JTH Tax, Inc. v. Grabert
Filing
20
AMENDED OPINION AND ORDER (Nunc pro tunc December 30, 2013): The instant "Amended Opinion and Order" replaces the Opinion and Order entered in this case on December 30, 2013, ECF No. 15. The final relief ordered with respect to contractual damages and attorney's fees remains unchanged from the relief ordered in the Court's prior Opinion and Order. The Judgment entered on December 31, 2013, ECF No. 16, remains in full effect. (See Order and Footnotes for Specifics). re 15 OPINION AND ORDER. Copy mailed to Pro se Defendant Grabert and copy provided to counsel for Liberty as directed on 3/26/2014. Signed by District Judge Mark S. Davis and filed on 3/26/2014. (bgra)
FILED
UNITED
STATES
EASTERN
DISTRICT
DISTRICT
OF
COURT
VIRGINIA
MAR 2 6 2014
Norfolk Division
JTH TAX,
INC. ,
CLERK, US DISTRICT COURT
NORFOLK. VA
D/B/A LIBERTY TAX SERVICE,
Plaintiff,
Civil
v.
No.:
2:13cv47
TRISHA GRABERT,
Defendant.
AMENDED OPINION AND ORDER1
This matter is before the Court on an unopposed Motion for
Default
Judgment
Liberty
Tax
("Grabert"
filed
Service
or
by
Plaintiff,
("Liberty").
"Defendant")
has
JTH
Tax,
Defendant
not
filed
Inc.,
Trisha
a
d/b/a
Grabert
response
in
opposition to the instant motion, and the time for doing so has
long since passed.
Motion
for
WITHOLDS
For the reasons
Default Judgment
ruling,
in
set forth below,
is GRANTED,
part,
until
an
in part,
Liberty's
and the Court
evidentiary
hearing
is
conducted.
The
instant
Order entered
final
"Amended Opinion
in
relief
attorney's
this
case
ordered
v/ith
modify
judgments,
its
at
warranted.").
remains
respect
unchanged
replaces
30,
to
interlocutory
any
time
from
2013.
the Opinion
ECF
contractual
the
No.
15.
damages
judgments,
prior
to
final
relief
ordered
including
partial
and
The
and
the
Court's prior Opinion and Order.
Accordingly, the Judgment entered on
December 31, 2013, ECF No. 16, remains in full effect.
The only
substantive changes contained herein consist of revisions
to the
Court's interlocutory defamation analysis contained in Part III.C.
See American Canoe Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 514-15
(4th Cir. 2003) ("[A] district court retains the power to reconsider
and
fees
and Order"
on December
judgment
when
in
summary
such
is
I.
Liberty
promoting,
FACTUAL AND PROCEDURAL BACKGROUND
is
and
engaged
in
licensing a
the
system of
throughout the United States.
2008
and
2012,
Grabert
business
Compl.
signed
four
advertising,
tax preparation
3
6, ECF No.
franchise
Liberty for four separate "Liberty Tax"
executed four promissory notes
of
1.
centers
Between
agreements
with
franchise locations and
payable
to Liberty.
Id. $ 12.
Each of the franchise agreements expressly sets forth Grabert's
contractual
amounts
post-termination
due
to
Liberty,
duties
ceasing
to
including:
associate
paying
herself
all
with
Liberty, transferring all telephone numbers, customer files, and
operations manuals to Liberty, and adhering to limited covenants
not to compete.
Aff.
On April 20,
of Robert Oliver, Exs. 2-5, ECF No. 6.
2012, Liberty terminated all four of Grabert's
franchise agreements due to her failure to submit contractually
required reports
Compl.
9[
13.
and failure
The
to pay monies
promissory
notes
owed to Liberty.
associated
with
the
terminated franchises expressly provide that failure to timely
pay the amounts due constitutes a default and authorizes Liberty
to accelerate the entire outstanding debt.
