PC Puerto Rico LLC v. El Smaili

925 F. Supp. 2d 222, 2013 WL 710307, 2013 U.S. Dist. LEXIS 28701
CourtDistrict Court, D. Puerto Rico
DecidedFebruary 28, 2013
DocketCivil No. 12-1973 (FAB)
StatusPublished
Cited by1 cases

This text of 925 F. Supp. 2d 222 (PC Puerto Rico LLC v. El Smaili) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PC Puerto Rico LLC v. El Smaili, 925 F. Supp. 2d 222, 2013 WL 710307, 2013 U.S. Dist. LEXIS 28701 (prd 2013).

Opinion

MEMORANDUM AND ORDER

FRANCISCO A. BESOSA, District Judge.

I. BACKGROUND

On November 30, 2012, plaintiff PC Puerto Rico, LLC (PCPR) filed a complaint against defendant Nidal K. El Smaili, John Doe, and ABC Company, Inc. (Docket No. 1.) In the complaint, plaintiff alleges trademark infringement and dilution pursuant to the Lanham Act, 15 U.S.C. Section 1051, et seq., the Trademark Dilution Revision Act, 15 U.S.C. Section 1125, et seq., and the Petroleum Marketing Practices Act, 15 U.S.C. Section 2801, et seq. Id. The complaint also alleges Puerto Rico law claims. Id. On that [224]*224same date, plaintiff filed an ex parte motion for a temporary restraining order, a preliminary injunction, a permanent injunction, and an order to show cause. (Docket No. 2.) On December 3, 2012, the Court denied plaintiffs motion for an ex parte temporary restraining order. (Docket No. 6.) Plaintiffs motion for a preliminary injunction, a permanent injunction, and an order to show cause remained pending. Id. Defendant failed to answer plaintiffs complaint. On February 12, 2013, the Court held a hearing regarding plaintiffs motion for a preliminary injunction. (Docket Nos. 14 & 15.) At the hearing, the Court indicated that the defendant is in default and that he could not present evidence. He was represented by counsel who could cross-examine the witnesses presented by PCPR. During the hearing, the Court instructed the parties to file proposed findings of fact and conclusions of law by February 15, 2013. (Docket No. 14.) On February 14, 2013, plaintiff submitted its proposed findings of fact and conclusions of law. (Docket No. 16.) On February 19, 2013, five days after the Court’s deadline, defendant filed a memorandum containing his proposed findings of fact and conclusions of law. (Docket No. 17.) After considering the proposed findings of fact and conclusions of law in addition to the evidence presented at the February 12, 2013 hearing, the Court GRANTS plaintiffs requests for immediate permanent injunctive relief and damages.

II. FINDINGS OF FACT

A. The Sub-Lease Agreements

1. On April 21, 2010 and September 16, 2010, plaintiff PCPR1 and defendant/retailer Nidal K. El Smaili (“defendant”)2 entered into Sub-Lease Agreements pursuant to which defendant was granted the right to buy and resale Texaco3 branded petroleum products and to operate two stations owned by PCPR and located in Camuy, identified as station # 556, and Aguada, identified as station # 662, using [225]*225the Texaco trademark. [Plaintiffs Exhibits 1 (Camuy Station) and 3 (Aguada Station) at p. 1, ¶ 1].

2. The Sub-Lease Agreements were for a term of three (3) years, effective April 1, 2010 and November 1, 2010, respectively, and thereafter on a month to month basis. [Plaintiffs Exhibits 1 (Camuy Station) and 3 (Aguada Station) at p. 1, ¶ 1].

3. The Sub-Lease Agreements continue in effect so long as the primary Lease Agreements continue in force and PCPR does not elect to terminate them in the manner specifically set out in the SubLease Agreements. [Plaintiffs Exhibits 1 (Camuy Station) and 3 (Aguada Station) at p. 9, ¶ 13(a) ].

