Brief in Support of Motion For Default Judgment

Case 2:22-cv-00387-JRS-MG Document 45 Filed 02/08/24 Page 1 of 26 PageID #: 955
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA
TERRE HUATE DIVISION
_____________________________________
HONEST ABE ROOFING FRANCHISE,

INC., an Indiana Corporation,
Plaintiff, Case No. 2:22-cv-387-JRS-MG
DCH & ASSOCIATES, LLC, a Georgia

limited liability company, HONEST ABE
ROOFING OF MACON GEORGIA, LLC, a
Georgia limited liability company,
DAMEION HARRIS, individually, and
CHRISTINE HARRIS, individually,
Defendants.
_____________________________________/
BRIEF IN SUPPORT OF PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND

PERMANENT INJUNCTION
I. INTRODUCTION
Plaintiff Honest Abe Roofing Franchise, Inc. (“Honest Abe”) respectfully submits this
Brief in Support of its Motion for Default Judgment and Permanent Injunction (the “Motion”).
Honest Abe is a franchisor of roofing repair and installation businesses. Defendants are former
franchisees of Honest Abe who received access to and training with Honest Abe’s confidential and
proprietary information for operating an Honest Abe roofing repair and installation business.
Armed with this information, Defendants are currently competing with Honest Abe and its
franchise system through a competitive roofing business, and blatantly and willfully violating their
covenant not to compete with Honest Abe. Defendants’ ongoing violation of the parties’
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agreements has caused, and continues to cause, irreparable harm to Honest Abe, for which
monetary damages are insufficient.
For the reasons explained below, a permanent injunction enjoining Defendants’ anti-
competitive conduct is warranted and necessary to prevent further irreparable harm. Honest Abe
respectfully requests that this Court grant its Motion.
II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The Honest Abe Business System and Confidential Information
Honest Abe has developed a unique and proprietary system for operating a roofing
installation and repair business, for providing roof installation and repair services, and for
providing gutter and siding installation, along with other products and services with the primary
focus being new roof installation (the “Business System”). (ECF No. 1 at 4.) The Business System
includes, without limitation, Honest Abe’s distinctive business format and method of doing
business, procedures for marketing and advertising, job bidding and scheduling, customer service,
and proprietary training processes and systems. (ECF No. 1 at 4.) Importantly, operation of the
Business System fundamentally requires knowledge of, access to, and training with certain
confidential and proprietary information, including but not limited to information, knowledge,
trade secrets, and know-how of Honest Abe concerning the Business System’s operations,
programs, services, products, customers, practices, books, records, manuals, computer files,
databases or software, operations manuals, training manuals, Honest Abe’s standards and
specifications (the “Confidential Information”). (ECF No. 1 at 5.) In essence, the Business System,
made up in large part of the Confidential Information, distinguishes Honest Abe from other roofing
businesses and is a significant source of Honest Abe’s competitive advantage in the market.
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Honest Abe owns and has exclusive rights to certain trade names, trademarks, service
marks, logos, symbols, proprietary marks, and other indicia of origin, including but not limited to
the federally registered marks “Honest Abe Roofing” (Registration No. 5,417,968) and “Honest
Abe Roofing the Reliable Roofer” (Registration No. 3,690,665) (collectively, Honest Abe’s
“Marks”). (ECF No. 1 at 4.) Honest Abe has built substantial goodwill in its Marks through years
of exclusive use of the Marks in connection with its roofing services. (ECF No. 1 at 5.) Honest
Abe has also built substantial goodwill for itself, its Franchise System, and its franchisees, and has
become associated in the minds of consumers as providing the highest standards of quality in the
maintenance, installation, and repair of roofing systems. (ECF No. 1 at 6.) As Defendants
acknowledged and agreed, all of such goodwill belongs exclusively to Honest Abe. (ECF No. 1-1
at 23; ECF No. 1-5 at 24.)
Honest Abe licenses the use of its Marks and Business System to, and provides its unique
services to the public through, authorized franchisees. (ECF No. 1 at 4.) In exchange for payment
of royalties and other fees, each authorized franchisee receives, among other things, knowledge
of, access to, and training with Honest Abe’s Confidential Information. (ECF No. 1 at 5.) Prior to
receiving such Confidential Information, all franchisees and equity owners are required to enter
into a Confidentiality and Nondisclosure Agreement and Covenant Not to Compete. Id.
The competitive value of the Business System and Confidential Information to Honest Abe
and the Franchise System relies upon such information remaining confidential to Honest Abe and
its authorized franchisees. Id. The Franchise System is undermined when one franchisee decides
unilaterally to operate a directly competitive business in the same geographic market as their
former franchised business and use Honest Abe’s Marks in connection with that competing
business. (ECF No. 1 at 6.)
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Defendants’ Franchise and Non-Compete Agreements
On April 8, 2021, Honest Abe entered into a franchise agreement (the “Macon Franchise
Agreement”) with Defendants Honest Abe Roofing of Macon Georgia, LLC (“HAR of Macon”),
Christine Harris (“Mrs. Harris”), and Damien Harris (“Mr. Harris”) (collectively, the “Harrises”)
for the operation of an Honest Abe roofing business in Macon, Georgia. (ECF No. 1 at 3.) The
Harrises are the sole members of HAR of Macon. Id. Like all other authorized franchisees, the
Harrises received in-depth knowledge of and access to Honest Abe’s Confidential Information and
were trained in how to operate the unique Business System. (ECF No. 1 at 4.) As a condition to
receiving such training and Confidential Information, the Harrises covenanted that they would not
compete against Honest Abe or its Franchise System within a fifty (50) mile radius of their
franchise location for a period of two (2) years following the expiration or termination of the
Macon Franchise Agreement (the “Non-Compete Agreement”). (ECF No. 1 at 10.) Defendants
expressly agreed that the Non-Compete Agreements are reasonable and that the term of the Non-
Compete Agreement would be extended for an additional two (2) years in the event of a violation
of the Non-Compete Agreement. (ECF No. 1-3 at 3,4; ECF No. 1-7 at 3,4.) Notably, the Non-
Compete Agreement does not prohibit the Harrises from engaging in the roofing business outside
of the 50-mile area, or anywhere after two years. (ECF No. 1 at 10.)
On December 22, 2021, Honest Abe entered a franchise agreement (the “Columbus
Franchise Agreement”) with Defendants DCH & Associates, LLC (“DCH”) and the Harrises for
operation of an Honest Abe roofing business in Columbus, Georgia. (ECF No. 1 at 2.) The Harrises
are the sole members of DCH. Id. The Columbus Franchise Agreement included the same Non-
Compete Agreement as that in the Macon Franchise Agreement. (ECF No. 1 at 13.) Both Non-
Compete Agreements are referred to collectively herein as the “Non-Compete Agreements.” The
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Columbus Franchise Agreement required Defendants to open their Columbus franchise for
business within five (5) months of executing the Agreement. (ECF No. 1 at 12.)
Defendants’ Breaches and Termination of the Franchise Agreements
By March 8, 2022, Defendants began failing to comply with material provisions of the
Macon Franchise Agreement. (ECF No. 1 at 10.) Defendants refused to pay Royalty, Brand
Development Fund Fees, and Technology Fees; comply with Honest Abe’s electronic funds
transfer (“EFT”) requirements; and permit Honest Abe to access HAR of Macon’s QuickBooks –
all required and agreed to under the Macon Franchise Agreement. (ECF No. 1 at 10-11.)
Under Section 15.02 of the Macon Franchise Agreement, the parties agreed to a clear
formula for computing Honest Abe’s liquidated damages arising from lost future Royalty and
Brand Development Fund Fees if the Franchise Agreement terminates early due to Defendants’
default. Specifically, Section 15.02 of the Macon Franchise Agreement provides:
Should this Agreement terminate due to a material breach by you, you shall pay
us for a period of two years (or the remainder of the Term of the Agreement if
that period is less than two years) a continuing Royalty (as partial compensation
for the future royalty fees that would have been paid by you under this
Agreement) in an amount equal to the total Royalty due from you for the 12
months preceding the termination divided by 12 multiplied by 24 months. If the
Franchised Business was open fewer than 12 months, then the average for all
months for which the Franchised Business was open shall be used.
In addition, you shall pay us for a period of two years (or the remainder of the
Term of the Agreement if that period is less than two years) a continuing Brand
Development Fee (as partial compensation for the future royalty Brand
Development Fund Fees that would have been paid by you under this
Agreement) in an amount equal to the total Brand Development Fund Fee due
from you for the 12 months preceding the termination divided by 12 multiplied
by 24 months. If the Franchised Business was open fewer than 12 months, then
the average for all months for which the Franchised Business was open shall be
used.
(ECF No. 1-5 at 37.)
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As of the termination of the Macon Franchise Agreement, HAR of Macon and the Harrises,
jointly and severally, owed Honest Abe a total $185,941.39, including $19,810.99 in past due,
unpaid Royalties, Brand Development Fund fees, and Technology Fees, and interest thereon, and
$166,130.40 of liquidated damages under the Macon Franchise Agreement. (ECF No. 44-2 at 3-
5.) All of such damages are supported by and ascertainable from the documentary evidence and
detailed affidavit of Honest Abe’s President, Kevin Newton, attached to the Motion. (ECF No. 44-
2 at 2-5.)
On April 12, 2022, pursuant to the Macon Franchise Agreement, Honest Abe provided
Defendants written notice of these material defaults and an opportunity to cure. (ECF No. 1 at 11.)
On May 5, 2022, the Macon Franchise Agreement was terminated in compliance with its terms
after Defendants failed to cure their material defaults. (ECF No. 1 at 11-12.)
On June 1, 2022, the Columbus Franchise Agreement was terminated after Defendants
failed to open the business within five (5) months after executing the Franchise Agreement. (ECF
No. 1 at 14.)
It is undisputed that both the Macon Franchise Agreement and Columbus Franchise
Agreement were terminated in compliance with their respective terms following Defendants’
material defaults. (ECF No. 1 at 11-12, 14.) Both Franchise Agreements contain post-termination
obligations of Defendants, relevantly including but not limited to, i) compliance with the Non-
Compete Agreements; ii) not using any of Honest Abe’s Marks or any designation of origin,
description, or representation suggesting an association or connection with Honest Abe; iii)
immediately ceasing to use any Confidential Information, the Business System, or other distinctive
signs, symbols, and devices associated with the Business System; iv) cancelling any assumed name
or equivalent registration containing the Marks; and v) paying Honest Abe all Royalty, Brand
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Development Fund Fees, and other fees due to Honest Abe, with late charges and interest. (ECF
No. 1 at 8-9,10,13-14.)
Defendants’ Undisputed Violation of the Non-Compete Agreements and

