WINE & CANVAS DEVELOPMENT LLC v. WEISSER et al
ENTRY ON PENDING MOTIONS - Defendants' Motion to Dismiss for Lack of Personal Jurisdiction (Dkt. 16 ) is DENIED regarding Mr. Weisser and YN Canvas and GRANTED with respect to AU Website; Defendants' Motion to Dismiss for Failure to Sta te a Claim (as to Counts I, IV, and IX) (Dkt. 14 ) is GRANTED WITHOUT PREJUDICE; Defendants' Motion to Dismiss for Failure to State a Claim (as to Counts X and XI) (Dkt. 14 ) is GRANTED; Defendants' Motion to Strike (Count VI) is GRANTED; and Plaintiff's Motion to Strike Portions of Defendants' Reply Brief (Dkt. 30 ) is DENIED AS MOOT. Signed by Judge Tanya Walton Pratt on 8/7/2012.(JD) Removed document restriction on 8/8/2012 (JD).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
WINE & CANVAS DEVELOPMENT, LLC,
YN CANVAS CA, LLC,
) Case No. 1:11-cv-01598-TWP-DKL
ENTRY ON PENDING MOTIONS
Plaintiff Wine & Canvas Development, LLC (“Wine & Canvas”), is an Indiana limited
liability company. As its name suggests, Wine & Canvas organizes parties where guests can
take a painting class while enjoying cocktails. Wine & Canvas has named the following as
defendants in its complaint: (1) YN Canvas CA, LLC (“YN Canvas”), a Nevada limited liability
company with its principal place of business in California; (2) www.art-uncorked.com (the “AU
Website”), the corporate website for Art Uncorked; (3) Theodore Weisser (“Mr. Weisser”), an
officer of YN Canvas who resides outside of Indiana; and (4) Christopher Muylle (“Mr.
Muylle”), an officer of YN Canvas who resides outside of Indiana (collectively, “Defendants”).
Art Uncorked is also a named defendant in this dispute. However, Art Uncorked is actually YN
Canvas’s new name; thus, for purposes of this entry, any references to YN Canvas will also
apply to Art Uncorked.
On November 29, 2011, Wine & Canvas filed an eleven-count complaint in Hamilton
County Circuit Court, which included claims for trademark infringement, false designation of
origin, trademark dilution, sales of counterfeit items/services, unfair competition, declaratory
judgment, civil action under the Indiana Crime Victims Act, breach of contract, fraud, permanent
injunctive relief, and request for writ of attachment. On December 2, 2011, Defendants removed
the lawsuit to this Court because Counts I through IV present a federal question under the
Lanham Act. See 28 U.S.C. § 1331 (2006); 15 U.S.C. §§ 1051-1141n. This matter comes before
the Court on the following motions: (1) Defendants’ Motion to Dismiss for Lack of Personal
Jurisdiction; (2) Defendants’ Motion to Dismiss for Failure to State a Claim on Counts I
(trademark infringement), IV (counterfeiting), IX (fraud), X (permanent injunction), and XI
(attachment); or in the alternative, Motion for a More Definite Statement on Count IX; (3)
Defendants’ Motion to Strike Count VI (declaratory judgment); and (4) Plaintiff’s Motion to
Strike Defendants’ Reply in Support of their Motion to Dismiss for Lack of Personal
For the reasons set forth below, the Court rules as follows: (1) Defendants’ Motion to
Dismiss for Lack of Personal Jurisdiction (Dkt. 16) is GRANTED in part and DENIED in part;
(2) Defendants’ Motion to Dismiss for Failure to State a Claim (Counts I, IV, IX, X, and XI)
(Dkt. 14) is GRANTED; (3) Defendants’ Motion to Strike (Count VI) (Dkt. 14) is GRANTED;
and (4) Plaintiff’s Motion to Strike Defendants’ Reply (Dkt. 30) is DENIED as moot.
