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Maaco Franchisor SPV, LLC v. Cruce

United States District Court, W.D. North Carolina, Charlotte Division

October 21, 2019

MAACO FRANCHISOR SPV, LLC, as successor-in-interest to MAACO ENTERPRISES, INC. and MAACO FRANCHISING, LLC, Plaintiff,
v.
WILLIAM D. CRUCE, individually, MARILYN A. CRUCE, individually, and CRUCO PRODUCTION AUTO PAINTING, INC., an Arizona corporation, Defendants.

          ORDER

          MAX O. COGBURN JR., UNITED STATES DISTRICT JUDGE

         This matter is before the Court on a Motion for Default and Summary Final Judgment, filed by Plaintiff Maaco Franchisor SPV, LLC. (Doc. No. 11). For the reasons set forth below, Plaintiff's motion is GRANTED.

         BACKGROUND

         In this action, Plaintiff has sued Defendants William D. Cruce, Marilyn A. Cruce, and Cruco Production Auto Plaintiff, Inc., alleging that Defendants breached various contracts with Plaintiff, including franchise agreements and personal notes and guarantees, all arising out of an agreement between the parties for Defendants to run Maaco automobile maintenance and repair centers. Plaintiff served Defendants, but Defendants did not respond or otherwise appear to defend this lawsuit. The Clerk of Court entered default against Defendants on August 31, 2018. (Doc. No. 8). On February 15, 2019, Plaintiff filed the pending motion. Defendants have not responded to the motion.

         Plaintiff has filed the following claims against Defendants:

Count I: Breach of 11440 Franchise Agreement against Cruco;
Count II: Breach of 12658 Franchise Agreement against Cruco;
Count III: Breach of 12598 Franchise Agreement against W. Cruce and M. Cruce;
Count IV: Breach of 12599 Franchise Agreement against W. Cruce and M. Cruce;
Count V: Breach of Franchise Fees Note against W. Cruce and M. Cruce;
Count VI: Breach of 12598 Note against W. Cruce and M. Cruce;
Count VII: Breach of 12599 Note against W. Cruce and M. Cruce;
Count VIII: Breach of 11440 Note against Cruco;
Count IX: Breach of 11440 Note Guaranty against W. Cruce and M. Cruce;
Count X: Breach of 11440 Personal Guaranty against W. Cruce and M. Cruce;
Count XI: Foreclosure of August 6, 2015 Security Interests against all Defendants;
Count XII: Foreclosure of 12598 Security Interests against all Defendants;
Count XIII: Foreclosure of 12599 Security Interests against all Defendants; and
Count XIV: Foreclosure of 11440 Security Interests against all Defendants.

         On February 15, 2019, Plaintiff voluntarily dismissed without prejudice Count VIII and Count IX from its cause of action against Defendants. (Doc. No. 10).

         i. 11440 Franchise Agreement

         On or about August 27, 2013, Plaintiff entered into a Franchise Agreement with Cruco relating to the operation of the franchised Maaco automobile maintenance and repair center located at 1693 West Grant Road, Tucson, Arizona 85745 (“Center 11440”). The August 27, 2013, Franchise Agreement and all renewals and amendments will hereinafter be referred to as the “11440 Franchise Agreement.” See (Doc. No. 11-2 at ¶¶ 9-14: Affidavit of Michael Murphy).

         On August 27, 2013, W. Cruce and M. Cruce also executed a personal guaranty in favor of Plaintiff wherein they jointly and severally agreed to be bound by all of the terms and conditions of the 11440 Franchise Agreement, and further agreed to guaranty and act as a surety for all of the obligations, commitments, duties and liabilities owed under the 11440 Franchise Agreement (the “11440 Personal Guaranty”). (Id. at ¶ 15).

         ii. 12658 Franchise Agreement

         On May 30, 2014, Plaintiff entered into a Franchise Agreement and Addendum with Cruco (collectively, the “12658 Franchise Agreement”) relating to the operation of a franchised Maaco automobile maintenance and repair center located in the metropolitan section of Tucson, Arizona known as Center 12658 (“Center 12658”). (Id. at ¶ 38).

         On May 30, 2014, W. Cruce and M. Cruce also executed a personal guaranty in favor of Plaintiff wherein they jointly and severally agreed to be bound by all of the terms and conditions of the 12658 Franchise Agreement, and further agreed to guaranty and act as a surety for all of the obligations, commitments, duties and liabilities owed under the 12658 Franchise Agreement (the “12658 Personal Guaranty”). (Id. at ΒΆ 40). On September 23, 2014, Cruco entered into an Amendment to the 12658 Franchise Agreement wherein Cruco agreed, among other things, that: (1) that the fifteen (15) year term of the 12658 Franchise Agreement would commence on July 7, 2014 and would expire on July 7, 2029; (2) the location of Center ...


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