A California couple, Christopher Heffington and his wife, Angela DelBiaggio, merely wanted to go into the junk removal business. Instead, so they claim, they ended up with a business that is just plain junky. They've filed suit to federal district court alleging fraud, breach of contract, and franchise and consumer law violations. They are seeking unspecified damages for their lost investment, lost profits and emotional distress.
In 2002, the couple contacted 1-800-GOT-JUNK?, which calls itself “the world's largest junk removal franchise,” boasting hundreds of franchised operations throughout North America, Australia and the United Kingdom. The market served by these franchises includes homeowners, property managers, contractors and businesses.
After providing the personal and financial information 1-800-GOT-JUNK? (GJ) asked for and paying the required fees, charges and other start-up expenses, Heffington and DelBiaggio signed a franchise agreement, which purported to hand over to them “exclusive” territories in northern California: two in East Sacramento, and one each in Yuba City and Marysville. In 2004, they bought two more territories in Napa and Vacaville. According to court documents, the couple says they relied on the representations in the agreement and offering circular that each of the territories would have at least 225,000 “serviceable people.” However, the couple had barely opened for business when they got chilling news.
Norcal Waste Systems Inc., based in San Francisco, owns and operates a subsidiary, Yuba-Sutter Disposal Inc. (YSD), which serves the Yuba City and Marysville areas under local government franchises awarding “an exclusive right … to collect and dispose of all garbage, refuse and recyclables from residences and businesses in the Yuba City and/or Marysville territory,” according to court papers. Not long after the couple started providing service, YSD wrote them a letter demanding that they cease operations in portions of the Yuba City and Marysville territories.
Yet another Norcal affiliate, Vacaville Sanitary Service (VSS), demanded in writing that the couple shut down their junk removal service in parts of the Vacaville territory where VSS and another company hold exclusive franchises for the collection of waste and recyclables from residential and commercial sources.
Heffington and DelBiaggio claim that GJ never told them, nor did they have reason to suspect, that other companies had operating rights that superseded the GJ franchises. In fact, they allege that a GJ executive told them to keep doing business and meet with Norcal to work out any problems. Moreover, they claim that GJ convinced VSS to drop a lawsuit it had brought against GJ and the couple by secretly agreeing to stop doing business in Vacaville.
As Heffington and DelBiaggio see it, the situation leaves them able to provide service only in fragmented and unprofitable areas in the three contested territories. Meanwhile, the franchise agreement prevents them from soliciting customers or providing service outside the GJ-designated areas.
For its part, GJ calls Heffington and DelBiaggio “an operating and viable franchisee.” The company has filed an answer denying the allegations in the complaint. “We intend to defend this action aggressively and on its merits,” says a company spokesperson.
[Heffington v. 1-800-GOT-JUNK?, LLC, No. 07-CV-508-CMP (W.D. Wash. filed April 6, 2007)]
The columnist is a Rockville, Md., attorney and serves as general counsel of the Solid Waste Association of North America.
The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: firstname.lastname@example.org.