Anthony Scott, (“Mr. Scott”), one of the founders of Wine & Canvas, was friends with
Mr. Weisser and Mr. Muylle. In fact, Mr. Weisser and Mr. Scott were childhood friends and
have known each other for more than two decades. In January 2011, Mr. Weisser’s company,
Weisser Management Group, LLC, (“WMG”), was hired by Wine & Canvas to assist in business
development, including licensing and franchising. Although the parties dispute who initiated the
relationship, it is seemingly undisputed that Wine & Canvas and Mr. Weisser began negotiations
in April 2011 regarding Mr. Weisser operating a Wine & Canvas location in San Francisco,
California. Shortly thereafter, Mr. Muylle joined Mr. Weisser as a business partner in the
proposed venture. The two then formed YN Canvas for the purpose of operating the Wine &
Canvas San Francisco location. From this point forward, the stories diverge.
Wine & Canvas asserts that, in conjunction with Defendants, it developed a business
arrangement where the parties would form a new limited liability company that would license the
Wine & Canvas trademarks and concept to other businesses, as well as operate a Wine & Canvas
location in San Francisco. On July 30, 2011, Mr. Weisser and Mr. Muylle met with Wine &
Canvas in Indiana on their way to California, and delivered a set of executed documents that they
represented as being consistent with the previously discussed business arrangement. However,
Wine & Canvas later discovered that the documents included a materially revised license
agreement and confidentiality agreement that were not consistent with the planned arrangement.
After receiving assurances from Mr. Weisser and Mr. Muylle that they would execute documents
consistent with the planned arrangement, Wine & Canvas sent representatives to California to
help launch the San Francisco store. After its successful launch, Mr. Weisser and Mr. Muylle
terminated their business relationship with Wine & Canvas based on the alleged revised
agreements but continued to use the Wine & Canvas concept and goodwill. Simply put, Wine &
Canvas alleges that Defendants pulled an old-fashioned bait-and-switch with the agreements.
Defendants, on the other hand, assert that Mr. Scott presented Mr. Weisser and Mr.
Muylle with the license and confidentiality agreements in Indiana. The two men then signed the
agreements at the insistence of Mr. Scott.
As a result, YN Canvas operated as a
licensee/franchisee of Wine & Canvas, which provided YN Canvas with some assistance and
oversight in its operations. Later, when Mr. Weisser and Mr. Muylle refused to sign additional
agreements, including a non-compete agreement and an increased royalty rate, YN Canvas
terminated the license agreement and changed its business name to Art Uncorked, LLC.
Additional facts will be added below as needed.
II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
Mr. Weisser and YN Canvas
Defendants assert that this Court lacks personal jurisdiction over Mr. Weisser (YN
Canvas’s owner and operator) and YN Canvas because they do not have sufficient minimum
contacts with Indiana, the forum state. As noted in Mr. Weisser’s declaration, he is not a
resident of Indiana; he does not own, in whole or in part, any real property located in Indiana;
and he does not personally incur or remit any taxes in Indiana. Moreover, according to Mr.
Weisser’s declaration, YN Canvas only has two places of business, both located in California; it
has no offices, agents, employees or other presence in Indiana; it has never conducted business in
Indiana; it does not own, in whole or in part, any real property located in Indiana; it has not
incurred or remitted any taxes in Indiana; it does not have any customers located in Indiana; and
it does not direct any advertising into Indiana.
Given these scant connections to Indiana,
Defendants argue, this action must be dismissed against Mr. Weisser and YN Canvas for lack of
Federal Rule of Civil Procedure 12(b)(2) requires dismissal of a claim where personal
jurisdiction is lacking. As an initial matter, a brief review of the mechanics of analyzing a Rule
12(b)(2) motion is warranted. After the defendant moves to dismiss under Rule 12(b)(2), “the
plaintiff bears the burden of demonstrating the existence of jurisdiction.” Purdue Research
Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The extent of plaintiff’s
burden is dependent upon the method in which the court determines the issue of personal
jurisdiction. Id. “When the . . . court holds an evidentiary hearing to determine [personal]
jurisdiction, the plaintiff must establish [personal] jurisdiction by a preponderance of the
evidence.” Id. But where, as here, the court determines personal jurisdiction based only on
reference to submissions of written materials, the plaintiff simply needs to make a prima facie
case of personal jurisdiction. GCIU-Employer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018,
1023 (7th Cir. 2009). In determining whether the plaintiff has met the prima facie standard, the
plaintiff is entitled to a favorable resolution of all disputed relevant facts. uBID, Inc. v. GoDaddy
Grp., Inc., 623 F.3d 421, 423-24 (7th Cir. 2010). If the defendant has submitted evidence in
opposition to the implementation of jurisdiction, however, “the plaintiff must go beyond the
pleadings and submit affirmative evidence supporting the exercise of jurisdiction.” Purdue, 338
F.3d at 782-83. This evidence submitted by the defendant may include affidavits unless the
affidavits merely contain conclusory assertions that the court lacks personal jurisdiction over the
defendant. Id. at 783 n.13 (citing Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir.
