Bathworks Enterprises LLC v. ReBath LLC

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Bathworks Enterprises LLC,
Plaintiff,
v.
ReBath LLC,
Defendant.
No. CV-25-04437-PHX-KML
ORDER
Plaintiff Bathworks Enterprises, LLC operates two Florida franchises under
agreements with defendant Re-Bath, LLC, a franchisor of residential bathroom remodeling
businesses. Bathworks alleges Re-Bath charged unauthorized fees, misused advertising
funds, restricted local marketing efforts, and then retaliated against it for challenging that
conduct in court. Re-Bath moved to dismiss most of Bathworks’s claims. The motion is
granted in part and denied in part.
I. Background
Defendant Re-Bath is a Delaware company that franchises residential bathroom
remodeling businesses. (Doc. 16 at 3–4.) Its principal place of business is in Arizona. (Doc.
16 at 3.) Plaintiff Bathworks Enterprises operates two Re-Bath franchises in Florida. (Doc.
16 at 3.) In April 2022, the parties entered into two separate but identical franchise
agreements.1 (Doc. 16 at 3.) Bathworks now alleges Re-Bath imposed unauthorized
technology fees, misused contributions to its Advertising Fund, restricted franchisees’ local
1 For simplicity and because the franchise agreements are substantively identical, the court
will refer to a singular agreement throughout this order.
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marketing efforts, and then retaliated when Bathworks challenged that conduct. (Doc. 16
at 2–3.)
Bathworks alleges Re-Bath had limited contractual authority to charge technology-
related fees. Before executing the franchise agreements, Bathworks received Re-Bath’s
Franchise Disclosure Document (“FDD”). (Doc. 16 at 6.) Bathworks alleges 16 C.F.R.
§ 436.5 required Re-Bath to disclose in the FDD all fees Bathworks would pay during the
contract term. (Doc. 16 at 6.) The FDD identified only one technology-related cost: an
ongoing monthly software fee of approximately $300 for a customer relationship
management (“CRM”) program. (Doc. 16 at 6.) The franchise agreement also addressed
technology-related charges by allowing Re-Bath to collect fees or charges relating to the
“Computer System[2] . . . for payment to the third party supplier(s) of the Computer System,
or components thereof, on a consolidated basis or otherwise.” (Docs. 16 at 7; 16-1 at 19.)
The franchise agreement allowed Re-Bath to mandate “reasonable” technology-related
changes to the Computer System and required software. (Docs. 16 at 7–8; 16-1 at 19.)
In May 2024, Re-Bath announced a new consolidated technology fee, claiming it
would provide new software tools and future technology enhancements. (Doc. 16 at 8–9.)
Re-Bath initially proposed a $1,500 per-territory fee plus monthly per-user fees. (Doc. 16
at 9.) After franchisee pushback, Re-Bath announced a revised population-based fee
structure of $1 per 1,000 people in each franchisee’s territory. (Doc. 16 at 9.) On August
5, 2024, Bathworks received its first consolidated technology-fee invoice: $3,021 for July
2024. (Doc. 16 at 9.) Before that, Bathworks’s monthly technology fee had been $490.
(Doc. 16 at 10.) Because Re-Bath was authorized to automatically withdraw amounts from
Bathworks’s account, Bathworks alleges it was forced to either allow the withdrawals or
turn off automatic payments and risk default. (Doc. 16 at 11.)
2 According to the franchise agreement, the “Computer System” consisted of: back office
and point of sale systems, customer relationship management systems, accounting systems,
reporting and data exchange systems, data, audio, video, and voice storage, retrieval, and
transmission systems; physical, electronic, and other security systems; printers and other
peripheral devices; archival back-up systems; e-mail systems; and Internet access mode
and speed. (Doc. 16-1 at 48.)
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Bathworks alleges the increased fee violated the franchise agreement. (Doc. 16 at
8–9.) The fee was not itemized and Bathworks alleges Re-Bath did not give sufficient
notice of the amount owed or the reason for it. (Doc. 16 at 9–10.) According to Bathworks,
the fee also did not lead to new technology, enhanced functionality, or improved services.
