Tuesday, December 3, 2013

Suburban Leisure Center, Inc. v. AMF Bowling Products, Inc. case brief

Suburban Leisure Center, Inc. v. AMF Bowling Products, Inc. case brief summary
468 F.3d 523 (2006)

Appellant franchisor sought review of an order of the United States District Court for the Eastern District of Missouri, which denied its motion to dismiss or, in the alternative, to compel arbitration and stay proceedings, pursuant to 9 U.S.C.S. § 3 of the Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et seq., with regard to a damages action brought by appellee franchisee after the franchisor terminated its oral franchise agreement.

Under the oral agreement, the franchisee had the right to use the franchisor's marks to sell the franchisor's tables. A subsequent written e-commerce dealer agreement had a merger clause and addressed the franchisor's sale of products from its website. The franchisor sent a letter requiring the franchisee to cease promoting the tables. The franchisee filed a damages action for the cancellation of the oral agreement.


  • The court affirmed the denial of the franchisor's motion to dismiss or compel arbitration and stay proceedings. 
  • The e-commerce agreement did not address the franchisee's ability to promote or sell the franchisor's products, which was the subject of the oral agreement; thus, the facts did not implicate the parol evidence rule because the oral agreement did not seek to contradict or supplement the subsequent agreement. 
  • The court held that the e-commerce agreement, which did not cover the contractual relationship addressed by the oral agreement, did not extinguish the oral agreement because it constituted an independent agreement under Virginia's collateral contract doctrine; thus, arbitration language in the e-commerce agreement was not attributed to the oral agreement.

The court affirmed.

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