ZP NO. 314, LLC v. ILM Capital, LLC et al

Filing 214

ORDER granting 188 Motion for Permanent Injunction - the Court FINDS that a permanent injunction is necessary as set out. ZP is entitled to attorneys fees in the amount of $158,566.50 pursuant to 15 U.S.C. § 1117 and the Alabama Trademar k Act, Ala. Code § 8-12-18(c)(1), and the same are hereby AWARDED. In addition, the Court hereby AWARDS ZP costs in the amount of $2,777.08. Motion 206 is DENIED as set out. Signed by Magistrate Judge Sonja F. Bivins on 5/28/20. (mpp)Copies to counsel

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ZP NO. 314, LLC,

*
*
*
*
* CIVIL ACTION NO. 16-00521-B
*
*
*
*

Plaintiff,
vs.
ILM Capital, LLC, et al.,
Defendants.

ORDER
This action is before the Court for the determination of
appropriate relief following a trial on Plaintiff, ZP No. 314, LLC
(“ZP”)’s claims under the Lanham Act for cybersquatting (15 U.S.C.
§ 1125(d) and unfair competition (15 U.S.C. § 1125(a), claims for
trademark infringement and unfair practices under Alabama Code §
8-12-1,

et

seq.,

and

claims

for

contributory

and

vicarious

liability and intentional interference with business relations.1
(Doc. 176 at 22-30, 36-37).

The Court found in favor of ZP on its

claims for unfair competition, trademark infringement and unfair
practices,

and

contributory

and

vicarious

liability

against

Defendants ILM Capital, LLC, Michael Wheeler, and A.J. Hawrylak
(hereinafter sometimes “ILM Capital Defendants” or “Defendants”).

1

The Court incorporates, as if fully set forth herein, the findings
of fact and conclusions of law set forth in its order dated
September 30, 2019. (Doc. 176).

1

The Court found in favor of these Defendants on ZP’s cybersquatting
claim

and

relations.2

claim

for

intentional

(Id. at 12-22, 32).

interference

with

business

The Court also found in favor of

Defendants ILM Mobile Management LLC, We Communities LLC, and
Mobile CQ Student Housing LLC on all of ZP’s claims.
With

respect

to

the

aforementioned

claims

(Id. at 32).
on

which

ZP

prevailed at trial, ZP has requested nominal damages, injunctive
relief, attorneys’ fees, and costs. (Doc. 193 at 5-6). Defendants
WE Communities, LLC, Mobile CQ Student Housing, LLC, ILM Mobile
Management, LLC, and Mary Schaffer-Rutherford assert that they too
are prevailing parties and have filed a motion for attorneys’ fees
and costs in this action.

(Doc. 206).

The motions have been fully

briefed by the parties and are before the Court for determination.
The parties’ motions will be addressed in turn.
I.

ZP’s Request for Nominal Damages.

As noted, supra, following a bench trial in this case, the
Court issued an order on September 30, 2019, finding in favor of
ZP on its claims for unfair competition under the Lanham Act,
trademark infringement and unfair practices under Alabama Code §
8-12-1, et seq., and contributory and vicarious liability against
the “ILM Capital Defendants”. (Doc. 176 at 22-30, 36-37).

2

ZP

The Court previously granted Defendant Mary Schaffer-Rutherford’s
motion for summary judgment. (Doc. 130 at 59).

2

requested

equitable

relief

in

the

form

of

an

accounting

of

Defendants’ profits, attorneys’ fees and costs, nominal damages,
and injunctive

relief.

In an order dated October 29, 2019 (Doc.

193), the Court determined that, in pretrial proceedings and at
trial, ZP abandoned its claims for an accounting of profits and
sought only nominal damages, injunctive relief, attorneys’ fees,
and costs in relation to its claims for unfair competition under
the Lanham Act and trademark infringement/unfair practices under
Alabama law.

In light of ZP’s waiver of claims for lost profits,

the Court awards ZP nominal damages in the amount of $1.00 on its
claims for unfair competition under the Lanham Act, trademark
infringement
contributory

and
and

unfair
vicarious

practices
liability

under

Alabama

against

the

law,

ILM

and

Capital

Defendants.3
II. ZP’s Request for Injunctive Relief.
At the conclusion of the bench trial in this case on December
7, 2018, ZP filed a motion in open court for immediate injunctive
relief and Motion for Judgment as a matter of law.4 (Docs. 163,
164).

ZP sought an order directing Defendants to transfer the

eight domain names made the subject of this lawsuit to ZP.

3

(Id.).

In the pretrial order, the only issue that was bifurcated was
any claim for attorneys’ fees. ZP offered no evidence at trial
regarding lost profits.

4

Neither motion was accompanied by a supporting brief.

3

After hearing arguments from the parties, the Court took the
motions

under

advisement

and

declined

to

order

transfer of the eight domain names at issue.

an

immediate

The Court directed

Defendants to maintain the status quo but did not address the
renewal of the registration for the domain names.
47-50).

On that same date, the Court entered an endorsed order

taking ZP’s motions under advisement.
On

(Doc. 167 at

January

22,

2019,

Defendants

(Doc. 165).
filed

a

brief

entitled

“Response to Plaintiff’s Motion for Immediate Injunctive Relief.”
(Doc. 172).

Included within Defendants’ response brief was a

statement “notify[ing]” the Court and ZP that, “unless instructed
otherwise by the Court,” Defendants intended to disable the autorenewal

feature

for

the

subject

domain

names

so

that

the

registrations on the domain names would lapse on the registration
anniversary dates in May 2019.

(Doc. 172 at 2).

Defendants

reasoned that, when they allowed the domain names to auto-renew
the previous year in order to maintain the status quo, ZP claimed
it was an additional act of cybersquatting.

(Id. at 1).

Thus, to

avoid further claims of cybersquatting, they did not intend to
auto-renew the domain names unless the Court instructed otherwise.
(Id.).

ZP filed a reply brief cautioning Defendants to maintain

the status quo as instructed by the Court on December 7, 2018.
(Doc. 174 at 1-2).

Once Defendants disabled the auto-renewal in

4

May 2019, the registration for the domain names lapsed and returned
to public auction.

(Doc. 190 at 1).

On September 30, 2019, the Court issued an order finding in
favor

of

ZP

on

its

Lanham

Act

claims,

state

law

trademark

infringement and unfair practices claims, and contributory and
vicarious liability with respect to these claims and held that ZP
was entitled to injunctive relief.5

(Doc. 176 at 37).

In a

separate “Partial Judgment,” also dated September 30, 2019, the
Court ordered ZP, with input from Defendants’ counsel, to file a
proposed permanent injunction enjoining Defendants from use of
ZP’s federally registered marks.

(Doc. 177).

ZP filed a proposed

order requesting, inter alia, that Defendants ILM Capital, LLC,
Michael Wheeler, and A.J. Hawyrlak be permanently enjoined from
all use or infringement of ZP’s “One Ten” and “One Ten Student
Living” trademarks.

(Doc. 188).

In Defendants’ brief in response, they asserted that ZP’s
request for injunctive relief is moot.

According to Defendants,

per the notice provided in their brief in February 2019, out of
concern that ZP would attempt to use any registration as new
evidence of cybersquatting, they disabled the auto-renewals; thus,
their registration for the domain names lapsed in May 2019, and

5

The Court advised that the issue of damages had yet to be
determined. (Doc. 176 at 37).

5

they could no longer transfer the domain names to ZP because they
no longer owned them.6

(Doc. 190).

Defendants further argued that

ZP’s proposed order for a permanent injunction was overly broad.
(Doc. 190 at 2). In its reply, ZP has argued that its request for
injunctive relief is not moot and that Defendants’ conduct in
allowing the domain names to lapse evidences continued bad faith
by Defendants.

