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

Filing 33

REVISED ORDER re 31 Order Finding Contempt. The Court directs parties attention to the following amendments and additions: 2c, 2d, 4, 5 & 8 (Copy sent to USM with 285). Signed by District Judge Robert J. Conrad, Jr on 3/10/16. (ssh)

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

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

REVISED ORDER

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); the Magistrate Judge’s
Memorandum and Recommendation regarding the same, (Doc. No. 19); and this Court’s Order
that Defendants ASAR Incorporated, LLC (“ASAR”), a Nevada limited liability company, and
Ralph and Ashvinder Ahmad, officers and shareholders of ASAR, (collectively, “Defendants”),
appear and show cause why they should not be held in contempt.
I.

FINDINGS OF FACT
The facts of this case are fully set forth in the Court’s August 13, 2014 Default Judgment

Order (“Default Judgment Order”), (Doc. No. 15); the Magistrate Judge’s January 21, 2015
Memorandum and Recommendation, (Doc. No. 19); and the Court’s January 20, 2016 Show Cause
Order (“Show Cause Order”), (Doc. No. 24). The facts contained in those Orders are specifically
incorporated by reference herein. The Court adds only the following for clarification and to
account for the procedural history of the case since the issuance of those orders.
The Default Judgment 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 Highway 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
advertised in conjunction with Meineke’s Marks.
(e) Immediately return to Meineke any and all operations manuals in Defendants
possession or control.
2. 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.
3. 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.
(Doc. No. 15 at 11–13). Plaintiff served Defendants with the Default Judgment Order via FedEx,

and Defendants received the Order on August 15, 2014. (Doc. Nos. 16-2, 16-3). Counsel for
Plaintiff subsequently spoke with Ralph Ahmad, and he acknowledged receipt of the Order. (Doc.
No. 16-2). Despite the Default Judgment Order directing Defendants, among other things, to
immediately cease and refrain from operating as a Meineke franchise, Defendants have continued
to operate as a Meineke franchise, and they have failed to take any steps toward complying with
the Default Judgment Order. (Doc. No. 29).
Due to their lack of compliance with the Order, the Court ordered Defendants to “appear
on Monday, February 22, 2016, at 10 a.m. to show cause why they should not be held in contempt.”
(Doc. No. 24 at 4). The Show Cause Order instructed Defendants that the “Court has broad
discretion in fashioning coercive remedies to ensure compliance with its orders” and that “a person
found to be in contempt may be, among other things, imprisoned or fined indefinitely until he
complies with the orders of the court.” (Id. at 4–5). The Clerk of Court sent copies of this Order
to each defendant via certified mail return receipt requested. On February 3, 2016, each mailing
was returned to the Clerk after delivery was “Refused.” (Doc. No. 27). However, Plaintiff filed
two declarations of service showing that Ralph and Ashvinder Ahmad were served by a process
server on February 16, 2016. (Doc. No. 28).
The Court conducted the show cause hearing on this matter on February 22, 2016, at 10
a.m. As with the Complaint and the numerous orders in this case, Defendants failed to file any
response or to appear at the hearing. The record in this case, including the briefing and affidavits
filed by Plaintiff, establish that there is a valid Court Order and that Defendants have received
service of that Order. The evidence presented also establishes Defendants’ noncompliance with
the Court’s Default Judgment Order. (Doc. Nos. 29, 30).

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)). Intent is largely irrelevant to a finding of civil contempt; the Court focuses only on whether
in fact the alleged contemnor's conduct complied with some “unequivocal command” set forth in
specific detail in the Order. In re Gen. Motors Corp., 61 F.3d 256, 258 (4th Cir. 1995). If the
moving party makes a prima facie showing of these elements, the burden shifts to alleged
contemnor to justify his non-compliance. United States v. Rylander, 460 U.S. 752, 757 (1983).
Finally, 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).
A. Defendants are in Contempt of the Default Judgment Order
The Court finds that Plaintiff has established each element of a prima facie case for
contempt by clear and convincing evidence, and Defendants have failed to appear or respond in
any way. The Default Judgment Order is a valid order issued by the Court in Plaintiff’s favor, of
which each defendant has actual and constructive knowledge. Plaintiff has presented substantial
evidence documenting Defendants’ ongoing violation of the terms of the Default Judgment Order.
The Court finds that the information on record establishes by clear and convincing evidence that
Defendants have actual knowledge of their violations and that they continue to willfully violate

