ELDER CARE PROVIDERS OF INDIANA, INC. v. HOME INSTEAD, INC.

Filing 165

ORDER - granting in part and denying in part 59 Motion for Preliminary Injunction *** SEE ORDER ***. Signed by Judge Sarah Evans Barker on 9/14/2015. (CKM)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
ELDER CARE PROVIDERS OF INDIANA,
INC.,

)
)
)
Plaintiff,
)
)
vs.
)
)
HOME INSTEAD, INC.,
)
)
Defendant.
)
______________________________________ )
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HOME INSTEAD, INC.,
)
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Counter Claimants,
)
)
vs.
)
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ANTHONY SMITH,
)
GEORGETTE SMITH,
)
HOME AGAIN SENIOR CARE, INC.,
)
ELDER CARE PROVIDERS OF INDIANA,
)
INC.,
)
)
Counter Defendants.
)

1:14-cv-01894-SEB-MJD

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S
MOTION FOR PRELIMINARY INJUNCTION
This cause is before the Court on the Motion for Preliminary Injunction [Dkt. No.
59] filed by Defendant Home Instead, Inc. on February 17, 2015, pursuant to Rule 65(a) of
the Federal Rules of Civil Procedure. Having considered Home Instead’s motion, the briefs
submitted by the parties, and the parties’ September 8, 2015 oral arguments, the Court

hereby GRANTS in PART and DENIES in PART the Defendant’s motion for injunctive
relief.
Factual Background
This case involves claims for breach of a franchise agreement. Defendant Home
Instead, Inc. (“Home Instead”) operates a business that provides non-medical care to senior
citizens through a network of independently-owned franchises. On October 16, 2006,
Plaintiff Elder Care Providers of Indiana, Inc. (“Elder Care”) entered into a franchise
agreement with Home Instead in which Elder Care agreed to operate the Home Instead
business within an exclusive area on the east side of Indianapolis, Indiana for a period of
ten years (“Franchise Agreement”).

Elder Care’s sole shareholders – Anthony and

Georgette Smith – personally guaranteed the Franchise Agreement.

[Dkt. No. 1-1

(Franchise Agreement).]
Elder Care provided non-medical home care to seniors and was not allowed (both
by its Franchise Agreement and Indiana licensure restrictions) to provide any medical care
because it was licensed as a PSA (personal service agency), rather than an HHA (home
health agency). HHAs are permitted to attend to home-based medical needs. Elder Care
thus was required to refer its clients who were in need of medical care to HHAs to have
their medical needs met. In November 2011, Mr. and Mrs. Smith formed Home Again
Senior Care, Inc. (“Home Again”), a separately licensed HHA corporation through which

2

medical home health care was provided to clients referred to it by both Elder Care and
other area Home Instead franchises.1
Not until March 2013 did Home Instead first learn of Home Again’s operations,
prompting it to voice two concerns: (1) the possible confusion resulting from the name
“Home Again”;2 and (2) the possibility that Home Again might be providing services that
competed with Home Instead. As a result, Home Instead undertook what became a 20month investigation into Home Again,3 which focused almost entirely on whether Elder
Care was diverting business to Home Again to the detriment of Home Instead. The Smiths
contend that throughout the investigation by Home Instead they were willing to change the
name of their HHA (Home Again), although Home Instead notes that their willingness was
conditioned on Home Instead’s stipulation that Home Again was not in competition with
Home Instead, which Home Instead was not willing to do.

1

The Smith Parties contend that they did not believe that Home Again would be competing
with Home Instead (or Elder Care), in part because Home Instead encouraged its franchisees to
develop partnerships with HHAs to provide complementary services. [Dkt. No. 86 at 8 (quoting
Home Instead’s Operations Manual).] Moreover, the evidence demonstrates that all of the Home
Instead franchisees with whom Home Again/Purpose have partnered testified that they could not
provide the services provided by Home Again/Purpose because those franchisees can provide only
non-medical services. [Id. at 9 (citing franchisee depositions).]
The parties dispute the reason the Smiths named their HHA “Home Again.” The Smiths
claim that it was inspired by Jim Neighbors’s “Back Home Again in Indiana” singing
performances at the Indianapolis 500, while Home Instead points to testimony of Mr. Smith that
he desired to have “Home Again” be similar to “Home Instead” so that he could market the two
companies together.
2

3

The parties dispute the reason that Home Instead’s investigation lasted twenty months.
Home Instead argues that the Smiths delayed in providing the documents requested. [See Dkt. No.
60 at 5.] The Smiths contend that Home Instead prioritized issues other than the Smith Parties and
they dispute that they were dilatory in responding to Home Instead’s requests for information.
[See Dkt. No. 86 at 12.]