(Doc. 197).

The Lanham Act provides courts with the “power to grant
injunctions, according to the principles of equity and upon such
terms as the court may deem reasonable.” 15 U.S.C. § 1116(a).

A

plaintiff seeking a permanent injunction must demonstrate that (1)
it has suffered an irreparable injury; (2) the remedies available
at law, such as monetary damages, are inadequate to compensate for
that injury; (3) considering the balance of hardships between the
plaintiff and defendant, a remedy in equity is warranted; and (4)
the

public

injunction.

interest

would

not

be

disserved

by

a

permanent

See Hard Candy, LLC v. Anastasia Beverly Hills, Inc.,

921 F.3d 1343, 1353 (11th Cir. 2019)(“In ‘ordinary trademark
infringement

actions

.

.

.

complete

injunctions

against

the

infringing party are the order of the day.’ . . . This is because
‘the public deserves not to be led astray by the use of inevitably

6

Defendants further argued that ZP’s proposed order
permanent injunction was overly broad. (Doc. 190 at 2).

6

for

a

confusing marks,’ and injunctive relief is the surest way to
prevent future harm.”) (citations omitted).
Historically, the Eleventh Circuit has subscribed to the rule
that “infringement of a trademark is, by its very nature, an
activity which causes irreparable harm.”

Sream, Inc. v. Barakat

Food, Inc., 2017 U.S. Dist. LEXIS 165420, *7, 2017 WL 7792613, *3
(S.D. Fla. Oct. 4, 2017), report and recommendation adopted, 2017
WL 7796163 (S.D. Fla. Oct. 31, 2017) (citing North Am. Med. Corp.
v. Axiom Worldwide, Inc., 522 F.3d 1211, 1227 (11th Cir. 2008)).
See also David Boggs, LLC v. Soltis, 2019 U.S. Dist. LEXIS 159063,
*9, 2019 WL 5110699, *4 (M.D. Fla. Aug. 26, 2019), report and
recommendation adopted, 2019 WL 4439866 (M.D. Fla. Sept. 17,
2019)(“In trademark infringement actions, injunctive relief is
often appropriate because: 1) ‘there is no adequate remedy at law
to redress infringement and 2) infringement by its nature causes
irreparable harm.’”)(emphasis in original)(citations omitted).
In Spire, Inc. v. Cellular S., Inc., 2017 U.S. Dist. LEXIS
146169, *53, 2017 WL 3995759, *18 (S.D. Ala. Sept. 11, 2017)(J.
DuBose), this Court observed that the presumption of irreparable
harm in a trademark infringement has been called into question by
the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C.,
547 U.S. 388, 390-92, 126 S. Ct. 1837, 164 L. Ed. 2d 641 (2006).
In eBay, the Supreme Court rejected a “general rule” that either
presumed irreparable injury or categorically denied it in patent

7

cases. Id. at 393-94.
In Axiom Worldwide, 522 F.3d at 1228, the Eleventh Circuit
declined to decide whether a presumption of irreparable injury in
a trademark infringement case “is the equivalent of the categorical
rules rejected by the [Supreme] Court in eBay.”

See also Nike,

Inc. v. Austin, 2009 U.S. Dist. LEXIS 100779, 2009 WL 3535500 *5
(M.D. Fla. 2009)(citing Axiom Worldwide, 522 F.3d at 1228).

In

Axiom Worldwide, the Eleventh Circuit confronted the relatively
unique

circumstance

of

trademark

infringement

arising

from

a

defendant’s use of the plaintiff’s trademarks in meta tags on its
website, which meta tags were not displayed to visitors to the
website. Id. at 1216-1217. In analyzing whether the plaintiffs
were entitled to a preliminary injunction, the Eleventh Circuit
acknowledged that its “prior cases do extend a presumption of
irreparable harm once a plaintiff establishes a likelihood of
success on the merits of a trademark infringement claim.”

Id. at

1227. The court declined to resolve the issue of whether the
presumption would be sufficient to establish irreparable harm in
light of eBay, instead remanding the case to the district court to
determine whether irreparable harm was shown without reliance on
the presumption, among other things.

Id. at 1228.

Assuming, without deciding, that there is no presumption of
irreparable harm in this trademark infringement case, the Court
has nevertheless found that Defendants’ use of ZP’s trademarks

8

would likely result in consumer confusion, given that the domain
names were identical or confusingly similar to ZP’s marks and were
intentionally

chosen

by

Defendants

for

that

reason;

that

Defendants are direct competitors of ZP and offer the same goods
and services in the same locale as ZP; that Defendants and ZP both
use the internet to advertise and compete for the same customer
base; and that the Defendants have repeatedly exhibited bad faith
in their dealings with ZP.

(Docs. 130, 176, 196 at 8).

Because

irreparable injury can be based upon the possibility of confusion,
ZP has established irreparable harm in this case, with or without
the presumption.

See Ferrellgas Partners, L.P. v. Barrow, 143

Fed. Appx. 180, 190 (11th Cir. 2005)(irreparable injury can be
based “upon the possibility of confusion.”); Sream, 2017 WL 7792613
at *3 (grounds for irreparable injury include “the possibility of
confusion.”).
Moreover, based on the evidence in this case, as recounted
herein and in the Court’s previous orders in this case (Docs. 130,
176, 196), the Court is satisfied that

monetary damages are

inadequate to compensate for ZP’s injury; that considering the
balance of hardships between ZP and Defendants, a remedy in equity
is warranted; and that the public interest would not be disserved
by a permanent injunction. (Docs. 130, 166, 167, 176, 196).
Indeed, Defendants and ZP are competitors for the local student
housing market and Defendants knowingly selected and registered

9

eight domain names containing ZP’s trademarks in an effort to
divert traffic from ZP’s website, and then parked the domain names
on their own parked webpages, with full knowledge that ZP, their
competitor, had obtained registration of the “One Ten Student
Living” and “One Ten” marks in July and October 2017, and in spite
of ZP’s repeated demands that Defendants cease using their marks
and transfer the domain names to them, Defendants refused.
While Defendants contend that ZP’s request for injunctive
relief

is

moot

because

Defendants

no

longer

possess

the

registrations for these domain names, ZP’s request for the transfer
of the domain names is only one facet of its broader request for
injunctive relief, namely, that the Court enjoin Defendants from
any and all use of ZP’s “One Ten” and “One Ten Student Living”
trademarks.
injunctive

(Doc.
relief

188).
is

Thus,
not

moot

ZP’s

request

simply

for

because

permanent
Defendants

relinquished ownership and control over the eight domain names at
issue in this case and can longer facilitate the transfer of the
domain names to ZP.7

7

With respect to ZP’s assertion that Defendant’s failure to renew
the eight domain names following the Court’s directive to maintain
the status quo is further evidence of bad faith, the undersigned
finds otherwise. The lapse of the registrations was unfortunate;
however, due to an oversight by the Court, the registrations
expired prior to issuance of the Court’s opinion in this case. In
the absence of an express assurance from the Court, or a
stipulation between the parties, that Defendants’ renewal of the
registrations in May 2019 would not constitute actionable conduct,
10

Further,
injunctive

the

Court

relief

is

rejects

unwarranted

Defendants’
because

argument

ZP

has

that

failed

to

demonstrate that Defendants “are likely to register additional
One-Ten related domain names” in the future.

(Doc. 190 at 4).

The evidence of Defendants’ bad faith in its dealings with ZP, as
well as its other competitors, is replete, as detailed repeatedly
in this case.
196 at 8).

(Doc. 130 at 34-38; Doc. 176 at 7 n.7, 16-26; Doc.

