Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-00955/USCOURTS-azd-2_07-cv-00955-8/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

John Covington and Deborah Covington,

husband and wife, 

Plaintiffs, 

vs.

Patriot Motorcycles Corporation, a Nevada

Corporation; Michael Attias and Jane Doe

Attias, husband and wife; David Gernak

and Jane Doe Gernak, husband and wife;

Dick Simon and Jane Doe Simon, husband

and wife, 

Defendants. 

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No. CV-07-955-PHX-FJM

ORDER

Plaintiffs John and Deborah Covington brought this action against Patriot Motorcycles

Corporation (“Patriot”), Michael Attias, David Gernak, and Dick and Dianne Simon

(collectively, the “Simons”) alleging several causes of action arising from the sale of their

motorcycle business and the licensing of associated trademarks. Patriot and Michael Attias

failed to defend and default was entered against them. Plaintiffs’ claims for common law

fraud and aiding and abetting tortious conduct, namely unfair competition and violations of

the Lanham Act, against defendants Gernak and the Simons were tried before a jury in

January 2009. After the close of evidence, the court granted directed verdict in favor of

defendants as to the aiding and abetting claim. Plaintiffs’ common law fraud claim was

submitted to the jury, which returned a verdict for defendants. 

Case 2:07-cv-00955-FJM Document 155 Filed 08/14/09 Page 1 of 3
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Defendant Gernak now seeks an award of $26,201 in attorneys’ fees. The Simons

also seek an award of attorneys’ fees in the amount of $46,212.75. Because these motions

raise nearly identical issues, we will consider them together. We have before us Gernak’s

motion for attorneys’ fees (doc. 148), plaintiffs’ response (doc. 150), and Gernak’s statement

of consultation and supporting memorandum (doc. 154). We also have before us the Simons’

motion for attorneys’ fees (doc. 147), plaintiffs’ response (doc. 149), and the Simons’

memorandum of points and authorities, statement of consultation, and supplemental

statement of consultation (docs. 151, 152 & 153). 

We must first determine whether defendants are entitled to an award of attorneys’ fees

in this case. Gernak and the Simons seek an award of attorneys’ fees as prevailing

defendants on plaintiff’s Lanham Act claims. The Lanham Act provides that for trademark

claims, “[t]he court in exceptional cases may award reasonable fees to the prevailing party.”

15 U.S.C. § 1117(a). However, the complaint does not allege a cause of action for Lanham

Act violations against Gernak and the Simons, but a cause of action for aiding and abetting

tortious conduct (doc. 31). Although plaintiffs attempted to show Lanham Act violations as

an underlying bad act for their “aiding and abetting” claim, the cause of action arose in tort.

See Wells Fargo Bank v. Ariz. Laborers, Teamsters and Cement Masons Local No. 395

Pension Trust Fund, 201 Ariz. 474, 485, 38 P.3d 12, 23 (2002). Defendants have not

presented any theory under which they are entitled to attorneys’ fees for plaintiffs’ tort

action. 

Moreover, even if this were a case arising under the Lanham Act, defendants would

not be entitled to attorneys’ fees. The Lanham Act’s provision for attorneys’ fees in

exceptional cases is to be construed narrowly. See Classic Media, Inc. v. Mewborn, 532 F.3d

978, 990 (9th Cir. 2008). To be entitled to fees, a prevailing defendant must show that the

plaintiff’s case was “groundless, unreasonable, vexatious, or pursued in bad faith.” Stephen

W. Boney, Inc. v. Boney Serv., Inc., 127 F.3d 821, 827 (9th Cir. 1997). Defendants do not

argue that plaintiffs pursued this action unreasonably or in bad faith, but argue that plaintiffs’

claim was groundless. 

Case 2:07-cv-00955-FJM Document 155 Filed 08/14/09 Page 2 of 3
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Indeed, plaintiffs’ belief that their trademark had been infringed was reasonable in

light of Patriot’s failure to defend against their claims of infringement. 

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Although we granted defendants’ Rule 50, Fed. R. Civ. P., motions for judgment as

a matter of law on plaintiff’s aiding and abetting claim at trial, plaintiffs’ claim was not

unreasonable or groundless. Plaintiffs had a good faith belief that their trademarks had been

infringed, that defendants were involved with this infringement, and that they would be able

to so demonstrate at trial.1

 In addition, it is unclear why, if the plaintiffs’ claims were

groundless, as defendants now allege, neither Gernak nor the Simons filed a motion for

summary judgment and instead proceeded with the time and expense of a trial by jury. 

Accordingly, IT IS ORDERED DENYING defendant Gernak’s motion for

attorneys’ fees (doc. 148). IT IS FURTHER ORDERED DENYING defendants Dick and

Dianne Simon’s motion for attorneys’ fees (doc. 147). 

DATED this 13th day of August, 2009.

Case 2:07-cv-00955-FJM Document 155 Filed 08/14/09 Page 3 of 3