T CE aD lD iY f’ oS r niR aE D l iT mA iC tO eS d CORP., a C V 19-03432-RSWL-AS x liability company, SUPPLEMENTAL ORDER re: Defendant and Counter- Plaintiff, Claimant Theodoro Vazquez Solis’ Application for v. Default Judgment [61] THEODORO VAZQUEZ SOLIS dba TEDDY’S RED TACOS, an individual, TEDDY’S ORIGINAL RED TACOS dba TEDDY’S RED TACOS, an unknown business entity, WAEL KHALIL dba TEDDY’S RED TACOS, an individual, LLC dba TEDDY’S RED TACOS, a California limited liability company, and DOES 1 through 50, inclusive, Defendants. THEODORO VAZQUEZ SOLIS, an individual, Counter-Claimant, v. dba TEDDY’S RED TACOS, a corporation, NANCY GOMEZ, an individual, JORGE GOMEZ, an indivi dual, and DOES 1 through 50, inclusive, Counter-Defendants.
Counter-Claimant Theodoro Vazquez Solis dba Teddy’s Red Tacos (“Vazquez”) applied for a default judgment against Counter-Defendants Teddy’s Red Tacos, Jorge Gomez, and Nancy Gomez (collectively, “Counter- Defendants”) for counterclaims related to Counter- Defendants’ infringement of Vazquez’s trademark. See generally Appl. for Default J. (“Appl.”), ECF No. 61. On August 16, 2021, the Court granted in part the application as to Vazquez’s counterclaims for false designation/unfair competition under 15 U.S.C. § 1125(a) and declaratory relief against Counter-Defendants and Vazquez’s counterclaims for breach of contract and unjust enrichment against Jorge Gomez and Nancy Gomez (the “Gomezes”) and denied the application as to Vazquez’s remaining counterclaims. See Order re: Def. and Counter-Claimant Theodoro Vazquez Solis’ Appl. for Default J. (“Prior Order”) 33:2-8, ECF No. 63. The Court enjoined Counter-Defendants from activities enumerated in Vazquez’s requested injunction and permitted Vazquez to submit a supplemental brief on his request for damages, attorney’s fees, and costs. Id. at 33:9-34:8. /// On August 31, 2021, Vazquez submitted a
supplemental brief with two exhibits and a supporting
declaration from his counsel. See generally Suppl.
Brief for Proof of Damages in Supp. of Appl. for Default J. (“Suppl. Brief”), ECF No. 64; Ex. A, ECF No. 64-1; Ex. B, ECF No. 64-2; Decl. of Shahrokh Shei k in Supp. of Suppl. Brief (“Suppl. Sheik Decl.”), ECF No. 64-3. The Court incorporates by reference the factual and procedural background set forth in the Prior Order as if fully set forth herein. See Prior Order 2:25-6:20. A. Damages Vazquez previously established entitlement to $33,000 in restitution but failed to sufficiently support his request for $150,000 in damages, which he claimed to be his fifty-percent share of profits from the Pico Location. See id. at 21:24-25:20; Appl. 8:21- 9:22. The only evidence Vazquez submitted in support of his damages request was a declaration stating that Vazquez “believe[s] the Gomezes have realized over $300,000 in profits from the use of [his] Mark and recipes” and that “[t]his number is based on observation of the Pico Location prior to [his] being locked out and based on [his] own expertise in the restaurant business.” Decl. of Theodoro Vazquez Solis in Supp. of Appl. ¶ 24, ECF No. 61-2. In the Prior Order, the Court found that these statements were insufficient to support his damages request but afforded Vazquez an opportunity to submit further evidence. See Prior Order 25:2-20.
