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Perry v. H&R Block Eastern Enterprises

August 18, 2009

DONNA PERRY
v.
H&R BLOCK EASTERN ENTERPRISES, INC.



The opinion of the court was delivered by: McLaughlin, J.

MEMORANDUM

Donna Perry sued H&R Block Eastern Enterprises, Inc., for sex and age discrimination, slander, and tortious interference with contract. H&R Block brought a counterclaim for breach of contract based on Ms. Perry's alleged violation of a non-compete provision in her employment agreement, as well as various related claims.

The Court granted summary judgment to H&R Block on some of Ms. Perry's claims but denied it with respect to the slander claim. The Court granted summary judgment to H&R Block on its counterclaim for violation of the non-compete clause. The Court then presided over a jury trial on the slander claim. The jury returned a verdict for H&R Block. The Court conducted a bench trial concerning the damages to be awarded to H&R Block on its breach of contract claim. This memorandum opinion constitutes the Court's decision on that bench trial.*fn1

I. Evidence of Damages

H&R Block's damages calculation relies on a damages provision in the relevant contract. The contract states that an employee who breaches the non-compete clause shall pay to [the] Company an amount equal to two times the Average Fee charged by [the employee] during the term of this Agreement multiplied by the number of Non-Returning Company Clients multiplied by [the employee]'s Baseline Client Retention Percentage as defined in Section 5 . . . .

See Employment Agreement ¶ 14(b), 8/14/07 Hrg. Ex. D-15 ("Empl. Ag."). H&R Block contends that this calculation results in damages of $46,784.33.

During the bench trial, a representative of H&R Block explained how the formula worked and whence the numbers related to Ms. Perry came. A second witness, who was a paralegal at defense counsel's firm, testified that he had taken a list of Ms. Perry's customers at H&R Block and compared the names on that list with those on a list of individuals at Jackson Hewitt for whom she had also prepared tax returns. H&R Block is seeking damages for all H&R Block customers for whom Ms. Perry prepared tax returns while at H&R Block who had their tax returns prepared at Jackson Hewitt.

During cross-examination of the H&R Block representative, it became clear that under the formula, H&R Block would recover more than its actual damages, as it did not deduct from the formula amount any commissions that would have been paid to the tax preparer who prepared the customers' tax returns had the customers stayed with H&R Block instead of going to Jackson Hewitt. See 8/14/07 Tr. at 29-36, 39.

Prior to the bench trial, neither the plaintiff nor her counsel had been able to view the Jackson Hewitt documents that formed the basis of H&R Block's damages because they had not yet signed a confidentiality agreement. On November 27, 2007, the Court issued an order stating that the plaintiff could see the list of clients for whom Ms. Perry did tax returns at Jackson Hewitt when Ms. Perry and her counsel sign a confidentiality order agreeing not to disclose any of this information. See Docket Nos. 109, 110; see also 4/25/08 Tr. at 3 (Docket No. 117). Counsel for the plaintiff was then permitted to withdraw with the consent of the plaintiff and with the understanding that the plaintiff would handle the remainder of the damages issue herself. See Docket No. 112.

After the plaintiff's counsel was permitted to withdraw, the Court received a number of correspondences from Ms. Perry and from defense counsel regarding difficulties they were having getting Ms. Perry to view the relevant documents. To facilitate this matter, the Court decided to hold a status conference, to which defense counsel was ordered to bring all documents relied on to support the defendants' damages calculations. The Court held a status conference on April 25, 2008, at which the defendant appeared through counsel and Ms. Perry and her husband appeared without counsel. At the conference, defense counsel explained to the Court and to Ms. Perry the nature of the documents that were available and how the defendant had used those documents in preparing the damages calculation.*fn2

During the conference, defense counsel stated that as long as a customer was an H&R Block customer whose tax returns Ms. Perry prepared while at H&R Block, who then went to Jackson Hewitt, defense counsel added the name of that customer to the list to be used to calculate damages even if Ms. Perry had not prepared the tax return at Jackson Hewitt. The Court, upon Ms. Perry's objection, stated that it would exclude from H&R Block's damages customers whose tax returns Ms. Perry did not prepare at Jackson Hewitt. It also instructed counsel for H&R Block to provide to the Court a list excluding those customers whose tax returns Ms. Perry did not prepare at Jackson Hewitt. 4/25/08 Tr. at 13, 15, 19-20.

Subsequent to the April 25, 2008, conference, the Court did not receive from the defendant a damages calculation that excluded individuals whose tax returns Ms. Perry had not prepared at Jackson Hewitt. On October 23, 2008, the Court issued an Order requiring H&R Block to submit to the Court on or before November 7, 2008, its damage calculation for only those people who left H&R Block for Jackson Hewitt whose taxes Ms. Perry prepared. See Docket No. 120.

In addition, at some point after the April 25, 2008, conference, Mr. and Mrs. Perry reviewed the customer lists in defense counsel's possession. On October 28, 2008, Ms. Perry submitted a letter, which the Court received on October 31, 2008. In this letter, Ms. Perry identified eighty-three customers on the H&R Block list for whom she believed she should not be charged for a number of reasons, including that the returns were not prepared by her either at H&R Block or Jackson Hewitt. See Letter from Donna Perry to Hon. Mary A. McLaughlin (Oct. 28, 2008), attached to Docket No. 124.

On November 5, 2008, H&R Block filed a memorandum explaining its damages calculation. See Docket No. 121. It now appears that at the time that H&R Block submitted that memorandum, it had not received a copy of Ms. Perry's letter dated October 28, 2008. Regardless, the memorandum merely repeated the position taken by defense counsel at the April 25, 2008, hearing regarding the amount of damages under the formula; it did not, however, take account of the fact that at the status conference on April 25, 2008, defense counsel said that ...


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