JTH Tax, Inc. v. Grabert

Filing 15

OPINION and ORDER: Liberty's Motion for Default Judgment is GRANTED, in part, and the Court WITHOLDS ruling, in part, until an evidentiary hearing isconducted. The Court GRANTS Liberty's motion for entry of default judgment on its defamati on claim as to liability. Accordingly, default Judgment is ENTERED in favor of Liberty in the following amounts: (1) $170,814.77, the aggregate outstanding balance owed by Defendant on the four promissory notes; and (2) $1,600.00 in attorne y's fees associated with Liberty enforcing such promissory notes. As to the propriety of entering a permanent injunction based on Defendant's breach of the franchise agreements, and as to the damages for defamation, the Court GRANTS Liberty 's request for a hearing on such issues and WITHHOLDS ruling at this time as to such matters. Liberty's counsel is DIRECTED to contact the undersigned judge's calendar clerk to schedule a hearing. Furthermore, once a hearing date is se lected, Liberty is INSTRUCTED to: (1) file on the public record in this case a "Notice" of such hearing;and (2) consistent with its obligation as to all filings, mail a copy of such "Notice" to Defendant Grabert. (Signed by District Judge Mark S. Davis on 12/30/2013). (Copy mailed to pro se Defendant Grabert on 12/31/2013)(bgra, )

FILED
UNITED

STATES

DISTRICT

EASTERN DISTRICT

OF

COURT

VIRGINIA

Norfolk Division

JTH TAX,

CLERK, US DISTRICT COURT
NORFOLK, VA

INC.,

D/B/A LIBERTY TAX SERVICE,
Plaintiff,
Civil

v.

TRISHA

No.:

2:13cv47

GRABERT,

Defendant

OPINION

This matter is

Default

Judgment

Liberty

Tax

("Grabert"

before

filed

Service
or

AND

the Court on an unopposed Motion for

by

Plaintiff,

("Liberty").

"Defendant")

Motion for Default
WITHOLDS

ruling,

For

in

not

is

part,

Tax,

filed

and the

the reasons

Judgment

JTH

Defendant

has

opposition to the instant motion,

long since passed.

ORDER

set

GRANTED,

until

an

Inc.,

Trisha
a

d/b/a
Grabert

response

time for doing

forth below,
in part,

and

evidentiary

so

in
has

Liberty's
the

Court

hearing

is

conducted.

I.

Liberty
promoting,

is

and

FACTUAL

AND

engaged
licensing

PROCEDURAL

in
a

system

throughout the United States.
2008

and

2012,

Grabert

the

signed

business
of

Compl.
four

BACKGROUND

tax

1 6,

of

advertising,

preparation

centers

ECF No.

Between

franchise

1.

agreements

with

Liberty for four separate "Liberty Tax"

franchise locations and

executed four promissory notes payable
Each of

the

to Liberty.

Id.

H 12.

franchise agreements expressly sets forth Grabert's

contractual

post-termination
to

Liberty,

duties

ceasing

including:

amounts

due

Liberty,

transferring all telephone numbers,

operations manuals to Liberty,
not to compete.

to

herself

all
with

customer files,

and

and adhering to limited covenants

Aff. of Robert Oliver,

On April 20, 2012,

associate

paying

Exs.

2-5,

ECF No. 6.

Liberty terminated all four of Grabert's

franchise agreements due to her failure to submit contractually
required

Compl.

reports

II

and

13.

The

terminated franchises

failure

to

pay

promissory

monies

notes

expressly provide

owed

to

associated
that

Liberty.

with

failure

to

the

timely

pay the amounts due constitutes a default and authorizes Liberty
to accelerate the entire outstanding debt.
Exs.

of

1-4, ECF No. 4.

all

attorney's

January

fees,

28,

costs,

2013,

or

expenses

of

the

franchise

Compl. H1I 6-12.
equitable

relief

that

Liberty

may

Id.
Liberty

filed

Court against Grabert alleging breach of
breach

of Danilo Jose,

Each promissory note also requires payment

incur in enforcing the notes.
On

Aff.

agreements,

a

complaint

in

this

the promissory notes,

and

defamation

per

se.

