DLA Piper Picks Top 9 Franchisor Lawsuits of '09
WASHINGTON, DC – In a webinar presentation on Tuesday, litigators from one of the world’s largest law firms, DLA Piper, discussed nine cases in 2009 of which franchisors should sit up and take notice. The criteria in selecting the top nine were that they were all either decided in 2009 or had a significant event in the case that year.
Below are three of the nine, two of which have been reported on here in Blue MauMau. The entire presentation on all nine cases is attached.
DLA Piper introduces each case with an intriguing question, explains the claims in the litigation and offers suggestions to the franchisors:
Q: Can a franchisor require franchisees to buy its supplies?
A: No, not always.
In the first case cited, Burda v. Wendy’s International, Inc., plaintiff franchisees asserted five claims; two Sherman Act tying claims and three breach of contract.
The lawsuit alleges that franchise owners who initially purchased hamburger buns from one supplier were threatened with termination by Wendy’s if they did not purchase buns from a Wendy's subsidiary vendor. A 4-cent-a-case surcharge was added on purchases from other approved suppliers.
The district court refused to dismiss the typing claims, particularly where plaintiffs had previously purchased from other suppliers.
Solution: Franchisors, in order to allow for maximum flexibility in structuring supply issues within the franchise system, should include broad reservations of rights in franchise agreements, covering areas such as the right to designate exclusive suppliers, including the franchisor and its affiliates; the right to earn fees on franchisee purchases from suppliers, and the right to include surcharges on purchases from approved suppliers.
Q: Does a franchisor need to disclose their officer’s grand larceny prank in its FDD?
A: Yes. Prank or not. Disclosure requirements for breaking the law must be literally complied with, whether the preparer thinks that knowing about a company officer stealing traffic cones is relevant to buying a franchise or not.
In Coffee Beanery, Ltd., et al. v. WW, LLC et al., a case reported on Blue MauMau, franchisees commenced arbitration against Coffee Beanery for, among other things, violation of the Maryland Franchise Act. They alleged the Uniform Franchise Disclosure Document failed to disclose felony conviction for grand larceny of an officer of the company.
The court agreed and rejected the arbitrator’s view that it was not the type of felony subject to disclosure. It also stated that the arbitrator’s award showed a “manifest disregard of the law, and that the franchisees were fraudulently induced, so not bound by arbitration clause. U.S. Supreme Court refused to hear the case.
Solution: Comply with disclosure requirements literally – even if seems not within purpose of statute.
- An arguably non-material omission in an FDD can have serious ramifications
- Uncertainty remains as to whether a “manifest disregard of the law” is a basis for vacating an arbitrator’s decision
(Writer’s note: Blue MauMau took issue with DLA Piper referring to the felony conviction by an officer of the company as a “college prank” when he was actually an adult who was working at Coffee Beanery corporate. The law firm responded with testimony given in Coffee Beanery’s petition to the Supreme Court. Shaw states the following:
“When I was in college, I was out with a buddy of mine and we were driving down the road picking up construction cones and throwing them in the back seat of the car, and we continued to drive down the road until the police officer saw all the orange construction cones in the back of the car and he stopped us and asked what we were doing with them. We were . . . it was a stupid college thing to do.”
Blue MauMau has a transcript of Shaw’s testimony stating he was not in college when he received the felony conviction.)
Q: Aren’t the standards for enforcing in-term covenants (while still in the system) more lenient than those applicable to post-term covenants (after franchisee has left the system)?
A: No. Georgia says franchisors can’t write loosey-goosey restrictions preventing franchise owners from competing with the franchisor and limiting his trade for years and years. That ain’t reasonable. Georgia has enough unemployed.
Atlanta Bread Co. Int’l Inc. v. Lupton-Smith, also reported on in BMM, answers that burning question. The trial court, the Court of Appeals of Georgia and the Supreme Court of Georgia all ruled the same way. The courts applied the strict scrutiny test to assess reasonableness of the in-term covenant and found in-term to be unenforceable. It also found post-term to be unenforceable.
