Sea Tow is reportedly telling its operators the Tampa Bay case is in the bag. So we pulled the full docket. Here is what was filed in 2020, what is left in July 2026, and why the two claims that survived may be the two worst claims Sea Tow could possibly be holding.
Confidence is not evidence. Any lawyer will tell a client the case is strong; that is roughly half the job. But when a franchisor tells the people who invested their lives into a business model — the operators, the ones with boats and payroll and SBA loans — that a six-year federal case is a sure thing, that's not reporting the facts, that's propaganda. You, the operators, are entitled to check the math for yourselves.
Everything below comes from the docket. Nothing below requires you to trust us, the Jaegers, or the crows nest. It requires a case number and eleven cents a page.
The honest caveat, stated once and meant: nobody can predict the outcome of pending litigation, and we do not. Judges rule; newsletters do not. What we can do is read what has already been decided — and what has already been decided is not a matter of opinion. Where Sea Tow has won something, we say so below. There is more of that than our earlier issues acknowledged, and this issue corrects the record.
Sea Tow filed on June 29, 2020, demanding $1,500,000. The Jaegers had taken the Tampa Bay territory by Management Agreement in November 2019 — months, not decades, before the complaint landed. They rent their home. They have two young boys.
The operative pleading is the Second Amended and Supplemental Complaint, docketed September 13, 2021 at DE 140. On September 30, 2022, Judge Joanna Seybert ruled on the motions to dismiss it, and on Sea Tow's motion for judgment on the pleadings against the Jaegers' third-party claims, in a 55-page Memorandum & Order at ECF No. 216. That opinion is the hinge of this entire case. Here is what it did to Sea Tow's counts.
Eighteen months later, Magistrate Judge Steven I. Locke read the pleadings against that opinion and wrote down, in one paragraph, exactly what is left of Sea Tow's case:
Having reviewed the pleadings, the Court now interprets Sea Tow's remaining claims, as set forth on Judge Seybert's September 30, 2022 Memorandum and Order, as limited to: (1) a breach of contract claim in connection with the Management Agreement for 15% of gross revenue for May and June 2020 and Promissory Note; and (2) for Trademark Infringement/Dilution and NYGBL claims. … All other claims, including those based on use of “Sea-Tow Knowhow,” are dismissed.
Sea Tow Servs. Int'l, Inc. v. Tampa Bay Marine Recovery, Inc. · No. 2:20-cv-02877 · Document 262, Civil Conference Minute Order · Filed 03/19/24 · PageID #: 9386 (Locke, M.J.)
Sea Tow objected to that order under Rule 72. On July 17, 2025, Judge William F. Kuntz II denied the objection as moot and lifted the discovery stay. DE 293. DE 262 stands.
Two claims. Sixty days of revenue share, a $25,000 note, and a paint job. That is what is left of a $1.5 million case that opened with everything the drafting software could produce.
Here is the part we would like every operator to sit with.
Sea Tow's entire defensive posture has been that it is not a franchisor. Not a franchise system. A membership arrangement. A licensing program. A Management Agreement. The Frochise™, as we have called it since Episode VI — a thing that walks like a franchise, charges like a franchise and terminates like a franchise, then denies being one whenever a statute walks into the room.
Now read the statute the way Judge Seybert read it. Under the New York Franchise Sales Act, GBL § 681(3), a franchise exists where a franchisee pays a franchise fee and either (a) operates under a marketing plan or system prescribed in substantial part by the franchisor, or (b) operates substantially associated with the franchisor's trademark. The fee is defined at § 681(7). The Court is required to construe the whole thing liberally. GBL § 695(2).
Then read what the Court actually wrote about Sea Tow's 15%:
The Management Agreement's payment structure fits comfortably within the foregoing definition, especially given the Court's duty to “liberally construe” the NYFSA's provisions. … These fees were paid for the right to enter into a business under a franchise agreement, because in exchange, Sea Tow (1) provided TBM-Recovery with a marketing plan or system prescribed by Sea Tow and (2) granted TBM-Recovery the rights to use Sea Tow's trademarks as part of its operations.
ECF No. 216 at 28 · PageID #: 7768 · Sept. 30, 2022 (Seybert, J.) — attribution note: this is the Seybert ruling. Judge Kuntz is the current presiding judge; the franchise-fee language is Judge Seybert's, and any source telling you otherwise is wrong, including three of our own back issues.
Surviving Claim 1 is the fee. Fifteen percent of gross revenue, owed monthly, as the price of continuing to operate the territory. To win it, Sea Tow must prove the obligation existed and was enforceable.
