Prudence Corporation v. Shred-It America, Inc.

MEMORANDUM

Shred-it America, Inc. (SAI) appeals the district court’s judgment in favor of Prudence Corporation (Prudence) in Prudence’s diversity action alleging breach of a franchise agreement between SAI, the franchisor, and Prudence, the franchisee. The district court determined that SAI had breached the franchise agreement by failing to timely submit proposed renewal terms to Prudence. The district court ordered the renewal of the franchise agreement under specific performance and declaratory relief, and awarded attorneys’ fees and costs to Prudence. SAI challenges the court’s finding of breach, and argues that the court’s order of specific performance constitutes an improper rewriting of the contract. We disagree.

There is substantial evidence to support the court’s finding of breach. SAI’s delay of well over a year in even attempting to renew the franchise agreement was entirely unreasonable and harmful to Prudence. None of SAI’s excuses for delay are legitimate.

Moreover, the district court acted properly when it ordered specific performance at the original royalty rate. According to the express terms of the franchise agreement, where a party improperly withholds its…