Defendants’ conduct in registering domain names that

are confusingly similar to the trademarks of its competitors
appears to be a mode of operation, not an isolated occurrence.
(Doc. 176 at 19).

Based on the clear evidence of bad faith in

this case, the Court finds that ZP has demonstrated that, absent
an injunction, there is a likelihood that Defendants will continue
to

infringe

on

ZP’s

“One

Ten”

and

“One

Ten

Student

Living”

trademarks in the future.
Based on the foregoing, the Court FINDS that a permanent
injunction is necessary to protect ZP from the threat of future
irreparable

injury,

that

monetary

damages

are

inadequate

to

compensate ZP for its injury, that considering the balance of
hardships

between

ZP

and

Defendants

a

remedy

in

equity

is

warranted, and that the public interest would not be disserved by

the Court cannot find that Defendants’ decision against renewal of
the registration was unreasonable under the circumstances.

11

a permanent injunction.

Accordingly, the Court hereby GRANTS a

permanent injunction barring Defendants ILM Capital, LLC, Michael
Wheeler, and A.J. Hawyrlak (sometimes referred to as “ILM Capital,
Wheeler, and Hawyrlak” or “Defendants”), from further use of the
“One Ten” and/or “One Ten Student Living” marks, as well as
prohibiting ILM Capital, Wheeler, and Hawrylak from using “One
Ten” and/or “One Ten Student Living” or any confusingly similar
mark in commerce, as part of a domain name, or for any other
reason.

The injunction shall extend to such use by Defendants ILM

Capital, Wheeler, and Hawrylak (individually or collectively);
their officers, agents, servants, employees, and attorneys; any
entity in which said Defendant(s) have an ownership interest
(excluding public companies in which said Defendant(s) own less
than 1% of the outstanding shares); and any person or entity making
such use in active concert or participation with or under said
Defendant(s) direction or control.8
III. ZP’s Request for Attorneys’ Fees and Costs.
As stated, following a bench trial in this case, the Court
issued an order on September 30, 2019, finding in favor of ZP and
against Defendants ILM Capital, Wheeler, and Hawrylak on ZP’s
claims for unfair competition, trademark infringement and unfair

8

The Court has considered Defendants’ objections that ZP’s
proposed order was overbroad and has tailored the instant order so
as to fully comply with Federal Rule of Civil Procedure 65.

12

practices, and contributory and vicarious liability.

(Doc. 176 at

22-30,

in

36-37).

In

its

motion,

ZP

argues

that,

light

of

Defendants’ “intentional and bad faith conduct, obstinate refusal
to transfer the infringing domains, and litigiousness in general,”
this is an “exceptional case” warranting an award of attorneys’
fees in favor of ZP pursuant to the Lanham Act (15 U.S.C. § 1117)
and under the Alabama Trademark Act (Ala. Code § 8-12-18(c)).9
(Docs. 203, 204).

ZP requests attorneys’ fees in the amount of

$634,266.00 and recoverable costs and expenses in the amount of
$2,977.08, for a total of award of $637,243.08 in fees, costs, and
expenses.

(Doc. 203 at 4).

Defendants oppose ZP’s request for any attorney’s fees in this
case and argue that this case is not exceptional.

Defendants

contend that they were not litigious10 and that any “victory” by ZP

9

Under the Alabama Trademark Act, the Court may award “reasonable
attorney fees” “[t]o a prevailing owner in such cases when the
court finds the defendant willfully intended infringement or
dilution.”
Ala. Code § 8-12-18(c)(1).
Having found that
Defendants ILM Capital, Wheeler, and Hawyrlak willfully intended
the trademark infringement in this case, ZP is entitled to a
reasonable attorneys’ fees award under this Act as well.
The
evidence that establishes ZP’s entitlement to an award of
attorneys’ fees under the Lanham Act, discussed in detail, infra,
also establishes ZP’s entitlement to an award of attorneys’ fees
under the Alabama Trademark Act.
As previously discussed, the
Court soundly rejects Defendants’ arguments that ZP cannot recover
under the Alabama Trademark Act because ZP was not a prevailing
party in this case and because Defendants did not willfully
infringe on ZP’s trademarks. (Doc. 211 at 24-25).

10

While the Court has not found Defendants to have been so
litigious as to have rendered this case exceptional on that basis,
13

is

“hollow,”

“nominal,”

“pyrrhic”

and

“so

technical

and

insignificant that the only ‘reasonable’ fee award is none at all.”
(Doc. 211 at 4-5, 11, 13).

Defendants concede that, if awarded,

the rates charged by Plaintiff’s counsel are reasonable;11 however,
Defendants argue that the hours should be reduced because ZP did
not prevail on all of its claims or against all of the Defendants.
Defendants also argue that ZP should not have incurred substantial
legal fees after summary judgment because some of its claims were
dismissed, and one Defendant was dismissed, that ZP’s counsel
expended twice the number of hours as Defendants’ counsel, and that
ZP should have resorted to other methods of dispute resolution
instead of litigation.

(Doc. 211).

ZP counters that Defendants’ deliberate and willful trademark
infringement and bad faith conduct render this case “exceptional.”
ZP further argues that the legal work performed by ZP’s counsel
was necessary and would have been the same even absent the claims
and/or Defendants as to which ZP did not ultimately prevail, as
all of the claims and Defendants were and are interrelated.

ZP

also argues that the legal work performed by counsel after the
summary judgment stage was necessary to prepare the case for trial

the Court rejects any implication that the filings in this case
were minimal. (Doc. 211 at 3).
11

Defendants concede that the hourly rate requested by ZP is
reasonable. (Doc. 211 at 28).

14

and to address post-trial motions and submissions. ZP further
asserts that the total number of hours expended by Defendants’
counsel are not in the record for comparison, nor should they be
compared as much of ZP’s legal work was necessitated by and
performed in response to motions and briefs filed by Defendants.
ZP also argues that it attempted repeatedly pre-suit and postfiling to settle this matter, but Defendants refused attempts at
settlement and even filed a retaliatory state court action against
ZP, which Defendants later voluntarily dismissed when forced to
provide discovery.

(Docs. 204, 213).

“The Lanham Act allows courts to award reasonable attorney
fees to prevailing parties ‘in exceptional cases.’”

Donut Joe’s,

Inc. v. Interveston Food Servs., LLC, 116 F. Supp. 3d 1290, 1292
(N.D. Ala. 2015)(quoting 15 U.S.C. § 1117(a)).
allows

the

registrant

of

a

mark

who

The Lanham Act also

establishes

trademark

infringement to collect qualifying costs of the action, regardless
of whether the case is found to be “exceptional.”

Choice Hotels

Int’l, Inc. v. Key Hotels of Atmore, II, LLC, 2016 U.S. Dist. LEXIS
155449, *20, 2016 WL 6652453, * 7 (S.D. Ala. Nov. 9, 2016) (“the
plain language of § 1117(a) makes clear that the higher standard
for attorneys’ fees does not apply to costs.”)(citing 15 U.S.C. §
1117(a)).

While the term “costs of the action” is not defined by

the Lanham Act, “the term has been interpreted as meaning the costs
allowed under 28 U.S.C. § 1920,” namely, (1) fees of the clerk and

15

marshal;

(2)

fees

for

printed

or

electronically

recorded

transcripts necessarily obtained for use in the case; (3) fees and
disbursements

for

printing

and

witnesses;

(4)

fees

for

exemplification and the costs of making copies of any materials
where the copies are necessarily obtained for use in the case; (5)
docket fees under section 1923; (6) compensation of court appointed
experts,
expenses,

compensation
and

section 1828.

costs

of
of

interpreters,

special

and

salaries,

interpretation

fees,

services

under

Choice Hotels Int’l, Inc. v. Key Hotels of Atmore

II, 2017 U.S. Dist. LEXIS 222711, *16, 2017 WL 6945340, *6 (S.D.
Ala. Aug. 18, 2017); 28 U.S.C. § 1920.
A

prevailing

party

is

the

party

who

“succeed[s]

on

a

significant litigated issue that achieves some of the benefits
sought by that party in initiating the suit.”