Georgia legislative effort to overcome Atlanta Bread is HB 173. The law, if enacted, would allow courts to modify covenants to protect legitimate interests, and would prevent striking in-term covenants on the grounds that they lack specific limitations of activity, duration or geographic scope. It would not apply retroactively.
Solutions: Franchisors granting franchises in Georgia should consider tightening up in-term and post-term covenants and putting in a time limitation on non-disclosure of non-trade secrets. If they choose Georgia law to interpret the agreement, carve out covenants—but they are warned that they cannot count on enforcing covenants in the state.
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So are you saying that Kevin is holding BMM and Rifkin responsible for something?
What could he hold them responsible for? Perjuring himself twice under Oath?
the only thing Kevin held rifkin and BMM responsible for was continuing the Lie that he was convicted of a felony
On 4/24/1985 To an amended charge of larceny. The same day that the charge was amended to larceny. Like I said, the charge was amended based on the completion of his probation. Keven's testimony ( posted here ) in his own words were that he did not complete his probation, as handed down by the courts.
The unidentified poster must be nuts in holding Rifkin and BMM responsible for Kevin's perjury. Which by the way is also illegal.
These are the facts
the only thing Kevin held rifkin and BMM responsible for was continuing the Lie that he was convicted of a felony
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
I don't recall someone being convicted for a misdemeanor (-$100) and being given a year's probation without a string of priors. Counselors...am I correct in this observation or not?
not
Job was to convince Kevin that he was not a felon?
You can't be serious. Or are you just Kevin dressed in Morons Clothing?
As to not confuse the Facts of case,The Coffee Beanery vs. WW,LLC, the following is an acknowledgement of what the 6th Circuit Appeals Court felt to be proven facts. These facts should not be confused with the separate issue of why the arbitration award was vacated, but instead, used in conjunction with the Courts outrage, in what was considered an obvious biased award made by the arbitrator.
Although it was arbitration that was on Trial in the 6th Circuit, it's interesting to note that at least these Judges recognized all the facts. Read below the Opionion
Independently on January 19, 2006, The Securities Commissioner of Maryland ("Commissioner") issued an administrative "Order of Show Cause" against Coffee Beanery and Kevin Shaw, alleging violations of the disclosure and anti fraud provisions of The Franchise Act, MD. Business Reg. Code Ann. & 14-210 et seq.
The substance of the Commissioner's claims was nearly identical to WW's allegations-namely that The Coffee Beanery made material misrepresentations in connection with the offer and sale of Cafe Store Franchises, that Shaw inappropriately told prospective buyers that they could expect a specific income level from the operation of a Cafe Store, and that The Coffee Beanery failed to timely provide prospective franchisees a copy of the offering prospectus and a proposed franchise agreement.
On January 30, 2006, eleven days after the Commissioner issued her Order, The Coffee Beanery responded in kind by filing a petition to compel arbitration in the United States District Court for The Eastern District of Michigan.
But before arbitration could proceed , on September 12, 2006, the Commissioner reached a Consent Order with the Coffee Beanery and Shaw, under which the Coffee Beanery and Shaw acknowledged that they had violated The Maryland Franchise Act by making material misrepresentations of fact or omissions of material fact to prospective Maryland Franchisees, and by failing to give prospective franchisees a copy of the offering prospectus.
It does not take Rocket Science to understand that this case was never about Orange Traffic Cones. This was a case about a zor who committed fraud, admitted to it, and then used a biased arbitrator to escape the consequences.
While it has been argued here on BMM, that WW will have a hard time trying to prove the theft of traffic cones injured them in their purchase of a CB franchise, these documented facts will be the argument in a real court of law. The State of Maryland proved Coffee Beanery broke the law, The Coffee Beanery agreed in entering in of The Consent Order, and then the 6th Circuit acknowledged their wrong doing as well.
