Cleaning Conflict

Sullivan purchased a commercial cleaning franchise from Jani-King. The parties ended up in two disputes that were resolved through a single settlement agreement in 2004. The settlement agreement required Sullivan to “immediately and permanently cease operation” of his competing business, and Jani-King to offer Sullivan a certain amount of accounts within the next 12 months. The franchise agreement remained in full force and effect. In 2005, Jani-King sued Sullivan for breach of the franchise and settlement agreements, alleging that Sullivan continued to operate his competing business and failed to pay Jani-King royalty and advertising fees in compliance with the franchise agreement. The jury found in favor of Jani-King and Sullivan appealed.

Among other issues, Sullivan challenged the factual sufficiency of the jury’s findings. The court of appeals found that Sullivan’s factual sufficiency complaints were not preserved for review because Sullivan failed to file a motion for new trial. The court rejected Sullivan’s claim that his motion to disregard the jury’s findings or for judgment notwithstanding the verdict sufficed as a motion for new trial because those motions did not ask the trial court to vacate the judgment and order a new trial. The court of appeals also found that Jani-King’s failure to provide Sullivan with accounts was excused by Sullivan’s prior breach of the settlement agreement through his failure to immediately cease operation of his competing business. The court of appeals affirmed the trial court’s judgment.

Sullivan v. Jani-King of NY, Inc., No. 05-11-01546-CV