Liberty's complaint seeks monetary damages and
in

the

form

of

a

permanent

injunction.

Liberty's claimed damages result from Grabert's failure to make

timely

payments,

refusal

to

abide

by

her

post-termination

obligations, and defamatory postings on the internet.
On April
of

the

8, 2013,

summons

and

Grabert failed to
Liberty

Grabert was properly served with a copy

complaint.

requested

instant

ECF No.

file a responsive pleading.
Entry

default on May 7, 2013.

the

Summons,

motion

of

Default,

ECF No.

for

10.

default

and

the

judgment,

However,

On May 6, 2013,

Liberty,

Grabert's response has long since passed.

8.

Clerk

entered

thereafter,

and

the

time

filed

for

Liberty's motion for

default judgment is therefore ripe for review.
II.

STANDARD

OF

REVIEW

"A court confronted with a motion for default

required

to

exercise

sound

judicial

discretion

in

judgment is

determining

whether the judgment should be entered,

and the moving party is

not

matter

entitled

to

April Music,
2009).

default

Inc.

When

a

v.

judgment

White,

defendant

well-pleaded

allegations

Network,

F.3d 778,

253

marks and citations

In

determining

allegations of

interpreted

the

of

780

a

a

F. Supp.

defaults

he

fact."
(4th Cir.

omitted);

whether
fact,

618

as

see also

plaintiff

of

2d 497,

admits

Ryan
2001)
Fed.

has

v.

right."
505

"the

EMI

(E.D. Va.

plaintiff's

Homecomings

Fin.

(internal quotation
R.

Civ.

P.

presented

8(b) (6).

well-pled

the Supreme Court of the United States has

Federal

Rules

of

Civil

Procedure

that a complaint "contain sufficient factual matter,

as

requiring

accepted as

true,

to

'state

face.'"
Bell

a

Ashcroft

Atl.

claim
v.

Corp.

Accordingly,

allegations

in

Iqbal,

V.

in

to

relief
556

U.S.

Twombly,

the

the

that
662,

550

default

complaint

is

678

U.S.

544,

on

(2009)

its

(quoting

deemed

570

(2007)).

context,

judgment

are

plausible

factual

admitted

and

the

"appropriate inquiry is whether or not the face of the pleadings

supports the default judgment and the causes of action therein."
Anderson

v.

Indians,

Found,

187

opinion)

for

F.3d

Advancement,

628

(4th

Cir.

(citing Nishimatsu Constr.

515 F.2d 1200,

1206

(5th Cir.

award of:

instant

(1)

all

1999)

Co.

Employment

of

(unpublished

v.

Am.

table

Houston Nat'l Bank,

DISCUSSION

motion

amounts

&

1975)).

III.

Liberty's

Educ.

for

due

default

judgment

seeks

an

and

the

on the promissory notes

attorney's fees incurred in conjunction with enforcement of such

notes;

(2)

termination
compensatory

a

permanent

obligations
damages,

injunction

of

the

punitive

injunction based

on Defendant's

discussed

the

below,

default judgment as

to

Court:

(1)

to

enforce

franchise

agreements;

damages,

defamation
grants

the breach of

the

and

a

post-

and

permanent

of Liberty.1

Liberty's

(3)

As

motion

for

the promissory notes;

(2)

1 Liberty requests $40,000 in compensatory damages for the claimed
defamation, which represents an amount "equal to the loss of one new
franchise sale."
Pi's Mem. in Supp. of Mot. for Default J. at 8, ECF
No. 12.
As for punitive damages, Liberty requests $80,000, which is
"equal to the loss of two unsold franchises." Id. at 9.

withholds judgment as to Liberty's injunctive relief claim; and
(3) grants Liberty's motion for default judgment as to liability
on the defamation claim,

but withholds

ruling on the amount of

defamation damages.

A. Breach of Promissory Notes
1. Outstanding Balance on the Notes

First,

Liberty asserts a claim against Grabert based on the

four unpaid promissory notes,
amount of
J.

$170,814.77.

