Phoenix Entertainment Partners, LLC v. Orlando Beer Garden, Inc. et al

Filing 39

ORDER adopting 36 REPORT AND RECOMMENDATIONS re 24 MOTION for default judgment against Orlando Beer Garden, Inc. (Renewed) filed by Phoenix Entertainment Partners, LLC. Signed by Judge Gregory A. Presnell on 10/18/2016. (ED)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
PHOENIX ENTERTAINMENT
PARTNERS, LLC,
Plaintiff,
v.

Case No: 6:16-cv-80-Orl-31DCI

ORLANDO BEER GARDEN, INC.,
Defendant.

ORDER
This matter comes before the Court on the Objection (Doc. 37) to the Report and
Recommendation (Doc. 36) of the Magistrate Judge. After de novo review, the Court will affirm
and adopt the Report and Recommendation.
I.

Background

The instant case involves a trademark dispute between Phoenix Entertainment Partners,
LLC (“Phoenix Entertainment”), which holds the trademark for Sound Choice (a brand of karaoke
accompaniment music tracks), and Orlando Beer Garden, Inc. (“OBG”), which operates a tavern.
Phoenix Entertainment contends that OBG hired Diane Calo to provide karaoke services at its
tavern and that, while doing so, Calo improperly displayed the Sound Choice mark.
On January 19, 2016, Phoenix Entertainment filed the instant suit, asserting claims for
trademark infringement, unfair competition, and violations of the Florida Deceptive and Unfair
Trade Practices Act against both OBG and Calo. (Doc. 1). All of the claims were based on
Calo’s allegedly wrongful display of the Sound Choice mark. On March 9, 2016, Phoenix

Entertainment notified the Court that it had settled with Calo. (Doc. 14). The claims against
Calo were dismissed on March 11, 2016. (Doc. 15).
Around this same time, Phoenix Entertainment sought a default judgment against OBG,
which had not filed an answer. On March 30, 2016, Magistrate Judge Baker filed a Report and
Recommendation in which he recommended that the motion for default judgment (Doc. 13) be
denied. (Doc. 16 at 9). Magistrate Judge Baker based his recommendation on his determination
that there were no allegations in the Complaint that OBG had itself improperly displayed the
mark, and the Complaint did not contain sufficiently detailed factual allegations to hold OBG
vicariously liable for any infringement by Calo. Phoenix Entertainment did not object to the
Report and Recommendation. Instead, it filed an Amended Complaint (Doc. 17) on April 13,
2016. On June 2, 2016, Phoenix Entertainment again moved for a default judgment against OBG.
(Doc. 24). The matter was again referred to Magistrate Judge Baker, who held an evidentiary
hearing on August 15, 2016. On September 16, 2016, he again recommended the Court deny the
Plaintiff’s motion for default judgment.
II.

Legal Standard

A district judge may designate a magistrate judge to conduct hearings, including
evidentiary hearings, and to submit proposed findings of fact and recommendations for the
disposition, by a judge of the court, of certain motions, including dispositive motions. 28 U.S.C.
§636(b)(1). To challenge the magistrate judge’s findings and recommendations, a party must file
written objections that specifically identify the portions of the proposed findings and
recommendation to which objection is made and the specific basis for objection. Heath v. Jones,
863 F.2d 815, 822 (11th Cir. 1989). Upon receipt of objections meeting this specificity
requirement, the district judge must make a de novo determination of those portions of the report

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to which objection is made and may accept, reject, or modify in whole or in part, the magistrate
judge’s findings or recommendations. Id.
III.

Analysis

As was the case with the Plaintiff’s first effort to obtain a default judgment against OBG,
Magistrate Judge Baker concluded that the second Motion for Default Judgment (Doc. 24) should
be denied because the factual allegations of the operative pleading – in this instance, the Amended
Complaint (Doc. 17) – were insufficient to hold OBG vicariously liable for the trademark
infringement allegedly committed by Calo. (Doc. 36 at 10). Quoting case law provided by the
Plaintiff in its motion, Magistrate Judge Baker pointed out that vicarious liability for trademark
infringement
requires a finding that the defendant and the infringer have an
apparent or actual partnership, have authority to bind one another in
transactions with third parties or exercise joint ownership or control
over the infringing product.
(Doc. 36 at 10) (quoting RGS Labs Intern., Inc. v. The Sherwin-Williams Co., 2010 U.S. Dis.
LEXIS 8339, at *3 (S.D. Fla. Jan. 11, 2010)). Magistrate Judge Baker noted that Phoenix
Entertainment was arguing that it had alleged, in the Amended Complaint, that OBG should be
held vicariously liable because it “had the ability to exercise control over the use of infringing
products, … had knowledge that infringing products were being used to provide services, and …
derived a direct financial benefit from the use of the infringing products.” (Doc. 36 at 10). In
Magistrate Judge Baker’s view, however, the pertinent allegations relied upon by the Plaintiff all
purported to alle*ge “generalized legal conclusions of agency or partnership, without any
supporting facts.” (Doc. 36 at 10). He described the allegations as “not only conclusory, [but]
contradictory.” (Doc. 36 at 10). Moreover, he found that Phoenix Entertainment had not
presented any evidence regarding the relationship between OBG and Calo to support the