Exs. 1-4, ECF No. 4.
of all
attorney's
Aff. of Danilo Jose,
Each promissory note also requires payment
fees,
costs,
incur in enforcing the notes.
Id.
or expenses
that
Liberty may
On
January
28,
2013,
Liberty
filed
a
Court against Grabert alleging breach of
breach
Compl.
of
ff
equitable
the
franchise
6-12.
agreements,
complaint
this
the promissory notes,
and
defamation
per
se.
Liberty's complaint seeks monetary damages and
relief
in
the
form
of
a
permanent
Liberty's claimed damages result from Grabert's
timely
in
payments,
refusal
to
abide
by
injunction.
failure to make
her
post-termination
obligations, and defamatory postings on the internet.
On April
of
the
8,
summons
2013,
and
Grabert was properly served with a copy
complaint.
Summons,
ECF
No.
Grabert failed to file a responsive pleading.
Liberty
requested
Entry
default on May 7, 2013.
the
instant
motion
of
Default,
ECF No. 10.
for
default
and
Liberty,
Grabert's response has long since passed.
However,
On May 6,
the
judgment,
8.
Clerk
entered
thereafter,
and
the
2013,
time
filed
for
Liberty's motion for
default judgment is therefore ripe for review.
II.
STANDARD OF REVIEW
"A court confronted with a motion
required
to exercise
sound
judicial
for default
discretion
in
judgment is
determining
whether the judgment should be entered, and the moving party is
not
entitled to default
April Music,
2009).
When
well-pleaded
judgment as a matter of right."
Inc. v. White,
a
defendant
allegations
618 F. Supp.
defaults
of
fact."
he
2d 497,
admits
Ryan
v.
505
"the
EMI
(E.D. Va.
plaintiff's
Homecomings
Fin.
Network,
253
F.3d 778,
780
(4th Cir.
marks and citations omitted);
In
determining
allegations of
whether
fact,
a
2001)
(internal quotation
see also Fed.
plaintiff
R. Civ.
has
P. 8(b)(6).
presented
well-pled
the Supreme Court of the United States has
interpreted the Federal
Rules of Civil
Procedure as requiring
that a complaint "contain sufficient factual matter, accepted as
true,
to
face.'"
Bell
'state
a
claim
Ashcroft v.
Atl.
Corp.
Accordingly,
allegations
in
Iqbal,
v.
in
to
that
556 U.S.
Twombly,
the
the
relief
662,
550
default
complaint
is
678
U.S.
544,
(2009)
on
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. Found,
Indians,
187
opinion)
F.3d
for Advancement,
628
(4th
Educ.
Cir.
1999)
(citing Nishimatsu Constr. Co.
515 F.2d 1200,
1206
(5th Cir.
award of:
instant
(1)
all
(unpublished
table
v. Houston Nat'l Bank,
1975)).
III.
Liberty's
& Employment of Am.
motion
DISCUSSION
for
default
judgment
seeks
an
amounts due on the promissory notes and the
attorney's fees incurred in conjunction with enforcement of such
notes;
(2)
a
permanent
termination
obligations
compensatory
damages,
of
injunction
the
punitive
to
franchise
damages,
enforce
the
agreements;
and
a
post-
and
(3)
permanent
injunction based on Defendant's
discussed
below,
the
default judgment as
withholds
Court:
to
judgment as
defamation
(1)
grants
for
the promissory notes;
(2)
injunctive relief claim;
Liberty's
Liberty's
As
motion
and
the breach of
to
of Liberty.2
(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, seeking damages
amount of $170,814.77.
Pi's Mem.
J.
ECF No. 12; Aff.
("Pi's Mem.")
at 3-4,
in Supp.
As set forth in Liberty's complaint,
into
four
enforceable
associated promissory
Under Virginia law,
written
notes.
a
of Mot.
for Default
of Danilo Jose,
Ex. 5.