the Court’s Order. For example, complaints received by Plaintiff from customers who have visited
Defendants’ operation document Ralph Ahmad telling a disgruntled customer to “Go ahead [and
report his actions to Plaintiff because] Corporate can’t do anything.” (Doc. No. 30 at 2). Finally,
the Court finds by clear and convincing evidence that Plaintiff has suffered harm as a result of
Defendants’ violation of the Default Judgment Order, including but not limited to Defendants’
illegal use of Plaintiff’s intellectual property and the tarnishing of Plaintiff’s goodwill and
reputation resulting from numerous customer complaints.

Accordingly, the Court finds

Defendants in contempt of court.
B. Civil Contempt Sanctions
The Court has the inherent power to coerce compliance with its orders, and it may exercise
that authority by ordering a defendant to be incarcerated or to pay a fine, or both, until he purges
himself of his contempt. Int'l Union, United Mine Workers of Am., 512 U.S. at 828. “Judicial
sanctions in civil contempt proceedings may, in a proper case, be employed for either or both of
two purposes; to coerce the defendant into compliance with the court’s order, and to compensate
the complainant for losses sustained.” United States v. United Mine Workers of Am., 330 U.S.
258, 303–04 (1947). The term of incarceration may be indefinite because “the contemnor is able
to purge the contempt and obtain his release by committing an affirmative act.” Id. Therefore, he
“‘carries the keys of the prison in his own pocket.’” Id. (quoting Gompers v. Buck’s Stove &
Range Co., 221 U.S. 418, 442 (1911)); see also Shillitani v. United States, 384 U.S. 364, 370 n.6
(1966) (upholding a two-year civil contempt sentence that included a purge clause).
Despite the Court’s orders, and despite having numerous opportunities to comply with
those orders, Defendants continue to knowingly and blatantly disregard the Default Judgment
Order. Moreover, Defendants have failed to even respond to the Court’s multiple show cause

orders. This shows an utter disregard for the Court’s Order and indicates that contempt sanctions
of imprisonment and fines are necessary in order to coerce Defendants to comply with the Default
Judgment Order. The Court further finds that previous notice has been given regarding the
potential of Defendants’ incarceration in order to achieve compliance with the Court’s Order,
(Doc. No. 24 at 4–5), and that Defendants were given an opportunity for a hearing and an
opportunity to cure with knowledge that failure to do so might lead to incarceration. Consequently,
the Court finds that a second period of time within which Defendants may comply before being
incarcerated would not accomplish compliance, and therefore, the Court’s order of arrest will take
effect immediately.
III.

CONCLUSION
IT IS, THEREFORE, ORDERED that:
1. Defendants ASAR Incorporated, LLC, Ralph Ahmad, and Ashvinder Ahmad are hereby
found in contempt of the Court’s Default Judgment Order issued August 13, 2014.
2. On account of such contempt:
a. Defendants are sanctioned in the additional amount of $1,000.00 per day, beginning
on March 2, 2016, and continuing until such time as Defendants have purged
themselves of said contempt.
b. Defendants shall produce financial records and reports showing all revenues
generated from their business at the prohibited location from August 13, 2014, to
the present.
c. The United States Marshal is authorized and directed to take any and all actions
necessary, including but not limited to the use of reasonable force, to arrest and take
into custody Defendant Ralph Ahmad, and to enter and remain on the premises