3

Home Instead ultimately concluded that the operation of Home Again constituted a
breach of the Franchise Agreement’s competitive restrictions as well as an infringement on
Home Instead’s trademark and, as a result, Home Instead terminated the agreement
between it and Elder Care. On November 7, 2014, Home Instead’s General Counsel
notified the Smiths’ attorney that Home Instead planned to terminate Elder Care’s franchise
agreement and file a federal lawsuit in Nebraska, unless the Smith Parties agreed that (1)
Home Again would pay royalties to Home Instead for revenues generated since 2011; (2)
Home Again would be consolidated with Elder Care to become a Home Instead franchise;
and (3) the Smiths would amend their franchise agreement to transform their business into
a medical franchise, and then have 180 days to sell their businesses or face permanent
wind-down. The Smiths did not agree and ultimately the franchise was terminated.
Elder Care continued to operate as a Home Instead franchise until January 31, 2015
allowing time for Elder Care to wind down the business. According to Elder Care, it
stopped operating as a Home Instead franchise during the first week of February 2015.
Elder Care insists that it has now returned all Home Instead proprietary materials; in fact,
they say, that occurred immediately after Elder Care discontinued operations. [See Dkt.
No. 86 at 15; Dkt. No. 145 at 2 (“Elder Care returned all the proprietary material received
from Home Instead . . . including operating manuals, training materials, and the like.”).]
The Franchise Agreement prohibits Elder Care and the Smiths from using any Home
Instead licensed mark for any unauthorized use. Specifically, the Franchise Agreement
provides:

4

[Franchise Agreement at ¶ 6(B).] The Franchise Agreement also provides that, after
termination of the agreement, Elder Care and the Smiths are required to deliver all materials
related to the franchise to Home Instead:

[Id. at ¶ 17(A).] The Franchise Agreement also prohibits Elder Care and the Smiths from
competing with Home Instead, as follows:

5

09/14
/2015

[Id. at ¶ 17(C)(2).]
Elder Care filed the current lawsuit on November 8, 2014 alleging that Home
Instead’s termination breached the Franchise Agreement and violated the Indiana
Deceptive Franchise Practices Act. Home Instead filed a counterclaim against Elder Care,
Mr. and Mrs. Smith as well as Home Again (collectively referred to as the “Smith Parties”)
for breach of contract, civil conspiracy, misappropriation of trade secrets, unfair
competition, and trademark infringement.
6

On May 26, 2015, counsel for the Smith Parties informed Home Instead that Elder
Care had executed a Letter of Intent to undertake a complete transfer of Elder Care’s clients
to a neighboring Home Instead franchisee, Care Choices. The Transfer Agreement,
executed on July 15, 2015, transferred Elder Care’s patients to Care Choices for $500,000
($30,000 down payment within 3 months and 36 monthly payments thereafter).4 Home
Instead raised various concerns about the legality of the Transfer Agreement in its briefing;
however, Home Instead does not seek to unwind the Transfer Agreement. [Dkt. No. 154
at 2 (“Home Instead, Inc. is not asking the Court to unwind the Transfer Agreement at this
point in time.”).] After transferring its clients to Care Choices, Elder Care ceased all
business operations.
As of August 26, 2015 Home Again Senior Care Inc.’s legal business entity name
became Purpose Home Health Inc. [Dkt. No. 157-1.]
Although the shifting facts and circumstances in this case reflect the parties’
ongoing business activities, Home Instead’s current formulation of its request for a
preliminary injunction consists of the following; that the Smith Parties:
(1) cease all use of the names Home Instead® and Home Instead Senior
Care®;
(2) cease all use of the names Home Again and Home Again Senior Care;
(3) comply with the post-termination covenants, including the covenants
against disclosure of confidential information and the covenants prohibiting
operating or having any financial or beneficial interest in a non-medical and
domestic care service business in Elder Care’s former exclusive territory that
4

It is Home Instead’s position that the Smith Parties are not entitled to any consideration
for the transfer of clients to Care Choices. [Dkt. No. 142 at 3.]

7

is of a character and concept similar to a Home Instead Senior Care®
business; and
(4) to deliver to Home Instead, Inc. all materials relating to the operation of
Elder Care’s business, including all copies of those materials, unless the
Smith Parties are otherwise required by law to retain copies.
[Dkt. No. 154 at 1.] We address each of these requests for injunctive relief below.
Legal Analysis
Standard of Review
In reviewing a motion for injunctive relief, courts proceed in two distinct phases.
First, we must determine whether the moving party has satisfied the threshold showing of
entitlement to relief, which in turn consists of three elements: (1) absent a preliminary
injunction, it will suffer irreparable harm in the interim period prior to final resolution of
its claims, (2) traditional legal remedies would be inadequate, and (3) its claim has some
likelihood of succeeding on the merits. Girl Scouts of Manitou Council, Inc. v. Girl Scouts
of U.S. of Am., Inc., 549 F.3d 1079, 1086 (7th Cir. 2008); Annex Books, Inc. v. City of
Indianapolis, 673 F.Supp.2d 750, 753 (S.D. Ind. 2009). If the moving party clears this
threshold, we proceed to the second stage, balancing “the nature and degree of the
plaintiff's injury, the likelihood of prevailing at trial, the possible injury to the defendant if
the injunction is granted, and the wild card that is the ‘public interest.’” Lawson Prods.,
Inc. v. Avnet, Inc., 782 F.2d 1429, 1433 (7th Cir. 1986).
Our balancing of these equitable factors is not rigid or formulaic; rather, we employ
a “sliding scale” approach – meaning, for example, that “the more likely it is the plaintiff
will succeed on the merits, the less the balance of irreparable harms need weigh towards
its side; the less likely it is the plaintiff will succeed, the more the balance need weigh
8

