United States District Court, D. Colorado
MONSTEROPS LLC, a Colorado limited liability company Plaintiff,
v.
MICHAEL SCHINDELE, an individual, and NATURALLY DRIVEN, LLC, a Florida limited liability company, Defendants.
ORDER
KATHLEEN M TAFOYA UNITED STATES MAGISTRATE JUDGE.
Before
the court is Defendant Michael Schindele's “Motion
to Stay Proceedings.” ([“Mot.”], Doc. No.
40.) In his Motion, Defendant Schindele asks that this case
be stayed for twelve months, while he serves a prison
sentence for an unrelated criminal offense. Plaintiff has
responded in opposition, Defendant Schindele has replied, and
Plaintiff has surreplied. ([“Resp.”], Doc. No.
50; [“Reply”], Doc. No. 53;
[“Surreply”], Doc. No. 54 Ex. 1.) Defendant
Naturally Driven, LLC has not responded to Defendant
Schindele's motion.[1]
Plaintiff
Monsterops, LLC produces and sells testosterone-boosting/male
enhancement products under the ALPHA MALE trademark.
([“Compl.”], Doc. No. 1 at ¶ 8.) Defendant
Michael Schindele previously sold similar products under the
trademarks, ALPHA MALE XL and ALPHA XL. (Id. at
¶¶ 13, 15.) It is Plaintiff's contention that
Defendant Schindele's use of the ALPHA MALE XL trademark
infringed upon its own ALPHA MALE trademark. (Id. at
¶ 13.)
On
February 13, 2018, Plaintiff and Defendant Schindele executed
a Confidential Settlement and Release Agreement [“the
Agreement”], by which they attempted to resolve their
trademark dispute. (Id. at ¶ 18, Ex. B.)
Pursuant to the Agreement, Defendant Schindele permanently
ceased use of the ALPHA MALE XL trademark. (Id. at
¶ 19, Ex. B at ¶ 1.) Plaintiff, for its part,
permitted Defendant Schindele to continue to use the ALPHA XL
trademark to sell testosterone-boosting/male-enhancement
products, in exchange for a monthly payment. (Id. at
¶¶ 20-21, Ex. B at ¶¶ 2, 4.) The
Agreement stipulated that Defendant Schindele's payment
obligations would bind any and all assignees and successors
in interest. (Id. at ¶ 23, Ex. B at 10(c).)
According
to the Complaint, nine months later, on November 7, 2018,
Defendant Schindele sold his ALPHA XL assets to Defendant
Naturally Driven, LLC. (Id. at ¶ 25.) In
connection with that sale, Defendant Schindele also assigned
to Defendant Naturally Driven, LLC a pending intent to use
[“ITU”] application for the ALPHA XL trademark.
(Id. at ¶¶ 34, 36, Ex. C.) Shortly
thereafter, on January 3, 2019, Defendant Naturally Driven,
LLC reportedly informed Plaintiff that it had “no duty
to continue payments due under the [A]greement.”
(Id. at ¶ 28.)
On
February 26, 2019, Plaintiff filed this lawsuit against
Defendants, asserting claims for breach of contract and
unjust enrichment, and seeking declarations that Defendant
Naturally Driven, LLC is bound by the terms of the Agreement,
and that Defendant Schindele's assignment of the ITU
application was invalid. (Id. at ¶¶
46-83.) Defendants, in response, asserted cross-claims
against each other for contractual indemnification. (Doc. No.
32-1 at 9-12; Doc. No. 35 at ¶¶ 29-38.) Defendant
Naturally Driven, LLC asserted additional cross-claims
against Defendant Schindele for intentional
misrepresentation, negligent misrepresentation, and breach of
contract. (Doc. No. 35 at ¶¶ 39-70.)
In the
interim, on March 11, 2019, the United States District Court
for the Western District of Missouri sentenced Defendant
Schindele to a maximum of thirty-seven months of confinement
for an unrelated criminal offense. (Mot. 2-3, Ex. A.) Two
months later, on May 6, 2019, Defendant Schindele began
serving his prison sentence at the Edgefield Federal
Correction Institution in Edgefield, South Carolina.
(Id. at 3.) As of this date, Defendant Schindele
remains incarcerated. (Id.)
On
August 5, 2019, Defendant Schindele filed a motion to stay
this case, in its entirety, for a period of twelve months,
because of his imprisonment. (Id. at 1.) In that
Motion, Defendant Schindele asserts that, due to his current
prison conditions, he is unable to fully participate in his
own defense in this case. (Id. at 4.) He contends,
for that reason, that moving forward with this case would be
a violation of his Fourteenth Amendment due process rights.
(Id.) Specifically, Defendant Schindele complains
that he has suffered “severely restrict[ed] [] access
to legal resources . . . and materials needed to effectively
defend against the claims in this case.” (Id.)
He states that he “has no access to documentation,
computers, or personal phones, which limits [his] ability to
adequately respond to any discovery requests at this
time.” (Id.) Defendant Schindele complains
that, since his incarceration began, the other parties in
this lawsuit have “served broad discovery
requests” upon him. (Id. at 2.) In addition,
Defendant Schindele complains that Defendant Naturally Drive,
LLC has asserted cross-claims against him that
“broaden[] the scope of the case significantly, ”
and that “require even more in-depth discovery on
topics [he] was not anticipating at the time of his
surrender.” (Id. at 2, 9.)