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allegations of the Amended Complaint. (Doc. 36 at 10). After analyzing the various allegations
and finding them to lack a sufficient factual predicate, Magistrate Judge Baker concluded that,
“[a]bsent a showing that Calo was [OBG]’s partner or agent, or that they exercised joint ownership
or control over the infringing product (the karaoke display of the mark), Plaintiff’s motion is due
to be denied to the extent it seeks a judgment based on vicarious liability.” (Doc. 36 at 13).
In its objection to the Report and Recommendation, Phoenix Entertainment argues that
“[t]he pleadings and the record demonstrate that Defendant has control over the karaoke
equipment, namely by its ability to control who can perform what services at its venue.” (Doc. 37
at 3). The Plaintiff then goes on to assert that
there can be no question that the venue (Orlando Beer Garden)
controls its agents (waitresses, bartenders, karaoke service
providers, etc.) in connection with the services that are provided to
benefit Orlando Beer Garden (food, beverage, and entertainment).
The same is true for an agent engaged by Orlando Beer Garden for
the purposes of providing karaoke services (entertainment) for the
benefit of increasing Orlando Beer Garden’s food and beverage
sales.
(Doc. 37 at 3). This argument is based on an assumption that Calo was OBG’s agent. While the
Amended Complaint contains numerous assertions to that effect, as noted by Magistrate Judge
Baker, those assertions are entirely conclusory:
[T]o establish an agency relationship under Florida law, a plaintiff
“must prove that (1) the principal acknowledges that the agent will
act for it; (2) the agent accepts the undertaking; and (3) the principal
controls the actions of the agent.” Ins. Co. of N. Am. v. Am. Marine
Holdings, Inc., No. 5:04-CV-86OC10GRJ, 2005 WL 3158049, at *6
(M.D. Fla. Nov. 28, 2005) (collecting cases). “A key element in
establishing an agency relationship is that of control.” Chase
Manhattan Mortg. Corp. v. Scott, Royce, Harris, Bryan, Barra &
Jorgensen, P.A., 694 So.2d 827, 832 (Fla. 4th DCA1997). Here,
there is no factual predicate alleged or introduced in evidence to
support a finding that Beer Garden acknowledged Calo as its
agent, or that Beer Garden controlled Calo.

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(Doc. 36 at 12) (emphasis added). Phoenix Entertainment does not take issue with Magistrate
Judge Baker’s assessment of Florida agency law or point to any allegations or evidence that he
overlooked. Accordingly, the Court agrees with Magistrate Judge Baker’s conclusion that OBG
cannot be held vicariously liable for trademark infringement based the allegations of the Amended
Complaint. The Plaintiff’s objection will be overruled. 1
IV.

Conclusion

In consideration of the foregoing, it is hereby
ORDERED that the Plaintiff’s objections (Doc. 37) are OVERRULED, and the Report
and Recommendation of the Magistrate Judge (Doc. 36) is ADOPTED, CONFIRMED, AND
MADE A PART HEREOF. And it is further
ORDERED that the Motion for Default Judgment (Doc. 24) is DENIED.
Should the Plaintiff wish to file another amended pleading, it must do so on or before
November 1, 2016.
DONE and ORDERED in Chambers, Orlando, Florida on October 18, 2016.

1

Phoenix Entertainment also disputes Magistrate Judge Baker’s determinations that (1) a
particular letter did not constitute a “cease and desist” letter and (2) that Phoenix Entertainment
must set off any payment it received from Calo against any damages it might be awarded against
OBG. (Doc. 37 at 3-6). As the determination regarding vicarious liability renders these
objections moot, the Court will not consider them here.

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