Response to Defendant’s Request to Dismiss Second Amended Complaint PAGE 1 

UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF TEXAS 

WACO DIVISION 

JTH TAX LLC d/b/a LIBERTY TAX 

SERVICE, and SIEMPRETAX+ LLC, 

Plaintiffs, 

v. 

MICKEY WHITE d/b/a NATTY’S TAX 

SERVICE, 

Defendant. 

CIVIL ACTION NO.: 6:20-cv-140 

PLAINTIFFS’ RESPONSE IN OPPOSITION TO DEFENDANT’S REQUEST TO 

DISMISS SECOND AMENDED VERIFIED COMPLAINT 

Plaintiffs JTH Tax, Inc. d/b/a Liberty Tax Service (“Liberty”) and SiempreTax+, LLC 

(“SiempreTax”) (collectively, “Plaintiffs”) file this Response in Opposition to Defendant Mickey 

White’s (“White”) Request to Dismiss (“Request to Dismiss”) the Second Amended Verified 

Complaint, and would show the Court as follows: 

I. PRELIMINARY STATEMENT 

In his Response to Plaintiffs’ Second Amended Complaint (“SAC”) Mr. White requests 

that the Court “refuse to let this case proceed” and to “uphold their ruling of case closed and noy 

(sic) let this proceed.” Response, ECF No. 57 at 13. To the extent that this request may be 

construed as a Motion to Dismiss the SAC, Plaintiffs’ file this Response in Opposition out of an 

abundance of caution. 

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Response to Defendant’s Request to Dismiss Second Amended Complaint PAGE 2 

As set forth below, the SAC states plausible allegations for his breach of the Franchise 

Agreements, Mutual Termination Agreement, non-compete covenants, and breach of the multiple 

Promissory Notes with at least $128,098.76 due and owing to Plaintiffs. 

II. FACTUAL BACKGROUND 

As the SAC sets forth in detail, Natty’s Tax Service was a competing business set up by 

White as a vehicle to hide revenue from which royalties are owed by White as a former 

franchisee to Liberty Tax. See SAC, ECF No. 56, at ¶ 2. The Franchise Location known as 

15546, located at 1400 W. Adams Street, Temple, Texas 76504 appears to be designed to solicit 

former Liberty customers to avoid royalty obligations. Id. By filing tax returns at this location 

while the Franchise Agreement was in effect, Mr. White violated the covenants in that 

agreement. Id. In addition, by continuing to operate this competing business following the 

execution of the Mutual Termination Agreement, Mr. White is in breach of the post-termination 

covenants of that Agreement. Id. Finally, Mr. White has failed to meet his obligations under 

three Promissory Notes executed in favor of Liberty that remain due and owing. Id. at ¶ 42-55. 

III. ARGUMENTS AND AUTHORITIES

A. Legal Standard

A party seeking to dismiss a claim for failure to state a claim upon which relief can be granted 

may do so through a Rule 12(b)(6) motion. FED. R. CIV. P. 12(b)(6). The facts alleged by a plaintiff 

need only be sufficient to suggest a claim is plausible, to survive a motion to dismiss. Bell Atl. Corp. 

v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 (2007). When reviewing a 12(b)(6) motion to 

dismiss, all factual allegations made in the pleadings are accepted as true. Kansa Reinsurance Co. v. 

Congressional Mortgage Corp. of Tex., 20 F.3d 1362, 1366 (5th Cir. 1994). Marshaling all available 

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Response to Defendant’s Request to Dismiss Second Amended Complaint PAGE 3 

evidence is not required at the pleading stage of litigation. A plaintiff need only provide a “short and 

plaint statement” of its claim sufficient to “give the defendant fair notice of what the plaintiff’s claim 

is and the grounds upon which it rests.” FED. R. CIV. P. 8(a); Twombly, 127 S. Ct. at 1964-65 

(citations omitted).

Even where a court finds the plaintiff’s pleadings to be insufficient, however, leave to refile 

under Rule 15(a) is preferred unless it is clear the defects in the complaint are incurable. See Great 

Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002); Hart 

v. Bayer Corp., 199 F.3d 239, 248 n. 6 (5th Cir. 2000) (plaintiff’s failure to meet specific pleading 

requirements should not automatically or inflexibly result in dismissal of the complaint with 

prejudice to refiling).

B. Plaintiffs Have Stated Plausible Claims for Breach of Contract 

Although Defendant’s Request to Dismiss is not made pursuant to 12(b)(6), Plaintiffs 

nevertheless have demonstrated plausible claims for breach of contract. 

The first three counts in the SAC—one in equity and two for monetary relief—address 

Defendant’s breach of his obligations under the franchise agreements at issue. See SAC ¶¶ 81-95. 

Specifically, these counts allege that Mr. White breached the two Franchise Agreements by filing 

tax returns at the Franchise Locations using software outside of Liberty’s system (in an effort to 

avoid paying franchisee obligations under the Franchise Agreements), while these agreements were 

in effect. Id. In addition, Mr. White subsequently breached the post-termination non-competition 

covenant set forth in the Mutual Termination Agreement by continuing to operate a tax preparation 

business at the Franchise Location. Id. Plaintiffs’ claims also allege that Mr. White disclosed 

Liberty’s confidential information, in violation of the Agreements. Id. 