Here, Defendants submitted evidence in opposition to the exercise of jurisdiction.
Therefore, Wine & Canvas had to offer evidence beyond the pleadings in support of exercising
jurisdiction. To that end, Wine & Canvas submitted a verified response brief in which Mr. Scott
verified the factual representations contained in the Statement of Facts section of the brief. A
verification is equivalent to an affidavit when it comports with the requirements of Federal Rule
of Civil Procedure 56(e). See Neal v. Kelly, 963 F.2d 453, 457 n.2 (D.C. Cir. 1992) (noting that
“[t]o the extent that a verified pleading meets the requirements of an affidavit set out in Rule
56(e), then it may properly be considered as equivalent to a supporting or opposing affidavit”);
Colon v. Coughlin, 58 F.3d 865, 872 (2d Cir. 1995); Sheinkopf v. Stone, 927 F.2d 1259, 1262
(1st Cir. 1991).
Thus, to the extent that the verified response brief contained factual
representations that were within Mr. Scott’s personal knowledge, Wine & Canvas’s response
brief satisfied its duty to offer additional evidence beyond the pleadings.
Having resolved this threshold evidentiary issue, the Court now turns to the substance of
Defendants’ personal jurisdiction argument. A district court must undertake and satisfy a twostep analysis in order to properly exercise personal jurisdiction over a non-resident defendant.
First, the exercise of personal jurisdiction must comport with the state’s long-arm statute;
second, the exercise must comport with the Due Process Clause of the Constitution. Purdue, 338
F.3d at 779.
Because Indiana’s long-arm statute, Indiana Rule of Trial Procedure 4.4(a),
“reduce[s] analysis of personal jurisdiction to the issue of whether the exercise of personal
jurisdiction is consistent with the [f]ederal Due Process Clause,” the Court only needs to
consider the second step of the analysis. LinkAmerica Corp. v. Albert, 857 N.E.2d 961, 967 (Ind.
Due process requires that the defendant have “certain minimum contacts with [the forum
state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and
substantial justice.’” Id. (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
These minimum contacts “must have a basis in ‘some act by which the defendant purposefully
avails itself of the privilege of conducting activities within the forum [s]tate, thus invoking the
benefits and protections of its laws.’” Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102,
109 (1987) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)).
purposeful availment is required to ensure that defendants may reasonably anticipate what
conduct will subject them to the jurisdiction of a foreign sovereign. Burger King, 471 U.S. at
Personal jurisdiction may be either specific or general, but only specific jurisdiction
needs to be considered here. Specific jurisdiction exists “for controversies that arise out of or are
related to the defendant’s forum contacts.” Hyatt Int’l Corp. v. Coco, 302 F.3d 707, 713 (7th
It “requires that the defendant purposefully availed itself of the privilege of
conducting activities within the forum state so that the defendant reasonably anticipates being
haled into court there.” LinkAmerica, 857 N.E.2d at 967 (citation omitted). A single contact
with the forum state may satisfy the standard of minimum contacts if the contact produces a
substantial connection with the forum state and the connection is related to the lawsuit. Id.
However, a defendant cannot be brought into a jurisdiction “solely as a result of random,
fortuitous, or attenuated contacts or of the unilateral activity of another party or a third person.”
Id. (quoting Burger King, 471 U.S. at 475).
This inquiry demands an assessment of the
relationship among the defendant, the forum, and the litigation. NUCOR Corp. v. Aceros Y
Maquilas de Occidente, S.A. de C.V., 28 F.3d 572, 580 (7th Cir. 1994).
