Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Maaco Franchising, Inc. v. Augustin

April 20, 2010


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


Maaco Franchising, Inc. (Maaco) brought suit for claims arising under the Lanham Act, 15 U.S.C § 1051, et seq.,*fn1 and state law against Pierre Philippe Augustin and his wife Virginie Augustin, and against their company Phil's Auto Body, Inc. (in the aggregate, the Augustin Defendants), for breach of a franchise agreement between the parties. Maaco has moved for a preliminary injunction to enforce the franchise agreement's covenant not to compete and to enjoin alleged misappropriation of its purported trade secrets (docket no. 4). After expedited discovery, the Augustin defendants have responded to Maaco's motion for a preliminary injunction (docket no. 18). Maaco then replied (docket no. 45). A two-day hearing was held to take testimony. The motion is now ripe for disposition. As explained herein, I will grant the motion in part and deny the motion in part.

I. Facts and Procedural History

Plaintiff, Maaco Franchising, licenses and trains franchisees to use the Maaco name and methods for auto body repair and painting. In October of 2002, defendants Pierre and Virginie Augustin entered into a franchise agreement with Maaco's predecessor in interest, Maaco Enterprises, Inc, to last fifteen years. Under the franchise agreement, the Augustins were required to i) pay a weekly royalty fee equal to a percentage of their gross receipts, ii) submit weekly reports of their gross receipts to Maaco, and iii) contribute to a joint advertising fund. Franchise Agreement ¶¶ 4-5, 11. As part of the franchise agreement, the Augustins agreed not to disclose Maaco's trade secrets. Franchise Agreement ¶¶ 10, 17.C.

In addition, the franchise agreement contained a covenant not to compete, which states: for a period of one (1) year after the expiration or termination of this [Franchise] Agreement, regardless of the cause of termination, or the date upon which Franchisee cease to operate the business franchised hereunder following termination or expiration of this [Franchise] Agreement, whichever is later, Franchisee shall not either directly or indirectly, for himself or through, on behalf of, or in conjunction with any other person, persons, partnership, or corporation:

(1) Divert or attempt to divert any business or customer of the business franchised hereunder to any competitor, by direct or indirect inducement or otherwise, to do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System[;]

(2) Employ or seek to employ any person who is that time employed by Maaco or any other franchisee of Maaco, or otherwise directly or indirectly to induct such person to leave his or her employment thereat[;]

(3) Own, maintain, engage in, be employed by, lease real estate to, finance, or have any interest in any business specializing in whole or in part in providing automobile painting or body repair services or products at the premises of the Center or within a ten (10) mile radius of any existing or proposed Maaco location.

Franchise Agreement, at ¶ 17.B(1)-(2), 17.C.

The Augustin defendants failed to make payments to Maaco under the franchise agreement, report their weekly gross receipts, or make their advertising contributions, which resulted in Maaco terminating the franchise agreement after notice and an opportunity to cure on April 9, 2009. The Augustins continued to operate the center until June 30, 2009. Maaco then took control of the Maaco franchise formerly run by the Augustins and refranchised it to David Stefan.

Defendant Pierre Augustin testified at the hearing that Maaco failed to fulfill several promises made to him. He testified that Maaco failed to pay for his relocation from Boston to Florida as promised, that Maaco failed to provide him a lighted sign, and that Maaco did not sufficiently aid him in renegotiating his rent or selling his franchise.

Pierre Augustin, after vacating the premises of the Augustins' former Maaco franchise, started a competing auto body shop one half-mile from their former Maaco franchise. Maaco alleges this operation entails use of the "Maaco System" (its purported trade secrets) and has been advertised as "Palm Beach Auto formerly Maaco Auto Pain[t]ing." Am. Compl. ¶¶ 45, 49.

On October 2, 2009, Maaco filed suit against the defendants for violation of the franchise agreement and for preliminary and permanent injunctions to enforce the non-compete clause and to protect Maaco's trade secrets. Maaco has also sued for trademark infringement and unfair competition, breach of the covenant of confidentiality, breach of the covenant of good faith and ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.