Liberty and Grabert entered
franchise
Aff.
in the aggregate
of
agreements
Danilo
Jose,
and
four
Exs.
1-4.
breach of contract occurs if a party
"without legal excuse fails to perform an obligation in a timely
manner."
Va. Code Ann. § 59.1-507.1(a).3
2 Liberty requests $40,000
Assuming the truth of
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.
3 Both the franchise agreements and the notes expressly provide that
the
contractual
terms
are
to
be construed and enforced according
to
the facts stated in the complaint,
the Court
finds
that Grabert
has materially breached the
franchise agreements and associated
promissory notes
to make
result of
failing
such breaches,
contractual
Liberty
by
right
has
themselves,
to
Liberty has
accelerate
presented
scheduled payments.
the
Court
As
a
appropriately invoked its
the
outstanding
with
the
balances.
promissory
notes
as well as affidavits setting forth the outstanding
balances on such notes, and there has been no challenge to the
enforceability or validity of the notes.
reveal
an
outstanding
balance
of
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 $170,814.77.
2. Attorney's Fees
In addition to seeking the balance due on the promissory
notes,
Liberty
seeks
enforce such notes.
attorney's
Pi's
Mem.
at
fees
incurred
4-5.
in
In each of
order
the
to
four
promissory notes signed by Grabert, there is a provision stating
"[t]he undersigned agrees to pay all attorneys'
fees and other
costs and expenses that Liberty may incur in connection with the
collection or enforcement of this Note."
Exs.
of Danilo Jose,
1-4.
Virginia law.
Exs.
Aff.
1-4.
Aff. of Robert Oliver, Exs.
2-5; Aff. of Danilo Jose,
Despite
attorney's
Grabert's
fee
award,
failure
"the
to
Court
review the fee award request
is
appear
516,
525
attorney's
figure"
(E.D.
fees
which
Va.
award,
is
an
obligated
to
independently for reasonableness."
2011) .
the
contest
nevertheless
Kennedy v. A Touch of Patience Shared Hous.,
2d
to
To
Court
calculated
by
Inc.,
calculate
must
779 F.
the
determine
multiplying
appropriate
a
"the
reasonable hours expended times a reasonable rate."
Equifax Info.
Servs.,
To
the
determine
Court's
discretion
LLC,
560
"reasonable"
should
be
F.3d 235,
243
number
hours
guided
of
by
the
Supp.
"lodestar
number
of
Robinson v.
(4th Cir.
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;
length
of
the
professional
attorney and client; and (12)
(11)
the nature and
relationship
between
attorneys' fees awards
in similar cases.
Id. at 243-44
226 n.28
(quoting Barber v. Kimbrell's Inc.,
(4th Cir.
1978)).
"the court need not address
577 F.2d 216,
In determining the lodestar figure,
in detail every single one of these
factors."
Dollar
Associates, LLC,
Tree
Stores,
Inc.
v.
Norcor
Bolingbrook
699 F. Supp. 2d 766, 768 (E.D. Va. 2009).
Here, Liberty is represented by David Lindley,
associate
asserts
acting
that
consisting
as
he
of
lead
spent
counsel
17.7
drafting
in
compensable
Liberty's
assembling associated exhibits,
Aff.
To
Mr.
and
such assertion,
exhibit
this
containing
matter.
Mr.
hours
Mr.
Lindley
this
on
complaint,
matter,
drafting
and
and
of David Lindley, ECF No. 13.
Lindley
detailed
Lindley's
case.
pursuing entry of default,
pursuing default judgment.
support
this
a fifth year
time
submitted an
entries
affidavit
for
also
affidavit
his
sets
work
forth
on
his
credentials in an effort to justify the requested rate of $225
per hour.
