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BRYFOGLE v. CARVEL CORP.

July 14, 1987

James C. Bryfogle and Mitzi Bryfogle
v.
Carvel Corporation



The opinion of the court was delivered by: HUYETT

 HUYETT, J.

 Plaintiffs, James and Mitzi Bryfogle ("the Bryfogles") entered into a written franchise agreement ("License Agreement") with defendant, Carvel Corporation ("Carvel") on May 13, 1975 under which the plaintiffs operated a Carvel ice cream store. The parties continued as franchisor and franchisee until the License Agreement expired in October, 1985, when the Bryfogles vacated the premises. On January 26, 1986, Carvel terminated its lease of the store. Subsequently, the Bryfogles entered into a lease for the identical property and commenced business on December 5, 1986, opening a store named "Mitzi's Ice Cream" which sold ice cream as well as greeting cards and gift items. The Bryfogles have, according to their complaint, completely remodeled the store thus removing any vestiges of Carvel.

 On January 8, 1987, Carvel commenced an action in the Supreme Court of the State of New York, County of Westchester, pursuant to paragraph 28 of the License Agreement, which reads, in pertinent part:

 
It is mutually understood and agreed that this Agreement shall be deemed to have been made in the State of New York, County of Westchester, and that any and all performance thereunder, or breach thereof shall be interpreted, governed and construed pursuant to the laws of the State of New York, and the parties consent that New York State shall be a forum where any cause of action arising under this Agreement may be instituted.

 In the New York case, Carvel sought to enjoin the Bryfogles from operating their store on the grounds that they violated the non-competition clause in paragraph 31 of the License Agreement, which reads:

 
To prevent dilution of the exclusivity of the valuable Carvel know-how and Carvel trade secrets to be acquired by Licensee hereunder, it is agreed as part of the consideration to, and inducement for, Licensor entering into this agreement that in the event Licensee sells the Carvel Store or abandons the Carvel Store provided for in this license, or in the event this license is terminated for any reason except for Licensor's breach, then for a period of three (3) years next following such event Licensee shall not directly or indirectly engage in whole or in part in the production, distribution or sale of ice cream or other frozen desserts whether as a proprietor, employee, officer, director, agent, joint venturer, partner or other capacity whatsoever, within a radius of two (2) miles of the site of the within Carvel store. The provisions of this paragraph shall survive termination, abandonment or other cancellation of this agreement.

 Additionally, Carvel sought an accounting of the Bryfogles profits, damages for trademark infringement, and past due monies owed to Carvel.

 Although I had originally scheduled an injunction hearing in this matter, the parties agreed that the case should be resolved on the basis of the pending motions. Pending are the Bryfogles' motion to remand and Carvel's motion to dismiss the complaint and to dissolve the preliminary injunction, or in the alternative, for summary judgment. For the reasons that follow, the motion to remand will be denied, summary judgment shall be granted in favor of Carvel, and the preliminary injunction shall be dissolved.

 I. Motion to Remand

 An action is removable only if it could have originally been brought in federal court. 28 U.S.C. § 1441(a). Carvel asserts that this case could have been brought in this court pursuant to 28 U.S.C. § 1332. It is undisputed that the citizenship of the parties is diverse. Plaintiffs argue, however, that the amount in controversy does not exceed ten thousand dollars.

 The right of removal is decided by the pleadings, viewed as of the time when the petition for removal is filed. Albright v. R.J. Reynolds Tobacco Co., 531 F.2d 132, 135 (3d Cir.), cert. denied, 426 U.S. 907, 48 L. Ed. 2d 832, 96 S. Ct. 2229 (1976). In their complaint, the Bryfogles seek to enjoin the New York action and also request "such damages as the court deems mete and just including exemplary damages and attorney's fees." (Complaint at 9). In a case where, as here, plaintiffs seek an injunction, the amount in controversy is measured by the value of the interest sought to be protected by the equitable relief requested. Spock v. David, 469 F.2d 1047, 1062 (3d Cir.), stay denied, 409 U.S. 971, 93 S. Ct. 301, 34 L. Ed. 2d 235 (1972); Hirsch v. Jewish War Veterans, 537 F. Supp. 242, 243 (E.D. Pa. 1982).

 In the instant case, the Bryfogles seek to stop a suit in New York. The outcome of the New York action could cause the Bryfogles to lose considerably more than ten thousand dollars, since Carvel seeks damages in excess of six million dollars. See motion to remand ex. A (Carvel complaint). Moreover, they could be forced to move their business location and plaintiffs aver that at "considerable expense" they remodeled the store. Complaint para. 10; see also motion to dismiss ex. 7 at 9. Plaintiffs also seek monetary damages, despite ...


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