Montgomery v. Noga,

168 F.3d 1282, 1304 (11th Cir. 1999)(plaintiff was a “prevailing
party” where he succeeded in procuring an injunction to prevent
defendants from falsely designating the origin of his copyrighted
computer

program,

which

plaintiff

sought

in

initiating

the

suit)(citing Cable/Home Communication Corp. v. Network Prods.,
Inc., 902 F.2d 829, 853 (11th Cir. 1990)(plaintiffs were prevailing
parties where they succeeded in protecting their copyrights and
programs, the principal objectives of the lawsuit).

“Where the

[party’s] success on a legal claim can be characterized as purely
technical or de minimis, a district court would be justified in

16

concluding that [this definition] has not been satisfied.”

Id.

(quoting Texas State Teachers Ass’n v. Garland Indep. Sch. Dist.,
489 U.S. 782, 792 (1989)).
In the instant action, ZP prevailed on some of its claims and
successfully

obtained

a

permanent

injunction

against

the

ILM

Capital Defendants (ILM Capital, Wheeler, and Hawyrlak), preventing
them from all use of ZP’s “One Ten” and “One Ten Student Living”
marks, which relief ZP sought when initiating this action.

Having

succeeded on such a central issue in the case, ZP is a prevailing
party. As such, ZP is entitled to recover qualifying costs incurred
in

this

action.

Moreover,

upon

a

showing

that

this

is

an

“exceptional case,” ZP is entitled to reasonable attorneys’ fees,
as well.

15 U.S.C. § 1117(a)).

Historically, an “exceptional case” has been defined in the
Eleventh Circuit as “one that can be characterized as malicious,
fraudulent, deliberate and willful, or one in which evidence of
fraud or bad faith exists.’” Donut Joe’s, 116 F. Supp. 3d at 1292
(quoting Tire Kingdom, Inc. v. Morgan Tire & Auto, Inc., 253 F.3d
1332, 1335 (11th Cir. 2001) (internal citations and quotation marks
omitted)).

However, in Tobinick v. Novella, 884 F.3d 1110, 1118

(11th Cir. 2018), the Eleventh Circuit held that the previous
definition of “exceptional case” under the Lanham Act was abrogated
by the Supreme Court’s decision in Octane Fitness, LLC v. ICON
Health & Fitness, Inc., 572 U.S. 545, 554 (2014), in which the

17

Supreme Court analyzed identical language under the Patent Act.
The Eleventh Circuit held that, following Octane Fitness, the
definition requires only a finding that the case “‘stands out from
others,’ either based on the strength of the litigating positions
or the manner in which the case was litigated,” or is one which is
“uncommon” or “not run-of-the-mill.”

Id. (quoting Octane Fitness,

134 S. Ct. at 1756).
The determination of whether a case is “exceptional” is to be
made in the district court’s discretion, on a “case-by-case” basis,
considering “the totality of the circumstances.”
572 U.S. at 545.
may

consider

Octane Fitness,

A “nonexclusive” list of factors that the court

includes

“frivolousness,

motivation,

objective

unreasonableness (both in the factual and legal components of the
case)

and

the

need

in

particular

circumstances

considerations of compensation and deterrence.”

to

advance

Id. at 554 n.6.

“[I]f the trial court finds that the circumstances of the case are,
in fact, exceptional, the decision whether to award [a prevailing
party] attorney’s fees is still discretionary.”

Dieter v. B & H

Indus. of Sw. Fla., Inc., 880 F.2d 322, 329 (11th Cir. 1989); see
also Suntree Techs., Inc. v. Ecosense Int’l, Inc., 2013 U.S. Dist.
LEXIS 38459, *10, 2013 WL 1174399, *3 (M.D. Fla. Feb. 7, 2013),
report and recommendation adopted, 2013 WL 1174841 (M.D. Fla. Mar.
20, 2013 (“[D]etermining whether a case is exceptional and, if so,
whether to award attorney’s fees remains within the court’s sound

18

discretion.”).
In the instant case, there is ample evidence to establish that
this case is “exceptional.”
Capital

Defendants

(ILM

First, ZP has shown that the ILM
Capital,

Wheeler,

and

Hawyrlak)

deliberately and willfully made unauthorized use of ZP’s “One Ten”
and “One Ten Student Living” marks by re-registering the domain
names made up of ZP’s marks and operating parked webpages with
click-through advertising displaying ZP’s trademarks prominently
at the top of each page. (Doc. 176 at 2-11). Despite ZP’s repeated
demands that Defendants cease all use of the marks, Defendants
persisted in that use although they had no legitimate claim to the
marks whatsoever and with full knowledge that ZP obtained trademark
rights in the marks in 2017. (Doc. 130 at 34-36; Doc. 166 at 12529, 134-36, 185-86; Doc. 167; Doc. 168-2 at 16-19; Doc. 176).
Further, there is historical evidence of Defendants’ predatory
conduct in 2016, before ZP obtained trademarks in the “One Ten” and
“One

Ten

Student

Living”

marks,

when

Defendants

selected

and

purchased the eight domain names at issue in this case based on the
fact that the domain names included the terms “One Ten” and “One
Ten Student Living” (which terms were being used by ZP, Defendants’
direct

competitor,

for

its

student

housing

project),

which

Defendants then used to redirect ZP’s web traffic to Defendants’
own website.

(Doc. 176 at 2-11).

In addition, ZP has shown that

Defendants have a history of this type of predatory conduct against

19

its other competitors, including the registration of at least
twenty-six domain names that were identical or confusingly similar
to Defendants’ competitors’ names, which Defendants then used to
redirect their competitors’ web traffic to their own websites.
(Doc. 176 at 7).

After ZP acquired trademark rights in the marks

in 2017, Defendants re-registered and continued to use the marks
and essentially forced ZP to expend great effort and resources to
enforce its trademark rights.
The foregoing evidence establishes Defendants’ conduct was
knowing, willful, deliberate.
action

were

unsuccessful.

non-frivolous,

For ZP’s part, its claims in this
even

those

that

ultimately

proved

The Court further notes that quantifying the damages

incurred as a result of infringement is extremely difficult, if not
impossible.

See Denny Mfg. Co. v. Drops & Props, Inc., 2011 U.S.

Dist. LEXIS 60155, *22, 2011 WL 2180358, *8 (S.D. Ala. June 1,
2011)(“In copyright and trademark litigation, intangibles such as
Denny’s goodwill and trade names have significant value which is
difficult to quantify.”); Internetshopsinc.com v. Six C Consulting,
Inc., 2011 U.S. Dist. LEXIS 31222, *16, 2011 WL 1113445, *6 (N.D.
Ga. Mar. 24, 2011) (“[t]he business damage caused by defendant’s
unauthorized use of plaintiff’s trademark is difficult, if not
impossible, to quantify.”)(citing Tally-Ho, Inc. v. Coast Cmty.
Coll, Dist., 889 F.2d 1018, 1029 (11th Cir. 1989)(“It is generally
recognized in trademark infringement cases that . . . there is not

20

[an] adequate remedy at law to redress infringement.”)).

Based on

the totality of the record, the Court finds that this case is
“exceptional”12 and that ZP, as a prevailing party, is entitled to
reasonable attorneys’ fees.
Turning now to the appropriate amount of attorneys’ fees,
“[t]he most useful starting point for determining the amount of a
reasonable fee is the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate.”
Eckerhart, 461 U.S. 424, 433 (1983).

