N. Am. Van Lines, Inc. v. N. Am. Moving & Storage, Inc.

NORTH AMERICAN VAN LINES, INC., Plaintiff, v. NORTH AMERICAN MOVING &STORAGE, INC., Defendant.

CAUSE NO.: 1:18-CV-196-HAB

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA FORT WAYNE INDIANA

February 10, 2020

OPINION AND DEFAULT JUDGMENT

This matter is before the Court on a Plaintiff's Motion for Entry of Default Judgment [ECF No. 47], filed by Plaintiff North American Van Lines, Inc. (NAVL), on December 20, 2019. NAVL is seeking a default judgment against Defendant North American Moving & Storage, Inc., for claims of Federal Trademark Infringement, Lanham Act Section 32 (15 U.S.C. §1114); Federal Unfair Competition, Lanham Act Section 43(a) (15 U.S.C. §1125(a)); Anticybersquatting Consumer Protection Act (15 U.S.C. §1125(d)); and Indiana Trademark Infringement (Ind. Code § 24-2-1-13 (2017)). Also pending before the Court is Plaintiff's Motion to Strike Evidence [ECF No. 50], which is directed at a letter addressed "To Whom This May Concern" advising that Defendant has not been in business since 2018.

NAVL represents that the Clerk of Court entered default against Defendant on August 6, 2018, and this matter is ripe for entry of judgment. As that is not a complete procedural history, the Court will provide additional background.

BACKGROUND

NAVL filed its Complaint on June 26, 2018. On August 6, 2018, the Clerk entered the default of the Defendant [ECF No. 10]. Thereafter, on September 7, 2018, NAVL moved for default judgment. The Court determined that ascertaining with reasonable certainty the proper amount of damages to award in this case would require an evidentiary hearing, and referred the matter to the Magistrate Judge to conduct a hearing to determine the amount of damages to award the NAVL and to prepare a report and recommendation.

After the Magistrate Judge set an evidentiary hearing date, NAVL moved to vacate the hearing on grounds that it was not necessary where NAVL was electing an award of statutory damages only. NAVL proposed that supplemental briefing on damages would be sufficient. The Magistrate Judge denied the request, noting that its Order setting the hearing identified a discrepancy between the relief sought in the Complaint and the relief sought in the Motion for Default Judgment.

Specifically, in its Complaint, NAVL sought injunctive relief and "to recover Defendant's profits, actual damages, trebled profits and damages, costs, and reasonable attorney's fees under 15 U.S.C. § 1114, 1116, and 1117." (ECF No. 1 ¶ 44). Similarly, in Count 2 of the complaint—a claim for unfair competition under the Lanham Act—NAVL sought injunctive relief and "to recover Defendant's profits, actual damages, costs, and reasonable attorney's fees." (ECF No. 1 ¶ 50). In its motion, however, NAVL argued that it should be awarded up to $2 million in statutory damages on a claim of "willful trademark counterfeiting" under the Lanham Act, a claim which the NAVL had not pled in its complaint. See Tovey v. Nike, Inc., No. 1:12CV448, 2013 WL 486341, at *3 (N.D. Ohio 2013) ("[T]he standard for trademark counterfeiting is significantly higher than that for trademark infringement and slight differences, so long as they are apparent to the typical consumer upon minimal inspection, will defeat the allegation that a mark is counterfeit.") (citations and internal quotation marks omitted).

On February 8, 2019, NAVL filed an Amended Complaint for Trademark Infringement to add a claim for willful trademark counterfeiting. In connection with the allegation, NAVL sought statutory damages of $2,000,000 in accordance with 15 U.S.C. § 1117(c)(2). The Amended Complaint, which became the operative pleading, rendered moot the request for default judgment on the original Complaint.

On May 24, 2019, NAVL sought the entry of default on the Amended Complaint. The request was denied because there was inadequate proof that Defendant had been served with the Amended Complaint. On November 27, 2019, an Affidavit for Proof of Service [ECF No. 46] was filed with the Court. The deadline to file an answer or otherwise respond to the First Amended Complaint passed on December 12, 2019.

On December 20, 2019, NAVL filed the Motion for Default Judgment that is currently pending, along with a Memorandum in Support [ECF No. 48].¹ On December 27, 2019, the Court received an unsigned letter. The unidentified author indicated that he receives court documents on behalf of the Defendant in this case, and that Defendant has not been in business since 2018. On January 3, 2020, NAVL filed a Motion to Strike Evidence Submitted by Defendants, noting that the Letter was anonymous, that the deadline to file an answer or motion under Rule 12 had already passed, and that the website at the URL northamericamoving.com was still operative and still infringing NAVL's Registered Trademarks in the same manner as outlined in the AmendedComplaint. NAVL attached a screenshot of www.northamericanmoving.com last visited on January 2, 2020.²

ANALYSIS

Federal Rule of Civil Procedure 12(a) generally requires a defendant to file an answer within twenty-one days after the service of the summons and complaint; the failure to do so may result in the defendant's default under Rule 55(a). "When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Fed. R. Civ. P. 55(a). An entry of default must proceed a default judgment. See Fed. R. Civ. P. 55(b).

