One Hour Air Conditioning Franchising, LLC v. Jerry's Comfort Experts, Inc. et al

Filing 22

ORDER granting 19 Motion for summary judgment and the Clerk of Court isdirected to enter judgment for the Plaintiff as a matter of law and enforcement of the guaranty and note against the guarantors in the amount of (1) $124,853.17 in los t continuing franchise fees and marketing fund contributions as per the terms of the Franchise Agreement (collectively, the "Franchise Fees"); (2) $4,500.00 in damages for unlicensed utilizationof One Hour's licensed trademarks; a nd (3) $13,048.50 in unpaid principal and interest on the Note. The Clerk of Court shall close this case and the Court reserves jurisdiction to consider any motion for attorneys' fees and costs which the Plaintiff shall file within the next forty-five days. All other pending motions shall be terminated. Signed by Judge Elizabeth A. Kovachevich on 5/5/2015. (SN)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

ONE HOUR AIR CONDITIONING
FRANCHISING, L.L.C., etc.,
Plaintiff,

vs.

CASE NO. 8:14-CV-994-T-EAK-TGW

JERRY’S COMFORT EXPERTS, INC.,
et al.,
Defendants.
/

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

The cause is before the Court on Plaintiff's motion for summary judgment as to
defendants Brent A. Rackham and Jason A. Rackham, the guarantors (Doc. 19). These
defendants have not responded to the motion for summary judgment despite the Court
allowing them until April 17, 2015, to respond or to have the motion for summary
judgment resolved without benefit of a response. The third defendant in this cause of
action was defaulted on June 19, 2014 (12).

STANDARD OF REVIEW

This circuit clearly holds that summary judgment should only be entered when the
moving party has sustained its burden of showing the absence of a genuine issue as to any
material fact when all the evidence is viewed in the light most favorable to the nonmoving
party. Sweat v. Miller Brewing Co., 708 F.2d 655 (11th Cir. 1983). All doubt as to the
existence of a genuine issue of material fact must be resolved against the moving party.
Hayden v. First National Bank of Mt. Pleasant, 595 F.2d 994, 996-7 (5th Cir. 1979),
quoting Gross v. Southern Railroad Co., 414 F.2d 292 (5th Cir. 1969). Factual disputes
preclude summary judgment.
The Supreme Court of the United States held, in Celotex Corp. v. Catrett, 477
U.S. 317, 91 L.Ed.2d 265, 106 S.Ct. 2548, (1986):
In our view the plain language of Rule 56© mandates the entry of summary
judgment, after adequate time for discovery and upon motion, against a party who
fails to establish the existence of an element essential to that party's case, and on
which that party will bear the burden of proof at trial. Id. at 273.

The Court also said, "Rule 56(e) therefore requires that nonmoving party to go
beyond the pleadings and by her own affidavits, or by the 'depositions, answers to
interrogatories, and admissions on file,' designate 'specific facts showing there is a
genuine issue for trial.'" Celotex Corp., at p. 274. As the district court in Coghlan v.
H.J. Heinz Co., 851 F.Supp. 808 (N.D. Tex. 1994), summarized:
Although a court must "review the facts drawing all inferences most favorable to
the party opposing the motion,"...the nonmovant may not rest on mere allegations
or denials in its pleadings; in short, "the adverse party's response... must set forth
specific facts showing that there is a genuine issue for trial." FED.R.CIV.P. 56(e).
However, merely colorable evidence or evidence not significantly probative will
not defeat a properly supported summary judgment...The existence of a mere
scintilla of evidence will not suffice...(cites omitted) at 810-811.
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The Court must “draw inferences from the evidence in the light most favorable to the
non-movant and resolve all reasonable doubts in that party’s favor.” Speciality Malls of
Tampa v. The City of Tampa, 916 F.Supp 1222 (Fla. M.D. 1996). (emphasis added) A
court is not required to allow a case to go to trial “when the inferences that are drawn
from the evidence, and upon which the non-movant relies are <implausible.’” Mize v.
Jefferson City Board of Education, 93 F.3d 739, 743 (11th Cir. 1996)

A court, however, may only consider “that evidence which can be reduced to an
admissible form,” Rowell v. BellSouth Corp., 433 F.3d 794, 799 (11th Cir. 2005). The
existence of some factual disputes between the litigants will not defeat an otherwise
properly supported summary judgment motion; “the requirement is that there be no
genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)(emphasis in original). The substantive law applicable to the claimed causes of
action will identify which facts are material. Id. In considering the evidence, the court
resolves all reasonable doubts about the facts in favor of the non-moving party and draws
all justifiable inferences in its favor. Hickson Corp. v. Northern Crossarm Co., Inc., 357
F.3d 1256, 1260 (11th Cir. 2004). The court does not, however, weigh the evidence or
make findings of fact. Anderson, 477 U.S. at 249-50.