Infringement of Honest Abe’s Marks
Following termination of both Franchise Agreements, the Harrises continued to engage in
the roofing business in the Macon and Columbus, Georgia markets under the name “Authority
Home Service Professionals.” (ECF No. 1 at 15,16.) In June, 2022, a private investigator engaged
by Honest Abe inquired with the Harrises about a quote to receive roofing services at a house in
Macon, Georgia. (ECF No. 1 at 16.) Mr. Harris represented to the investigator that the Harrises’
company is “Honest Abe Roofing” but had “just got bought over so [they] are called Authority
Home Service Professionals.” Id. Mr. Harris also encouraged the investigator to “put Honest Abe
Roofing for now, just so they can remember.” Id. When the investigator asked whether the Harrises
were “Abe,” Mr. Harris replied “Yes. Yes, sir. Yes, sir.” Id. On a later call, Mrs. Harris assured
the investigator that they would service the property located in Macon, Georgia, which was well
within the geographic area of the Non-Compete Agreements. (ECF No. 1 at 17.) While meeting at
the Macon property to provide the investigator a quote for the Harrises’ roofing services, Mr.
Harris stated that they had been “doing pretty good business,” that they are “out of Columbus,
Georgia,” and “services all over the state.” (ECF No. 1 at 21.) Meanwhile, the Harrises continued
to maintain a business entity using Honest Abe’s Marks in the name after termination of the
Franchise Agreements. Id.
Based on the foregoing, it is undisputed that the Harrises are engaged in a roofing business
in violation of the Franchise and No-Compete Agreements.
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III. PROCEDURAL BACKGROUND
On September 7, 2022, Honest Abe filed a Verified Complaint and Motion for Temporary
Restraining Order and Preliminay Injunction seeking to enforce its rights and Defendants’ post-
termination obligations under the Macon and Columbus Franchise Agreements. (ECF No. 1.) In
the Complaint, Honest Abe alleged, and pleaded facts to support, Defendants’ joint and several
liability for: 1) Federal Trademark Counterfeiting and Infringement; 2) Federal Law Unfair
Competition; 3) Federal Designation of Origin; 4) Breach of the Macon and Columbus Franchise
Agreements; 5) Breach of the Macon and Columbus Confidentiality and Nondisclosure Agreement
and Covenant Not to Compete; 6) State Common Law Unfair Competition; and 7)
Misappropriation of Goodwill. (ECF No. 1 at 22-34.) On September 9, 2022, service of the
Complaint was accepted for Defendant HAR of Macon. (ECF No. 11 at 2.) On September 12,
2022, service of the Complaint was accepted for the Harrises. Id.
On November 3, 2022, this Court denied Honest Abe’s Motion for Temporary Restraining
Order and Preliminary Injunction. (ECF No. 20.)
On December 27, 2022, default was entered against Defendants HAR of Macon and the
Harrises after Defendants failed to plead or otherwise defend in accordance with Federal Rules of
Civil Procedure. (ECF No. 27.) On January 11, 2023, the Court denied Honest Abe’s Motion for
Entry of Default against DCH. (ECF No. 28.)
On February 28, 2023, Honest Abe filed a Motion for Entry of Default Judgment and Order
for Permanent Injunction against HAR of Macon and the Harrises, seeking to enforce the
provisions of the Non-Compete Agreements. (ECF No. 30.) On June 22, 2023, this Court denied
Honest Abe’s Motion for Entry of Default Judgment and Order for Permanent Injunction on the
basis that DCH had not yet been served process. (ECF No. 35.) On November 8, 2023, default was
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entered against DCH for failure to plead or otherwise defend. (ECF No. 41.) On February 2, 2024,
Honest Abe filed its Motion for Entry of Default Judgment and Permanent Injunction. (ECF No.
44-2.)
IV. LEGAL STANDARD
Upon entry of default by the Clerk, “the well-pleaded allegations in the complaint relating
to liability are taken as true.” VLM Food Trading Int’l, Inc. v. Ill. Trading Co., 811 F.3d 247, 255
(7th Cir. 2016) (internal citations omitted); Stephen Knowles Tr. v. Kingery, No. 1:23-cv-00502-
JPH-MKK, 2023 U.S. Dist. LEXIS 92430, at *3 (S.D. Ind. May 26, 2023) (“[T]he Court must
accept as true allegations relating to liability”). While “allegations in the complaint with respect to
the amount of damages are not deemed true” by entry of default, a hearing on damages is not
required when “the amount claimed is liquidated or capable of ascertainment from definite figures
contained in the documentary evidence or in detailed affidavits.” e360 Insight v. Spamhaus
Project, 500 F.3d 594, 602 (7th Cir. 2007).
To obtain a permanent injunction in a default judgment, the plaintiff must show: 1) 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. Id. at 604.
V. ARGUMENT
Honest Abe’s monetary damages for unpaid Royalty, Brand Development Fund fees, and
Technology fees under the Macon Franchise Agreement, agreed-upon interest thereon, and
damages for loss of bargain are all readily ascertainable from definite figures contained in the
documentary evidence and detailed affidavits attached to Honest Abe’s Motion for Entry of
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Default Judgment and Permanent Injunction. Honest Abe’s damages for loss of bargain under the
Macon Franchise Agreement are liquidated under Section 15.02 of the Macon Franchise
Agreement. Accordingly, this Court should award Honest Abe a judgment in the amount of its
well-documented and liquidated damages under the Macon Franchise Agreement. See Id. at 602.
Enforcing the Non-Compete Agreements and preventing further infringement of Honest
Abe’s Marks is warranted and necessary to prevent further irreparable harm to Honest Abe and its
Franchise System. The Seventh Circuit has long-held that injunctive relief is an appropriate
remedy for breach of a covenant not to compete. Turnell v. Centimark Corp., 796 F.3d 656, 666-
67 (7th Cir. 2015) (Stating that the potential damage to an employer from an employee violating a
covenant not to compete is “a canonical form of irreparable harm” and that “injuries that flow from
the violation of a non-compete are difficult to prove and quantify . . . that is what makes restrictive
covenants prime candidates for injunctive relief”); Cook Med., Inc. v. Griffin, No. 1:08-cv-188-
SEB-JMS, 2008 U.S. Dist. LEXIS 24779, at *2 (S.D. Ind. March 27, 2008) (“Indiana courts have
routinely held (and the Indiana Supreme Court has recently affirmed) that a preliminary injunction
is an appropriate remedy for breach of noncompetition agreement”).
Here, Defendants’ violation of the Non-Compete Agreements is undisputed and
established by default. VLM Food Trading Int’l, 811 F.3d at 555. The Non-Compete Agreements