It's clear that Kevin made an illegal earnings claim, WW was not given a copy of the registered FDD's, and CB failed to disclose the required info on the failed Cafe concept.
I read through the depositions and never did the zor admit to fraud....another lie....
Could hold the key here. Kevin testified that he pled to a lesser charge based on completing his Probation. By his own account, he admits that he never completed his Probation and choose to take his lumps.
It's more likely that The Courts did not update thier records, then it is that he was nver a Felon. Maybe someone should bring this to the records dept. where he was charged.
Remember also, that his testimony was a matter of record and could not be changed during Appeal. Even if new info had been allowed in the appeal process, this would have been denied, as it was an appeal as to what the arbitrator knew to be facts when making her decision
He testified in a prior Trial that he was a convicted Felon. That prior Trial was bwtween Shaw and Yurik, and it was 5 years prior to the WW,LLC arbitration. Plenty of time for him and his attorney to get the facts straight. By the way, Shaw had the same attorney in the Yurik case as well.
rifkin had the same amount of time to get the facts straight as well
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard thanks for the suggestion. here are the facts from the court documents.
Shaw’s admission/testimony was obviously incorrect, perhaps he was blindsided by a brilliant attorney and got flustered....
State of Michigan, 67th District Court
Case Number: CRO8419519
01/15/1985 COMPLAINT SWORN- WARRANT ISSUED
01/15/1985 DATE OF OFFENSE JULY 27, 1984 L.W. LAMB CO.
01/15/1985 WARRANT TAKEN BY LT LANEY
02/28/1985 WARRANT RETURNED FLINT TWP PD
02/28/1985 BOND POSTED $200.00/KURT A SHAW TO APP
02/28/1985 FOR ARR. ON MAR. 11, 1985 8:30AM
03/17/1985 ARRAIGNED BY JUDGE MOSIER
03/07/1985 RETAIN ATTY.
03/07/1985 PRE-TRIAL/EXAM MARCH 18/20, 1985
03/07/1985 BOND CONTINURED FB 200.00 AS POSTED
03/20/1985 ADJOURNED TO MARCH 25/27, 1985
03/25/1985 ADJOURNED TO APRIL 1/3, 1985 CPA
04/01/1985 ADJOURNED TO APRIL 8/10, 1985
04/08/1985 ADJOURNED TO APRIL 22/24, 1985
04/24/1985 AMENDED CHARGE LARCENY UNDER $100.00
04/24/1985 PLED GUILTY AMENDED CHARGE
04/24/1985 PRE-SENTENCE ORDER/SENTENCE JUNE 3 1985 8:30 AM
04/24/1985 PROBATION OFFICER CURTIS
06/03/1985 SENTENCE $100/$50/$5 OR 30 DAYS
06/03/1985 FINE/COSTS DEFERRED TO SEPTEMBER 11, 1985
06/03/1985 PROBATION ORDERED 1 YEAR. $15 O/S FEE
06/03/1985 PAID IN FULL $155 FINE AND COSTS
09/11/1985 PAID PROBATION FEE R# 184646 $45.00
10/11/1985 PAID PROBATOIN FEE 191524, $15.00
02/21/1996 PAID PROBATOIN FEE R#218653 $75.00
03/03/1986 PET. & ORD. DISCHARGE FROM PROB
Clearly this is not a felony conviction of grand larceny, had shaws attorneys done a better job
getting this information to the maryland courts maybe the lower court would not have been duped.
if Bluemaumau/rifkin would have fact checked then maybe their slander campaign of shaw would never have gotten this far.
Then again it does not appear rifkin or sparks are interested in facts.
Kevin Shaw should be hung out to dry for Duping those Judges into believeing him, when he testified that he was a convicted Felon, not once but twice.
Best of all, shame on Rifkin for not exposing such a lie
As to not confuse the Facts of case,The Coffee Beanery vs. WW,LLC, the following is an acknowledgement of what the 6th Circuit Appeals Court felt to be proven facts. These facts should not be confused with the separate issue of why the arbitration award was vacated, but instead, used in conjunction with the Courts outrage, in what was considered an obvious biased award made by the arbitrator.
