Northwest Aquifer Franchisees Go After Half-Million Award

Franchisees Now Seek Federal Court Judgment After Not Being Paid Arbitration Award

SEATTLE, Wash. (Blue MauMau) - Seven former franchisees of Northwest Aquifer Surveying, Inc. have filed a motion in the Federal District Court for the Western District of Washington, seeking entry of a judgment totaling almost half a million dollars against the franchisor and its owners. According to their attorney, Howard R. Morrill, Bundy & Morrill, “This case shows how dangerous it is for franchise sellers to puff and exaggerate what they are really capable of delivering.” He said the Washington franchise law is intended to be very protective of franchisees and it also imposes liability on individuals who are closely involved with franchise offerings. The motion seeks court confirmation of an award made last November by a panel of three American Arbitration Association arbitrators in Seattle. Morrill explains that under the Federal Arbitration Act, an arbitration award may be confirmed by the federal court in the district where the award was made.

But the franchisor seems to be making the franchisees jump through hoops to collect their money.  Sam B. Franklin, Lee, Smart, Cook, Martin & Patterson, attorney for the franchisor-respondents, is now opposing the motion because he thinks the federal courts have no jurisdiction (firm's letter to the federal judge is also attached below, NWAS Response.doc).  He said it was just a procedural matter in filing his answer today to the motion to confirm the arbitration award. But Morrill said he doesn't care what court it goes through, he just wants the payment that is due franchisees for the AAA award (pdf). 

The crux of the case centers on sales claims made by the company and its owners, Ervin and Christine Kraemer, in selling franchises. The arbitrators found that at least one such statement constituted a “material misleading statement or omission” and violated the anti-fraud provision of the state’s franchise statute. The award stated that all franchisee-claimants were entitled to rescission based on the franchisor’s violation, that each franchise purchased by claimants would be deemed canceled, null and void as soon as the payment was made by the franchisor-respondent. Since the company and its owners have not paid the award, Morrill said they had no choice but to enter judgment.

Attachment	Size
NWAS Final Award.pdf	113.64 KB
NWAS Response.doc	38.5 KB