Rule 206 ELECTRONIC CITATION: 2000 FED App. 0147P (6th Cir.) File Name: 00a0147p.06… v. Little Caesar Enterprises, Inc.

12 Cook, et al. v. Little Caesar Enterprises No. 99-1163
Michigan courts have held that to maintain a cause of
action for tortious interference, a plaintiff must establish that
defendant was a “third party” to the contract or business
relationship. See Reed v. Michigan Metro Girl Scout Council,
201 Mich. App. 10, 12 (Mich. Ct. App. 1993).
The district court properly held that, because the franchise
agreements gave Little Caesar Enterprises the right, under
specified conditions, to approve or disapprove any sale of the
franchises, Little Caesar Enterprises was not a “third party”
and, consequently, Cook could not maintain a cause of action
for tortious interference. See Cook, 972 F. Supp. at 414-16.
The franchise agreements included language that any
proposed sale or transfer of the franchise must be approved by
Little Caesar Enterprises. Cook’s purchase agreement with
Aboujaoude was expressly (and properly) conditioned upon
the approval of the transaction by Little Caesar Enterprises.
Little Caesar Enterprises was a party to the contract. Cook
cannot establish that Little Caesar Enterprises was a “third
party.” A cause of action for tortious interference is
precluded. See Reed, 201 Mich. App. at 12. We therefore do
not reach Cook’s contention that Little Caesar Enterprises’
“means of interference” with this purchase agreement were
intentional, improper, and unjustified.
AFFIRMED.
*The Honorable Jerome Farris, Circuit Judge of the United States
Court of Appeals for the Ninth Circuit, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0147P (6th Cir.)
File Name: 00a0147p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
KEVIN R. C OOK and K. C OOK
ENTERPRISES, INC.
Plaintiffs-Appellants,
v.
LITTLE C AESAR ENTERPRISES,
INC.,
Defendant-Appellee.
;>

1
No. 99-1163
Appeal from the United States District Court
for the Eastern District of Michigan at Flint.
No. 95-40234—Paul V. Gadola, District Judge.
Argued: March 15, 2000
Decided and Filed: April 24, 2000
Before: RYAN, MOORE, and FARRIS,* Circuit Judges.

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2 Cook, et al. v. Little Caesar Enterprises No. 99-1163
_________________
COUNSEL
ARGUED: Alan D. Penskar, SMITH, HARRIS, GOYETTE,
WINTERFIELD, PENSKAR & FERREHI, Flint, Michigan,
for Appellants. Irwin Alterman, KEMP, KLEIN, UMPHREY
& ENDELMAN, Troy, Michigan, for Appellee. ON BRIEF:
Alan D. Penskar, SMITH, HARRIS, GOYETTE,
WINTERFIELD, PENSKAR & FERREHI, Flint, Michigan,
for Appellants. Irwin Alterman, KEMP, KLEIN, UMPHREY
& ENDELMAN, Troy, Michigan, for Appellee.
_________________
OPINION
_________________
JEROME FARRIS, Circuit Judge. Kevin R. Cook and K.
Cook Enterprises, Inc., appeal the district court’s summary
judgment for defendant Little Caesar Enterprises, Inc., in this
diversity action arising from the parties’ franchise
agreements. We have jurisdiction pursuant to 28 U.S.C.
§ 1291. We affirm.
Background
Cook is a Little Caesar franchisee with three restaurants in
Fresno, California. Cook’s basic contention is that although
he was promised (1)“the entire territory ‘east of Blackstone in
the City of Fresno,’” and (2) that he would “be allowed to
exclusively develop locations in the nearby cities of Clovis
and Sanger,” Little Caesar Enterprises infringed on his
territories by franchising additional restaurants and not
allowing him to open additional restaurants. The franchise
agreements, however, provide only that Little Caesar
Enterprises will not locate other Little Caesar restaurants
within one mile of Cook’s locations. Each franchise
agreement includes an integration clause with respect to any
prior agreements or promises.
No. 99-1163 Cook, et al. v. Little Caesar Enterprises 11
an element required in every claim based on
misrepresentations.” Bonfield, 708 F. Supp. at 876.