Surviving Claim 2 is the mark. What branding the Jaegers were required to strip off their vessels once the relationship ended. To win it, Sea Tow must prove the vessels were substantially associated with Sea Tow's marks in the first place.
Fee, plus trademark association. That is § 681(3)(b) in two pieces. The only claims Sea Tow has left are the two facts a claimant would need to prove that Sea Tow is a franchisor.
We are not telling you the Court arranged it that way on purpose. We do not know, and we will not invent a motive for a federal judge. But there is a second feature of ECF No. 216 that makes the bind tighter, and it sits in a footnote most people skip. The Court observed that Sea Tow's trademark claims rise and fall with the termination of the Management Agreement: if Sea Tow is wrong that the Jaegers breached that agreement, then it cannot plausibly claim their continued use of the marks was unauthorized. ECF No. 216 at 50 n.10, PageID #: 7790. The Court then expressly deferred ruling on the trademark claims pending final resolution of the Management Agreement claim. ECF No. 216 at 51, PageID #: 7791.
Translated: the paint job depends on the billing dispute, and the billing dispute is the franchise fee.
The question, framed as it should be — for sworn testimony, not for a newsletter: can Sea Tow prove the 15% obligation and the trademark-identification obligation strongly enough to win those two claims, while simultaneously maintaining that neither obligation makes it a franchisor under GBL Article 33? We do not know the answer. We would very much like to hear it asked under oath.
There is history here, and it is not helpful to Hummel Avenue. In 1988 the New York Attorney General opened an investigation into Sea Tow International and its then-president, Joseph J. Frohnhoefer Jr. — “Joe 2,” the founder, now deceased, and never to be confused with Joseph J. Frohnhoefer III, the current principal and a third-party defendant here. The resulting settlement papers, filed in this very case as an exhibit to a Stein declaration, contain this:
… but in an effort to move further away from alleged franchising have changed the licensing program by deleting the collection of a license fee.
Settlement Agreement, People v. Sea Tow Int'l, Inc. · filed as Ex. C to the Stein Declaration · Document 192-4 · PageID #: 6349
You do not move away from a place you were never standing. And the same instrument bound Sea Tow and Frohnhoefer Jr., in the regulator's own unusual phrasing, not to violate GBL § 680 et seq. “from now until the end of time.”
Thirty-eight years later, the surviving claims in a federal case are a revenue-share fee and a trademark-identification obligation. Draw your own chart.
Now turn the scorecard over.
The Jaegers did not merely defend. On January 8, 2021, at DE 62, they filed an Answer with Affirmative Defenses, a Counterclaim against Sea Tow Services International, and a Third-Party Complaint against Mitchell A. Stein and Joseph J. Frohnhoefer III personally. Sea Tow, Stein and Frohnhoefer moved for judgment on the pleadings to kill all of it. DE 192. Here is how that went.
One count out. Everything else standing, including the personal exposure. And the statute the survivors run on is not a slap on the wrist. Under GBL § 691(1), a person who offers or sells a franchise in violation of §§ 683, 684 or 687 is liable for damages — and where the violation is willful and material, for rescission, with six percent interest from the date of purchase, plus reasonable attorney fees and court costs. “Person” is defined at § 681(13) to reach individual officers and those in control. ECF No. 216 at 26–27, PageID #: 7766–67.
Sea Tow's best possible day: it collects two months of 15% revenue share from 2020, enforces a $25,000 note, and wins some measure of trademark relief over the appearance of a boat — the yellow-hull registration, No. 3678375, having already been cancelled by the TTAB as a discovery sanction in Cancellation No. 92059856 on September 29, 2017.
The Jaegers' best possible day: a finding that Sea Tow operated as an unregistered franchisor, agreements unwound, rescission plus interest and fees under § 691, and two individuals personally on the hook.
Those are not the same size. One is a billing dispute. The other is a business model.
And a ruling on the second does not stay in Tampa Bay. A holding that the Sea Tow paper is franchise paper, and that the franchisor never registered, is a holding about a form contract — the same form sitting in file cabinets from Montauk to Marco Island. That is why we keep repeating the same tiresome thing: this case is not about the Jaegers. It is about the paper you signed.
Suppose we are wrong. Suppose Sea Tow collects its sixty days of fees, enforces the note, and takes a trademark judgment over a repainted hull. Suppose it goes to the national meeting and says we told you so.
Read what that victory actually buys the operators.
You still do not have a legal franchise agreement. A win on a two-month billing claim does not register anything with anybody; it does not cure a registration or disclosure failure, and it does not convert a Management Agreement into compliant franchise paper. You are still holding the same document the day after the verdict.
