39 F. Supp. 3d 112
D. Mass.2014Background
- Jan‑Pro Franchising International, Inc. (JPI) is a franchisor that sells rights to regional master franchisees; those regional masters sell unit franchises that perform cleaning services and manage billing and accounts.
- Seven named plaintiffs are unit franchisees; this decision focuses on plaintiff Giovani Depianti (Massachusetts), who contracted with regional master franchisee BradleyMktg Enterprises, Inc. (BME).
- Plaintiffs allege JPI misclassified unit franchisees as independent contractors (Counts II–III), engaged in unfair/deceptive practices and misrepresentation (Counts I, IV), and assert quantum meruit and unjust enrichment (Counts V–VI).
- The Massachusetts SJC answered certified questions on vicarious liability and misclassification (holding a franchisor may be liable if it controls the specific policy/practice causing harm and that lack of contract alone does not preclude liability).
- The Georgia Court of Appeals (GCA) ruled JPI is not Depianti’s employer under Mass. law; the Georgia interlocutory certification and denial of certiorari rendered that ruling preclusive under Georgia law in federal court.
- Motions: plaintiffs sought to add new Massachusetts plaintiffs (denied as unduly delayed); JPI moved to supplement its answer to assert preclusion (allowed).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preclusive effect of Georgia decision | Depianti: GCA shouldn’t preclude this court; apply Massachusetts law (SJC answers) directly. | JPI: GCA judgment that JPI is not employer precludes Depianti’s misclassification/wage claims. | GCA decision is preclusive under Georgia law (interlocutory certification made order final for preclusion); Counts II and III dismissed. |
| Misclassification (Mass. Gen. Laws ch. 149 §148B) | Depianti: JPI is the employer despite lack of direct contract; SJC held lack of contract doesn’t bar liability. | JPI: No control; BME, not JPI, hired, billed, paid, and controlled accounts. | GCA’s factual application found all three statutory prongs met; court finds GCA consistent with Mass. law; JPI entitled to summary judgment on Counts II–III. |
| Vicarious liability / Chapter 93A liability | Plaintiffs: JPI exerts control or right to control regional masters and is vicariously liable for misrepresentations and unfair practices. | JPI: Under SJC instrumentality test, only policies/practices that JPI controls or has right to control can impute liability. | Applying SJC’s instrumentality test, court grants summary judgment to JPI on most 93A/misrepresentation allegations, but denies summary judgment as to claim that BME’s unit franchise contract terms (the contract form) were inherently unfair and that JPI has a contractual right to control that contract. |
| Misrepresentation (specific promises about guaranteed accounts) | Depianti: was told he’d receive $100,000 gross/year in accounts; that was false and relied upon. | JPI: BME made those promises using JPI’s menu; JPI did not control BME’s selection of franchise plan offered. | Court: A reasonable finder could conclude BME misrepresented availability of accounts, but no evidence JPI controlled BME’s plan-selection instrumentality; JPI wins on misrepresentation claim. |
| Quantum meruit | Plaintiffs: JPI was unjustly enriched and should pay for services conferred. | JPI: Quantum meruit requires plaintiff reasonably expected compensation from defendant; unit franchisees had no dealings with or expectation of pay from JPI. | Summary judgment for JPI on Count V: Plaintiffs conceded they did not expect compensation from JPI and contract was with BME. |
| Unjust enrichment (equitable) | Plaintiffs: alternative remedy for JPI’s enrichment from scheme. | JPI: Equitable claim barred if adequate legal remedy exists. | Count VI (unjust enrichment) survives summary judgment for now; court declines to decide whether an adequate legal remedy bars equitable relief later. |
Key Cases Cited
- Depianti v. Jan‑Pro Franchising Int’l, Inc., 465 Mass. 607, 990 N.E.2d 1054 (Mass. 2013) (SJC answers on franchisor vicarious liability and misclassification statute application)
- Jan‑Pro Franchising Int’l, Inc. v. Depianti, 310 Ga. App. 265, 712 S.E.2d 648 (Ga. Ct. App. 2011) (GCA ruling that JPI is not Depianti’s employer under Massachusetts misclassification statute)
- Somers v. Converged Access, Inc., 454 Mass. 582, 911 N.E.2d 739 (Mass. 2009) (Misclassification Statute analyzed; employer bears burden to establish independent contractor elements)
- Kerl v. Dennis Rasmussen, Inc., 273 Wis.2d 106, 682 N.W.2d 328 (Wis. 2004) (instrumentality test for franchisor liability—franchisor liable only for franchisor‑controlled instrumentality)
- Awuah v. Coverall N. Am., Inc., 707 F. Supp. 2d 80 (D. Mass. 2010) (franchisor held employer where franchisor sold and billed cleaning services; contrasts with JPI’s three‑tier model)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment standard and movant’s initial burden)