(Doc. 16 at 9.) Instead, many of the tools were allegedly programs inaccessible to
franchisees, redundant of programs already used, or otherwise not properly included in the
new fee. (Doc. 16 at 10.) Bathworks allegedly later3 discovered the fee covered Re-Bath’s
own overhead and labor costs, even though neither the FDD nor the franchise agreement
allowed Re-Bath to recover those costs through a technology fee. (Doc. 16 at 11.)
In addition to the technology fee increase, Bathworks challenges the way Re-Bath
handled the Advertising Fund. (Doc. 16 at 12.) Under the franchise agreement, franchisees
were required to contribute a percentage of gross revenues to the Advertising Fund, which
was intended to be used for marketing and brand awareness for the benefit of franchisees.
(Doc. 16 at 12.) Bathworks alleges the franchise agreement prohibits Re-Bath from using
the Advertising Fund for its ordinary operating expenses. (Doc. 16 at 12.) Re-Bath
nevertheless allegedly used Advertising Fund contributions to subsidize overhead and
labor expenses unrelated to marketing, technology platforms that benefited only Re-Bath
itself, and legal expenses from prior litigation. (Doc. 16 at 12.)
Bathworks also challenges Re-Bath’s control over franchisees’ local marketing
efforts. (Doc. 16 at 12–13.) According to the complaint, Re-Bath pressured franchisees to
use Re-Bath-controlled marketing services, made it difficult to work with outside
marketing agencies, and limited access to approved marketing materials unless franchisees
used its preferred vendors. (Doc. 16 at 12–13.) Those restrictions allegedly prevented
franchisees from using their preferred and longstanding local marketing partners, even
though the franchise agreement did not authorize Re-Bath to exercise that level of control
over local marketing. (Doc. 16 at 13.) The restrictions also allegedly forced franchisees to
3 The complaint states this discovery occurred in November 2024 (Doc. 16 at 11), but
Bathworks’s response to the motion to dismiss claims that was a scrivener’s error and the
correct date of the discovery was November 2025 (Doc. 20 at 4).
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buy marketing materials at inflated prices and submit marketing invoices through a
platform not required by the franchise agreement. (Doc. 16 at 13–15.)
Bathworks filed its original complaint on November 26, 2025. (Doc. 1.) One month
later, Re-Bath issued a notice of default identifying four alleged breaches: use of
unauthorized marketing vendors, failure to comply with laws and operational standards in
connection with a Home Depot project, failure to submit local marketing spend reports
through Concur, and unauthorized sales and jobs outside Bathworks’s protected territory.
(Doc. 16 at 15.) In January 2026, Bathworks disputed the alleged defaults. (Doc. 16 at 15.)
On February 5, 2026, Re-Bath issued a Notice of Termination purporting to terminate both
franchise agreements. (Doc. 16 at 15.) Bathworks alleges the default and termination were
retaliatory and pretextual. (Doc. 16 at 15–16.)
On February 6, 2026, Bathworks filed an amended complaint that asserts claims for
breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent
concealment, fraudulent misrepresentation, violation of the Arizona Consumer Fraud Act
(“ACFA”), specific performance for accounting, and declaratory judgment. (Doc. 16 at
19–27.)4 Re-Bath moves to dismiss all claims except the wrongful-termination aspects of
the breach-of-contract and implied-covenant counts. (Doc. 19 at 1–3.)
II. Legal Standard
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (simplified). This is not a “probability requirement,” but a
requirement that the factual allegations show “more than a sheer possibility that a defendant
has acted unlawfully.” Id. A claim is facially plausible “when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. “Determining whether a complaint states a plausible claim
for relief . . . [is] a context-specific task that requires the reviewing court to draw on its
4 Bathworks also alleged a Florida Deceptive and Unfair Trade Practices Act claim but has
withdrawn that claim. (Doc. 20 at 3 n.1.) Bathworks says it will seek leave to amend to
insert a new claim but has not done so as f the date of this order. (Doc. 20 at 3 n.1.)
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judicial experience and common sense.” Id. at 679.
