The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Hard Rock Cafe’s former Nassau franchisee has lost its bid to overturn the dismissal of its $18.877 million damages claim for “deceptive and unfair business practices”.

HRCC Ltd and its principals, Keith and Kevin Doyle, saw the US 11th district court of appeals in a July 2017 ruling affirm a prior verdict that their damages claim was incompatible with Florida law.

The Florida middle district court’s initial ruling found in favour of the Hard Rock franchisor and two of its senior executives, agreeing that HRCC’s claim provided no evidence that Florida’s Deceptive and Unfair Trade Practices Act (FDUPTA) had been breached.

The court found that this Act limited damages to direct losses, not “consequential” ones such as lost future profits, and that the Doyles had failed to provide evidence of such actual damages.

The US appeals court affirmed the initial judge’s ruling after “careful review”, dismissing HRCC Ltd’s claim that the FDUPTA Act should be interpreted more broadly to include “compensatory” claims.

As to the former Nassau franchisee’s second ground of appeal, the court said: “HRCC did not argue the issue of actual damages, and neither did it point to evidence of actual damages, in its response to the defendants’ summary judgment motion.

“In this appeal, HRCC makes arguments about actual damages based on evidence in the record from below, but never cited to the district court before that court entered judgment.”

The US appeals court said the failure to cite such evidence was entirely HRCC’s fault, and that to survive a summary judgment bid it had to provide damages evidence to the lower court. This it failed to do.

HRCC Ltd and the Doyles had initially alleged they were the victim of a conspiracy, involving Hard Rock International and two executives, Hamish Dodds and Michael Beacham.

They claim they were forced or squeezed out of the Charlotte Street, downtown Nassau business so that the franchise, whose landlord is ex-MP Marvin Pinder, could be “resold to a third party for profit”.

However, the Florida court previously ruled that the “personal animosity”, which the Doyles and HRCC claimed were directed against them by the Hard Rock executives, did not amount to a ‘conspiracy’ that would result in “personal gain” for the latter from terminating the Nassau franchisee’s agreement. 

HRCC had claimed it was “induced” by Hard Rock to open a restaurant to complement the existing store, which was already profitable on a standalone basis.

It argued that it was solely the restaurant operation that caused it to “incur millions of dollars in damages”, and that the middle district Florida court had been wrong to lump this together with the retail store in its ruling.

HRCC alleged it had invested $4 million into the restaurant franchise alone prior to its 2014 termination, and paid $5 million in royalties to Hard Rock.

The restaurant lost its Nassau franchisee some $7.127 million prior to its closure, with the enforced night openings resulting in losses of between $600,000 to $800,000 over the period December 2011 to end-March 2014.

Besides the royalty rights and restaurant losses, HRCC argued that the damages it incurred also included a $1 million payment to Mr Pinder; $3 million in “development costs”; capital loans and interest worth $2 million; and $500,000 in expenses.