When the defendant’s contacts with the forum concern a contractual relationship, the
court must “consider the parties’ ‘prior negotiations and contemplated future consequences,
along with the terms of the contract and the parties’ actual course of dealing’ in determining
whether there were sufficient minimum contacts.” Citadel Grp. Ltd. v. Wash. Reg’l Med. Ctr.,
536 F.3d 757, 761 (7th Cir. 2008) (quoting Burger King, 471 U.S. at 479). A defendant’s
solicitation of business with the plaintiff is a factor supporting jurisdiction, even where the
solicitation “amounted to no more than a single communication that initiated negotiations of the
transaction at issue.” Madison Consulting Grp. v. South Carolina, 752 F.2d 1193, 1203 (7th Cir.
The relevant contacts supporting the exercise of personal jurisdiction over Mr. Weisser
and YN Canvas are summarized as follows:
Wine & Canvas is an Indiana LLC. Mr. Weisser was a friend of Mr. Scott
and knew him for over 20 years. Mr. Weisser’s other company, WMG,
worked as a consultant in the development of Wine & Canvas’s business
operations, during which Mr. Weisser traveled to Indiana one or two times.
As a result, by dealing with Mr. Scott and Wine & Canvas, Mr. Weisser knew
he was transacting with an Indiana company.
Mr. Weisser approached Wine & Canvas and requested that he partner with it
to start a Wine & Canvas location in San Francisco.
Mr. Weisser and Wine & Canvas negotiated a business arrangement involving
Mr. Weisser operating a Wine & Canvas store in San Francisco.
YN Canvas was formed for the purpose of operating the Wine & Canvas store
in San Francisco.
Mr. Weisser signed the disputed license agreement in Indiana, and the license
agreement contained a forum selection clause that provided exclusive
jurisdiction in the state of Indiana as well as a governing law provision
providing that Indiana law would govern all disputes.
YN Canvas operated a Wine & Canvas store in San Francisco at least from
July to November 2011.
YN Canvas operated under the belief it was a licensee/franchisee of Wine &
Canvas via the disputed license agreement, and it had some assistance and
oversight in its operations from Wine & Canvas, including assistance from
Wine & Canvas in setting up the Wine & Canvas store in San Francisco as
well as sending representatives that participated in that store’s opening events.
In the Court’s view, these contacts are sufficient to permit the exercise of specific
jurisdiction over Mr. Weisser and YN Canvas in this case. See, e.g., Burger King, 471 U.S. at
479-81 (finding personal jurisdiction where defendant knew he was affiliating and negotiating a
franchise agreement with a Florida corporation, that the agreements were made in and enforced
from Miami, the defendant carried on a continuous course of direct communications with the
Miami headquarters, the contract contained a governing law provision providing that Florida law
would govern disputes between the parties of the contract, and the defendant’s continued use of
plaintiff’s trademark after the contract was terminated caused foreseeable injury to plaintiff in
Florida); NUCOR, 28 F.3d at 580-81 (prior telephone negotiations and single meeting in forum
state leading to the defendant's purchase of steel subjected defendant to personal jurisdiction);
Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1292 n.4 (7th Cir. 1989) (“Obviously,
a valid forum-selection clause, even standing alone, can confer personal jurisdiction.”); Noble
Roman’s, Inc. v. French Baguette, LLC, 684 F. Supp. 2d 1065, 1070-71 (S.D. Ind. 2010) (finding
personal jurisdiction where defendant franchisee entered into a multi-year business relationship
with plaintiff franchisor and in exchange received trade secrets, confidential information and
Defendants basically make two arguments in support of dismissal. First, Defendants
assert that Wine & Canvas cannot try to enforce the forum-selection clause contained in the
license agreement signed by the Defendants while at the same time claiming that license
agreement is invalid. This “you can’t have it both ways” argument has some appeal. But, from
what the Court can gather, it should be rejected. In Intercall Telecommunications, Inc. v. Instant
Impact, Inc., for instance, the plaintiff argued it was not subject to the jurisdiction of Maryland
because the contract between it and the defendant was not valid, and thus, neither was the forumselection clause contained within it that gave Maryland exclusive jurisdiction. 376 F. Supp. 2d
155, 159 (D.P.R. 2005). The District Court of Puerto Rico rejected this argument, holding that
under the separability doctrine, a forum-selection clause is deemed separate from a contract and
enforceable if “not vitiated by fraud or otherwise unenforceable.” Id. at 160 (citing that the
court’s holding was in accordance with Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 n.14
(1974)). The court found that the plaintiff never asserted that the forum-selection clause itself
was the product of fraud or coercion. Intercall, 376 F. Supp. 2d at 160. As a result, the forumselection clause was still enforceable. Id. This Court finds the reasoning in Intercall both
persuasive and applicable.
