RE/MAX, LLC v. Sensational Realty, Inc. et al

Filing 23

ORDER DENYING 17 Motion to Appoint Counsel; STRIKING 17 Motion to Dismiss; DENYING AS MOOT 18 Motion to Strike; DENYING 21 Motion for Hearing - Signed by Chief Judge Louise Wood Flanagan on 4/8/11. Counsel should refer to Order for critical information. (Tripp, S.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
NO.5:10-CV-483-FL
RE/MAX, LLC,
Plaintiff,
V.

SENSATIONAL REALTY, INC. and
GLEN A. FREDERICH,
Defendants.

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ORDER

This matter comes before the court for scheduling, upon plaintiffs Rule 26(f) report
(DE #20), to which defendants Sensational Realty, Inc. ("Sensational Realty") and Glen Frederich
("Frederich") filed a brief response (DE #22). Also before the court are a number of pending
motions, including defendants' motion to appoint counsel (DE #17), defendants' motion to dismiss
(DE#17), defendants' motion for a change of venue (DE #17), and defendants' motion for a hearing
(DE #21). Also before the court is plaintiff s motion to strike defendants' answer to complaint and
motion to strike defendants' motion for change of venue (DE #18). These matters are ripe for
reVIew. The disposition of these motions is set forth in conclusion of this order.

STATEMENT OF THE CASE
Plaintiff is a limited liability company that provides real estate brokerage services through
a network of franchisees and affiliated independent contractors or sales associates who are
authorized to use the RE/MAX trademarks in connection with providing the real estate brokerage
services. Sensational Realty is a North Carolina business entity in the business of providing real

estate services. Frederich is the founder and principal of Sensational Realty. This action arises out
of defendants' use of signage which plaintiff alleges is confusingly similar to plaintiffs' signage.
The complaint states four causes of action: (1) a claim for trademark infringement, in
violation of 15 U.S.C. § 1114(1); (2) a claim for unfair competition, in violation of 15 U.S.C. §
1125(a); (3) a claim for violation of the North Carolina Unfair and Deceptive Trade Practices Act,
N.C. Gen. Stat. § 75-1.1; and (4) a claim for trademark infringement and unfair competition under
North Carolina common law. The court has jurisdiction over the federal claims pursuant to 15
U.S.C. § 1121, and has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C.
§§ 1338 and 1367.
Counsel for defendants moved to withdraw on February 2, 2011, which request was
subsequently allowed by the court. Defendants, appearing pro se, filed answer to complaint on
February 9, 2011.
DISCUSSION
A.

Motion to Appoint Counsel
Defendants request court appointed counsel. There is no constitutional right to counsel in

civil cases, and courts should exercise their discretion to appoint counsel for pro se civil litigants
"only in exceptional cases." Cook v. Bounds, 518 F.2d 779, 780 (4th Cir. 1975). The existence of
exceptional circumstancesjustifying appointment ofcounsel depends upon "the type and complexity
of the case, and the abilities of the individual bringing it." Whisenant v. Yuam, 739 F.2d 160, 163
(4th Cir. 1984), abrogated on other grounds by Mallard v. u.s. Dist. Court for the S. Dist. ofIowa,
490 U.S. 296 (1989).

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The case does not appear overly complex. In support oftheir request for counsel, defendants
assert only that they are financially unable to retain counsel to provide a defense in this matter.
Defendants have not demonstrated the existence of circumstances which would compel the
conclusion that this action is sufficiently exceptional as to justify the appointment of counsel.
Accordingly, defendants' motion to appoint counsel is DENIED.
B.

Motion for Change of Venue
Plaintiff has alleged, and defendants have admitted, that venue is proper in the Eastern

District of North Carolina pursuant to 28 U.S.C. § 1391. Defendants' motion for change of venue
specifically requests "that the court action location of the trial and any proceedings be relocated to
a Wake County Courthouse so as not to cause additional financial burden ...." (Mot., 2)
To the extent that defendants' request might be construed as a request to transfer the case to
a state court in Wake County, for example, Wake County Superior Court, such request is denied
where plaintiff has properly invoked federal jurisdiction over the matter. Otherwise, the court notes
that the matter is currently pending in the Eastern District of North Carolina, which encompasses
Wake County. To the extent that defendants do not seek a change of venue, but request that certain
proceedings be held at the Terry Sanford Federal Building in Raleigh, North Carolina, those requests
may be taken up and considered more particularly at the time of scheduling.
Defendants' motion for change ofvenue is DENIED. Plaintiffs motion to strike the motion
for change of venue (DE #18) is DENIED AS MOOT.
C.

Motion to Strike Answer
Plaintiff moves to strike defendants' pro se answer. Specifically, plaintiff moves to strike

the answer as to Sensational Realty only, arguing that because a business entity may not appear in

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federal court except through licensed counsel, the answer must be stricken as to the entity defendant.
Plaintiff does not seek to strike the answer as to Frederich.
Although individual litigants such as Frederich are generally free to represent themselves,
the law is well-established that business entities cannot appear pro se. Gilley v. Shoffner, 345
F.Supp.2d 563, 566-67 (M.D.N.C. 2004). The court notes there appears some confusion as to the
precise nature of the Sensational Realty entity, as defendants describe Sensational Realty both as a
limited liability company and as a subchapter S corporation. However, it is well-settled that business
entities, including both corporations and limited liability companies, may not appear in federal court
except through a licensed attorney. Gilley, 345 F.Supp.2d at 566. Accordingly, Sensational Realty
may not represent itself in this matter.
The Fourth Circuit has previously affirmed the rejection of a pro se corporate defendant's
answer. See Allied Colloids, Inc. v. ladair, Inc., 139 F.3d 887 (table), 1998 WL 112719, at *1 (4th
Cir. 1998).

