Uptown Grill, LLC v. Shwartz et al

Filing 204

ORDER AND REASONS granting 194 Motion for Summary Judgment. Signed by Judge Jane Triche Milazzo on 7/9/15. (Reference: All Cases)(ecm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

UPTOWN GRILL, LLC

CIVIL ACTION

VERSUS

NO: 13-6560 c/w
14-810; 14-837

MICHAEL LOUIS SHWARTZ, ET AL

SECTION: "H"(4)
(Applies to All Cases)

ORDER AND REASONS
Before the Court is Motion for Summary Judgment (Doc. 194) filed by
Uptown Grill, LLC. For the following reasons, the Court finds that the Bill of
Sale clearly and unambiguously transferred the disputed trademarks to Uptown
Grill, LLC. Motion for Summary Judgment is GRANTED.
BACKGROUND
This consolidated matter involves a protracted dispute over the ownership
rights to certain intellectual property associated with the famous Camellia Grill
restaurant in New Orleans. In the various suits, two business entities each
1

claim to own the intellectual property associated with the restaurant.
In the lead case, Uptown Grill, LLC ("Uptown Grill")1 seeks a judgment
against Michael Shwartz, Camellia Grill Holdings, Inc. ("CGH"), and Camellia
Grill, Inc.2 (jointly referred to as the "Shwartz parties") declaring that "(1) it
owns the trademarks, etc. that are located within or upon the property 626
South Carrollton Avenue, and (2) that its continued use of the trademarks, etc
that it purchased is lawful in all respects."3
In the consolidated cases, Camellia Grill Holdings, Inc. (CGH) seeks
judgment against Defendants, Hicham Khodr; The Grill Holdings, LLC ("Grill
Holdings"); Chartres Grill, LLC; RANO, LLC; Uptown Grill, LLC; Uptown Grill
of Destin, LLC; K&L Investments, LLC; and Robert's Gumbo Shop, LLC (jointly
referred to as the "Khodr parties").4 CGH alleges that the defendants, acting as
a single business enterprise, are unlawfully using the contested Camellia Grill
trademarks. CGH seeks damages for trademark infringement and requests that
the defendants be enjoined from further infringement.
For many years prior to Hurricane Katrina, the Shwartz family owned and
operated Camellia Grill. Under the Shwartz family ownership, the restaurant
on Carrollton Avenue was the only location of operation. In 1999, Shwartz
formed CGH for the sole purpose of holding federally registered trademarks
1

Uptown Grill is wholly owned by Hicham Khodr.

2

CGH and Camelia Grill, Inc. are wholly owned by Michael Shwartz.

3

Doc. 1, p. 6.

4

The Grill Holdings, LLC; Chartres Grill, LLC; RANO, LLC; Uptown Grill; LLC;
Uptown Grill of Destin, LLC; K&L Investments, LLC; and Robert's Gumbo Shop, LLC are all
wholly owned by Hicham Khodr.

2

associated with the restaurant.
In August of 2005, the city of New Orleans was decimated by the landfall
of Hurricane Katrina. Shwartz relocated to Grenada, Mississippi in the wake
of the storm, and Camellia Grill remained closed. At some point during the year
following Katrina, Shwartz and Khodr negotiated the sale of Camellia Grill. In
August of 2006, the parties, through various entities, executed three contracts:
(1) the Cash Sale, (2) the Bill of Sale, and (3) the License Agreement.
The Cash Sale was executed on August 11, 2006. Pursuant to the Cash
Sale, Michael Shwartz sold the immovable property located at 626 Carrollton
Avenue (the home of Camellia Grill) to RANO, LLC for the sum of $490,000.00.
On August 11, 2006, Michael Shwartz, Camellia Grill, Inc., and CGH
executed a Bill of Sale in favor of Uptown Grill, LLC, for the sum of $10,000.00.
The Bill of Sale transfers:
[I]nterest in and to the following tangible personal property located
within or upon the real property described in Exhibit "A" . . . and
within or upon the buildings and improvements located thereon:
All furniture, fixtures and equipment, cooking
equipment, kitchen equipment, counters, stools, tables,
benches, appliances, recipes, trademarks, names, logos,
likenesses, etc., and all other personal and/or movable
property owned by Seller located within or upon the
property described in Exhibit A annexed hereto and
within or upon the buildings and improvements
thereon.5
On August 27, 2006, CGH and Grill Holdings executed the License
Agreement, in which the parties acknowledged that CGH held the now-disputed
5

Doc. 194–3.