Wine & Canvas has not asserted that the forum-selection clause itself was the product of
fraud or coercion. In fact, Wine & Canvas asserts that both parties intended that their business
arrangement be governed by Indiana law and that Indiana would have exclusive jurisdiction, as
evidenced by both versions of the license agreement (the purported original version and the
alleged fraudulent version). Moreover, Defendants themselves argue that the license agreement
(and its forum selection clause and its choice of law provision) is valid. So, under their version
of the facts, the Court would unquestionably have personal jurisdiction. Simply stated, any way
you slice it, Defendants had to be aware that they may be subject to jurisdiction in Indiana.
Defendants’ second argument is that personal jurisdiction over a person in his individual
capacity must be established separate from personal jurisdiction over that same person in his
capacity as a corporate officer. In effect, Defendants invite the Court to apply the “fiduciary
shield doctrine,” which precludes a state from exercising jurisdiction over an individual sued in
his personal capacity if the only basis is the individual’s actions as a fiduciary of a corporation.
Intermatic, Inc. v. Taymac Corp., 815 F. Supp. 290, 293 (S.D. Ind. 1993). However, it has
become relatively well-settled that “the fiduciary shield doctrine cannot be asserted to defeat
personal jurisdiction in Indiana.” Id. at 296; see also CR3 of Indiana, LLC v. Specialty Surfaces
Int’l., Inc., No. 1:07-cv-0991-DFH-JMS, 2008 WL 3914092, at *2 (S.D. Ind. Aug. 19, 2008);
Huber v. House, No. 1:04–CV–1231–JDT–WTL, 2004 WL 3130618, at *3 (S.D. Ind. Dec. 7,
2004); Health Mgmt. Prof’ls, Inc. v. Diversified Bus. Enters., Inc., 882 F. Supp. 795, 799 (S.D.
Ind. 1995). Therefore, Defendants’ second argument fails.
Having determined that the contacts of Mr. Weisser and YN Canvas with Indiana are
sufficient to allow the Court to exercise personal jurisdiction, the Court also finds that exercising
personal jurisdiction over both Mr. Weisser and YN Canvas comports with traditional notions of
fair play and substantial justice. See LinkAmerica, 857 N.E.2d at 967 (“[I]f the defendant has
contacts with the forum state sufficient for general or specific jurisdiction, due process requires
that the assertion of personal jurisdiction over the defendant is reasonable.”).
reasonableness of asserting personal jurisdiction over Defendants is determined by balancing
five factors: (1) the burden on the defendants; (2) Indiana’s interest in adjudicating the dispute;
(3) plaintiff’s interest in obtaining convenient and effective relief; (4) the interstate judicial
system’s interest in obtaining the most efficient resolution of controversies; and (5) the shared
interest of several states in furthering fundamental substantive social policies. Burger King, 471
U.S. at 477. Notably, the stronger the Defendants’ contacts are with Indiana, the more likely it is
that exercising personal jurisdiction over the Defendants will be appropriate. Illinois v. Hemi
Grp., LLC, 622 F.3d 754, 760 (7th Cir. 2010).
Turning to the first factor, “though it is always somewhat burdensome to defend a lawsuit
away from home, it is not a burden that violates due process in this instance.” Noble Roman’s,
684 F. Supp. 2d at 1072 (citing support in Burger King, 471 U.S. at 474); see also Logan Prods.,
Inc., v. Optibase, Inc., 103 F.3d 49, 54 (7th Cir. 1996); Bd. of Trs., Sheet Metal Workers' Nat'l
Pension Fund v. Elite Erectors, Inc., 212 F.3d 1031, 1037 (7th Cir. 2000) (“Easy air
transportation, the rapid transmission of documents, and the abundance of law firms with
nationwide practices, make it easy these days for cases to be litigated with little extra burden in
any of the major metropolitan areas.”). In this case, Mr. Weisser has traveled to Indiana a few
times while working with Wine & Canvas. See Laibe Corp. v. R. Cushman & Assocs., Inc., No.