III. Analysis
Re-Bath moves to dismiss most of Bathworks’s claims. It argues the franchise
agreement’s contractual limitations provision bars nearly all claims, any timely fraud-
based theories fail Rule 9(b), the ACFA does not apply to franchises, and the accounting
and declaratory-judgment claims are not independent causes of action. (Doc. 19 at 2–3.)
Re-Bath does not seek dismissal of the wrongful-termination theories within Bathworks’s
breach-of-contract and implied-covenant claims. (Docs. 19 at 2; 21 at 2 n.1.) Because Re-
Bath does not separately challenge the merits of the breach-of-contract or implied-covenant
claims, they are analyzed only for timeliness. The parties’ arguments do not map neatly
onto the complaint’s formal claim labels, so the court addresses the motion by factual
theory where necessary rather than proceeding claim-by-claim.
A. Timeliness
Re-Bath argues that “nearly all” of Bathworks’s claims are untimely under the
franchise agreement, except those regarding wrongful termination. (Doc. 19 at 7.) A
complaint may be dismissed on limitations grounds only when untimeliness is apparent on
the face of the complaint. Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir.
2006). Under Arizona law, “parties are at liberty to contract and may, indeed, agree to
shorten the statute of limitations from that which normally applies to claims.” Zuckerman
v. Transamerica Ins. Co., 650 P.2d 441, 446 (Ariz. 1982). Section 24.7 of the franchise
agreement outlines limitations periods for claims arising out of the contract and the
franchise relationship. (Doc. 16-1 at 53.) Under that provision, such claims are barred
unless brought before the earliest of three deadlines: the applicable statutory limitations
period, “one (1) year after the date upon which a party discovered, or should have
discovered, the facts giving rise to an alleged claim,” or “two (2) years after the first act or
omission giving rise to an alleged claim.” (Doc. 16-1 at 53.) Bathworks does not dispute
the limitations provision is enforceable. (See Doc. 20 at 6.)
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1. Technology-fee Theories
Many of Bathworks’s claims stem from Re-Bath’s increased technology fees. The
relevant question for assessing the timeliness of any of these claims is when Bathworks
discovered, or should have discovered, the facts giving rise to them. Arizona’s discovery
rule does not require a plaintiff to know every fact supporting its claim before the
limitations period begins to run. Instead, the claim accrues when the plaintiff knows, or
through reasonable diligence should know, the facts underlying the claim. Gust, Rosenfeld
& Henderson v. Prudential Ins. Co. of Am., 898 P.2d 964, 966 (Ariz. 1995). The discovery
rule is meant to protect plaintiffs where injuries or acts causing the injury may be difficult
to detect; it does not postpone accrual when the injury is open and obvious. Id. at 967.
The complaint clearly establishes Bathworks knew or should have known the facts
giving rise to its technology-fee theory by August 2024. Re-Bath announced the new
consolidated technology-fee structure in May 2024 and justified the fee then by pointing
to multiple technology tools it purportedly provided franchisees. (Doc. 16 at 8–9.) On
August 5, 2024, Bathworks received a monthly consolidated technology-fee invoice for
$3,021, scheduled for automatic withdrawal four days later, representing an increase of
more than 500% over the previous fee of $490 per month. (Doc. 16 at 9–10.)
By August 2024, Bathworks had enough information to trigger the one-year
limitations period. Bathworks knew the FDD disclosed only a monthly CRM software cost,
knew the franchise agreement limited Re-Bath’s authority to collect technology-related
fees, and knew Re-Bath had suddenly imposed a consolidated technology fee more than
six times higher than Bathworks previously paid. (Doc. 16 at 6–10.) Bathworks also knew
the fee was not itemized and Re-Bath had not provided the same type of notice it
historically gave for vendor-cost increases. (Doc. 16 at 8–10.) Those facts were enough to
put Bathworks on notice of a potential wrong and require it to investigate whether the new
fee exceeded Re-Bath’s authority under the franchise agreement. See Gust, 898 P.2d at
966–67.
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Bathworks’s later discovery of additional facts, such as that the technology fee
allegedly included Re-Bath’s overhead and labor costs, does not change that conclusion.
