Khan v. Addy's BBQ LLC

419 F.Supp.3d 538

Adnan Alam KHAN, Plaintiff,

v.ADDY'S BBQ LLC and Nauman Cheema, Defendants.

19-cv-2235 (SJF)(AYS)

United States District Court, E.D. New York.

Signed November 6, 2019

Joseph D. Nohavicka, Anastasi Pardalis, Pardalis & Nohavicka, LLP, Astoria, NY, Ariadne Anna Panagopoulou Alexandrou, Lewis Brisbois Bisgaard & Smith LLP, Eleni Melekou, Pardalis & Nohavicka, LLP, New York, NY, for Plaintiff.

Christine T. Rubinstein, Castiglia-Rubinstein, Self, NY, for Defendants.

OPINION AND ORDER

FEUERSTEIN, United States District Judge On April 16, 2019, plaintiff Adnan Alam Khan ("plaintiff" or "Khan") commenced this action against defendants Addy's BBQ LLC ("Addy's BBQ") and Nauman Cheema ("Cheema") (collectively, "defendants"), alleging, inter alia , trademark infringement, false designation of origin and unfair competition in violation of Section 43(a)(1)(A) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), and New York common law; trademark dilution in violation of the Federal Trademark Dilution Act ("FTDA"), 15 U.S.C. § 1125(c), and Section 360-l of the New York General Business Law ; and cybersquatting in violation of the Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d). Presently before the Court are: (i) plaintiff's motion pursuant to Rule 65 of the Federal Rules of Civil Procedure for a temporary restraining order ("TRO") and preliminary injunction enjoining and restraining defendants from using the mark, "Addy's BBQ," and the domain name, http://addysbbq.com/; and (ii) defendants' cross motion to cancel plaintiff's registration of the service mark, "Addy's Barbeque," pursuant to Section 37 of the Lanham Act, 15 U.S.C. § 1119. For the reasons set forth herein, plaintiff's motion is denied in its entirety; and defendants' cross motion is granted to the extent that defendants are granted leave to amend their answer to assert a counterclaim seeking to cancel plaintiff's registration of his service mark pursuant to Section 37 of the Lanham Act, 15 U.S.C. § 1119 on the basis that the registration was obtained fraudulently, and their cross motion is otherwise denied.

I. BACKGROUND

A. Factual Background

Plaintiff is a self-proclaimed "professional Chef," (Declaration of Adnan Alam Khan in Support of Motion for TRO ["Plf. Decl."], ¶ 2)¹ , who also goes by the name "Addy" or "Chef Addy." (Id. , ¶ 3). In or around March 2015, plaintiff opened a restaurant named "Addy's Barbeque," located at 1199 Teaneck Road, Teaneck, New Jersey, 07666 (the "Teaneck restaurant"). (Id. , ¶ 2).

In or about November 2017, Cheema met with plaintiff in New Jersey and "expressed interest in opening up a restaurant on Long Island, New York." (Declaration of Nauman Cheema in Support of Cross Motion and in Opposition to Motion for a TRO ["Cheema Decl."], ¶ 3). According to Cheema, plaintiff "expressed great joy in this proposal ... since he had just earlier that day put his restaurant in Teaneck, New Jersey up for sale." (Id. ; see also Id. , ¶ 5 [asserting that when Cheema "initially met plaintiff ... his [Teaneck] restaurant was failing"] ). Cheema's brother, Umar Cheema ("Umar"), who is the head chef at the Long Island restaurant subsequently opened by plaintiff and Cheema, also asserts that plaintiff "was very grateful that [his] brother [Cheema] helped him out." (Declaration of Umar Cheema in Support of Cross Motion and in Opposition to Motion for a TRO ["Umar Decl."], ¶ 4). However, according to plaintiff, "one of the reasons ... [Cheema] approached [him] was" because his Teaneck restaurant "had established a solid reputation and attracted the attention of many consumers of halal food[ ] because ... [it] was among the first restaurants serving exclusively halal meat in the Tri-State area." (Plf. Decl., ¶ 6).

In December 2017, plaintiff entered into a partnership with Cheema to open and operate a restaurant located at 799 Elmont Road, Elmont, New York, 11003 (the "Elmont restaurant"), which they named "Addy's BBQ."² (Plf. Decl., ¶¶ 4, 7; Cheema Decl., ¶¶ 4, 6). Although the parties dispute whether their partnership agreement was ever memorialized in writing, (compare Plf. Decl., ¶ 8 [claiming that there was never a written partnership agreement] with Cheema Decl., ¶ 6 [claiming that there was a written partnership agreement, but that he does not have a copy of it] ), neither party has produced a copy of any written partnership agreement between them.

