Maya Swimwear Corp. v. Maya Swimwear, LLC

855 F.Supp.2d 229

MAYA SWIMWEAR CORP., and Carolina Dinardi, Plaintiffs,

v.MAYA SWIMWEAR, LLC, David McKinney, and Todd Ford, Defendants.

Civ. No. 11–59–SLR.

United States District Court, D. Delaware.

April 5, 2012.

Neil Lapinski, Esquire of Elliot Greenleaf, Wilmington, DE, Of Counsel: Daniel G.P. Marchese, Esquire of The Marchese Law Firm, LLC, for Plaintiff.

David E. Wilks, Esquire, of Wilks, Lukoff & Bracegirdle, LLC, Wilmington, DE, for Defendant.

MEMORANDUM OPINION

ROBINSON, District Judge.

I. INTRODUCTION

Carolina Dinardi (“Dinardi”) and Maya Swimwear Corp. (“Maya Agentina”) (collectively “plaintiffs”) design, manufacture, and distribute an exclusive line of bikinis under the “Maya” brand name. (D.I. 14 at ¶¶ 8–13) David McKinney (“McKinney”), Todd Ford (“Ford”), and Maya Swimwear LLC (“Maya USA”) (collectively “defendants”) originally sold Maya brand bikinis in the United States according to a 2003 Letter of Intent (“LOI”) signed by the parties. ( Id. ¶ 17) On January 15, 2011, after business discord came to a boil, plaintiffs filed suit against defendants. (D.I. 1) Plaintiffs amended their complaint on January 20, 2011 and again on February 3, 2011. (D.I. 7; 14) The second amended complaint: 1) seeks declaratory judgment that the business relationship between Maya USA and Maya Argentina has been severed (count I) (D.I. at ¶¶ 33–36); 2) alleges violation of sections 1114(b) and 1125(a) of the Lanham Act, 15 U.S.C. § 1051 et seq. for trademark violations (counts II & III) ( Id. at ¶¶ 37–40); and 3) claims that defendants tortiously interfered with a contractual relationship by harassing Christina Pinto (“Pinto”), a former employee of defendants who now works for plaintiffs (count IV). ( Id. at ¶¶ 41–52)

After a ruling on plaintiffs' motion for a preliminary injunction and defendants' motion to dismiss (D.I. 30), the parties engaged in settlement discussions. (D.I. 34; 37) Currently before the court is plaintiffs' motion to enforce their settlement agreement with defendants.¹ (D.I. 33) For the following reasons, the court grants plaintiffs' motion.

II. BACKGROUNDA. The Parties and The Contested Use of the Mark

Dinardi is the owner of Maya Argentina, a Florida corporation with its principal place of business in Buenos Ares, Argentina. (D.I. 14 ¶¶ 2–3) McKinney and Ford are both owners of Maya USA, a Delaware corporation with its principal place of business in Florida. ( Id. at ¶¶ 4–6)

Dinardi began selling Maya bikinis in the United States in 2002. ( Id. at ¶ 10) She had initially used Joe Market USA LLC to import Maya bikinis into the United States from Argentina. ( Id. at ¶ 14) In September 2003, Ford and McKinney traveled to Argentina to present a business proposal to Dinardi. ( Id. at ¶ 17) Dinardi, Ford, and McKinney thereafter reached an agreement and signed the LOI which gave Maya USA exclusive sale and distribution rights for Maya bikinis in the United States. ( Id.) Defendants set up a website, www. buymaya. com, to help with the marketing, promotion and sale of the bikinis.

On April 20, 2004, Dinardi filed for registration of the Maya trademark on the principal register of the United States Patent and Trademark Office. The registration issued on October 9, 2007 with registration number 3306450. ( Id. at ¶ 19)

Defendants failed to meet the sales goals set fourth in the LOI which meant the LOI expired in 2005; nevertheless, Dinardi continued the business relationship with defendants in order to sell and market Maya bikinis in the United States. ( Id. at ¶ 20–22) Sales continued to decline, yet the relationship continued through 2010 when, according to plaintiffs, Ford and McKinney failed to book a booth at the Miami Trade Show. ( Id. at ¶¶ 28–30) In the wake of this failure, on October 13, 2010, Dinardi sent Maya USA a letter memo officially severing ties to defendants and ending any and all business relations with them. ( Id. at ¶ 32) Despite this letter, defendants continued to sell Maya bikinis via their www. buymaya. com website. ( Id. at ¶ 33) The current litigation resulted from plaintiffs' failed attempt to effectively sever relations with defendants.