The technology-fee theory is not limited to the inclusion of overhead and labor. The
complaint alleges Re-Bath imposed a new, undisclosed, non-itemized, dramatically-larger
technology fee without sufficient notice, without substantiation, and without any
corresponding increase in functionality or value. (Doc. 16 at 8–11.) All of these facts were
obvious by August 2024, even if additional details were filled in later. Because Bathworks
knew enough by August 2024 to identify the alleged wrong and resulting injury, any claim
based on the initial imposition of the technology fee accrued then. Gust, 898 P.2d at 966.
That conclusion does not bar all aspects of those claims based on the increased
technology fee. Under Arizona law, breaches may accrue separately via recurring
payments, so a plaintiff may recover for injuries within the limitations period even if earlier
ones are time-barred. See Builders Supply Corp. v. Marshall, 352 P.2d 982, 986 (Ariz.
1960). Here, Re-Bath continued collecting monthly technology fees through automatic
withdrawals that Bathworks says were not contractually authorized. Each allegedly-
unauthorized withdrawal may therefore constitute a separate breach rather than a
continuing consequence of the first improper invoice.5 See id.; cf. Ancala Holdings, L.L.C.
v. Price, 220 F. App’x 569, 572 (9th Cir. 2007) (rejecting continuing-breach theory under
Arizona law where claim was not based on “recurring payments that have become due”).
Bathworks may therefore pursue its technology-fee theory only to the extent it is based on
allegedly unauthorized withdrawals occurring within one year before the complaint was
filed (i.e., withdrawals on or after November 26, 2024).
5 Re-Bath cites City of Chandler v. Roosevelt Water Conservation Dist., 559 P.3d 184 (Ariz
Ct. App. 2024), but the Arizona Supreme Court recently ordered that opinion depublished.
See City of Chandler v. Roosevelt Water Conservation Dist., No. CV-24-0267-PR, 2026
WL 1141802, at *1 (Ariz. Apr. 28, 2026). Arizona courts therefore view that case as
“neither precedential nor persuasive authority.” Hansen v. Chon-Lopez in & for Cnty. of
Pima, 501 P.3d 762, 772 n.6 (Ariz. Ct. App. 2021). In any event, this case involves
recurring withdrawals of money instead of a single repudiation followed by continuing
effects.
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2. Franchise Disclosure Document Theories
Bathworks alleges Re-Bath was required to disclose the consolidated technology
fee in the FDD but failed to. (Doc. 16 at 6.) Instead, the FDD identified only one ongoing
technology-related charge: a monthly fee of approximately $300 for a CRM system, which
Bathworks says was presented as a pass-through payment to the software provider rather
than a separate revenue source for Re-Bath. (Doc. 16 at 6.) The FDD also listed several
other Computer System programs but stated Re-Bath did not charge franchisees for those
programs. (Doc. 16 at 7.) Bathworks believes the failure to disclose all fees supports fraud-
based claims. (See Docs. 16 at 23–24; 20 at 3, 11–12.) Because FDD-based theories depend
on information Re-Bath allegedly failed to disclose before Bathworks signed the franchise
agreements, § 24.7(C)’s two-year outside limit applies. That provision bars claims brought
more than two years after the “first act or omission giving rise to an alleged claim.” (Doc.
16-1 at 53.) Any FDD omission occurred no later than April 11, 2022, when Bathworks
signed the franchise agreements. (Doc. 16 at 7.) Bathworks did not file this case until
November 2025 and offers no convincing argument for tolling the limitations period. Thus,
any claim based on Re-Bath’s alleged failure to disclose the consolidated technology fee
in the FDD is time-barred.
3. Advertising and Marketing Theories
Re-Bath has not shown the Advertising Fund or marketing-restriction theories are
time-barred at this stage. Bathworks alleges Re-Bath misused Advertising Fund
contributions by diverting them to overhead, technology, and legal expenses unrelated to
the fund’s marketing purpose. (Doc. 16 at 12.) Bathworks also alleges Re-Bath improperly
restricted franchisees’ local marketing by limiting their ability to work with outside
vendors, inflating prices for marketing materials, and imposing unauthorized reporting
requirements. (Doc. 16 at 12–15.) Unlike the technology-fee allegations, however, the face
of the complaint does not establish when Bathworks discovered or should have discovered
this alleged misconduct. See Huynh, 465 F.3d at 997. At least some marketing-related
allegations appear tied to reports for May through July 2025, within one year of the
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November 2025 complaint. (Doc. 16 at 15.) Because the complaint alone does not establish
the Advertising Fund or marketing-restriction theories are untimely, they will not be
dismissed on timeliness grounds.
