CHRIN HAULING, INC. v. CHRIN

CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 23, 2023
Docket5:21-cv-03328
StatusUnknown

This text of CHRIN HAULING, INC. v. CHRIN (CHRIN HAULING, INC. v. CHRIN) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CHRIN HAULING, INC. v. CHRIN, (E.D. Pa. 2023).

Opinion

_______________F_O__R_ _T_H__E_ _E_A_S_T__E_R__N_ _D_I_S_T_R__IC_ T OF PENNSYLVANIA

CHRIN HAULING, INC., et al., : Plaintiffs, : : v. : Civil No. 5:21-cv-03328-JMG : JAMES T. CHRIN, : Defendant. : __________________________________________

MEMORANDUM OPINION GALLAGHER, J. October 23, 2023 I. OVERVIEW Plaintiffs Chrin Hauling, Inc., Chrin Brothers, Inc., and Chrin of Delaware, Inc. (collectively, “Plaintiffs”) have alleged claims against Defendants James Chrin and Chrin Waste Systems, Inc. d/b/a Control Waste Systems and Control Management System (“CMS”). Plaintiffs’ claims arise out of a longstanding intra-family dispute regarding James Chrin’s waste management business dealings outside of the Chrin family businesses. Before the Court are cross-motions for summary judgment: the parties believe that there is no dispute of material fact and request this Court to rule on the issues as a matter of law. For the reasons that follow, Defendants’ motions are granted in part and denied in part. Plaintiffs’ motion is denied. The Court dismisses Plaintiffs’ Lanham Act claim (Count I) and declines to exercise supplemental jurisdiction over Plaintiffs’ remaining (state law) claims. They will be dismissed without prejudice so that Plaintiffs may bring them in state court. II. BACKGROUND A. Relevant Facts Plaintiffs are three family-run businesses founded by the late Charles Chrin, See Plaintiffs’ Statement of Facts (“PSOF”) at ¶¶ 1–17, ECF No. 63-2, and they provide a range of and land development services. Id. at ¶ 5; Am. Compl. at ¶ 20. Until his death in June 2018, Charles Chrin was the principal shareholder and President of Plaintiffs. Id. at ¶ 13. Charles Chrin had three sons: Dennis, Gregory, and Defendant James Chrin. After Charles Chrin’s death, Gregory and Dennis Chrin became the President and Vice President, respectively, and the sole directors of Plaintiffs. Id. at ¶¶ 14, 16.1

Plaintiffs market their services to the greater Lehigh Valley area. This includes Northampton County and portions of Lehigh and Bucks Counties, and it encompasses the towns of Easton, Bethlehem, Allentown, Nazareth, and Quakertown. Id. at ¶ 21. Their largest customer is Lehigh Valley Health Network, which is also a customer of Defendant CMS. Id. at ¶ 44. Plaintiffs and CMS also share the following large accounts in the greater Lehigh Valley: St. Luke’s University Health Network; Porsche Logistics Services LLC; Victaulic Company; and UGI Corporation. Id. at ¶ 45. During the 1980s, Defendant Chrin worked for Chrin, Inc. Id. at ¶ 57. In the early 1990s, Defendant Chrin left his employment with Plaintiffs to work for Chambers, which had recently

acquired Plaintiffs’ waste hauling business. Id. at ¶ 58. Once Plaintiffs began offering waste hauling services again, in 1996, Defendant Chrin was re-hired by Chrin Hauling as a salesperson. Id. at ¶¶ 59–60. His responsibilities included, among other things, selling waste-related services and equipment and maintaining customer relationships. Id. at ¶ 61. In 2016, Charles Chrin reassigned Defendant Chrin to Chrin family business unrelated to waste management, Id. at ¶ 66, because of Defendant Chrin’s continued activities with CMS, see Joint Appendix (“JA”) at