Hensley v.

The resulting figure is known

as the lodestar method, and the product is known as the lodestar.
See In re Home Depot Inc., 931 F.3d 1065, 1076 (11th Cir. 2019).
In applying the lodestar method, “[c]ourts should exclude from this
initial fee calculation hours that were not reasonably expended,”
and “[c]ounsel for the prevailing party should make a good-faith
effort to exclude from a fee request hours that are excessive,
redundant, or otherwise unnecessary. . . .”
434 (internal quotation marks omitted).

Hensley, 461 U.S. at

In addition, courts may

apply to the lodestar a “multiplier, also known as an enhancement
or an upward adjustment, to reward counsel on top of their hourly

12

The Court finds that ZP would be entitled to attorneys’ fees
under both the pre-Tobinick standard (requiring malicious,
fraudulent, deliberate, willful, or bad faith conduct on the part
of Defendants) and the post-Tobinick standard (requiring a finding
that the case stands out from others, is uncommon, or not run-ofthe-mill). See Tobinick, 884 F.3d at 1118.

21

rates.”

Home Depot, 931 F.3d at 1076.

Courts may also adjust the

fee upward or downward based on other factors such as the “results
obtained.”

Hensley, 461 U.S. at 434. Where, as here, a prevailing

party succeeded on only some of the claims for relief, courts may
consider whether the plaintiff failed to prevail on claims that
were unrelated to the claims on which he succeeded (and thus cannot
be deemed to have been “expended in pursuit of the ultimate result
achieved”) and whether plaintiff achieved a level of success that
makes the hours reasonably expended a satisfactory basis for making
a fee award.

Id.

“Where a plaintiff has obtained excellent

results, his attorney should recover a fully compensatory fee,” and
“the fee award should not be reduced simply because the plaintiff
failed to prevail on every contention raised in the lawsuit.”

Id.,

461 U.S. at 435.
With respect to the hourly rate, a reasonable hourly rate is
“the prevailing market rate in the relevant legal community for
similar

services

by

lawyers

experience, and reputation.”

of

reasonably

comparable

Norman v. Housing Auth. of City of

Montgomery, 836 F.2d 1292, 1303 (11th Cir. 1988).
bears

the

burden

of

skills,

producing

satisfactory

“The applicant

evidence

that

the

requested rate is in line with prevailing market rates,” and
“[s]atisfactory evidence at a minimum is more than the affidavit
of the attorney performing the work.”

Id. (citations omitted).

Also, an “agreed-upon billing rate” between a client and counsel

22

“is a strong indication of a reasonable rate.”

Tire Kingdom, Inc.

v. Morgan Tire & Auto, Inc., 253 F.3d 1332, 1337 (11th Cir. 2001).
In the present case, as previously noted, Defendants agree
that the hourly rates requested by ZP are reasonable in this
market.13

(Doc. 211 at 28).

Moreover, ZP has established through

opinion testimony from Edward Dean, Esq., that the rates requested
are reasonable in this market.14

(Doc. 203-2).

In addition, the

13

The rates for ZP’s primary counsel range from $325 for attorney
Quittmeyer (35 years’ experience), to rates of $225, $240, and
$250 for attorney Campbell (13 years’ experience)(depending on the
year in which the work was done), $250 for attorney Parks
(associate with 26 years’ experience), and $140 for paralegal
McCarthy (26 years’ experience). (Doc. 203-1 at 12). There were
other lawyers and paralegals in the firm who spent small increments
of time on the case, charged at the following hourly rates: Ms.
Hart at $220 in 2018 and $230 in 2019, Mr. Gill at $305, Mr.
Morrissette at $350, Ms. Bitzer at $290, Mr. O’Dowd at $220, Ms.
Hartzog at $145, Ms. Miles at $140, and Ms. Thornton at $145.
(Id.).

14

Mr. Dean attested that he has practiced business and commercial
litigation in a law firm in Mobile, Alabama, since 1981, that he
is familiar with fees charged in complex business cases in the
Mobile area, that he had extensively reviewed this case and
considered factors such as time and labor required, the novelty
and difficulty of the issues involved, the skill required to
perform the legal work properly, the customary fee charged in this
area for complex business litigation, the results obtained, and
the experience, reputation, and ability of the attorneys involved.
Mr. Dean opined that that hourly rate and number of hours expended
in this case were reasonable given that this was a complex,
intellectual property case that was handled successfully by the
attorneys involved. (Doc. 203-2). Moreover, comparable hourly
rates of attorneys at the Hand firm (representing ZP herein) have
previously been found by this Court to be reasonable and
recoverable in commercial litigation cases. See Breland v. Levada
EF Five, LLC, 2016 U.S. Dist. LEXIS 56396, *37, 2016 WL 1717207,
*12 (S.D. Ala. Apr. 28, 2016).

23

requested rates appear to have been agreed upon by ZP, a fact that
provides a strong indication that the rates are reasonable.
203-1).
the

(Doc.

Based on the foregoing, including the Court’s expertise,15

consideration

of

Mr.

Dean’s

declaration,

and

Defendants’

concession that the rates requested by ZP’s counsel are reasonable,
the Court finds that ZP has satisfied this requirement of the
lodestar method.
With respect to the reasonable number of hours factor, the
affidavit of Mr. Quittmeyer, lead counsel for ZP, shows that he
spent 992.5 hours on this case through October 31, 2019; that Mr.
Campbell spent 1045.9 hours; Ms. Parks spent 97.2 hours; and Ms.
McCarthy (paralegal) spent 254.6 hours through that same date.
(Doc. 203-1).

The Court has considered the reasonableness of these

hours in the context of this particular case.

There is no question

that the instant case has been lengthy and aggressively litigated.
It has spanned more than three years in federal court and has
involved issues relating to trademark infringement and unfair
competition under the Lanham Act and comparable state law, which
are complicated and specialized areas of law.

15

This case also has

“The court may utilize its own ‘knowledge and expertise’ to come
to an independent judgment regarding the reasonableness of
requested attorney’s fees.” Wells Fargo Bank, N.A. v. Williamson,
2011 U.S. Dist. LEXIS 10838, *7, 2011 WL 382799, *3 (S.D. Ala.
Feb. 3, 2011)(quoting Loranger v. Stierheim, 10 F.3d 776, 781 (11th
Cir. 1994)).

24

been characterized by extensive motion practice by the parties,
accompanied by laborious briefing.16

Ultimately, the case required

a two-day trial, resulting in an important win for ZP on some of
its claims.
attorneys’

The Court has also considered that an award of
fees

to

ZP

will

serve

the

purpose

of

encouraging

trademark owners to undertake the necessary efforts to protect
their trademark rights,17 thereby also protecting the public from
the harmful consequences of trademark infringement, and it will
serve the important purpose of deterrence.18
Under

the

circumstances,

the

Court

finds

that

the

time

expended by ZP’s counsel was not more than reasonably required to
litigate this action. Calculating the hourly rates by the number
of hours claimed yields a lodestar figure of $634,266.00.

A

lodestar figure “is itself strongly presumed to be reasonable.”

16

The parties’ filings in this case have not been frivolous but
have been aggressive, which has added to the considerable time
required to respond on both sides.

17

As the Eleventh Circuit recently stated, “[c]ourts have widely
noted that ‘[t]he cost of enforcing [trademark] rights may well be
larger than the lost profits in any particular case,’ but trademark
owners have an interest in preventing the weakening of their rights
over time.” PlayNation, 939 F.3d at 1215 (internal citations
omitted).