4. The Sub-Lease Agreements provide that defendant must make all gas and rent payments via electronic wire transfer to a pre-approved bank account of PCPR. [Plaintiffs Exhibits 1 (Camuy Station) and 3 (Aguada Station) at p. 4, ¶ 4(b) ].

5. The Sub-Lease Agreements provide that defendant must maintain the condition of all pumps, tanks, and other equipment owned by PCPR by conducting detailed daily, weekly, and monthly maintenance; these provisions are designed to facilitate PCPR’s compliance with applicable federal and state environmental laws, rules, and regulations, all of which require compliance with strict monitoring and record-keeping programs. [Plaintiffs Exhibits 1 (Camuy Station) and 3 (Aguada Station) at p. 1, ¶¶ 16-20],

6. The Sub-Lease Agreements provide that in the event defendant fails to comply with any of his duties under the agreements, PCPR would be entitled to terminate the agreements. [Plaintiffs Exhibits 1 (Camuy Station) and 3 (Aguada Station) at p. 6, ¶ 7(b) ].

7. The Sub-Lease Agreements authorize their termination pursuant to certain circumstances, including the following: the occurrence of any event which constitutes a breach of contract; if the defendant fails to make his best effort to comply with the provisions of the agreements; in the event the defendant fails to make timely payments of any monies owed to PCPR; in the event the defendant violates the trademarks; in the event that the defendant shuts down a station or stations for a period of 7 consecutive days without selling gasoline; if the defendant commits dishonest, fraudulent, or otherwise illegal acts; or for any termination grounds available under applicable law. [Plaintiffs Exhibits 1 (Camuy Station) and 3 (Aguada Station) at p. 6, ¶ 7(b)(l)-(13) ].

8. Pursuant to the terms of the SubLease Agreements, if PCPR is made a party to any lawsuit or any legal action as a result of any act of defendant resulting in non-compliance with the terms of the Sub Lease Agreements, defendant must indemnify and hold PCPR harmless from all expenses, fines, suits, proceedings, claims, losses, damages, liabilities or actions of any kind or nature, including but not limited to, costs, and attorneys’ fees. [Plaintiffs Exhibits 1 (Camuy Station) and 3 (Aguada Station) at p. 8, ¶ 11].

9. The Sub-Lease Agreements constitute a part of the Franchise Agreements pursuant to the Petroleum Marketing Practices Act (“PMPA”).

B. The Supply Agreements

10. On April 21, 2010 and September 16, 2010, PCPR and defendant entered into Supply Agreements pursuant to which defendant was granted the right to buy and resale Texaco branded petroleum products and to operate the two stations owned by PCPR located in Camuy, identified as # 556, and Aguada, identified as [226]*226# 662, using the Texaco trademark. [Plaintiffs Exhibits 2 (Camuy Station) and 4 (Aguada Station) at p. 1, ¶ 1].

11. The Supply Agreements were for a term of three (3) years, effective April 1, 2010 and November 1, 2010, respectively, and thereafter on a month to month basis; they were subject to the duration of the leasing agreements and continued in effect so long as the lease agreements continued in force. [Plaintiffs Exhibits 2 (Camuy Station) and 4 (Aguada Station) at p. 1, ¶1],

12. The Supply Agreements provide that defendant would only use the marks, registered marks, trademarks, names, service distinctions, and/or color patterns that PCPR expressly authorized the defendant to use as part of the operation of the stations. [Plaintiffs Exhibits 2 (Camuy Station) and 4 (Aguada Station), Supply Agreements at p. 2, ¶ 4].

13. The Supply Agreements provide that in the event defendant failed to comply with any of his duties under the agreements, PCPR would be entitled to terminate them. [Plaintiffs Exhibits 2 (Camuy Station) and 4 (Aguada Station) at p. 4, ¶ 7(b) ].

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925 F. Supp. 2d 222, 2013 WL 710307, 2013 U.S. Dist. LEXIS 28701, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pc-puerto-rico-llc-v-el-smaili-prd-2013.