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Tim Hortons USA Inc. v. Singh

United States District Court, S.D. Florida, Miami Division

April 5, 2017

TIM HORTONS USA, INC. et al, Plaintiffs,
GURVINDER SINGH, et al., Defendants/Counter-Plaintiffs.



         Doughnuts usually make people happy. National Doughnut Day is celebrated in the United States on the first Friday of June of each year. Parry Gripp, a singer- songwriter and the lead vocalist and guitarist for the pop punk bank Nerf Herder, wrote a song called “One Donut a Day, ” which has nothing but good things to say about the edible, deep-fried delight: “One donut a day, and everything's gonna be okay. Hey! Eat a donut a day, And everything's gonna be o-o-o-o-o-okay.”[1]

         Smithsonian Magazine published an article in March 1998 entitled “The History of the Doughnut, ” which explained that doughnuts were promoted on posters at the 1934's World's Fair in Chicago as “the food hit of the Century of Progress.” The article noted that, as of 1998, approximately 10 billion doughnuts were made each year in the United States.[2] Famed songwriter Irving Berlin penned a song called “We Made the Doughnuts Over There, ” in which he explained that “We're the girls who made the doughnuts for the doughboys over there.”[3]

         And in an article entitled “Doughnut or Donut? The Great Spelling Debate of Our Time, ” writer Kristen Aiken began her piece by proclaiming that “doughnuts have become an integral part of American culture, loved for providing us with mouths full of comfort and loathed for ruining our diets.”[4] Doughnuts have even found their way into music videos, including one featuring iconic landmark “Randy's Donuts” in a Justin Timberlake video for his song “Can't Stop the Feeling.” That donut store is famous for its giant 32-foot doughnut towering above its rooftop.[5]

         Miami-Dade County is no exception to the doughnut-loving locales and recently, on March 30, 2017, hosted a doughnut festival (called “Donuts!”) in the Wynwood area of Miami. According to a January 11, 2017 article discussing the then-upcoming doughnut festival, the 2016 event sold out quickly, attracting 650 attendees who were provided with 14, 000 doughnuts.[6]

         This lawsuit is about doughnuts. Specifically, it is about a doughnut franchise agreement. But, despite the usually-positive, festive atmosphere surrounding doughnuts, the doughnut operation in this case has not generated much happiness among the parties to this lawsuit. To the contrary, the doughnut business at issue here has generated disputes and bad feelings, not to mention litigation.

         This lawsuit arises from the purported termination of a franchise agreement, which led to a lawsuit by the franchisor (Tim Hortons USA Inc., a/k/a “THUSA”) and the landlord (Tim Donut U.S. Limited, Inc. (“TDUSL”)) against the franchisee, Panagg Café Incorporated (“Panagg”), and its three guarantors (Gurvinder Singh, Ashna Walia and Adarsh Walia). Panagg and its three guarantors filed a Counterclaim, and Count V of that Counterclaim seeks a declaratory judgment.

         According to the Counterclaim, THUSA's Notice of Termination was premature because it was sent one day before expiration of Panagg's opportunity to cure. Plaintiffs disagree, and contend that the Notice of Termination was timely and not premature. Under Plaintiffs' version of events, the five-day cure period expired on July 12, 2017 because the Financial Default Notice was sent on July 7, 2016 via email and overnight delivery. Panagg contends that the cure period expired on July 13, 2017, which it says means that its July 13, 2016 offer to cure was timely.

         Plaintiffs' motion for partial final summary judgment [ECF No. 60] targets the declaratory relief sought in Count V of the Counterclaim. It contends that (1) Panagg received the Financial Default Notice and had actual knowledge of it on July 7, 2016; (2) the cure period expired on July 12, 2016; (3) Panagg did not offer to cure the financial default until July 13, 2016; and (4) its July 13, 2016 Confirmation of Termination was timely.

         Defendants/Counter-Plaintiffs argue that the partial summary judgment motion should be denied for several reasons: (1) the Court should not resolve the motion because it is intertwined and indivisible with other claims in both the Amended Complaint and Counterclaim; (2) THUSA failed to timely provide individual notice to each of Panagg's representatives and its guarantors; (3) the Financial Default Notice was improperly sent because it was issued by email even though the Franchise Agreement provided for notice by personal delivery or telefax; and (4) THUSA ignores a course of conduct which constituted an oral payment plan.

         Plaintiffs challenge these opposition arguments. They say that (1) partial summary judgment is permissible even it seeks to resolve less than the entire case; (2) the emailed Financial Default Notice was sufficient because strict compliance with the type of notice provided is unnecessary when, as here, the recipient has actual notice; (3) the guarantors were not entitled to individual notice as guarantors because they agreed to waive notice in the guarantee itself; and (4) although a course of dealing may explain an ambiguous contract, it may not contravene a contrary express provision in a contract.

         For the reasons outlined in greater detail below, the Undersigned grants, but only in part, Plaintiffs' motion for partial summary judgment on Count V. The specifics of the ruling, and its limitations, are provided later in the Order.

         Factual Background

         The Motion and the Inadequate Response

         Plaintiffs filed their summary judgment motion with a Statement of Material Facts [ECF No. 61]. Panagg and the three guarantors (i.e., the Counter-Plaintiffs) filed a response and a Response to Plaintiffs' statement of material facts [ECF Nos. 68; 69]. But the response to the statement of material facts is procedurally improper and violates the applicable local rule.

         Plaintiffs' Statement of Material Facts includes 20 separate facts, in paragraphs numbered 1 through 20. The Defendant's/Counter-Plaintiffs' response disputes some of the 20 alleged facts, but does so in a confusing and procedurally improper way. For example, numbered paragraph 3 of its response discusses the purportedly undisputed facts in paragraph 11 of Plaintiffs' statement of facts, paragraph 9 of their response denies the statements from paragraph 17, and paragraph 11 denies the statements from paragraph 19.

