Jackson Hewitt, Inc. v. Greene

865 F. Supp. 1199, 1994 U.S. Dist. LEXIS 15519, 1994 WL 591522
CourtDistrict Court, E.D. Virginia
DecidedOctober 26, 1994
Docket2:94cv665, 2:94cv866
StatusPublished
Cited by2 cases

This text of 865 F. Supp. 1199 (Jackson Hewitt, Inc. v. Greene) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jackson Hewitt, Inc. v. Greene, 865 F. Supp. 1199, 1994 U.S. Dist. LEXIS 15519, 1994 WL 591522 (E.D. Va. 1994).

Opinion

MEMORANDUM ORDER

CLARKE, District Judge.

This matter comes before the Court on Cross-Motions for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reason set forth below, Summary Judgment is GRANTED on behalf of Jackson Hewitt, Incorporated against Alan Greene. Alan Greene’s Summary Judgment Motion against Jackson Hewitt, Incorporated is DENIED.

I.

This contractual dispute arose out of the franchise agreement (the “Agreement”) entered into by Jackson Hewitt Incorporated (“JHI”) and Alan Greene (“Greene”) on November 22, 1991. JHI is a national franchisor of “income tax preparation retail franchise stores.” Greene is a JHI franchisee whose territory is located in Westchester County, New York.

JHI franchisees are provided with, among other things, income tax related computer software programs. One of the JHI programs (the “Preparation Software”) allows a franchisee to prepare a customer’s income tax return based on a series of questions asked by the computer operator. After the operator inputs the customer data, the Preparation Software performs the computations required to complete the customer’s tax return.

In conjunction with the Preparation Software, JHI has developed a service known as the “Superfast Refund” payment program. The Preparation Software and the Superfast Refund are meant to function as an integrated business system. Using the Superfast Refund program, the customer’s tax return is electronically filed by JHI franchisees with the Internal Revenue Service (the “IRS”). If the customer is due a refund, JHI franchisees then obtain a bank loan on the customer’s behalf through JHI and a participating bank, and pay the customer his anticipated refund amount. Of course, the bank fees and the franchise fees are deducted from the customer’s refund amount. JHI, as franchisor, receives a certain percentage of the franchisee’s revenue.

*1202 On April 28,1994 JHI sent Greene a letter which purported to terminate Greene’s franchise (the “Franchise”). Greene responded on May 24,1994 by filing suit in the Supreme Court of the State of New York alleging that the termination notice was invalid. The New York court issued an ex parte temporary restraining order preventing JHI from interfering with Greene’s operation of the Franchise.

On June 28, 1994 JHI filed suit in the Eastern District of Virginia complaining that Greene had breached the Agreement and violated federal trademark law. After removing Greene’s New York state action to federal court, the New York District Court then transferred it to this Court based on the Agreement’s exclusive choice of forum clause. The two cases were consolidated on August 23, 1994.

II.

This matter is now before the Court on cross-motions for Summary Judgment pursuant to Rule 56 of the Federal Riiles of Civil Procedure. Both Greene and JHI have briefed the issues and provided supporting affidavits. The Court also heard oral argument on October 11, 1994. Accordingly, the cross-motions are now ripe for disposition.

A.The Legal Standard For Summary Judgment:

Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to summary judgment as a matter of law.” Fed.R.Civ.P. 56(c). To avoid summary judgment, the opposing party must introduce evidence to create an issue of material fact on “an element essential to the party’s case, and on which that party will bear the bürden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A verified complaint based on personal knowledge serves as the equivalent of an opposing affidavit for the purposes of summary judgment. Williams v. Griffin, 952 F.2d 820, 823 (4th Cir.1991).

B. The Language Of the Agreement Controls:

It is the duty of the Court to decide the meaning of an unambiguous written agreement as a matter of law. Winn v. Aleda Constr. Co., 227 Va. 304, 307, 315 S.E.2d 193, 194 (1984). In all relevant respects, the Court finds the Agreement unambiguous as written. Paragraph 18(e) of the Agreement states that,

[n]o amendment, change or variance from this Agreement shall be binding upon either Franchisor or Franchisee except by mutual written agreement.

This clause purports to bar any oral modification of the Agreement. However, under Virginia law, written agreements can be modified by subsequent oral agreement if the express mutual assent of both parties is demonstrated. Stanley’s Cafeteria, Inc. v. Abramson, 226 Va. 68, 72, 306 S.E.2d 870, 872 (1983). Mutual assent must be proven with “clear and unmistakable proof.” Id. at 72-73, 306 S.E.2d at 873. Because neither JHI nor Greene offer any proof that the Agreement has been modified, the Court will interpret the Agreement as written.

C. Franchise Termination Under The Agreement:

Section 13(a) of the Agreement provides fifteen (15) separate grounds which constitute “good cause” to terminate a franchise. In its actions against Greene, JHI relies specifically on the following termination provisions:

(xiii) If Franchisee is reasonably determined by Franchisor to have underreport-ed by two percent (2%) or more its Gross Volume of Business to Franchisor on two or more occasions during the term of this Agreement, whether or not Franchisee subsequently rectifies such deficiency.
(xiv) If Franchisee violates any covenant of confidentiality or non-disclosure as contained in Paragraph 8 of this Agreement ... without Franchisor’s prior approval.

(Agreement, Paragraph 13(a) clause xiii, xiv). The Agreement further provides that termination is effective “either immediately upon *1203 the date Franchisor gives written notice of termination or upon such other date as may be set forth in such notice of termination.” Furthermore, while some of the termination provisions require that JHI provide a written Notice to Cure, neither clause xiii nor clause xiv state any such condition precedent.

III.

A. Greene’s Obligation To Report The Franchise’s GVB:

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Bluebook (online)
865 F. Supp. 1199, 1994 U.S. Dist. LEXIS 15519, 1994 WL 591522, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jackson-hewitt-inc-v-greene-vaed-1994.