SUPER 8 WORLDWIDE, INC. v. SAIRAM CORPORATION et al
MEMORANDUM OPINION AND ORDER granting DEFAULT JUDGMENT in the sum of $277,091.49 in favor of Pltf, SUPER 8 WORLDWIDE, INC. against Defts, SAIRAM CORPORATION, DINESH PATEL ***CIVIL CASE TERMINATED. Signed by Judge Esther Salas on 9/4/14. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
SUPER 8 WORLDWIDE, INC., formerly
known as SUPER 8 MOTELS, INC., a South
Civil Action No. 13-6161 (ES)
OPINION & ORDER
SAIRAM CORPORATION, an Ohio
Corporation; and DINESH PATEL, an
SALAS, DISTRICT JUDGE
This action comes before the Court on the motion of Plaintiff Super 8 Worldwide, Inc.,
formerly known as Super 8 Motels, Inc., a South Dakota Corporation (“Plaintiff” or “SWI”) for
entry of a permanent injunction and final judgment by default against Defendants, Sairam
Corporation and Dinesh Patel (collectively, “Defendants”), pursuant to Federal R. Civ. P. 55(b)(2)
(See D.E. No. 11-1). The Court, having considered Plaintiff’s submissions, and it appearing that:
On October 17, 2013, Plaintiff commenced the instant civil action, claiming that
Defendants, Sairam Corporation and Dinesh Patel, breached the franchise agreement
contract that the parties entered into on July 7, 1997. (D.E. No. 1, Complaint
(“Compl.”) ¶ 34).
On October 24, 2013, Defendants were served with a copy of the Summons and
Verified Complaint. (D.E. No. 5).
The time for answering or otherwise responding to the Verified Complaint expired,
and Defendants have neither been granted an extension of time within which to
answer, nor interposed an answer or otherwise responded to the Complaint.
On November 27, 2013, Plaintiff sent the Clerk of Court a letter requesting that
default be entered against Defendants. (See D.E. No. 6). The same day, the Clerk
of Court entered default as to Defendants for their failure to plead or otherwise defend
this action. (See D.E. dated November 27, 2013).
On December 2, 2013, Plaintiff served a copy of the Clerk’s Entry of Default upon
Defendants. (D.E. No. 11-1, Ex. A).
On January 24, 2014, Plaintiff filed its motion seeking entry of permanent injunction
and final judgment by default pursuant to Fed. R. Civ. P. 55(b)(2). (D.E. No. 11).
“A consequence of the entry of [default] is that the factual allegations of the
complaint . . . will be taken as true.” Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149
(3d Cir. 1990).
“Before granting a default judgment, the Court must determine (1) whether there is
sufficient proof of service, (2) whether a sufficient cause of action was stated, and (3)
whether default judgment is proper.” Teamsters Health & Welfare Fund of Phila. &
Vicinity v. Dubin Paper Co., No. 11-7137, 2012 WL 3018062, at *2 (D.N.J. July 24,
2012) (internal citations omitted).
First, the Court finds that there has been sufficient proof of service because
Defendants were personally served. (D.E. No. 5).
Second, the Court finds that there has been a sufficient cause of action stated. In New
Jersey, a plaintiff must allege three elements to state a cause of action for breach of
contract: (1) a valid contract, (2) breach of that contract, and (3) damages resulting
from that breach. Ramada Worldwide Inc. v. Courtney Hotels USA, LLC, No. 11896, 2012 WL 924385, at *3 (D.N.J. Mar. 19, 2012). Here, Plaintiff has alleged: (1)
that there was a contractual relationship based on the Franchise Agreement and
Defendant’s personal guaranties, (Compl. ¶ 18); (2) that Defendants breached the
contract when they failed to remit required payments, (Id. ¶ 34); and (3) that Plaintiff
suffered resulting damages in the amount of $277,091.49 (D.E. No. 11-2, Affidavit
of Suzanne Fenimore in Support of Entry of Permanent Injunction and Final
Judgment by Default, (“Fenimore Aff.”) ¶¶ 40, 47-50). Therefore, Plaintiff has
sufficiently alleged a cause of action for breach of contract.