1:03–CV–1144–DFH, 2003 WL 23220053, at *4 (S.D. Ind. 2003) (finding personal jurisdiction
over defendant in part because defendant had an employee that traveled to Indiana as part of
defendant’s course of dealing with plaintiff). Thus, it would not be a significantly greater burden
on Mr. Weisser to defend this suit in Indiana than it was when Mr. Weisser was working with
Wine & Canvas from Alabama.
As to the second factor, Indiana has an interest in adjudicating this dispute because Wine
& Canvas is an Indiana LLC. Because Wine & Canvas is an Indiana company, it clearly has an
interest in obtaining convenient and effective relief, which is best accomplished in Indiana.
None of the other relevant factors weigh conclusively in either Mr. Weisser or YN Canvas’s
favor. In light of the substantial connection between Wine & Canvas’s claim and the purposeful
contacts of Mr. Weisser and YN Canvas with Indiana, and the lack of prejudice to both Mr.
Weisser and YN Canvas, this Court may exercise personal jurisdiction over Mr. Weisser and YN
Canvas in this action. Accordingly, Defendants’ 12(b)(2) motion to dismiss for lack of personal
jurisdiction regarding Mr. Weisser and YN Canvas must be denied.
The Art-Uncorked Website
Defendants also assert that this Court lacks personal jurisdiction over the AU Website
because it is not a legal entity and thus cannot be sued. See Swaim v. Moltan Co., 73 F.3d 711,
718 (7th Cir. 1996) (holding the pleading requirements of capacity correspond with the pleading
requirements of personal jurisdiction). The AU Website is merely the domain name used for the
corporate website of Art Uncorked. Federal Rule of Civil Procedure 17(b)(3) provides that,
under these circumstances, “the law of the state where the court is located” must govern. Fed. R.
Civ. P. 17(b)(3). So, in this case, Indiana law must govern.
Based on common sense and Indiana precedent, it is obvious to this Court that a website
alone is not an entity capable of being sued. See Pein v. Miznerr, 84 N.E. 981, 983 (Ind. 1908)
(stating a nonentity lacks standing as a defendant).
Moreover, although authority relating
directly to this subject matter is limited, the Court has discovered support for its conclusion in
Banks.com, Inc. v. Kerry, No. C 09–06039 WHA, 2010 WL 1688612, at *4 (N.D. Cal. Apr. 26,
2010) (finding a “website, in and of itself, is not an entity capable of being sued”). In its
briefing, Wine & Canvas asserts that no authority states a party under its trade name cannot be
sued, and, hence, the website itself can be sued. The Court disagrees. A dearth of authority
exists for all sorts of propositions, but that fact alone should not stop a court from rejecting it.
Moreover, as a practical matter, Wine & Canvas’s assertion is incorrect. In Pein, the Indiana
Supreme Court held a trade name is a non-entity that lacks the capacity to be sued. 84 N.E. at
983. And, regardless, Mr. Muylle is the registrant of the AU Website and is a defendant in this
suit. Thus, the naming of the AU Website as a defendant is redundant. As a result, Defendants’
12(b)(2) motion to dismiss for lack of personal jurisdiction regarding the AU Website is granted.
Wine & Canvas’s Motion to Strike Portions of Defendants’ Reply Brief
Finally, in light of the Court’s ruling, Wine & Canvas’s Motion to Strike Portions of
Defendants’ Reply Brief in regards to Defendants’ Motion to Dismiss for Lack of Personal
Jurisdiction is rendered moot because none of the portions Wine & Canvas requested to be struck
pertained to the AU Website and the Defendants’ motion was denied regarding Mr. Weisser and
YN Canvas. Therefore, this motion (Dkt. 30) is denied as moot.