3

federally registered trademarks and granted Grill Holdings exclusive license to
use the trademarks for the sum of $1,000,000.00, plus royalties.
Sometime following the transactions in 2006, disagreements arose
regarding the License Agreement and litigation ensued.

The Licensing

Agreement was ultimately cancelled by a Louisiana state court based on the
finding that Grill Holdings had breached its obligations under the contract.6
That order has become final on direct appeal.
While the state judgment cancelling the License Agreement was on appeal,
CGH filed suit in this Court alleging that Grill Holdings' continued use of the
Camellia Grill trademarks violated the Lanham Act, and seeking a preliminary
and permanent injunction prohibiting Grill Holdings from using the marks,
including the facade of the Camellia Grill building.7 After, this Court denied
CGH's Motion for Preliminary Injunction, CGH filed a Motion for Voluntary
Dismissal, which this Court granted.
While the Motion for Voluntary Dismissal was pending, Uptown Grill filed
13–6560, the lead case in this litigation. Uptown Grill alleges that it owns the
trademarks that are located "within or upon the property" at 626 South
Carrollton Avenue, that its continued use of the trademarks is lawful, and that
it is entitled to a declaratory judgment to that effect.
After the Motion for Voluntary Dismissal was granted and while the
6

See The Grill Holdings, L.L.C. v. Camellia Grill Holdings, Inc., 120 So. 3d 294 (La.
App. 4 Cir. 2013).
7

See Camelia Grill Holdings, Inc. v. City of New Orleans, et al, No. 13–5148 (E.D. La.
filed July 23, 2013).

4

Uptown Grill claim was pending, CGH initiated suit in state court asserting
claims for trademark infringement by filing a supplemental pleading in the
then-closed state court litigation. The Khodr parties removed the litigation to
this Court, invoking this Court's federal question jurisdiction under the Lanham
Act, and the litigation was consolidated with the declaratory action. After the
Court denied a motion to remand, CGH amended its complaint to explicitly
assert Lanham Act claims.
At its core, this Motion turns on whether the language of the Bill of Sale
was clear and unambiguous and, if so, what was transferred to whom.
LEGAL STANDARD
Summary judgment is appropriate "if the pleadings, depositions, answers
to interrogatories, and admissions on file, together with affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law."8 A genuine issue of fact exists only
"if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party."9
In determining whether the movant is entitled to summary judgment, the
Court views facts in the light most favorable to the non-movant and draws all
reasonable inferences in his favor.10 "If the moving party meets the initial
burden of showing that there is no genuine issue of material fact, the burden
8

Fed. R. Civ. P. 56(c) (2012).

9

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

10

Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528 (5th Cir. 1997).

5

shifts to the non-moving party to produce evidence or designate specific facts
showing the existence of a genuine issue for trial."11 Summary judgment is
appropriate if the non-movant "fails to make a showing sufficient to establish the
existence of an element essential to that party’s case."12 "In response to a
properly supported motion for summary judgment, the non-movant must
identify specific evidence in the record and articulate the manner in which that
evidence supports that party’s claim, and such evidence must be sufficient to
sustain a finding in favor of the non-movant on all issues as to which the nonmovant would bear the burden of proof at trial."13 "We do not . . . in the absence
of any proof, assume that the nonmoving party could or would prove the
necessary facts."14

Additionally, "[t]he mere argued existence of a factual

dispute will not defeat an otherwise properly supported motion."15
LAW AND ANALYSIS
The questions before the Court are relatively straightforward, even if the
answers are not. On August 11, 2006, Michael Shwartz sold the building and
real estate of Camelia Grill to RANO, LLC. On that same date, the Shwartz
parties and Uptown Grill executed the Bill of Sale at issue.