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Response to Defendant’s Request to Dismiss Second Amended Complaint PAGE 4 

The elements of a breach of contract action under Virginia law1 are: (1) a legally 

enforceable obligation of a defendant to a plaintiff; (2) the defendant’s violation or breach of that 

obligation; and (3) injury or damage to the plaintiff caused by the breach of obligation. Ulloa v. 

QSP, Inc., 271 Va. 72, 79 (2006). Here, the SAC alleges the existence of three agreements between 

the parties. SAC ¶¶ 15-41. These agreements contained both in-term and post-termination noncompetition covenants, which Mr. White breached. Id. ¶¶ 56-57. Mr. White further has not met the 

obligations under the agreements regarding outstanding royalty and advertising fees. Id. ¶¶ 58-59. 

These actions have resulted in substantial losses, fees, and expenses to Plaintiffs. Id. ¶¶ 77-78; 84; 

93. 

Therefore, the SAC states a valid claim for breach of contract under Counts I, II, and III. 

C. Plaintiffs Have Stated a Plausible Claim for Defendant’s Breach of His Obligations 

Under the Notes 

As described in the SAC, Mr. White made three promissory notes (collectively, the 

“Notes”) in favor of Liberty that are due and owing. Id. ¶¶ 42-55. Each of the Notes specified 

that, in the event of default, the entire unpaid balance became due and payable. Id. Liberty sent 

three Notices to Cure Default to Mr. White on January 22, 2020. Id. ¶ 56. The outstanding 

principal due on the Notes totals $112,957.36, while the past due amount on the Notes was 

$15,141.40 as of the date of the notice of default. Id. ¶¶ 60-64. By virtue of Mr. White’s failure 

to satisfy the amounts due and owing under the Notes, he has harmed Liberty in an amount equal 

 

1

 The Franchise, Area Developer, and Buyback Agreements between Liberty and 

Contreras/Trinity all are governed by Virginia law. See Franchise Agreements § 17(a); Franchise 

Buyback Agreement § 11(c); Area Developer Agreement § 9.8(a); Area Developer Buyback 

Agreement § 14. 

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Response to Defendant’s Request to Dismiss Second Amended Complaint PAGE 5 

to the full value of the Notes, including accruing interest, and the attorneys’ fees and costs 

incurred by Liberty in connection with the collection and enforcement of the Notes. Id. ¶ 107. 

Therefore, the SAC states a valid claim for breach of his obligations under the Notes in 

Count IV. 

D. Plaintiffs Have Stated a Plausible Claim for Tortious Interference with Contract 

In addition, the SAC demonstrates a plausible claim for tortious interference with contract 

against the business entity, Natty’s Tax Service. 

In Virginia, the elements of a claim for tortious interference with contractual relations are 

typically recited as (1) the existence of a valid contractual relationship or business expectancy; (2) 

knowledge of the relationship or expectancy on the part of the interferor; (3) intentional interference 

inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant 

damage to the party whose relationship or expectancy has been disrupted. Schaecher v. Bouffault, 

290 Va. 83, 106, 772 S.E.2d 589, 602 (2015). 

Here, the parties entered into three valid agreements regarding the operation, and subsequent 

termination, of Liberty franchises. SAC ¶¶ 15-41. Natty’s Tax Service, solely owned and operated 

by Defendant, had knowledge of the obligations under these agreements; indeed, the business is 

operating out of one of the Liberty franchise locations. Id. ¶ 110. By preparing and filing income 

tax returns in violation of the franchise and Mutual termination agreements, among other things, the 

business engaged in intentional and improper conduct to induce Mr. White into breaching the interm and post-termination covenants. Id. ¶¶ 108-116. In other words, Natty’s Tax Service prepared 

and filed tax returns both during the term of the Franchise Agreement and then subsequently 

provided the same services during the post-termination non-compete period. Id. As a direct and 

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Response to Defendant’s Request to Dismiss Second Amended Complaint PAGE 6 

proximate result of Natty’s tortious interference, Plaintiffs have suffered and will continue to 

suffer damages. Id. ¶ 115. 

Therefore, Count V of the SAC for tortious interference with contract is adequately pled. 

IV. CONCLUSION

For these reasons, Plaintiffs request that the Court deny Defendant’s request to dismiss 

the matter and permit the claims against Defendant, including claims for injunctive relief, to go 

forward. 

Dated: July 23, 2021 Respectfully submitted, 

GORDON REES SCULLY MANSUKHANI, LLP 

By: /s/ Kirstie Simmerman 

Kirstie Simmerman, Lead Counsel 

Texas Bar No. 24083858 

ksimmerman@grsm.com 

2200 Ross Avenue, Suite 3700 

Dallas, Texas 75201 

214-231-4660 

214-461-4053 (Facsimile) 

Attorneys for Plaintiffs 

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Response to Defendant’s Request to Dismiss Second Amended Complaint PAGE 7 

CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on Fri, Jul 23, 2021, the foregoing Notice was provided to 

Defendant Mickey White d/b/a Natty’s Tax Service via electronic mail at mcwbjcw@gmail.com

and certified mail at the address below: 

Mickey White d/b/a Natty’s Tax Service 

212 CR 206A 

Cameron, Texas 76520 

/s/ Kirstie M. Simmerman 

Kirstie M. Simmerman 

1204633/59923066v.1 

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