18

The Court rejects Defendants’ argument that ZP should have
pursued some form of dispute resolution other than filing this
lawsuit.
(Doc. 211 at 30).
The record reflects that ZP made
multiple (at least six), unsuccessful pre-suit attempts to resolve
its dispute with Defendants before it resorted to litigation.
(Doc. 166 at 26-31, 206-213; Doc. 168-2 at 36-38, 68).

25

Resolution Trust Corp. v. Hallmark Builders, Inc., 996 F. 2d 1144,
1150 (llth Cir. 1993).

Nonetheless, once the lodestar has been

calculated, it may then be adjusted after considering other factors
such as the results obtained.
434 (1983).

Hensley v. Eckerhart, 461 U.S. 424,

In Hensley, the Supreme Court recognized that where

“a plaintiff has achieved only partial or limited success, the
product of hours reasonably expended on the litigation as a whole
times a reasonable hourly rate may be an excessive amount.” Id. at
461 U.S. 436. In fact, the Court called the degree of success
obtained

“the

most

critical

factor”

in

determining

reasonableness of a fee award to a prevailing party.

Id.

the

Indeed,

courts have significantly reduced fees when plaintiffs recovered a
small percentage of their claimed damages. See Martinez v. Hernando
Cnty. Sheriff’s Office, 579 Fed. Appx. 710, 715 (11th Cir. 2014)
(affirming 75% reduction in fees where recovery was 1.8% of claim);
see also Ramos v. Goodfellas Brooklyn’s Finest Pizzeria, LLC, 2009
U.S. Dist. LEXIS 61057, 2009 WL 2143628, *2 (S.D. Fla. July 16,
2009)(reducing fees by 50% due to limited success).
In this case, some of the conduct for which ZP sought to hold
Defendants

liable,

while

egregious,

protectible trademark rights.

occurred

before

ZP

had

Moreover, while ZP sought up to a

statutory maximum of $2,400,000.00 in damages on its cybersquatting
claims for violations occurring after July 2017, it did not prevail
at trial on the cybersquatting claims.

26

The fact that ZP prevailed

on

its

unfair

competition

claims

and

obtained

an

injunction

protecting its trademarks and prohibiting the offending conduct in
the future was not insignificant, as detailed herein. However,
viewing the litigation as a whole, ZP achieved limited success,
which the undersigned finds warrants a 75% reduction in attorneys’
fees.
Last, with respect to costs, ZP seeks $2,977.08, comprised of
ZP’s $400.00 filing fee, $1,947.16 for photocopies, $332.25 for the
cost of the transcript of the deposition of ZP’s expert Glenda
Snodgrass
(including

taken

by

$120.00

Defendants,

$200.00

for

Snodgrass

Glenda

for
to

witness
attend

per
a

diems

one-day

deposition and the two-day bench trial, and $80.00 for Emily Moree
to attend the two-day bench trial), and $97.67 in postage relating
to service of process.

(Doc. 203 at 4).

Defendants object to

these costs on the grounds that ZP did not prove that its witness
fees for Snodgrass and Moree were actually incurred and that its
photocopies were obtained for use in this case.
32).

(Doc. 211 at 321-

The Court finds that the billing records and affidavit of Mr.

Quittmeyer are sufficient proof that the photocopies were incurred
in this case.

(Doc. 207).

However, it is unclear which of the

fees paid by ZP applied specifically to Ms. Snodgrass and Ms. Moree.
Therefore, the Court will reduce the recoverable costs by $200.
Accordingly, ZP is entitled to attorneys’ fees in the amount of
$158,566.50 pursuant to 15 U.S.C. § 1117 and the Alabama Trademark

27

Act, Ala. Code § 8-12-18(c)(1), and the same are hereby AWARDED.
In addition, the Court hereby AWARDS ZP costs in the amount of
$2,777.08.
IV. Defendants’ Request for Attorneys’ Fees and Costs.
Movants, Defendants WE Communities, LLC, Mobile CQ Student
Housing,

LLC,

Rutherford

ILM

Mobile

(sometimes

Management,

referred

to

as

LLC,
the

and

Mary

“non-ILM

SchafferCapital”

Defendants) have filed a motion for attorneys’ fees and costs in
this action pursuant to pursuant the Lanham Act, 15 U.S.C. §
1117(a), and the Alabama Trademark Act, ALA. CODE § 8-12-8(c).
(Doc. 206).

As discussed, the Court granted summary judgment for

Defendant Rutherford and dismissed Defendants WE Communities, LLC
(“WE Communities”), Mobile CQ Student Housing, LLC (“Mobile CQ”),
ILM Mobile Management, LLC (“ILM Mobile”), at trial, finding that
the evidence failed to establish that these Defendants participated
in the infringement made the basis of this lawsuit.
56; Doc. 176 at 12).

(Doc. 130 at

Prior to their dismissal, however, the

evidence regarding the precise nature of their relationship with
the “ILM Capital” Defendants, who were found liable for intentional
and willful trademark infringement at trial, was not always clear.
Indeed, the evidence showed that all four of the “non-ILM Capital”
Defendants/Movants were closely related to, working with, and
affiliated with the ILM Capital Defendants at the time of the acts
alleged in the amended complaint.

28

As stated, however, the nature

and level of their involvement with the alleged acts of infringement
was

unclear

until

the

summary

judgment

stage

for

Defendant

Rutherford and until trial for Defendants We Communities, Mobile
CQ, and ILM Mobile.
As discussed, the Lanham Act allows courts to award reasonable
attorneys’ fees to “prevailing parties” in “exceptional” cases.
Donut Joe’s, 116 F. Supp. 3d at 1292 (quoting 15 U.S.C. § 1117(a));
Montgomery, 168 F.3d at 1304 (a prevailing party is the party who
“succeed[s] on a significant litigated issue that achieves some of
the benefits sought by that party in initiating the suit.”).

The

Court finds that Defendants Rutherford, We Communities, Mobile CQ,
and ILM Mobile are prevailing parties under the Act. See generally
Pickett v. Iowa Beef Processors, 149 Fed. Appx. 831, 832 (11th
Cir. 2005)(“A defendant is a prevailing party if the plaintiff
achieves none of the benefits sought in bringing its lawsuit. If
the case is litigated to judgment on the merits in favor of the
defendant, the defendant is the prevailing party.”); see also
Pediatric Nephrology Assocs. of S. Fla. v. Variety Children’s
Hosp., 2018 U.S. Dist. LEXIS 114443, *7, 2018 WL 4778456, *2 (S.D.
Fla. July 9, 2018), report and recommendation adopted, 2018 WL
4777166

(S.D.

Fla.

July

24,

2018)(“Defendants

became

the

prevailing parties when the Court granted summary judgment” as to
the Lanham Act claim).

As prevailing parties, the Movants are

entitled to recover qualifying costs incurred in this action under

29

the Lanham Act.

However, unless these Defendants are able to

establish that this is an “exceptional” case as between themselves
and the Plaintiff ZP, they are not entitled to attorneys’ fees
under the Act.

15 U.S.C. § 1117(a)).

As discussed with respect to ZP’s motion for attorneys’ fees
and costs, historically, an “exceptional” case under the Lanham Act
was one characterized as “malicious, fraudulent, deliberate and
willful, or one in which evidence of fraud or bad faith exists.”
Donut Joe’s, 116 F. Supp. 3d at 1292.

However, after Octane

Fitness, the standard became whether the case “‘stands out from
others,’ either based on the strength of the litigating positions
or the manner in which the case was litigated,” or one which is
“uncommon” or “not run-of-the-mill.”
(quoting

Octane

acknowledge

that

Fitness,
the

134

S.

decision

Tobinick, 884 F.3d at 1118

Ct.

at

regarding

1756).

