defectively designed.
No Fault refused to contribute based on the opinions of an expert witness, who was jointly retained by
Widdicombe and No Fault.
Widdicombe contended that the franchiserÆs business relationship letter was an enforceable contract; that
Widdicombe was an intended third party beneficiary of the agreement; that the SAF DEK installation
agreement indemnity clause was an invalid modification of the business relationship letter and/or void as
against public policy; that the faxed SAF DEK installation agreement was illegible and therefore unenforceable
where there was a conflicting business relationship; that the SAF DEK installation agreement did not
constitute a valid modification.
No Fault contended that the franchiserÆs business relationship letter was not an
enforceable contract because of lack of consideration; that even if franchiserÆs business
relationship letter was enforceable, the SAF DEK installation agreement constituted a valid
modification; that the fax of the SAF DEK installation agreement was legible (and was read from
at trial); that the SAF DEK installation agreement indemnity clause was not invalid as against
public policy for seeking to receive indemnity for its strict products liability for a consumer good;
and that No Fault was not actively negligent and Widdicombe had the burden to prove such
active negligence (based on liability expert testimony from a jointly retained expert).
Settlement Discussions
On the day of the underlying trial, plaintiff demanded $175,000. After extensive settlement negotiations, the plaintiff agreed to $87,500 to be paid by Widdicombe. No Fault refused to contribute.
Damages
$87,500 in underlying settlement plus fees and costs.
Result
$177,908.31 for Cross-Complainant
Other Information
After the underlying settlement, Widdicombe demanded waiver of fees and costs in return for reimbursement of $43,750 from No Fault, or 50 percent of the settlement. No Fault refused, and the indemnity bench trial was heard Oct. 29-30, 2001. A motion for new trial was denied. This matter is now on appeal, based on four separate grounds.
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