B. Fraudulent Misrepresentation and Concealment
Bathworks’s remaining fraud theories are narrow. The only potentially timely
common-law fraud theories are based on Re-Bath’s allegedly unauthorized technology-fee
withdrawals within one year before the complaint was filed. Bathworks frames those
theories in two ways: fraudulent misrepresentation and fraudulent concealment. (Doc. 16
at 22–24.)
To state a fraud claim, the complaint must allege “with particularity the
circumstances constituting fraud.” Fed. R. Civ. P. 9(b); Vess v. Ciba-Geigy Corp. USA,
317 F.3d 1097, 1103 (9th Cir. 2003). Under this standard, Bathworks must identify the
“who, what, when, where, and how” of the alleged misconduct. Vess, 317 F.3d at 1106.
The allegations must be specific enough to give the defendant notice of the particular
misconduct alleged so the defendant can defend against the charge rather than simply deny
wrongdoing. Neubronner v. Milken, 6 F.3d 666, 671–72 (9th Cir. 1993). In Arizona, a
fraudulent-misrepresentation claim requires nine elements: “(1) a representation; (2) its
falsity; (3) its materiality;” the speaker’s (4) knowledge of its falsity; (5) intent that it be
acted upon in the way that would be reasonably expected; the hearer’s (6) ignorance of its
falsity; (7) reliance on its truth; (8) right to rely on it; and (9) consequent and proximate
injury. Comerica Bank v. Mahmoodi, 229 P.3d 1031, 1033–34 (Ariz. Ct. App. 2010).
“‘[F]ailure to [plead] any one of [these elements] is fatal to the cause of action.’” Tavilla
v. Cephalon, Inc., 870 F. Supp. 2d 759, 774 (D. Ariz. 2012) (citing Fridenmaker v. Valley
Nat’l Bank of Ariz., 534 P.2d 1064, 1068 (Ariz. Ct. App. 1975)).
Liability for fraudulent concealment lies against any “party to a transaction who by
concealment or other action intentionally prevents the other from acquiring material
information.” Wells Fargo Bank v. Arizona Laborers, Teamsters & Cement Masons Loc.
No. 395 Pension Tr. Fund, 38 P.3d 12, 34 n.22 (Ariz. 2002), as corrected (Apr. 9, 2002).
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Active concealment may be actionable even where a party has no independent duty to
disclose. Id. at 35–36.
Bathworks’s fraudulent-misrepresentation allegations do not satisfy Rule 9(b). For
reasons already explained, the FDD-based misrepresentation theory is time-barred. What
remains post-agreement are claims Re-Bath misrepresented both that the increased
technology fees were necessary to recover actual costs, and the nature and purpose of the
consolidated technology fee. But the complaint does not identify any timely statement to
Bathworks with the specificity Rule 9(b) requires. The concrete statements identified in the
complaint occurred during the May and June 2024 rollout of the consolidated technology
fee, outside the one-year limitations period. (Doc. 16 at 8–9.) And although the complaint
references a January 2025 internal communication from Re-Bath’s former CFO, that
allegation concerns Re-Bath’s internal understanding of its authority to collect technology
fees, not any representation made to Bathworks. (Doc. 16 at 8.) Bathworks does not
identify a timely affirmative misrepresentation, the speaker, the manner of communication,
Bathworks’s reliance on that particular statement, or why that particular statement was
false when made. Comerica Bank, 229 P.3d at 1033–34. Accordingly, the fraudulent-
misrepresentation claim is dismissed.