are reasonable in terms of geographic and temporal scope, and further a legitimate, protectible
interest of Honest Abe. Defendants’ ongoing misappropriation of Honest Abe’s Confidential
Information and customer goodwill is precisely the type of harm for which an award of monetary
damages is inadequate, and for which an “injunction is an appropriate remedy.” Cook Med., 2008
U.S. Dist. LEXIS 24779, at *2.
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A. Honest Abe’s Damages for Unpaid Sums Under the Macon Franchise
Agreement are Liquidated and Ascertainable from the Documentary Evidence
In the Seventh Circuit, the Court may grant a default judgment awarding monetary
damages without a hearing when the “the amount claimed is liquidated or capable of ascertainment
from definite figures contained in the documentary evidence or in detailed affidavits.” e360
Insight, 500 F.3d at 602.
Honest Abe has provided the Court with definite figures contained in documentary
evidence of the unpaid amounts due and owing to Honest Abe under the Macon Franchise
Agreement with its Motion, attached to a detailed affidavit of Kevin Newton, President of Honest
Abe. (ECF No. 44-2 at 2-5.) Such documentary evidence includes copies of invoices and
statements of Defendants balance owed to Honest Abe, kept in the ordinary course of Honest Abe’s
business. Id. Defendants, jointly and severally, owe Honest Abe $19,810.99 in past due, unpaid
Royalties, Brand Development Fund fees, and Technology Fees. Id.
In addition, Honest Abe’s damages for loss of bargain are liquidated and were agreed-upon
under Section 15.02 of the Macon Franchise Agreement. (ECF No. 1-5 at 37.) Section 15.02
provides a formula for calculating Honest Abe’s liquidated damages for lost future Royalty and
Brand Development Fund Fees under the Franchise Agreement:
Should this Agreement terminate due to a material breach by you, you shall pay
us for a period of two years (or the remainder of the Term of the Agreement if
that period is less than two years) a continuing Royalty (as partial compensation
for the future royalty fees that would have been paid by you under this
Agreement) in an amount equal to the total Royalty due from you for the 12
months preceding the termination divided by 12 multiplied by 24 months. If the
Franchised Business was open fewer than 12 months, then the average for all
months for which the Franchised Business was open shall be used.
In addition, you shall pay us for a period of two years (or the remainder of the
Term of the Agreement if that period is less than two years) a continuing Brand
Development Fee (as partial compensation for the future royalty Brand
Development Fund Fees that would have been paid by you under this
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Agreement) in an amount equal to the total Brand Development Fund Fee due
from you for the 12 months preceding the termination divided by 12 multiplied
by 24 months. If the Franchised Business was open fewer than 12 months, then
the average for all months for which the Franchised Business was open shall be
used.
(ECF No. 1-5 at 37.)
Section 2.02 of the Macon Franchise Agreement requires Defendants to pay Plaintiff
Royalty of five percent (5%) of the Franchise Business’s Gross Sales, or a minimum Royalty of
Four Thousand Dollars ($4,000) per month for the first twelve (12) months the Franchised
Business is open. (ECF No. 44-2 at 3-4.) Section 9.02 of the Franchise Agreement requires
Defendants to monthly pay Plaintiff Brand Development Fees of two percent (2%) of Gross Sales.
Id. Defendants’ average monthly Royalty due to Honest Abe from August 1, 2021 to April 4, 2022,
was $5,175.24. Id. Defendants’ average monthly Brand Development Fund Fees due to Honest
Abe from August 1, 2021, to April 4, 2022, was $1,746.86. Id. Pursuant to Section 15.02 of the
Macon Franchise Agreement, Defendants owe Honest Abe $41,924.67 ($1,746.86 x 24 months)
in liquidated damages for lost future Brand Development Fund Fees and $124,205.73 ($5,175.24
x 24 months) in liquidated damages for lost future Royalty, totaling of $166,130.40 of liquidated
damages. Id.
Documentary evidence of all of such amounts owed Honest Abe is attached to the detailed
affidavit of Honest Abe’s President, each submitted with the Motion. Id.
B. The Non-Compete Agreements are Enforceable under Indiana Law
i. The Non-Compete Agreements are Necessary for Protecting Honest Abe and
its Franchise System’s Legitimate, Protectible Interests
Indiana courts have long recognized a franchisor’s legitimate, protectible interest in the
goodwill developed in its trademarks and service marks, in its unique and confidential information,
in its ability to re-franchise in a geographic area without competition from rogue franchisees, and
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in the franchise itself. See Tutor Time Learning Centers, LLC v. Larzak, Inc., No. 3:05-CV-322
RM, 2007 U.S. Dist. LEXIS 49740, at *30 (N.D. Ind. July 6, 2007) (holding that the names,
addresses, and requirements of a franchisor’s customers, “together with the manuals and other
materials associated with operating” a franchise, are unique to the franchisor and are entitled to
protection as legitimate business interests), McCart v. H & R Block, 470 N.E.2d 756, 764 (Ind. Ct.
App. 1984) (holding that franchisor had a protectible interest in the goodwill associated with its
mark by customers, which it preserved by including the covenant not to compete in its franchise
agreement), South Bend Consumers Club, Inc. v. United Consumer Club, Inc., 572 F. Supp. 209,
213 (N.D. Ind. 1983) (finding that franchisor had legitimate protectible interest in the franchise
itself, customer contacts, and goodwill).
Honest Abe has a legitimate, protectible interest in 1) the goodwill built up with the public
in and around Macon and Columbus, Georgia; 2) its ability to re-franchise in and around Macon
and Columbus, Georgia, without Defendants’ unfairly competing; and 3) its Confidential
Information, which includes without limitation customer lists and buying preferences, pricing
strategies and information, and the contents of Honest Abe’s training programs and operations
manual.
Honest Abe also has a protectible interest in protecting its Franchise System from
competing against rogue franchisees armed with its Confidential Information. Honest Abe also has
a protectible interest in preventing other franchisees from being emboldened to follow Defendants’
lead in abandoning their franchises and unfairly competing against Honest Abe.
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ii. The Non-Compete Agreements are Reasonable in Geographic and Temporal

