Scheck v. Burger King Corp. (756 F. Supp. 543 (S.D. Fla. 1991) was a case of the United States District Court for the Southern District of Florida in which it considered motions for summary judgement brought by defendant Burger King Corporation concerning four counts raised by Plaintiff Scheck who alleged that defendant "breached an implied non-competition agreement (Count I), an implied covenant of good faith and fair dealing (Count II) an implied contract created by promissory estoppel (Count III) and the Massachusetts Consumer Protection Act" which plaintiff alleged incorporates the proceeding three claims. Burger King moved for summary judgement on the basis that Scheck's claims were insufficient "as a matter of law", were barred by the Massachusetts Statute of Frauds, or were released by the plaintiff as a direct result of two releases executed by Scheck in 1985 and 1986, respectively. The case invoked legal questions concerning the covenant of good faith and fair dealing related to legal protection of the territory rights of franchisees.
Background and procedural history
On February 6, 1989, Steven Scheck, the owner of a Burger King franchise restaurant located in Lee, Massachusetts, filed a complaint in four counts against Burger King in the United States District Court for the District of Massachusetts. Prior to the Scheck's complaint, a nearby Howard Johnson restaurant, located two miles away from Scheck's franchise, was converted into a new Burger King restaurant by Marriott Corporation. This conversion was supported by Burger King holdings, and effectively allowed for the creation of a corporately-owned but competing franchise location. Scheck alleged that he was entitled to compensable damages due to Burger King's sanctioning of the conversion. Burger King's initial response was composed of a motion to dismiss and/or transfer the case pursuant to 28 U.S.C. §1404 , claiming that the forum selection provision of the Assignment Agreement requires that the suit be litigated in the U.S. District Court for the Southern District of Florida. In an order dated June 15, 1989, Chief U.S. District Judge for the District of Massachusetts Judge Frank H. Freedman denied the motion to dismiss, but ordered that in the interest of justice, the case be transferred to the District Court for the Southern District of Florida pursuant to the previously mentioned change of venue provision of the United States code. The matters of jurisdiction and venue were decided under the provisions of 28 U.S.C. §1332 and 28 U.S. Code § 1391(a), respectively, with the court finding complete diversity between the parties and an amount in controversy in excess of $50,000 with regard to the former issue, and interpreting §1391(a) as allowing jurisdiction regardless of whether the action itself was local or transitory.