Court Opinion

ID: 1021888
Source: CourtListenerOpinion
Date Created: 2013-07-04 23:13:50.503103+00
Date Added: 2024-06-11T12:38:56.846768
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                            No. 06-1489

INTERNATIONAL HOUSE OF PANCAKES, INC.,

                                              Plaintiff - Appellee,

          versus

JIMMIE MCNEAL,

                                              Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore. J. Frederick Motz, District Judge. (1:04-
cv-01480-JFM)

Submitted:   February 9, 2007              Decided:   March 2, 2007

Before WILLIAMS and GREGORY, Circuit Judges, and HAMILTON, Senior
Circuit Judge.

Affirmed by unpublished per curiam opinion.

Jimmie McNeal, Appellant Pro Se. John M. G. Murphy, OBER, KALER,
GRIMES & SHRIVER, PC, Baltimore, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

              Jimmie McNeal appeals from the district court’s order

granting summary judgment to International House of Pancakes, Inc.

(“IHOP”) on its breach of contract and trademark infringement

claims and awarding compensatory damages.            Finding no reversible

error, we affirm the district court’s order.

              On October 17, 1998, IHOP and McNeal entered into a

Franchise Agreement, a Sublease, and an Equipment Lease (the

“Franchise Documents”), which authorized McNeal to operate an IHOP

restaurant in Salisbury, Maryland.         McNeal promised to pay IHOP

certain fees, including advertising fees, rent for IHOP’s real

property, and equipment rent for its personal property.            He also

agreed to keep and maintain at least thirty-six months of sales

records.      Under the Franchise Documents, IHOP was permitted to

conduct routine audits.      In late 2003, such an audit revealed that

McNeal had been underreporting his income (and thereby underpaying

IHOP) and had failed to keep thirty-six months of sales records as

required by the Franchise Documents.           As a result of McNeal’s

breach   of    the   Franchise   Documents,   IHOP    terminated   McNeal’s

franchise under the terms of the Franchise Agreement and demanded

he relinquish IHOP’s real and personal property and that he cease

and desist from operating the restaurant as IHOP and using IHOP’s

intellectual property.

                                   - 2 -
          IHOP filed suit and moved for a preliminary injunction to

prevent McNeal from continuing to use its trademarks and other

intellectual property.     The district court granted IHOP’s motion

for preliminary injunction and later ordered McNeal to show cause

why he should not be held in contempt when he had violated the

injunction.     After McNeal failed to respond, the court entered a

contempt order and arrest warrant for McNeal.   The court rescinded

this order, however, after IHOP successfully obtained possession of

the restaurant and all of its intellectual property.

          IHOP moved for summary judgment on the remaining issues

that McNeal owed IHOP nearly $400,000 in pre-termination fees, more

than $500,000 in past-termination fees, and damages for McNeal’s

continued use of IHOP’s intellectual property after the franchise

was terminated.     IHOP also sought attorney’s fees, prejudgment

interest, and treble damages under the Lanham Act for the trademark

infringement.    McNeal responded, making conclusory statements that

he had not defaulted under the Franchise Agreement and attaching an

affidavit from his accountant, which stated McNeal was not in

default and IHOP’s audit figures were incorrect. The affidavit did

not, however, address McNeal’s failure to keep thirty-six months of

sales records as required by the Franchise Documents.

          In a letter order, the district court granted summary

judgment to IHOP, finding that even if McNeal did not default by

underpaying IHOP, his failure to keep thirty-six months of sales

                                - 3 -
records   as     required      by   the    Franchise        Documents   provided    a

sufficient     independent      ground      for    IHOP’s     termination   of    the

Franchise    Agreement.         The    court      awarded    IHOP   $915,432.82     in

contract damages and $75,000 for compensatory damages under the

Lanham Act.

            This court reviews a district court’s grant of summary

judgment de novo.           Higgins v. E.I. DuPont de Nemours & Co., 863

F.2d 1162, 1167 (4th Cir. 1988).               Summary judgment is proper “if

the   pleadings,       depositions,       answers     to    interrogatories,      and

admissions on file, together with affidavits, if any, show that

there is no genuine issue as to any material fact and that the

moving party is entitled to a judgment as a matter of law.”                      Fed.

R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322

(1986).   The court construes the evidence and draws all reasonable

inferences in the light most favorable to the non-movant.                          See

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).                   A mere

scintilla of proof, however, will not suffice to prevent summary

judgment; the question is “not whether there is literally no

evidence, but whether there is any upon which a jury could properly

proceed   to    find    a    verdict   for     the   party”     resisting   summary

judgment.      Id. at 251 (internal quotation marks omitted).

            On appeal, McNeal alleges that his accountant calculated

the correct sales totals, that IHOP’s calculations were erroneous,

and that he therefore did not default on the Franchise Agreement.

                                          - 4 -
In   addition,   McNeal   claims   IHOP    falsified   records    and   made

fraudulent statements concerning the default.            McNeal does not

challenge the amount of compensatory damages granted to IHOP.

           While McNeal produced an affidavit from his accountant

purporting to show that his calculations were correct and IHOP’s

were incorrect, he has failed to refute IHOP’s alternate and

adequate   reason   for   the   default--that   McNeal   failed    to   keep

business records for thirty-six months as required under the

Franchise Documents. Thus, even if McNeal established IHOP’s audit

was incorrect, because he has not established that he maintained

thirty-six months of sales documents, IHOP still had a basis for

determining McNeal defaulted under the Franchise Documents.              We

therefore find the district court properly granted summary judgment

to IHOP.   We decline to consider McNeal’s allegations that IHOP

falsified records and made false statements to the court, because

these claims are raised for the first time on appeal.        See Muth v.

United States, 1 F.3d 246, 250 (4th Cir. 1993).

           For the foregoing reasons, we affirm the district court’s

order.   We dispense with oral argument because the facts and legal

contentions are adequately presented in the materials before the

court and argument would not aid the decisional process.

                                                                  AFFIRMED

                                   - 5 -