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Judge rules in RedBrick's favor
June 18, 2007
LOS ANGELES — A Los Angeles Superior Court judge has ruled against a former RedBrick Pizza master developer in a writ of attachment filed against Red Brick and its founder Jim Minidis.
The proceeding, brought by Jay Bharat Developers Inc., alleged that RedBrick committed fraud by failing to disclose prior litigation against the company in its Uniform Franchise Offering Circular.
But in the June 14 ruling, Judge Victor Greenberg said Bharat did not establish that RedBrick displayed willful or intentional conduct,"particularly in light of the defendant's representation that they consulted with counsel and believed the omission to be proper," he said.
Greenburg also said Bharat failed to act for one year and two months following notification, "during which they had full knowledge of the circumstances under which they now assert a right to rescind... As a result, the plaintiff has arguably waived and foreclosed any right to rescind."
According to an attorney for Bharat, RedBrick's failure to disclose the litigation delayed the company's certification by the California Department of Corporations, in turn hampering Bharat's ability to sell franchises.
Bharat had sought the return of the $600,000 fee the company paid to RedBrick for the rights to resell RedBrick franchises in Los Angeles and Ventura County, and reimbursement for the costs of opening a RedBrick location.
Read also, RedBrick saga shows perils of franchising.
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