Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-01457/USCOURTS-azd-2_13-cv-01457-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Best Western International Incorporated,

Plaintiff, 

v. 

BBW LLC, et al., 

Defendants.

No. CV-13-01457-PHX-DGC

ORDER 

 Plaintiff Best Western International, Inc. (“Best Western”) has filed a motion for 

entry of default judgment. Doc. 39. The Court will grant the motion. 

I. Background. 

 Best Western’s complaint alleges that on November 12, 2000, Defendants BBW, 

LLC and Richard Knapp applied for a Best Western membership for “The Bartlesville 

Inn” located in Bartlesville, Oklahoma. Doc. 1, ¶ 26. The application was approved and 

the hotel became a Best Western member property known as “Best Western Bartlesville 

Inn.” Id., ¶¶ 26-27. Defendants’ relationship with Best Western was memorialized in a 

Membership Agreement. Id. Under the Agreement, Defendants were required to pay all 

fees, dues, charges, and assessments imposed on members by Best Western’s board and 

to promptly pay the costs of all goods or services provided by or ordered through Best 

Western. Id., ¶ 28. For a variety of reasons, Best Western’s board voted to cancel 

Defendants’ membership on February 19, 2013. Id., ¶ 35. Pursuant to the Membership 

Agreement, termination of Defendants’ Best Western membership triggered an obligation 

Case 2:13-cv-01457-DGC Document 42 Filed 07/08/14 Page 1 of 5
- 2 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

to immediately satisfy their payment obligations to Best Western. Id., ¶ 36. In addition, 

the Membership Agreement required Defendants to remove all Best Western marks 

displayed at the Bartlesville Inn and from any advertising for the Bartlesville Inn within 

fifteen days of termination. Id. 

 Best Western’s complaint alleges that Defendants failed to pay off their account 

balance and remove Best Western symbols from the Bartlesville Inn and from advertising 

for the Bartlesville Inn. Id., ¶¶ 39-42. The complaint asserts twelve claims, including 

breach of contract, breach of the implied covenant of good faith and fair dealing, unjust 

enrichment, and trademark infringement. Id., ¶¶ 48-122. 

 Best Western filed a motion for Default Judgment on October 2, 2013. Doc. 12. 

The Court denied the motion because Defendants filed an answer to the complaint on 

October 11, 2013. Doc. 23. A settlement conference was held on February 19, 2014 

before Magistrate Judge Steven Logan but a settlement was not reached. Doc. 30. On 

April 22, 2014, Defendant BBW, LLC’s attorney filed a motion to withdraw as attorney. 

Doc. 33. The Court held a hearing on May 7, 2014, after which it granted the motion to 

withdraw. Doc. 35. On May 8, 2014, the Court ordered Defendant Knapp to file a 

memorandum showing cause why default judgments should not be entered against the 

Defendants. Doc. 36. No memorandum was filed. The Court held a hearing on May 28, 

2014, but Defendants did not appear. Doc. 38. 

II. Legal Standard. 

 The Court has discretion to grant default judgment against Defendants pursuant to 

Rule 55(b). See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980); Draper v. 

Coombs, 792 F.2d 915, 924 (9th Cir. 1986). Factors the Court should consider include 

(1) the possibility of prejudice to Plaintiff, (2) the merits of the claims, (3) the sufficiency 

of the complaint, (4) the amount of money at stake, if any, (5) the possibility of a dispute 

concerning material facts, (6) whether default was due to excusable neglect, and (7) the 

policy favoring a decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 

(9th Cir. 1986). 

Case 2:13-cv-01457-DGC Document 42 Filed 07/08/14 Page 2 of 5
- 3 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

III. Analysis. 

A. Possible Prejudice to Best Western. 

 The first Eitel factor favors entry of default judgment because Defendants have 

refused to participate in the litigation after being properly served with process and 

previously participating in the case. 

B. The Merits of the Claims and the Sufficiency of the Complaint. 

 The second and third Eitel factors favor entry of default judgment because Best 

Western’s claims are each legally sufficient as pled and can be evaluated given Best 

Western’s factual allegations. Best Western’s breach of contract claim alleges facts to 

support each element of a breach of contract claim. Chartone, Inc. v. Bernini, 83 P.3d 

1103, 1111 (Ariz. Ct. App. 2004) (stating that a breach of contract claim contains three 

elements: (1) the existence of a contract, (2) its breach, and (3) resulting damages). Best 

Western has also substantiated the correctness of each charge on the open account as 

required to prove its claim of open account. See Merrick v. U.S. Rubber Co., 440 P.2d 

314, 317 (Ariz. Ct. App. 1968). In addition, Best Western has pled adequate facts to 

establish a claim for trademark infringement under Section 32 of the Lanham Act. 15 

U.S.C. § 1114(1). 