CGH and Grill

11

Engstrom v. First Nat’l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995).

12

Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).

13

John v. Deep E. Tex. Reg. Narcotics Trafficking Task Force, 379 F.3d 293, 301 (5th Cir.
2004) (internal citations omitted).
14

Badon v. R J R Nabisco, Inc., 224 F.3d 382, 394 (5th Cir. 2000) (quoting Little v.
Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)).
15

Boudreaux v. Banctec, Inc., 366 F. Supp. 2d 425, 430 (E.D. La. 2005).

6

Holdings entered into the License Agreement two weeks later. The current
Motion requires the Court first to determine whether the terms of the Bill of
Sale were clear and unambiguous and, if so, what the Bill of Sale transferred to
Uptown Grill.
I. Bill of Sale
The Bill of Sale expressly invokes Louisiana law. "According to the
Louisiana Civil Code, '[i]nterpretation of a contract is the determination of the
common intent of the parties.'"16 In probing this intent, a court looks first to the
four corners of the contract.17

"When the words of a contract are clear and

explicit and lead to no absurd consequences, no further interpretation may be
made in search of the parties' intent."18 "Each provision of a contract must be
interpreted in light of the other provisions, and a provision susceptible of
different meanings must be interpreted with a meaning that renders it effective
rather than one which renders it ineffective."19 "When a clause in a contract is
clear and unambiguous, the letter of that clause should not be disregarded under
the pretext of pursuing its spirit, as it is not the duty of the courts to bend the
meaning of the words of a contract into harmony with a supposed reasonable
intention of the parties."20 "The rules of contractual interpretation simply do not
16

Guidry v. Am. Pub. Life Ins. Co., 512 F.3d 177, 181 (5th Cir. 2007) (quoting La. Civ.
Code art. 2045).
17

See John Paul Saprir, LLC v. Yum! Brands, Inc., 106 So. 3d 646, 652 (La. App. 4 Cir.
2012) (citation omitted).
18

La. Civ. Code art. 2046.

19

Lis v. Hamilton, 652 So. 3d 1327, 1330 (La. 1995) (citations omitted).

20

Clovelly Oil Co., LLC v. Midstates Petroleum Co., LLC, 112 So. 3d 187, 192 (La. 2013).

7

authorize a perversion of the words or the exercise of inventive powers to create
an ambiguity where none exists or the making of a new contract when the terms
express with sufficient clarity the parties' intent."21
The determination of whether a contract is clear or ambiguous is a
question of law.22 "When a contract can be interpreted from the four corners of
the instrument, the question of contractual interpretation is answered as a
matter of law, and summary judgment is appropriate."23 If, on the other hand,
the court makes a threshold finding that the contract is ambiguous, an issue of
material fact exists as to the intention of the parties, and summary judgment is
rarely appropriate.24 Accordingly, the threshold inquiry is whether the Bill of
Sale is clear and unambiguous.
The Bill of Sale was executed by Michael Shwartz, Camellia Grill, Inc.,
CGH,25 and Uptown Grill.26 The contract recites that:
FOR AND IN CONSIDERATION of the price and sum of TEN
THOUSAND AND NO/100 ($l0,000.00) DOLLARS, which Purchaser
has well and truly paid unto Seller, the receipt and sufficiency
whereof is acknowledged, Seller does by these presents, hereby sell,
transfer, and convey unto Purchaser, its successors and assigns, all
of Seller's right, title and interest in and to the following tangible
21

Sims v. Mulhearn Funeral Home, Inc., 956 So. 2d 583, 589 (La. 2007).