         In addition, the Defendants'/Counter-Plaintiff's response [ECF No. 69, p. 3] included their own additional facts in the same paragraph and then included a final, all- encompassing paragraph (number 12) “incorporating” Singh's declaration “in its entirety as a statement of material facts[.]” For example, paragraph 5 of the response admits certain portions of paragraph 13 and then provides additional purported facts.

         Under Local Rule 56.1, the Undersigned has authority to deem as admitted all the facts submitted by Plaintiffs in support of their partial summary judgment arguments.

         As the plain language of Local Rule 56.1 states, “(a): A motion for summary judgment and the opposition thereto shall be accompanied by a statement of material facts as to which it is contended . . . there does exist a genuine issue to be tried[.]“ S.D. Fla. L.R. 56.1(a) (emphasis supplied). The local rule requires that such statement “(1) Not exceed ten (10) pages in length; (2) Be supported by specific references to pleadings, depositions, answers to interrogatories, admissions, and affidavits on file with the Court; and (3) Consist of separately numbered paragraphs.“ Id. (emphasis supplied).

         The local rule further provides that “[s]tatements of material facts submitted in opposition to a motion for summary judgment shall correspond with the order and with the paragraph numbering scheme used by the movant[.]” It also provides that “additional facts which the party opposing summary judgment contends are material shall be numbered and placed at the end of the opposing party's statement of material facts[.]” (emphasis added).

         Failure of a respondent to file a statement of disputed facts, in the format as required above, causes “[a]ll material facts set forth in the movant's statement” to be “deemed admitted unless controverted by the opposing party's statement[.]” S.D. Fla. L.R. 56.1(b) (emphasis added).

         When a party properly complies with Local Rule 56.1, it is relatively easy for a court to determine whether there is a genuine disputed issue of fact. Basically, all a court needs to do is to look at the opposing statement of material facts on a paragraph- by-paragraph basis, see whether any paragraphs carrying the same number are designated as disputed and then make note of the evidentiary reasons for the dispute. If a Court wanted to see if paragrap. 3 of the summary judgment movant's statement of facts is disputed, then it would simply and easily turn to numbered paragrap. 3 of the opposition's factual statement.

         When a party does not comply with the Local Rule by using the same paragraph numbers, however, then it is more difficult for a court to discern if there is an actual factual dispute concerning a specific paragraph. A court needs to review the entire opposing statement to determine whether there is a sound factual basis for saying that a point deemed factually undisputed by the movant is actually disputed. Here, for example, I needed to review paragraph 11 of the response to the statement of facts to see if paragraph 19 is being disputed. I should have been able to turn to numbered paragraph 19 to make that determination, but there is no numbered paragraph 19 in Defendants'/Counter-Plaintiffs' response.

         This can be an arduous process, and, in any event, generates unnecessary work for the court and its staff.

         Defendants'/Counter-Plaintiffs' approach is contrary to the local rule and, in effect, requires me to do their job. Basically, I needed to review all numbered paragraphs of their response to see which of Plaintiffs' numbered paragraphs were being challenged as disputed.

         But “[j]udges are not like pigs, hunting for truffles buried in briefs.” United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991); see also Chavez v. Secʹy Fla. Dept. of Corr., 647 F.3d 1057, 1061 (11th Cir. 2011) (“judges are not required to ferret out delectable facts buried in a massive record, like the one in this case”). The local rule is unambiguous: it requires the response to carry the same paragraph numbering system.

         So Defendants/Counter-Plaintiffs did not follow a basic procedural requirement of Local Rule 56.1. This is disappointing, to say the least, and the Court undoubtedly has the discretion to deem all of Plaintiffs' undisputed facts admitted and then enter partial summary judgment in Plaintiffs' favor on Count V as Defendants'/Counter- Plaintiffs' defective response essentially leaves the Court with “the functional analog of an unopposed motion for summary judgment.” Lugo v. Carnival Corp., 154 F.Supp.3d 1341, 1343 (S.D. Fla. 2015) (admitting facts from defendant's undisputed material facts statement after reviewing the record based on plaintiff's violation of Local Rule 56.1); Regions Bank v. 62' Ocean Sport Fish, No. 13-20966-CIV, 2014 WL 4055707, at *2 (S.D. Fla. Aug. 14, 2014) (admitting undisputed facts in plaintiff's statement supported by the record based on defendants' violation of Local Rule 56.1).

         Because Defendants/Counter-Plaintiffs have not filed an acceptable statement of disputed material facts, the Court, as noted, could treat all of Plaintiffs' statement of undisputed facts as true. See Johnson v. Sch. Bd. of Broward Cty., Case No. 07-60797-CIV, 2008 WL 5427789, at *2-3 (S.D. Fla. Dec. 30, 2008) (finding local rule requires that a statement of disputed facts include reference to supporting evidence and deeming facts disputed by plaintiff but not supported by record evidence as admitted).

         However, it is clear that Defendants/Counter-Plaintiffs dispute some facts but basically admit the ones relevant for this motion. For example, they do not dispute that Gurvinder Singh (“Singh”) received the two notices of default by email, forwarded them to his daughter within the hour and then telephoned THUSA's Director of Franchise Performance later that same evening.

         Therefore, for all practical purposes, Defendants'/Counter-Plaintiffs' procedural misstep is of no legal consequence because they admitted the critical allegations anyway.

         But Defendants/Counter-Plaintiffs are not the only parties who committed procedural ...

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