Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_03-cv-00148/USCOURTS-alsd-1_03-cv-00148-2/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:15 Antitrust Litigation

---

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

NORRIS ARMSTRONG, et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 03-0148-WS-C

 )

HRB ROYALTY, INC., et al., )

 )

Defendants. )

_______________________________________)

 )

HRB ROYALTY, INC., et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 03-0635-WS-C

 )

NORRIS ARMSTRONG, et al., ) 

 )

Defendants. )

ORDER

This matter is before the Court on a motion in limine filed by the Block defendants (“Block”) to

clarify that the plaintiffs’ equitable estoppel claim has been dismissed. (Doc. 237). The parties have

submitted briefs in support of their respective positions, (Docs. 246, 251), and the motion is ripe for

resolution. After carefully considering the foregoing materials, the Court concludes that the motion is

due to be denied. 

BACKGROUND

The original complaint and all three amended complaints have included a claim for equitable

estoppel, based upon alleged “misrepresentations, false promises and suppressions” by Block

concerning the perpetual nature of the franchise agreements and the limited circumstances under which

Block would terminate them. The first three of these complaints demand that Block be estopped from

Case 1:03-cv-00148-KD-C Document 299 Filed 10/14/05 Page 1 of 7
1The other triable issues invoking equitable estoppel read as follows:

“Is Block equitably estopped from recovering any damages on its counterclaims”; and 

“Is Block equitably estopped from terminating ABS in the manner that it employed.” (Id., ¶¶ 6,

10).

2That action was eventually consolidated with this one for all purposes. (Doc. 95).

-2-

terminating or non-renewing the franchise agreements “or asserting any other rights or taking any other

actions which are inconsistent with Block’s representations and promises.” (Doc. 1 at 30-32; Doc. 38

at 33-35; Doc. 149 at 22-24). The third amended complaint includes substantively the same quoted

language but does not seek an estoppel to terminate or non-renew the agreements. (Doc. 162 at 24-

25). The plaintiffs’ listing of triable issues in the joint proposed pretrial order identifies three triable

issues concerning equitable estoppel, including whether “Block is equitably estopped from terminating

the Agreements without paying ABS its fair and equitable price based upon the parties’ long term

expectations when they entered the Agreement.” (Doc. 241 at 18, ¶ 5).1

Several months after this action was filed, Block filed a related action seeking, inter alia, an

order enjoining the plaintiffs from operating as a Block franchisee after the termination of the franchise

agreements. (Civ. Action No. 03-635-WS-C, Doc. 1).2 The plaintiffs responded that Block was

“equitably estopped from refusing to renew the [franchise agreements].” (Id., Doc. 17 at 12). In his

November 2003 order granting some of the requested injunctive relief, Judge Butler noted that, at oral

argument, the plaintiffs “abandoned” the argument that Block “should be estopped from terminating or

refusing to renew the franchise agreement.” (Id., Doc. 34 at 9). Judge Butler also “rejected” the

abandoned argument because it would have allowed equitable estoppel to nullify the public policy

reflected in the Missouri Court of Appeals’ holding that the franchise agreements permitted Block to

terminate them unilaterally at the expiration of any five-year term. (Id. at 9, n.9). 

In September 2004, Block moved for summary judgment with respect to twelve of the fourteen

counts asserted in the third amended complaint, including the plaintiffs’ five fraud claims and their

equitable estoppel claim. (Doc. 175). Block described the latter claim as one “that Block is equitably

estopped in perpetuity from exercising its contractual right not to renew ABS’s former franchise

agreements” and argued that the plaintiffs’ abandonment of this claim at oral argument, and Judge

Case 1:03-cv-00148-KD-C Document 299 Filed 10/14/05 Page 2 of 7
-3-

Butler’s acknowledgment of this abandonment and rejection of the claim on its merits in his order on

motion for preliminary injunction, were dispositive. (Doc. 177 at 45-47). Block also argued that

Missouri public policy and the plaintiffs’ demand for payment under paragraph 24 of the franchise

agreements (which is triggered only by termination) required summary judgment. (Id. at 45-46.) Judge

Butler’s order on motion for summary judgment denied summary judgment with respect to the plaintiffs’

breach of contract claim and granted summary judgment with respect to their fraud claims. (Doc. 230

at 2-10). Judge Butler then stated that he “decline[d] to enter summary judgment on the plaintiffs’

remaining claims, finding that there are genuine issues of material fact precluding judgment as a matter of

law.” (Id. at 10). Block now asks the Court to “clarify” that the order on motion for summary

judgment, in addition to eliminating all fraud claims, “also disposed of or was intended to dispose of” the

equitable estoppel claim. (Doc. 237 at 1).