("Pi's Mem.")

seeking damages

Pi's Mem.

at 3-4,

ECF No.

in Supp.

12;

Aff.

As set forth in Liberty's complaint,
into

four

enforceable

written

Under

of

law,

a

breach

for Default

of Danilo Jose,

Ex.

5.

Liberty and Grabert entered

Aff.

Virginia

of Mot.

franchise

associated promissory notes.

in the aggregate

of

agreements

Danilo

contract

occurs

four

Exs.

Jose,

and

1-4.

if

a

party

"without legal excuse fails to perform an obligation in a timely

manner."

Va. Code Ann. § 59.1-507.1(a).2

the facts stated in the complaint,

the

Assuming the truth of

Court finds that Grabert

has materially breached the franchise agreements and associated
promissory notes by failing
result of

such breaches,

contractual

right

to

to

make

scheduled payments.

As

a

Liberty has appropriately invoked its

accelerate

the

outstanding

balances.

2 Both the franchise agreements and the notes expressly provide that
the contractual terms are to be construed and enforced according to
Virginia law.
Aff. of Robert Oliver, Exs. 2-5; Aff. of Danilo Jose,
Exs.

1-4.

Liberty

has

presented

themselves,

the

Court

the

promissory

notes

as well as affidavits setting forth the outstanding

balances on such notes,

and there has been no challenge

enforceability or validity of
reveal

with

an

outstanding

the notes.

balance

of

to the

Liberty's submissions

$170,814.77.

Accordingly,

Liberty's motion for default judgment is GRANTED as to the claim
asserting

a

breach

of

the

promissory

notes,

and

judgment

is

entered in Liberty's favor in the amount of $17 0,814.77.
2. Attorney's Fees

In addition
notes,
enforce

Liberty
such

to

seeking

seeks

notes.

the

balance

attorney's
Pi's

Mem.

fees

at

promissory notes signed by Grabert,
"[t]he undersigned agrees

due

on the promissory

incurred

4-5.

In

in

each

order

of

the

to
four

there is a provision stating

to pay all attorneys'

fees and other

costs and expenses that Liberty may incur in connection with the
collection or enforcement
Exs.

of

this Note."

Aff.

of Danilo Jose,

1-4.

Despite

Grabert's

award,

failure

"the

to

Court

is

appear

to

nevertheless

contest

an

obligated

to

attorney's

fee

review the

fee award request independently for reasonableness."

Kennedy v. A Touch of Patience Shared Hous.,
2d

516,

525

attorney's

figure"

(E.D.

fees

which

Va.

award,

is

2011) .

the

calculated

To

Court

by

Inc.,

calculate

must

779 F. Supp.

the

determine

multiplying

"the

appropriate

a

"lodestar

number

of

reasonable hours expended times a reasonable rate."

Robinson v.

Equifax

Cir.

To

Info.

Servs.,

determine

Court's

the

LLC,

560

"reasonable"

discretion

should

be

F.3d

235,

number

guided

243

of

(4th

hours

by

the

and

2009).

rate,

following

the

twelve

factors:

(1) the time and labor expended; (2) the novelty and
difficulty of the questions raised;
(3) the skill
required
to
properly perform
the
legal
services
rendered;
(4)
the attorney's opportunity costs in
pressing the instant litigation; (5) the customary fee
for like work; (6) the attorney's expectations at the

outset of the litigation; (7) the time limitations
imposed by the client or circumstances; (8) the amount
in controversy and the results obtained;
(9)
the
experience, reputation and ability of the attorney;
(10) the undesirability of the case within the legal
community in which the suit arose; (11) the nature and
length
of
the
professional
relationship
between
attorney and client; and (12) attorneys' fees awards
in similar cases.

Id. at 243-44
226 n.28

(quoting Barber v. Kimbrell's Inc., 577 F.2d 216,

(4th Cir.

1978)).

In determining the lodestar figure,

"the court need not address in detail every single one of these
factors."

Dollar

Tree

Stores,

Inc.

v.

Associates, LLC, 699 F. Supp. 2d 766, 768

Norcor

(E.D. Va. 2009).

