Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-01416/USCOURTS-casd-3_12-cv-01416-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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FILED' I SEP 11 2012 I 

CLERK, u.s. DIS. rq\il"'~1

SOUTHERN DISTRICT Yrnlftf.t".,., 

fJI( 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

CENTURY 21 REAL ESTATE LLC, a 

Delaware Limited Liability Company, 

formerly known as Century 21 Real Estate 

Corporation, a Delaware Corporation, 

Plaintiff, 

vs. 

SAN VICENTE REAL ESTATE 

SERVICES, INC, a California corporation 

doing business as Century 21 San Vicente; 

ARNOLD K. FRY, an individual; 

HELEN B. JUPIN, an individual, 

Defendants. 

CASE NO. 12CVI416WQH(WVG) 

ORDER 

FL\)1ES,Judge: 

Thematters before the Court are the Application for an Order to Show Cause Regarding 

a Preliminary Injunction (ECF No.7) and Motion for Default Judgment (ECF No. 21) filed by 

Plaintiff Century 21 Real Estate LLC. 

BACKGROUND 

On June 11, 2012, Plaintiff initiated this action by filing the Complaint against 

Defendants San Vicente Real Estate Services, Inc., Arnold K. Fry, and Helen B. Jupin. (ECF 

No.1). On June 14,2012, Plaintiff filed an Ex Parte Application for a Temporary Restraining 

Order and Order to Show Cause Regarding a Preliminary Injunction. (ECF No.7). On June 

18,2012, the Court denied the Application for a Temporary Restraining Order for failure to 

comply with the requirements ofRule 65(b)(1). (ECF No. 12). The Court stated: "The Court 

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will set a briefing schedule for the Application for an Order to Show Cause Regarding a 

Preliminary Injunction after proofs ofservice ofthe Summons, Complaint, and Application for 

an Order to Show Cause Regarding a Preliminary Injunction are filed." [d. 

On June 18, 2012, proofs of service of the Summons and Complaint on Defendants 

were filed. (ECF Nos. 9, 10, 11). On June 19,2012 and June 26, 2012, proofs of service of 

the Application for an Order to Show Cause on Defendants were filed. (ECF Nos. 13, 14, 15). 

On June 28, 2012, the Court set a briefmg schedule for the Application for an Order to Show 

Cause. (ECF No. 16). On June 29,2012, Plaintiff filed a certificate ofservice reflecting that 

the Court's June 28,2012 Order was mailed to Defendants. (ECF No. 17). Defendants did 

not file any answer to the Complaint or response to the Application for an Order to Show 

Cause as instructed by the Court. 

On July 10,2012, the Clerk ofthe Court entered default against Defendants. (ECF No. 

19). On May 8, 2012, Plaintiff filed a Motion for Entry of Default Judgment against 

Defendants. (ECF No. 21). 

ALLEGATIONS OF THE COMPLAINT 

On July 1,2004, Defendant San Vicente entered into areal estate franchise agreement 

with Plaintiff Century 21. Defendants Fry and Jupin personally guaranteed San Vicente's 

performance under the agreement. Under the agreement, Plaintiff agreed to grant the Century 

21 trademarks and marketing license to San Vicente in exchange for a 6% gross revenue 

royalty fee and a 2% gross revenue contribution to the national advertising fund. San Vicente 

agreed that any unauthorized use of the Century 21 marks would constitute a breach of the 

agreement and infringement ofPlaintiffs rights. San Vicente agreed that upon termination of 

the agreement, San Vicente would permanently and immediately discontinue all use of the 

Century 21 marks. The agreement also contained provisions permitting recovery ofattorneys 

fees to any party prevailing in a legal proceeding against the other. 

On August 23, 2011, Plaintiff exercised its option to terminate the agreement, after 

giving Defendants required notice and the opportunity to cure breaches. As of August 23, 

2011, Defendants were to cease use ofCentury 21 trademarks on signs, advertising, letterheads 

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and listings. 

Defendants have continued to use the Century 21 marks in conducting their real estate 

brokerage business, including answering their phones as "Century 21," and failing to remove 

Century 21 signage from the office building, online website, and business cards. Defendants 

have ignored Plaintiff s demands to cease and desist use ofthe Century 21 marks. 

Plaintiff asserts claims for trademark infringement, common law trademark 

infringement, unfair competition, false designation and false advertising against all 

Defendants. Plaintiff asserts a claim ofbreach ofcontract against Defendant San Vicente and 

breach ofguaranty against Defendants Fry and Jupin in the amount of$1 07,000. Plaintiff also 

seeks reasonable attornets fees and costs of suit. Plaintiff seeks preliminary and permanent 

injunctions against Defendants' continued infringement through use ofthe Century 21 marks. 

DISCUSSION 

Plaintiff seeks default judgment against San Vicente, Fry, and Jupin in the amount of 

$107,000, for fees and contributions owed during the infringement period. Plaintiff seeks 

attorney's fees and costs in the amount of $22,132, which is permitted by the terms of the 

franchise agreement. Plaintiff seeks post-judgment interest on the total amount of the 

judgment at the interest rate available under 28 U.S.C. § 1961. Plaintiff seeks a permanent 

injunction precluding Defendants from using Century 21 trademarks in any manner. 