22

La. Ins. Guar. Ass'n v. Interstate Fire & Cas. Co., 630 So. 2d 759, 764 (La. 1994)
(citation omitted).
23

Mobil Exploration & Producing U.S. Inc. v. Certain Underwriters Subscribing to Cover
Note 95-3317(A), 837 So. 2d 11, 24 (La. App. 1 Cir. 2002) (citation omitted).
24

See Orleans Parish Sch. Bd. v. Lexington Ins. Co., 118 So. 3d 1203, 1212 (La. App. 4
Cir. 2013) (citation omitted).
25

The contract refers to these parties collectively as "Seller."

26

The contract refers to Uptown Grill as "Purchaser."

8

personal property located within or upon the real property described
in Exhibit "A"' annexed hereto and within or upon the buildings and
Improvements located thereon:
All furniture, fixtures and equipment, cooking
equipment, kitchen equipment, counters, stools, tables,
benches, appliances, recipes, trademarks, names, logos,
likenesses, etc., and all other personal and/or movable
property owned by Seller located within or upon the
property described in Exhibit A annexed hereto and
within or upon the buildings and improvements thereon
(the "Personal Property").27
The parties vehemently disagree on the proper interpretation of the
contract. Uptown Grill contends that the contract clearly and explicitly conveys
ownership of all "trademarks" to it. The Shwartz parties offer three arguments
to the contrary. First, they argue that the contract's use of the phrase "tangible
personal property" necessarily limits the contract to such items or renders the
contract ambiguous. Second, they argue that, even assuming that the contract
transferred ownership of the trademarks, such a transfer is not permitted under
the law. Finally, the Shwartz parties argue that this Court should consider
parol evidence regarding the intent of the parties.
The Shwartz parties' first argument, that the inclusion of the term
"tangible personal property" limits the terms of the contract or creates ambiguity
within it, is without merit. They contend that, under Louisiana law, trademarks
are incorporeal movable property and thus not "tangible." According to the
Shwartz parties, the clear wording of the contract limits the assets transferred
27

Doc. 194–3. Exhibit A is a legal description of the property on which the Carrollton
Avenue restaurant sits.

9

to tangible property. Alternatively, the Shwartz parties argue that the inherent
conflict between the term "tangible personal property" and the term
"trademarks" renders the contract ambiguous.
While the Shwartz parties correctly contend that trademarks and other
intellectual property rights are not tangible, this argument ignores a
fundamental rule of contract interpretation. "[I]n the interpretation of . . .
contracts, the specific controls the general."28 To the extent that the general
phrase "tangible personal property" conflicts with the specific provision
purporting to transfer all "recipes, trademarks, names, logos, likenesses," this
Court must enforce the specific provision. Moreover, Louisiana law requires
"that each provision of a contract must be interpreted in light of the other
provisions, and a provision susceptible of different meanings must be interpreted
with a meaning that renders it effective rather than one that renders it
ineffective."29 The Shwartz parties would have this Court ignore specific entries
in this contract. This the Court cannot do.
This Court finds that the term "tangible personal property" can be
reconciled with the rest of the contract such that all of the words in the contract
have meaning, without doing violence to any provision. This Court finds that all
tangible personal property located at 626 Carrollton Avenue was transferred, as
28

Corbello v. Iowa Prod., 850 So. 2d 686, 704 (La. 2003) (superseded by statute on other
grounds); see also Mazzini v. Strathman, 140 So. 3d 253, 259 (La. App. 4 Cir. 2014); Centerlink,
Inc. v. Sarpy Properties, LLC, 78 So. 3d 776, 781 (La. App. 5 Cir. 2011); Jessop v. City of
Alexandria, 871 So. 2d 1140, 1146 (La. App. 3 Cir. 2004); Aikman v. Thomas, 887 So. 2d 86, 90
(La. App. 1 Cir. 2004).
29

Lis, 652 So. 3d at 1330.