Scope
The Non-Compete Agreements are enforceable under Indiana law. Indiana’s public policy
has long been to protect parties’ rights to contract and hold parties to their contractual obligations.
Steak N Shake Enters. v. iFood, Inc., No. 1:21-cv-02131-TWP-MPB, 2021 U.S. Dist. LEXIS
160599, at *24 (S.D. Ind. August 25, 2021) (“Indiana courts over many years have made clear that
the enforcement of contractual obligations is an important public interest”) (citing Hodnick v. Fid.
Tr. Co., 96 Ind. App. 342; 183 N.E. 488, 491 (1932) (“in Banc”); Pond v. Pond, 700 N.E.2d 1130,
1136 (Ind. 1998) (“It is well established that the public policy of this state generally favors the
freedom of contract between private parties”). In this regard, Indiana courts will enforce covenants
not to compete that are reasonably restrained in time and geographic scope. South Bend Consumers
Club, 572 F. Supp. at 213 (stating that a franchisor’s protectible interests “must be protected by a
covenant reasonable in temporal scope [and] . . . reasonable in terms of the spatial restrain it
imposes”); Tutor Time, 2007 U.S. Dist. LEXIS 49740, at *31.
Here, the Non-Compete Agreements are limited to fifty (50) miles from each of
Defendants’ former franchise locations in Macon and Columbus, Georgia, respectively. (ECF No.
1 at 10, 13-14.) The Non-Compete Agreements are also limited to only two (2) years. Id. These
geographic and temporal restrictions are reasonably tailored to protect Honest Abe’s legitimate
interests and are consistent with geographic and temporal restrictions of covenants not to compete
previously found reasonable in Indiana. See Tutor Time, 2007 U.S. Dist. LEXIS 49740, at *12
(finding a two-year covenant not to compete in a franchise agreement reasonable), South Bend
Consumers Club, 572 F. Supp. at 213 (finding a two-year covenant not to compete in a franchise
agreement reasonable and noting the “ample case law pointing to the reasonableness of the time
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restraint”), McCart, 470 N.E.2d at 765 (upholding a franchisee’s covenant not to compete within
a 50-mile radius of the franchisee’s location).
Defendants each expressly agreed that the Non-Compete Agreements are reasonable, and
that the term of the Non-Compete Agreements would be extended for an additional two (2) years
if they violate the Non-Compete Agreements. (ECF No. 1-3 at 3,4; ECF No. 1-7 at 3,4.)
Based on the foregoing, the Non-Compete Agreements are reasonable and enforceable
under Indiana law.
C. A Permanent Injunction is Warranted to Prevent Further Breaches of the