where he is located, or reasonably believed to be located, including but not limited
to, the land, buildings, vehicles and any structures located thereon. Upon his arrest,
the United States Marshal is not required to take Defendant Ralph Ahmad before a
magistrate, but instead to incarcerate him in a facility which the United States
Marshal shall designate. Thereafter, Defendant Ralph Ahmad shall remain
incarcerated and in the custody of the United States Marshals Service until
Defendants have purged themselves of said contempt and/or until such time as the
Court orders his release.
d. Plaintiff shall pay the United States Marshal a deposit, in advance, for any and all
anticipated expenses, as estimated by the United States Marshal, in connection
with: (1) the apprehension and custody of Defendant Ralph Ahmad; (2) the
transportation of Defendant Ralph Ahmad to the facility that the Marshal
designates; and (3) the execution of this and any other process associated with this
finding of contempt. Defendant Ralph Amhad shall be liable and shall reimburse
Plaintiff for actual expenses incurred in connection with Defendant Ralph Amhad’s
arrest and incarceration under this Order and the United States Marshal to the extent
of actual expenses incurred and paid in excess of Plaintiff’s advance deposit. The
United States Marshal shall submit a report of its expenses, as described herein, to
the Court within ten (10) days after Defendant Ralph Ahmad’s initial appearance
before the Court in compliance with this Order.
e. Plaintiff shall submit itemized documentation with supporting affidavits of all
reasonable costs, fees, and expenses incurred in this action to the Court within
fourteen (14) days of this Order.

3. Defendants shall purge themselves of their contempt by:
a. fully complying with and obeying the Default Judgment Order, entered August 13,
2014, as well as this Order;
b. apprising the Court of any attempt that Defendants make to satisfy the prescribed
means for purging this contempt citation, by filing sworn affidavits with the Clerk
of Court specifying the actions taken to comply with the Court’s directions,
supported by all necessary documentation;
c. upon full compliance with the Orders, filing an appropriate motion for purging of
contempt and release from incarceration, supported by all necessary documentation
and sworn affidavits specifying all actions taken to comply with the Court’s
directions; and
d. making such further report as the Court may require.
4. In the event that Defendants fail to purge themselves of their contempt or fail to take
substantial steps toward purging their contempt within fourteen (14) days of Defendant
Ralph Ahmad's arrest, the United States Marshal is authorized and directed to take any
necessary actions, including reasonable force, to enter the premises located at 3744
Highway 50 East, Carson City, Nevada 89706, to secure the premises and to enable
Plaintiff to enter the premises and recover any pertinent intellectual property located
thereon and ensure compliance with the Court's Orders.
5. The United States Marshal is also authorized to seize or impound any property on the
premises identified by Plaintiff as personal property belonging to the Defendant(s), up to
an amount sufficient to satisfy the debt owed by Defendants on the judgment at that time,
including interest and the United States Marshal's fees. See 28 U.S.C. § 1921. Plaintiff

shall create and sign a written inventory of all items removed from the premises, which the
United States Marshal shall confirm and sign when verified, and provide a copy of same
to the United States Marshal and the Court. Plaintiff shall be solely responsible for the
transport and storage of all items removed from the premises. The United States Marshal
is further directed to sell the items seized pursuant to Paragraph 5 of this Order by public
auction pursuant to 28 U.S.C. §§ 2001, 2002, et seq., at a time and place designated by the
United States Marshal and federal law.
6. As specified in the Default Judgment Order section IV.1(a), (Doc. No. 15 at 11–12),
Defendants shall be prohibited from competing directly or indirectly with Plaintiff for a
period of one year from the date of compliance with the Default Judgment Order and this
Order.
7. The Court retains jurisdiction, upon the failure of Defendants to fully purge themselves of
civil contempt, to levy a compliance fine against them and to grant such other and further
relief as the Court finds appropriate.
8. This Order may be executed nationwide pursuant to Federal Rule of Civil Procedure 4.1(b)
which provides that "An order committing a person for civil contempt of a decree or
injunction issued to enforce federal law may be served and enforced in any district.”
Signed: March 10, 2016