A federal court in New York recently denied Community Care Companions, Inc. and Interim Healthcare, Inc.’s motions for reconsideration of the court’s summary judgment rulings in an ongoing franchise dispute. Cmty. Care Companions, Inc. v. Interim Healthcare, Inc., 2025 WL 1616585 (E.D.N.Y. June, 6 2025).
In 2017, Community Care purchased seven home health care franchises operated under Interim Healthcare, pursuant to seven franchise agreements. In 2019, Community Care filed a lawsuit alleging violations of the New York Franchise Sales Act, New York State Public Health Law, breach of contract, and breach of fiduciary duty. Interim Healthcare filed counterclaims and a third-party complaint against individuals affiliated with Community Care for breaches of contract related to the royalties, rebranding, and noncompete provisions in the franchise agreements and the addendum and for breaches of good faith. Following the court’s grant in part and denial in part of defendant’s motion for summary judgment, both parties filed motions for reconsideration.
Community Care sought reconsideration of the court’s ruling that it was procedurally improper for Community Care to argue for the first time at the summary judgment stage that Interim Health made material misrepresentations related to the timeline for acquiring licensed home care services agency licenses in violation of New York General Business Law Section 687. Denying the motion, the court reasoned that Community Care failed to make any explicit mention of licensing fraud allegations in its complaint. Instead, the complaint referenced overly broad terms such as Interim’s “misrepresentations,” “omissions,” and “financial performance representations.” The court reasoned that ruling otherwise would violate the fair notice required under Fed. R. Civ. Pro. 8(a)(2).
The court also denied Interim Health’s motion for reconsideration of the court’s denial of summary judgment on its counterclaim for breach of the franchise agreement’s royalties provision. Based on inconsistencies between the franchise agreement, addendums, and emails, the court maintained its previous finding that there was a genuine dispute of material fact as to when royalties began to accrue. The court also rejected Interim Health’s attempt to advance new theories via a reconsideration motion. The case is scheduled to proceed to trial on the outstanding issues.
*Zac Racy is a Summer Associate for Lathrop GPM who contributed to the writing of this post.