10

well as the specifically identified intangible property of "recipes, trademarks,
names, logos and likenesses." This reading comports with the Court's obligation
to construe specific terms as controlling over general terms and to ensure that
the contract is interpreted in a manner that renders each term effective.
The Shwartz parties additionally argue that a transfer of the trademarks
could not have legally occurred in the Bill of Sale because the good will
associated with the marks was not explicitly transferred in the contract. The
Court disagrees.
Good will is essentially the good reputation that a business enjoys.30 This
positive reputation results in the expectancy of continued patronage.31 It is "the
total of all the imponderable qualities that attract customers to the business."32
"A trademark is merely a symbol of good will and has no independent
significance apart from the good will that it symbolizes."33

Therefore, a

trademark cannot be transferred separate from the good will it symbolizes.34
The sale of a trademark without the good will it represents is an "assignment in
gross" and is invalid.35

"The purpose of the rule prohibiting the sale or

assignment of a trademark in gross is to prevent a consumer from being misled
30

Newark Morning Ledger Co. v. United States, 507 U.S. 546, 555 (1993).

31

Id.

32

Id. at 556.

33

Sugar Busters LLC v. Brennan, 177 F.3d 258, 265 (5th Cir. 1999).

34

Id.; see also 15 U.S.C. § 1060 ("A registered mark or a mark for which application to
register has been filed shall be assignable with the goodwill of the business in which the mark
is used, or with that part of the goodwill of the business connected with the use of and
symbolized by the mark.").
35

Sugar Busters, 177 F.3d at 265.

11

or confused as to the source and nature of the goods or services that he or she
acquires."36 Courts have not required that contracts transferring ownership of
trademarks explicitly mention the good will of the marks. Rather, because "good
will is an intangible, evasive concept . . . courts will look to see where the
tangible assets of a company went in order to determine whether an alleged
assignee of a mark in fact obtained the good will of the assignor."37 As a leading
commentator has recognized, "if an assignee buys a total business, including
physical assets, trade secrets, formula, drawings, and customer lists of another,
there seems little doubt that it has purchased the 'good will' of the seller."38
The Shwartz parties correctly note that trademarks may not be
transferred without the good will of the business to which they are attached;
they may not be sold in gross. The Shwartz parties go further, however, and
seem to argue that good will cannot be transferred without its express mention
in the contract. This argument misses the point. In the Bill of Sale, the Shwartz
parties clearly and unambiguously transferred "recipes, trademarks, names,
logos, likenesses, etc. and all other personal and/or movable property." The Bill
of Sale transferred every single asset of Camellia Grill to Uptown Grill. It is
clear to this Court that Camellia Grill was sold lock, stock, and barrel. Pursuant
to well-settled trademark law, the Court must conclude that the good will of
Camellia Grill was transferred with the sale of the entire business.
36

Id.

37

3 J. THOMAS MCCARTHY, MCCARTHY
18:23 (4th ed. 2015).
38

ON

Id.

12

TRADEMARKS

AND

UNFAIR COMPETITION §

In this Motion, the Shwartz parties offer one final argument. They
contend that the Court must consider the conduct of the parties after the Bill of
Sale to properly interpret the contract. Louisiana Civil Code article 2053
provides that "a doubtful provision [in a contract] must be interpreted in light
of the nature of the contract, equity, usages, the conduct of the parties before
and after the formation of the contract, and of other contracts of a like nature
between the same parties." The plain text of the article counsels against its
application in this case—there is no "doubtful provision" in the Bill of Sale.
Having found that the contract was clear and unambiguous, this Court may not
resort to extrinsic evidence.

