Henderson v. Golden Corral Systems, Inc.
- Nelson Roman
- 7:19-cv-02878
- U.S. District Court · Southern District of New York
- 14
Henderson v. Golden Corral: Judge Roman granted Golden Corral’s dismissal motion, dismissing Henderson’s claims without prejudice for lack of standing.
Sherrance Henderson’s individual claims against Golden Corral were dismissed without prejudice for lack of standing. The court also dismissed the claims against Niral Patel and John Craig for untimely service, while claims against TD Bank, Anthony Segreti, and Lance Trenary were treated as moot after Henderson withdrew them. The ruling identified Cornucopia Queen, Inc. as the entity that could potentially pursue franchise-related claims through counsel.
What happened
In Henderson v. Golden Corral Franchising Systems, Inc., Sherrance Henderson, representing herself, claimed that Golden Corral breached a franchise agreement and discriminated against her. She had assigned the franchise rights to Cornucopia Queen, Inc., which was not a plaintiff in the case.
The court also addressed claims involving other defendants. Henderson withdrew her claims against TD Bank, Anthony Segreti, and Lance Trenary, so their motions were treated as moot. The court dismissed the claims against Niral Patel and John Craig because Henderson did not timely serve them.
Judge Roman granted Golden Corral’s motion to dismiss and dismissed Henderson’s claims without prejudice because she lacked standing to sue individually after assigning the franchise rights. The court stated that claims on behalf of Cornucopia Queen would need to be brought by that corporation through a lawyer.
The detailed version
- Henderson v. Golden Corral Systems, Inc. · No. 7:19-cv-02878
- Nelson Roman
- Sept. 23, 2021
Background
Sherrance Henderson brought the case without a lawyer against Golden Corral Franchising Systems, Inc., Lance Trenary, Anthony Segreti, Niral Patel, TD Bank, and John Craig. She alleged, among other things, breach of contract and violations of Sections 1981 and 1985 of Title 42 arising from her efforts to open and operate a Golden Corral franchise in Poughkeepsie, New York. She also initially asserted racketeering and emotional-distress claims, but withdrew those claims in her opposition papers.
Henderson alleged that Golden Corral made promises about training, personnel services, and other support. She alleged that Golden Corral later issued default and termination notices concerning the Poughkeepsie restaurant and treated her differently because she was Black, a woman, and disabled. In 2015, however, she assigned her rights connected to the franchise to her holding company, Cornucopia Queen, Inc. She later personally guaranteed a loan for, and invested money in, Cornucopia Queen.
Golden Corral’s Motion
Golden Corral moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legally plausible claim. Golden Corral argued that Henderson lacked standing—the legal ability to bring the claims—because she had assigned the franchise agreement to Cornucopia Queen. It also argued that she had not plausibly alleged a breach of the franchise agreement.
The court agreed that Henderson could not bring the contract claims in her individual capacity. Because she had assigned the franchise rights to Cornucopia Queen, she was no longer individually a party to the contract allegedly breached. The court also found that she had not alleged facts establishing that she was an intended third-party beneficiary of the agreement between Cornucopia Queen and Golden Corral.
The court further explained that Henderson could not sue on behalf of Cornucopia Queen while representing herself. If the corporation were to pursue claims, it would have to be named as the plaintiff and represented by a lawyer.
Discrimination Claims
Henderson alleged that Golden Corral discriminated against her because of race and gender and treated her differently from white and male franchisees. The court analyzed the Section 1981 claim even though Golden Corral had not properly raised it, because Henderson was representing herself and the court was dismissing the claims without prejudice. Section 1981 protects certain rights to make and enforce contracts, including protection against racial discrimination in those contractual relationships.
The court concluded that the alleged harm from the post-assignment conduct was harm to Cornucopia Queen, the franchisee, rather than harm to Henderson’s own contractual relationship. The court therefore held that Henderson lacked standing to bring the race-discrimination claims individually. The court also noted that Sections 1981 and 1985 do not apply to disability discrimination, and that Henderson had not established an independent disability-discrimination claim. Her references to fraud, fraudulent inducement, and detrimental reliance did not state additional claims supported by sufficient allegations.
Other Defendants and Disposition
Henderson voluntarily withdrew her claims against TD Bank, Anthony Segreti, and Lance Trenary. The opinion states that TD Bank’s and Segreti’s motions were denied as moot, and the conclusion states that the motions concerning TD Bank, Segreti, and Trenary were dismissed as moot.
The court also dismissed the claims against Niral Patel and John Craig under Rule 4(m), which concerns timely service of the summons and complaint. Patel had not appeared, and the court found that Craig apparently had never been served within the required time.
Judge Nelson S. Roman granted Golden Corral’s motion to dismiss and dismissed Henderson’s claims against Golden Corral without prejudice for lack of standing. The court stated that Henderson could file a second amended complaint on behalf of Cornucopia Queen by November 8, 2021, but only through counsel and with Cornucopia Queen named as the plaintiff.
Read the full 14-page opinion on CourtListener, the free public archive maintained by the Free Law Project.