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Yelin v. Carvel Corp.

Supreme Court of New Mexico
893 P.2d 450 (1995)


Facts

Kenneth and Jacqueline Yelin (defendants) entered into a franchise agreement with Carvel Corporation in 1986. A wholly owned subsidiary of Carvel leased retail space from George Doolittle and Jeanette Doolittle Ingraham (the Doolittles) (plaintiffs), then assigned its entire lease interest to the Yelins. The term of the lease was 9 years and 10 months. The Yelins’ business did poorly, and they closed their franchise after three and a half years. In 1991, the Doolittles sued the Yelins for breach of the lease agreement. The Yelins filed a third-party complaint against Carvel, alleging that: (1) Carvel had induced them to enter the franchise agreement through negligent misrepresentations, (2) Carvel had breached the franchise agreement by failing to timely provide necessary materials, and (3) Carvel’s malfeasance had harmed their business so as to prevent them from fulfilling the terms of the lease. The court granted Carvel’s motion to dismiss the Yelins’ complaint against it. The Yelins appealed.

Rule of Law

Issue

Holding and Reasoning (Frost, J.)

Dissent (Franchini, J.)

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