III. MOTION TO DISMISS COUNTS I, IV, IX, X AND XI
Having resolved Defendants’ motion relating to personal jurisdiction, the Court now
turns to Defendants’ motion to dismiss several counts of Wine & Canvas’s complaint. Pointing
to Fed. R. Civ. P. 12(b)(6), Defendants have moved to dismiss Wine & Canvas’s claims for
trademark infringement and counterfeiting (Counts I and IV), as well as claims for specific forms
of relief (Counts X and XI). Defendants also seek to dismiss Wine & Canvas’s claim for fraud
(Count IX) under Rules 12(b)(6) and 9(b) (failure to plead counts with the requisite
particularity); or in the alternative, Defendants seek a More Definite Statement on this count.
See Fed. R. Civ. P. 12(e).
When reviewing a Rule 12(b)(6) motion, the Court takes all well-pleaded facts alleged in
the complaint as true and draws all inferences in favor of the plaintiff. Bielanski v. Cnty. of
Kane, 550 F.3d 632, 633 (7th Cir. 2008) (citations omitted). The factual allegations must “give
the defendant fair notice of what the . . . claim is and the grounds upon which it rests,” and the
“[f]actual allegations must be enough to raise a right to relief above the speculative level.”
Pisciotta v. Old Nat’l Bancorp, 499 F.3d 629, 633 (7th Cir. 2007) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). Stated differently, the complaint must include “enough
facts to state a claim to relief that is plausible on its face.” Hecker v. Deere & Co., 556 F.3d 575,
580 (7th Cir. 2009) (citations omitted). To be facially plausible, the complaint must allow “the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).
Counts I and IV
As it stands, both Count I (trademark infringement under 15 U.S.C. § 1114(1)(a)) and
Count IV (use of a counterfeit mark under 15 U.S.C. § 1116(d)) are fatally defective. This is
because both claims require a registered mark. Wine & Canvas concedes that it does not have
registered marks and that both of these counts should be dismissed; however, Wine & Canvas
urges the Court to dismiss without prejudice because the registration of its marks is pending.
Because the date of filing for the registration was on April 12, 2011, a few months prior to the
signing of the disputed license agreement, the Court finds that Counts I and IV should be
dismissed without prejudice. See 15 U.S.C. § 1057(c) (stating that for a mark registered on the
principal register, the “filing of the application to register [the] mark shall constitute constructive
use of the mark”); American Throwing Co., v. Famous Bathrobe Co., 250 F.2d 377, 380
(C.C.P.A. 1957) (holding “[t]he presumption of use created by the registration is deemed to
relate back to the filing date thereof”).
Counts X and XI
Wine & Canvas’s Counts X and XI seek specific forms of relief – Permanent Injunction
and Attachment, respectively. See Bravado Int’l Grp. Merch. Servs., Inc. v. Ninna, Inc., 655 F.
Supp. 2d 177, 199 (E.D.N.Y. 2009) (stating that a permanent injunction is an appropriate remedy
under 15 U.S.C § 1125); Vuitton v. White, 945 F.2d 569, 572 (3d Cir. 1991) (stating that an
attachment is legal remedy available under Fed. R. Civ. P. 64(b)). Because these remedies are
based on causes of actions in other counts within the Wine & Canvas’s complaint and are
included within the Wine & Canvas’s prayer for relief, it is unnecessary to dedicate a separate
count for each specific remedy. See Walters v. Juno, No. Civ. A. No. 85–6775, 1986 WL 5172,
at *1 (E.D. Pa. May 1, 1986). As a result, Counts X and XI must be dismissed.
Count IX of Wine & Canvas’s complaint involves a cause of action for fraud.
Defendants assert that Wine & Canvas has failed to state a claim of fraud because its pleading
lacks particularity. The Court agrees.
In addition to the legal standard for a Rule 12(b)(6) motion stated above, a fraud claim is
subjected to a heightened pleading standard. See Borsellino v. Goldman Sachs Grp., Inc., 477
F.3d 502, 507 (7th Cir. 2007) (referring to Fed. R. Civ. P. 9(b) as providing a heightened
pleading requirement). Federal Rule of Civil Procedure 9(b) states that when “alleging fraud . . .,
a party must state with particularity the circumstances constituting fraud.” Because fraud can
cause serious harm to a business or person, the heightened pleading standard of Rule 9(b)
ensures that the plaintiff has some basis for his accusations of fraud and discourages the plaintiff
from using the accusations as a tool to gain leverage for other purposes. Uni*Quality, Inc. v.
