X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
STAFF REPORTER It’s not uncommon for litigators giving a trial post-mortem to concede that their opponents had a point or two that gave them cause for concern. But talking to the attorneys for the McDonald’s Corp. and for Sandra Darling, a former McDonald’s franchisee who says the company pursued a vendetta against her, leaves the impression that they attended separate trials. Each side declares adamantly that the other put on a case utterly lacking in merit. Darling has the better of the argument considering the outcome. On April 29, a Los Angeles County Superior Court jury awarded her $6.5 million in compensatory damages and $10 million in punitive damages. It found that McDonald’s had conspired to defraud her out of the six McDonald’s restaurants she once owned. As to liability, the 12-member jury was unanimous on all points. (A nine-member majority would have sufficed.) Three jurors dissented from the punitive award, according to McDonald’s trial attorney, Alan H. Silberman, a partner in the Chicago office of Sonnenschein Nath & Rosenthal. But he concedes that the dissenters gave no indication of whether they wanted a higher or a lower figure. Jurors could not be reached for comment, in part because of local court rules shielding the identities of jurors. Despite the jury’s show of unanimity, Silberman insisted that “the verdict was a surprise to everyone. It was pretty obvious that it was not supported by the facts or the law.” He speculated that the jury was moved by Darling’s courtroom appearances wearing an oxygen mask and predicted certain vindication in the appellate courts. Not a happy meal Darling’s trial attorney, George Knopfler, is quick to point out that the judge instructed the jury from the very first that her medical condition had nothing to do with the case at hand. Knopfler, who heads a three-lawyer firm in Woodland Hills, Calif., gave most of the credit to another of Darling’s attorneys, Nick P. Reckas. Reckas, a San Rafael, Calif., solo practitioner who specializes in fraud cases, had developed most of the evidence by the time he came to Knopfler, a semiretired real estate and construction lawyer. Reckas sought him out because of his trial experience. Knopfler said that Reckas succeeded in coaxing him off his retirement ranch in part because of the overwhelming evidence of the injustice done to Darling. According to Knopfler, trial testimony showed that Darling, whose father had been a McDonald’s franchisee for 20 years, was one of the most successful franchisees in the country from 1983 to 1993. Richard Adams, a former McDonald’s employer and franchisee who now advises franchisees and who testified on Darling’s behalf, said in an interview that Darling’s most successful restaurant had more than $3 million in annual sales at a time when the average for McDonald’s franchisees was about $1.2 million. What happened next, said Knopfler, is that Darling spoke out about changes in the way the company did business following the death of founder Roy Kroc in 1984. In particular, Knopfler said, she accused management of exploiting franchisees. Knopfler said that McDonald’s retaliated by giving Darling’s restaurants poor ratings, steering her to an accountant who mismanaged her affairs, putting other franchises near her franchise and, finally, refusing to approve a loan that could have saved Darling from bankruptcy. Adams said that since McDonald’s generally owns the buildings in which franchisees’ restaurants are located, lenders will not make loans unless the company agrees to subordinate its debt. He added that it is unusual for McDonald’s to decline subordination. Knopfler said that two former McDonald’s executives testified that Darling’s name appeared on a “hit list” of franchisees the company wanted pushed out of the system. Silberman said that Darling’s problems were the result of her own mismanagement, that the two former executives had an axe to grind (one of them having even sued the company) and that McDonald’s actually did Darling a favor by giving her time to sell her restaurants for more than $5 million, even though her failure to come up to the standards of her franchise agreement meant that the company could have immediately terminated the franchise. Even if Darling’s case had factual support, Silberman said, she wouldn’t have a legal claim, because she signed legal releases in exchange for that extension of time. Knopfler said that the jury rightly ignored those releases as being part and parcel of McDonald’s long course of fraud against his client. Young’s e-mail address is [email protected]

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.