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Blazer Foods10/30/2003
FOR PUBLICATION
Plaintiffs appeal as of right from an order granting summary disposition to defendants in this mixed contract and tort action involving a suit by plaintiff franchisees to recover damages allegedly arising from defendants' contractual breaches and corporate mismanagement. We conclude that neither the "continuing wrong" nor the "continuing services" theory of recovery applies to the instant case, and we therefore affirm the trial court's conclusion that plaintiffs' lawsuit is barred by the applicable limitation periods.
Plaintiffs are franchise owners of Hot 'n Now stores. Their claims against defendant Restaurant Properties (RP) arose out of numerous separate agreements between the respective plaintiffs and RP for the establishment and management of Hot 'n Now restaurants located throughout Michigan and Indiana. Plaintiffs alleged in their complaint that RP committed various misdeeds, such as failing to provide adequate training, delaying site approval for new stores, and changing menu items in violation of the franchise agreements. Plaintiffs alleged breach of contract and other legal theories against RP. Plaintiffs also sued defendants Taco Bell and Pepsico, corporate parents of RP, alleging that both companies caused RP to change the original Hot 'n Now concept to the detriment of plaintiffs and other franchisees. Plaintiffs argued that Taco Bell and Pepsico essentially turned the Hot 'n Now restaurants into a "laboratory experiment." Plaintiffs raised theories of tortious interference and "corporate usurpation" against Taco Bell and Pepsico.
RP filed a motion for summary disposition under MCR 2.116(C)(7) (claim barred by statute of limitations), alleging, in part, that plaintiffs' claims were barred by the applicable limitation periods because, according to plaintiffs' admissions, they were aware of alleged contractual breaches in 1990 but did not file their lawsuit until March 2, 2000. RP argued that no continuing wrong or continuing services theory of recovery served to extend the periods of limitation. RP also moved for summary disposition under MCR 2.116(C)(8) (failure to state a claim on which relief can be granted), arguing that various legal theories raised by plaintiffs were untenable. Taco Bell and Pepsico also filed a motion for summary disposition under MCR 2.116(C)(8), arguing, among other things, that (1) a parent corporation or an affiliate corporation cannot tortiously interfere with the contract of a subsidiary or affiliate corporation and (2) the legal theory of corporate usurpation is not recognized under Michigan law.
The trial court dismissed all plaintiffs' claims. It noted that an action for breach of contract must be brought within six years from the time it accrues and a tort action must be brought within three years of accrual. The court found that, based on plaintiffs' admissions, plaintiffs' claims accrued shortly after PepsiCo or Taco Bell acquired RP in 1990 - more than siX years before plaintiffs filed their complaint. The court also found that plaintiffs each signed a release as part of its franchise agreement that, if valid, would preclude future litigation with PepsiCo or Taco Bell. The court held that the releases were valid under MCL 566.1, even in the absence of consideration, and found that the releases barred all plaintiffs' claims.
Additionally, the trial court disagreed with plaintiffs' argument that the statutory periods of limitation were extended because the franchise agreements required the performance of continuous services. The court found that the continuing wrong or continuing services doctrines had not been extended to cover the applicable causes of action and that extending the doctrin
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