Independently on January 19, 2006, The Securities Commissioner of Maryland ("Commissioner") issued an administrative "Order of Show Cause" against Coffee Beanery and Kevin Shaw, alleging violations of the disclosure and anti fraud provisions of The Franchise Act, MD. Business Reg. Code Ann. & 14-210 et seq.
The substance of the Commissioner's claims was nearly identical to WW's allegations-namely that The Coffee Beanery made material misrepresentations in connection with the offer and sale of Cafe Store Franchises, that Shaw inappropriately told prospective buyers that they could expect a specific income level from the operation of a Cafe Store, and that The Coffee Beanery failed to timely provide prospective franchisees a copy of the offering prospectus and a proposed franchise agreement.
On January 30, 2006, eleven days after the Commissioner issued her Order, The Coffee Beanery responded in kind by filing a petition to compel arbitration in the United States District Court for The Eastern District of Michigan.
But before arbitration could proceed , on September 12, 2006, the Commissioner reached a Consent Order with the Coffee Beanery and Shaw, under which the Coffee Beanery and Shaw acknowledged that they had violated The Maryland Franchise Act by making material misrepresentations of fact or omissions of material fact to prospective Maryland Franchisees, and by failing to give prospective franchisees a copy of the offering prospectus.
It does not take Rocket Science to understand that this case was never about Orange Traffic Cones. This was a case about a zor who committed fraud, admitted to it, and then used a biased arbitrator to escape the consequences.
While it has been argued here on BMM, that WW will have a hard time trying to prove the theft of traffic cones injured them in their purchase of a CB franchise, these documented facts will be the argument in a real court of law. The State of Maryland proved Coffee Beanery broke the law, The Coffee Beanery agreed in entering in of The Consent Order, and then the 6th Circuit acknowledged their wrong doing as well.
It's clear that Kevin made an illegal earnings claim, WW was not given a copy of the registered FDD's, and CB failed to disclose the required info on the failed Cafe concept.
Good luck R&D
I am compelled to set the record straight. In the arbitration hearing and in an earlier deposition in another case, Kevin Shaw tetified under oath that he was convicted of the felony of grand larceny. He was even asked by the arbitrator if that conviction was expunged and he stated it was not. That testimony was not challenged in the arbitration or in any appellate briefs or in oral argument wherein Mr. Fink, the Coffee Beanery's lawyer admitted to the felony conviction. Only after the opinion was issued vacating the award, did Mr. Fink decide to try to get the testimony changed. He submitted some documents to me purporting to show that while he was charged with a felony, he pled to a misdemeanor. I was never able to verify that information with the court that handled the matter and as a matter of established law and fact, he had a felony conviction. Nobody was duped and I certainly did not dupe anyone. Kevin Shaw is the one who so testified in our case and in an earlier deposition. I found out about the conviction from Mr. Shaw's prior sworn testimony as nothing was ever disclosed. His testimony in our case was the same as previously made.
Of course, this was only one of many nondisclosures by The Coffee Beanery. The court never had to reach the others.
I would ask that people learn the facts before defaming someone's character. I am owed an apology by the person accusing me (and BlueMauMau) of lying.
Harry M. Rifkin
hrifkin@franbuslaw.com
Shaw’s testimony was obviously incorrect, perhaps he was blindsided by a brilliant attorney and he got flustered....
State of Michigan, 67th District Court
Case Number: CRO8419519
01/15/1985 COMPLAINT SWORN- WARRANT ISSUED
01/15/1985 DATE OF OFFENSE JULY 27, 1984 L.W. LAMB CO.