DISCUSSION

 Judge Butler’s order is unambiguous as to which claims were dismissed. After granting

summary judgment as to the plaintiffs’ fraud claims, Judge Butler expressly “decline[d] to enter

summary judgment on the plaintiffs’ remaining claims.” (Doc. 230 at 10). The Court cannot clarify that

the equitable estoppel claim was dismissed by the order, because it plainly was not. Similarly, the

Court cannot clarify that Judge Butler actually intended to dismiss the equitable estoppel claim, both

because his written order provides no such suggestion but rather negates it, and because one judge

cannot speak to the unexpressed intent of another. 

Rather than a motion to clarify, Block could have filed a motion to reconsider. Block did not

do so, and such a motion would have been futile. The grant or denial of a motion to reconsider is left to

the discretion of the trial court. E.g., Chapman v. AI Transport, 229 F.3d 1012, 1023-24 (11th Cir.

2000)(en banc). Such a motion may not be used as a vehicle to inject new arguments into the

underlying motion for summary judgment, or to submit evidence previously available but not properly

presented on the underlying motion. E.g., Mays v. United States Postal Service, 122 F.3d 43, 46

(11th Cir. 1997). Instead, “[a] motion to reconsider is only available when a party presents the court

Case 1:03-cv-00148-KD-C Document 299 Filed 10/14/05 Page 3 of 7
3Block apparently relies on the third amended complaint, which deleted language seeking to

estop Block from terminating the franchise agreements and deleted the word “other,” as italicized in

-4-

with evidence of an intervening change in controlling law, the availability of new evidence, or the need to

correct clear error or manifest injustice.” Summit Medical Center, Inc. v. Riley, 284 F. Supp. 2d

1350, 1355 (M.D. Ala. 2003). None of Block’s arguments satisfies any of these tests.

 Block first argues that the plaintiffs abandoned their estoppel claim and that Judge Butler

rejected it on its merits in his order on motion for preliminary injunction. (Doc. 237 at 2, 3). That

argument is not new, as Block raised it on motion for summary judgment, but Judge Butler’s rejection

of the argument did not constitute clear error or work a manifest injustice. 

What the plaintiffs abandoned at oral argument was the contention that they were entitled to “a

contract in perpetuity.” (Doc. 177, Exhibit 52 at 2). Judge Butler correctly acknowledged in his order

that the plaintiffs had abandoned the argument that Block should be “estopped from terminating or

refusing to renew the franchise agreement.” (Civ. Action No. 03-0635-WS-C, Doc. 34 at 9). He also

rejected the argument’s necessary premise, “that principles of equitable estoppel would allow

enforcement of a contract in perpetuity even though public policy would not.” (Id. at 9 n.9). 

Pursuant to Judge Butler’s order on motion for preliminary injunction, the plaintiffs’ equitable

estoppel claim is no longer part of this lawsuit to the extent it seeks to preclude Block from

terminating or non-renewing the franchise agreements. Block assumes this represents the full

extent of the relief demanded under the plaintiffs’ equitable estoppel claim, (Doc. 251 at 2), but that is

manifestly incorrect. As noted above, the plaintiffs have consistently stated that their claim not only

estops Block from ending the franchise agreements but also estops Block from “asserting any other

rights or taking any other actions which are inconsistent with Block’s representations and promises ....” 

(Doc. 1 at 31, ¶ 113; Doc. 38 at 35, ¶ 122; Doc. 149 at 23, ¶ 76 (emphasis added)). The third

amended complaint, to which the motion for summary judgment was directed, maintains the substance

of the quoted language. What the plaintiffs abandoned and Judge Butler rejected was the effort to

compel Block to keep the franchise agreements in force; neither addressed any “other” rights or actions

Block might be estopped to take.3 To that extent, the claim survived the motion for preliminary

Case 1:03-cv-00148-KD-C Document 299 Filed 10/14/05 Page 4 of 7
text, from the statement of that which Block is estopped to do. (Doc. 251 at 2). Those changes simply

recognized that the plaintiffs had abandoned, and Judge Butler had rejected, their effort to prevent the

termination of the franchise agreements; the changed language patently did not serve to shrink the

estoppel claim to encompass only that portion of the claim that the plaintiffs had abandoned.

4The plaintiffs’ statement of triable issues identifies the “other” conduct Block is estopped to

engage in as including the termination of the franchise agreements (which has been done) “without

paying ABS its fair and equitable price based upon the parties’ long term expectations when they

entered the Agreement.” (Doc. 241 at 18, ¶ 5 (emphasis added); accord Doc. 246 at 11, 12). 