Vazquez timely filed a supplemental brief, in which
he states:
It has been difficult for Counter-Claimant to
obtain the necessary discovery to show proof of his loss. As stated in Counter-Claimant’s supporting declaration for the Default Judgment Application, Counter-Claimant is relying on his expertise as an experienced restauranter and businessman based in Los Angeles to calculate his damages. Counter- Claimant calculates, based on his observation of the Pico Location from the documents and sales he could review prior to being locked out, that the Pico Location did substantial business from use of his Mark and recipes. Thus, Counter-Claimant requests that the Court award him damages in the amount of $150,000. Suppl. Brief 2:15-21. Vazquez essentially reiterates the statements made in his earlier declaration, providing no additional declaration or other evidence to substantiate his requested damages.1 Although the well-pleaded factual allegations of a complaint are deemed true upon default, the plaintiff “must ‘prove up’ the amount of damages.” Landstar Ranger, Inc. v. Parth Enters., Inc., 725 F. Supp. 2d 916, 923 (C.D. Cal. 2010) (citations omitted); see TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18
1 Moreover, it remains unclear whether Vazquez seeks $150,000 in damages for breach of contract or lost profits under the Lanham Act. See Prior Order 25:18-20 (“If Vazquez chooses to submit further evidence, he must also clarify whether he seeks damages by way of breach of contract or 15 U.S.C. § 1117(a).”). (9th Cir. 1987). “[C]ourts have accepted less precise
estimates of damages where a defendant frustrates the
discovery of a precise amount by defaulting in the
action.” Wecosign, Inc. v. IFG Holdings, Inc., 845 F.
Supp. 2d 1072, 1084 (C.D. Cal. 2012). Nevertheless,
Vazquez must establish a reasonable basis f or calculating his requested damages. See Cal. Civ. Code § 3301 (“No damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and origin.”); Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400, 1407 (9th Cir. 1993) (“As a general rule, damages which result from a tort must be established with reasonable certainty. The Supreme Court has held that ‘[d]amages are not rendered uncertain because they cannot be calculated with absolute exactness,’ yet, a reasonable basis for computation must exist.” (citation omitted) (quoting Eastman Kodak Co. v. S. Photo Materials Co., 273 U.S. 359, 379 (1927))), abrogated on other grounds by SunEarth, Inc. v. Sun Earth Solar Power Co., Ltd., 839 F.3d 1179 (9th Cir. 2016) (en banc). While the Court understands that it is difficult for Vazquez to measure damages given Defendants’ lack of participation in this action, it cannot use Vazquez’s vague and speculative statements to award damages. Vazquez has not given the Court sufficient information— such as sales data, the relevant time period for such sales, or the types of documents reviewed—that would allow the Court to conclude that Vazquez’s estimate is
reasonable. Nor has Vazquez sought to quantify his own
lost profits. Based on the evidence submitted, the
Court cannot estimate either Counter-Defendants’ profits
or Vazquez’s lost profits.2 Accordingly, the Court has
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T CE aD lD iY f’ oS r niR aE D l iT mA iC tO eS d CORP., a C V 19-03432-RSWL-AS x liability company, SUPPLEMENTAL ORDER re: Defendant and Counter- Plaintiff, Claimant Theodoro Vazquez Solis’ Application for v. Default Judgment [61] THEODORO VAZQUEZ SOLIS dba TEDDY’S RED TACOS, an individual, TEDDY’S ORIGINAL RED TACOS dba TEDDY’S RED TACOS, an unknown business entity, WAEL KHALIL dba TEDDY’S RED TACOS, an individual, LLC dba TEDDY’S RED TACOS, a California limited liability company, and DOES 1 through 50, inclusive, Defendants. THEODORO VAZQUEZ SOLIS, an individual, Counter-Claimant, v. dba TEDDY’S RED TACOS, a corporation, NANCY GOMEZ, an individual, JORGE GOMEZ, an indivi dual, and DOES 1 through 50, inclusive, Counter-Defendants.