Similarly, the district court noted that reasonable reliance
was required for a fraud action under the Indiana Franchise
Act. See Hardee’s of Maumelle, Ark., Inc. v. Hardee’s Food
Systems, Inc., 31 F.3d 573, 579 (7th Cir. 1994). In Hardee’s,
the franchisee alleged that the franchiser had made
misrepresentations about sales estimates and future
opportunities which were not included in the written
agreement (which included an integration clause). After a
bench trial, the franchisee appealed to the Seventh Circuit.
On appeal, the court held that “it is simply unreasonable to
continue to rely on representations after stating in writing that
you are not so relying.” Id. at 576.
It was not error to look to case law interpreting the Illinois
and Indiana franchise laws. We agree that reasonable or
justifiable reliance was necessary for a Michigan Franchise
Investment Law claim. The existence of an integration clause
in the franchise agreements made Cook’s alleged reliance
unreasonable, as the district court concluded. See Cook, 972
F. Supp. at 412-14.
Cook’s claim under Section Five of the Michigan Franchise
Investment Law, which prohibits fraudulent acts and
statements in franchise contracts, “is basically a contractual
fraud claim.” General Aviation, Inc. v. Cessna Aircraft Co.,
13 F.3d 178, 183 (6th Cir. 1993). As General Aviation
concluded, “this argument simply rehashes the breach of
contract claim that we have already dismissed.” Id.
F. Tortious interference with contractual and
advantageous relationships
Cook contends that the district court erred by granting
summary judgment on his tortious interference with
contractual and advantageous relationships claim because
Little Caesar Enterprises forfeited its status as a party to the
sale agreement. We reject the argument.

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10 Cook, et al. v. Little Caesar Enterprises No. 99-1163
fails to create a genuine issue of material fact concerning any
bad faith on the part of Little Caesar Enterprises.
Cook argues that he reasonably relied on Little Caesar
Enterprises’ representations and this reasonable reliance is an
element of actionable fraud. Reliance upon oral
representations or prior documents, even if false, is
unreasonable if the party enters into a subsequent agreement.
See 3 P.M., Inc. v. Basic Four Corp., 591 F. Supp. 1350, 1366
(E. D. Mich. 1984) (interpreting Michigan law and holding
that a plaintiff may not reasonably rely on prior oral
statements that directly contradict the terms of a written
contract). Cook’s signing the franchise agreements precludes
his reasonable reliance on the prior representations.
D. Innocent misrepresentation
Cook also contends that the district court erred by granting
summary judgment on his innocent misrepresentation claim
because the representations addressed present facts. We
reject the argument. It finds no support in the record.
E. Michigan Franchise Investment Law
Cook contends that the district court erred by granting
summary judgment on his Michigan Franchise Investment
Law claim because “reasonable reliance” was not required.
We reject the argument. Although there is no direct Michigan
authority, the district court noted that under the similar
Illinois Franchise Act any reliance on an alleged
misrepresentation made prior to signing the agreement was
found to be not reasonable. See Bonfield v. AAMCO
Transmissions, Inc., 708 F. Supp. 867, 876-78 (N. D. Ill.
1989) (superseded by statute on other grounds). In Bonfield,
a franchisee claimed that he had relied on the franchiser’s
alleged misrepresentations made prior to signing the franchise
agreement, even though he acknowledged the existence of an
integration clause. The Bonfield court granted summary
judgment for the franchiser, finding that, under the anti-fraud
section of the Illinois Franchise Act, “justifiable reliance [is]
No. 99-1163 Cook, et al. v. Little Caesar Enterprises 3
A threshold issue involves the application of the parole
evidence rule to various documents Little Caesar Enterprises
provided to Cook prior to his signing the franchise
agreements and also oral promises that Little Caesar
Enterprises representatives allegedly made. When Cook
began investigating franchise opportunities, Little Caesar
Enterprises sent him a dear-prospective-franchisee letter and
a franchise-offering circular. After meeting with Little Caesar
Enterprises real estate representatives, Cook eventually signed
a franchise option agreement. Cook alleged that Little Caesar
representatives, both orally and in written map outlines, set
aside specific territory exclusively for him.