Franchise Agreements and Non-Compete Agreements, and Infringement of
Honest Abe’s Marks
i. Honest Abe Has Suffered Irreparable Harm from Defendants’ Operation of

a Competing Roofing Business and Infringement of Honest Abe’s Marks
1. Defendants’ Violations of the Non-Compete Agreements Have Caused,

and Continue to Cause, Honest Abe Irreparable Harm
The first factor to determine whether a permanent injunction should issue is whether
Honest Abe has suffered an irreparable harm. e360 Insight, 500 F.3d at 604. Harm is irreparable
“if it is not fully compensable by monetary damages.” Certified Restoration Dry Cleaning
Network, LLC v. Tenke Corp., 511 F.3d 535, 550 (6th Cir. 2007). And, “an injury is not fully
compensable by money damages if the nature of the plaintiff’s loss would make the damages
difficult to calculate.” Basicomputer Corp. v. Scott, 973 F.2d 507, 511 (6th Cir. 1992) (citing
Roland Machinery Co. v. Dress Industries, Inc., 749 F.2d 380, 386 (7th Cir. 1984) (stating that
while lost profits can, in principle, be monetized, “in practice it may be very difficult to distinguish
the effect of the termination [of a dealer contract] from the effect of other things happening at the
same time, and to project that effect into the distant future”). As the Seventh Circuit Court has
instructed, “it is precisely the difficulty of pinning down what business has been or will be lost that
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makes an injury ‘irreparable.’” Life Spine, Inc. v. Aegis Spine, Inc., 8 F.4th 531, 546 (7th Cir. 2021)
(upholding the District Court’s finding of irreparable harm “stemming from loss of customers and
loss of goodwill and reputation”).
In that regard, “Indiana courts have routinely held” that an “injunction is an appropriate
remedy for breach of a noncompetition agreement.” Cook Med., 2008 U.S. Dist. LEXIS 24779, at
*2-3 (“It is clear that money damages alone would not be sufficient to remedy the harm that could
result if [plaintiff’s] goodwill is further damaged, and its confidential information continually used,
by continued breach of the noncompetition agreements”); See also, J.P. Morgan Sec., LLC, v.
Duncan, No. 2:22-cv-11732, 2022 U.S. Dist. LEXIS 143924, at *14 (E.D. Mich. August 11, 2022)
(“[T]he risk of new breaches is an irreparable injury because it cannot be captured by money
damages”). Courts have also recognized that the parties agreeing that violations of a covenant not
to compete will cause irreparable harm, supports a finding of irreparable harm. Id. at 15 (citing
York Risk Servs. Grp., Inc. v. Couture, 787 F. App’x 301, 308 (6th Cir. 2019), Dominion Video
Satellite, Inc. v. Echostar Satellite Corp., 356 F.3d 1256, 1266 (10th Cir. 2004).
In the franchise context, this District has found irreparable harm to a franchisor resulting
from a franchisee’s breach of the noncompete covenant in the franchise agreement. See Steak N
Shake, 2021 U.S. Dist. LEXIS 160599, at *20. In Steak N Shake, this District granted plaintiff-
franchisor’s motion for a preliminary injunction enforcing the parties’ covenant not to compete,
finding that the franchisor’s “ability to re-franchise the area will be compromised if a former
franchisee is allowed to operate in the area under a different name.” Id. “An injury to these interests
cannot be accurately or easily measured by an award of damages.” Id. The Steak N Shake Court
also stated in support of granting the injunction that “indeed . . . permitting continued operation of
a business violating noncompete agreements could undermine the quintessential purposes of such
Page 16 of 26
provisions (such as limiting geographic association with a business, curtailing misappropriation of
insider ‘know-how,’ and providing a franchisor the ability to refranchise absent unfair
competition).” Id.
This District’s holding in Steak N Shake is consistent with long-standing law in Indiana,
the Federal Seventh Circuit, and other jurisdictions that the loss of goodwill and the competitive
advantage obtained by a former franchisee, licensee, or employee from being armed with
knowledge of a competitor’s confidential information, processes and methods, pricing metrics, and
supplier and customer relations constitutes irreparable harm. See P.P.K., Inc. v. McCumber, No.
94-2721, 1995 U.S. App. LEXIS 5764, at *8 (7th Cir. February 6, 1995) (upholding the District
Court’s finding of irreparable harm from loss of goodwill resulting from former franchisee
operating a competing convenience store after expiration of a franchise agreement), Gateway
Eastern Ry. Co. v. Terminal R.R Ass’n, 35 F.3d 1134, 1140 (7th Cir. 1994) (“We have stated that
showing injury to goodwill can constitute irreparable harm that is not compensable by an award
of money damages”), Economou v. Physicians Weight Loss Centers, 756 F. Supp. 1024, 1039
(N.D. Oh. 1991) (stating that protecting against loss of goodwill and loss of reputation is a
sufficient ground for finding irreparable injury in enforcing restrictive covenants in franchise
agreements), Bad Ass Coffee Co. of Haw., Inc. v. JH Nterprises, Inc., 636 F. Supp. 2d 1237 (D.
Utah 2009) (finding irreparable harm to franchisor by franchisees’ violation of noncompete
covenant in the franchise agreement from, in part, difficulty in franchising in the area while the
former franchisee is competing, potential for other franchisees to be emboldened to breach their
franchise agreement, and the “overnight switch” to a competing business is likely to erode the
franchisor’s goodwill in the marketplace).
Page 17 of 26
Here, it is undisputed that Defendants are blatantly and knowingly violating the Non-
Compete Agreements. Like the franchisee in Steak N Shake, the Harrises received Honest Abe’s
Confidential Information, including among other things, knowledge, trade secrets, and know-how
concerning Honest Abe’s operations, programs, services, products, customers, practices, records,
manuals, computer files, databases, and software. (ECF No. 1 at 5.) After learning Honest Abe’s
Confidential Information, and receiving exclusive training in how to operate a roofing business,
the Harrises abandoned their franchises and are competing against Honest Abe and its Franchise
System. (ECF No. 1 at 10-11,15-21.) Honest Abe and its Franchise System has been, and continues
to be, irreparably harmed by being forced to compete with a competitor with knowledge of Honest
Abe’s Confidential Information. (ECF No. 1 at 34.)
The Harrises’ conduct is also likely to embolden other franchisees to abandon their
franchises and compete against Honest Abe. These inherent, adverse effects on the Franchise
System cannot be adequately compensated with monetary damages.
Like the franchisor in Steak N Shake, Honest Abe’s ability to re-franchise in the Macon
and Columbus markets is harmed by the Harrises’ ongoing breach of the Non-Compete
Agreements. “An injury to these interests cannot be accurately or easily measured by an award of
damages.” Steak N Shake, 2021 U.S. Dist. LEXIS 160599, at *20.
Again, as this District has recognized, permitting the Harrises to continue violating the
Non-Compete Agreements undermines the quintessential purposes of such provisions, including
“limiting geographic association with a business, curtailing misappropriation of insider ‘know-
how,’ and providing a franchisor the ability to refranchise absent unfair competition.” Id.
Page 18 of 26
2. The Harm to Honest Abe from Defendants’ Infringement of its Marks is