Here, Liberty is represented by David Lindley,
associate
asserts

acting

that

consisting

he
of

as

lead

spent

counsel

17.7

drafting

this

compensable

Liberty's

assembling associated exhibits,

pursuing default judgment.

in

a fifth year

case.

hours

Mr.

Lindley

this

on

complaint,

pursuing

Bolingbrook

matter,

drafting

entry of

Aff. of David Lindley,

default,

and

and

ECF No. 13.

To

support

and

such assertion,

exhibit

this

containing

matter.

Mr.

Mr.

Lindley

detailed

Lindley's

time

entries

affidavit

credentials in an effort to justify the

per hour.

Id.

that

number

the

reasonable
rates
awards

in

Virginia,

another

the

of
on

are

before

another

Potts,

No.

billed

work

reasonable

Norfolk

year
judge

(1)

also

his

sets

work

forth

requested rate of

of

by

Liberty's

performed.
and

Division

on
his

$225

Further,

consistent
of

counsel

the

the

with

is

hourly

recent

Eastern

fee

District

of

a recent fee award of $225 per hour to

associate

2:09-cv-108

recent fee award of
case before

hours
the

including:

fifth

for

Having reviewed such submission, the Court finds

based

claimed

submitted an affidavit

this
(E.D.

representing
Court,
Va.

JTH Tax,

Jan.

11,

$225 per hour to Mr.

the undersigned

judge,

Liberty

JTH

Inc.

2013);

in

a

v.

Cochise

and

Lindley himself

Tax,

Inc.

v.

case

(2)

a

in a

Callahan,

No. 2:12-cv-691 (E.D. Va. July 8, 2013).3

3 The primary support for the hourly rate charged by Liberty's counsel
is Mr. Lindley's own sworn statement that he inquired with other
attorneys and determined that $225 is a customary fee for a fifth year
The Court
associate in this region.
Aff. of David Lindley, ^ 6.
awards the unchallenged requested hourly rate of $225 in this case
because of the Court's own familiarity with recent cases before this
Court and reasonable rates in the area, including the two cases cited
above, both of which included an affidavit from counsel that did not
represent Liberty.
However, Mr. Lindley is reminded that it is his
burden to prove that his fee request falls within prevailing market
rates and that an affidavit from disinterested counsel is typically

submitted to satisfy such burden.
See
Project Vote/Voting for
America, Inc. v. Long, 887 F. Supp. 2d 704, 710
(E.D. Va. 2012)
(discussing the types of evidence that is typically submitted to
demonstrate prevailing market rates).

Multiplying
reasonable rate

However,

its

as

of

only one of

include

a

reasonable

hours

(17.7)

by

the

would result in a fee award of $3,982.50.

discussed herein,

that

fees.

number

($225)

complaint,

notes

the

Liberty advances

three claims

which is related to

provision for

in

promissory

recovery of

the

the

attorney's

Liberty offers no legal basis for recovery of attorney's

fees

for

the

time

spent

pursuing

the

other

two

claims.

Liberty fails to effectively document the division

Furthermore,

of time between tasks for which there is a valid legal basis to
recover fees,

and tasks

for which no

Proper documentation of
proper

calculation

documentation is

E.E.O.C.
1988)

v.

compensable

of

a

a basis

Nutri/Sys.,

recover

for

461 U.S.
hours

Inc.,

is

award,

685

F.

Eckerhart,

at 434

that

hours

basis

is

and

are

Supp.

to

the

"[inadequate

568,

461 U.S.

asserted.

essential

for reducing or denying a

(quoting Hens ley v.

see Hensley,

fee

legal

fee award."

573

424,

(E.D.

433

Va.

(1983));

(indicating that counsel should not
"excessive,

redundant,

or otherwise

unnecessary").

Here,

even

though

three

claims

are

asserted,

it

appears

that Liberty may have been able to recover fees for the majority
of

the

17.7

hours

requested

documented the division of

had

its counsel's

evidence demonstrating that many of
time

spent

drafting

Liberty

affidavits

and

more

effectively

time and/or presented

the hours claimed
reviewing

the

(such as

contracts)

would

have

been

expended

regardless

pursued injunctive relief
because

it

is

matters,

and

division

of

reduction

improper

and relief
for

in

light

of

time,

the

fee

of

the

the

whether

lack

to

of

will

sixty

Liberty

for defamation.