You are still outside the protections. Registered franchisees get a Franchise Disclosure Document with twenty-three items of required information, audited financials, litigation history, a list of current and former operators, and a regulator with a file open on the brand. Operators of a system that insists it is not a franchise get a press release.
Your business is still devalued. SBA Franchise Directory eligibility is not a vanity badge — it is the mechanism by which your buyer gets financed. A brand that cannot or will not certify as franchise-compliant to a federal agency shrinks the pool of people who can afford to buy you out. That is money out of your retirement, and it comes out whether Sea Tow wins or loses this case.
And the franchisor still makes decisions that hit your P&L with no oversight and no recourse. Territory changes. Fee changes. Program changes. Transfer approvals. Renewal terms. In a registered system, those live inside a disclosed contract policed by a state regulator. In a system that is not a franchise, they live wherever the franchisor says they live.
Put plainly: a Sea Tow win in this case is a win for Sea Tow. There is no version of it that improves an operator's legal position by one inch. The best outcome available to the fleet is not on Sea Tow's side of the caption — and that is worth understanding before anyone asks you to celebrate.
Our earlier issues told you Sea Tow had not won a contested ruling since 2022. That was wrong, and here is the honest board. Sea Tow has won discovery skirmishes. What it has not done, in four years of trying, is restore a single dismissed claim.
| Date | What happened | Who won |
|---|---|---|
| Sept. 30, 2022 | ECF 216 (Seybert, J.): Knowhow, NCNDA, replevin, bankruptcy-disclosure and Franchise Agreement fee claims dismissed; Jaegers' § 687 fraud count dismissed; individual liability against Stein and Frohnhoefer III sustained | Split, heavily Jaeger |
| Jan. 5, 2023 | Sea Tow's motion for reconsideration denied in its entirety (Morrison, J.) | Jaegers |
| Mar. 14, 2023 | Leave to file a Third Amended Complaint denied — DE 238, with the finding that the amendment appeared to be sought in bad faith to slow the litigation and drain the Jaegers' comparatively limited resources | Jaegers |
| Oct. 16, 2023 | Jaegers' second motion to compel granted; Steven Altman's withdrawal as Sea Tow counsel granted on consent — DE 248 | Jaegers |
| Feb. 27, 2024 | Sea Tow's second motion to compel denied as untimely — DE 257 | Jaegers |
| Mar. 19, 2024 | DE 262: case narrowed to 15% for May–June 2020, the Promissory Note, and Lanham Act / NYGBL | Jaegers |
| May 15, 2025 | Jaegers' request to move for partial summary judgment on liability denied as premature; no party may move for summary judgment until the close of discovery (Morrison, J.) | Sea Tow |
| July 17, 2025 | Sea Tow's Rule 72 objection to DE 262 denied as moot; discovery stay lifted; companion case 25-cv-2145 remanded to New York state court — DE 293 (Kuntz, J.) | Jaegers |
| Dec. 29, 2025 | Sea Tow's third motion to compel largely denied as overbroad, disproportionate and time-barred; the representation that the Jaegers produced no damages documents found untrue; document discovery declared closed | Jaegers |
| Dec. 29, 2025 | Jaegers' motion to compel a new ESI search denied; Sea Tow's motion to strike the Jaegers' 29-page reply brief granted — DE 304, DE 307 | Sea Tow |
| Feb. 19, 2026 | Emergency temporary stay of 17 non-party subpoenas granted — DE 311 | Jaegers |
| Feb. 25, 2026 | The stay did not hold. Jaegers' objections to the third-party subpoenas overruled; confidentiality and undue-burden objections rejected; four additional non-party deponents identified — DE 314 | Sea Tow |
| Mar. 27, 2026 | Moreno Defendants, Tampa Bay Marine Towing & Service, and Preferred Brands dismissed by stipulation — DE 315, DE 316 | Both |
| Sept. 29, 2017 | Yellow-hull mark, Reg. No. 3678375, cancelled as a discovery sanction — TTAB Cancellation No. 92059856 | Not Sea Tow |
Episodes covering February 2026 described the 17 non-party subpoenas as frozen. That was accurate on February 19 and inaccurate six days later. On February 25, 2026, Judge Locke overruled the Jaegers' objections, holding that because the Jaegers assert counterclaims based on harm to their business, Sea Tow is entitled to test those damages assertions. Documents received are to be served on the Jaegers in real time and held confidentially for this litigation only. Four additional non-party deponents were identified on the record. DE 314.
