YELIN V. CARVEL CORPORATION
893 P.2d 450 (1995)
NATURE OF THE CASE: Yelin (D) appealed a decision that dismissed their third party
complaint against Carvel and Realty (D1s), franchisers, in connection with lessor's action
against D for unpaid rent.
FACTS: D entered into a franchise agreement with D1 to sell ice cream. D1's wholly owned
subsidiary, Franchise Stores Realty Corporation (D1), leased retail space from the
Doolittles. D1 then assigned its entire interest in the lease to the D as owners of the
franchise. The term was for a period of nine years and ten months. D operated the franchise
for approximately 3 1/2 years. The franchise lost money, and, ultimately, D was forced to
close the business. The Doolittles filed suit against D for breach of the lease agreement. D
filed a third-party complaint against D1 seeking to recover, in addition to other damages,
all amounts adjudged against them in the Doolittles' suit. D claims that D1's negligent
misrepresentations induced them to enter the franchise agreement and that D1 breached the
terms of the franchise agreement by failing to provide advertising and necessary supplies on
a timely basis. D1 moved to dismiss the third-party complaint on the grounds that it was
improper. The district court granted the motion to dismiss, finding that D1's potential
liability to D was not dependent on the outcome of the Doolittles' suit. D appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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