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Gentle Giant Moving Co., Inc. v. Gentle Giant Moving and Storage, Inc.

United States District Court, D. Colorado

September 4, 2019

GENTLE GIANT MOVING CO., INC., Plaintiff,
v.
GENTLE GIANT MOVING AND STORAGE INC., JOSE M. ESQUIVEL, ITAMAR FRIEDMAN, SR., and EMPIER MOVING AND STORAGE SERVICES CO., Defendants.

          ORDER

          PHILIP A. BRIMMER CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on plaintiff Gentle Giant Moving Co., Inc.'s Motion for Sanctions and Application for Default Judgment Against Defendants Jose M. Esquivel, and Itamar Friedman, Sr. [Docket No. 42]. The Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338 and 15 U.S.C. § 1121.

         I. BACKGROUND

         On November 11, 2017, plaintiff filed this lawsuit against defendants Gentle Giant Moving and Storage Inc., Empier Moving and Storage Services Co. (collectively, “the corporate defendants”), Jose M. Esquivel, and Itamar Friedman, Sr. (collectively, “individual defendants”) (collectively, “defendants”). Docket No. 1. In its complaint, plaintiff alleges the following:

         Plaintiff is a professional moving services business that has used its company name, Gentle Giant Moving Co., Inc., since its founding in 1980. Id. at 5, ¶ 12. It owns multiple trademark registrations for the marks “GENTLE GIANT, ” “GENTLE GIANT MOVING COMPANY, ” and the company's logo, each registered for the uses related to moving and relocation services. Id., ¶ 13. Plaintiff's trademark application for “GENTLE GIANT MOVING & STORAGE, ” which was filed with the U.S. Patent and Trademark Office in 2013, is pending. Id. at 6-7, ¶ 14.

         Plaintiff alleges it became aware that a competing company was using its GENTLE GIANT and GENTLE GIANT MOVING AND STORAGE trademarks. Id. at 7, ¶ 16. Defendants had registered a domain name at gentlegiantservices.com, which was used in connection with defendants' packing, moving, and storage services. Id., ¶ 17. Defendant Gentle Giant Moving and Storage Inc. incorporated in the state of Colorado under the name “Gentle giant moving and storage inc” and registered to do business in the state under the name “jose m esquivel.” Id., ¶ 18. Defendant Empier Moving and Storage Services Co. incorporated in Colorado under the name “empier moving & storage services co” and subsequently registered to do business in the state under the assumed names “empire moving and storage inc” and “gentle giant moving and storage inc.” Id. at 8, ¶ 20.

         In 2016, plaintiff's counsel sent cease and desist letters to the corporate defendants, [1] demanding they stop using the trademarks GENTLE GIANT, GENTLE GIANT MOVING AND STORAGE, and any other trademark similar to the GENTLE GIANT mark. Id., ¶ 23. Neither corporate defendant responded. Id., ¶ 24. A second set of letters similarly went unanswered. Id., ¶ 25.

         Plaintiff initiated a Uniform Domain-Name Dispute-Resolution Policy (“UDRP”) proceeding in 2017 regarding defendants' use of the domain gentlegiantservices.com. Id. at 9, ¶ 28. Defendants did not respond to the complaint. Id., ¶ 29. While the action was pending, defendants registered two new domains - ggmovingservices.com and ggmovingreservations.com - and established a website at ggmovingservices.com. Id., ¶ 31. The domain arbitrator issued a decision ordering the domain gentlegiantservices.com to be transferred from defendants to plaintiff. Id., ¶ 29. Defendants continued to use that domain until the transfer took place. Id., ¶ 30.

         Plaintiff alleges that it has received complaints from multiple individuals who believed they had hired plaintiff but, in reality, had hired defendants and were unsatisfied with defendants' services. Id. at 11, ¶ 38. Plaintiff asserts that defendants' actions have harmed its business reputation and goodwill and have led to lost sales and profits. Id., ¶ 37.

         After plaintiff initiated this lawsuit, defendants were properly served, Docket No. 7, and filed an answer on December 26, 2017. Docket No. 11. One month later, defendants' counsel moved for leave to withdraw from representation. Docket No. 19; Docket No. 22. The magistrate judge granted the motions. Docket No. 23; Docket No. 29.