Accordingly, the Court may not consider the

conduct of the parties.39
It is, however, possible to read this argument another way. While the
Shwartz parties have not explicitly made this argument, perhaps they contend
that a literal application of the language in the Bill of Sale produces an "absurd"
result. Louisiana law permits courts to consider extrinsic evidence in search of
the parties' intent where the literal interpretation of a contract leads to absurd
results.40 The Shwartz parties point to the conduct of the parties after the Bill
of Sale was executed, along the terms of the document itself, to argue that a
literal application of its terms is objectively unreasonable. The Court is not
convinced.
39

See La. Civ. Code art. 2053 cmt. a ("This Article . . . clarifies the law by providing that
courts may resort to equity for guidance only when the meaning of a provision is in doubt. They
may not do so in order to enlarge or restrict the scope of a contract or provision whose meaning
is apparent.").
40

Halphen v. Borja, 961 So. 2d 1201, 1205 (La. App. 1 Cir. 2007).

13

CGH argues that the price reflected in the Bill of Sale, $10,000, is
irreconcilable with the value of the Camellia Grill name. In support of this
argument, it cites the License Agreement in which Grill Holdings paid one
million dollars for the right to use the Camellia Grill trademarks. This fact
alone does not render a result "absurd." The Fifth Circuit has cautioned that,
"although a business decision may be unwise, imprudent, risky, or speculative,
it is not necessarily 'absurd.' We decline to allow contracting parties to escape
the unfortunate and unexpected, though not objectively 'absurd,' consequences
of a contract by subsequently characterizing their consequences as 'absurd.'"41
Here, the Shwartz parties agreed to accept the sum of $10,000 for the assets
described in the Bill of Sale. At the time of the purchase, the restaurant had
been closed for about one year. The Court has been presented a dearth of
evidence upon which it may rely to determine the actual value of the
trademarks. In the absence of any objective evidence regarding the value of
Camellia Grill, the Court cannot say that $10,000 is an "absurd" valuation.
Indeed, in the absence of any evidence, it is equally likely that the one million
dollar valuation is the absurd result. Merely demonstrating that a different
party valued an asset differently at a different time does not demonstrate than
the first valuation is objectively absurd.
On the basis of these facts, the Court simply cannot find that the literal
application of the Bill of Sale's terms rises to the level of absurdity. The fact that
the Shwartz parties appear to be suffering from an acute case of sellers' remorse
41

Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Circle, Inc., 915 F.2d 986, 991 (5th Cir.

1990).

14

does not render the terms of the Bill of Sale objectively absurd. Accordingly, the
Court holds, as a matter of law, that the terms of the Bill of Sale clearly and
unambiguously transfer ownership of the trademarks associated with the
operation of the Camellia Grill restaurant on Carrollton Avenue to Uptown Grill.
II. License Agreement
The Court must next determine the effect, if any, of the License
Agreement. The License Agreement was executed between CGH and Grill
Holdings. In the agreement, the parties stipulated that CGH owned Camellia
Grill's intellectual property. The agreement further provided that CGH licensed
the use of the property to Grill Holdings. The agreement did not require that
Grill Holdings pay royalties on the restaurant operations at the Carrollton
location but did require the payment of royalties on any future restaurants and
all merchandise sales. The agreement was cancelled by a Louisiana state court.
CGH argues that the License Agreement is conclusive evidence that CGH
retained ownership of the trademarks in dispute or, alternatively, that the
agreement creates ambiguity in the Bill of Sale. The Court will address these
arguments in reverse order.
Where, as in this case, the Court finds that the contract is clear and
unambiguous "no further interpretation may be made in search of the parties'
intent and courts must enforce the contract as written."42 Having found that the
plain terms of the Bill of Sale are clear and unambiguous, the Court cannot
search for ambiguity in other places, including the License Agreement.
42

Sims v. Mulhearn Funeral Home, Inc., 956 So. 2d 583, 589 (La. 2007); La. Civ. Code
art. 2046.

