H&R Block scores preliminary injunction in lawsuit against competing company

By Charmaine Little | Apr 5, 2019

JEFFERSON CITY – H&R Block Tax Services LLC was granted its motion for a preliminary injunction in a breach of contract case in the U.S. District Court for the Western District of Missouri in the Western Division on March 28.

District Judge Nanette K. Laughrey determined H&R Block satisfied the requirements assessed when considering a preliminary injunction in its lawsuit against Kim Santiago and Max Tax LLC.

Laughrey ruled that H&R Block did indeed prove that it is owed the relief it requested. The judge ruled in its favor after she said H&R Block is very likely to be successful on the merits of its breach of contract claim against the defendants thanks to the evidence it displayed in a verified complaint. 

“[It] demonstrates that defendants – as well as other persons and entities acting in concert with them – have violated and are actively violating the (Franchise License Agreement)’s reasonable, enforceable, noncompetition and nonsolicitation covenants ... by which they have agreed to be bound,” the ruling states.


U.S. District Judge Nanette K. Laughrey  

As for the covenants, the court had no problem in ruling that not only are they enforceable, but also fitting for the agreement between the parties as they include time and geographical limits for provisions after the termination date of the covenant, which was Nov. 13, 2018.

The ruling stated that evidence presented in the complaint show the defendants broke the agreement when they launched a tax preparation business and went after H&R Block’s clients. The time limit for the noncompetition and nonsolicitation agreements between the parties was two years after the termination date, meaning the covenants were good through Nov. 13, 2020, at the earliest. Since the defendants broke the covenant before then, the court ruled H&R Block is entitled to the injunction.

Plus, if H&R Block doesn’t get the injunction, it will suffer injury that can’t be repaired, the judge determined based on evidence H&R Block presented. The judge also said when it comes to hardships, the balance is H&R Block’s favor – meaning that the injury H&R Block would get as a result of the defendants breaking the covenant is much more than what the defendants would suffer if H&R Block is granted the preliminary injunction.

“Any harm to defendants is self-inflicted and the restraints being placed on defendants are no greater than those to which they already agreed,” the ruling states.

Laughery also stated that public interest also calls for a preliminary injunction in favor of H&R Block.

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