O'neal V. Burger Chef Systems Inc‪.‬

Defendants, Burger Chef Systems, Inc., and its former parent company, General Foods Corporation, appeal the jury verdict awarding $175,859.23 in compensatory damages and $100,000.00 in punitive damages to plaintiff, Rita O'Neal, a former Burger Chef franchisee. The award of damages was based on a theory of "wrongful non-disclosure." In her complaint plaintiff alleged that General Foods had reached a firm decision in 1978 to sell Burger Chef Systems, but failed to disclose this decision to the Burger Chef franchisees, including plaintiff. Plaintiff further alleged that she would not have continued to invest money in her restaurants had she known that General Foods was planning to sell the franchise in 1981. The defendants argued that General Foods management did not decide to sell Burger Chef until it was approached by the purchaser, Hardee's Food Systems, Inc., in 1981. Defendants admitted that General Foods periodically considered selling the financially troubled Burger Chef Systems, but defendants maintained that the sale of the system was simply one of several options which were considered during the 1970s and that no firm decision to sell was reached until 1981 shortly before the sale was announced publicly. Therefore, defendants contend that General Foods was not under a duty to disclose the ongoing internal debate over corporate strategy. The district court held, as a matter of law, that if General Foods had reached a "firm decision" to sell Burger Chef by 1978 and failed to disclose its decision to Burger Chef's franchisees, this non-disclosure was actionable. The jury returned a verdict against defendants on this theory. The district court also granted a partial summary judgment to the defendants dismissing plaintiff's contract claims on the ground that such claims were barred by the contractual limitations period set forth in the franchise agreements. Plaintiff has filed a cross-appeal contesting the dismissal of her contract claims.