Infotronix, Inc., 974 F.2d 918, 924 (7th Cir. 1992).
To plead with the requisite particularity, the plaintiff must provide more than conclusory
allegations, see Robin v. Arthur Young & Co., 915 F.2d 1120, 1127 (7th Cir. 1990), and instead,
detail “the who, what, when, where, and how.” DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th
Stated differently, the plaintiff must “identi[fy] . . . the person making the
misrepresentation, the time, place, and content of the misrepresentation, and the method by
which the misrepresentation was communicated to the plaintiff.” Kennedy v. Venrock Assocs.,
348 F.3d 584, 593 (7th Cir. 2003) (citation omitted).
The five elements of fraud are: “(i)
material misrepresentation of past or existing facts by the party to be charged (ii) which was false
(iii) which was made with knowledge or reckless ignorance of the falseness (iv) was relied upon
by the complaining party and (v) proximately caused the complaining party injury.” Rice v.
Strunk, 670 N.E.2d 1280, 1289 (Ind. 1996) (citation omitted).
Wine & Canvas’s complaint lacks the requisite specificity to maintain a charge of fraud.
No date or relative time frame is given as to when the alleged fraud occurred, nor is there any
indication as to where the fraud took place. Although Wine & Canvas alleges the fraud was
accomplished through switched documents, it is unclear as to the method in which the
misrepresentation was communicated to Wine & Canvas.
Admittedly, many of these
uncertainties are clarified in Wine & Canvas’s response brief; however, Rule 9(b) is concerned
with the complaint and a subsequent response brief cannot be used “to plead for the first time
with the requisite particularity.” Kennedy, 348 F.3d at 593. As a result, the Court finds that
Count IX should be dismissed without prejudice.
IV. MOTION TO STRIKE COUNT VI
Wine & Canvas’s Count VI seeks a declaratory judgment on the rights with respect to
Wine & Canvas’s trademarks and the enforceability of the Non-Compete Agreement.
Defendants assert that Count VI is duplicative of Count VIII’s breach of contract claim and
should be stricken. The Court agrees.
Federal Rule of Civil Procedure 12(f) states that a court may strike “redundant,
immaterial, impertinent, or scandalous matter” from any pleading. The general rule is a motion
to strike is disfavored unless it helps to relieve unnecessary clutter from a case and thus serves to
expedite matters. Heller, 883 F.2d at 1294. The Court’s decision of whether to strike material
from a pleading is discretionary. See Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654, 655
(7th Cir. 1992); Olayan v. Holder, 833 F.Supp.2d 1052, 1059 (S.D. Ind. 2011).
Because Wine & Canvas’s Count VIII alleges that Defendants are in breach of the NonCompete Agreement, the enforceability of the Non-Compete Agreement will necessarily be
addressed in Count VIII’s adjudication. In addition, the determination of Wine & Canvas’s
rights in regards to its trademarks will necessarily be addressed in the adjudication of Count II, a
claim of false designation of origin, and Count III, a claim of trademark dilution. As a result,
Count VI is redundant. Therefore, Count VI should be dismissed.
For the reasons set forth above, Defendants’ Motion to Dismiss for Lack of Personal
Jurisdiction (Dkt. 16) is DENIED regarding Mr. Weisser and YN Canvass and GRANTED with
respect to AU Website; Defendants’ Motion to Dismiss for Failure to State a Claim (as to Counts
I, IV, and IX) (Dkt. 14) is GRANTED WITHOUT PREJUDICE; Defendants’ Motion to
Dismiss for Failure to State a Claim (as to Counts X and XI) (Dkt. 14) is GRANTED;
Defendants’ Motion to Strike (Count VI) is GRANTED; and Plaintiff’s Motion to Strike
Portions of Defendants’ Reply Brief (Dkt. 30) is DENIED AS MOOT.
Hon. Tanya Walton Pratt, Judge
United States District Court
Southern District of Indiana
P. Adam Davis
DAVIS & SARBINOFF LLP
William A. McKenna
WOODARD EMHARDT MORIARTY MCNETT & HENRY, LLP
Charles Johnson Meyer
WOODARD EMHARDT MORIARTY MCNETT & HENRY, LLP
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