According to Cheema, under the terms of the partnership agreement, inter alia , (a) he owned seventy percent (70%) of the Elmont Restaurant and plaintiff owned thirty percent (30%); (b) "[s]ince plaintiff had no capital to invest he brought his Teaneck restaurant into the partnership with the same split;" (c) Cheema "would have first right of refusal in the next five (5) businesses that plaintiff would start, if any;" (d) plaintiff would receive a monthly payment of six thousand dollars ($6,000.00), but Cheema "took nothing and reinvested everything back into the business;" and (e) "if anything happened to plaintiff's family they would be taken care of from the businesses." (Cheema Decl., ¶ 6; see also Id. , ¶ 13 [claiming a seventy percent (70%) interest in both the Elmont and Teaneck restaurants] ). Plaintiff disputes that Cheema was ever given an ownership interest in the Teaneck restaurant, (Plf. Decl., ¶ 5), but does not indicate what any of the specific terms of the alleged partnership agreement were.³

The Elmont restaurant opened in January 2018. (Plf. Decl., ¶ 7). According to Cheema, his "responsibilities included floor management, focusing on business growth, accounting and marketing[,]" whereas plaintiff "was to create the menu and be in charge of the kitchen." (Cheema Decl., ¶ 7). Cheema further asserts, inter alia , that he "kept investing in the renovation, marketing, store front and the purchase of equipment[;]" and he "also formed the company Qabila Afghan Grill, LLC [‘QAG’] DBA Addy's BBQ," but plaintiff's "name was not on the company papers or the lease...."⁴ (Id. , ¶ 8).

According to plaintiff, his "business relationship with Cheema was not profitable or harmonious from the very beginning[,]" (Plf. Decl., ¶ 10), and "[t]here were several issues between [him] and Cheema, as the way [Cheema] managed the [Elmont] restaurant did not satisfy [plaintiff's] criteria and ... expectations." (Id. , ¶ 11). Plaintiff also asserts that he was not satisfied with "the supplier and the quality of the meats offered;" the competency, professionalism or "quality" of the personnel and waitstaff; or "the conditions in the kitchen" of the Elmont restaurant. (Id. , ¶¶ 12-13).

However, according to Cheema, "[d]espite plaintiff's claims to the contrary," the partnership "got off to a pretty good start and in [their] first month [they] did approximately $30,000 worth of business. In March and April, 2018 [they] did about $50,000 worth of business each month." (Cheema Decl., ¶ 9). Cheema further asserts that plaintiff and/or his wife "received monthly checks" from the Elmont restaurant, (id. ), and he submits six (6) checks payable to plaintiff and/or his wife by QAC from March 2018 to July 2018, five (5) of which contain the notation "salary" on the memo line. (Id. , Ex. A). According to plaintiff, those checks "were given to [him] as a [sic] compensation for [his] work at the [Elmont] restaurant. Throughout the duration of the partnership, [he] was working long hours every day, all day into the night preparing meals and training employees." (Plaintiff's Declaration in Opposition to Defendants' Cross Motion ["Plf. Opp."], ¶ 13).

In July 2018, plaintiff "decided to depart the partnership." (Plf. Decl., ¶ 9; see also Cheema Decl., ¶ 11). According to plaintiff, upon his departure, he "left equipment and several objects at the Elmont restaurant" and made it clear to Cheema that he could "keep all of them, as long as, he stops using [plaintiff's] name (‘Chef Addy’ or ‘Addy’) and [plaintiff's] brand name (Addy's Barbeque)[,]" (Plf. Decl., ¶ 14), because he did not want the Teaneck restaurant to be associated with the Elmont restaurant.⁵ (Id. ). Plaintiff asserts that defendant neither returned the equipment that he left at the Elmont restaurant, nor stopped using plaintiff's purported "brand name despite [plaintiff] forbidding him from doing so." (Plf. Decl., ¶ 15; see also Id. , ¶ 16 [claiming that plaintiff "explicitly forbade [Cheema] from using [his] name or trademark"] ). According to plaintiff, he "never allowed [Cheema] to use [his] name or received consideration in order to grant him a permission to conduct business under [plaintiff's] trademark and name." (Id. , ¶ 16; see also Plf. Opp., ¶ 12 [asserting, inter alia , that after plaintiff left the partnership, he "explicitly forbade [Cheema] from using [his] name or trademark"] ).

However, Cheema asserts that after plaintiff left the partnership, he consented to defendants continued use of the name "Addy's BBQ." (Cheema Decl., ¶ 13). In support of that assertion, defendants submit a screenshot of a partial text message sent by plaintiff on September 7, 2018 indicating, in relevant part, "You were right in saying nothing there is mine, as when I left I left it all to you. As for the name , recipes and menu I did give you open heartedly without falter and that too is yours .... This is the last you'll hear from me. I forgive you for any wrongdoing ... and ask you do the same, and no, you're not a liar or a thief, but someone I still love and respect dearly...."⁶ (Id. , Ex. C) (emphasis added). In addition, Umar avers, inter alia , that "[o]n multiple occasions plaintiff personally told [him] that the name of the Elmont restaurant belonged to [Cheema]." (Umar Decl., ¶ 4).

In August or November 2018, plaintiff opened another restaurant named "Addy's Barbeque," located at 30-94 Steinway St., Astoria, New York 11103 (the "Astoria restaurant"). (Plf. Decl., ¶ 2; Cheema Decl., ¶ 12). Cheema never had any ownership interest in the...