Groundbreaking Court Decision Has National Implications Against Franchisor Snap-on Tools

"The wives wanted to present their claims before a jury because the terms of the arbitration clause limits their legal rights by shortening the time to bring suit, limits the scope of pre-trial discovery and prevents the wives from banding together in either a joint or class action,"…

biz.yahoo.com
December 22, 2004

Groundbreaking Court Decision Has National Implications Against Franchisor Snap-on Tools

In a groundbreaking legal opinion, New Jersey Superior Court Judge Mathias E. Rodriguez has determined that the wives of Snap-on Tools dealers have an independent legal right to sue the franchisor in court before a jury, in connection with their own fraud claims against the company and, accordingly, are not bound to bring their claims in arbitration.

Prior to Judge Rodriguez's decision, Snap-on had argued that claims of the spouses, like those of their tool dealer husbands, had to be brought in a proceeding before the American Arbitration Association.

"This decision has nationwide implications for all 3,400 current Snap-on dealers, as well as all former dealers and their wives who claim that they were defrauded in their franchise agreement by Snap-on," said Gerald A. Marks, the Red Bank, N.J.-based attorney representing the three plaintiffs in the case before Judge Rodriguez. The plaintiffs in the New Jersey case are: Nancy Casey of Middletown, Abbye Goldwasser of New Brunswick and Maritza Franco of Scotch Plains. Marks now plans to institute additional suits on behalf of the wives of other Snap-on franchisees in New York, Florida, California, Ohio, and other states nationwide.

"The wives wanted to present their claims before a jury because the terms of the arbitration clause limits their legal rights by shortening the time to bring suit, limits the scope of pre-trial discovery and prevents the wives from banding together in either a joint or class action," Mr. Marks explained. "A jury trial offers the most objective forum for the spouses to prove their claim that Snap-on had engaged in a consistent, deliberate policy of inducing families to invest their money into a franchised tool route, when Snap-on knew that the territory contained an insufficient amount of customers, or that a previous dealer had failed in that very same route."

Commenting on the Court's decision, Susan Kezios, President of the American Franchisee Association, said, "The gates of justice are now open to wives and other family members who were hurt by Snap-on's wrongful action. Like many other franchise companies, Snap-on will no longer be able to hide adverse decisions against it through the arbitration process. This confidential process does not permit a finding of franchisor wrongdoing in one arbitration to be used in another, as is the case in normal court proceedings."


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Risks: Able to finance and sell negative cash flow franchise on crooked appraisals, Liar Loans, Spouse can sue for losses also, American Franchisee Association, AFA, Susan Kezios, Arbitration, secret, Trade payable debt used to dominate, Must arbitrate disputes, cannot litigate, Churning (serial reselling), United States, 20041222 Groundbreaking Court

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