Court

award

approximately

of

be

However,

speculate

such

detail

also

on

such

regarding

reduced

to

$1,600,

based

on

Liberty's

percent,

a

failure to differentiate the time spent on compensable hours and

non-compensable hours.

Liberty is therefore AWARDED attorney's

fees in the amount of $1,600.

B. Breach of the Franchise Agreements

Liberty's
comply

with

second

the

claim

contractual

asserts

that

Grabert

post-termination

obligations

forth in each of the four franchise agreements.

Based

on

enforcing

such

the

failure,

written

Liberty

post-termination

determining whether a permanent
Court

must

evaluate

demonstrate the

seeks

whether

a

failed

Pi's Mem.

permanent

obligations.

pled

facts

injunction

Id.

sufficient

following four factors:

(1) that it has suffered an
that remedies
available at

irreparable injury; (2)
law,
such as
monetary
damages, are inadequate to compensate for that injury;
(3) that, considering the balance of hardships between
the plaintiff and defendant, a remedy in equity is
warranted; and (4) that the public interest would not
be disserved by a permanent injunction.

10

set

at 6.

injunction is appropriate,

Liberty

to

In
the
to

Legend Night Club v.

(quoting eBay

Inc.

Miller,

v.

637

F.3d 291,

MercExchange,

297 (4th Cir.

L.L.C.,

547

U.S.

2011)

388,

391

(2006)).

Considering
harm,

the

whether

Court

materials

finds

include

therefore are not
See

Ryan,

253

Liberty

that

limited

has

demonstrated

Liberty's

facts,

complaint

are

somewhat

irreparable

and

supporting

conclusory,

and

sufficient to support entry of an injunction.

F.3d at

that while

well-pleaded

fact in a complaint are accepted as

allegations of

780

(explaining

true for the

purposes of default judgment,

a party's failure to defend does

not constitute an admission of conclusions of

law).

Similarly,

Liberty's brief in support of default judgment relies on little
more

than the

judges

of

permanent

this

*3

Court,

injunction

See JTH Tax,
2007);

citation to

Inc.

JTH Tax,

Liberty

business
with

Liberty,

former

and

514

v.

Smith,

2006).

franchisees

subsequent

to

the

resulting

potential

the

on

Lee,

(E.D. Va. June 23,

former

where

based

v.

Inc.

prior Liberty cases,

in

a

Court

similar

F. Supp.
No.

granted

2d

818,

of

in

the

continued improper use of Liberty's trademarks.

11

a

their

irreparable
and,

(E.D. Va.
at

such prior cases involved

termination

clients,

826

a

agreement.

2006 WL 1982762,

actively operating

the

Liberty

franchise

2:06cv76,

However,

heard by other

loss

competing

tax

relationship
of

Smith

Liberty's
case,

the

In contrast,

failed

to

previous

here,

turn

Liberty's complaint states that Grabert

over

offices,

manual."

of

irreparable

and

Compl.

conclusion

customer

harm

her

Hfl

files,

copy

of

that:

and

has

Liberty does not

"operations

further

offers

continue

suffered

to

damages

suffer

damages

nor does

the
and

and

Compl. fl 46.

include facts asserting that Grabert

improperly used any of

with Liberty,

her

Liberty

irreparable harm because of [Grabert's] breaches."
Notably,

of

the

"Liberty

will

numbers

Liberty

41-43.

law

phones

such

retained materials

Liberty reveal

the number of

Grabert served at the former franchises,
remain active or disconnected,
franchises in the locations

to compete
customers

whether the phone lines

or whether Liberty has

(or near the locations)

reopened

of Grabert's

former tax preparation businesses.

Although

the

Court

does

not

question

irreparable harm on the instant facts,

the

potential

for

it is improper for the

Court to award the extraordinary equitable remedy of a permanent

injunction

based

irreparable

injury.

130

2743,

S.