towards its side.” Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 12 (7th Cir.
1992) (citations omitted). The sliding scale approach “is not mathematical in nature, rather
‘it is more properly characterized as subjective and intuitive, one which permits district
courts to weigh the competing considerations and mold appropriate relief.’” Ty, Inc. v.
Jones Group, Inc., 237 F.3d 891, 895–896 (7th Cir. 2001) (quoting Abbott Labs., 971 F.2d
at 12).
Although discretion to issue a preliminary injunction lies with the courts, injunctive
relief it is to be considered an “extraordinary remedy,” appropriate only on a “clear
showing of need.” See Sierra Club v. Gates,499 F.Supp.2d 1101, 1126 (S.D. Ind. 2007).
The moving party bears the burden of proof and must establish by preponderance of the
evidence that he is entitled to the requested relief. Id.
Discussion
I.

The Smith Parties’ Use of Home Instead-Related Names and Return of Home
Instead-Related Documents.
Home Instead seeks an order requiring the Smith Parties to cease using the names

Home Instead, Home Instead Senior Care, Home Again, and Home Again Senior Care.
Additionally, Home Instead requests that the Court require the Smith Parties to deliver to
it all business-related materials pertaining to the operation of Elder Care’s business,
including copies,5 unless the Smiths are required by law to retain copies. We hold that
Home Instead has satisfied its burden of demonstrating that it has a reasonable likelihood

5

Because this matter is in litigation, although the Smith Parties are ordered turn over all
documents related to Elder Care’s business, many of these documents may be part of discovery
and court filings and thus copies may be retained by the Smith Parties and/or their lawyers.

9

of success on the merits of its claim for breach of Franchise Agreement and will suffer
irreparable harm for which there is no adequate remedy at law absent a preliminary
injunction. Moreover, the Smith Parties will suffer no burden in being so enjoined.
A.

Balance of Harms.

Typically, the balancing of the harms analysis relating to a preliminary injunction
is the final step undertaken by the Court. Here, because the parties’ representations and
actions bear significantly on our consideration, we shall begin our discussion with these
issues. The Smith Parties have represented, apparently countless times, that they are no
longer using the names “Home Instead” or “Home Again” in connection with their
business. [See, e.g., Dkt. No. 86 at 15-16, 32-33; Dkt. No. 157.] Home Again has morphed
into “Purpose Home Health” at this point and represents that “it voluntarily stopped
operating under [Home Again Senior Care] on April 1, 2015 . . . and has no intention of
using the ‘Home Again Senior Care’ trade name in the future.” [Dkt. No. 86 at 19.] The
Smith Parties assert that “Elder Care and the Smiths stopped using Home Instead’s
Licensed Marks and any Home Instead materials as of early February 2015.” [Dkt. No. 86
at 17.] Indeed, the Smith Parties have argued that “any effort by Home Instead to seek an
injunction with regard to the Licensed Marks or ‘confidential information’ has been

10

rendered moot.” [Dkt. No. 86 at 18 (citing Chicago United Indus., Ltd. v. Chicago, 445
F.3d 940, 947 (7th Cir. 2006)).]6
However, based on the evidence supplied by Home Instead, its request for injunctive
relief is not rendered moot by the Smith Parties’ representations. The Smith Parties have
conceded that in isolated circumstances anecdotal references to Home Instead would crop
up in the conduct of Elder Care’s business; they characterize those references as “what one
would expect after the initial breakup” in a divorce. [Dkt. No. 86 at 19.] Home Instead
disagrees. The Smith Parties represent that as of February 2015 they ceased using the name
Home Instead. [See Dkt. No. 87-35 (Decl. of G. Smith at ¶ 3 (“On February 4, 2015. Elder
Care ceased operating as a franchisee of Home Instead, Inc., and ceased using the trade
names ‘Home Instead Senior Care’ and ‘Home Instead.’”); id. at ¶ 8 (“To my knowledge,
we have taken every reasonable step to ensure that we are no longer operating under the
trade names ‘Home Instead Senior Care’ or ‘Home Instead’.”).] Yet, in a March 16, 2015
email sent by Mrs. Smith to the Indiana State Department of Health, she referred to Elder