As to fraudulent concealment, Bathworks plausibly pleads a narrow theory with
particularity. The complaint identifies Re-Bath as the party that imposed and collected the
consolidated technology fee. (Doc. 16 at 8–11.) It identifies the actively-concealed
information as the actual basis, calculation, and allocation of that fee—specifically, that
the fee allegedly covered Re-Bath’s overhead and labor costs rather than technology-
related charges authorized by the franchise agreement. (Doc. 16 at 10–11, 22–23.) It
explains when the concealment occurred: each time Re-Bath collected the fee without
disclosing what Bathworks was actually paying for. (Doc. 16 at 9–11.) It also sets out how
the concealment occurred: Re-Bath billed the fee without itemization explaining what
Bathworks was paying for, and collected the fee through automatic withdrawals from
Bathworks’s account. (Doc. 16 at 9–11.) And it identifies why the concealment was
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allegedly fraudulent: Re-Bath allegedly knew the intended fee structure was not authorized
under Bathworks’s version of the franchise agreement but imposed it anyway, while
concealing information that would have revealed the fee exceeded Re-Bath’s contractual
authority. (Doc. 16 at 8.) Taken together, those facts identify the who, what, when, where,
and how of the alleged concealment and give Re-Bath notice of the particular theory being
asserted. See Vess, 317 F.3d at 1106; Neubronner, 6 F.3d at 671.
Re-Bath argues the concealment claim should fail because Bathworks does not
identify a post-agreement transaction or a duty to disclose. (Doc. 19 at 8–9.) But each
timely withdrawal of the technology fee may qualify as a transaction, all of which occurred
post-agreement. See State ex rel. Brnovich v. City of Phx., 468 P.3d 1200, 1205 (Ariz.
2020) (explaining “transaction” may mean an “exchange or transfer” of funds, business
dealings, or the performance of a contract). And because Bathworks alleges intentional
concealment rather than mere nondisclosure, the claim does not fail for lack of an
independent duty to disclose. See Wells Fargo, 38 P.3d at 34 n.22, 35–36. Accordingly,
the fraudulent-concealment claim may proceed to the extent it is based on allegedly
unauthorized technology-fee withdrawals on or after November 26, 2024.
C. Arizona Consumer Fraud Act
The ACFA prohibits “deception, deceptive or unfair act or practice, fraud, false
pretense, false promise, misrepresentation, or concealment, suppression or omission of any
material fact with intent that others rely on such concealment, suppression or omission, in
connection with the sale or advertisement of any merchandise.” A.R.S. § 44-1522(A); see
Cheatham v. ADT Corp., 161 F. Supp. 3d 815, 826 (D. Ariz. 2016). “Merchandise”
includes “objects, wares, goods, commodities, intangibles, real estate or services.”
A.R.S. § 44-1521(5). Claims under the ACFA are subject to Rule 9(b)’s particularity
requirements. See Gould v. M & I Marshall & Isley Bank, 860 F. Supp. 2d 985, 988 n.2
(D. Ariz. 2012).
Although the parties debate the issue, the court need not decide whether the ACFA
can ever apply to the sale of a franchise. Any ACFA theory based on Re-Bath’s FDD
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disclosures or the sale of the franchise is untimely under the franchise agreement. The only
potentially-timely theory concerns Re-Bath’s later technology-fee withdrawals. That
theory plausibly falls within the ACFA because Bathworks alleges the recurring fee was
tied to software tools and technology platforms Re-Bath provided to franchisees, “services”
which undoubtedly qualify as merchandise under the statute. A.R.S. § 44-1521(5). Re-Bath
argues the ACFA does not apply because this dispute arises from a franchise relationship
(Docs. 19 at 9–11; 21 at 8–10), but does not convincingly explain why a recurring
technology fee for software tools and technology platforms cannot qualify as a charge for
services. And the alleged deception is pleaded with particularity for the same reason as the
fraudulent-concealment theory: Bathworks alleges Re-Bath concealed the basis,
calculation, and allocation of the fee through non-itemized invoices and automatic
withdrawals while collecting charges Bathworks says were not authorized by the franchise
agreement. (Doc. 16 at 8–11.) The ACFA claim therefore may proceed only as to allegedly
unauthorized technology-fee withdrawals on or after November 26, 2024.
