Malone sues over Subway franchise

Kim Smith

Friday, Dec. 7, 2001 | 10:43 a.m.

Former Clark County Commissioner Lance Malone filed a lawsuit this week against the owners of the Subway sandwich chain, claiming it violated an agreement he signed with the company.

The lawsuit claims that Doctor's Associates, Inc., the company that owns Subway, refused to allow Malone to operate a shop at The Orleans after he signed a franchise agreement.

According to the lawsuit, filed late Wednesday in District Court, Malone signed an agreement with the company on Sept. 14, 2001, and paid a $10,000 franchise fee.

According to the lawsuit, however, there were problems with some aspects of the franchise agreement.

"Some clauses were unenforceable as being unconscionably favorable to one part against the other, constituting a restraint of trade," the lawsuit states.

After Malone signed a lease with Coast Resorts Inc. for space in The Orleans in November, Doctor's Associates, Inc. read it and refused to allow Malone to operate a Subway shop on the premises, the lawsuit claims.

Officials with the fastfood restaurant said they would allow Malone to run the restaurant if he became a sub-lessee, the lawsuit states.

The lawsuit claims that officials with the fast food chain want the company to be the main lessee, with Malone taking a sublease. The lawsuit states Coast Resorts stood by its agreement with Malone, saying only Malone could operate a franchise on its property.

As a result, Malone wants to be allowed to rescind his agreement with Doctor's Associates and recoup his $10,000 franchise fee. He is also suing for unspecified compensatory and punitive damages and attorney's fees.

Malone's attorney, Mark Albright, said Thursday that negotiations are under way in the case.

Hopefully, Albright said, Malone will one day be able to operate the restaurant without Doctor's Associates being a party to the lease.

Officials for Doctor's Associates were not immediately available to comment.

Malone lost his bid for re-election last year largely because of a campaign to defeat him that was launched by Station Casinos. Malone upset Station officials and Spring Valley residents when he vowed to vote against a competing neighborhood casino, then changed his mind at the last minute.

Also during his tenure, Malone went before the Nevada State Ethics Commission after he voted to grant a lucrative disadvantaged-business contract at McCarran International Airport to his wife's best friend.