6

Although the Smith Parties cite to Chicago United, that case supports the entry of an
injunction under these circumstances given that, as recently as July, 2015, the Smith Parties
received a check in payment for services addressed to “Home Instead Care” [Dkt. No. 160-11]. In
addition, they described in their communications with the public Purpose Home Heath as
“formerly Home Again Senior Care.” [Dkt. No. 155-2 at p. 36.] They also transferred client lists,
files, and records to Care Choices in July, 2015. [Dkt. No. 154 at 4-7.] The court in Chicago
United held: “It is true that the mere cessation of the conduct sought to be enjoined does not moot
a suit to enjoin the conduct, lest dismissal of the suit leave the defendant free to resume the conduct
the next day. But that is in general rather than in every case. ‘The case may nevertheless be moot
if the defendant can demonstrate that there is no reasonable expectation that the wrong will be
repeated.’” Chicago United Indus., Ltd. v. City of Chicago, 445 F.3d 940, 947 (7th Cir. 2006)
(citations omitted). Based on the evidence before us, the Smith Parties’ representations do not
entirely moot Home Instead’s request.

11

Care as “formerly Home Instead Senior Care.” [Dkt. No. 100-19.] The next day, the
Department of Health informed Mrs. Smith that it did not recognize Elder Care’s name and
instructed her that “[w]hen submitting documentation to our office it must be submitted as
Home Instead Senior Care.” [Id.] On March 17, 2015, Mrs. Smith used the name “Home
Instead Senior Care” in her signature block on an email to the Department of Health. [Dkt.
No. 100-20.]

On March 19, 2015, Kimberly Dean, the Home Again Scheduling

Coordinator, used the name “Home Again/Home Instead Senior Care” as her company
affiliation in her email signature block. [Dkt. No. 101-4.] As of July 31, 2015, Elder Care’s
bank account with The National Bank of Indianapolis was still named “Elder Care
Providers of Indiana DBA Home Instead Senior Care.” [Dkt. No. 155-2 at p. 47.]
The same pattern is true for the name “Home Again.” On May 18, 2015, Mr. Smith
stated in his declaration: “We have no plans, however, to use the name ‘Home Again
Senior Care’ ever again with our patients, employees, vendors, or in any other capacity.
We are not using the Home Again Senior Care name, or any derivation thereof, even to
describe our former business.” [A. Smith Decl. at ¶ 18.] But, one month later, on June 17,
2015, Mr. Smith sent an email in which his signature block read: “Purpose Home Health
formerly Home Again Senior Care.” [Dkt. No. 155-2 at p. 36.] And one month after that,
on July 15, 2015, Monica Watson-Clark, Purpose’s Intake Manager, sent an email to Mrs.
Smith wherein her signature block stated: “Purpose Home Health (formerly Home Again
Senior Care)”. [Dkt. No. 155-2 at p. 40.]
The Smith Parties have stated that they “have no interest in any continued affiliation
with Home Instead or its information.” [Dkt. No. 86 at 18 (citing A. Smith Decl. at ¶ 12).]
12

They “have gone to great lengths to eradicate any connection to Home Instead, sending
back any information in their possession that originated with Home Instead, . . . .” [Dkt.
No. 86 at 17.] The Smith Parties contend that Home Instead’s efforts to seek an injunction
with regard to this “confidential information” have been rendered moot by its actions to
return all such documents. If true, no burden will befall the Smith Parties from the entry
of a preliminary injunction that requires them to do that which they have already done.
B.

Reasonable Likelihood of Success on the Merits.

Home Instead has also demonstrated a reasonable likelihood of success on the
merits with respect to its trademark infringement claims and the breach of the Franchise
Agreement claim related to the return of confidential information.

“A reasonable

likelihood of success on the merits means a better than negligible chance of succeeding on
the merits.” Boczar v. Kingen, No. IP 99-0141-C-T/G, 1999 WL 33109074, at *5 (S.D.
Ind. July 2, 1999) (citing Meridian Mut. Ins. Co. v. Meridian Ins. Group, Inc., 128 F.3d
1111, 1114 (7th Cir.1997); Doyle, 162 F.3d at 473 (Manion, J., dissenting) (“more than a
negligible chance of success on the merits”)).
Most of Home Instead’s claims are predicated on a finding that it rightfully
terminated the Franchise Agreement. This central issue remains hotly contested by the
parties. Home Instead posits that it had the right to immediately terminate the Franchise
Agreement after its twenty-month investigation revealed that the Smiths were using the
name “Home Again Senior Care” for their medical care-based company. In response, the
Smiths contend that Home Instead waived its right to terminate the Franchise Agreement
due to its delay in doing so and that once it decided to terminate the agreement, it did so
13

improperly without notice and in bad faith, in violation of the Ind. Code § 23-2-2.7.7 The
Smiths also contend that the post-termination covenants in the Franchise Agreement are
overbroad and unenforceable as a matter of law. Although this issue remains hotly disputed
between the parties, Home Instead can at a minimum show a better than negligible chance
of succeeding on its claimed breach of Franchise Agreement that permitted its lawful
termination by Home Instead.
The Franchise Agreement provides in part:

[Franchise Agreement at ¶ 6(B).] The evidence submitted to us in conjunction with the
pending motion demonstrates that (1) the Smith Parties had continued to use the name
“Home Instead” after termination of the Franchise Agreement and (2) without Home

7

The Smith Parties have argued that Home Instead’s termination of the Franchise
Agreement was coercive because Home Instead offered to suspend the termination only if the
Smiths would agree to pay royalties for Home Again’s profits and wind down both companies –
which is describes as “Don Corleon’s irrefutable offer.” [Dkt. No. 86 at 20.] Home Instead, on
the other hand, contends that its attempts were made in good faith and in an attempt to reach a
compromise. [Dkt. No. 89 at 5-7.] The weight of the evidence before us suggests that Home
Instead’s termination of the Franchise Agreement was not made in bad faith and was based on its
interpretation of the Franchise Agreement. Home Instead has demonstrated the requisite “better
than negligible” likelihood of success in proving that its termination of the Franchise Agreement
was lawful.

14

Instead’s permission, the Smith Parties had used the name “Home Instead” in conjunction
with their other company, “Home Again,” in an attempt to market the two companies
together, and that the Smith Parties often intertwined details of the operations of the two
businesses. This evidence contradicts the Smith Parties’ position that Home Instead
terminated the Franchise Agreement in bad faith.
Home Instead argues that the Smith Parties used its formerly-authorized mark
following the termination of the Franchise Agreement, which constitutes the use of
counterfeit marks. Century 21 Real Estate, LLC v. Destiny Real Estate Properties, 2011
WL 6736060, at *3 (N.D. Ind. Dec. 19, 2011) (“The Court therefore holds that [the former
franchisee’s] continued unlicensed use of [the franchisor’s] trademarks in reference to
services that have no connection with, nor approval from, [the franchisor], constitutes the
use of counterfeit marks.”). Examples of such use were submitted during the hearing –
emails from March of 2015 referencing Home Instead and a copy of Elder Care’s bank
account, which states “DBA HOME INSTEAD SENIOR CARE.” [See Home Instead
PowerPoint Presentation.] The Smith Parties did not dispute these uses of the name Home
Instead or that they occurred after Home Instead had terminated the Franchise Agreement.
Home Instead also contends that the name “Home Again” is a modified form of the
“Home Instead” trademark, which infringes on Home Instead’s trademark and the use of
such a modified trademark violates the Franchise Agreement and trademark law. For
example, Mr. Smith explained to a Home Instead representative that “he chose the name
Home Again Senior Care because he wanted a name as close as possible to Home Instead
Senior Care, that way he could market the two businesses together and use Home Instead,
15

Inc.’s reputation to build the Home Again Business.” [Dkt. No. 60 at 28 (citing Declaration
of Jennifer Rozgay at ¶¶ 6-7); see generally id. at 11-12 (examples of considering the two
companies as one business).] Home Again’s workers compensation policy listed contact
information for Mr. Smith at his “homeinstead.com” email address. [Id. at 11.] The Smiths
advertised a job opening for Home Again under the name Home Instead. [Id.] Thus, we
hold that Home Instead has a better than negligible chance of succeeding on this claim for
breach of the Franchise Agreement, the consequences of which breach permits the
termination of the Franchise Agreement and the cessation of the Smith Parties’ entitlement
to the continued use the Home Instead mark or derivations thereof.
Likewise, Home Instead has demonstrated a likelihood of success on its trademark
claims pursuant to which it asserts that the Smith Parties’ use of the names “Home Instead”
and “Home Again” will and do cause confusion between the marks and the parties. “In the
trademark/service mark/unfair competition field, the movant shows a likelihood of success
by establishing that: 1) [it] has a protectable mark, and 2) that a ‘likelihood of confusion’
exists between the marks or products of the parties.” Meridian Mut. Ins. Co. v. Meridian
Ins. Grp., Inc., 128 F.3d 1111, 1114-15 (7th Cir. 1997) (citations omitted). No dispute
exists over the fact that Home Instead has protectable trademarks. In addition, Home
Instead has presented sufficient evidence of actual confusion arising when the Smith
Parties used both the Home Instead and the Home Again trademarks. [See, e.g. Dkt. No.
60 at 3 (describing a phone call to a neighboring Home Instead franchisee for an employee
at Home Again).] Thus, we also conclude that Home Instead has demonstrated a better

16

than negligible chance of succeeding on the merits of its trademark claim, which forecloses
the Smith Parties’ right to use the “Home Again” moniker.
C.