DISCUSSION

The Plaintiff, One Hour Air Conditioning Franchising, L.L.C. (One Hour) has
established the following undisputed facts regarding this cause of action.
(1) On September 18, 2008, One Hour entered into the Franchise Agreement with
Jerry's Comfort for a ten-year term expiring on September 17, 2018. Brent
Rackham signed the Franchise Agreement as President of Jerry's Comfort. The
Guarantors both signed the Franchise Agreement as "Owner[s]," thereby
obligating themselves to certain duties under the Franchise Agreement.
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(2) As further inducement for One Hour to grant a franchise to Jerry's Comfort,
the Guarantors also executed the Guaranty, thereby personally and unconditionally
guaranteeing Jerry's Comfort's performance of each obligation under the Franchise
Agreement. The Guarantors agreed to be "personally bound by, and personally
liable for the breach of, each and every provision" in the "Franchise Agreement
and any documents, agreements, instruments and promissory notes executed
pursuant to or in connection with the Franchise Agreement."
(3) Jerry's Comfort and the Guarantors also executed the Note, payable to One
Hour for $51,385.34 over a term of sixty (60) months at 18% interest. The Note
states that in the event of a default, One Hour has the right to declare the
outstanding principal balance and all unpaid accrued interest immediately due and
payable in full. The Note also provides that Jerry's Comfort and the Guarantors
owe One Hour all costs and expenses reasonably incurred or paid at any time by
One Hour, including, but not limited to, reasonable attorneys' fees and other legal
costs in enforcing payment and collection of the balance due of the Note. The Note
"shall be the joint and several obligation" of both Jerry's Comfort and the
Guarantors.
(4) From September 18, 2008 until September 2013, Jerry's Comfort operated its
franchise pursuant to the Franchise Agreement. On September 26, 2013, One
Hour sent written correspondence to Jerry's Comfort and the Guarantors, notifying
them of certain defaults under the Franchise Agreement. On October 22, 2013,
One Hour sent written correspondence to Jerry's Comfort and the Guarantors,
terminating the Franchise Agreement due to Jerry's Comfort's failure to cure all
deficiencies under the Franchise Agreement.12 After termination of the Franchise
Agreement, Jerry's Comfort continued to utilize One Hour's registered trademarks,
competed directly with One Hour in the same territory, and failed to pay One Hour
on the Note. (Doc 19-1, pgs. 2-4) (footnotes omitted)
The Defendants have failed to come forward with “affidavits, or by the 'depositions,
answers to interrogatories, and admissions on file,' designate 'specific facts showing there
is a genuine issue for trial.'" Celotex , at 274.

The Court adopts by reference the legal arguments set out by the Plaintiff in
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support of their request for summary judgment. The Court finds that the referenced note
and guaranty is an enforceable contract and the entry of default as to Jerry’s Comfort
Experts, Inc. establishes that One Hour holds the Note; the installment payment on the
note was not paid, and One Hour elected to accelerate payment on the note.
Consequently, the guarantors, Brent A. Rackham and Jason A. Rackham, are in breach of
the guaranty and the note. Therefore, the Court having reviewed the entire record
determines that the Plaintiff has established it is entitled to summary judgment as to the
defendants.

The remaining question goes to the damages that should be awarded to the
Plaintiff. The Plaintiff has requested damages, as supported by the affidavit of Derrick
Wozniak, of “$142,401.67..., plus attorneys' fees and costs that continue to accrue. The
total damages include the following: (1) $124,853.17 in lost continuing franchise fees and
marketing fund contributions as per the terms of the Franchise Agreement (collectively,
the "Franchise Fees"); (2) $4,500.00 in damages for unlicensed utilization of One Hour's
licensed trademarks; and (3) $13,048.50 in unpaid principal and interest on the Note.”
The Court concludes that the requested damages are supported by the evidence presented, which
has not been disputed by the defendants, with the exception that the request for attorneys’ fees
and costs should be made by separate motion and by filing the appropriate form to request costs
reimbursement. Accordingly, it is

ORDERED that the motion for summary judgment be granted and the Clerk of Court is
directed to enter judgment for the Plaintiff as a matter of law and enforcement of the guaranty
and note against the guarantors in the amount of (1) $124,853.17 in lost continuing franchise

fees and marketing fund contributions as per the terms of the Franchise Agreement
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(collectively, the "Franchise Fees"); (2) $4,500.00 in damages for unlicensed utilization
of One Hour's licensed trademarks; and (3) $13,048.50 in unpaid principal and interest on
the Note. The Clerk of Court shall close this case and the Court reserves jurisdiction to consider
any motion for attorneys’ fees and costs which the Plaintiff shall file within the next forty-five
days.

DONE and ORDERED in Chambers, in Tampa, Florida, this 5th day of May, 2015.

Copies to:
All parties and counsel of record

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