Ct.

on

speculation
See

Monsanto

2761 (2010)

("An

as

to

Co.

v.

the

possibility

of

Geertson Seed Farms,

injunction is a drastic

and

extraordinary remedy, which should not be granted as a matter of
course.").

determination

Because

facts

relevant

remain undeveloped,

the

to

Court

the

injunction

concludes

that

an

evidentiary hearing is warranted on this issue pursuant to Fed.
12

R.

Civ.

P.

55(b)(2).

The

Court

therefore WITHHOLDS

Liberty's motion seeking entry of

default

ruling on

judgment in

the form

of a permanent injunction.4
C.

Defamation Per se

Third, Liberty seeks damages for defamation per se based on
Grabert's numerous postings of

internet sites.

In Virginia there are several ways to establish

defamation per se,
commission of

defamatory statements on various

a

including

criminal

if

statements:

offense

"[1]

impute[]
turpitude

involving moral

which a party may be convicted; ...

[2]

impute []

the
for

an unfitness

to perform the duties of a job or a lack of

integrity in the

performance of the duties; or

the party in her

profession or trade."
297

n.2,

221 Va.

497
884,

plaintiff

in

relate

'the

to

its

prejudice []

Yeagle v. Collegiate Times,

S.E.2d 136,
889,

[3]

138

(1998)

275 S.E.2d 632,

profession

skills

or

or

635

(citing

particular occupation of the plaintiff.'"

1993)

(quoting

Corporations,

Fleming,

as well as

"the

character required

Electro-Optical Products Div.,

221

993

Va.

individuals,

890,

Moore,

To prejudice a

statements
to

carry

must

out

the

Swengler v. ITT Crop.

F.2d 1063,

at

Fleming v.

(1981)).

trade,

255 Va. 293,

275

can be

1070-71

S.E.2d

(4th Cir.

at

636).

defamed per se by

4 In light of the limited facts before the Court and the Court's ruling
permitting Liberty an opportunity to submit additional evidence to
support its claim for injunctive relief, the Court does not comment on
the remaining three prongs of the injunction test.
13

statements
credit,

that

aspersions

on

the

target's

efficiency or its prestige or standing in

business.'"

Id. at 1071

Meredith Corp.,
a

cast

plaintiff

its

field of

(quoting General Products Co.,

526 F. Supp.

proves

"'honesty,

Inc. v.

546, 549-50 (E.D. Va. 1981)).

defamation

per

se,

"Virginia

law

Once

presumes

that the plaintiff suffered actual damage to its reputation and,
therefore,
such

[the

plaintiff]

damages."

Id.

does

(citing

not

have

Fleming,

to

221

present

Va.

at

proof

of

889-90,

275

plaintiff

for

S.E.2d at 636).

In

addition

defamation per se,
actual

damages

Newspaper

S.E.2d

that

Id.

the

are

136

must

neither

Virginia law to

compensating

found

Corp.

v.

(1976)).

demonstrate

defendant

(citations

damages

a

"'punitive damages may be awarded even though

Publishing

132,

plaintiff

to

made

include

Burke,

To

shown.'"
216

recover

through

the

omitted).

nor

800,

punitive

(quoting
805,

224

damages,

a

"clear and convincing proof

statements

"Actual

Va.

Id.

with

malice"

'actual

is

"a statement made with

malice.'"

defined

under

'knowledge that

it was false or with reckless disregard of whether or not it was
false.'"

136).

Id.

(quoting

Burke,

216

Va.

at

805,

224

S.E.2d

at

"[A] plaintiff is entitled to prove the defendant's state

of mind through circumstantial evidence,

and it

cannot be

said

that evidence concerning motive or care never bears any relation
to the actual malice inquiry."

Harte-Hanks Communications,
14

Inc.

v.

Connaughton,

491

U.S.

657,

668

(1989)

(internal

citations

and assuming as true

all well-

omitted).

Applying these principles,
pled

facts

Liberty

in

has

Grabert's

intent

on

apparent

in

the

Ex.

3-1.5

complaint,

sufficient

Liberty

business

2, ECF No.

