Meineke Car Care Centers LLC v. ASAR Incorporated, LLC et al

Filing 24

ORDER re 18 Order on Motion for Order to Show Cause, 16 MOTION for Order to Show Cause , 19 MEMORANDUM AND RECOMMENDATIONS on 1 Complaint filed by Meineke Car Care Centers LLC, ( Show Cause Hearing set for 2/22/2016 10:00 AM in Courtroom, 401 W Trade St, Charlotte, NC 28202 before District Judge Robert J. Conrad Jr.). Signed by District Judge Robert J. Conrad, Jr on 1/20/16. (ssh)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:14-cv-129-RJC
MEINEKE CAR CARE CENTERS, LLC

)
)
Plaintiff,
)
)
vs.
)
)
ASAR INCORPORATED, LLC, RALPH
)
AHMAD, and ASHVINDER AHMAD
)
)
Defendants.
)
________________________________________ )

ORDER AND NOTICE OF
HEARING

THIS MATTER comes before the Court on Plaintiff Meineke Car Care Centers, LLC’s
(“Plaintiff”) Motion for Order to Show Cause, (Doc. No. 16); the Magistrate Judge’s Order
granting Plaintiff’s Motion for Order to Show Cause, (Doc. No. 18); and the Magistrate Judge’s
Memorandum and Recommendation regarding the same, (Doc. No. 19). The matter is ripe for
adjudication.
I.

BACKGROUND
On March 24, 2014, Plaintiff filed suit against Defendants ASAR Incorporated, LLC

(“ASAR”), a Nevada limited liability company, and Ralph and Ashvinder Ahmad (collectively,
“Defendants”), officers and shareholders of ASAR, who personally guaranteed the obligations of
ASAR under its Franchise Agreement. (Doc. No. 1). ASAR was served with the Summons and
Complaint on April 7, 2014, (Doc. No. 6), and had until April 28, 2014, to respond. Fed. R. Civ.
P. 12(a)(1)(A)(i). ASAR failed to respond within this time. Plaintiff moved for entry of default
on May 23, 2014, (Doc. No. 7), and the Clerk of Court entered default against ASAR on May 29,
2014, (Doc. No. 8). Likewise, Ralph and Ashvinder Ahmad were served with the Summons and
Complaint on May 17, 2014, (Doc. Nos. 9, 10), and had until June 9, 2014, to respond. Fed. R.

Civ. P. 12(a)(1)(A)(i). They failed to respond within this time. Plaintiff moved for entry of default
on June 11, 2014, (Doc. No. 12), and the Clerk of Court entered default against them on June 12,
2014. (Doc. No. 13).
On June 13, 2014, Plaintiff filed its Amended Motion for Default Judgment as to all
Defendants. (Doc. No. 14). On August 13, 2014, the Court granted default judgment to Plaintiff
against all Defendants. (Doc. No. 15). The facts of this case are fully set forth in that Order and
incorporated by reference herein. Specifically, the Order directed that:
1. Defendants ASAR INCORPORATED, Ralph Ahmad and Ashvinder Ahmad
and their officers, agents, servants, employees and attorneys, and all persons in
active concert or participation with them who receive actual notice of this
Order, by personal service or otherwise, must permanently:
(a) Cease and refrain from, for a period of one year from the date of compliance
with this Order, directly or indirectly (such as through corporations or other
entities owned or controlled by them), owning a legal or beneficial interest in,
managing, operating or consulting with: (i) any business operating at the
premises of former Center No. 1262 located at 3744 Highwy 50 East, Carson
City, NV 89706 or within a radius of six miles of the premises of former Center
No. 1262 which business repairs or replaces exhaust system components, brake
system components, or shocks and struts; and (ii) any business operating within
a radius of six miles of any Meineke Center existing as of September 26, 2013,
the date Defendants’ Franchise Agreement terminated, which business repairs
or replaces exhaust system components, brake system components, or shocks
and struts.
(b) Immediately cease using and/or remove and/or have removed any names,
marks, signs, forms, advertising, manuals, computer software, supplies,
products, merchandise and all other things and materials of any kind which are
identified or associated with the Meineke name, logo, marks or trade dress, or
which contain a name, logo or mark confusingly similar to the Meineke name,
logo, marks or trade dress, including, but not limited to any black and yellow
signage on or near Center No. 1262 at 3744 Highway 50 East, Carson City, NV.
(c) Immediately cease making any representation or statement that Defendants or
the business located at 3744 Highway 50 East, Carson City, NV 89706 is in any
way approved, endorsed, or licensed by Meineke, or is associated with Meineke
in any way.
(d) Immediately do everything required by the telephone company, including but
not limited to, signing all required paperwork and paying any amount due, to
release or transfer to Meineke the telephone numbers 775-882-7800, 775-8834873, 775-461-2618 and 775-461-2329 being used by Defendants’ business
located at 3744 Highway 50 East, Carson City, NV 89706 or which have been
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(e)
2.

3.

