This adversary proceeding was removed to this court from the Commonwealth of Kentucky Pike Circuit Court. The complaint alleges that on or about October 19, 1996 the plaintiff purchased from defendant’s franchise dealer, Don Hart, a "Quest 8 New Summer Sapphire Spa" for which plaintiff prepaid by check in the amount of $4,000. The complaint alleges that Don Hart was the agent of the defendant or an agent whom the defendant had permitted to hold himself out as being its agent; and that neither Don Hart nor the defendant ever delivered the plaintiff’s spa for which he had paid in advance. The complaint seeks recovery of the $4,000 prepayment plus 8% interest from October 19, 1996, or in the alternative, delivery and installation of the spa as ordered.

Prior to bankruptcy, the debtor, Robert J. Rodgers, Jr., was the proprietor of a spa and pool maintenance company which he operated under the name Spas’ R Us. He conducted this business from his home at 317 Fox Harbour Drive, Lexington, Kentucky. When dealers sold spas to customers Rodgers installed the spas under contract or subcontract with the dealer. One of the dealers for which he installed spas was Advanced Spas and Pools.

J. DeBrullin Co., Inc., an Ohio corporation which does business in Ohio as Advanced Spas and Pools, in March of 1996 opened an Advanced Spas and Pools store at 996 New Circle Road, Lexington, Kentucky where it sold spas, pools, and pool tables. J. DeBrullin Company, Inc. operates Advanced Spas and Pools stores in Cincinnati and Dayton, Ohio. Don Hart was manager of the Lexington store between March and September 10, 1996 while the store was operated by J. DeBrullin Co., Inc.

On September 10, 1996 the debtor, Robert J. (Bob) Rodgers entered into an agreement to purchase the Lexington store (business) from Advanced Spas and Pools for the sum of $15,150.00, of which $8,150.00 was to be paid on September 9, 1996 and the balance of $7,000.00 was to be paid on or before September 9, 1997.

Under the sales agreement the debtor assumed responsibility for day-to-day operations and expenses of the business beginning September 9, 1996, including general operational liability insurance, the lease payments due the lessor of the premises, utility and trash services, and telephone service and related yellow page advertising.

Pertinent provisions of the agreement are as follows:

Exhibit "A" to the contract, which apparently was a listing of the inventory of the business as of September 10, 1996, is not attached to the copy of the contract submitted as evidence herein.

Don Hart was retained by the debtor as manager after the debtor assumed operation of the business.

Sometime prior to October 19, 1996 a customer placed on consignment with the debtor for resale the "Quest 8 New Summer Sapphire Spa" which is the subject of this litigation.

On October 19, 1996 the debtor’s business sold this used spa to the plaintiff Charles Williamson of Belfrey, Kentucky for $4,000.00. This price included installation. Williamson gave the debtor’s business, Advanced Spas and Pools, a check for $4,000.00 for the purchase and installation of the spa, which was to be installed in about two weeks. See Defendant’s Ex. No. 2 to Debtor’s Deposition of 11-5-97.

Although the record is not clear on the point, apparently the inventory in place at the Lexington store of Advanced Spas and Pools was subject to a floor plan financing agreement between Advanced Spas and Pools and a third party financing institution at the time the debtor purchased the business.

In any event, after the sale but before installation of the spa for which the plaintiff Williamson had prepaid, either Advanced Spas and Pools which had sold the Lexington business to the debtor, or a floor plan financing institution seized the inventory by causing the locks on the premises to be changed. The spa which plaintiff Williamson had purchased was locked in the store and was not accessible to the debtor. Tr. 9-11.

The debtor made an attempt to obtain a new spa for Williamson utilizing the name of the debtor’s former business, Spas R Us to purchase the replacement spa, but the manufacturer, L.A. Spas of Etowa, Tennessee, would not sell a spa to the debtor. See Defendant’s Ex. No. 1 to Debtor’s Deposition of 11-5-97, pgs. 23, 26.

There is no evidence from which the court may conclude that either Don Hart or the defendant debtor, Robert J. Rodgers, Jr., were acting as agents of J. DeBrullin Co., Inc., d/b/a Advanced Spas and Pools, when they sold the used spa in question to the plaintiff Williamson.

The spa had been placed on consignment with the debtor’s business after the debtor acquired the business from J. DeBrullin Co., Inc., d/b/a Advanced Spas and Pools. The spa was not part of the inventory, which was on the premises when the debtor purchased the Lexington store from Advanced Spas and Pools. There is no evidence that J. DeBrullin Co., Inc. was in any way connected with the sale of this used spa to Williamson.

Although Don Hart was retained as manager of the store after the debtor acquired the business, from that point in time Don Hart was an employee and agent of the debtor and not an employee or agent of the J. DeBrullin Co., Inc., d/b/a Advanced Spas and Pools.

The fact that the sale and purchase agreement permitted the debtor to continue to operate the store under the name of Advanced Spas and Pools only for one year from the date of acquisition of the store without the further consent of the seller indicates the agreement was not a typical franchise agreement.

Accordingly, the court is of the opinion the motion of J. DeBrullin Co., Inc., d/b/a Advanced Spas and Pools, for summary judgment dismissing the complaint should be sustained.

Dated:

By the court –

________________________________
JOE LEE, U.S. BANKRUPTCY JUDGE

Copies to:

Will Shier, Esq.

Billy J. Moseley, Esq.

J. James Rogan, Esq.

U.S. Trustee

In conformity with the memorandum opinion of the court this day entered, IT IS ORDERED that the motion of defendant, J. DeBrullin Co., Inc., d/b/a Advanced Spas and Pools, for summary judgment be and the same is sustained and the complaint in the above-styled adversary proceeding is hereby dismissed. There being no just cause for delay, this is a final and appealable order.

Dated:

By the court –

_______________________________
JOE LEE, U.S. BANKRUPTCY JUDGE

Copies to:

Will Shier, Esq.

Billy J. Moseley, Esq.

J. James Rogan, Esq.

U.S. Trustee