         The magistrate ordered the corporate defendants to retain new counsel by March 30, 2018.[2] Docket No. 29 at 2. Despite the magistrate judge's order, no attorney entered an appearance for the corporate defendants. Docket No. 34 at 2. The magistrate judge ordered the corporate defendants to appear at a show cause hearing on May 1, 2018 and show cause why default judgment should not be entered against them pursuant to Fed.R.Civ.P. 16(f). Id. at 3.

         The corporate defendants failed to appear at the show cause hearing. Docket No. 35 at 1. On May 1, 2018, the magistrate judge recommended that the Court enter default against the corporate defendants and allow plaintiff to file a motion for default judgment against those defendants. Docket No. 36 at 3. No party filed an objection to the Recommendation.

         Meanwhile, on April 4, 2018, plaintiff filed a Motion to Compel Responses to Discovery Requests Propounded Upon Defendants [Docket No. 32], alleging defendants had failed to respond to its discovery requests. Docket No. 32 at 2-3. On May 1, 2018, the magistrate judge ordered defendants to respond to plaintiff's discovery requests by May 15, 2018. Docket No. 37 at 1. The Order stated:

Defendants shall respond to Plaintiff's written discovery requests on or before May 15, 2018. Failure to do so may result in sanctions. Specifically, Fed.R.Civ.P. 37 lists a variety of sanctions available when a party must file a motion compelling compliance with discovery obligations, which includes ‘rendering a default judgment' or treating the behavior as contempt of court.

Id. at 1-2 (emphasis in original).

         Defendants failed to respond to plaintiff's discovery requests or the Court's order. On October 23, 2018, plaintiff filed this Motion for Sanctions and Application for Default Judgment Against Defendants Jose M. Esquivel and Itamar Friedman, Sr. Docket No. 42.[3] Plaintiff asks the Court to enter an order granting default judgment against all defendants under Rules 16(f) and 37(b)(2). Docket No. 42 at 3, 7. It further requests the Court to award plaintiff damages in the amount of $63, 903.47, to award plaintiff reasonable attorney's fees, and to enter a permanent injunction enjoining defendants from infringing on plaintiff's trademarks. Id. at 8.

         II. LEGAL STANDARD

         “On motion or on its own, the court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney . . . fails to obey a scheduling or other pretrial order.” Fed.R.Civ.P. 16(f). The Federal Rules of Civil Procedure further permit a court to sanction a party if the party “fails to obey an order to provide or permit discovery.” Fed.R.Civ.P. 37(b)(2). Sanctions for either violation may include “rendering a default judgment against the disobedient party.” Fed.R.Civ.P. 37(b)(2)(A)(vi).

         “Determination of the correct sanction for a discovery violation is a fact-specific inquiry, . . . and in making such a determination trial courts are accorded broad discretion.” Gates Rubber Co. v. Bando Chemical Indus., Ltd., 167 F.R.D. 90, 102 (D. Colo. 1996). “Default judgment is generally considered a harsh sanction that should be used only when a party's noncompliance is due to willfulness, bad faith, or any fault of the disobedient party, and not when a party is unable to comply with a discovery order.” Power Places Tours, Inc. v. Free Spirit, No. 16-cv-02725-CMA-KMT, 2017 WL 2718473, at *2 (D. Colo. June 23, 2017). A willful failure to comply is “any intentional failure as distinguished from involuntary noncompliance. No wrongful intent need be shown.” Id. (quoting In re Standard Metals Corp., 817 F.2d 625, 628-29 (10th Cir. 1987). Before imposing a default judgment as a sanction, a court should consider “(1) the degree of actual prejudice to the opposing party; (2) the amount of interference with the judicial process; (3) the culpability of the litigant; (4) whether the court warned the party in advance that [default judgment] would be a likely sanction for noncompliance; and (5) the efficacy of lesser sanctions.” Id. (citing Ehrenhaus v. Reynolds, 965 F.2d 916, 920-21 (10th Cir. 1992)).

         III. ANALYSIS

         A. Sanctions Under Rules ...


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