Block complains that the claim for equitable estoppel as worded in the third amended complaint “says

absolutely nothing about ‘fair and equitable value’ or any post-termination payment.” (Doc. 251 at 2). 

That is true, but it hardly shows that the plaintiffs are “belatedly re-engineer[ing] that claim into

something entirely different.” (Id.). Just as a demand for “compensatory damages” adequately

apprises a defendant of the relief sought and does not preclude the plaintiff from seeking any particular

form of compensatory damages, the demand here to estop Block from asserting “any” right or taking

“any” action inconsistent with its representations and promises patently notified Block that the plaintiffs

were seeking expansive relief under this claim. Block’s apparent failure to ferret out the precise scope

of this demand in discovery no more prevents the plaintiffs from asserting the demand than would a

defendant’s failure to inquire as to the types of compensatory damages being sought preclude the

plaintiff from recovering for, say, lost income.

-5-

injunction, and Judge Butler correctly declined on motion for summary judgment to dismiss the entire

equitable estoppel claim on the basis that it had already been abandoned and judicially rejected.4

Block’s second argument is that “the injunctive relief sought is irreconcilable with the remainder

of the case to be tried,” because the plaintiffs seek payment under paragraph 24 and no such payment

can be due unless the franchise agreements have been terminated. (Doc. 237 at 3-4). This argument

as well was raised on motion for summary judgment, and its rejection by Judge Butler did not constitute

clear error or work a manifest injustice for the same reason as Block’s previous argument: it incorrectly

assumes that the equitable estoppel claim addresses only Block’s ability to terminate the franchise

agreements.

Block’s third argument is that summary judgment on the fraud claims necessitates summary

judgment on the equitable estoppel claim because the latter claim is “derivative” of the former. (Doc.

237 at 3-4). Because that argument could have been, but was not, raised on motion for summary

judgment, it provides improper material for a motion to reconsider. At any rate, Judge Butler’s failure

Case 1:03-cv-00148-KD-C Document 299 Filed 10/14/05 Page 5 of 7
5Block identified the elements of an equitable estoppel claim as: “(1) That H&R Block made an

admission, statement or act that is inconsistent with a claim afterwards asserted by H&R Block and

upon which H&R Block has sued; (2) That ABS acted in reliance on the admission, statement or act of

H&R Block, which action was to ABS’s detriment such that ABS was misled to its prejudice and

changed its position; and (3) That injury to ABS would result from allowing H&R Block to contradict

or repudiate the admission, statement or act.” (Doc. 292, Exhibit 2B at 26). 

-6-

to recognize and address this argument sua sponte could not be clear error, and the divergent results

did not work a manifest injustice. 

It may be assumed for present purposes that a court ruling that eliminates certain claims while

leaving intact other claims whose disposition is governed by the same analysis would work a manifest

injustice because it treats legally indistinguishable claims differently. However, Block has not shown

that Judge Butler’s analysis of the plaintiffs’ fraud claims requires a like disposition of the equitable

estoppel claim. Judge Butler’s rejection of the fraud claims rested on two bases: (1) statute of

limitations; and (2) insufficient evidence of the “requisite fraudulent intent.” (Doc. 230 at 7-9). Block

has not even identified the applicable statute of limitations for an equitable estoppel claim, and its

statement of the elements of such a claim omits any mention of intent, fraudulent or otherwise.5 Block

seizes upon the plaintiffs’ statement that their equitable estoppel claim “is supported by Plaintiffs’

evidence and legal support submitted in opposition to Block’s summary judgment as related to

Armstrong’s fraud claims,” (Doc. 237 at 3 (quoting Doc. 201 at 2)), but that is hardly an admission that

the fraudulent intent Judge Butler found lacking is fatal to their equitable estoppel claim. 

Finally, Block frets that “the Court’s intention of streamlining the case for trial will not be

realized if the equitable estoppel claim ... must be tried. ” (Doc. 237 at 4). Of course, courts as well as

parties are governed by the rule of law, regardless of any adverse impact on the resultant scope of trial. 

Whatever arguments might be marshaled against the plaintiffs’ equitable estoppel claim, the Court can

consider only those that Block has elected to present and, as discussed above, those arguments do not

support the dismissal of the equitable estoppel claim in its entirety.

CONCLUSION

Case 1:03-cv-00148-KD-C Document 299 Filed 10/14/05 Page 6 of 7
-7-

For the reasons set forth above, Block’s motion in limine to clarify that the plaintiffs’ equitable

estoppel claim has been dismissed is denied.

DONE and ORDERED this 14th day of October, 2005.

s/ WILLIAM H. STEELE

UNITED STATES DISTRICT JUDGE

Case 1:03-cv-00148-KD-C Document 299 Filed 10/14/05 Page 7 of 7