Valvoline LLC and Valvoline Licensing and Intellectual Property LLC. v. Franks Oil King, Inc.

CourtDistrict Court, E.D. Michigan
DecidedOctober 21, 2020
Docket2:20-cv-10044
StatusUnknown

This text of Valvoline LLC and Valvoline Licensing and Intellectual Property LLC. v. Franks Oil King, Inc. (Valvoline LLC and Valvoline Licensing and Intellectual Property LLC. v. Franks Oil King, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Valvoline LLC and Valvoline Licensing and Intellectual Property LLC. v. Franks Oil King, Inc., (E.D. Mich. 2020).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

VALVOLINE, LLC, ET AL.,

Plaintiffs, Case No. 20-cv-10044

v. U.S. DISTRICT COURT JUDGE

GERSHWIN A. DRAIN FRANKS OIL KING, INC., ET AL.,

Defendants. ______________ / OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION FOR DEFAULT JUDGMENT [#18] I. INTRODUCTION Plaintiffs Valvoline LLC and Valvoline Licensing and Intellectual Property LLC (collectively, “Plaintiffs”) bring this motion for default judgment against Defendants Franks Oil King, Inc., d/b/a Frank’s Oil King and/or as Quick Oil Auto Repair; Franks Oil Center, Inc. d/b/a Frank’s Oil King and/or as Quick Oil Auto Repair, and Fadi Hachem a/k/a Frank Hachem (collectively, “Defendants”). See ECF No. 1. Plaintiffs request damages and a permanent injunction after Defendants failed to pay for motor oil delivery and continued to display a Valvoline Mark at their facilities after termination of the contract between the parties. Plaintiffs bring various federal and state claims, including trademark infringement, false advertising, and breach of contract. Presently before the Court is Plaintiffs’ Motion for Default Judgment, filed on May 20, 2020. ECF No. 56. Defendants have failed to file an answer or otherwise

defend this matter. A hearing on Plaintiffs’ Motion was held on October 21, 2020. For the reasons discussed herein, the Court will GRANT Plaintiffs’ Motion [#18]. II. FACTUAL BACKGROUND Plaintiffs are producers and distributors of “premium-branded automotive,

commercial and industrial lubricants and automotive chemicals,” all offered under the broad Valvoline brand. ECF No. 1, PageID.3. Plaintiffs franchise various oil change facilities around the nation, including in Detroit, Michigan. Id. at PageID.4.

With prior authorization and agreement, these facilities may utilize one of Valvoline’s many registered U.S. trademarks, some of which are visually displayed within Plaintiffs’ Complaint. See id. at PageID.4-5. One of Valvoline’s licensed distributors is Vesco Oil Corporation (“Vesco”).

Id. at PageID.5. Plaintiffs state that Vesco and Defendant Frank’s Oil King entered into an Equipment Loan Agreement (“Agreement”) on April 3, 2017. ECF No. 5-1, PageID.34. The Agreement was signed by Defendant Hachem on behalf of Frank’s

Oil King. Id. The Agreement provided that Defendants would borrow certain equipment (“Equipment”) from Vesco, including tanks, pumps, and hoses typically utilized by oil change facilities. See id. The Agreement also provided that failure to pay for products could result in termination of the Agreement and that, upon termination, Defendants should make the Equipment available for pick up and return. ECF No. 1, PageID.6-7. Plaintiffs note that Vesco assigned both its rights

under the Agreements and its title to the Equipment to Valvoline once the Agreement was signed. Id. Plaintiffs allege that it delivered motor oil to Defendants on September 28,

2018, but that Defendants failed to pay the amount due provided on the invoice (“Invoice”). ECF No. 5-2, PageID.38. Additionally, Plaintiffs state that Defendants acquired another facility in 2019, Quick Oil Auto Repair, wherein they continued to use a Valvoline trademark without Plaintiffs’ authorization. ECF No. 1, PageID.8.