15

The first argument is less clear. It seems that CGH argues that, even if
the Bill of Sale unambiguously transfers ownership of the trademarks, the
License Agreement modifies the Bill of Sale to provide that CGH retained the
trademarks. This argument, however, overlooks a key difference between the
two contracts: The Bill of Sale transferred property to Uptown Grill, whereas the
License Agreement licensed the trademarks to Grill Holdings. "Once [a] contract
is complete, it is not subject to further modification by either party without the
consent of the other."43 Clearly, the provision in the Bill of Sale transferring
ownership of the trademarks to Uptown Grill may not be modified without the
consent of Uptown Grill. CGH has not offered the Court a scintilla of evidence
suggesting that Uptown Grill consented to the License Agreement.
Though not specifically argued in these Motions, the Court notes that
CGH alleged in the consolidated cases that the Khodr parties are a single
business enterprise.44 If the Khodr parties are such an enterprise, then the
consent of Grill Holdings to the license agreement could equally bind Uptown
Grill. The Court cannot conclude that the Khodr parties are a single business
enterprise for several reasons.

First, that defense was not pled in the

declaratory judgment action. Second, CGH failed to raise this argument in
response to these motions. Finally, even if the Court considers the single
enterprise allegation, CGH has failed to provide evidence upon which this court
can rely to make such a finding.
43

Woods v. Morgan City Lions Club, 588 So. 2d 1196, 1200 (La. App. 1 Cir. 1991).

44

This allegation is found in the consolidated cases only and is not pled in the
declaratory action.

16

Under Louisiana law, business organizations are generally regarded as
separate entities.45 On the other hand, "where a single corporation has been
fragmented into branches that are separately incorporated and are managed by
a dominant or parent entity . . . the courts have held the dominant or parent
corporation liable for the obligations of its branches whenever justice requires
protection of the rights of third persons."46 Louisiana Courts consider a list of
eighteen illustrative factors when deciding whether to hold that several entities
constitute a single business enterprise.47 CGH makes reference to the fact that
Khodr owns both Uptown Grill and Grill Holdings but fails to mention single
business enterprise or provide any analysis.
Common ownership, standing alone, is insufficient to establish that
several entities constitute a single business enterprise.48 Accordingly, in the
complete absence of any additional evidence implicating the factors, the Court
simply cannot consider a single business enterprise allegation. The Court must,
therefore, hold that the License Agreement had no effect on the rights acquired
by Uptown Grill in the Bill of Sale.
III. Laches
CGH also argues that Uptown Grill's declaratory judgment action should
be dismissed based upon the equitable remedy of laches.

"Laches are an

45

Green v. Champion Ins. Co., 577 So. 2d 249, 257 (La. App. 1 Cir. 1991).

46

Id. at 257.

47

Id.

48

Town of Haynesville, Inc. v. Entergy Corp., 956 So. 2d 192, 197 (La. App. 2 Cir. 2007)
("The involvement of a sole or majority shareholder in a corporation is not sufficient alone to
establish a basis for disregarding the corporate entity").

17

inexcusable delay that results in prejudice to the defendant."49

In order to

prevail on the affirmative defense of laches, a defendant must prove that (1)
plaintiff delayed in asserting the rights at issue, (2) the delay is inexcusable, and
(3) defendant has suffered undue prejudice as a result of the delay.50 CGH has
not cited a single case supporting its ability to assert laches as a defense to this
action, and the Court has not located one.
Moreover, even assuming that CGH could assert the defense, it cannot
prove that Uptown Grill delayed filing this action. CGH argues that Uptown
Grill delayed filing this action until eight years after the Bill of Sale was
executed. This contention misses the point. Uptown Grill brought this action
for declaratory judgment in response to the action brought in this Court by CGH.
On July 23, 2013, CGH filed a Complaint against Grill Holdings alleging
trademark infringement related to the continued operation of Camellia Grill.51
After CGH moved to voluntarily dismiss that action, but before the Court ruled
on the motion, this action was filed. Indeed, Uptown Grill filed this action
seeking a declaration that the continued operation of the Carrollton Avenue
restaurant does not constitute trademark infringement less than five months
after the CGH first asserted a trademark infringement claim against it. It
cannot be said that Uptown Grill unreasonably delayed in asserting this claim
and any defense of laches must, therefore, fail.
49

Abraham v. Alpha Chi Omega, 708 F.3d 614, 622 (5th Cir. 2013).