Depositions were ordered completed by April 23, 2026 with no further extensions, capped at ten per side. Stein was set for March 16, Frohnhoefer III for March 17, Kristen Frohnhoefer for March 18. The Court also warned that the next discovery dispute may result in the appointment of a special master, split evenly between the parties. Electronic Scheduling Order, Feb. 2, 2026.
On Monday, July 27, 2026, at 11:15 a.m., the parties appear before Magistrate Judge Steven I. Locke in Courtroom 820 of the Central Islip courthouse. The conference was set by Electronic Scheduling Order dated July 9, 2026, to address the issues raised in the parties' joint status report at DE 318, filed July 7, 2026 by Sea Tow, Stein and Frohnhoefer after a consent extension at DE 317.
It is a status conference on the state of discovery — not oral argument on a dispositive motion. But with document discovery closed since December, depositions closed since April, and no summary judgment motion yet on the docket, this is the conference where the shape of the endgame gets set. Here is what we are watching.
Next issue will be a straight report from the hearing. No adjectives we cannot source. If you attend, or pull the minute entry before we do, the crows nest is at hornswaggled@proton.me.
In March 2026, three people sat for depositions under oath in this case: Mitchell A. Stein on March 16, Joseph J. Frohnhoefer III on March 17, and Kristen Frohnhoefer on March 18. Electronic Scheduling Order, Feb. 2, 2026. Those are the first sworn examinations of Sea Tow's general counsel and its two principals in six years of litigation.
There are exactly two mechanisms available to a party that does not care for how a deposition went. Both are in play here, and they do different jobs. One changes what the testimony says. The other changes who gets to read it.
Federal Rule of Civil Procedure 30(e) lets a deponent review the transcript and submit a signed statement of changes. It comes with three conditions that matter enormously and that most people have never heard of.
First, review has to be requested before the deposition is completed. Second, the deponent has 30 days from being notified the transcript is available. Third — and this is the one — the deponent must list each change and the reason for making it. The rule does not contemplate a quiet find-and-replace. It contemplates a signed document, on the record, in which a witness explains why the answer they gave under oath is not the answer they now wish to give.
Rule 30(e) exists to fix the court reporter's ear: a misheard number, a garbled name, a “can't” typed as “can.” What courts in this Circuit have grown deeply impatient with is the other use — errata that changes testimony in substance, reversing or materially softening a sworn answer, filed conveniently ahead of summary judgment. Judges have a name for that instinct, borrowed from the rule against sham affidavits: you generally may not manufacture a factual dispute by contradicting your own sworn testimony. A late errata sheet is worse still, because untimeliness is its own independent ground for striking the changes absent good cause.
Depositions closed April 23, 2026. Summary judgment was barred until the close of discovery and is now unlocked. Errata that revises substantive testimony in that window is not housekeeping — it is testimony being edited in the last moments before it becomes evidence in a dispositive motion. That is precisely the sequence that draws a motion to strike.
We are not asserting that any particular change was improper; we have not seen the errata sheets, and neither has the public. We are telling you where to look. If changes were made, the rule requires each one to carry a stated reason. Those reasons are a document. Ask for it.
The second tool does not touch a word of the testimony. It just puts the transcript in a drawer.
Under a protective order, a party can stamp material CONFIDENTIAL and restrict its use to the litigation. Here is the thing operators should understand: that stamp is applied by the party, not by the judge. It is not a judicial finding that anything is actually confidential. It is a label, applied unilaterally, that holds until somebody challenges it. A blanket designation — marking an entire transcript rather than identifying specific passages containing genuine trade secrets or private financial data — is the aggressive version, and it is the version that draws objections.
There is history on this point that is worth knowing. In March 2021, both sides submitted competing proposed protective orders and Judge Locke resolved it baseball-arbitration style: pick one, no splitting the difference. He adopted the Jaegers' proposed order, as modified, and denied Sea Tow's outright. DE 102; Electronic Order, Mar. 5, 2021 (denying DE 94). Whatever confidentiality regime governs this case, Sea Tow did not write it and lost the fight over it.
Separately, the February 25, 2026 order imposed confidentiality on documents produced by the non-party subpoena recipients — those are to be maintained confidentially and used for this litigation and no other purpose, an obligation the Court applied to all parties and counsel. DE 314. That is a court-imposed condition on third-party documents. It is not the same thing as a party stamping its own principals' deposition transcripts, and the two should not be confused, including by us — an earlier draft of this issue ran them together.