Lacks Adequate Remedy at Law and Irreparable Harm.

There is a “well-established presumption that injuries arising from Lanham Act
violations are irreparable, even absent a showing of business loss.” Abbott Labs., 971 F.2d
at 16; see also AM Gen. Corp. v. DaimlerChrysler Corp., 311 F.3d 796, 805 (7th Cir. 2002)
(confirming “the law’s presumption that trademark dilution or infringement threatens
irreparable injury for which there is no adequate remedy at law”); Deckers Outdoor Corp.
v. Does 1-100, No. 12 C 10006, 2013 WL 169998, at *4 (N.D. Ill. Jan. 16, 2013). “This
willingness to find irreparable harm in trademark cases stems from an understanding that
the ‘most corrosive and irreparable harm attributable to trademark infringement is the
inability of the victim to control the nature and quality of the defendants’ goods. Even if
the infringer’s products are of high quality, the plaintiff can properly insist that its
reputation should not be imperiled by the acts of another.’” 7–Eleven, Inc. v. Spear, No. 10
C 6697, 2011 WL 830069, at *6 (N .D. Ill. Mar. 3, 2011) (quoting Int'l Kennel Club of
Chi., Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1092 (7th Cir. 1988)).
Home Instead has submitted undisputed evidence of the strength of its marks. Home
Instead has more than 1000 independently owned and operated franchises worldwide, with
over 600 located in North America. [Dkt. No. 60 at 26 (citing Dkt. No. 22 at ¶ 8).]
According to the Director and General Counsel for Home Instead, Tanya Morrison, the
company has expended significant amounts of time, effort, and resources to perfect its
unique management and business system. [Morrison Decl. at ¶¶ 4-14.] Home Instead
17

claims that it keeps its system and confidential information secret from competitors and
works to ensure that the system and information do not become publically known. [Id. at
¶¶ 11-14.] It registers the Licensed Marks in order to protect the brand equity it has built
over the course of the past twenty years, and to allow potential consumers to differentiate
between start-up companies that offer home care services to seniors and the global leader.
[Id., Ex. 1-5.] All of Home Instead, Inc.’s efforts have allowed it to become the largest
franchisor in the field of home care services for seniors, routinely earning top honors for
franchising excellence. [Dkt. No. 61 at 27 (citing Hogan Decl. at ¶ 3).]
The strength of Home Instead, Inc.’s Licensed Marks is reflected in the public’s
awareness of the Licensed Marks. For example, Home Instead, Inc.’s marketing research
reveals that between February 2013 and June 2014, its website was visited more often than
its top three competitors combined, and that in 2014, approximately 600,630 searches were
performed on Google by people throughout the United States using the key words “Home
Instead Senior Care” or a variation thereof. [Dkt. No. 60 at 27 (citing Declaration of Doug
McCall, ¶¶ 4-5, Ex.1-2).] Of those searches, approximately 8,740 were conducted by
people in the Indianapolis, Indiana area. [Id., Ex. 2.] We find that the Smith Parties’
unauthorized use of the Home Instead trademarks, including similarity of the Home Again
name, threaten to irreparably harm the reputation and goodwill Home Instead has
developed with respect to its home care services. Having so determined, we also find that
Home Instead will suffer irreparable harm without a preliminary injunction, and that there
is no adequate remedy at law for this harm.

18

II.

Enforcement of Post-Termination Covenants Against the Smiths Related to
Operation of Home Again (n/k/a Purpose).
Home Instead seeks to enforce the Franchise Agreement’s post-termination

covenants which prohibit the Smiths from operating or having any financial or beneficial
interest in a non-medical and domestic care service business in Elder Care’s former
exclusive territory that is of a character and concept similar to a Home Instead Senior Care.
According to Home Instead, Home Again (now known as Purpose) is “of a character and
concept similar to” Home Instead and, as a result, asks us to enjoin the Smiths from
operating Home Again/Purpose. Home Instead’s ability to establish irreparable harm is
thwarted by its inability to establish a likelihood of success on the merits and its failure to
make reasonable or at least tolerable the burden on Home Again/Purpose’s clients and
employees of injunctive relief that would put the Smiths entirely out of business.8
A.

Irreparable Harm and Inadequacy of Legal Remedies.

