United States District Court, W.D. Kentucky, Paducah Division
MEMORANDUM OPINION AND ORDER
Brent Brennenstuhl United States Magistrate Judge
the Court is the motion of Plaintiff Jay Riley to compel
Defendant NewPenn Kilt, LLC to provide documents in discovery
(DN 41). NewPenn has filed a response in opposition (DN 45).
No. reply has been filed and the matter is ripe for decision.
Kilt is a franchised casual dining and bar enterprise. Tilted
Kilt Franchise Operating, LLC (“TKFO”) is the
national franchisor. Riley was an area developer in the
franchise system, recruiting and supporting franchisees in a
defined geographic territory. Riley was compensated through a
share of royalties paid by the franchisees to TKFO. Riley
sold his area developer rights to NewPenn. Their agreement
provided that NewPenn would pay Riley a portion of
NewPenn's net income from the franchisees. Further, the
parties agreed he would receive 20% of NewPenn's net
proceeds if it subsequently sold or assigned the area
developer rights to a third party. NewPenn subsequently sold
the area developer rights back to TKFO and the parties
disagree over whether this resulted in net proceeds to which
Riley is entitled a share.
propounded a request for production of documents on NewPenn
seeking information about the sale or assignment of the area
Request No. 5: Please produce for copying and inspection any
and all correspondence, contract, assignments, or other
documents evidencing your sale or assignment of a Replacement
Developer Agreement or any party thereof to TKFO.
responded as follows:
Response: Defendant objects to this request as overbroad,
unduly burdensome, and disproportionate to the needs of the
case in that it calls for “any and all correspondence,
contracts, assignments, or other documents.” Subject to
and without waiving the foregoing, Defendant will produce
responsive, non-privileged documents located after a
(DN 45 PageID # 179).
subsequently produced the contract between itself and TKFO
regarding the sale of the area developer rights. NewPenn also
produced documents related to an offer from a third party to
buy NewPenn's area developer rights.
believes that this production is insufficient (DN 41 PageID #
159-62). He notes that NewPenn and TKFO were involved in
litigation over money allegedly owed by TKFO to NewPenn on
TKFO's purchase of NewPenn's area developer rights.
He further contends that NewPenn and TKFO were involved in
arbitration over liquidated damages when NewPenn closed three
franchise locations operating within the developer territory.
The store closures resulted in arbitration between defendant
and TKFO whereby defendant was to pay to TKFO a substantial
amount of money although a cash buyout allegedly never
occurred. Instead, it is plaintiff's understanding, the
amount defendant owed TKFO through the arbitration award . .
. was offset by the amount of money TKFO was to pay to