Here, the clerk has not made an entry of default on the Amended Complaint. However, "[w]hen deciding a motion for entry of default judgment, if there is no entry of default by the clerk, the court can treat such motions as requests for both: (1) an order to the clerk to enter the default; and (2) entry of default judgment." Wolf Lake Terminals, Inc. v. Mut. Marine Ins. Co., 433 F. Supp. 2d 933, 941 (N.D. Ind. 2005); see also Breuer Elec. Mfg. Co. v. Toronado Sys. of Am., Inc., 687 F.2d 182, 185 (7th Cir. 1982) (advising that default may be entered by the court even though Rule 55(a) refers to entry of default by the clerk). Accordingly, the Court will treat the NAVL's Motion as a request for the entry of default as well as the entry of default judgment.

A. Entry of Default

According to an Affidavit for Service filed on November 27, 2019, NAVL effectuated service of the summons and First Amended Complaint for Trademark Infringement on November 21, 2019. A responsive pleading was due on December 12, 2019. Defendant has not filed any pleading or motion permitted by law or otherwise appeared in this action. The anonymous letterfiled with the Court on December 27, 2019, is not a response that precludes the entry of default. Even if the Court construed it as an intent to defend the suit, a corporation cannot appear pro se. See Philos Techs., Inc. v. Philos & D, Inc., 645 F.3d 851, 858 (7th Cir. 2011) (noting that corporations are "legally incapable of appearing in court unless represented by counsel"). Accordingly, the anonymous letter is not an appearance or a pleading in defense.

The first step of default proceedings has been satisfied because Defendant has "failed to plead or otherwise defend" and this "failure is shown by affidavit or otherwise." Fed. R. Civ. P. 55(a).

B. Default Judgment

Once the default of a party has been established for failure to plead or otherwise defend, Federal Rule of Civil Procedure 55 authorizes a party to seek and a court to enter a default judgment. As long as a plaintiff's allegations are well-pled, a default judgment, as a general rule, "'establishe[s], as a matter of law, that defendants [are] liable to plaintiff as to each cause of action alleged in the complaint.'" Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983) (quoting Breuer Elec. Mfg. Co. v. Toronado Sys. of Am., Inc., 687 F.2d 182, 186 (7th Cir. 1982)); see also O' Brien v. R.J. O'Brien & Assocs., Inc., 998 F.2d 1394, 1404 (7th Cir. 1993). The party moving for a default judgment must then establish entitlement to the relief sought. In re Catt, 368 F.3d 789, 793 (7th Cir. 2004); see also e360 Insight v. The Spamhaus Project, 500 F.3d 594, 604 (7th Cir. 2007) ("[A]lthough a default judgment establishes liability, it does not answer whether any particular remedy is appropriate").

Under Rule 54(c), a party obtaining a default judgment in its favor is not entitled to a judgment that differs in kind from or an award that exceeds the amount demanded in the pleadings. Courts must ascertain with reasonable certainty the proper amount to award as damages to theprevailing party, based upon either an evidentiary hearing or from definite figures contained in documentary evidence or in detailed affidavits. In re Catt, 368 F.3d at 793; Dundee Cement Co., 722 F.2d at 1323.

NAVL seeks judgment in its favor for willful infringement of the its trademark, 15 U.S.C. § 1114, unfair competition, 15 U.S.C. § 1125(a), willful cybersquatting, 15 U.S.C. § 1125(d), Indiana Trademark Infringement, Indiana Code § 24-2-1-13, and Indiana common law unfair competition. Additionally, NAVL's First Amended Complaint contains an allegation of trademark counterfeiting, but NAVL does not reference it until its discussion of damages, beginning on page 14 of its Memorandum.

1. Trademark Infringement and Unfair Competition

Trademark infringement, including counterfeiting, is prohibited under 15 U.S.C. § 1114(a). The Lanham Act prohibits the use, without the registrant's consent, of a copy, counterfeit, or colorable imitation of a registered trademark in connection with the advertising or sale of goods or services where such use "is likely to cause confusion, or cause mistake, or to deceive." 15 U.S.C. § 1114(1)(a). To prove trademark infringement, a plaintiff must show that (1) its marks are distinctive enough to be worthy of protection and (2) the defendant's use of those marks is likely to cause...