Third, to determine whether granting default judgment is proper, the Court must make
factual findings “as to (1) whether the party subject to default has a meritorious
defense, (2) the prejudice suffered by the party seeking default, and (3) the culpability
of the party subject to default.” Doug Brady, Inc., v. N.J. Bldg. Laborers Statewide
Funds, 250 F.R.D. 171, 177 (D.N.J. 2008). Here, the Court finds that: first, absent
any responsive pleadings from Defendants, meritorious defenses do not appear to be
available to them. Second, the Court finds that Plaintiff “will suffer prejudice if the
Court does not enter default judgment as Plaintiff has no other means of seeking
damages for the harm caused by Defendant[s].” Gowan v. Cont'l Airlines, Inc., No.
10-1858, 2012 WL 2838924, at *2 (D.N.J. July 9, 2012). Finally, Defendants have
been served with notice of this action but have failed to participate properly.
Moreover, Defendants are culpable because they are not infants or otherwise
incompetent nor are they presently engaged in the military service of the United
States. (D.E. No. 11-1, Certification of Bryan P. Couch (“Couch Cert.”) ¶¶ 13-14).
Thus, the Court finds that the three elements of Teamsters Health & Welfare Fund
have been established here.
Plaintiff has alleged contractual damages in the amount of $277,091.49. (Fenimore
Aff. ¶ 52). This amount includes $158,825.10 in charges that became due or were
due at the time the franchise agreement was terminated (i.e., recurring fees, principal
plus interest), as well as, $68,982.40 for liquidated damages (principal plus interest)
(Id. ¶¶ 47-48); $44,452.50 for Lanham Act Damages (infringement damages for
Defendants’ use of Super 8® Marks). (Id. ¶¶ 49-50).
Plaintiff also alleges $3,900 in attorneys’ fees and $931.49 in costs of suit. (Couch
Cert. ¶¶ 9, 11).
Plaintiff also seeks a permanent injunction against Defendants, restraining them from
continuing to market, promote and rent rooms through the unauthorized use of the
Super 8® Marks. (Compl. ¶ 56). For the Court to grant injunctive relief to prevent
further violation of Plaintiff’s mark, Plaintiff must show that “(1) the Court’s exercise
of equity jurisdiction is proper, (2) the Plaintiff succeeded on the merits, and (3) the
balance of equities tips in favor of injunctive relief.” Chanel, Inc. v. Gordashevsky,
558 F. Supp. 2d 532, 539 (D.N.J. 2008) (citing TKR Cable Co. v. Cable City
Corp., No. 96-2877, 1998 WL 34028782, at *5 (D.N.J. Jan.27, 1998)).
demonstrate the Court’s proper exercise of equity jurisdiction, Plaintiff must show
that (1) he/she has no adequate legal remedy, (2) the threatened injury is real and (3)
no equitable defenses exist. (Id.).
Here, the Court finds that permanent injunctive relief is warranted. First, the Court’s
exercise of equity jurisdiction is proper because due to the extent of Defendant’s
trademark infringement and potential for future violations, this Court finds that a
legal remedy is not adequate in providing Plaintiff with relief and that an injunction
is necessary as an effective remedy. See TKR Cable Co., 1998 WL 34028782, at *5.
And, Plaintiff has demonstrated that the threatened injury is real and that no equitable
defense exists for Defendants. Second, the Court finds that Plaintiff succeeds on the
merits because unchallenged facts show that Defendants have violated the Lanham
Act through unauthorized use of Plaintiff’s marks. Finally, because Defendants’ ongoing acts of infringement have and will continue to harm Plaintiff, the balance of
equities weighs in favor of granting injunctive relief.
Accordingly, IT IS on this 4th day of September 2014,
ORDERED that Plaintiff’s motion for final default judgment is GRANTED, and it is
further ORDERED that judgment is hereby entered jointly and severally against Sairam
Corporation & Dinesh Patel in favor of SWI in the total amount of $277,091.49, and it is
further ORDERED that Plaintiff’s motion for permanent injunction is GRANTED; and it
is further ORDERED that the Clerk of the Court shall close this matter.
Esther Salas, U.S.D.J.
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