Grabert's

sloppy";

(2)

falsely";

(3)

"interfered

numerous

Liberty

"bribed"
was

right

so
now

they

[Grabert's]

will

from

and

of

take

crippling

of

owners,

lives,

submitted by

se.

through

is

Liberty.

Pamela Evans Ex.

an

postings

individual

in

"unlawful

success";

(5)

your

(4)

Liberty is
first

losses

born

and

"Liberty Tax, as a whole" are "crooks."

5 The majority

per

personal

internet

engaged

tax stores from franchisees;
sloppy

Aff.

defamation
its

exhibits

1-2;

that

and

practices
of

that

demonstrate

to

concludes

1,

ECF

include

Liberty's quarterly results were "lies and

Liberty

with

facts

disparage

(1)

Court

constitute

many pages

assertions that:

the

postings

to

their

See Compl.

No.

presented

internet

Grabert's

attacks

Liberty's

Grabert's

postings

a

"to

testify

actions"

Liberty

that

"steal[s]"

"dirty and getting
to

save

their

shutdown";

tail

and

(6)

ECF Nos. 1-2 and 3-1.6

appear on

a

website

called

"Unhappy
Franchisee,"
http://www.unhappyfranchisee.com.
However,
Grabert also made postings on other websites, including "Facebook."

6 In another post, Grabert stated that Liberty's system is "wrong, a
scam,

a scheme,

a con," and then noted in her conclusion to such post:

"Oh, let me add in case they have a legal dollar to try me one [sic]
everything I stated is 'IN MY HONEST OPINION' ;-)"
Compl. Ex.

2, ECF No.

1-2.
15

These

statements

prejudice

Liberty

aspersions

standing

impute

on

in

in

a

its

Liberty's

its

lack

field

of

integrity

profession

honesty,

of

or

trade,

efficiency,

business.

to

Liberty,
and

cast

prestige,

Therefore,

in

and

light

of

Grabert's failure to appear in this case and defend the accuracy
of her statements, they constitute defamation per se.

Having found defamation per
whether

Liberty has

demonstrated

were made with actual malice.

statements

"with

se,

the

the

that

Court

the

next

statements

considers
at

issue

Liberty alleges Grabert wrote the

knowledge

that

said

statements

are

false

and for the sole purpose to damage the good will and reputation

of Liberty."
solely

on

exhibits
additional

Grabert.
Inc.,

674

complaint

Compl.
such

to

H 50.

Liberty,

conclusory

its

exhibits

assertion,

complaint
that

however,

and

detail

but

instead

submitted
the

does not rely
attached

affidavits

online

postings

with

made

by

Cf. Mayfield v. Nat'l Ass'n for Stock Car Auto Racing,
F.3d 369,

377-78

is deficient

(4th

Cir.

in alleging

2012)

"actual

(indicating that

malice"

when

it

a

is

limited to the conclusory assertion that the disputed statements
were

made

"malicious[ly]"

or

"with

reckless

disregard

as

to

their veracity").
Based
affidavits

on
and

the

complaint

exhibits

and

thereto,

exhibits
the

Court

thereto,
finds

has demonstrated, by clear and convincing evidence,
16

that

and

the

Liberty

that Grabert

acted

with

statements
minimum,

Va.

at

actual
with

with

805,

Grabert

that

knowledge

"reckless

that

disregard

numerous

2012

and

actions,

Furthermore,

corporate

in

224 S.E.2d at 136).

in

Liberty's

I don't

the

published

websites

malice

in one post,

is

incompetant

they

for

made
were

the

could

on

sinister

no

way

unresponsive,

multiple

motives

of

to

knowing.

and

indifferent.

think for a second that they promote anything illegal.

1-2

at 4.

Compl.

unlawful

statements

conduct

were

Ex.

2,

Such statement support's Liberty's position

that Grabert's numerous statements accusing Liberty of

in

216

"I simply think

Unethical? Maybe if you interpret it that way."
ECF No.

a

as quoted above,

Grabert acknowledges:

[sic],

at

Burke,

statements

have

disputed
or,

truth."

attributing

she

the

false

Specifically,

defamatory

2013

which

she

were

false.

made

with

Accordingly,

knowledge
the

engaging

that
finds

Court

such
that

Liberty has alleged facts supporting each element of

its claim

for

that

defamation

disputed

per

statements

se,

and

were

made

further

with

demonstrated

actual

malice.