B. The Court's June 8, 2011 Ruling

In a June 8, 2011 memorandum opinion and order, 789 F.Supp.2d 506 (D.Del.2011), the court granted in part and denied in part both plaintiffs' motion for a preliminary injunction and defendants' motion to dismiss. Specifically, the court held:

1. Plaintiffs' motion for a preliminary injunction (D.I. 8) is granted-in-part and denied-in-part, to wit:

a. Defendants may continue to sell Maya brand bikinis, but they cannot claim or imply that they are the current line unless they actually are.

b. Defendants are to refrain from using the URL www. buymaya. com.

c. Defendants are to refrain from using the Maya trademark at the top of their website.

d. Defendants are to use a different business name for their website that does not involve the “Maya” trademark.

e. Defendants may use the Maya trademark on their website to advertise the sale of Maya brand bikinis, but they must use the mark either as plain text or in whole with a clear disclaimer that they are not an authorized retailer.

2. Defendants' motion to dismiss for failure to state a claim (D.I. 16) is granted-in-part and denied-in-part, to wit:

a. Defendants' motion to dismiss counts one, two, and three is denied.

b. Defendants' motion to dismiss count four is granted.

(D.I. 31)

C. Settlement Discussions

Following the court's ruling, the parties attempted to broker a settlement agreement. According to the plaintiffs, the parties agreed on a settlement following a June 20, 2011 telephone conversation. (D.I. 34 at 3–6) Plaintiffs point to a series of emails sent between counsel following the June 20th discussion in support of their position that an agreement on all essential terms was reached. ( Id.) Specifically, in that June 20, 2011 email to defense counsel, plaintiffs' counsel stated the following:

Gentlemen:

My clients have given the “green light” to the settlement discussed earlier this afternoon. Kindly allow the letter to confirm this matter has resolved as follows:

1. The Order of the U.S. District Court for the District of Delaware of June 8, 2011, shall remain in place and in full force and effect and essentially can be deemed and or considered a final order.

2. Per the Order, the status quo shall be maintained.

3. The parties shall exchange mutual releases and mutual non-disparagment agreements.

Thank you for reaching out. Neil and I will set out to tackle the Releases and Non–Disparagement Agreements and will work out the other fine points in the next five (5) business days.

(D.I. 34 at Ex. A) In a subsequent email from defense counsel to plaintiffs' counsel, dated June 30, 2011, the parties were arguing about whether defendants' website complied with the court's June 8, 2011 order. In that email, defense counsel stated:

[T]he site is wholly compliant with the order and we resist our competitor's effort to select our client's marketing methods. I find it difficult to understand how this issue could be “an issue with finalizing” the settlement, since we have not yet received the draft settlement agreement that was promised some time ago. If your client does, in fact, desire to resolve this case as she has already agreed, please circulate a proposal at your first opportunity. If she intends to renege on her agreement, we will take the action we feel most appropriate.

( Id. at Ex. B) Just after this exchange, plaintiffs' counsel forwarded a proposed settlement agreement to defense counsel. (D.I. 37 at Ex. B) Defendants responded a few days later with a redlined version of the proposed settlement. ( Id. at Ex. C) In response, plaintiffs' counsel provided defense counsel with what they deemed a stripped down version of the agreement that only contained the essential terms. ( Id. at Ex. D) In that August 3, 2011 email, plaintiffs' counsel stated the following:

[Defense counsel], In response to your revised version, we have attached a memorialization of our agreement. It contains only the essential terms agreed to on our telephone conversation of June 20, 2011 as confirmed in [plaintiffs' counsel] email of the same date. Since that date you have repeatedly reminded us that we have an agreement and admonished us that our client will suffer consequences should she renege. We agree. Please provide an executed copy by close of business today or we will file a motion to enforce the settlement agreement with the Court. Thank you[.]

( Id.) Negotiations broke down shortly thereafter when the parties could not agree on a final written settlement agreement.

III. STANDARD OF REVIEW

“An agreement to settle a lawsuit, voluntarily entered into, is binding upon the parties, whether or not made in the presence of the court, and even in the absence of a writing.” Rohm and Haas Elec. Materials, LLC v. Honeywell Intern., Inc., 2009 WL 1033651, at *4 (D.Del.2009) (quotations and citation omitted). A district court has jurisdiction to enforce a settlement agreement entered into by litigants in a case pending before it. See Hobbs & Co. v. Am. Investors Mgmt., Inc., 576 F.2d 29, 33 & n. 7 (3d Cir.1978). Because motions for the enforcement of settlement agreements resemble motions for summary judgment, the court must employ a similar standard of review. See Tiernan v. Devoe, 923 F.2d 1024, 1031–32 (3d Cir.1991). Accordingly, the court must treat all the non-movant's assertions as true, and “when these assertions conflict with those of the movant, the former must receive the benefit of the doubt.” Id. at 1032 (internal quotation and citation omitted). Summary judgment is appropriate only if “there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). Courts should not summarily enforce purported settlement agreements, in the absence of an evidentiary hearing, where material facts concerning...