Long-Recognized Irreparable Harm
The dilution of customer goodwill that inherently flows from trademark infringement
categorically constitutes irreparable harm. The Seventh Circuit has “clearly and repeatedly held
that damage to a trademark holder’s goodwill can constitute irreparable injury for which the
trademark owner has no adequate legal remedy.” Re/Max N. Cent., Inc. v. Cook, 272 F.3d 424,
433 (7th Cir. 2001); See also Processed Plastic Co. v. Warner Communs. Inc., 675 F.2d 852, 858
(7th Cir. 1982) (“This and many other Courts have often recognized that the damages occasioned
by trademark infringement are by their very nature irreparable and not susceptible of adequate
measurement for remedy at law”). “The most corrosive and irreparable harm attributable
to trademark infringement is the inability of the victim to control the nature and quality of the
defendants' goods.” Re/Max N. Cent., 272 F.3d at 433.
The Seventh Circuit has unequivocally stated that “it is a well-established presumption that
injuries arising from Lanham Act violations are irreparable, even absent a showing of business
loss.” Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 16 (7th Cir. 1992) (emphasis in
original); Country Inns & Suites by Carlson v. Nayan, LLC, No. 1:08-cv-624-SEB-DML, 2008
U.S. Dist. LEXIS 88559, at *19 (S.D. Ind. October 28, 2008) (stating that irreparable does not
flow from trademark infringement only in rare cases); Elder Care Providers of Ind., Inc. v. Home
Instead, Inc., No. 1:14-cv-01894-SEB-MJD, 2015 U.S. Dist. LEXIS 122367, at *21 (S.D. Ind.
September 14, 2015) (Following the “well-established presumption” of irreparable harm from
trademark infringement when franchisee infringed franchisor’s mark).
It is undisputed that Defendants continued to maintain a business name utilizing Honest
Abe’s Marks and represented themselves as “Honest Abe” after the Franchise Agreements were
terminated. Defendants’ operation of a competing roofing business while representing that they
Page 19 of 26
are “Honest Abe” and maintaining a business registration that includes the name “Honest Abe”
infringes Honest Abe’s Marks. Defendants’ liability for trademark infringement and Lanham Act
violations are undisputed and established by their default. e360 Insight, 500 F.3d at 604 (default
establishes defendant’s liability). Defendants’ infringement of Honest Abe’s Marks, Lanham Act
violations, and liability to Honest Abe arising therefrom are undisputed and established by
default. VLM Food Trading Int’l, Inc. v. Ill. Trading Co., 811 F.3d 247, 255 (7th Cir. 2016).
Honest Abe has suffered, and continues to suffer, irreparable harm from Defendants’
undisputed violations of the Non-Compete Agreements and infringement upon Honest Abe’s
Marks and for which Defendants are liable to Honest Abe.
ii. Legal Remedies are Inadequate to Compensate Honest Abe for the
Irreparable Harm Suffered and that it Continues to Suffer
Remedies available at law are inadequate to compensate Honest Abe for the harm suffered
from Defendants’ violation of the Non-Compete Agreements and infringement of Honest Abe’s
Marks. Processed Plastic Co., 675 F.2d at 858 (“This and many other Courts have often recognized
that the damages occasioned by trademark infringement are by their very nature irreparable and
not susceptible of adequate measurement for remedy at law”). As discussed above, these harms
include the erosion of Honest Abe’s customer goodwill, difficulty re-franchising without new
franchisees being forced to compete against competitors with inside information of their business
operations, and the likelihood of Defendants’ conduct, if permitted, emboldening other franchisees
to breach their franchise agreements.
In the context of a breach of a covenant not to compete, “it is precisely the difficulty of
pinning down what business has been or will be lost that makes an injury ‘irreparable.’” Life Spine,
8 F.4th at 531, 546. The Seventh Circuit has also stated that although lost profits, in principle, may
be compensable by money damages, “in practice it may be very difficult to distinguish the effect
Page 20 of 26
of the [breach] from the effect of other things happening at the same time, and to project that effect
into the distant future.” Roland Machinery Co. v. Dress Industries, Inc., 749 F.2d 380, 386 (7th
Cir. 1984).
Legal remedies are particularly inadequate to compensate for injury suffered in the context
of ongoing violations of an agreement not to compete. See Cook Med., 2008 U.S. Dist. LEXIS
24779, at *2-3. “It is clear that money damages alone would not be sufficient to remedy the harm
that could result if [plaintiff’s] goodwill is further damaged, and its confidential information
continually used, by continued breach of the noncompetition agreements.”, Id. at *2-3 (“Indiana
courts have routinely held” that an “injunction is an appropriate remedy for breach of a
noncompetition agreement”). Further, “[t]he risk of new breaches is an irreparable injury because
it cannot be captured by money damages.” J.P. Morgan Sec., 2022 U.S. Dist. LEXIS 143924, at
*14.
Similarly, the Seventh Circuit, “and many other Courts have often recognized that the
damages occasioned by trademark infringement are by their very nature irreparable and not
susceptible of adequate measurement for remedy at law.” Processed Plastic Co., 675 F.2d at 852,
858. The erosion of customer goodwill in a trademark that results from trademark infringement
cannot be adequately measured in dollars.
Here, the injuries suffered, and continued to be suffered, by Honest Abe from Defendants’
willful breach of the Non-Compete Agreements are precisely that which courts have long, and
routinely, found to be un-remediable by monetary damages. See Barnes Group v. Rinehart, 2001
U.S. Dist. LEXIS 12752 (S.D. Ind. February 26, 2001), Steak N Shake, 2021 U.S. Dist. LEXIS
160599, at *20. The unfair competition faced by Honest Abe and its franchisees from the Harrises’
possession of Honest Abe’s confidential and proprietary information, the erosion of Honest Abe’s
Page 21 of 26
customer goodwill, and difficulty re-franchising in the affected markets cannot be accurately or
adequately measured in dollars. Monetary damages are also insufficient to prevent Defendants
from continuing to flout their Non-Compete Agreement into the future. J.P. Morgan Sec., 2022
U.S. Dist. LEXIS 143924, at *14 (“The risk of new breaches is an irreparable injury because it
cannot be captured by money damages”). Only injunctive relief may provide Honest Abe an
adequate remedy to the irreparable harm incurred from Defendants’ unfair competition. Cook
Med., 2008 U.S. Dist. LEXIS 24779, at *2-3.
Likewise, the harm to Honest Abe from Defendants’ undisputed infringement of Honest
Abe’s Marks cannot be adequately compensated by legal remedies. Processed Plastic Co., 675
F.2d at 858.
Based on the above, the harm from Defendants’ unlawful conduct cannot be adequately
remedied by money damages. This factor weighs in favor of granting Honest Abe’s Motion.
iii. The Balance of Hardships Favors Granting Honest Abe the Permanent
Injunction
Under the third factor required for granting a permanent injunction, “the Court must weigh
the harm that the plaintiff will suffer absent an injunction against the harm to the defendant from
an injunction, and consider whether an injunction is in the public interest.” See Steak N Shake,
2021 U.S. Dist. LEXIS 160599, at *22. Importantly, “the Court is not required to speculate as to
the harms Defendants might face or make arguments on their behalf.” Brights Franchising, LLC
v. Northern Nev. Care, Inc., 2020 U.S. Dist. LEXIS 23209, at 26 (N.D. Ill. February 11, 2020)
(citing Econ. Folding Box Corp. v. Anchor Frozen Foods Corp., 515 F.3d 718, 721 (7th Cir.
2008) (“It is not the court’s responsibility to research the law and construct the parties’ arguments
for them”)).
Page 22 of 26
Here, the balance of hardships favors granting Honest Abe a permanent injunction
enforcing the parties’ Non-Compete Agreements and preventing Defendants’ infringement of
Honest Abe’s Marks. In the absence of a permanent injunction, Honest Abe will continue to suffer
the irreparable harms set forth above. Honest Abe and its franchisees will continue to be forced to
compete against a business armed with Honest Abe’s confidential and proprietary information,
continue to have its customer goodwill eroded, and will continue to risk its franchisees being
emboldened to abandon their franchises to compete with Honest Abe in violation of their
respective covenants.
Defendants have not identified any hardships that they would face if a permanent injunction
issues, and it is neither Honest Abe’s nor this Court’s responsibility to do so for them. See Brights
Franchising, 2020 U.S. Dist. LEXIS at 26 (granting franchisor’s motion for permanent injunction
and stating “the Court is not required to speculate as to the harms Defendants might face or make
arguments on their behalf”). A permanent injunction enforcing the Non-Compete Agreements and
preventing further infringement would not put Defendants out of business or prohibit Defendants
from engaging in the roofing business. Defendants may continue their current roofing business
outside of the reasonable geographic scope and time period agreed upon by the parties in the Non-
Compete Agreements, and without infringing Honest Abe’s Marks.
It is undisputed that Defendants expressly agreed to the Non-Compete Agreement, along
with all other post-termination provisions of the Franchise Agreement. (ECF No. 1-3 at 3,4; ECF
No. 1-7 at 3,4.) It is also undisputed the Defendants own no rights in or to Honest Abe’s Marks.
Any “harm” to Defendants from this Court’s enforcement of the Non-Compete Agreements and
prohibiting further unauthorized use of Honest Abe’s Marks would only be that to which
Defendants expressly agreed as a condition to receiving Honest Abe’s Confidential Information.
Page 23 of 26
The balance of hardships weighs in favor of granting Honest Abe’s Motion.
iv. The Public Interest Favors Enforcement of the Non-Compete Agreement by