Counter-Claimant Theodoro Vazquez Solis dba Teddy’s Red Tacos (“Vazquez”) applied for a default judgment against Counter-Defendants Teddy’s Red Tacos, Jorge Gomez, and Nancy Gomez (collectively, “Counter- Defendants”) for counterclaims related to Counter- Defendants’ infringement of Vazquez’s trademark. See generally Appl. for Default J. (“Appl.”), ECF No. 61. On August 16, 2021, the Court granted in part the application as to Vazquez’s counterclaims for false designation/unfair competition under 15 U.S.C. § 1125(a) and declaratory relief against Counter-Defendants and Vazquez’s counterclaims for breach of contract and unjust enrichment against Jorge Gomez and Nancy Gomez (the “Gomezes”) and denied the application as to Vazquez’s remaining counterclaims. See Order re: Def. and Counter-Claimant Theodoro Vazquez Solis’ Appl. for Default J. (“Prior Order”) 33:2-8, ECF No. 63. The Court enjoined Counter-Defendants from activities enumerated in Vazquez’s requested injunction and permitted Vazquez to submit a supplemental brief on his request for damages, attorney’s fees, and costs. Id. at 33:9-34:8. /// On August 31, 2021, Vazquez submitted a
supplemental brief with two exhibits and a supporting
declaration from his counsel. See generally Suppl.
Brief for Proof of Damages in Supp. of Appl. for Default J. (“Suppl. Brief”), ECF No. 64; Ex. A, ECF No. 64-1; Ex. B, ECF No. 64-2; Decl. of Shahrokh Shei k in Supp. of Suppl. Brief (“Suppl. Sheik Decl.”), ECF No. 64-3. The Court incorporates by reference the factual and procedural background set forth in the Prior Order as if fully set forth herein. See Prior Order 2:25-6:20. A. Damages Vazquez previously established entitlement to $33,000 in restitution but failed to sufficiently support his request for $150,000 in damages, which he claimed to be his fifty-percent share of profits from the Pico Location. See id. at 21:24-25:20; Appl. 8:21- 9:22. The only evidence Vazquez submitted in support of his damages request was a declaration stating that Vazquez “believe[s] the Gomezes have realized over $300,000 in profits from the use of [his] Mark and recipes” and that “[t]his number is based on observation of the Pico Location prior to [his] being locked out and based on [his] own expertise in the restaurant business.” Decl. of Theodoro Vazquez Solis in Supp. of Appl. ¶ 24, ECF No. 61-2. In the Prior Order, the Court found that these statements were insufficient to support his damages request but afforded Vazquez an opportunity to submit further evidence. See Prior Order 25:2-20.
Vazquez timely filed a supplemental brief, in which
he states:
It has been difficult for Counter-Claimant to
obtain the necessary discovery to show proof of his loss. As stated in Counter-Claimant’s supporting declaration for the Default Judgment Application, Counter-Claimant is relying on his expertise as an experienced restauranter and businessman based in Los Angeles to calculate his damages. Counter- Claimant calculates, based on his observation of the Pico Location from the documents and sales he could review prior to being locked out, that the Pico Location did substantial business from use of his Mark and recipes. Thus, Counter-Claimant requests that the Court award him damages in the amount of $150,000. Suppl. Brief 2:15-21. Vazquez essentially reiterates the statements made in his earlier declaration, providing no additional declaration or other evidence to substantiate his requested damages.1 Although the well-pleaded factual allegations of a complaint are deemed true upon default, the plaintiff “must ‘prove up’ the amount of damages.” Landstar Ranger, Inc. v. Parth Enters., Inc., 725 F. Supp. 2d 916, 923 (C.D. Cal. 2010) (citations omitted); see TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18
1 Moreover, it remains unclear whether Vazquez seeks $150,000 in damages for breach of contract or lost profits under the Lanham Act. See Prior Order 25:18-20 (“If Vazquez chooses to submit further evidence, he must also clarify whether he seeks damages by way of breach of contract or 15 U.S.C. § 1117(a).”). (9th Cir. 1987). “[C]ourts have accepted less precise
estimates of damages where a defendant frustrates the
discovery of a precise amount by defaulting in the
action.” Wecosign, Inc. v. IFG Holdings, Inc., 845 F.