Cook opened his first Little Caesar restaurant in November,
1990, for which he signed a franchise agreement on April 8,
1991. Sometime in January or February of 1992, another
franchisee opened a Little Caesar restaurant in Clovis,
California, just to the east of Fresno which Cook alleges was
part of his exclusive territory. In May of 1992, Cook opened
his second Little Caesar restaurant. He signed a franchise
agreement for this in July of 1992. In May of 1993, Cook
signed the franchise agreement for his third Little Caesar
restaurant. He also attended two national franchise
conventions where his meetings with Little Caesar Enterprises
representatives, in his view, affirmed his expectation of
exclusive territories for his restaurants.
In 1994, Cook and Jean Aboujaoude, who is another
Fresno-area Little Caesar franchisee, signed a purchase
agreement for Cook’s three Little Caesar restaurants. Within
a month, Little Caesar Enterprises disapproved this purchase
agreement, for the alleged reasons that the price was too high
and Aboujaoude was not contributing enough capital.
In May of 1996, Cook sought approval from Little Caesar
Enterprises to close one of his Little Caesar restaurants. It
was losing sales, he alleged, to other Little Caesar franchises.
Little Caesar Enterprises rejected Cook’s application for
closure.

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4 Cook, et al. v. Little Caesar Enterprises No. 99-1163
1The district court denied summary judgment for Little Caesar
Enterprises on Cook’s seventh claim, seeking a declaratory judgment that
Little Caesar Enterprises could not deny him the right to permanently
close one of his restaurants. See Cook, 972 F. Supp. at 416-17. Because
the language in the franchise agreement addressing the permanent closure
of a restaurant was ambiguous, the district court held, there was a material
issue of fact concerning the parties’ intent on this claim. See id. Cook,
however, later dismissed this claim with prejudice “to concentrate on
pursuing the damage claims now before this Court.” Appellants’ Opening
Brief at 4. This claim is not part of the present appeal.
2In denying Cook’s motion for reconsideration, the district court
corrected some minor clerical errors concerning case names.
Cook brought this action in district court on July 12, 1995.
In a second amended complaint, he alleged seven counts:
breach of contract, breach of implied covenant of good faith
and fair dealing, fraudulent misrepresentation, violation of the
Michigan Franchise Investment Law, tortious interference
with contractual and advantageous relationships, innocent
misrepresentation, and he sought a declaratory judgment that
Little Caesar Enterprises could not deny him the right to
permanently close one of his restaurants. The district court
granted Little Caesar Enterprises’ motion for summary
judgment on August 7, 1997.1 See Cook v. Little Caesar
Enterprises, Inc., 972 F. Supp. 400 (E. D. Mich. 1997).2 The
district court entered judgment on January 7, 1999. Cook
filed a timely notice of appeal.
Standard of Review
We review a district court’s grant of summary judgment de
novo. See Terry Barr Sales Agency, Inc. v. All-Lock Co., Inc.,
96 F.3d 174, 178 (6th Cir. 1996). In contract actions,
summary judgment may be appropriate when the documents
and evidence underlying the contract are undisputed and
there is no question as to intent. See P. F. Manley v.
Plasti-Line, Inc., 808 F.2d 468, 471 (6th Cir. 1987) (citation
omitted). Normally, however, disputed issues of contractual
intent are considered to be factual issues which preclude an
award of summary judgment. See id. (citations omitted); see
No. 99-1163 Cook, et al. v. Little Caesar Enterprises 9
C. Fraudulent misrepresentation
Cook contends that the district court erred by granting
summary judgment on his fraudulent misrepresentation claim
because the representations addressed present facts. We
reject the argument.
To establish fraud, the allegedly false statements must
relate to past or existing facts, not to future promises or
expectations. See Two Men and a Truck v. Two Men and a
Truck, 955 F. Supp. 784, 785 n.1 (W. D. Mich. 1997); Haque
Travel Agency, Inc. v. Travel Agents Int’l, Inc., 808 F. Supp.
569, 572 (E. D. Mich. 1992). We agree with the district court
that Hi-Way Motor Co. v. Int’l Harvester Co., 398 Mich. 330
(Mich. 1976), is “strikingly similar to the instant case.”