The

whether

a

parties
case

is

“exceptional” lies solely within the district court’s discretion
and that the Court may consider factors such as frivolousness,
motivation, objective unreasonableness (both in the factual and
legal

components

circumstances
deterrence.

to

of

the

advance

Octane

case)

and

the

considerations

Fitness,

572

U.S.

at

need
of

in

particular

compensation

554

n.6.

Even

and
in

“exceptional” cases, however, the decision whether to award a
prevailing party attorneys’ fees rests soundly within the court’s
sound discretion.

See Dieter, 880 F.2d at 329; Suntree, 2013 U.S.

30

Dist. LEXIS 38459 at *10, 2013 WL 1174399 at *3.
Similarly, under ALA. CODE § 8-12-18(c), courts may award
reasonable attorney fees to defendants who prevail on a claim
brought under the Alabama Trademark Act “in such cases as the
Alabama Litigation Accountability Act [“ALAA”] provides.”

The

ALAA, ALA. CODE §§ 12-19-270 to 12-19-276, provides for the recovery
of reasonable attorneys’ fees and costs “against any party or
attorney if the court . . . finds that an attorney or party brought
an action or any part thereof, or asserted any claim or defense
therein, that is without substantial justification, or that the
action or any part thereof, or any claim or defense therein, was
interposed for delay or harassment, or if it finds that an attorney
or party unnecessarily expanded the proceedings by other improper
conduct . . . .” Id. at § 12-19-272(c).
The grounds offered in support of the Movants’ requests for
attorneys’ fees under both the Lanham Act and the Alabama Trademark
Act in this case are identical, i.e., that ZP’s case against the
Movant Defendants was weak; therefore, ZP’s manner of litigation
was unreasonable, and ZP must have had an improper motive in keeping
them in the case.

(Doc. 206).

The Court has considered the

applicable factors under both the Lanham Act and the Alabama
Trademark Act, including the factors listed at Alabama Code, § 1219-273 (such as efforts made to determine validity of the claim,
efforts

made

to

reduce

the

number

31

of

claims/defendants,

availability of facts to determine validity of claims, relative
financial position of parties,19 existence of bad faith, the amount
of any offer of settlement in relation to the ultimate relief
granted by the court,20 etc.), as well as the totality of the
circumstances in this case, and finds that Movants are not entitled
to attorneys’ fees under either Act.
The evidence shows that Defendants ILM Capital, Wheeler, and
Hawrylak (the “ILM Capital Defendants”) were directly involved in
the registration, redirection, and re-registration of the domain
names at issue in this case;21 all of the domain names at issue in
this case were registered by Hawrylak through Wheeler’s account
with GoDaddy.com; Defendant Wheeler is the manager, CEO, and sole
member

of

ILM

Capital,

ILM

Management,

and

WE

Communities;

Defendant ILM Capital is a real estate investment company whose
portfolio includes Campus Quarters in Mobile, Alabama; Defendant
19

The Court notes that Defendant Rutherford did not pay any of her
own defense costs.
Rather, Movants state that her costs were
apportioned among and paid by the other Defendants. (Doc. 206 at
25).

20

With respect to this factor, the Court has already discussed
Defendants’ hard-line approach to settlement.
Although the
Movants ultimately prevailed with respect to ZP’s claims against
them, their approach to settlement does not weigh in their favor.

21

As stated, the ILM Capital Defendants (Wheeler, ILM Capital, and
Hawrylak) do not seek attorneys’ fees or costs in this action.
The “non-ILM Capital” Defendants/Movants (WE Communities, Mobile
CQ, ILM Mobile, and Rutherford) were ultimately dismissed from
this case and, on that basis, seek attorneys’ fees as prevailing
parties.

32

Hawrylak is ILM Capital’s chief operating officer; Defendant Mobile
CQ Student Housing owns the real property on which the Campus
Quarters student apartments are located; Defendant ILM Mobile
Management

managed

Mobile

CQ

Student

Housing;

Defendant

WE

Communities is a property management company that manages Campus
Quarters;

and

Defendant

Rutherford

was

Communities who managed Campus Quarters.

an

employee

of

WE

(Doc. 60 at 2; Doc. 66

at 4; Doc. 115 at 5; Doc. 95 at 4-5; Doc. 130 at 56; Doc. 166 at
79, 196-97).
In the Court’s order granting Defendant Rutherford’s motion
for summary judgment, the Court noted that Rutherford was employed
by WE Communities as the general manager of Campus Quarters and had
been

involved

in

the

circumstances

infringement in this case.22

surrounding

the

alleged

However, the evidence ultimately

showed that the GoDaddy account at issue was not in her name; she
had no access to or control over the account; and her name did not
appear anywhere in the documents produced by third parties relating

22

The evidence showed that, on May 26, 2016, Rutherford worked for
WE Communities and emailed Defendant Hawrylak, “[j]ust wanted to
update
you
on
our
new
comp.
They
have
an
Instagram.
Onetenstidentliving (sic). Their website link does not work yet.
But they posted a picture of what it will look like.” (Doc. 1682 at 56). Hawrylak replied “Nice. Thank you. Let the fun begin.”
(Doc. 166 at 97; Doc. 168-2 at 56). The following day, Hawrylak
registered three domain names using the terms “One Ten:”
onetenusa.com, liveonetenapartments.com, and liveonetenmobile.com
using Wheeler’s/ILM’s account with GoDaddy.com. (Doc. 166 at 8898, 159, 196-199, 234-235, 241; Doc. 168-2 at 30, 43, 72).

33

to the GoDaddy Account.

Because there was no evidence of direct

involvement by Rutherford in the registration, redirection, or
reregistration of the domain names at issue, the Court dismissed
ZP’s claims against Rutherford at the summary judgment stage.23
(Doc. 130 at 59; Doc. 97 at 2).

Similarly, at trial, the evidence

ultimately failed to establish that WE Communities, Mobile CQ, and
ILM Mobile personally participated in the infringement made the
basis of this lawsuit.

(Doc. 176 at 12, 32).

Therefore, the Court

dismissed ZP’s claims against these Defendants.
As

stated,

the

Movants

argue

that

they

(Id.).
are

entitled

to

attorneys’ fees under both the Lanham Act and the Alabama Trademark
Act

for

the

same

reasons:

ZP’s

case

against

them

was

weak.

Therefore, ZP’s manner of litigation was unreasonable (i.e., ZP
should never have sued them and/or should have dismissed them early
in the case), which suggests that ZP must have had an improper
motive in pursuing the case against them.

(Doc. 206 at 4).

The

Court disagrees.
As

stated,

the

relationship

23

between

Movants

and

the

ILM

The Court awarded summary judgment to all of the Defendants on
ZP’s state law claims for conduct occurring prior to March 23,
2017, and on ZP’s federal claims for conduct occurring prior to
July 2017. (Doc. 130 at 60-61). However, the Court noted that the
evidence regarding the “level of direct participation” by
Defendants Mobile CQ, ILM Mobile, and WE Communities after those
dates was “murky” given the “interrelated nature of the corporate
entities” and “Defendant Wheeler’s ownership/control” over those
entities. (Doc. 130 at 54-55, 58).

34

Capital Defendants and the nature and degree of their involvement
with the alleged infringement was far from clear, even as late as
the trial with respect to We Communities, Mobile CQ, and ILM Mobile.
All of the non-ILM Capital Defendants/Movants, as well as the ILM
Capital

Defendants,

Defendant

Wheeler

in

were

under

relation

the
to

direction

the

Campus

and

control

Quarters

of

student

housing facility, and Wheeler (along with Defendant ILM Capital and
Hawrylak) was found liable on four of the six counts in the second
amended complaint.

