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JTH Tax, Inc. v. Frashier

United States Court of Appeals for the Fourth Circuit
624 F.3d 635 (4th Cir. 2010)


JTH Tax, Inc. (Liberty) (plaintiff) franchises tax preparation offices throughout the country. Harry Frashier (defendant) entered into a franchise agreement with Liberty in 2006. Liberty brought suit against Frashier in federal court under its diversity jurisdiction, alleging violations of post-termination provisions of the franchise agreement. Liberty’s complaint sought $80,000.00 in damages and a permanent injunction requiring Frashier to comply with the post-termination provisions. Liberty later filed a motion for summary judgment in which Liberty reduced its claim for money damages to $60,456.25. The district court then dismissed Liberty’s complaint for its failure to meet the $75,000.00 amount-in-controversy requirement for diversity actions. Liberty appealed.

Rule of Law


Holding and Reasoning (Motz, J.)

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