DOCTOR'S ASSOCIATES INC. v. DOCTOR

Filing 7

LETTER OPINION. Signed by Judge William J. Martini on 10/18/10. (gh, )

-MF DOCTOR'S ASSOCIATES INC. v. DOCTOR

Doc. 7

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MARTIN LUTHER KING JR. FEDERAL BLDG. & U.S. COURTHOUSE 50 WALNUT STREET, P.O. BOX 419 NEWARK, NJ 07101-0419 [phone]

WILLIAM J. MARTINI JUDGE

LETTER OPINION

O c to b e r 18, 2010 F o rre s t Scott Turkish 5 9 5 Broadway B a yo n n e , NJ 07002 (A tto r n e y for Plaintiff) O S K Paper International, Inc. 3 3 9 8 Kiveton Court N o rc ro s s , GA 30092 (D e fe n d a n t)

RE:

D o c to r 's Associates, Inc. v. Nehal D. Doctor C iv il Action No. 10-2699 (WJM)

D e a r Litigants: T h is action comes before the Court on the motion of Plaintiff Doctor's Associates, In c . for default judgment against Defendant, Nehal D. Doctor. There was no oral a rg u m e n t. Fed. R. Civ. P. 78. For the reasons stated below, Plaintiff's motion is G R A N T E D , and default judgment shall be entered against Defendant, Nehal D. Doctor. I. BACKGROUND P la in tif f , Doctor's Associates, Inc. (hereinafter "Plaintiff"), is the owner of the S u b w a y trade name and related service marks and is the Franchisor of the chain of s a n d w ic h shops. Plaintiff entered into a Franchise Agreement with Defendant, Nehal D. D o c to r (hereinafter "Defendant"), for the operation of a Subway located at 671 Georges R o a d , North Brunswick, NJ 08902 (hereinafter "the Franchisee") dated June 29, 2004 as a m e n d e d by Franchise Agreement #46478 dated July 18, 2008 between the parties

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(hereinafter collectively referred to as "the Franchise Agreement"). (See Certification of P ro o f at paragraphs 2-3 and Exhibits "A" at paragraph 9.a. and "F" at paragraph 14, a n n e x e d thereto). T h e Franchise Agreement provides for the arbitration of disputes between the p a rtie s and provides that any disputes concerning the Arbitration clause would be g o v e rn e d by the Federal Arbitration Act 9 U.S.C. §2, et seq. (See Certification of Proof at p a ra g ra p h 6 and Exhibit "F" annexed thereto at paragraph 10.f.). Pursuant to the F ra n c h is e Agreement, arbitration proceedings were commenced before the Alternative D is p u te Resolution Center resulting in an Arbitration Award entered on April 21, 2010. (C e rtif ic a tio n of Proof at paragraphs 7-9 and Exhibit "B" annexed thereto). The A rb itra tio n Award terminated the Franchise Agreement and awarded monetary and in ju n c tiv e relief, enjoining Defendant from using the Subway trademarks, etc. or from v io la tin g the Restrictive Covenant contained in paragraph 8.g. of the Franchise A g re e m e n t. (Certificate of Proof at paragraph 9 and Exhibit "B" annexed thereto). The A rb itra tio n Award, entered April 21, 2010, was served upon Defendant by the Alternative D is p u te Resolution Center on April 23, 2010. (Certificate of Proof at paragraph 13 and E x h ib it "D" annexed thereto). A Complaint seeking to confirm the Arbitration Award was filed in this matter on M a y 26, 2010. (CM/ECF Docket Entry No. 1). Default was entered by the Clerk in this m a tte r on July 19, 2010 against Defendant. (Id. at No. 4-5). Any motion to modify or v a c a te the Arbitration Award pursuant to 9 U.S.C. §10 or §11, respectively, was required to have been made within three months of the date of the Arbitration Award. No motion h a s been made to vacate or modify the Arbitration Award even though more than three m o n th s have passed. (See Certification of Proof at paragraph 10). Notwithstanding the foregoing, Defendant has failed to dis-identify the Subway s to re #12470 and has continued to use the Subway trade names, trademarks, etc. at said lo c a tio n , and continues to do so until present. By the time of the return date of the M o tio n , on October 4, 2010, 166 days will have lapsed since the entry of the Award. P u rs u a n t to the Franchise Agreement at paragraph 8.e. and the Arbitration Award at p a ra g ra p h 5, Defendant is liable to Plaintiff at the rate of $250 per day for each day D e f e n d a n t continues to use the Subway Trademarks after the Arbitration Award. These p e n a ltie s equal $41,500.00 (166 days x $250 per day). Additionally, Plaintiff incurred $ 2 ,6 5 0 in attorney's fees, $406.66 in costs in connection with the prosecution of this m a tte r, an arbitrator's fee in the amount of $1,950, and $1,104.13 for that portion of the s u m s previously advanced to the Alternative Dispute Resolution Center by Doctor's A s so c ia te s. (Totaling = $47,610.79). II. A N A L Y S IS A defendant's default has the legal effect of admitting the truth of all well-pled a lle g a tio n s contained in the complaint that pertain to liability. Comdyne I, Inc. v. Corbin, 2

908 F.2d 1142, 1149 (3d Cir. 1990). With that in mind, the Court must consider the three f a c to rs that control whether a default judgment should be granted: (1) prejudice to the p la in tif f if default is denied, (2) whether the defendant appears to have a litigable defense, a n d (3) whether the defendant's delay is due to culpable conduct. United States v. $ 5 5 ,5 1 8 .0 5 in U.S. Currency, 728 F.2d 192, 195 (3d Cir.1984). H e re , the Court must accept the truthfulness of Plaintiff's allegations pertaining to b re a c h of contract and non-payment of fees. In this context, the Court must consider the a p p ro p ria te n e s s of entering default judgment against Nehal D. Doctor. The Court finds th a t the longer Plaintiff does not receive payment, the more it is harmed. Therefore, if d e f a u lt were denied, Plaintiff would likely be prejudiced. In addition, it appears to the C o u rt that Defendant, Nehal D. Doctor, was properly served and that Plaintiff took all p ro p e r steps in bringing its motion for default. Therefore, the Court is unaware of any litig a b le defenses available to the Defendant and finds that Defendant's failure to respond to the Complaint was the result of Defendant's own culpable conduct and no one else's. Therefore, the requirements for granting default judgment are satisfied. III. C O N C L U S IO N F o r the reasons stated above, Plaintiff's motion for default judgment is G R A N T E D and default judgment is entered against Defendant Nehal D. Doctor. An a p p ro p ria te final judgment order follows.

_/s/William J. Martini__________ WILLIAM J. MARTINI, U.S.D.J.

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