Hi-Way involved negotiations leading to a franchise
agreement, complete with an integration clause. The written
agreement made no mention of some key elements of the
prior negotiations. See id. at 333-35. In Hi-Way, the court
held there was no fraudulent misrepresentation because “an
action for fraudulent misrepresentation must be predicated
upon a statement relating to a past or an existing fact. Future
promises are contractual and do not constitute fraud.” Id. at
336.
The district court properly concluded that Little Caesar
Enterprises representatives’ allegedly false statements referred
to events which might happen in the future and not to past or
present facts. See Cook, 972 F. Supp. at 410-11. Cook’s
amended complaint and opening brief on appeal support the
conclusion that he is complaining about future promises. The
allegations and contentions all concern alleged representations
about future events.
Cook also argues that the district court erred by dismissing
out-of-hand the “bad faith” exception to the “past or present
fact requirement” of the fraudulent misrepresentation
doctrine. See Hi-Way, 398 Mich. at 337-38 (“a fraudulent
misrepresentation may be based upon a promise made in bad
faith without intention of performance”). Cook, however,

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8 Cook, et al. v. Little Caesar Enterprises No. 99-1163
See General Aviation, Inc. v. Cessna Aircraft Co., 915 F.2d
1038, 1041 (6th Cir. 1990) (construing Michigan law). In the
franchise agreements, Little Caesar Enterprises reserved the
right to grant licenses to others subject only to Cook’s
“exclusive territory,” which, by the terms of the franchise
agreement, was a one-mile exclusive territory. This limitation
was an express term of the franchise agreements and as such,
under Michigan law, the implied covenant of good faith and
fair dealing cannot be employed to override it. See id.
Cook could not employ the implied covenant of good faith
and fair dealing to override the express term of the franchise
agreements which allowed Little Caesar Enterprises to license
franchises outside of Cook’s one-mile exclusive territories.
The district court did not err. See Cook, 972 F. Supp. at
409-10.
Cook specifically contends that to the extent that Little
Caesar Enterprises made the manner of its performance a
matter of its own discretion, the implied covenant would
apply. See Burkhardt v. City Nat’l Bank of Detroit, 57 Mich.
App. 649, 652 (Mich. Ct. App. 1975) (“Where a party to a
contract makes the manner of its performance a matter of its
own discretion, the law does not hesitate to imply the proviso
that such discretion be exercised honestly and in good faith.”).
Cook argues that Little Caesar Enterprises had discretion in
three ways because: (1) the franchise agreements are silent as
to where Little Caesar Enterprises can locate franchises
outside of the one-mile radius of Cook’s restaurants, (2) the
franchise option agreement referred to an “approximate” one
mile radius, and (3) the dear-prospective-franchisee letter
promised to allocate one restaurant for a minimum of 15,000
population. It does not follow that, because the franchise
agreements prohibit Little Caesar Enterprises from locating
other franchises within the one-mile radius, Little Caesar
Enterprises cannot place other franchises outside this radius
even though it did not expressly reserve the right to do so.
The parole evidence rule bars consideration of matters not
incorporated into the written agreement.
No. 99-1163 Cook, et al. v. Little Caesar Enterprises 5
3As noted by the district court, Michigan law permits parties to
choose which state’s law will govern their contract and, here, the
franchise agreements provide that Michigan law should govern. See
Cook, 972 F. Supp. at 406.
also Parrett v. American Ship Building Co., 990 F.2d 854,
858 (6th Cir. 1993) (noting that the interpretation of
ambiguous contract language is usually a factual issue turning
on the intent of the parties).
Discussion
A. Breach of contract
Cook contends that the district court erred by granting
summary judgment on his breach of contract claim because,
since there are material issues of fact regarding the meaning
of the franchise agreements, the court must consider parole
evidence and look to the parties’ intent. We reject the
argument.
Michigan follows the parole evidence rule which does not
permit extrinsic evidence to be used to contradict the terms of
a written contract that was intended to be the final and
complete expression of the parties’ agreement.3 See
American Anodco, Inc. v. Reynolds Metals Co., 743 F.2d 417,
422 (6th Cir. 1984). The court must first find, however, “that
the parties intended the written instrument to be a complete
expression of their agreement as to the matters covered.
Extrinsic evidence of prior or contemporaneous agreements
or negotiations is admissible as it bears on this threshold
question of whether the written instrument is such an
‘integrated’ agreement.” NAG Enters., Inc. v. All State Indus.,
Inc., 407 Mich. 407, 410 (Mich. 1979) (per curiam).