01/15/1985 WARRANT TAKEN BY LT LANEY
02/28/1985 WARRANT RETURNED FLINT TWP PD
02/28/1985 BOND POSTED $200.00/KURT A SHAW TO APP
02/28/1985 FOR ARR. ON MAR. 11, 1985 8:30AM
03/17/1985 ARRAIGNED BY JUDGE MOSIER
03/07/1985 RETAIN ATTY.
03/07/1985 PRE-TRIAL/EXAM MARCH 18/20, 1985
03/07/1985 BOND CONTINURED FB 200.00 AS POSTED
03/20/1985 ADJOURNED TO MARCH 25/27, 1985
03/25/1985 ADJOURNED TO APRIL 1/3, 1985 CPA
04/01/1985 ADJOURNED TO APRIL 8/10, 1985
04/08/1985 ADJOURNED TO APRIL 22/24, 1985
04/24/1985 AMENDED CHARGE LARCENY UNDER $100.00
04/24/1985 PLED GUILTY AMENDED CHARGE
04/24/1985 PRE-SENTENCE ORDER/SENTENCE JUNE 3 1985 8:30 AM
04/24/1985 PROBATION OFFICER CURTIS
06/03/1985 SENTENCE $100/$50/$5 OR 30 DAYS
06/03/1985 FINE/COSTS DEFERRED TO SEPTEMBER 11, 1985
06/03/1985 PROBATION ORDERED 1 YEAR. $15 O/S FEE
06/03/1985 PAID IN FULL $155 FINE AND COSTS
09/11/1985 PAID PROBATION FEE R# 184646 $45.00
10/11/1985 PAID PROBATOIN FEE 191524, $15.00
02/21/1996 PAID PROBATOIN FEE R#218653 $75.00
03/03/1986 PET. & ORD. DISCHARGE FROM PROB
That is a nice schedule of events for Shaw. Had he not bugged out, he would have eventually been discharged from probation after 15 months. (Whew, that's a long time. That judge must've been ticked off.) It looks like the felony would have been knocked down to a misdemeanor for the records. That would have been nice for him.
I'm pretty sure that you probably questioned the credibility of Kevin Shaw while he was testifying, but now that it's in your favor, his testimony is credible?
The attorneys for their side didn't do the best job, and personally from the testimony I read, I don't think your clients/expert witnesses were well prepared either, which would be a reflection of your performance.
DId you read the whole transcript? I doubt it. I don't know what ax you have to grind by attacking any counsel in a hearing you did not attend and did not review the entire transcript. I know I was well prepared. I thought my witnesses did generally well, but not every witness is as perfect as what one would hope. The defamation and attacks continue but consider the source.
the question in the appeal process. However, JD, the credibility in question was that of the arbitrator, not Kevin Shaw. The appeal was based on the arbitrator being biased and corrupt, and one only has to read the Arbitrator's Award to understand that based on Kevin's testimony, he was in fact a convicted felon. She mentions his conviction, and decided it didn't have to be Disclosed.
Of course it didn't help in the 6th Circuit Court of Appeals Oral Argument that Kevin's attorney also admitted his client was a convicted Felon. But with being said, if he had tried to set Kevin's record straight then, it was already too late. It was the arbitrator who was now in question. Those are the facts of the case. Wheather or not Kevin is a felon has nothing to do with what the arbitrator thought, based on the testimony she was given, she just decided it didn't matter.
You should probably stick to accounting, since law seems to be above your pay grade.
Seriously, who cares about someone picking up a few traffic cones after a few drinks one night after a college party?
I really fail how that is relevant to running a franchise organization unless ofcourse you're in the traffic cone franchiose business and may regress one night after a holiday party and run off with a few of the franchisees traffic cones.
It would have been comical to see that written up in the disclosure document. In fact, it would have been a great sales pitch... Convicted for picking up a few cones to put in your dorm... that's kinda funny.... I'd be more inclined to buy a franchise from someone like that as I'd know they wouldn't be clever enough to steal my money and get away with it.... It's the ones that don't get caught you have to watch out for!
