Commercial Roofing Specialties, Inc. v. CRS Roofing Company

CourtDistrict Court, N.D. Georgia
DecidedFebruary 13, 2023
Docket1:21-cv-02758
StatusUnknown

This text of Commercial Roofing Specialties, Inc. v. CRS Roofing Company (Commercial Roofing Specialties, Inc. v. CRS Roofing Company) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commercial Roofing Specialties, Inc. v. CRS Roofing Company, (N.D. Ga. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

COMMERCIAL ROOFING SPECIALTIES, INC., Plaintiff, Civil Action No. v. 1:21-cv-02758-SDG CRS ROOFING COMPANY and CLAYTON SHIPLEY, Defendants.

OPINION AND ORDER This matter is before the Court on Plaintiff Commercial Roofing Specialties, Inc.’s (CRS) motion for default judgement against Defendants CRS Roofing Company and Clayton Shipley (collectively, Defendants) [ECF 21]. For the following reasons, CRS’s motion is GRANTED in part and DENIED without prejudice in part. I. Background1 CRS, a roofing supply retailer and cargo unloading servicer, initiated this action against Defendants on July 9, 2021, for unauthorized use of its trade name

1 The following well-pleaded facts are deemed admitted for purposes of this Order. Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005). and service mark (the Mark).2 As alleged in the verified complaint, since 1981, CRS has used the Mark in connection with its business in Georgia, Florida, and Tennessee, including in Knoxville, Tennessee.3 In May 2020, CRS discovered that Defendants were using the Mark for their competing roofing supply business in

Sevierville, Tennessee, which is near Knoxville.4 CRS sent Defendants a demand letter, and, after negotiations, the parties executed a settlement agreement on September 16, 2020 (the Agreement).5 The

Agreement required Defendants to change their business name and cease all use of the Mark by May 16, 2021; transfer their domain name to CRS; and never use any mark or name like the Mark.6 In exchange for Defendants’ promises, CRS paid them $30,000.7

Defendants continued using the Mark and domain name beyond May 16, 2021, despite CRS’s numerous attempts to correspond.8 CRS has

2 ECF 1, at 1, 4. 3 Id. at 3–4. 4 Id. at 5. 5 Id. at 7. 6 Id. 7 Id. 8 Id. at 8. asserted federal claims for trademark infringement9 and unfair competition,10 and state law claims for breach of contract,11 unfair competition,12 and deceptive trade practices.13 CRS seeks injunctive relief, compensatory damages, restitution, Defendants’ profits resulting from their use of the Mark, and attorneys’ fees.14

Defendants have neither answered nor appeared in this Court in any manner, despite having been properly served on July 13, 2021.15 Defendants’ deadline to answer was August 3.16 The Clerk of Court entered default as to

Defendants on August 30. On November 15, 2021, CRS moved for a default judgment.17 That motion is now ripe for consideration.

9 Id. at 9. 10 Id. at 10. 11 Id. at 11. 12 Id. at 13. 13 Id. at 14. 14 Id. at 17–18. 15 ECF 13; ECF 14. 16 Id. 17 ECF 21. The motion for default judgment was erroneously docketed as a notice and was consequently untimely submitted to the Court. The Court corrected the error to issue this Order. II. Legal Standard Federal Rule of Procedure 55 establishes a two-step process for a party to obtain a default judgment. First, the party seeking default must obtain a Clerk’s entry of default pursuant to Rule 55(a) by providing evidence “by affidavit or

otherwise” that the opposing party “has failed to plead or otherwise defend.” Fed. R. Civ. P. 55(a). Second, after the Clerk has made an entry of default, the party seeking the judgment must file a motion under Rule 55(b)(1) or (2). Id. See also Frazier v. Absolute Collection Serv., Inc., 767 F. Supp. 2d 1354, 1360 n.1 (N.D. Ga.2011)

(“First the clerk must enter a party’s default . . . the party [seeking the default judgment] must then apply to the court for a default judgment.”). A defaulted defendant is deemed to have admitted the plaintiff’s well-

pleaded allegations of fact. Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005). However, a defaulted defendant is not held to admit facts that are not well pleaded or which constitute conclusions of law. Id. “[A] default judgment cannot stand on a complaint that fails to state a claim.” Chudasama v. Mazda Motor

Corp., 123 F.3d 1353, 1371 n.41 (11th Cir. 1997) (citing Nishimatsu Constr. Co. v. Hous. Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Therefore, when considering a motion for default judgment, a court must investigate the legal sufficiency of the

allegations and ensure the complaint states a plausible claim for relief. Crossfit, Inc. v. Quinnie, 232 F. Supp. 3d 1295, 1304 (N.D. Ga. 2017). See also Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1245 (11th Cir. 2015) (“Conceptually . . . a motion for default judgment is like a reverse motion to dismiss for failure to state a claim.”). Ultimately, an entry of a default judgment is committed to the discretion of the

district court. Hamm v. DeKalb Cnty., 774 F.2d 1567, 1576 (11th Cir. 1985). III. Discussion A. Jurisdiction and Venue The Court has subject matter jurisdiction over CRS’s federal trademark

infringement and unfair competition claims pursuant to 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331, 1337, and 1338. CRS’s state law claims share a common nucleus of operative facts with its federal law claims. Through their default, Defendants admitted facts supporting CRS’s federal causes of action. Accordingly, the Court

exercises supplemental jurisdiction over CRS’s state law claims pursuant to 28 U.S.C. § 1367(a). See Growler Station, Inc. v. Foundry Growler Station, LLC, 2019 WL 3769639, at *11 (N.D. Ga. Jan. 9, 2019) (exercising supplemental

jurisdiction over a plaintiff’s Georgia state law claims for trademark infringement and violation of the Uniform Deceptive Trade Practices Act arising “out of common nucleus of operative fact with the federal trademark infringement claims”). In addition, as CRS alleges, Defendants consented to personal jurisdiction and venue in this district as parties to the Agreement, which contains a forum

selection clause directing that disputes “shall be brought in the U.S. District Court for the Northern District of Georgia.”18 When parties have agreed to a valid forum selection clause, the clause should be given controlling weight in all but the most

exceptional cases. Atlantic Marine Const. Co., Inc. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49, 51 (2013). Here, the Court finds its exercise of subject matter jurisdiction, personal jurisdiction, and venue are proper. B. CRS’s Claims

1. Federal Trademark Infringement CRS asserts a claim for federal trademark infringement under 15 U.S.C. § 1114

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Bluebook (online)
Commercial Roofing Specialties, Inc. v. CRS Roofing Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commercial-roofing-specialties-inc-v-crs-roofing-company-gand-2023.