In the
Motion, Defendant Schindele's lawyer also alleges that
her access to her client has been “severely
restricted.” (Id. at 2.) She claims that she
was unable to communicate with her client, at all, until July
2019, and that, since that time, she has only been able to
communicate with him intermittently via email. (Id.
at 2-4.) Defendant Schindele's lawyer complains that the
prison email system “only allows for a limited number
of text and no attachments to be sent, ” and that, as a
result, “the counter-crossclaims had to be sent to
[Defendant] Schindele in a series of four emails.”
(Id. at 3-4.) She asserts that “the amount of
time that lags in-between [Defendant] Schindele receiving
[discovery request] documents through the [prison mail]
system and his ability to respond among his other duties
required of him during the day in prison is a problem and
necessarily delays the discovery process.”
(Id. at 4.) In addition, Defendant Schindele's
attorney complains that visitation of her client at the South
Carolina prison facility “would be extremely costly and
burdensome, ” because she resides in Colorado.
(Id.)
Plaintiff,
in response, does not object to a stay of the cross-claims
asserted by Defendants in this case. (Resp. 4.) It contends,
however, that Defendant Schindele has failed to show that a
stay is warranted as to its own claims. (Id.)
Specifically, Plaintiff argues that there is no evidence to
show that Defendant Schindele has had difficulty
communicating with his lawyer, or that he has raised such
complaints to prison officials. (Id. at 3, 11.)
Plaintiff also argues that the requested length of the stay
is “speculative, ” because there is no evidence
to suggest that Defendant Schindele will be even be released
from prison within one year. (Id. at 4.) Plaintiff
maintains that Defendant Schindele will not be unduly
burdened if its claims against him proceed, because those
claims remain “unchanged, ” and because the
discovery it requests from him is
“narrowly-tailored” to those claims.
(Id. at 8-9.)
The
Federal Rules of Civil Procedure do not expressly provide for
a stay of proceedings. Rule 26(c), however, provides that,
upon a showing of good cause, a court may “issue an
order to protect a party . . . from annoyance, embarrassment,
oppression, or undue burden or expense.” Fed.R.Civ.P.
26(c). Further, “[t]he power to stay proceedings is
incidental to the power inherent in every court to control
the disposition of the causes on its docket with economy of
time and effort for itself, for counsel, and for
litigants.” Landis v. N. Am. Co., 299 U.S.
248, 254-55 (1936) (citing Kan. City S. Ry. Co. v. United
States, 282 U.S. 760, 763 (1931)).
In this
District, a stay of proceedings is generally disfavored.
See, e.g., Rocha v. CCF Admin., No.
09-cv-01432, 2010 WL 291966, at *1 (D. Colo. Jan. 20, 2010);
Jackson v. Denver Water Bd., No. 08-cv-01984, at *1
(D. Colo. Dec. 15, 2008); Chavez v. Young Am. Ins.
Co., No. 06-cv-02419, at *2 (D. Colo. Mar. 2, 2007).
Nevertheless, the decision whether to stay a case rests
firmly within the sound discretion of the court. United
Steelworkers of Am. v. Or. Steel Mills, Inc., 322 F.3d
1222, 1227 (10th Cir. 2003) (quoting Landis, 299
U.S. at 254).
In
ruling on a motion to stay, five factors are generally
considered: “(1) [the] plaintiff's interests in
proceeding expeditiously with the civil action and the
potential prejudice to [the] plaintiff of a delay; (2) the
burden on the defendants; (3) the convenience to the court;
(4) the interests of persons not parties to the civil
litigation; and (5) the public interest.” String
Cheese Incident, LLC v. Stylus Shows, Inc., No.
02-cv-01934, 2006 WL 8949955, at *2 (D. Colo. Mar. 30, 2006);
see United Steelworkers, 322 F.3d at 1227.
In this
case, a balance of the String Cheese factors weighs
against the imposition of a stay. First, given the nature of
the allegations in the Complaint, Plaintiff will likely
suffer prejudice if this case is delayed for one year.
Plaintiff alleges that Defendants have failed to make
contractually obligated monthly payments owed to it under the
Settlement Agreement for at least eight months, and that it
relies on those payments for its ongoing business operations.
(Compl. ¶¶ 28, 32, 77-83; Resp. 7-8.) In addition,
Plaintiff alleges that Defendants' infringement of its
ALPHA MALE trademark has continued unabated. (Compl.
¶¶ 41-45; Resp. 7.) If a one-year stay is imposed
in this case, Plaintiff's damages will continue to
accrue, and its business will potentially suffer further
harm, as a result. See Gold, Inc. v. H.I.S. Juveniles,
Inc., No. 14-cv-02298, 2015 WL 1650900, at *2 (D. Colo.
Apr. 8, 2015) (“[T]his court has previously recognized
that a trademark plaintiff has a substantial interest in
avoiding continuing injury due to a defendant's alleged
violation of its ...