Photographs of the Defendants’ facilities with signage containing the Valvoline marks are included within Plaintiffs’ Complaint. See id. at PageID.8-9. While Plaintiffs sent various letters demanding Defendants cease their conduct and

providing notice of the Agreement’s termination, Plaintiffs state that the Defendants have failed to remove the Valvoline marks, pay the Invoice, return the Equipment, or otherwise respond in any manner. Id. at PageID.11. Plaintiffs therefore commenced the instant action against Defendants on

January 7, 2020. ECF No. 1. Plaintiffs bring ten claims against Defendants, including three counts under the Lanham Act and state law claims for unfair competition, breach of contract, unjust enrichment, and replevin. Id. Defendants failed to file an answer or otherwise defend this matter in accordance with Federal Rule of Civil Procedure 12.

On April 6, 2020, Plaintiffs filed a request for the Clerk’s Entry of Default against each Defendant. ECF No. 12. The Clerk entered a Default as to each Defendant on that same day. ECF Nos. 14, 15, 16. On May 20, 2020, Plaintiffs

filed the present Motion, asking this Court to enter a default judgment in its favor and to find that Plaintiffs are entitled to (1) the return of the relevant Equipment in Defendants’ possession; (2) damages; (3) reasonable expenses, including attorneys’ fees; and (4) injunctive relief enjoining Defendants from using any Valvoline marks

or otherwise taking action that would associate Defendants’ business with the Valvoline brand. ECF No. 18, PageID.56-58. Defendants did not file a response to the Motion.

III. LEGAL STANDARD Rule 55 of the Federal Rules of Civil Procedure governs entry of judgment by default. In order to obtain judgment by default, the proponent must first request the Clerk’s entry of default pursuant to Rule 55(a). Once a default has been entered by

the Clerk, the plaintiff’s well-pleaded allegations are deemed admitted. See, e.g., Thomas v. Miller, 489 F.3d 293, 299 (6th Cir. 2007); State Farm Fire and Casualty Company v. Piron, No. 11-11375, 2011 WL 3625048, at *1 (E.D. Mich. July 28, 2011). The plaintiff may then file for default judgment by the Clerk or by the court. FED. R. CIV. P. 55(b).

When the plaintiff’s complaint alleges damages for a sum certain, the Clerk “on plaintiff’s request, with an affidavit showing the amount due—must enter judgment for that amount and costs against a defendant who has been defaulted for

not appearing.” FED. R. CIV. P. 55(b)(1). “In all other cases, the party must apply to the court for a default judgment.” FED. R. CIV. P. 55(b)(2). A default judgment may be entered without a hearing unless it is necessary to determine the amount of monetary damages. Id. The court must exercise “sound judicial discretion” when

determining whether to enter the default judgment. CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE, § 2685 (3d ed. 1988); see also Applebaum v. Target Corporation, No. 11-cv-15035,

2015 WL 13050014, at *1 (E.D. Mich. Sept. 10, 2015); Piron, 2013 WL 1843965, at *2. IV. DISCUSSION A. Defendant Hachem’s Personal Liability As an initial matter, this Court must address the issue of personal liability for

the individual Defendant Hachem. In breach of contract claims, for example, a plaintiff must plead allegations sufficient to establish entitlement to pierce the corporate veil and hold an individual personally liable for breach of the corporate defendant’s contract. See Dimensional Tech. Int'l, No. 07-CV-14232, 2010 WL 726740, at *3. “Michigan courts will not pierce the corporate veil unless (1) the

corporate entity was a mere instrumentally of another entity or individual; (2) the corporate entity was used to commit a fraud or wrong; and (3) the plaintiff suffered an unjust loss.” Id. (quoting Servo Kinetics, Inc. v. Tokyo Precision Instruments Co.

Ltd., 475 F.3d 783, 798 (6th Cir. 2007)).

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Valvoline LLC and Valvoline Licensing and Intellectual Property LLC. v. Franks Oil King, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/valvoline-llc-and-valvoline-licensing-and-intellectual-property-llc-v-mied-2020.