Supp. 2d 1072, 1084 (C.D. Cal. 2012). Nevertheless,
Vazquez must establish a reasonable basis f or calculating his requested damages. See Cal. Civ. Code § 3301 (“No damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and origin.”); Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400, 1407 (9th Cir. 1993) (“As a general rule, damages which result from a tort must be established with reasonable certainty. The Supreme Court has held that ‘[d]amages are not rendered uncertain because they cannot be calculated with absolute exactness,’ yet, a reasonable basis for computation must exist.” (citation omitted) (quoting Eastman Kodak Co. v. S. Photo Materials Co., 273 U.S. 359, 379 (1927))), abrogated on other grounds by SunEarth, Inc. v. Sun Earth Solar Power Co., Ltd., 839 F.3d 1179 (9th Cir. 2016) (en banc). While the Court understands that it is difficult for Vazquez to measure damages given Defendants’ lack of participation in this action, it cannot use Vazquez’s vague and speculative statements to award damages. Vazquez has not given the Court sufficient information— such as sales data, the relevant time period for such sales, or the types of documents reviewed—that would allow the Court to conclude that Vazquez’s estimate is
reasonable. Nor has Vazquez sought to quantify his own
lost profits. Based on the evidence submitted, the
Court cannot estimate either Counter-Defendants’ profits
or Vazquez’s lost profits.2 Accordingly, the Court has
no option but to conclude again that Vazque z has failed to establish entitlement to $150,000 in damages. B. Attorneys’ Fees and Costs When a party properly requests attorneys’ fees in excess of the schedule provided in Local Rule 55-3, “the court is obliged to calculate a ‘reasonable’ fee” using the lodestar method. Vogel v. Harbor Plaza Ctr., LLC, 893 F.3d 1152, 1159 (9th Cir. 2018). “[T]he lodestar amount is calculated by multiplying ‘the number of hours reasonably expended on the litigation by a reasonable hourly rate.’” Id. at 1160 (citation omitted). “A reasonable hourly rate is ordinarily the prevailing market rate in the relevant community.” 3M Co. v. Am. Dental Equip., LLC, No. 5:20-CV-02128-JWH-SHKx, 2021 WL 3473560, at *4 (C.D. Cal. July 26, 2021) (quoting Kelly v. Wengler, 822 F.3d 1085, 1099 (9th Cir. 2016)). Vazquez previously sought $48,767.34 in actual attorneys’ fees and costs, see Appl. 10:3-4, and now seeks $47,044.84, see Suppl. Brief 2:7. In support of his request, Vazquez submitted a declaration from his
2 The Lanham Act provides that, subject to the principles of equity, a trademark owner may “recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.” 15 U.S.C. § 1117(a). counsel as well as the relevant billing records and cost
invoices from his counsel’s previous and current law
firms. See generally Suppl. Sheik Decl.; Exs. A-B.
Counsel for Plaintiff billed hourly rates of $325 and
$375 for a partner; $225, $275, and $335 for associates;
and $125 and $150 for paralegals. See Supp l. Sheik Decl. ¶ 3. Having reviewed these documents, the Court finds that the time expended and the expenses incurred were reasonable, particularly in light of the complexity and duration of this case and the fact that Counter- Defendants initially appeared in this action. The Court also finds the rates charged by Vazquez’s counsel to be reasonable and generally consistent with rates billed in trademark infringement cases within this district. See, e.g., Athena Cosms., Inc. v. Timbo Trading Co., No. EDCV 20-418 JGB (SPx), 2020 WL 4805470, at *3 (C.D. Cal. June 19, 2020) (finding rates of $495, $395, and $245 reasonable in trademark infringement case); Energizer Brands, LLC v. Lumintop Tech. Co., No. CV 19-04360-AB (ASX), 2020 WL 1279456, at *3 (C.D. Cal. Feb. 3, 2020) (finding billed rates of $505.75 and $701.25 for partners, $333.75 for an associate, and $259.25 for a paralegal to be reasonable despite being “at the high end”). Accordingly, Vazquez’s request for $47,044.84 in attorneys’ fees and costs is GRANTED. /// ///
Based on the foregoing, the Court awards $33,000 in
restitution and $47,044.84 in attorneys’ fees and costs
to Vazquez.
DATED: September 29, 2021 /s/ Ronald S.W. Lew HONORABLE RONALD S.W. LEW Senior U.S. District Judge