The

the

Court

therefore GRANTS Liberty's motion for entry of default judgment
on its defamation claim as to liability.

Having determined
claims

for

attempted

to

liability,

defamation

prove

that

loss of actual revenue,

the

damages.

Grabert's

Court

turns

Although

statements

to Liberty's

Liberty

resulted

has

in

not

the

Liberty has linked its damages request,
17

and punitive damages request, to the cost of a new Liberty tax
franchise.

As

previously

noted,

Liberty

is

not

obligated

to

prove actual damages because it has demonstrated defamation per
se.

Swengler,

993 F.2d at 1071 (citing Fleming,

90, 275 S.E.2d at 636) .

However,

221 Va. at 889-

in light of the fact that the

Court has already determined that a hearing should be conducted

to address whether Liberty is entitled to a permanent injunction
based on the breach of the franchise agreements, the Court finds
that

the

present

better course
oral

elaborate

is

argument

its

theory

to

on
as

allow Liberty an opportunity to

this
to

issue

in

order

an

award

of

why

defamation is appropriate in this case.
55(b)(2)

(authorizing

a

district

to

$120,000

See Fed.

court

to

hearing in the default judgment context).

further

conduct

R.
a

Civ.

for

P.

damages

The Court therefore

GRANTS Liberty's request for a hearing on this issue and DEFERS

ruling on the amount of defamation damages.7
IV.

CONCLUSION

For the reasons discussed above,

motion

for default

(1) breach of
Furthermore,

the
as

judgment on

the

promissory notes

to the breach of

the Court GRANTS Liberty's

issue
and

(2)

of

liability as

to:

defamation per

se.

the promissory notes,

Liberty

7 The Court notes that Liberty's complaint also seeks an injunction
instructing Grabert to remove her internet postings.
However, Liberty
has failed to demonstrate either that any harm that may have resulted

from

such

postings

is

"irreparable"

inadequate.
18

or

that

a

monetary

award

is

has

advanced sufficient evidence to

this time.

Accordingly,

default Judgment is ENTERED in favor of

Liberty in the following amounts:

outstanding

balance

notes;

(2)

and

support a damages award at

owed

by

$1,600.00

(1)

$170,814.77,

Defendant

in

on

attorney's

the
fees

the aggregate

four

promissory

associated

with

Liberty enforcing such promissory notes.

As

to

the

propriety

of

based on Defendant's breach of

to

the

request
this

damages
for

time

a hearing

as

(permitting

for

to

the

such

Court

the

matters.

See

conduct

damages"

At such hearing,

permanent

Court

on such issues

to

a

injunction

the franchise agreements,

defamation,

"determine the amount of
matter").

entering

GRANTS

Liberty's

and WITHHOLDS
Fed.

an

R.

Civ.

or to

ruling

P.

evidentiary

and as

at

55(b) (2)

hearing

to

"investigate any other

Liberty will be permitted to present

any relevant evidence and argue as to the appropriate resolution
of the outstanding matters.
Liberty's

counsel

is

DIRECTED

to

contact

judge's calendar clerk to schedule a hearing.
a hearing date
on the

and (2)

public

is selected,

the

undersigned

Furthermore,

Liberty is INSTRUCTED to:

record in this

case a

"Notice"

of

(1)

once
file

such hearing;

consistent with its obligation as to all filings, mail a

copy of such "Notice" to Defendant Grabert.

The Clerk is DIRECTED to provide a copy of this Opinion and
Order

to

counsel

for

Liberty

and
19

to

mail

a

copy

to

pro

se

Defendant

Grabert,

who

is

not

a

registered

e-filer

in

this

Court.

IT

IS

SO

ORDERED.

m£r

/s/<
Mark S.

Davis

United States District Judge

Norfolk,

Virginia

December 3>0 , 2013

20