50

Id.

51

See Camellia Grill Holdings, Inc. v. New Orleans City et al, No. 13-5148, Doc. 1 (E.D.
La. filed July 23, 2013).

18

IV. Uptown Grill's Declaratory Judgment Action
In light of the foregoing, the Court grants summary judgment to Uptown
Grill. In the Declaratory Action, Uptown Grill seeks a judgment declaring that
it owns all of the intellectual property "within or upon" the Camellia Grill
location on Carrollton Avenue and that its continued use of that property does
not violate the Lanham Act, 28 U.S.C. § 1114, or any other law. As outlined in
this Order, the Bill of Sale clearly and unambiguously transferred the Camellia
Grill trademarks to Uptown Grill. The Court has not been presented with any
evidence indicating that Uptown Grill has divested itself of the trademarks.
Accordingly, the Court concludes that Uptown Grill owns the trademarks
"within or upon" the Camellia Grill location on Carrollton Avenue. The Court
will separately issue a judgment in accord with this finding.
Having determined that Uptown Grill has carried its burden to prove that
it owns the trademarks, the secondary issue for this Court to address is whether
the trademarks transferred to Uptown Grill in the Bill of Sale could be limited
to the trademarks "within or upon" the Carrollton Avenue location. In other
words, did CGH retain any interest in Camelia Grill trademarks following the
Bill of Sale?
The Court must answer this question in the negative. It is axiomatic that
"ownership of trademarks is established by use, not by registration."52 Indeed,
even if one acquires ownership of a mark, he only acquires ownership of that

52

Bd. of Supervisors for Louisiana State Univ. Agric. & Mech. Coll. v. Smack Apparel
Co., 550 F.3d 465, 475 (5th Cir. 2008).

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mark within the geographic area in which he is currently using the mark.53 At
the time of the Bill of Sale, CGH owned the rights to the Camellia Grill
trademarks to the extent of its use of the marks.
As mentioned above, there is absolutely no dispute that, CGH used the
marks solely in connection with the Carrollton Avenue Camellia Grill
restaurant. Indeed, at oral argument, counsel for CGH conceded that the marks
had never been used outside of the Carrollton location.54 The Bill of Sale
unambiguously transferred ownership of the marks associated with the
Carrollton Avenue location to Uptown Grill. Because CGH only owned the
marks in connection with the Carrollton Avenue Camellia Grill restaurant and
those marks were sold in the Bill of Sale, the Court must conclude that CGH
divested itself of all of its interest in the Camellia Grill trademarks.
The Court itself has doubts about what the parties subjectively intended
when they entered into the transactions at issue. The Court's role in this
matter, however, is governed by Louisiana contract law. Under that law, the
Court must first attempt to discern the intent of the parties from the four
corners of the contract itself. If the contract is clear and unambiguous, the Court
must accept the terms of the contract as reflective of the parties' intent. That is
precisely what the Court has done in this case. The parties to these contracts
were sophisticated businessmen represented by competent counsel. Now, faced
53

Union Nat. Bank of Texas, Laredo, Tex. v. Union Nat. Bank of Texas, Austin, Tex., 909
F.2d 839, 843 (5th Cir. 1990).
54

Transcript of Oral Argument at 5:17–20, Uptown Grill v. Michael Shwartz, et al, No.
13–6560 (April 29, 2015).

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with the prospect that the Bill of Sale does not say what they subjectively
intended it to say, the Shwartz parties ask the Court to rescue them from the
consequences of the contract they signed. The Court declines this invitation.
Accordingly, for the reasons set forth above, the Court concludes that Uptown
Grill owns all of the Camellia Grill trademarks.
CONCLUSION
For the foregoing reasons, the Motion for Summary Judgment (Doc. 194)
is GRANTED, and the Court will issue judgment for Plaintiffs in 13–6560.
New Orleans, Louisiana, this 9th day of July, 2015.

________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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