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Rule of Limitations Appeal From a Default Judgment

There is a potential conflict of interest created when an Exchange furniture store employee, representing the store, sues a fellow employee, representing the defendant. This scenario plays out frequently in the small retail stores throughout the United States. The question arises whether the mere act of expressing a competing interest between two opposing companies creates a conflict of interest between the employees of the Exchanged, which creates a clear case of a consumer against the corporation. This article will address this specific issue and explain whether or not an Exchange sued can create such a scenario.

The first rule for the plaintiff in error next contends that if a corporate vice president of the company commits a violation of anti-competition law, then such violations create a situation where the company has actual notice of the conduct. The term “actual notice” is defined as the time at which the defendant actually had knowledge of the conduct complained of. The concept of actual notice is based upon the concept that a corporation’s board of directors should have knowledge of all acts of its business in order to evaluate the validity of the corporation’s management policies. The existence of this standard creates a huge exception to the general principle of anti-competition law generally applicable to most businesses, including those owning stores. This exception now allows the plaintiff in error next contends that the defendant was aware of and should have known of the anti-competitive conduct complained of, yet failed to provide anti-competition policies to the plaintiffs.

The second rule for the plaintiff in error next contends that if the corporation fails to timely forward its records to a party who is entitled to access such records, the plaintiff is entitled to a default judgment. This is a judgment for an amount of money that is clearly wrong for the defendant. If the plaintiff in error next contends that the defendant should have provided a copy of its canceled checks to the old hopper, the court may award such damages. However, again, such awards are only possible when there exists a genuine issue of material fact underlying the dispute.

The third rule for the plaintiff in error next contends that the only way that such a result can occur is if the defendant in error does not act within the scope of its franchises agreement. The plaintiffs argue that the defendant did not commit fraud by permitting the former store to remain open after it had been notified that it was not doing so on its proper basis. Furthermore, such a conclusion is not possible unless there is knowledge or reason to believe that the failure to terminate the franchise was caused by a lack of knowledge by the defendant in error. Such a determination is obviously impossible if such a case was tried before the expiration of the relevant franchise agreement. The implication here is that if the plaintiff was allowed to continue operations in good faith despite knowing of the defendants’ anti-competitive intent, it is irrelevant whether the defendant acted within the scope of its franchises agreement.

The fourth rule for the plaintiff in error next contends that if the defendant did not act in accordance with the terms of the franchise agreement, then the franchisee has the burden of proving that such conduct was not required by the agreement. Such a requirement is obviously self-defeating, because if it were accepted that certain conduct was required by the franchisor in order for the agreement to be enforceable, courts would likely be reluctant to prevent such conduct on the grounds that the franchisor was just exercising its right to regulate its business. Moreover, even if such conduct could be deemed reasonable based upon the facts of the case, a reviewing court would likely review the case on the basis of what would be deemed reasonable under the circumstances rather than on the basis of what would likely be deemed reasonable in any particular case. Thus, such a review would likely chill the very exercise that the franchisee desired.

The final rule for the plaintiff in error contends that the defendant failed to discharge its obligation to mitigate the harm it caused when it sold the old hopper at a ridiculously low price. The argument is that such a breach of fiduciary duty deprived the Hopper of its right to recover damages on behalf of the injured party because (in violation of the statute) the defendant failed to discharge its obligation to mitigate the harm. However, the Court declines to adopt this argument. First, as previously noted, the statute provides absolutely no protection for the party who has been injured; Second, there was no evidence that such a duty was waived; and third, the record contains no indication that such a duty ever was waived. Accordingly, the Court holds that the Hopper did not receive a benefit from the sale of the old hopper at the sale price because (a) the breach of fiduciary duty was not required by the agreement and (b) the breach of a duty owed was not required by the terms of the agreement.

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