Id.
that
number
the
Having reviewed such submission,
of
hours
billed
by
Liberty's
reasonable based on the work performed.
rates
claimed
awards
in
Virginia,
another
the
are
Norfolk
including:
fifth
before
another
Potts,
No.
reasonable
year
and
Division
Further,
consistent
of
the Court finds
the
with
Eastern
counsel
is
the hourly
recent
fee
District
of
(1) a recent fee award of $225 per hour to
associate
judge of
2:09-cv-108
this
(E.D.
representing
Court,
Va.
JTH
Jan.
Liberty
Tax,
11,
recent fee award of $225 per hour to Mr.
Inc.
2013);
in
a
v.
Cochise
and
case
(2)
a
Lindley himself in a
case before
the undersigned
judge,
JTH Tax,
Inc.
v.
Callahan,
No. 2:12-cv-691 (E.D. Va. July 8, 2013)."
Multiplying
the
number
of
reasonable hours
(17.7)
by
the
reasonable rate ($225) would result in a fee award of $3,982.50.
However,
as
discussed herein,
its complaint,
notes
fees.
fees
that
Liberty advances
only one of which
three claims
in
is related to the promissory
include a provision for
the
recovery of
attorney's
Liberty offers no legal basis for recovery of attorney's
for
the
Furthermore,
time
spent
pursuing
the
other
two
claims.
Liberty fails to effectively document the division
of time between tasks for which there is a valid legal basis to
recover fees,
and tasks
Proper
documentation
proper
calculation
of
of
for which no
compensable
a
fee
legal
hours
award,
basis
is
is asserted.
essential
and
to
the
"[ijnadequate
documentation is a basis for reducing or denying a fee award."
E.E.O.C.
v.
Nutri/Sys.,
Inc.,
685 F. Supp.
568,
573
(E.D.
Va.
4 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
Aff. of David Lindley, fl 6.
The Court
associate in this region.
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).
1988)
(quoting Hens ley v. Eckerhart,
see Hensley,
recover
461 U.S.
for hours
461 U.S. 424, 433
(1983));
at 434 (indicating that counsel should not
that
are
"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
had
Liberty
more
effectively
documented the division of its counsel's time and/or presented
evidence demonstrating that many of the hours claimed (such as
time
spent drafting
would have been
affidavits
and reviewing the contracts)
expended regardless
of
whether
Liberty also
pursued injunctive relief and relief for defamation.
because
matters,
it
is
improper
and in light
division of time,
for
the Court
of the
to
However,
speculate on
lack of such detail
such
regarding
the fee award will be reduced to $1,600,
reduction of approximately sixty percent,
a
based on Liberty's
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
claim
the contractual
asserts
that
Grabert
post-termination
forth in each of the four franchise agreements.
Based
on
such
failure,
Liberty
10
seeks
a
failed
obligations
to
set
Pi's Mem. at 6.
permanent
injunction
enforcing
the
written
determining whether
Court
must
a permanent
evaluate
demonstrate the
post-termination
whether
obligations.
injunction
Liberty
is
pled
Id.
In
appropriate,
facts
sufficient
the
to
following four factors:
(1) that it has suffered an irreparable injury; (2)
that remedies available at 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.
Legend Night Club v. Miller,
(quoting eBay Inc.
v.
637 F.3d 291,
MercExchange,
297 (4th Cir.
L.L.C.,
547 U.S.
2011)
388,
391
(2006)).
Considering whether
harm,
Liberty
has demonstrated
irreparable
the Court finds that Liberty's complaint and supporting
materials include limited facts,
are somewhat conclusory,
and
therefore are not sufficient to support entry of an injunction.
See Ryan,
253 F.3d at 780
(explaining that while well-pleaded
allegations of fact in a complaint are accepted as 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 citation to prior Liberty cases, heard by other
judges
of
permanent
this
Court,
where
the
injunction based on a
See JTH Tax,
Inc.
v. Lee,
514 F.
11
Court
similar
Supp.
granted
franchise
2d 818,
826
Liberty
a
agreement.
(E.D.
Va.
2007);
*3
JTH Tax,
(E.D.
former
Va.
and
Smith,
No.
