JACKSON HEWITT INC. v. BARNES ENTERPRISES, INC. et al

Filing 354

OPINION. Signed by Judge Dennis M. Cavanaugh on 6/5/2013. (nr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

JACKSON HEWITT, iNC.,
Plaintiff,
V.

DJSG UTAH TAX SERVICE, LLC,
DONALD GODBEHERE, and SHEILA
GODBEHERE. et aT:

Hon. Dennis M. Cavanaugh

OPINION
Case No. l0-cv-5330 (formerly
Consolidated Case No. l0-cv-05 108)
(DMC) (JAD)

Defendants.

DENNIS M. CAVANAUGH. U.S.D.J.:
This matter comes before the Court upon the Motion of Defendants Donald Godbehere
and Sheila Godbehere (collectively, ‘Defendants”), pursuant to FED. R. Civ. P. 60(b)(6). for
Relief from this Court’s November 28, 2011 Order. (ECF No. 339 in Case No. l05l08)1.
Pursuant to FIFD. R. Civ. P. 78. no oral argument was heard. After carefully considering the

submissions of the parties, and for the reasons stated herein, Defendants’ Motion for Relief is
denied.
I, BACKGROUND
On October 28, 2010, Plaintiff Jackson Hewitt filed a Complaint against Defendants.
(Civil Action No. I0-cv-05330, ECF No. I). On January 10, 2011, the Court granted Jackson
Unless otherwise indicated, all citations to ECF filings come from the 2: 10-cv5 1 08
docket.

Hewitt’s application for a preliminary injunction enjoining Defendants, and those in active
concert or participation with them, from, among other things, violating the post-termination
obligations contained in the franchise agreements. (ECF No. 68). On November 28. 2011. this
Court granted Jackson Hewitt’s motion for sanctions and defauft judgment against Defendants
following the Defendants failure to obey an Order of the Court. (ECF No. 244). The
accompaming Oidei gianted Jackson Hewitt s application toi a pcimanent

injunction cnjolning

Defendants and those acting in concert with them from operating competing tax preparation
businesses in Defendants’ former Jackson Hewitt franchise territories for a period of two years.
beginning on the date of the Order.
Defendants filed the instant Motion for Relief and an accompanying Moving Brief (“DeE
Br.) on November 27, 2012. (ECF No. 339). Jackson Hewitt filed an Opposition Brief(”JH
Opp. Br.”) on January 8. 2013. (ECF No. 347). The

matter

is now before this Court.

II, STANDARD OF REVIEW
Rule 60(b)(6) provides that “[ojn motion and just terms, the

court may

relieve a party or

its legal representative from a final judgment, order, or proceeding for the following reasons: any
other reason that justifies relief.” Relief under Rule 60(b)(6) is available only in cases
evidencing extraordinary circumstances.” Martinez—McBean v. Government of V.1,, 562 F.2d
908. 911 (3d Cir. 1977). “The correction of legal errors committed by the district courts is the
function of the Courts of Appeals. Since legal error can usually be corrected on appeal, that
factor without more does not justify the granting of relief under Rule 60(b)(6).’ Selkridge v.
United of Omaha Life Ins. Co., 360 F.3d 155, 173 (3d Cir.2004).

2

III. I)ISCUSS1ON
The Defendants’ specific objections to this Court’s November 28. 2011 Order pertain to
Paragraph Six, which permanently enjoins the Defendants from competing with Jackson Hewitt
for two years from the date that the Order was entered (emphasis added). The sole basis for this
objection is that it is inconsistent with a similar injunction ordered by this Court in a separate
action by Jackson Hewitt against Ronald N. Clark (‘Clark”). Defendants argue that the Order that
applies to Clark “appropriately held that the date by which Clark’s non-compete was to begin
was on the date [Jackson 1-Iewitt] terminated Clark’s franchise agreement and that the same

holding should be applied to the Defendants.” (Def. Br, 6). Defendants further argue that the
Court’s Order that applies to the Defendants should also only enjoin them from competing with
Jackson Hewitt for a period of two years from the time that Jackson Hewitt terminated its
Franchise Agreement with Defendants, rather than a period of two years that began on the date
that the Order was entered. (DeL Br, 6, 7). Defendants fail to cite to any case law in support of
their argument.
As this Court has previously stated, “Rule 60(b)(6) relief is available only in cases
evidencing extraordinary circumstances.” Howard Intern.. Inc. v. Cupola Enterprises, LLC, No.
01-1205, 2006 WL 625210, *2 (D.N.J. Mar. 10, 2006) (citations omitted). Such circumstances
do not exist here. In the instant matter, the facts warranted an extension of the covenant not to
compete beyond the terms of the franchise agreement. The Defendants did not comply with the
terms of injunction provision in the franchise agreement. Instead, the Defendants, and those
acting in concert with them. continued operating competing tax preparation businesses in

Defendants former Jackson Hewitt franchlsL ten itorics Ioi over on ycai altei tLrmlnatlon of

their franchise agreements, in violation of the franchise agreement’s covenant not to compete and
the Court’s injunctions issued on January 10, 201 1 and November 28, 2011. (See ECF Nos. 67
(preliminary injunction against Defendants and those acting in concert with Defendants), 244
(permanent injunction against Defendants and those acting in concert with Defendants), and 268
(Order extending injunctions to those acting in concert. namely. Stephanie Marshall. Frontier
Accounting Service, LLC, and Tax Savers Accounting, LLC)), Accordingly, this Court was
justified in extending the injunction beyond the terms of the franchise agreement because
Defendants, and those acting in

concert

with them, actively engaged in competition in violation

of the franchise agreements and the Court’s injunctions.
No. 06-cv-0909 DMC, 2008 WL 834386,

*

Jackson Hewitt Inc. v. Childress,

ii (D.NJ. Mar. 27. 2008) (extending injunction for

twenty-four months beginning on the date of compliance with the covenant not to compete).
Furthermore, the Defendants request for relief from Paragraph 6 of the November 28,
2011 Order fails because this Court need not consider this Motion while an appeal of the same
Order is currently pending before the United States Court of Appeals for the Third Circuit. FED.
R. Civ. P. 62.1 provides that in

instances

where a “motion is made for relief that the court lacks

authority to grant because an appeal that has been docketed and is pending, the court may: (1)

defer considering the motion; (2) deny the motion; or (3) state that either that it would grant the
motion

if the court of appeals remands for that purpose or that the motion raises a substantial

issue.” Here, the Defendants have already appealed the Court’s November 28, 2011 Order to the
United States Court of Appeals for the Third Circuit.

ECF Nos. 261, 272; Appeal No. 11-

4647 (3d Cir.). Thus, the Court denies Defendants’ motion pursuant to Rule 62.1
Accordingly, the Court properly extended the injunction beyond the terms of the franchise
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agreement, and further, is within its right to deny the instant Motion, as an Appeal has already
been filed as to this exact same issue.
IV. CONCLUSION
For the foregoing reasons, Defendants’ Motion for Relief of the Court’s November 28,
2011 Order is denied. An appropriate Order accompanies this Opinion.

I)ennis M. Cavanaugh,
Date:
Orig.:
cc:

June %32013
Clerk
All Counsel of Record
Hon. Joseph A. Dickson, U.S.M.J.
File

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