Twenty months after learning that the Smiths had founded an HHA to deliver
medically-related home health services called “Home Again,” Home Instead terminated
the Franchise Agreement between them. Home Instead then waited three months after the

8

Home Instead also complained that Elder Care’s sale of the client list and transfer of
patients to Care Choices on an installment basis results in Elder Care having a financial interest in
a “non-medical companionship and domestic care services business that is of a character and
concept similar to the HOME INSTEAD SENIOR CARE Business” in contravention of paragraph
18(C)(2) of the Franchise Agreement. [Dkt. No. 142 at 12.] Home Instead has made no specific
request for relief with respect to Elder Care’s installment-based sale to Care Choices (other than
that “the Court is equally empowered to order the Smith Parties to divest themselves of the
unlawful interest in Care Choices” [Dkt. No. 142 at 15]) and has stated it does not seek to unwind
the Transfer Agreement. Because Home Instead has made no specific request for injunctive relief
with respect to the Transfer Agreement and Elder Care’s sale of its client list and transfer of
patients to Care Choices, we decline to consider or grant any such relief at this time.

19

filing of this lawsuit to seek a preliminary injunction in an attempt to stop Home
Again/Purpose from operating in Elder Care’s former Home Instead territory. Even then,
Home Instead did not seek in its original motion specifically to enjoin the Smith Parties
from operating Home Again/Purpose in its original motion. [See Dkt. No. 60 (Home
Again’s Mtn. for Prelim. Inj.).] Not until August 21, 2015 in its Supplemental Reply Brief
did Home Instead requested that Home Again/Purpose’s operations cease within Elder
Care’s former exclusive area, a request it buried on page 15 of that brief. [Dkt. No. 154 at
15; see also Dkt. No. 142 (Home Instead’s Supp. Br. filed July 28, 2015) (“The Smiths are
also continuing to operate Home Again in the former Exclusive area in violation of Section
17 of the Franchise Agreement, . . .”).]
“[A] delay in requesting equitable relief is inconsistent with a claim of irreparable
injury.” Taylor v. Biglari, 971 F. Supp. 2d 847, 853 (S.D. Ind. 2013) (citing cases where
a two-month delay and a six-month delay repudiated a claim of irreparable injury). We
similarly view Home Instead’s delay as inconsistent with its claim of irreparable injury.
Indeed, Home Instead’s actions speak louder than its words. If Home Again/Purpose’s
operations were truly causing irreparable injury, then we would have expected Home
Instead to act more promptly in seeking judicial relief. Instead, Home Instead waited
nearly two years to seek to halt the Home Again/Purpose business invoking a two-year
covenant not to compete. The time period of potential competitive harm defined by Home
Instead passed under its own blind eye. Home Instead has failed to make an adequate
showing of irreparable harm or inadequate remedy at law with respect to its request that
Home Again/Purpose be enjoined from continuing to operate its HHA.
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B.

Reasonable Likelihood of Success on the Merits.

In addition to the lack of irreparable harm and an inadequate remedy at law, Home
Instead has failed to demonstrate a reasonable likelihood of success on the merits that
Home Again/Purpose is a “non-medical companionship and domestic care service business
that is of a character and concept similar to the HOME INSTEAD SENIOR CARE
Business”, as described in paragraph 17(C)(2) of the Franchise Agreement.9 Home Instead,
by its own admissions, operates as a non-medical home care company (PSA) as opposed
to a medical home care company (HHA). [John Hogan (Chief Development Officer for
Home Instead) Deposition at 34; see also Dkt. No. 86 at 4 (quoting Home Instead materials
repeating that its services are “exclusively non-medical”).] PSAs, like the Indianapolislocated Home Instead franchisees, cannot lawfully provide the medical services provided
by an HHA because they are not licensed to do so. According to the Smith Parties, Elder
Care’s Franchise Agreement expressly prohibited Elder Care from providing medical
services. [Dkt. No. 86 at 6.]
Home Again/Purpose operates as a home health agency (HHA) pursuant to HHA
licensure and provides care based on a prescription from a medical doctor that is overseen
by a licensed registered nurse. [Id. (“An HHA license is necessary to perform skilled

9

The Smith Parties have advanced several arguments that the post-termination covenants
of the Franchise Agreement are overly broad and unenforceable, including but not limited to the
scope of the non-competition provision and the defined geographic scope. [See Dkt. No. 86 at 2332.] We need not resolve these issues today because, even assuming the post-termination
solicitation and competition covenants are enforceable, Home Instead has failed to demonstrate
that Home Again/Purpose is of the same character and concept as Home Instead such that its
operation could be construed as competitive.

