Superior Court County: Skagit. Superior Court Cause No: 92-2-00043-4. Date filed in Superior Court: April 29, 1994. Superior Court Judge Signing: Judge George E. McIntosh.
Written by: Judge Baker, Concurred by: Judges Kennedy, Agid
BAKER, C.J. - Gwen and Dietrich Black appeal summary judgment dismissing their claims against the sellers and sellers' agent regarding their purchase of a Diet Center business. They argue that issues of material fact exist regarding whether the sale involved the transfer of a franchise, and whether it was an isolated transaction. We hold that this sale was indisputably an isolated transaction. Because the Blacks have failed to allege facts necessary to establish a fraud claim under the Franchise Investment Protection Act (FIPA), it is unnecessary to determine whether the transaction was the sale of a franchise. The Blacks have not established an issue of material fact, and the court did not err by dismissing their claims.
In September 1990 the Blacks executed a purchase and sale agreement with Shelley and Rodney Dale regarding "the business commonly known as Diet Center" in Mount Vernon. Sandy Youngren was the selling and listing agent. This transaction was the only time the Dales ever sold a Diet Center business, and involved the only Diet Center business the Dales ever owned. In conjunction with the transaction, the Blacks executed a promissory note for $37,500 in favor of the Dales.
In October 1990 the Blacks executed a franchise sub-license agreement with the subfranchisor, J. L. Purvis, regarding the operation of the franchise. A condition of the purchase and sale agreement with the Dales had been Purvis's approval.
Two years later the Dales sued the Blacks for defaulting on the promissory note. The Blacks counterclaimed against the Dales, alleging violations of FIPA (RCW 19.100.170, .020),*fn1 fraud, violation of the Consumer Protection Act (CPA) (RCW 19.86), and breach of contract. The Blacks also brought the FIPA, CPA, and fraud claims against Youngren and Purvis as third party defendants.
Gwen Black alleged that Shelley Dale and Youngren both represented that the transaction was the sale of a franchise business, that she would be a subfranchisee, and that Purvis was the subfranchisor. Black also alleged that Dale did not provide her with any information about the franchise, and assured her she would have a successful business.
The trial court granted the Youngrens' motion for summary judgment, dismissing all of the Blacks' claims against both the Youngrens and the Dales.
The Blacks' only arguments on appeal are that their transaction with the Dales was the sale of a franchise, and that it was not an isolated transaction. The Blacks' franchise claims were based on violations of the registration (RCW 19.100.020) and antifraud (RCW 19.100.170) provisions of FIPA.
Whether or not the transaction involved the sale or transfer of a franchise, the transaction is exempt from the registration requirements of FIPA because it was isolated.*fn2 The Blacks argue that whether a transaction is isolated is a question of fact which cannot be determined on summary judgment. However, a question of fact can be determined on summary judgment where, as here, reasonable ...