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ST. CHARLES, Missouri – Although Jitterswing Inc. and its franchise development firm, Francorp Inc., had agreed to resolve any disputes arising out of their contract in Illinois, a three-judge panel with the Missouri Court of Appeals saw it differently on March 16, stating that Missouri had jurisdiction over the matter because the language in the forum selection clause was not sufficient and it would create an unfair result.
Jitterswing filed a complaint in 2009 against Francorp in Missouri’s circuit court alleging the firm had performed actions that constituted the practice of law when it was not licensed to do so in the state. Under their contract, Francorp agreed to create a comprehensive franchise program; launch a marketing and sales campaign; and recruit, train and service franchise owners. Their agreement stated that all documents and forms provided by Francorp would be submitted to the dance club’s attorney for review and approval, and that Francorp would not act as Jitterswing’s attorney.
But according to the court filing, Francorp violated that trust by acting as its legal counsel.
After Francorp filed its motion to dismiss, citing the contract’s forum selection clause, the Missouri trial court ruled in its favor stating the clause was applicable and the matter should be resolved in Illinois.
Jitterswing then appealed that decision.
Allen D. Karcher, attorney for Jitterswing, said he and his client were appreciative that they were successful in the ruling and were looking forward to proceeding with the case in circuit court. “Appellate courts will always write their opinions in ways that are limited to the specific facts of the case. I think this decision is no different in that regard,” he explained. But Karcher added,
Missouri courts have consistently ruled against non-attorneys in their attempts to evade the prohibitions of Sections 484.010 and 484.020 through their business dealings with members of the public. In this case, those business dealings included writing a contract requiring disputes to be tried in Illinois state courts which, if upheld, would have effectively eliminated Jitterswing’s claim against Francorp for the unauthorized practice of law in Missouri. The court prohibited that practice and we are pleased with the result.
Recently Francorp was the subject of another lawsuit in Florida brought by five franchisees against the development firm and its client South Beach Franchising. Unlike the Jitterswing litigation alleging the one specific count, that case brought various other charges related to Francorp’s deceptive scheme in fraudulently inducing investors into their program. Although the unauthorized practice of law claim was not part of the $400k judgment in the Florida case, plaintiff attorneys felt it was evidence that supported the negligence and unfair and deceptive trade practices law. The South Beach case settled out of court last month, skirting around the unauthorized practice of law claim.
|Court of Appeals DecisionJittersSwing (20100316).pdf||222.53 KB|