The advertising and marketing-related ACFA theories do not survive. Bathworks
alleges Re-Bath misused Advertising Fund contributions, restricted local marketing
vendors, imposed inflated markups on marketing materials, and required franchisees to
submit marketing invoices through Concur. (Doc. 16 at 12–15, 24–25.) Those allegations
do not plead fraud with the particularity Rule 9(b) requires. Bathworks does not identify a
specific deceptive statement or act of concealment tied to those marketing practices, when
it occurred, who made it, what Bathworks relied on, or how that conduct caused ACFA
damages distinct from the alleged contractual harm. See Vess, 317 F.3d at 1106. Thus, the
ACFA claim may proceed only as to the timely technology-fee concealment theory.
D. Demand for Accounting
Bathworks asserts a demand for accounting, arguing the franchise agreement
entitles it to a full accounting of Re-Bath’s expenditures from the Advertising Fund. (Doc.
16 at 21.) Under Arizona law, actions for accounting are generally reserved for situations
involving a fiduciary relationship. Wright v. Chase Home Fin. LLC, No. CV-11-0095-
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PHX-FJM, 2011 WL 2173906, at *3 (D. Ariz. June 2, 2011) (citing Mollohan v. Christy,
294 P.2d 375, 376–77 (Ariz. 1956)). When there is a commercial contract, a fiduciary
relationship exists only when one party agrees to serve in a fiduciary capacity. Urias v.
PCS Health Sys., Inc., 118 P.3d 29, 35 (Ariz. Ct. App. 2005); see also Best W. Int’l, Inc. v.
AV Inn Assocs. 1, LLC, No. CV-08-2274-PHX-DGC, 2010 WL 2595274, at *4 (D. Ariz.
June 24, 2010), aff’d, 464 F. App’x 568 (9th Cir. 2011) (treating franchisor-franchisee
relationship as commercial contract that did not impliedly create a fiduciary duty). Here,
the franchise agreement explicitly states that Re-Bath assumes no fiduciary obligation in
maintaining, directing, or administering the Advertising Fund. (Doc. 16-1 at 29.)
Bathworks points to no other allegations showing a fiduciary relationship and does not
explain why it could not use ordinary discovery to determine how Re-Bath used
Advertising Fund contributions. Accordingly, the “Specific Performance—Demand for
Accounting” claim is dismissed.
E. Declaratory Judgment
Bathworks seeks a declaratory judgment that Re-Bath lacked authority under the
franchise agreement to impose the challenged technology fees, use Advertising Fund
contributions for non-marketing purposes, and restrict Bathworks’s local marketing
activities. (Doc. 16 at 26–27.) The Declaratory Judgment Act provides a remedy, not an
independent cause of action. City of Reno v. Netflix, Inc., 52 F.4th 874, 878–79 (9th Cir.
2022). And even when jurisdiction exists, the court has discretion whether to entertain
declaratory relief. Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220, 1223 (9th Cir. 1998) (en
banc). Here, the requested declaratory relief merely mirrors Bathworks’s contract theories,
so resolving the breach-of-contract claim will resolve whether Re-Bath’s challenged
conduct was authorized by the franchise agreement. See HM Hotel Props. v. Peerless
Indem. Ins. Co., 874 F. Supp. 2d 850, 855 (D. Ariz. 2012) (dismissing declaratory-relief
claim as duplicative of breach-of-contract claim). Accordingly, the standalone declaratory
judgment claim is dismissed. However, Bathworks may seek declaratory relief as a remedy
if appropriate and tied to a viable underlying claim.
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Accordingly,
IT IS ORDERED Re-Bath’s motion to dismiss (Doc. 19) is GRANTED IN PART
and DENIED IN PART as explained in this order.
IT IS FURTHER ORDERED as follows:
The parties are directed to meet, confer, and develop a Rule 26(f) Joint Case
Management Report, which must be filed within 4 weeks of the date of this order. It is
the responsibility of plaintiff(s) to initiate the Rule 26(f) meeting and prepare the Joint Case
Management Report. Defendant(s) shall promptly and cooperatively participate in the Rule
26(f) meeting and assist in preparation of the Joint Case Management Report.
The Joint Case Management Report shall contain the following information in
separately-numbered paragraphs.
