ALERT - Everett v. Paul Davis Restoration, Inc.: Will the Doctrine of Direct Benefits Estoppel Soon Spread to California Franchisees?
Applying the doctrine of “direct benefits estoppel,” the Court of Appeals for the Seventh Circuit held that a non-signatory spouse to a franchise agreement may nevertheless be bound by the terms of that agreement if she directly benefited from the franchise relationship. In Everett v. Paul Davis Restoration, Inc., EA Green Bay, LLC entered into a franchise agreement with Paul Davis Restoration, Inc., to provide water, fire and mold clean-up services. In the franchise agreement, Matthew Everett identified himself as the “100%” owner of EA Green Bay, LLC. In reality, his wife, Renee Everett, held a 50% interest in the company. Only Matthew Everett signed the franchise agreement, notwithstanding the fact that the agreement required all owners of EA Green Bay, LLC to do so. Renee Everett...