CHHJ Franchising LLC v. Spaulding

CourtDistrict Court, M.D. Florida
DecidedJanuary 22, 2024
Docket8:23-cv-01979
StatusUnknown

This text of CHHJ Franchising LLC v. Spaulding (CHHJ Franchising LLC v. Spaulding) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CHHJ Franchising LLC v. Spaulding, (M.D. Fla. 2024).

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

CHHJ FRANCHISING LLC,

Plaintiff,

v. Case No. 8:23-cv-01979-WFJ-AAS

VICTOR SPAULDING and SPAULDING HAULING & MOVING LLC,

Defendants.

___________________________________/

ORDER Before the Court is Spaulding Hauling & Moving LLC’s (“Spaulding Hauling”) and Victor Spaulding’s (collectively, “Defendants”) Motion to Dismiss (Dkt. 29) CHHJ Franchising LLC’s (“Plaintiff”) Amended Complaint (Dkt. 25). Plaintiff filed a Response (Dkt. 32) and Defendant submitted a Reply (Dkt. 33). After careful consideration, the Court grants in part and denies in part Defendants’ Motion. BACKGROUND Plaintiff, a moving and junk removal franchise, brings this seven-count Amended Complaint against Defendants, their former franchisees. Plaintiff accuses Defendants of breaching a post-termination non-compete agreement and of continuing their use of Plaintiff’s trademarks to advertise a competing business after the parties’ relationship had terminated. Plaintiff alleges the following facts

relevant to the instant Motion to Dismiss: Since about 2003, Plaintiff has operated as the College Hunks Hauling Junk (“CHHJ”) franchise. Dkt. 25 ¶¶ 9–12. During that time, it has made use of various names and marks that are registered with the

U.S. Patent and Trademark Office. Id. In May 2021, the parties agreed that Defendants would open a CHHJ franchise business in New Jersey. Id. ¶ 19. For a time, Defendants operated their CHHJ business, governed by a franchise agreement (“Franchise Agreement”) signed by the parties.

Defendants allegedly failed to comply with certain provisions of the Franchise Agreement. Id. ¶¶ 45–52. Subsequently, Plaintiff sent a Notice of Default with Right to Cure on January 27, 2023, two Notices of Default and Termination

with Opportunity to Cure in February and April 2023, and a Notice of Termination on June 26, 2023. Id. Defendants did not respond to any of Plaintiff’s notices. Id. Further, Plaintiffs allege that Defendants began operating a competing moving and junk

hauling business prior to and after the Franchise Agreement was terminated. Id. The Complaint states that, after the termination, Defendants used CHHJ trademarks in connection with the competing business. See generally id. Specifically, Plaintiff asserts that Defendants operated their new business, Spaulding Hauling & Moving from the same address as the CHHJ franchise. Id. ¶

56. At that address, Defendants allegedly continued to display an exterior sign bearing the CHHJ mark while also using equipment labeled “Spaulding Hauling & Moving.” Id. ¶ 56. Plaintiff further avers that, after termination of the Franchise

Agreement, Defendants advertised both the CHHJ franchise and Spaulding Hauling on third-party websites (the Chamber of Commerce, a local Chamber of Commerce webpage, Nextdoor, and Alignable). Id.¶¶ 59–66. Several of the websites bearing CHHJ marks advertised phone numbers and an address connected

to Spaulding Hauling & Moving. Id. ¶¶ 64, 74. Plaintiff sent Defendants a Cease & Desist and Demand for Payment on July 26, 2023. Id. ¶ 80. After Defendants did not respond, Plaintiff filed the instant

lawsuit. Id. ¶ 81. Plaintiffs allege seven counts: (1) Breach of Franchise Agreement, against Spauling Hauling; (2) Breach of Guaranty, against Mr. Spaulding; (3) Federal Trademark Infringement; (4) Federal Unfair Competition and False Designation of Origin; (5) Florida Common Law Unfair Competition;

(6) a request for preliminary and permanent injunction; and (7) a request for attorney’s fees. Defendants filed the instant Motion to Dismiss on November 2, 2023. They

argue that Counts III through VII fail to state a claim upon which relief may be granted. Dkt. 29 at 13, 19, 22. Moreover, they argue that Counts I and II arise under state law, so the Court should decline jurisdiction over them after its

dismissal of the federal question claims. Id. at 22–23. In their Motion, Defendants contest the allegation that they operated a competing business post-termination. Dkt. 29 at 17–18. They also contest that they control third party websites or

exterior signage at their rented office, and that the phone numbers posted on webpages with the CHHJ marks were transferred to Spaulding Hauling & Moving. Id. In support of their factual claims, Defendants attached exhibits to their Motion. For the reasons outlined below, the Court grants the Motion in part and

denies it in part. LEGAL STANDARD To survive a Fed. R. Civ. P. 12(b)(6) motion to dismiss, the plaintiff must

plead sufficient facts to state a claim that is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. In

considering the motion, the Court must accept all factual allegations of the complaint as true and construe them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008) (citation omitted). The

Court should limit its “consideration to the well-pleaded factual allegations, documents central to or referenced in the complaint, and matters judicially noticed.” La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004)

(citations omitted). DISCUSSION As an initial matter, the Court did not consider the exhibits attached to

Defendants’ Motion to Dismiss. Thus, it need not accept Defendants’ invitation to convert the Motion into one for summary judgment. See Harper v. Lawrence Cnty., 529 F.3d 1227, 1232 (11th Cir. 2010). In ruling on the Motion to Dismiss, the Court will discuss the trademark infringement and unfair competition claims first,

followed by Plaintiff’s requests for injunctive relief and attorneys fees. A. Counts III, IV, and V: Trademark Infringement and Unfair Competition Count III asserts that Defendants violated Section 32 of the Lanham Act,

codified at 15 U.S.C. § 1114. Dkt. 25 ¶ 96. Counts IV and V allege that Defendants engaged in unfair competition, in violation of Section 43(a) of the Lanham Act (codified at 15 U.S.C. § 1125) and Florida common law. Dkt. 25 ¶¶ 97–100. Defendants concede that “the analysis is the same” for claims under §1114, § 1125,

and Florida common law. Babbit Electronics, Inc. v. Dynascan Corp., 38 F.3d 1161, 1181 (11th Cir. 1994); Dkt. 29 at 19–20. Because Plaintiffs state a claim for trademark infringement under Count III, they also state a claim for unfair

competition under Counts IV and V. Babbit, 38 F.3d at 1181 (explaining that § 1125 is broader than § 1141, so the facts stating a cause of action under § 1114 will also state a claim under § 1125).

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