Acevedo-Lopez v. H&R Block Tax Services, LLC

Filing 27

MEMORANDUM AND OPINION denying 23 Motion for Partial Summary Judgment. By 10/13/2015, Plaintiff shall show cause why her complaint should not be dismissed; Defendant shall respond by 10/20/2015. No extensions of time will be allowed.Signed by US Magistrate Judge Silvia Carreno-Coll on 9/30/2015.(NBB)

IN THE UNITED STATES COURT
FOR THE DISTRICT OF PUERTO RICO

CAROLINA ACEVEDO-LÓPEZ,
Plaintiff,
v.

CIV. NO.: 15-1240(SCC)

H&R BLOCK TAX SERVS.,
LLC,
Defendant.

MEMORANDUM AND ORDER
H&R Block sued Lutgardo Acevedo-López in federal court
in Missouri, accusing him of violating a franchise agreement to
which he had subscribed. H&R Block won that suit, and the
court entered judgment in its favor. As part of that judgment,
an injunction issued against Lutgardo1 forbidding him “and all

1.

I use Lutgardo Acevedo-López’s first name here not out of disrespect,
but because he shares the same last names with his sister, Carolina, who
is the plaintiff in this suit.

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persons in concert or participation with him” from (1) soliciting
Lutgardo’s former clients and (2) operating an income tax
preparation business within 25 miles of his former territory.
H&R Block Tax Servs. LLC v. Acevedo-López, Civ. No. 12-1320,
ECF No. 149 (W.D. Mo. Oct. 1, 2014) (final judgment).
Subsequently, H&R Block came to suspect that Lutgardo’s
sister, Carolina, was working in concert with Lutgardo to
violate the Missouri court’s injunction. It thus registered that
court’s judgment in this court, see Misc. No. 14-420(JAG),
served Carolina with a copy of the judgment, and then sought
discovery aimed at proving that Carolina was violating the
injunction. In response, Carolina filed this suit in Puerto Rico
state court, which H&R Block removed to federal court. Docket
No. 1. The Complaint seeks a declaratory judgment holding
that the non-compete to which Lutgardo subscribed did not
apply to her. Docket No. 1-4. She has also filed a motion for
partial summary judgment in which she argues, essentially,
that the Missouri judgment cannot be enforced against her
because Puerto Rico’s law of res judicata would not allow it.
Docket No. 23.
Carolina’s argument misses the point because H&R Block
has at no time asked this Court to apply preclusion principles

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in finding the Missouri judgment binding on Carolina. Nor is
it asking this Court to enforce the non-compete agreed to by
Lutgardo against Carolina. To the contrary, H&R Block is
attempting to enforce another federal court’s injunction order
against Carolina on the grounds that the order itself binds her.
As noted, the injunction applies to persons acting “in concert
or participation with” Lutgardo. This is proper under the
Federal Rules, at least insofar as H&R Block can prove
Carolina’s knowledge of the injunction and her “active concert
or participation” with Lutgardo in violation of it. Fed. R. Civ.
P. 65(d)(2)(C); see also Reich v. United States, 239 F.2d 135,
137–38 (1st Cir. 1954).
Properly framed, it becomes clear that Carolina’s suit is a
collateral attack on the Missouri judgment. This is improper.
United States v. Schine, 260 F.2d 552, 556–57 (2d Cir. 1958)
(forbidding collateral attack on injunction by parties not named
in original decree); see also G.&C. Merriam Co. v. Webster
Dictionary Co., Inc., 639 F.2d 29, 34 (1st Cir. 1980) (holding that
an injunction generally may not be challenged by collateral
attack); N.LR.B. v. Unión Nacional de Trabajadores, 611 F.2d 926,
928 (1st Cir. 1979) (same); WRIGHT & MILLER, FED. PRAC. &
PROC. § 2960 (“[O]bedience to a decree is required, even

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though the issuing court has based its decision on an incorrect
view of the law, unless there was no opportunity for effective
review of the decree.”).
For this reason, Carolina’s motion for partial summary
judgment is DENIED.2 In light of this ruling, moreover,
Carolina has ten days to SHOW CAUSE why her Complaint
should not be dismissed.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 30th day of September, 2015.
S/ SILVIA CARREÑO-COLL
UNITED STATES MAGISTRATE JUDGE

2.

In making this ruling, I of course do not find that Carolina has violated
the Missouri judgment, simply that it is not subject to collateral attack.