A: The law cares. Franchise regulators care. Buyers care. But obviously this franchise seller didn't care about compliance to the law.
In franchising, it is difficult for buyers and franchise owners to be able to prove a franchisor is providing bad or misleading information. Darn hard. Most of the time, all we have are allegations from franchisees who are not privy to know system-wide details or witness under the table shenanigans of a franchisor. Although Coffee Beanery was required to list the property theft of one of its founders, it had freedom to spin the stealing convinction in its franchise disclosure document any which way it wanted. The master sellers could have probably even spun it as a selling point.
It chose not to.
Here is what the court said:
Coffee Beanery was so full of themselves about being above the law that when caught they kept sinking money into reversing this order, all the way up to appealing it to the U.S. Supreme Court. The Supreme Court wouldn't hear of it.
When actual convictions of stealing by company leaders have not been disclosed, franchise buyers should not walk, but rather run away, and count their lucky stars that they did not buy into this system. They know that the franchising firm's franchise disclosure document is only good for wiping their backside. And even at that, it ain't so good.
I don't think any party in this lawsuit has any credibility, plaintiffs, defendants and the attorneys. You've got a franchisor that sells unprofitable stores, you've got franchisees that obviously didn't understand what they were getting into (yet wrote a check on discovery day), you've got the plaintiff's attorney that was accused of 'forum shopping' by a federal judge and didn't have his witnesses/clients prepared, you've got defendant attorneys that don't check on a possible felony conviction, etc.
This case can be summed up with the term FUBAR.
Hey, but at least the attorneys are making some money. The longer it drags out the more they make.
for intimacy. Only a grossed out drug freak hippie fills up make out space with construction cones.
But, when you take into account that he is from Michigan and what it must be like to find yourself alone in your car with a Michigan person, maybe it's best to fill up the back seat with construction detritis.
When I was a kid, we didn't have credit cards and ATM cards, and if you had $ 5 to get you through the entire weekend you were very fortunate indeed. Most of our children were conceived in some automotive setting - except for the Stuhr kids whose family ran a funeral home. They used hearses for dates and made out in coffins in the back. Now which of you can match that for an erotic evening?
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
In Texas--where everyone drives a pickup truck--this would make sense. But to do this in a car seems like an awful lot of work.
If Shaw is that bored, maybe he should find a part-time job at Starbucks. Not only will he stay out of trouble, he might learn how to run a profitable coffee shop.
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
I've read this same information, and the 'Certificate of Conviction' stated that it was a 'Misdemeanor charge of larceny under $100'. (This can be found as doc 5-7 (exhibit 6 of document 5) on the case they filed 7/16.
I wish BMM and their contributors 'that are journalists' would present the facts of the cases in the proper way. It really brings down the quality of the website.
The law firm DLA Piper reports (slide 47) the crime as a felony, saying, "Alleged UFOC failed to disclose felony conviction for grand larceny of officer"
Is DLA Piper correct, and hence BMM's reporting of their presentation, or was the conviction a misdemeanor?
I'm sure the author has access to the same information that I had (it's on pacer). Although figuring out which case it was that was filed may be the difficult part.
In terms of DLA Piper's report, it's not so much whether it was grand larceny or a misdemeanor, it's the fact that a grand larceny must be disclosed in the FDD.
Blue MauMau has false information regarding the coffee beanery officer. There never was a felony conviction for grand larceny, it did not happen regardless of said testimony. The attorny's and Blue MauMau continue to publish Lies regarding this fact...(writers note I take issue with Blue MauMau and WW,LLC for intentionally publishing lies Shaw was never convicted for grand larceny a felony. some how a whole court of judges were dupped by this false information also....the correct information was supplied to WW,LLC's attorney harry rifkin who continues to deny its existence....Facts be damned
Kevin Shaw admits the grand larceny in his own deposition. He says, "Yea. lt was over a hundred dollars so it was considered grand larceny." Are you saying that Shaw perjured himself, lieing in court about having a grand larceny conviction, when he actually did not? That's a mighty mean accusation. I would think that Shaw would not appreciate some anonymous poster smearing his name through the mud like that.