2006).
franchisees
subsequent
Liberty,
former
v.
June 23,
Liberty
business
with
Inc.
to
potential
However,
actively
the
resulting
2:06cv76,
in
clients,
at
such prior cases involved
operating
termination
the
2006 WL 1982762,
of
in
competing
their
irreparable
and,
a
loss
the
tax
relationship
of
Smith
Liberty's
case,
the
continued improper use of Liberty's trademarks.
In contrast,
failed
to
here,
turn
over
previous
offices,
manual."
Compl.
conclusion
of
irreparable
harm
Liberty's
customer
and
her
gist
law
and
files,
copy
41-43.
that:
will
complaint states
of
phones
the
Liberty
"Liberty
continue
numbers
Liberty does not
her
"operations
further
offers
suffer
irreparable harm because of [Grabert's] breaches."
Notably,
of
Liberty
suffered
to
that Grabert
damages
damages
the
and
and
Compl. 5 46.
include facts asserting that Grabert
has improperly used any of such retained materials to compete
with Liberty,
nor
does
Liberty reveal
the number of customers
Grabert served at the former franchises, whether the phone lines
remain active or disconnected,
or whether Liberty has reopened
franchises in the locations (or near the locations) 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
12
injunction
based
irreparable
injury.
130
2743,
S.
Ct.
on
See
Co.
("An
to
v.
the
possibility
Geertson
injunction
is
a
of
Seed Farms,
drastic
and
which should not be granted as a matter of
Because
determination
as
Monsanto
2761 (2010)
extraordinary remedy,
course.").
speculation
remain
facts
relevant
undeveloped,
the
to
Court
the
injunction
concludes
that
an
evidentiary hearing is warranted on this issue pursuant to Fed.
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.5
C.
Defamation Per se
Third, Liberty seeks damages for defamation per se based on
Grabert's
posting
of
Whether a statement
defamatory
statements
on
the
internet.
contains or infers
"provably false" facts,
and thus is capable of being defamatory,
or whether it is a non-
actionable "statement[]
of opinion," is a question of law for
the Court.
Hyland v. Raytheon Technical Services Co., 277 Va.
40,
670
46-47,
statement
that
it
challenged
is
S.E.2d
actionable,
constitutes
statements:
746,
750-51
there
are
"defamation
*[1]
(2009).
several
per
impute[]
se,"
the
Moreover,
ways
to
if
a
establish
including
commission
if
of
the
a
5 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
criminal offense involving moral turpitude for which a party may
be
convicted;
...
[2]
impute []
an
unfitness
to
perform
the
duties of a job or a lack of integrity in the performance of the
duties;
or
trade."
S.E.2d
889,
its
[3]
prejudice[]
Yeagle v.
136,
138
(1998)
skills
or
or
635
(1981)).
trade,
character
"the
Products
(quoting Fleming,
Div.,
credit,
profession
293,
Moore,
297 n.2,
221
Va.
or
497
884,
To prejudice a plaintiff in
to
carry
must
out
Swengler v.
F.2d 1063,
relate
the
"the
particular
ITT Crop.
1070-71
to
Electro-
(4th Cir.
1993)
as well as individuals,
that cast aspersions
on
can be defamed per se
the target's
"'honesty,
efficiency or its prestige or standing in its field of
business.'"
Id. at 1071
Meredith Corp.,
a
her
221 Va. at 890, 275 S.E.2d at 636).
Corporations,
by statements
v.
statements
required
993
in
255 Va.
(citing Fleming
occupation of the plaintiff.'"
Optical
party
Collegiate Times,
275 S.E.2d 632,
profession
the
plaintiff
(quoting General Products Co., Inc. v.
526 F. Supp.
proves
546, 549-50
defamation
per
se,
(E.D. Va.
1981)).
"Virginia
law
Once
presumes
that the plaintiff suffered actual damage to its reputation and,
therefore,
such
[the plaintiff]
damages."