Recently, the Michigan Court of Appeal has held “that when
the parties include an integration clause in their written
contract, it is conclusive and parole evidence is not admissible
to show that the agreement is not integrated except in cases of
fraud that invalidate the integration clause or where an
agreement is obviously incomplete ‘on its face’ and,

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6 Cook, et al. v. Little Caesar Enterprises No. 99-1163
4Unlike the alleged prior representations, the franchise agreements
do not provide that: (1) territories would have a minimum of 15,000
population, (2) Cook would have an exclusive territory east of Blackstone,
or (3) Cook would have future options to open restaurants in Clovis and
Sanger.
therefore, parole evidence is necessary for the ‘filling of
gaps.’” UAW-GM Human Resources Ctr. v. KSL Recreation
Corp, 228 Mich. App. 486, 502 (Mich. Ct. App. 1998)
(quoting 3 Corbin, Contracts, § 578, p. 411).
The record supports the conclusion that the franchise
agreements were intended to be complete expressions of the
parties’ agreements and they are not ambiguous. See Cook,
972 F. Supp at 408. Each franchise agreement: (1) provided
Cook with only an exclusive territory of the geographical area
within a one-mile radius of each restaurant, and (2) included
an integration clause and acknowledgment by Cook that he
had no knowledge of any representations by Little Caesar
representatives that are contrary to the terms of the agreement.
Cook could not use parole evidence to elude the clear
provisions of the franchise agreements.
Cook’s bare allegation that he was promised “the entire
territory ‘east of Blackstone in the City of Fresno,’” is
insufficient to create a genuine issue of material fact since the
plain language of the franchise agreements specifically
provides otherwise. Cook’s allegation is based entirely on
documents received prior to his signing the first franchise
agreement and oral representations allegedly made by Little
Caesar representatives prior to and after his signing of the first
franchise agreement.4 The franchise agreements provide only
that Little Caesar Enterprises will not establish other Little
Caesar restaurants within one mile of Cook’s locations. Each
agreement also includes an integration clause with respect to
any prior agreements or promises, indicating that the parties
intended the written franchise agreements to be complete
expressions of their agreements. See NAG, 407 Mich. at 410.
There is no evidence of fraud or that the agreements are
incomplete. See UAW-GM, 228 Mich. App. at 502.
No. 99-1163 Cook, et al. v. Little Caesar Enterprises 7
5In arguing that “the District Court erred by confusing Morley Bros.
with Kovacs,” Appellants’ Opening Brief at 25, Cook ignores the district
court’s acknowledgment of this error, and its correction, in the denial of
Cook’s motion for reconsideration.
Cook’s contention that the trial court is bound by a previous
decision in Eberhardt v. Comerica Bank, 71 B. R. 239 (E. D.
Mich. 1994), is of no consequence. In Eberhardt, the court
held that the presence of an integration clause was not
conclusive “when the contract is a pre-printed form drawn by
a sophisticated seller, and presented to the buyer without any
negotiations.” Eberhardt, 71 B. R. at 243. There, the court
looked to all writings and oral statements to ascertain the
parties’ intentions. See id. at 243-44. Eberhardt, however,
involved a situation where both parties agreed that the pre-
printed term was not consistent with the essence of the
contract. A non-party creditor sought to enforce the provision
of the contract. See id. The distinction is pivotal.
Cook’s further contention that the district court erred by
basing its decision on the “officer approval” requirement of
Kovacs v. Electronic Data Sys. Corp., 762 F. Supp. 161
(E. D. Mich. 1990), is without merit. The contract at issue in
Kovacs included language that required approval of an EDS
officer to modify the contract. See id. at 164. Cook’s
franchise agreements include language that any change or
modification must be “in writing and signed by both parties
to this Agreement.”5
B. Breach of implied covenant of good faith and fair
dealing
Cook contends that the district court erred by granting
summary judgment on his breach of implied covenant of good
faith and fair dealing claim because Little Caesar Enterprises
undertook discretionary actions which injured Cook. We
reject the argument.
The obligation of good faith cannot be employed, in
interpreting a contract, to override express contract terms.

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