the Permanent Injunction
Enforcing the Non-Compete Agreements by granting Honest Abe a permanent injunction
serves the public interest and is consistent with Indiana public policy. As this District has stated in
support of granting a preliminary injunction to enforce a covenant not to compete in a franchise
agreement, “Indiana courts over many years have made clear that the enforcement of contractual
obligations is an important public interest.” Steak N Shake, 2021 U.S. Dist. LEXIS 160599, at *24
(citing Hodnick 96 Ind. App., at 342 (“in Banc”), Pond, 700 N.E.2d at 1136 (“It is well established
that the public policy of this state generally favors the freedom of contract between private
parties”). Further, and as explained above, the Non-Compete Agreements are limited to a 50-mile
radius around the Columbus and Macon franchise locations, and to 2 years following this Court’s
Order. Accordingly, the Non-Compete Agreements are reasonable and enforceable under Indiana
law.
With respect to Defendants’ undisputed infringement of Honest Abe’s Marks, “the
public also has an interest in knowing with whom they do business and whether or not the agent
is a franchisee” of Honest Abe. Re/Max N. Cent., 272 F.3d at 433. “Under Seventh Circuit law, in
trademark cases, the relevant consideration [in determining whether the public interest will be
disserved by the grant of an injunction] is the consumer’s interest in not being deceived about the
products they purchased.” Country Inns & Suites by Carlson, 2008 U.S. Dist. LEXIS 88559, at
*24. (internal citations omitted).
There is no public interest in Indiana that favors Defendants continuing to disregard their
enforceable contractual obligations, Defendants’ unfairly competing with Honest Abe while in
possession of Honest Abe’s Confidential Information, or infringing Honest Abe’s Marks. Honest
Page 24 of 26
Abe’s, and other franchisors’, ability to rely on rogue franchisees’ enforceable covenants not to
compete are an important public interest, the lack of which “could undermine the quintessential
purposes of such provisions.” See Steak N Shake, 2021 U.S. Dist. LEXIS 160599, at *20.
Defendants have not disputed that an injunction enforcing the Non-Compete Agreements
or preventing their infringement of Honest Abe’s Marks is in the public interest.
CONCLUSION
For the reasons set forth above, Honest Abe requests that this Court grant its Motion for
Default Judgment and Permanent Injunction.
Dated: February 8, 2024