Id.
does
(citing
not
Fleming,
have
to
221
present
Va.
at
proof
889-90,
of
275
S.E.2d at 636) .
In
addition
to
damages
compensating
a
plaintiff
for
defamation per se, "'punitive damages may be awarded even though
14
actual
damages
Newspaper
S.E.2d
are
Publishing
132,
136
plaintiff must
that
Id.
neither
the
Corp.
found
v.
(1976)).
nor
Burke,
To
(citations
made
the
omitted).
Virginia law to include
216
recover
demonstrate through
defendant
shown.'"
Id.
Va.
(quoting
800,
punitive
805,
224
damages,
a
"clear and convincing proof
statements
"Actual
with
malice"
'actual
is
malice.'"
defined
under
"a statement made with '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."
v.
Connaughton,
491
U.S.
Harte-Hanks Communications, Inc.
657,
668
(1989)
(internal
citations
omitted).
Applying these principles,
pled
facts
Liberty
in
has
Liberty's
presented
and assuming as true all well-
complaint,
sufficient
the
Court
facts
to
concludes
that
demonstrate
that
portions of Grabert's internet postings constitute defamation
per se.
Grabert's
assertions
(1)
"deceptive";
include
false
factual
that prejudice Liberty in its profession or trade.
Specifically,
that:
defamatory statements
Grabert's
Liberty's
(2)
internet
postings
quarterly
results
Liberty was
engaged in
15
include
were
assertions
"lies"
and
"unlawful actions"
that
interfered
with
Grabert's
success;
(3) Liberty
"encouraged/
persuaded and ordered" its franchisees to falsify their business
records;
(4)
Liberty's system is
"a scam,
a scheme,
a con";
and
(5)
Liberty's CEO "is being investigated for Racketteering [sic]
and
training
a
tax
scheme"
and Liberty
"steal[s]"
franchisees and pays nothing for them.
Ex.
2;
Aff.
statements
Liberty
Pamela
impute
in
Liberty's
of
its
a
Evans
lack
of
profession
honesty,
Ex.
1,
trade,
efficiency,
field of business.
See Compl.
ECF
integrity
or
to
and
prestige,
Therefore,
stores
No.
I 48; Compl.
3-1.6
Liberty,
cast
and
from
These
prejudice
aspersions
standing
in
on
its
in light of Grabert's failure to
appear in this case and defend the accuracy of her statements,
the five statements identified above constitute defamation per
se.
Having
whether
were
Liberty has
made
wrote
found defamation per
the
with
demonstrated
actual
above
malice.
statements
se,
the
that
the
Liberty
"with
Court
the
next
statements
alleges
considers
at
issue
that Grabert
knowledge
that
said
statements are false and for the sole purpose to damage the good
will
and reputation
of
Liberty."
Compl.
f
50.
Liberty,
however, does not rely solely on such conclusory assertion, but
instead
attached
exhibits
to
its
complaint
and
submitted
6 All but one of Grabert's defamatory postings appear on a website
called "Unhappy Franchisee."
See http://www.unhappyfranchisee.com.
16
affidavits
with
additional
postings made by Grabert.
Car
Auto
Racing,
(indicating that
Inc.,
a
exhibits
that
detail
the
online
Cf. Mayfield v. Nat'l Ass'n for Stock
674
F.3d
complaint
369,
377-78
is deficient
in
(4th
Cir.
alleging
2012)
"actual
malice" when it is limited to the conclusory assertion that the
disputed statements were made "malicious[ly]" or "with reckless
disregard as to their veracity").
Based
on
the
complaint
and
affidavits and exhibits thereto,
exhibits
thereto,
and
the
the Court finds that Liberty
has demonstrated, by clear and convincing evidence, that Grabert
acted
with
actual
malice
in
that
she
made
statements with the knowledge that they were
minimum,
the
false or,
with "reckless disregard for the truth."
