What did EVCS, LLC request as a declaratory judgment against Engel & Volkers?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
EVCS, LLC and Amie Streater v. Engel & Völkers Americas, Inc., Curtin Stinson, Luxury Tucson, Inc., Turner Associates, LLC, and IRE Inc., Case No. 2023CV32068 In the District Court, County of El Paso, State of Colorado. On October 26, 2023 our franchisee in Colorado Springs, Colorado, EVCS, LLC ("EVCS"), and its owner Amie Streater, filed a complaint against us and the above-named co-defendants. Plaintiffs' amended complaint ("complaint") asserted causes of action against us for breach of the franchise agreement and the implied covenant of good faith and fair dealing by failing to stop alleged encroachments by certain other franchisees into the protected territory of EVCS. The complaint also alleges that we are liable to EVCS for damages resulting from breaches of EVCS's alleged "third party beneficiary" rights in the franchise agreements we have with those other franchisees. The complaint further alleges a claim for promissory estoppel, claiming that we breached a purported promise to make EVCS aware if anyone else wanted to submit an application for a franchise in Castle Rock or Castle Pines, Colorado and to allow EVCS to submit its own application. Finally, the plaintiffs seek a declaratory judgment that EVCS can properly declare its franchise agreement terminated or rescinded and receive a return of its investment or, alternatively, an injunction requiring us to enforce provisions in franchise agreements with certain other franchisees to prevent encroachment on EVCS's protected area, and/or money damages in an unspecified amount to be proved at trial. We filed a motion to dismiss the case in January 2024. On March 12, 2024, the Court granted our motion to dismiss in part, dismissing plaintiffs' claims against us for breach of the implied covenant of good faith and fair dealing, third party beneficiary, and promissory estoppel. However,
Source: Item 3 — LITIGATION (FDD pages 17–21)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, EVCS, LLC sought a declaratory judgment as part of a larger complaint against Engel & Völkers Americas, Inc., and other co-defendants. The complaint, filed on October 26, 2023, in the District Court of El Paso County, Colorado, included allegations of breach of the franchise agreement and the implied covenant of good faith and fair dealing. EVCS claimed that Engel & Volkers failed to prevent alleged encroachments by other franchisees into EVCS's protected territory. Additionally, EVCS asserted damages resulting from breaches of its alleged "third party beneficiary" rights in franchise agreements with other franchisees. They also claimed promissory estoppel related to a purported promise about franchise applications in specific Colorado locations.
The declaratory judgment sought by EVCS was that it could properly declare its franchise agreement terminated or rescinded. As an alternative to termination, EVCS requested either a return of its investment or an injunction. The injunction would require Engel & Volkers to enforce provisions in franchise agreements with other franchisees to prevent encroachment on EVCS's protected area. In addition to these remedies, EVCS also sought money damages in an unspecified amount, to be determined at trial.
Engel & Volkers responded to the complaint by filing a motion to dismiss the case in January 2024. The court granted the motion in part on March 12, 2024, dismissing claims for breach of the implied covenant of good faith and fair dealing, third-party beneficiary status, and promissory estoppel. However, the court denied the motion to dismiss regarding the claims for breach of contract and declaratory judgment, allowing those aspects of the case to proceed. This indicates that the court found sufficient grounds to allow the breach of contract and declaratory judgment claims to be heard further.