Given the interrelatedness of all of the

Defendants and the furtive nature of the circumstances surrounding
the infringement itself, the strength of ZP’s case against the
Movants was difficult to determine up to and including trial.24
Also, contrary to the Movants’ suggestion, there is no evidence in
this case that ZP was ever motivated by an improper purpose in
pursuing its claims against these Defendants.

Indeed, based on the

totality of the circumstances in this case, the Court is satisfied
that

ZP’s

claims

against

the

Movants,

while

ultimately

unsuccessful, were not frivolous, were not objectively unreasonable
(legally or factually), were not without substantial justification,
nor were they based upon any motivation other than an attempt to
protect ZP’s legal rights in the “One Ten” and “One Ten Student

24

For this reason, the Court denied summary judgment for Defendants
WE Communities, Mobile CQ, ILM Mobile, finding that it was
unwarranted at that stage of the proceedings. (Doc. 130 at 58).

35

Living” marks.
fees

to

the

The Court likewise sees no need to award attorneys’
Movants

in

order

compensation and deterrence.

to

advance

considerations

of

There is no need to deter other

Plaintiffs like ZP from bringing suits to enforce their legal
rights, nor is there a need to compensate the Movants, particularly
where, as here, their defense was performed by the same legal
counsel who represented the ILM Capital Defendants and appears,
generally, to have been based on the same facts, law, etc.,
applicable to the ILM Capital Defendants. (Doc. 212 at 16). Again,
although the Movants ultimately prevailed with respect to ZP’s
claims against them, the Court is satisfied that this case is not
exceptional vis-a-vis these four Defendants and ZP.

See Florida

Van Rentals, Inc. v. Auto Mobility Sales, Inc., 2015 U.S. Dist.
LEXIS

108130,

*6,

2015

WL

4887550,

*3

(M.D.

Fla.

Aug.

17,

2015)(“[A]fter considering the totality of the circumstances, the
Court finds that this case is not exceptional. First, although the
Court ultimately found that Plaintiffs lacked any protectable
rights

in

their

asserted

trademarks,

it

was

not

objectively

unreasonable or frivolous for Plaintiffs to attempt to enforce
their purported rights in these marks. . . . [A]lthough the totality
of the evidence supporting the validity of these marks was weak,
Plaintiffs’ overall case was at least colorable.”).

Accordingly,

for each of the reasons set forth above, Movants’ motion for

36

attorneys’ fees (Doc. 206) is DENIED.25
With respect to Movants’ requests for taxable costs, Movants
seek $1,482.61, which they describe as 78.4% of the total taxable
costs for photocopies, transcripts, and subpoena and summons fees.
(Doc. 206 at 30-31; Doc. 206-3 at 14, 125).

The problem with

Movants’ request is that the Court is unable to discern from the
evidence submitted precisely which Defendant actually paid the
costs and how much each Defendant paid.
attorney-prepared

“spread

sheet”

does

Indeed, Defendants’

not

identify

a

single

Defendant who was actually billed and actually paid for the listed
service.

(Id.).

Rather,

the

Movants’

attorneys

have

prepared

affidavits

stating that Mobile CQ (on behalf of itself and ILM Mobile) paid
54.7% of Burr & Forman’s legal fees (and presumably costs), and WE
Communities paid 23.7% of same.

Therefore,

Movants request 78.4%

of the costs (and attorneys’ fees) incurred in the case as a whole,
including those incurred in defense of the ILM Capital Defendants
who were found liable on four of the six counts in this case. (Doc.
206-2 at 2; Doc. 206-3 at 7).

Curiously, counsel has described

25

Having denied the Movants’ request for attorneys’ fees, the
Court need not address ZP’s remaining arguments directed to this
issue, except as those arguments relate to the issue of costs.
(Doc. 210 at 18). That being said, the same reasons discussed in
relation to the Court’s denial of costs likewise apply to Movants’
request for attorneys’ fees.

37

Mobile CQ, ILM Mobile, and WE Communities in this case as being
essentially unnecessary, nominal, and marginal Defendants.

Yet,

now, the same counsel who asserts that these nominal Defendants
paid 78.4% of all of the attorneys’ fees and the costs in defending
this case, has failed to produce a single billing record and instead
has submitted a spread sheet that she prepared describing work
performed by the firms’ attorneys but making no mention of the
Defendant/client

for

whom

the

work

was

performed

or

which

Defendant/client actually paid the bill. (Doc. 206-3 at 17).

To

be sure, even if Defendants had produced their actual billing
records, the Court would still have proceeded to determine the
reasonableness of such a curious allocation of fees and expenses
as

proffered

by

the

Defendants

in

this

case.

It

is

indeed

fortuitous for the primary, culpable Defendants who dominated the
defense of this case (Wheeler, Hawrylak, and ILM Capital) that the
Movant Defendants who arguably had the smallest role in these
proceedings, but prevailed in their defense and thus could seek
attorneys’ fees, assumed the lion’s share of fees and costs incurred
in defense of all Defendants.26

In any event, whatever the reason

behind such a questionable arrangement, the Court is unable to

26

As ZP points out, the Moving Defendants’ “allocation” of costs
and fees mysteriously does not allocate any percentage to
Defendants Wheeler or Hawrylak, the two primary individual actors
found liable for deliberate infringement and bad faith conduct in
this case.

38

determine from the evidence submitted by Movants which taxable
costs or attorneys’ fees were actually billed to and paid by which
Defendants (Movants or non-Movants).

Thus, the motion for costs,

as well as attorneys’ fees, is DENIED.

Cf., Essex Builders Grp.,

Inc. v. Amerisure Ins. Co., 2007 U.S. Dist. LEXIS 14458, *52007 WL
700851, *2 (M.D. Fla. Mar. 1, 2007) (“The Court finds that it would
be manifestly unfair to Amerisure to require it to defend against
the sizeable fee award claimed by Essex without the benefit of the
full record upon which the fees are based.”)(emphasis added); Ideal
Elec. Sec. Co. v. International Fid. Ins. Co., 129 F.3d 143, 151
(D.C. Cir. 1997)(“The reasonableness of any portion of the billing
statement

can

only

be

determined

by

examining

all

billing

statements pertaining to the legal services provided as a whole.”).
The Court can conceive of no good reason for Defendants’ failure
to

submit

the

reimbursement.

actual

billing

records

for

which

they

seek

Defendants’ assertion that reviewing their spread

sheet was “easier” than reviewing the actual billing records is
unacceptable.27

(Doc. 212 at 12).

27

The Court agrees with ZP that “[t]he Moving Defendants want the
Court to just take their word for it that their calculation of the
amount of the unidentified ‘client’s’ attorneys’ fees is correct
and that the unidentified ‘client’s’ internal ‘allocation’ of
those fees matters, and they go out of their way to avoid providing
what they should have candidly given the Court: the actual billing
records sent to the unidentified ‘client’ by the Defendants’
lawyers.”
(Doc. 210 at 19)(emphasis added).
Clearly, without
full disclosure of the billing statements, ZP is wholly deprived
of the opportunity to challenge the reasonableness of the fees
39

For each of the foregoing reasons, Movants’ request for costs
is DENIED.
DONE this the 28th day of May, 2020.
/s/ SONJA F. BIVINS
UNITED STATES MAGISTRATE JUDGE

requested by Defendants, as the Court is deprived of the ability
to review the reasonableness of the request. In contrast, ZP has
provided its actual billing records to the Court and to Defendants
in connection with its Motion for Attorneys’ Fees. Under the
circumstances of this case, Defendants’ request for attorneys’
fees and costs, without providing the actual billing records to
support that request, smacks of further bad faith.

40