C. Amount of Money at Stake. 

 The fourth Eitel factor favors entry of default. The Court must consider the 

amount of money at stake in relation to the seriousness of Defendants’ conduct. See 

PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d. 1172, 1176 (9th Cir. 2002). The 

damages requested stem from a breach of contract. The Court concludes that the 

seriousness of Defendants’ conduct warrants the requested damages. 

D. Possible Dispute Concerning Material Facts. 

 Because Defendants disputed material facts in their answer (Doc. 15), the fifth 

factor does not favor entry of default. 

E. Whether Default Was Due to Excusable Neglect. 

 The sixth factor favors entry of default judgment because there is no excuse for 

Case 2:13-cv-01457-DGC Document 42 Filed 07/08/14 Page 3 of 5
- 4 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

Defendants’ failure to continue participating in this litigation, particularly in light of the 

Court’s warning that failure to participate could result in entry of default. 

F. Policy Underlying Federal Rules of Civil Procedure. 

 The seventh factor favors entry of default judgment because Defendants have 

chosen not to continue defending this action. 

G. Conclusion. 

 Having reviewed Best Western’s motion, which addresses each Eitel factor, and 

having reviewed the supporting affidavits and documents provided by Best Western, the 

Court concludes that default judgment is appropriate. 

 The Court will grant default judgment on counts one, two, three, four, and five of 

the complaint in the amount of $82,015.30, plus interest. Best Western also requests 

attorneys’ fees and costs incurred in connection with counts one through five. The 

Membership Agreement provides that in the event Defendants breach any obligation of 

the Membership Agreement, Defendants are “liable to Best Western for all attorney’s 

fees, costs and expenses incurred by Best Western in connection with the breach or 

violation.” Doc. 1-1 at 9, ¶ 36. This provision is enforceable under Arizona law so long 

as the fees are facially reasonable. See McDowell Mountain Ranch Cmty. Ass’n v. 

Simons, 165 P.3d 667, 672 (Ariz. Ct. App. 2007). The Court has reviewed the affidavit 

of Best Western’s attorney, Michelle Swann, and concludes that the fees are reasonable. 

Best Western is entitled to recover $20,621.90 in attorney’s fees and costs. The Court 

will also grant injunctive relief on counts seven, eight, and nine. 

 With respect to count six, post termination use of trademarks, Best Western seeks 

liquidated damages in the amount of $161,634.56. This amount represents $820.48 per 

day (15% of the average room rate multiplied by the number of rooms) for 197 days – 

from March 10, 2013 until September 23, 2013, the last date proof exists of Defendants’ 

trademark infringement. Doc. 39 at 11. The District of Arizona has already found that 

Best Western’s Membership Agreement’s liquidated damages clause is reasonable. See 

Best Western Int’l, Inc. v. Ridenour, No. CV-10-1789-PHX-DGC, 2011 WL 1086014, at 

Case 2:13-cv-01457-DGC Document 42 Filed 07/08/14 Page 4 of 5
- 5 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

*2 (D. Ariz. Mar. 24, 2011); Best Western Int’l., Inc. v. Oasis Invs., L.P., 398 F. Supp. 2d 

1075, 1081 (D. Ariz. 2005). Best Western is entitled to $161,634.56. 

IT IS ORDERED: 

1. Best Western’s motion for default judgment (Doc. 39) is granted. 

2. Default judgment is entered in favor of Best Western and against 

Defendants BBW, LLC and Richard Knapp on counts one, two, three, four, 

and five in the amount of $82,015.30, plus 1.5% interest per month from 

June 1, 2014. 

3. Default is entered in favor of Best Western and against Defendants BBW, 

LLC and Richard Knapp on count six in the amount of $161,634.56, plus 

post-judgment interest pursuant to 28 U.S.C. § 1961. 

4. Best Western is awarded attorneys’ fees and costs in the amount of 

$20,621.90, plus post-judgment interest pursuant to 28 U.S.C. § 1961. 

5. Defendants, and any person or entity acting on their behalf or in concert 

with them, are permanently enjoined from using, or authorizing, 

licensing, assisting, or facilitating any person’s or entity’s use of, the Best 

Western marks, any colorable imitation thereof, or any other confusingly 

similar mark. 

6. Defendants shall, within 10 days from the date of this order, remove all 

Best Western marks used in connection with the subject hotel located in 

Bartlesville, Oklahoma. 

7. The Clerk shall enter judgment and terminate this action. 

 Dated this 8th day of July, 2014. 

Case 2:13-cv-01457-DGC Document 42 Filed 07/08/14 Page 5 of 5