Respectfully submitted,
/s/ William W. Drummy

William W. Drummy #4607-84
WILKINSON GOELLER MODESITT
WILKINSON & DRUMMY, LLP
333 Ohio Street
Terre Haute, IN 47807
Telephone: (812) 232-4311
Facsimile: (812) 235-5107
E-mail: wwdrummy@wilkinsonlaw.com
Page 25 of 26
CERTIFICATE OF SERVICE
The undersigned attorney hereby certifies that on February 8, 2024, a copy of the foregoing
Motion for Entry of Default Judgment and Order for Permanent Injunction was filed electronically.
The undersigned attorney further certifies that a copy of the foregoing electronically filed pleading
was sent via U.S. mail, postage prepaid, on February 8, 2024, to the following parties:
Honest Abe Roofing of Macon GA LLC

Dameion Harris, Registered Agent
3235 Satellite Boulevard
Building 400, Suite 300
Duluth, GA 30096
Dameion Harris
Christine Harris
1820 Browning Bend Court
Dacula, GA 30019
DCH & ASSOCIATES, LLC

c/o Dameion Harris, Registered Agent
1820 Browning Bend Court
Dacula, GA 30019
s / William W. Drummy
William W. Drummy, #4607-84
Page 26 of 26

Brief in Support of Motion For Default Judgment

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Case 2:22-cv-00387-JRS-MG Document 45 Filed 02/08/24 Page 1 of 26 PageID #: 955

UNITED STATES DISTRICT COURT

HONEST ABE ROOFING FRANCHISE,

Plaintiff, Case No. 2:22-cv-387-JRS-MG

DCH & ASSOCIATES, LLC, a Georgia

BRIEF IN SUPPORT OF PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND

monetary damages are insufficient.

respectfully requests that this Court grant its Motion.

II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The Honest Abe Business System and Confidential Information

at 23; ECF No. 1-5 at 24.)

business. (ECF No. 1 at 6.)

Defendants’ Franchise and Non-Compete Agreements

Defendants’ Breaches and Termination of the Franchise Agreements

default. Specifically, Section 15.02 of the Macon Franchise Agreement provides:

(ECF No. 1-5 at 37.)

description, or representation suggesting an association or connection with Honest Abe; iii)

Defendants’ Undisputed Violation of the Non-Compete Agreements and

Following termination of both Franchise Agreements, the Harrises continued to engage in

Franchise Agreements. Id.

in violation of the Franchise and No-Compete Agreements.

III. PROCEDURAL BACKGROUND

Misappropriation of Goodwill. (ECF No. 1 at 22-34.) On September 9, 2022, service of the

Order and Preliminary Injunction. (ECF No. 20.)

Entry of Default against DCH. (ECF No. 28.)

IV. LEGAL STANDARD

contained in the documentary evidence or in detailed affidavits.” e360 Insight v. Spamhaus

Project, 500 F.3d 594, 602 (7th Cir. 2007).

be disserved by a permanent injunction. Id. at 604.

Enforcing the Non-Compete Agreements and preventing further infringement of Honest

is an appropriate remedy for breach of noncompetition agreement”).

Here, Defendants’ violation of the Non-Compete Agreements is undisputed and

interest of Honest Abe. Defendants’ ongoing misappropriation of Honest Abe’s Confidential

U.S. Dist. LEXIS 24779, at *2.

Insight, 500 F.3d at 602.

Royalties, Brand Development Fund fees, and Technology Fees. Id.

Brand Development Fund Fees under the Franchise Agreement:

B. The Non-Compete Agreements are Enforceable under Indiana Law

itself, customer contacts, and goodwill).

ii. The Non-Compete Agreements are Reasonable in Geographic and Temporal

imposes”); Tutor Time, 2007 U.S. Dist. LEXIS 49740, at *31.

a 50-mile radius of the franchisee’s location).

under Indiana law.

C. A Permanent Injunction is Warranted to Prevent Further Breaches of the

i. Honest Abe Has Suffered Irreparable Harm from Defendants’ Operation of

1. Defendants’ Violations of the Non-Compete Agreements Have Caused,

loss of goodwill and reputation”).

provisions (such as limiting geographic association with a business, curtailing misappropriation of

operating a competing convenience store after expiration of a franchise agreement), Gateway

Utah 2009) (finding irreparable harm to franchisor by franchisees’ violation of noncompete

franchisor’s goodwill in the marketplace).

Abe’s Confidential Information. (ECF No. 1 at 34.)

System cannot be adequately compensated with monetary damages.

damages.” Steak N Shake, 2021 U.S. Dist. LEXIS 160599, at *20.

Non-Compete Agreements undermines the quintessential purposes of such provisions, including

“limiting geographic association with a business, curtailing misappropriation of insider ‘know-

2. The Harm to Honest Abe from Defendants’ Infringement of its Marks is

defendants' goods.” Re/Max N. Cent., 272 F.3d at 433.

trademark infringement when franchisee infringed franchisor’s mark).

It is undisputed that Defendants continued to maintain a business name utilizing Honest

Marks and for which Defendants are liable to Honest Abe.

to breach their franchise agreements.

cannot be adequately measured in dollars.