A confidentiality designation is strongest while material sits in a lawyer's file and weakest the moment it is attached to a motion. Once a document is filed with a court in connection with a dispositive motion, it becomes a judicial document, and judicial documents carry a strong presumption of public access under settled Second Circuit law. Broad, unexamined designations tend not to survive that test; a party must justify sealing item by item, and “this is embarrassing” has never been a recognized ground.
So the practical question for every operator is simple: if the March 2026 testimony is quoted in a summary judgment brief, does the public get to read it? On the current law, much of it probably should. Which is why what happens to these designations before briefing starts is not a technicality.
Run the two mechanisms in sequence and you get a coherent shape. First the testimony is amended. Then the amended version is sealed. What survives into the public record is neither what was said nor available to be read.
We are not going to tell you that is the plan, because we cannot see inside anyone's head and because in this newsletter allegations stay framed as questions until a witness answers them under oath. Errata sheets are sometimes filed for entirely legitimate reasons. Confidentiality designations are sometimes entirely proper. Both tools have honest uses.
But both tools also have exactly one dishonest use, and it is the same one: making sworn testimony say something other than what it said, in front of an audience smaller than the one entitled to hear it. The operators of this system have a direct financial stake in the answers three people gave under oath in March about whether they run a franchise. Whether those answers reach you in the form they were given — or at all — is being decided in a courtroom in Central Islip while you read this.
That is the question to bring to Monday. Not did they win. What did they say, who changed it, and who is allowed to see it?
Reading a scorecard is not a remedy. There are two regulators whose jurisdiction this case sits squarely inside, and both take complaints directly from operators. Neither one requires a lawyer, a filing fee, or anyone's permission.
New York registers and regulates franchisors. That office is the one that opened the 1988 investigation. It has a dedicated online franchise complaint form:
https://ag.ny.gov/franchise-complaints
The form asks, among other things, for: the franchisor's name and address; a full description of the complaint with attachments (up to ten files); the relief you seek, such as return of your franchise fee; whether you signed a contract and where; the franchise fee, the amount paid, and your total investment; whether any negotiation or offer took place in New York State; promises or agreements that were not in writing; whether you have already complained to the company and what they said; whether the matter is with another agency or attorney; and whether court action is pending. It also asks two questions worth thinking about before you start typing: whether you are willing to be interviewed, and whether you are willing to be a witness in a formal proceeding.
Practical notes: the form expects you to have complained to the franchisor first, so do that in writing and keep the reply. Attach the agreement itself. The OAG may forward your complaint to the company you name — that is stated on the form. Bureau contact of record: Investor Protection Bureau, 28 Liberty Street, 21st Floor, New York, NY 10005, (212) 416-8222.
The FTC's Franchise Rule, 16 C.F.R. Part 436, requires a franchisor to give every prospective franchisee a Franchise Disclosure Document containing twenty-three specified items before any money changes hands. Failure to furnish one is a Rule violation carrying civil penalties per violation. File at:
https://reportfraud.ftc.gov
Click Report Now, choose Job, investment, money-making opportunity, franchise, then select Franchise. The FTC added that pathway specifically because franchisees were having trouble finding the right category.
Operators tell us they believe their non-disclosure and non-disparagement paperwork prevents them from talking to regulators. In 2024 the FTC issued a policy statement addressing exactly this: provisions in franchise agreements or other contractual documents between franchisors and franchisees may not restrict a franchisee's communications with the Commission, or with any other state or federal law enforcer or regulator, about potential law violations. The Commission said it issued the statement because franchisees appeared reluctant to report their experiences even when they believed the law had been broken.
Read that against a case where the NCNDA-based claims were dismissed with prejudice in 2022 and then re-asserted in a second forum in 2025. We are not giving legal advice and you should ask your own lawyer. But the federal agency that writes the Franchise Rule has put its position in writing, and it is a short document worth reading before you decide you are not allowed to speak.
One more thing worth doing, and it costs nothing: pull the docket yourself. Case No. 2:20-cv-02877-WFK-SIL, E.D.N.Y. Read ECF No. 216. Read DE 262. They are two documents, one of them 55 pages, and between them they contain every fact in this issue.
Print the scorecard. Bring it to the next regional call. When someone tells you the case is a certainty, ask four questions:
One: which of our original counts survived ECF 216, and which were dismissed? Two: if we are not a franchise, why is the surviving money claim a percentage of gross revenue and the surviving trademark claim about de-identification? Three: which of the Jaegers' claims have been dismissed, and which are still standing against Mr. Stein and Mr. Frohnhoefer personally? Four: if we win, what exactly changes for me?
You do not need a law degree to evaluate the answers. You need only notice whether you get any.
Nineteen episodes. Still a royal pain in the ass.
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