Plaintiff submits the declaration of Gary A. Collis, counsel for Plaintiff, who has 

attached evidence showing Plaintiffincurred the cost of$22,132 litigating Plaintiffs claims 

against Defendants. (ECF No. 21-2). Plaintiff submits the declaration of Jacqueline Bertet, 

senior director of Century 21 Real Estate LLC, who states that "a reasonable approximation 

of the amount that San Vicente owes for the nearly one year period of time that it has been 

infringing on the Century 21 marks in the operation of its real estate brokerage is 

$111,499.63." (ECF No. 21-1). Plaintiff seeks$1 07,000 because that amount was demanded 

in the Complaint. Plaintiff submits the franchise agreement signed by Defendants which states: 

Ifwe bring an action a~ainst you or anyone associated with you in the Business, 

before or after expiratIon or termination, seeking to halt mfringement of the 

Marks, you acknowledge that any court having jurisdiction of the matter may 

enter temporary restraming orders, preliminary and permanent injunctions 

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without posting a bond or other security .... Furthennore, ... you will pay Royalty 

Fees and NAP contributions on all Gross Revenues during the period of any 

infringement; attorneys' fees incurred by us in the enforcement of our rights 

concerning the Marks; and the costs and disbursements of bringing the 

enforcement action. You acknowledge that ifyou breach this Agreement and/or 

continue to utilize the System or Marks at such times when you are not legally 

entitled to use them, we shall have no adequate remedy at law. Therefore, you 

expressly consent and agree that we may, in addition to any other available 

remedies, obtain an injunction and/or temporary restraining order to tenninate 

or prevent the continuation of any existing default or violation, and to prevent 

the occurrence ofany threatened default or violation, by you ofthis Agreement. 

(ECF No. 1-1 at 8). 

Rule 55(a) ofthe Federal Rules ofCivil Procedure requires that the Clerk ofthe Court 

enter default ''when a party against whom a judgment for affinnative relief is sought has failed 

to plead or otherwise defend, and that failure is shown by affidavit or otherwise." Fed. R. Civ. 

P.55(a). Rule 55(b)(2) of the Federal Rules of Civil Procedure provides that the court may 

grant a default judgment after default has been entered by the Clerk ofthe Court. Fed. R. Civ. 

P. 55(b)(2). The Ninth Circuit has articulated the following factors for courts to consider in 

detennining whether default judgment should be granted: 

(1) the substantive merit of the plaintiff's claims, (2) the sufficiency of the 

complaint, (3) the amount ofmoney at stake, (4) the possibility ofprejudice to 

the plaintiffifreliefis denied, (5) the possibility ofdisputes to any material facts 

in the case, (6) whether default resulted from excusable neglect, and (7) the 

public policy favoring resolutions of cases on the merits. 

1811 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9thCir. 1986). 

19 II "The general rule of law is that upon default the factual allegations of the complaint, 

II except those relating to the amount of damages, will be taken as true." Tele Video Sys., Inc. v. 

21 II Heidenthal, 826 F .2d 915, 917-18 (9th Cir. 1987) (quotation omitted). "Plaintiff is required 

22 II to prove all damages sought in the complaint. In addition, [a] judgment by default shall not 

23 II be different in kind [or] exceed in amount that prayed for in the [complaint]. In detennining 

24 II damages, a court can rely on the declarations submitted by the plaintiff or order a full 

II evidentiary hearing .... Ifproximate cause is properly alleged in the complaint, it is admitted 

26 II upon default. Injury is established and plaintiffneed prove only that the compensation sought 

2711 relates to the damages that naturally flow from the injuries pled." Phillip Morris USA, Inc. v. 

2811 Castworld Prods., 219 F.R.D. 494, 498 (C.D. Cal. 2003) (citations omitted). 

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1 The Clerk ofthe Court has entered default against Defendants San Vicente, Fry, and 

2 Jupin. The Court accepts the factual allegations in the Complaint as true. 

3 Plaintiff has shown that Defendants breached the franchise agreement and are 

4 unlawfully using the Century 21 trademark in violation ofthe terms ofthe agreement. Plaintiff 

has shown that Defendants San Vicente, Fry, and Jupin were served with the Summons, the 

6 Complaint, and the Application for Order to Show Cause Regarding a Preliminary Injunction. 

7 Defendants have failed to respond to the Complaint or the Application. The possibility that 

8 Defendants' default was due to excusable neglect is low. The. sum of money at stake for 

9 damages is commensurate with the violations as alleged in the Complaint. Although there is 

a "strong policy ... favoring decision on the merits," the content of Fed. R. Civ. P. 55(b) 

11 indicates that the seventh Eitel factor is not alone dispositive. Eitel, 782 F.2d at 1472. 

12 Defendants' failure to answer the Complaint makes a decision on the merits "impractical, if 

13 not impossible." Phillip Morris USA, Inc. v. Castworld Prods., 219 F .R.D. 494,501 (C.D. Cal. 

14 2003) (quotation omitted). The Court has considered the factors articulated in Eitel and 

concludes that default judgment against Defendants San Vicente, Fry, and Jupin is appropriate. 

16 CONCLUSION 

17 IT IS HEREBY ORDERED that the Motion for Default Judgment Against Defendants 

18 San Vicente Real Estate Services, Inc., Arnold K. Fry, and Helen B. Jupin (ECF No. 21) is 

19 II GRANTED. Plaintiff shall submit a proposed judgment reflecting the requested monetary and 

injunctive relief no later than fourteen (14) days from the date of this Order. 

21 IT IS FURTHER ORDERED that the Application for an Order to Show Cause 

22 Regarding a Preliminary Injunction (ECF No.7) is DENIED as moot. 

24" DATED: 9/dLL 

William Q. Hayes 

United States DistlTct Judge 26 

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