Howard Johnson Co. v. Khimani

892 F.2d 1512, 1990 WL 1410
CourtCourt of Appeals for the Eleventh Circuit
DecidedJanuary 29, 1990
DocketNo. 87-3874
StatusPublished
Cited by83 cases

This text of 892 F.2d 1512 (Howard Johnson Co. v. Khimani) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Howard Johnson Co. v. Khimani, 892 F.2d 1512, 1990 WL 1410 (11th Cir. 1990).

Opinion

KRAVITCH, Circuit Judge:

Defendants Torbay Holding, Inc. (Tor-bay), its wholly owned subsidiary Maralak, Ltd., and its principal shareholder Amir Khimani (referred to collectively as Mara-lak), appeal the district court’s finding of civil contempt and imposition of sanctions in a trademark infringement action brought by plaintiffs Howard Johnson Co., Inc., Howard Johnson Franchise Systems, Inc., and Howard Johnson Restaurant Franchises, Inc. (referred to collectively as Howard Johnson). Because we conclude that the district court did not abuse its discretion in holding the defendants in civil contempt and imposing sanctions, we affirm.

FACTS

On February 6, 1984, Maralak and Howard Johnson entered into a franchise agreement respecting the operation of three Howard Johnson motor lodges and restaurants in St. Petersburg, Cocoa, and Melbourne, Florida. After the expiration of the agreement on February 6, 1986, the defendants continued to hold out these properties as authorized Howard Johnson franchises. On July 25, 1986, Howard Johnson filed the present trademark infringement suit and sought a preliminary injunction to halt Maralak’s conduct. On August 4, 1986, the court granted Howard Johnson’s motion and enjoined the defendants from using the words “HOWARD JOHNSON” or “HOWARD JOHNSON’S” or the Howard Johnson quality stripe design service mark or the orange roof and blue cupola design service mark, or “any colorable imitations of these trade names and federally-registered servicemarks” in connection with the operation, promotion, and sale of services of defendants’ St. Pe-tersburg, Cocoa, and Melbourne, Florida motor lodges and restaurants. Additionally, the defendants were prohibited from engaging in any advertising or sales practices that in any way diluted or disparaged these service marks and trade names. The district court’s preliminary injunction was subsequently affirmed by this court. Howard Johnson Co. v. Khimani, 819 F.2d 1148 (11th Cir.1987) (mem.).

The defendants’ efforts at compliance were dilatory and grudging. At least through August 17, 1986, the defendants’ facilities continued to hold themselves out to the public as Howard Johnson franchises. All of the exterior signs identified the facilities as Howard Johnson motor lodges and restaurants and the buildings each had the distinctive Howard Johnson orange roof and blue cupola. The lobbies, restaurants, and guest rooms were all replete with articles bearing the Howard Johnson logo. Additionally, the personnel at these locations continued to refer to their facilities as Howard Johnson when speaking to patrons. Substantial compliance was not achieved until the eve of a September 5, 1986, contempt hearing.

Howard Johnson filed a second motion for contempt on November 6, 1986, after it discovered that the plastic coverings used by the defendants to block out the signs at the Melbourne and Cocoa locations had blown off and had not been replaced. The plaintiffs also noticed that two billboards advertising the Cocoa facility still retained the orange “roofline” logo of Howard Johnson. The trial court denied the plaintiffs’ motion for contempt after the defendants removed the signs and obscured the “roof-line” logo from the billboards three days prior to the second contempt hearing.

The third motion for contempt, which is the subject of this appeal, was filed by Howard Johnson on April 21, 1987, after discovering that the defendants had begun operating their Cocoa and Melbourne motor lodges and restaurants under the name “H.J. Inns.” The trial court had testimony from Azim Visram, the general manager of the Cocoa and Melbourne facilities, concerning a November 1986 meeting between Visram, Khimani, and Khimani’s son Ariff, who was president of defendant [1515]*1515Torbay Holding.1 Visram testified that at this meeting, “it was decided that we would get a name that would be close to Howard Johnson’s name, yet it would not infringe on their name.... ” Visram later affirmed that “the idea was to get as close to Howard Johnson as you could without infringing.” Visram testified that during or shortly after this meeting, the Khimanis, with the final approval of defendant Amir Khimani, decided to rename the facilities “H.J. Inns.”

Pursuant to Amir Khimani’s decision to rename the facilities, “H.J. Inns” was painted in white lettering against a dark blue background on the former Howard Johnson sign at the Cocoa lodge. Previously, the sign had displayed “HOWARD JOHNSON’S” in white letters on a light blue background. The name “H.J. Inns” was also placed with removable black plastic letters on the marquee sign at the Melbourne lodge. Additionally, the employees at both locations answered their phones and identified the facilities to the public as “H.J. Inns.”

The trial court found that the defendants’ operation of the Melbourne and Cocoa facilities under the name “H.J. Inns” and the “H.J. Inns” signs constituted a violation of the court’s preliminary injunction. It therefore granted the plaintiffs’ third motion for civil contempt and, in a subsequent hearing, imposed compensatory damages, costs, and attorneys’ fees in the amount of $234,475.15. On appeal, the defendants challenge both the district court’s finding of contempt and the amount of sanctions.

JURISDICTION

As a preliminary matter, the appellees assert that this court lacks jurisdiction to hear Maralak’s appeal because it is allegedly based upon a non-final interlocutory order of civil contempt. Appellees rely on the Supreme Court’s holding in Fox v. Capital Co., “that except in connection with an appeal from a final judgment or decree, a party to a suit may not review upon appeal an order fining or imprisoning him for the commission of a civil contempt.” 299 U.S. 105, 107, 57 S.Ct. 57, 58, 81 L.Ed. 67 (1936); see Doyle v. London Guarantee & Accident Co., 204 U.S. 599, 27 S.Ct. 313, 314, 51 L.Ed. 641 (1907); Rosenfeldt v. Comprehensive Accounting Service Corp., 514 F.2d 607, 613 n. 9 (7th Cir.1975).

Appellees are correct that a finding of civil contempt is generally not reviewable on interlocutory appeal. Fox, 299 U.S. at 107, 57 S.Ct. at 58; Combs v. Ryan’s Coal Co., 785 F.2d 970, 976 (11th Cir.), cert. denied, 479 U.S. 853, 107 S.Ct. 187, 93 L.Ed.2d 120 (1986). However, there are several exceptions to this principle. Most significant is the distinction this court has drawn

between orders imposing a fine or penalty for contempt which may be avoided by the party purging himself of the contempt by complying with the order, and those in which a fine or penalty is imposed within a time certain that may not be avoided by some other form of compliance. The former is not appealable in an interlocutory action; the latter may be taken on appeal immediately.

Combs, 785 F.2d at 976; Drummond Co. v. District 20, United Mine Workers of America, 598 F.2d 381, 384 (5th Cir.1979).2 If the contempt penalties imposed are conditional or subject to modification, then they are not reviewable on appeal. Combs, [1516]

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892 F.2d 1512, 1990 WL 1410, Counsel Stack Legal Research, https://law.counselstack.com/opinion/howard-johnson-co-v-khimani-ca11-1990.