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nursing services in the home, such as dressing, cleaning, and debriding wounds, drawing
blood, injecting prescribed medications, providing medical baths, and providing periodic
nursing assessments and diagnoses. All services provided to the patient under a doctor’s
plan of care, including meal preparation and light housekeeping, are considered medical
because they are administered according to the physician’s orders and at the direction of a
registered nurse.”) (citing Declaration of Vivian Ann “Rusty” Diemer (owner of First
Horizon Consulting, Inc. which provided guidance to the Smiths in starting Home
Again/Purpose) at ¶¶ 7-8; A. Smith Dep. at 21-22, 27; A. Smith Decl. at ¶ 3).] The
gravamen of an HHA, like Home Again/Purpose, is to provide medical-based home health
care. In contrast, the Franchise Agreement’s covenant not to compete prohibits the Smiths
from operating a “non-medical companionship and domestic care service business” –
which Home Again/Purpose clearly is not.
Home Instead argues that the services provided by Home Again/Purpose overlap
with those provided by Home Again/Purpose. Home Instead takes the position that
because some of the services provided by Home Again/Purpose are the same as those
provided by Home Instead (such as bathing a patient, for example), Home Again/Purpose
is of a character and concept similar to Home Instead. But Home Instead ignores the fact
that the covenant not to compete is limited to competing non-medical companionship and
domestic care company of a character and concept similar to Home Instead. No evidence
supports a finding that Home Again/Purpose is a non-medical companionship and domestic
care company similar to Home Instead.

Given the significant burden to Home

Again/Purpose, its patients, and its employees described below, Home Instead’s very
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modest likelihood of success (if any) cannot overcome the burden that would result from
this form of injunctive relief.
C.

Balance of the Equities.

The balance of the equities here also weighs strongly against enjoining the Smiths
from operating Home Again/Purpose. Home Again/Purpose has 230 patients with 124
employees.

All 230 patients could be deprived of a continuity of care if Home

Again/Purpose were forbidden from operating in the Elder Care former exclusive area. In
addition, Home Again/Purpose’s 124 employees may be out of work, if Home
Again/Purpose were not allowed to operate in Elder Care’s former exclusive area. Home
Again/Purpose would be forced to close up shop and seek to relocate in an unfamiliar
territory, if it were enjoined as Home Instead asks. As we have previously noted, the
potential burden on Home Again/Purpose, its patients, and employees is potentially
tremendous. Home Instead’s failure to establish that a significant likelihood of success,
does not offset the significant burden imposed on the Smith Parties, Home Again/Purpose’s
patients, and Home Again/Purpose’s employees if an injunction were to be entered.
III.

Conclusion.
Home Instead’s Motion for Preliminary Injunction is GRANTED in PART and

DENIED in PART. Home Instead’s request for a preliminary injunction to halt the
business of Home Again/Purpose is DENIED. We GRANT, however, Home Instead’s
request for preliminary injunctive relief ordering the Smith Parties to cease using the names
Home Again, Home Again Senior Care, Home Instead, and Home Instead Senior Care and

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deliver all business-related materials pertaining related to the operation of the Elder Care,
Inc. Home Instead franchise as follows:
(1)

Anthony Smith, Georgette Smith, and Home Again Senior Care, Inc. (n/k/a
Purpose Home Health, Inc.) shall immediately cease using the names Home
Instead® and Home Instead Senior Care® with respect to any of their
businesses, including but not limited to, any non-medical home care and
medical home health care; and

(2)

Anthony Smith, Georgette Smith, and Home Again Senior Care, Inc. (n/k/a
Purpose Home Health, Inc.) shall immediately cease using the names Home
Again and Home Again Senior Care with respect to any of their businesses,
including but not limited to, any non-medical home care and medical home
health care, which includes describing Purpose Home Health Care, Inc. as
“formerly Home Again” or “formerly Home Again Senior Care”; and

(3)

Anthony Smith, Georgette Smith, and Home Again Senior Care, Inc. (n/k/a
Purpose Home Health, Inc.) shall deliver to Home Instead, Inc. all Operations
Manuals, software licensed by Home Instead, records, files, instructions,
correspondence, all materials related to operating Elder Care, Inc., including,
without limitation, agreements, invoices, and any and all materials relating
to the operation of the Elder Care, Inc. in the Smith Parties’ possession or
control within the next fifteen (15) days.

Date: _____________
09/14/2015

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Distribution:
Gregory W. Guevara
BOSE MCKINNEY & EVANS, LLP
[e-mail]
Philip R. Zimmerly
BOSE MCKINNEY & EVANS, LLP
[e-mail]
Ronald E. Elberger
BOSE MCKINNEY & EVANS, LLP
[e-mail]
Adam W. Barney
CLINE WILLIAMS WRIGHT JOHNSON & OLDFATHER, LLP
[e-mail]
Theresa D. Koller
CLINE WILLIAMS WRIGHT JOHNSON & OLDFATHER, LLP
[e-mail]
Trenten P. Bausch
CLINE WILLIAMS WRIGHT JOHNSON & OLDFATHER, LLP
[e-mail]
Adam Arceneaux
ICE MILLER LLP
[e-mail]
Mark R. Alson
ICE MILLER LLP
[e-mail]
Olga A. Voinarevich
ICE MILLER LLP
[e-mail]
Josh F. Brown
LAW OFFICES OF JOSH F. BROWN, LLC
[e-mail]

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