4.

advertised in conjunction with Meineke’s Marks.
Immediately return to Meineke any and all operations manuals in Defendants
possession or control.
That judgment shall be entered in favor of Plaintiff Meineke and against
Defendants ASAR Incorporated, Ralph Ahmad and Ashvinder Ahmad, jointly
and severally, in the amount of $31,373.56 for unpaid fees due and owing to
Meineke under the terms of the Franchise Agreement between the parties.
That Defendants ASAR Incorporated, Ralph Ahmad and Ashvinder Ahmad,
jointly and severally, are adjudged liable for all of Meineke’s costs and
expenses incurred in this action pursuant to Article 17.6 of the Franchise
Agreement. Meineke is directed to file an Affidavit of its costs and expenses
incurred within 18 days of this Order, and the Court will enter a Supplemental
Judgment.
The Court denies Plaintiff’s request for attorney’s fees.

(Doc. No. 15 at 11–13).
Plaintiff’s Motion for Order to Show Cause was filed on November 12, 2014. (Doc No.
16). In that motion, Plaintiff alleges that “Defendants are continuing to offer the same services
offered when they were an authorized Meineke franchisee.” (Doc. No. 16 at 1). As with the
Complaint and other motions in this case, Defendants failed to file any response to Plaintiff’s
Motion for Order to Show Cause. On December 2, 2014, the Magistrate Judge granted Plaintiff’s
Motion and ordered Defendants to “SHOW CAUSE on or before December 31, 2014, why they
should not be held in contempt.” (Doc. No. 18 at 1). Again, Defendants failed to respond.
Consequently, on January 21, 2015, the Magistrate Judge entered a Memorandum and
Recommendation (“M&R”) recommending “that Defendants be ORDERED to appear before the
presiding District Judge on a date certain to SHOW CAUSE why they should not be held in
contempt.” (Doc. No 19 at 6). Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rule 72 of the Federal
Rules of Civil Procedure, Defendants were given fourteen (14) days to respond or object to the
M&R. (Id. at 6–7). Again, Defendants failed to make any response, and the time for doing so has
expired.

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II.

DISCUSSION
To establish civil contempt, a movant must show each of the following elements by clear

and convincing evidence:
(1) the existence of a valid decree of which the alleged contemnor had actual or
constructive knowledge; (2) . . . that the decree was in the movant's “favor”;
(3) . . . that the alleged contemnor by its conduct violated the terms of the decree,
and had knowledge (at least constructive knowledge) of such violations; and
(4) . . . that [the] movant suffered harm as a result.
Ashcraft v. Conoco, Inc., 218 F.3d 288, 301 (4th Cir. 2000) (quoting Colonial Williamsburg
Found. v. Kittinger Co., 792 F. Supp. 1397, 1405–06 (E.D. Va. 1992), aff'd, 38 F.3d 133 (4th Cir.
1994)). “When a district court's decision is based on an interpretation of its own order, [the
appellate court’s standard of review is highly] deferential because district courts are in the best
position to interpret their own orders.” JTH Tax, Inc. v. H & R Block E. Tax Servs., Inc., 359
F.3d 699, 705 (4th Cir. 2004). Prior to holding a person in contempt, the district court must provide
the alleged contemnor notice and opportunity for a hearing. Int'l Union, United Mine Workers of
Am. v. Bagwell, 512 U.S. 821, 826–27 (1994).
The basic facts of this case are set forth in the Court’s Default Judgment Order. (Doc. No.
15). According to Plaintiff, Defendants are continuing to knowingly and blatantly disregard this
Court’s Order. (Doc. Nos. 16, 20). Moreover, Defendants have failed to show cause or even
respond to the Magistrate Judge’s orders. (Doc. Nos. 18, 19).
Under the circumstances, including Defendants’ complete failure to file any response in
this action, the Court finds good cause for Defendants to appear before the Court and show cause
why they should not be found in contempt for violating this Court’s Orders. Accordingly, the
Court ORDERS that Defendants appear on Monday, February 22, 2016, at 10 a.m. to show
cause why they should not be held in contempt. The Court has broad discretion in fashioning
coercive remedies to ensure compliance with its orders. To that end, a person found to be in
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contempt may be, among other things, imprisoned or fined indefinitely until he complies with the
orders of the court. Int'l Union, United Mine Workers of Am., 512 U.S. at 828. Defendants are
warned that failure to appear before the Court on Monday, February 22, 2016, at 10 a.m. and show
good cause for their failure to comply with this Court’s Orders will likely result in them being held
in contempt.
III.

CONCLUSION
IT IS, THEREFORE, ORDERED that Defendants appear on Monday, February 22,

2016, at 10 a.m. to show cause why they should not be held in contempt. The Clerk of Court is
directed to send copies of this Order and Notice of Hearing to counsel for Plaintiff; and to each
defendant, at 3744 U.S. Highway 50 East, Carson City, NV 89701, via certified mail return receipt
requested.
Signed: January 20, 2016

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