American Dairy Queen Corporation v. Blume et al

Filing 285

ORDER Overruling 279 Objections; Adopting in its entirety 278 Report and Recommendation; granting 219 Motion for Sanctions; Striking [181-185], 188 , 191 , 194 , 199 , and 209 Motions, and Directing the Clerk of Court to enter Blume's default in this matter as a sanction; referring this matter to Magistrate Judge Leung to determine the appropriate amount of the money judgment to be entered; dismissing with prejudice 178 and 237 Blume's counterclaims; denying as moot Motions 167 , 201 , 212 , 213 , 227 , 230 , 233 , 238 , 240 , 251 , 262 , 272 , and 273 . (Written Opinion). Signed by Judge Richard H. Kyle on 04/23/13. (kll)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

American Dairy Queen Corporation,
Plaintiff,
Civ. No. 11-358 (RHK/TNL)
ORDER
v.
Guy A. Blume, et al.,
Defendants.

This matter is before the Court on the January 11, 2013 Report and
Recommendation (Doc. No. 278) of Magistrate Judge Leung, recommending inter alia
that default judgment be entered against Defendant Guy A. Blume. Blume has filed
Objections (Doc. No. 279) to the Report and Recommendation, to which Plaintiff has
responded (Doc. No. 284). Having reviewed the Report and Recommendation de novo,
see 28 U.S.C. § 636, and having carefully considered Blume’s Objections and Plaintiff’s
response, the Court concludes that the Magistrate Judge’s recommendation is fully
supported by the record in this case and by controlling legal principles. Based on the
foregoing, and all the files, records, and proceedings herein, IT IS ORDERED:
1.

Blume’s Objections (Docket No. 279) are OVERRULED, and the Report

and Recommendation (Doc. No. 278) is ADOPTED in its entirety;
2.

Plaintiff’s Motion to Strike Various Submissions and Motion for Sanctions

(Doc. No. 219) is GRANTED. Docket Nos. 181-85, 188, 191, 194, 199, and 209 are

STRICKEN, and the Clerk of Court is DIRECTED to enter Blume’s default in this
matter, as a sanction pursuant to Federal Rule of Civil Procedure 37;
3.

Plaintiff shall recover of Blume the sum of $5,000 as a sanction, pursuant

to Federal Rule of Civil Procedure 37, for fees and costs incurred prosecuting this action
and responding to Blume’s improper filings;
4.

Plaintiff is DECLARED to have properly terminated for cause the

Franchise Agreement entered into on May 1, 1981, with Bruce and Marla Lenocker for
the operation of a DAIRY QUEEN restaurant in Audubon, Iowa (Doc. No. 122, Ex. C)
(the “Audubon Franchise Agreement”), and assigned to Royal Professional Solutions,
LLC, on September 1, 2006 (Doc. No. 122, Ex. D);
5.

Plaintiff is DECLARED to have properly terminated for cause the DAIRY

QUEEN Territory Agreement (Doc. No. 122, Ex. H) and Food Service Addendum (Doc.
No. 122, Ex. I) (together, the “Poweshiek/Grinnell Territory Agreement”) assigned to
Defendant Blume on or about July 28, 2009 (Doc. No. 122, Ex. J); and
6.

This matter is REFERRED to Magistrate Judge Leung to determine the

appropriate amount of the money judgment to be entered in Plaintiff’s favor and against
Blume as damages under the parties’ various agreements. Plaintiff should be prepared to
offer proof of its damages to the Magistrate Judge, including showing which of the
Defendants in this action are legally responsible for such damages; 1

1

The Court declines Plaintiff’s request to “enjoin[] Defendants from . . . acts of extortion or
defamation,” as set forth in the Amended Complaint, due to First Amendment concerns with
granting such relief. Any future speech or other conduct by Defendants for which Plaintiff
believes it has been damaged must be addressed in a separate lawsuit. The Court further declines

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7.

Blume’s purported Counterclaims (Doc. Nos. 178, 237) are DISMISSED

WITH PREJUDICE; and
8.

All pending Motions not stricken above (Doc. Nos. 167, 201, 212, 213,

227, 230, 233, 238, 240, 251, 262, 272, and 273) are DENIED AS MOOT.

Date: April 23, 2013

s/Richard H. Kyle
RICHARD H. KYLE
United States District Judge

to require approval before Blume may file a future action against Plaintiff. However, Blume is
warned that he now has “two strikes” (this action and the action before Judge Pratt in the
Southern District of Iowa) and a filing injunction may become appropriate should he file
frivolous proceedings against Plaintiff at a later time.

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