What about the franchisor attorneys DLA Piper whose presentation this is? I take it you like them. You just seem angry with the Coffee Beanery franchisees, their attorney and a franchisee news site that dares to publish this court case. Franchisor attorneys DLA Piper considers the Coffee Beanery case as one of the most impactful cases in 2009 for franchisors.
Dumb, duped judges. It is hard to believe that even the Supreme Court refused Coffee Beanery's petition to be heard and to possibly overturn the lower courts' unfavorable rulings. Duped, duped, I say.
Apparently, some facts more than others. People are such strange things. They can be hit over the head over and over and over again with the truth and yet they still won't get it. Isn't that right, GUEST?
Here is a deposition of Coffee Beanery's Kevin Shaw by franchisee attorney Harry Rifkin. Attorneys Karl V. Fink; Paul R. Fransway and Joshua R. Fink of Pear, Sperling, Eggan & Daniels PC represented franchisor Coffee Beanery.
1 A. Yes. I have.
2 Q. And what was that crime?
3 A. When I was in college, I was out with a buddy of mine
4 and we were driving down the road picking up
5 construction cones and throwing them in the backseat
6 of the car. and we continued to drive down the road
7 until the police officer saw all the orange
8 construction cones in the back of the car and he
9 stopped us and asked us what we were doing with them.
10 We were ... it was a stupid college thing to do.
11 Q. You were in college in 1987?
12 A. I was ... it was college buddy of mine.
13 Q. You were not in college?
1 4 A. No. It was a college buddy of mine.
15 Q. You were out of college. What year were you born in?
16 A. 1964.
17 Q. So 1987 this event occurred?
18 A. If you say so.
19 Q. l'm asking you.
20 A. l have no recollection of it, the date.
21 Q. You were charged with grand larceny.
22 A. Yea. lt was over a hundred dollars so it was
23 considered grand larceny.
24 Q, And you went to court in Mundy Township?
25 A. lf you say so.
Page 2569
1 Q. Well, I‘rn not saying so. I'm reading from the
2 deposition that you gave in a case, previously in the
3 case of Coffee Beanery versus William Albert on June
4 14th, 2002 and you testified therein at Page 8 of your
5 deposition that the charge was in Mundy Township.
6 A. l'm just curious as to relevancy to this case at this
7 particular moment in time
8 Q. l'm just asking you the question.
9 MR. FINK; I would object. If it is
10 relevant that he was convicted, then I think it's
11 appropriate to ask if he was convicted what he was
12 convicted of and the rest of the details.
13 ARBITRATOR BARRON: I assume. Mr. Rifkin,
14 you‘re not going to go into details of asking
15 questions about this particular case, whatever
16 deposition that is from?
17 MR. RIFKIN: No. l'm just trying to get
18 him to -- his claim that he didn’t know what court it
19 was in and he did previously.
20 ARBITRATOR BARRON: Let me ask you.
21 Mr. Shaw, does the fact that Mr. Rifkin has suggested
22 that it might have been Mundy. does that refresh your
23 recollection?
24 THE WITNESS: No.
25 ARBITRATOR BARRON: Do you have any other
Page 2570
1. reason to think it wasn't Mundy?
2 THE WITNESS: No.
3 ARBITRATOR BARRON: Next question,
4 Mr. Ritkin.
5 BY MR. RIFKIN:
6 Q. You were put on probation; is that correct?
7 A. There was a court appointed officer that I was
8 supposed to meet with for a monthly period of time and
9 then it would get expunged.
10 Q. Now --
11 ARBITRATOR BARRON: For clarification, was
12 that expunged?
13 THE WITNESS: I did not complete my
14 probation with tho officer. I accepted the -- it
15 going on my record. I was -- she and I did not get, so.
16 along, so.
