The Minnesota Supreme Court awarded a major victory to Cambria Company, LLC, on Sept. 11, 2024, ending a long-running dispute brought by a former installer of Cambria product and offering an interpretation of what constitutes a “franchise” under the Minnesota Franchise Act (“MFA”) for the first time in more than three decades.

The dispute dates back to June 2017 when Cambria sued M&M Creative Laminants, Inc. (“M&M”), for unpaid invoices following the termination of their business relationship, under which M&M had purchased and installed Cambria countertops. M&M asserted counterclaims for (1) violations of the MFA, which requires good cause for terminating a franchise and 90 days’ notice of the reasons for termination; (2) breach of contract; (3) unjust enrichment; (4) tortious interference with contract; and (5) unfair competition. M&M sought more than $20 million in alleged lost-profit damages.

In March 2020, the district court granted summary judgment for Cambria on the installer’s MFA claims. The district court held that the parties’ relationship did not constitute a franchise because the required element of payment of a franchise fee was not present. The remaining claims were decided during a two-and-a-half-week jury trial in August 2021, in which Cambria was awarded a net recovery of over $365,000.

The installer appealed. In Cambria Company, LLC, v. M&M Creative Laminants, Inc., the Minnesota Court of Appeals affirmed the trial court’s grant of summary judgment dismissing the installer’s MFA claims and enforcing the parties’ contractual limitation of liability clause. 995 N.W.2d 426 (Minn. Ct. App. 2023). The Court of Appeals rejected the installer’s other claims of error arising out of the jury verdict and affirmed Cambria’s monetary recovery.

The Minnesota Supreme Court then granted the installer’s petition for review on the sole issue of whether summary judgment had been properly entered on the franchise fee issue under the MFA. Oral argument was held May 6, 2024, and the Supreme Court affirmed the district court’s ruling on Sept. 11, 2024. The Minnesota Supreme Court’s ruling is notable because the court rejected the installer’s novel argument that a purchase of goods fabricated to the installer’s specifications constituted a franchise fee, and instead found that the purchase of such goods is covered by the bona fide wholesale goods exception, Minn. Stat. § 80C.01, subd. 9(a).

Maslon attorneys Bryan Freeman, Jim Long, and Jevon Bindman obtained the grant of summary judgment, tried the remaining claims in the case to the jury, and handled both appeals.