1. The parties who attended the Rule 26(f) meeting and assisted in developing
the Joint Case Management Report;
2. A list of all parties in the case, including any parent corporations or entities
(for recusal purposes);
3. Any parties that have not been served and an explanation of why they have
not been served, and any parties that have been served but have not answered
or otherwise appeared;
4. A statement of whether any party expects to add additional parties to the case
or otherwise amend pleadings;
5. The names of any parties not subject to the court’s personal (or in rem)
jurisdiction;
6. A description of the basis for the court’s subject matter jurisdiction, citing
specific jurisdictional statutes. If jurisdiction is based on diversity of
citizenship, the report shall include a statement of the citizenship of every
party and a description of the amount in dispute. See 28 U.S.C. §1332;
7. A short statement of the nature of the case (no more than three pages),
including a description of each claim, defense, and affirmative defense;
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8. A listing of contemplated motions and a statement of the issues to be decided
by those motions;
9. Whether the case is suitable for reassignment to a United States Magistrate
Judge for all purposes or suitable for referral to a United States Magistrate
Judge for a settlement conference;
10. The status of any related cases pending before this or other courts;
11. A discussion of any issues relating to preservation, disclosure, or discovery
of electronically stored information (“ESI”), including the parties’
preservation of ESI and the form or forms in which it will be produced;
12. A discussion of any issues relating to claims of privilege or work product;
13. A discussion of necessary discovery, which should take into account the
December 1, 2015 amendments to Rule 26(b)(1) and should include:
a. The extent, nature, and location of discovery anticipated by the parties
and why it is proportional to the needs of the case;
b. Suggested changes, if any, to the discovery limitations imposed by the
Federal Rules of Civil Procedure;
c. The number of hours permitted for each deposition. The parties also
should consider whether a total number of deposition hours should be
set in the case, such as twenty total hours for plaintiffs and twenty
total hours for defendants. Such overall time limits have the advantage
of providing an incentive for each side to be as efficient as possible in
each deposition, while also allowing parties to allocate time among
witnesses depending on the importance and complexity of subjects to
be covered with the witnesses;
14. Proposed deadlines for each of the following events. In proposing deadlines,
the parties should keep in mind the Case Management Order will contain
deadlines to govern this case and once the dates have been set the court will
vary them only upon a showing of good cause. A request by counsel for
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extension of discovery deadlines in any case that has been pending more than
two years must be accompanied by a certification stating the client is aware
of and approves of the requested extension. The court does not consider
settlement talks or the scheduling of mediations to constitute good cause for
an extension. The parties must propose the following:
a. A deadline for the completion of fact discovery, which will also be
the deadline for pretrial disclosures pursuant to Rule 26(a)(3). This
deadline is the date by which all fact discovery must be completed.
Discovery requests must be served and depositions noticed
sufficiently in advance of this date to ensure reasonable completion
by the deadline, including time to resolve discovery disputes. Absent
extraordinary circumstances, the court will not entertain discovery
disputes after this deadline;
b. Dates for full and complete expert disclosures and rebuttal expert
disclosures, if any;
c. A deadline for completion of all expert depositions;
d. A date by which any Rule 35 physical or mental examination will be
noticed if such an examination is required by any issues in the case;
e. A deadline for filing dispositive motions;
f. Case-specific deadlines and dates, such as the deadline to file a motion
for class certification or a date on which the parties are available for a
Markman (patent claim construction) hearing;
g. A date by which the parties shall have engaged in face-to-face good
faith settlement talks;
h. Whether a jury trial has been requested and whether the request for a
jury trial is contested, setting forth the reasons if the request is
contested;
i. Any other matters that will aid the court and parties in resolving this
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case in a just, speedy, and inexpensive manner as required by Federal
Rule of Civil Procedure 1;
15. A statement indicating whether the parties would prefer that the court hold a
case management conference before issuing a scheduling order—and, if so,
an explanation of why the conference would be helpful.
IT IS FURTHER ORDERED the parties shall file a proposed Case Management
Order containing all the proposed dates at the same time they file the Rule 26(f) Case
Management Report. The proposed Case Management Order must also be emailed in Word
format to Lanham_Chambers@azd.uscourts.gov.
Dated this 23rd day of June, 2026.
Case 2:25-cv-04437-KML Document 22 Filed 06/23/26 Page 17 of 17