Fraser v. Superior Snack
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1998 ME 6
Docket:	Wal-97-453
Argued:	December 5, 1997
Decided:	January 5, 1998

Panel:WATHEN, C.J., and ROBERTS, CLIFFORD, RUDMAN, DANA, LIPEZ, and
SAUFLEY, JJ.

JOHN C. FRASER

v.

A SUPERIOR SNACK, INC.

PER CURIAM

	[¶1]  A Superior Snack, Inc., appeals from the summary judgment
entered in the Superior Court (Waldo County, Calkins, J.) in favor of John C.
Fraser on his complaint for rescission of Superior's contract with Fraser. 
Superior contends that the court erred by applying to the contract a statute
regulating the sale of business opportunities.  We affirm the judgment.  
	[¶2]  In August 1995 Fraser and Superior, a California corporation,
entered into a written contract in which Superior agreed to assist Fraser to
establish a vending route.  Superior agreed to provide Fraser with two weeks
of training and to establish fifty accounts with local businesses on his behalf. 
Fraser paid Superior $15,500.  Superior did not supply Fraser with any of
the snack foods to be sold by him, but rather acted as a broker between
Fraser and the manufacturers.  
	[¶3]  In September 1996 Fraser filed a complaint against Superior
alleging a failure by Superior to comply with the statute regulating the sale of
business opportunities, 32 M.R.S.A. §§ 4691 to 4700-B (1988 & Pamph.
1997).{1}  After a hearing on cross-motions for a summary judgment, the
court entered a judgment for Fraser and against Superior for $15,500 plus
attorney fees, interest, and costs, on the ground that Superior had not
registered with the securities administrator as required by section 4696 of
the statute.  This appeal followed.  
	[¶4]  Superior's sole ground of defense in the trial court and on appeal
is that the statute does not apply to its contract with Fraser.  Superior relies
on the undisputed facts that (1) it sold no products to Fraser, (2) it is not
affiliated with any of the entities that did sell products to Fraser, and (3) it is
not a distributor of the products.  Superior's contention is plainly wrong.  As
relevant to this case, section 4691 requires that a transaction meet three
criteria for it to fall within the statute:  (1) that the transaction be a sale of
any services for the purpose of enabling the purchaser to start a business;
(2) that the purchaser pay an amount in excess of $250 for those services;
and (3) that the seller represent that it will assist the purchaser by
providing a sales or marketing program.  32 M.R.S.A. § 4691(3)(A)(5).  
	[¶5]  While Fraser did not purchase from Superior the products to be
sold, Fraser paid $15,500 for something.  The contract between the parties
refers repeatedly to Superior as the "seller."  The disclosure sheet included
with the contract refers to the "seller assisted marketing plan."  In
exchange for the payment of $15,500, Fraser was to receive a start-up kit,
two weeks of training from a Superior representative, and Superior's
assistance in establishing his first fifty accounts.  There is no doubt that
Superior sold its services to Fraser, i.e., its marketing plan and technical
assistance, for the purpose of enabling Fraser to start a business.  
	[¶6]  Because Superior could not reasonably believe that the statute
does not apply to Fraser's contract, we conclude that this appeal is frivolous
within the meaning of M.R. Civ. P. 76(f).  Accordingly, we award treble costs
on appeal.  Attorney fees for the appeal will be awarded on remand pursuant
to section 4700(6).  
	The entry is:
				Judgment affirmed.  Plaintiff John C. Fraser
				is awarded treble costs payable by defendant
				A Superior Snack, Inc., or its attorney.
				Remanded for the award of attorney fees for
				the appeal. 
Attorney for plaintiff:

Douglas F. Jennings, Esq., (orally)
150 State Street
Augusta, ME 04330

Attorney for defendant:

Daniel C. Purdy, Esq., (orally)
Steven A. Little & Associates
P O Box 924
Rockland, ME 04841

Attorneys for amicus curiae, State of Maine Securities Administrator:

Andrew Ketterer, Attorney General
Linda Conti, Asst. Atty. Gen.
6 State House Station
Augusta, ME 04333-0006

FOOTNOTES******************************** {1}. 32 M.R.S.A. § 4691 (Pamph. 1997) provides in relevant part: § 4691. Definitions As used in this chapter unless the context indicates otherwise the following terms shall have the following meanings. .... 3. Business opportunity. "Business opportunity means: A. The sale, lease or distribution of any services, products, equipment, supplies, goods or commodities ... that are sold, leased or distributed by the seller or an affiliated person to the purchaser for the purpose of enabling the purchaser to start a business, for which the purchaser is required to pay an amount that exceeds $250 ... and in which the seller represents that: .... (5) The seller or an affiliated person will provide a sales program or marketing program[.]