1 Dennis, Gregory, and a trust created for Defendant Chrin’s benefit each own a one-third share of Chrin Hauling. Gregory and a trust created for Gregory’s benefit own all the voting shares in Chrin Brothers; the non-voting shares are owned by Dennis, Gregory, and Defendant Chrin’s Trust. Gregory and Gregory’s Trust own all the voting shares in Chrin of Delaware; the non- voting shares are owned by Dennis, Gregory, and Defendant Chrin’s Trust. PSOF at ¶ 14. 2 Defendant Chrin’s employment with Chrin Hauling for, among other reasons, his employment at CMS. PSOF. at ¶ 77, ECF No. 63-2. CMS was incorporated in Pennsylvania in January 1990, id. at ¶ 79, and employs only Jim Chrin and his wife, Jacquelyn Chrin, Resp. to PSOF (“PSOF Resp.”) at ¶ 91, ECF No. 68.

Although the company’s Articles of Incorporation identify its name as “Chrin Waste Systems, Inc. Trading as Control Management Systems, Inc.,” PSOF. at ¶ 79, ECF No. 63-2., the company does business as “CMS,” a condensed version of Control Management Systems, id. at ¶ 83. CMS sells, leases, and services trash compactors. Id. at ¶ 86. CMS does not have logos or other trade dress on its equipment or on the clothing of its agents. Id. at ¶ 99. During her May 24, 2022 deposition, Jacqueline Chrin testified that CMS avoided using the term “Chrin” because Plaintiffs were already using the word. Id. at ¶ 84. Defendant Chrin is responsible for CMS’s compactor sales, leasing, repair, and marketing. Id. at ¶ 104–05. Defendant Chrin held many of these same responsibilities in his employment with Chrin Hauling. Id. at ¶ 62–65. CMS’s business relationships are based on

people knowing Defendant Chrin. Id. at ¶ 103. From at least 2008 until the termination of his employment with Plaintiffs in July 2021, Defendant Chrin worked for both CMS and one of the Chrin family companies. Id. at ¶ 126. Owing to Defendant Chrin’s dual roles in competing companies within the same market, the record contains recent examples of customer confusion. Id. at ¶ 46. In some instances, CMS’ customers and vendors have tried to pay Plaintiffs for services provided by CMS. Id. at ¶ 156. Plaintiffs have been aware of Defendant Chrin’s dual roles for some time. On August 26, 2008, a lawyer representing the Plaintiffs sent a letter to Defendant Chrin expressing concern regarding his employment with CMS and requesting that Defendant Chrin divulge any other

3 outside employment could “jeopardize the company or otherwise tarnish the goodwill and trademark recognition of the same.” Id. B. Procedural History Plaintiffs commenced this lawsuit against Defendants on July 27, 2021, alleging claims

of federal and state trademark infringement as well as state claims for fiduciary breach and conversion. Compl., ECF No. 1. Plaintiffs filed an Amended Complaint on September 13, 2021, adding CMS. Am. Compl., ECF No. 9. No motions to dismiss were filed in this case, but there was a round of summary judgment briefing prior to the motions presently before the Court. In March and September of 2022, the parties filed cross-motions for summary judgment. ECF No.s 29, 41–42. The Court initially agreed to withhold its ruling on these motions in light of then ongoing settlement discussions, and ultimately denied these motions without prejudice while the parties continued to seek a global resolution. ECF No. 58. Following the collapse of those discussions, the parties refiled their respective motions for summary judgment. ECF No.s 61, 63, 64.

III. SUMMARY JUDGMENT STANDARD Summary judgment is properly granted when there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). Facts are material if they “might affect the outcome of the suit under the governing law.” Physicians Healthsource, Inc. v. Cephalon, Inc., 954 F.3d 615, 618 (3d Cir. 2020) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A dispute as to those facts is genuine if the “evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. (quoting Anderson, 477 U.S. at 248). “We view all the facts in the light most favorable to the

4 citation omitted). The party moving for summary judgment must first “identify[] those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.”

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CHRIN HAULING, INC. v. CHRIN, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chrin-hauling-inc-v-chrin-paed-2023.