The Cleaning Authority Franchising SPE, LLC v. Cavallaro
1:24-cv-00147
D. MarylandMay 1, 2025Background
- The Cleaning Authority Franchising SPE LLC sued Mike Cavallaro alleging breach of a franchise agreement, trademark infringement, and unfair competition, seeking injunctive and monetary relief.
- Mr. Cavallaro operated a Cleaning Authority franchise under a 2017 agreement that included royalty/ad fees and a 24-month noncompetition covenant post-termination.
- In 2023, Cavallaro stopped allowing The Cleaning Authority to withdraw fees, defaulted on payments, and started a competing business (Hygienitech HCS) in the same territory after termination.
- Cavallaro brought counterclaims, alleging The Cleaning Authority breached its duty to provide operational support, and sought declaratory relief based on impossibility, frustration of purpose (citing COVID-19 impact), and unconscionability.
- The Cleaning Authority moved for summary judgment on its contract claims and on Cavallaro’s counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract—payment of fees | Cavallaro failed to pay fees as agreed | Claimed breach by The Cleaning Authority excused performance | For The Cleaning Authority |
| Breach of contract—noncompete agreement | Cavallaro started competing business locally | Claimed contract excused; purpose frustrated/COVID-19 | For The Cleaning Authority |
| Defendant's breach of contract claim | Provided reasonable operational support | Inadequate advice/guidance re: staffing/hiring | For The Cleaning Authority |
| Declaratory judgment (impossibility, etc.) | Performance not impossible; contract binding | COVID-19/staffing made contract purpose impossible/frustrated | For The Cleaning Authority |
| Damages, fees, and injunctive relief | Entitled to damages, fees, permanent relief | Disputes amounts due, challenges calculations | Denied on evidentiary grounds |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (sets standard for summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (material fact and genuine dispute requirements for summary judgment)
- RRC Ne., LLC v. BAA Md., Inc., 413 Md. 638 (2010) (outlines Maryland law for breach of contract elements)
- Taylor v. NationsBank, N.A., 365 Md. 166 (2001) (Maryland contract interpretation and nominal damages)
- Montauk Corp. v. Seeds, 215 Md. 491 (1958) (doctrine of impossibility and frustration of purpose in contract)