17 ARBITRATOR BARRON: So as far as you know,
18 it remains on your record.
19 THE WITNESS: Yes. Absolutely. I accepted
20 that.
21 ARBITRATOR BARRON: Go ahead. MR Rifkin.
22 BY MR. RIFKIN
23 Q. Now. you are familiar with the consent order that was
24 entered in Maryland by the securities commissioner
25 against The Coffee Beanery and Kevin Shaw?
Page 2571
1 A. Actually. yes, l'm familiar with it.
2 Q. And, indeed, there had been a show cause order brought
3 against you as well as The Coffee Beanery by the
4 Office of the Attorney General Securities Commission
5 for Maryland?
6 A. l'm aware that that happened.
7 Q. And did you review the terms of the consent order
8 before they were entered -- before it was entered
9 into?
10 A. No. I did not.
11 Q. Have you reviewed it at any time since?
12 A. I have not reviewed it in its entirety and I do not
13 have it committed to memory.
14 Q. Okay. There's a statement of facts contained in that
15 consent decree. Would you take a moment to read it.
16 Exhibit C4, and tell me whether there are any facts in
17 that consent order that you believe not to be true?
18 MR. FINK: Where are you asking him to
19 read?
20 MR. RIFKIN: The fact section beginning on
21 Page 3.
22 MR. FINK: Thank you.
23 BY MR. RIFKIN:
24 Q. Just let me know when you‘re finished reading it.
25 A. Okay.
State of Michigan, 67th District Court
Case Number: CRO8419519
01/15/1985 COMPLAINT SWORN- WARRANT ISSUED
01/15/1985 DATE OF OFFENSE JULY 27, 1984 L.W. LAMB CO.
01/15/1985 WARRANT TAKEN BY LT LANEY
02/28/1985 WARRANT RETURNED FLINT TWP PD
02/28/1985 BOND POSTED $200.00/KURT A SHAW TO APP
02/28/1985 FOR ARR. ON MAR. 11, 1985 8:30AM
03/17/1985 ARRAIGNED BY JUDGE MOSIER
03/07/1985 RETAIN ATTY.
03/07/1985 PRE-TRIAL/EXAM MARCH 18/20, 1985
03/07/1985 BOND CONTINURED FB 200.00 AS POSTED
03/20/1985 ADJOURNED TO MARCH 25/27, 1985
03/25/1985 ADJOURNED TO APRIL 1/3, 1985 CPA
04/01/1985 ADJOURNED TO APRIL 8/10, 1985
04/08/1985 ADJOURNED TO APRIL 22/24, 1985
04/24/1985 AMENDED CHARGE LARCENY UNDER $100.00
04/24/1985 PLED GUILTY AMENDED CHARGE
04/24/1985 PRE-SENTENCE ORDER/SENTENCE JUNE 3 1985 8:30 AM
04/24/1985 PROBATION OFFICER CURTIS
06/03/1985 SENTENCE $100/$50/$5 OR 30 DAYS
06/03/1985 FINE/COSTS DEFERRED TO SEPTEMBER 11, 1985
06/03/1985 PROBATION ORDERED 1 YEAR. $15 O/S FEE
06/03/1985 PAID IN FULL $155 FINE AND COSTS
09/11/1985 PAID PROBATION FEE R# 184646 $45.00
10/11/1985 PAID PROBATOIN FEE 191524, $15.00
02/21/1996 PAID PROBATOIN FEE R#218653 $75.00
03/03/1986 PET. & ORD. DISCHARGE FROM PROB
grand larceny
n. the crime of theft of another's property (including money) over a certain value, as distinguished from petty larceny in which the value is below the grand larceny limit. Some states only recognize the crime of larceny, but draw the line between a felony [punishable by state prison time and/or fine] and a misdemeanor (by county/local jail and/or fine) based on the value of the loot [like stealing over $100]. - Legal dictionary at Law.com
Maybe you could enlighten us all so that we could join you in debunking false claims.
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
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