Va. at 805, 224 S.E.2d at 13 6.
statements
identified
actionable
opinions
above,
regarding
defamatory
Burke,
at a
216
In addition to the defamatory
Grabert
published
Liberty,
as
well
lengthy
as
non-
personal
attacks on Liberty's officers, which taken together, suggest an
intentional and purposeful effort to injure Liberty's reputation
at any cost.
Grabert
Moreover,
acknowledges:
most notably,
"I simply
think
in one internet post,
[Liberty]
incompetant [sic], unresponsive, and indifferent.
for a second that they promote anything illegal.
Maybe if you interpret it that way."
at 4.
corporate is
I don't think
Unethical?
Compl. Ex. 2, ECF No. 1-2
Such post, which is dated after all of the posts found to
17
be
actionable
defamation
Liberty's
contention
alleging
unlawful
information,
in
that
this
Grabert's
conduct,
operating
franchisees
to
falsely
"steal[ing]"
franchisees'
a
Liberty has
their
businesses,
alleged facts
claim for defamation per se,
disputed
statements
were
and
made
supports
defamatory
reporting
"scam"
report
clearly
earlier
false
that such statements were false.
that
case,
a
of
financial
"con,"
business
posts,
ordering
revenue,
and
were made with knowledge
Accordingly,
the Court finds
supporting each element of
its
and further demonstrated that
the
with
actual
malice.
The
Court
therefore GRANTS Liberty's motion for entry of default judgment
on its defamation claim as to liability.
Having determined liability,
claims
for
attempted
defamation
to
prove
that
the Court turns to Liberty's
damages.
Although
Grabert's
Liberty
statements
has
resulted
not
in
the
loss of actual revenue, Liberty has linked its damages request,
and punitive damages request,
franchise.
to the cost of a new Liberty tax
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 Grabert's breach of the franchise agreements,
18
the Court
finds that the better course is
to
present
oral
elaborate
its
defamation
is
55(b)(2)
argument
theory
appropriate
(authorizing
hearing in
as
the
default
a
to allow Liberty an opportunity
on
this
issue
to
why
an
in
this
district
in
order
award
case.
court
of
See
to
judgment context).
to
further
$120,000
Fed.
R.
conduct
The Court
for
Civ.
a
P.
damages
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, the Court GRANTS Liberty's
motion for default judgment on the issue of liability as to:
(1) breach of the promissory notes and (2)
Furthermore,
defamation per se.
as to the breach of the promissory notes,
Liberty
has advanced sufficient evidence to support a damages award at
this time.
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
attorney's
fees
associated
with
Liberty enforcing such promissory notes.
As to the propriety of entering a permanent injunction, and
as to the damages for defamation,
the Court GRANTS Liberty's
7 The Court notes that Liberty's complaint also seeks an injunction
instructing Grabert to remove her internet postings. However, Liberty
has failed at this time to demonstrate either that any harm that may
have resulted from such postings is "irreparable" or that a monetary
award is inadequate.
19
request
this
for
time
as
(permitting
a
hearing
to
the
such
Court
on
issues
matters.
to
"determine the amount of
matter").
such
See
conduct
damages"
At such hearing,
and WITHHOLDS
Fed.
an
or
R.
Civ.
P.
evidentiary
to
ruling
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 is selected,
the undersigned
Furthermore,
Liberty is INSTRUCTED to:
(1)
once
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.
The Clerk is DIRECTED to provide a copy of this Opinion and
Order
to counsel
Defendant
Grabert,
for Liberty and
v/ho
is
not
a
to mail
a copy
registered
to pro
e-filer
in
se
this
Court.
IT
IS
SO
ORDERED.
VPJ55
/S/
Mark S.
Davis
United States District Judge
Norfolk., Virginia
March £& . 2014
Nunc pro tunc to December 30,
2013,
the date the original Opinion and Order
was signed and entered
20
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