Accordingly, plaintiff s motion to strike the answer as to Sensational Realty is

GRANTED, and the answer as to Sensational Realty is STRICKEN.
The court in its initial order, dated February 15, 2011, informed Sensational Realty that it
may not proceed without counsel and accordingly instructed Sensational Realty to secure counsel
prior to proceeding further.

Several weeks having now passed, the docket does not reflect

appearance of counsel on behalf of Sensational Realty. Sensational Realty is now ORDERED to
retain counsel, to be signaled to the court through counsel's proper filing of a notice of appearance,
no later than fourteen days from date of entry of this order. If counsel is not timely retained,
plaintiff will be directed to proceed pursuant to Rule 55 to reduce the matter to judgment as to
Sensational Realty.
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D.

Motion for Hearing
Defendants' motion for hearing specifically requests "that the courts do not consider or

execute amotion to strike order until both parties ... have an opportunity to come before [the court]
for an initial appearance regarding this matter." (Mot. for Hr'g, 1) The court interprets defendants'
motion as requesting a hearing on plaintiff s motion to strike. Local Civil Rule 7.1 (i) provides that
"hearings on motions may be ordered by the court in its discretion," but that "unless so ordered,
motions shall be determined without a hearing." In the court's discretion, a hearing on plaintiffs
motion to strike is not warranted where plaintiffs motion is based on a well-established point oflaw
and clearly is meritorious. Defendants' motion for hearing is accordingly DENIED.
E.

Motion to Dismiss
The final motion pending before the court is defendants' motion to dismiss. Defendants do

not specify the rule under which they seek dismissal ofthe action, but the court construes the motion
as a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
In support oftheir motion to dismiss, defendants submitted an exhibit presenting a "new sign
design." Specifically:
[D]efendant requests the court ... review the documentation ... and determine that
there is no ground for continued court action by the plaintiff and move to dismiss all
charges against the defendant. The defendant submits that there is absolutely no base
for allegations of infringement violations with their new sign design.
(Mot., 2)
The court notes again that Sensational Realty may not appear pro se in this matter.
Therefore, just as the purported answer as to Sensational Realty was stricken, so t06shall be the
motion to dismiss. The motion to dismiss is accordingly STRICKEN as to Sensational Realty.

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As to Frederich, the motion is DENIED without prejudice. The court notes primarily that
a Rule 12(b)(6) motion is not the proper vehicle for the arguments made, which would be more
appropriately raised in a motion for summary judgment.' The motion is denied without prejudice,
however, given the liberal standard afforded to pro se litigants. See, e.g., Erickson v. Pardus, 551
U.S. 89,94 (2007). Denial without prejudice will afford Frederich the opportunity to raise argument
at a later date in more appropriate form, perhaps jointly with Sensational Realty with benefit of
counsel.
SCHEDULING
Pursuant to Federal Rule of Civil Procedure 26(f), the parties conferred by telephone on
March 1, 2011, with plaintiff appearing through counsel Matthew Ladenheim, and with Frederich
representing himself pro se. Sensational Realty is not currently represented by counsel. After
reviewing the Rule 26(f) report filed by plaintiffMarch 14, 2011, and the response filed by Frederich
March 15,2011, the court orders the following:
A.

Discovery
1.

The parties shall exchange by April 15, 2011, the information required by Federal
Rule of Civil Procedure 26(a)(l).

2.

Discovery will be necessary on the following subjects: All claims and defenses raised

I "The purpose ofa motion under Federal Rule 12(b)(6) is to test the formal sufficiency of the statement of the
claim for relief; the motion is not a procedure for resolving a contest between the parties about the facts or the substantive
merits of the plaintiffs case." 58 WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 1356 (3d ed. 2004). In
a motion pursuant to Rule 12(b)(6), "the movant merely is asserting that the pleading to which the motion is directed does
not sufficiently state a claim for relief." Id., at § 2713. Frederich's arguments do not address the sufficiency of the
complaint's allegations.
Frederich's arguments would more appropriately be raised in a motion for summaryjudgment pursuant to Rule
56, which "typically is based on the pleadings as well as any affidavits, depositions, and other forms ofevidence relevant
to the merits of the challenged claim or defense..." Id. "The movant under Rule 56 is asserting that on the basis ofthe
record as it then exists, there is no genuine issue as to any material fact so that the movant is entitled to a judgment on
the merits as a matter of law." Id.

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in the pleadings.
3.

All discovery shall be commenced or served in time to be completed by November
1,2011.

4.

The following discovery issue(s) were raised by one or more of the parties: The
parties raised no specific anticipated discovery problems; however, plaintiff submits
that the parties likely will seek a protective order.

5.

No party shall serve more than twenty (20) interrogatories, including all discrete
subparts, to any other party. Responses are due thirty (30) days after service ofthose
interrogatories.

6.

No party shall serve more than twenty (20) requests for admissions to any other
party. Responses are due thirty (30) days after service of those requests for
admissions.

7.

There shall be no more than six depositions by plaintiff and six by defendant.

8.

Each deposition shall be limited to seven hours, unless otherwise agreed by the
parties.

9.

Disclosures required by Federal Rule of Civil Procedure 26(a)(2), including reports
from retained experts, shall be served by the party with the burden of proof by
August 1,2011, and responsive disclosures shall be served by September 1, 2011.
The parties shall serve any objections to such disclosures, other than objections
pursuant to Federal Rules of Evidence 702, 703, or 705, Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579 (1993), Kumho Tire Co. v. Carmichael, 526 U.S.
137 (1999) or similar case law, within fourteen (14) days after service of the
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disclosures upon them. These objections should be confined to technical objections
related to the sufficiency of the written expert disclosures

(~,

whether all of the

information required by Rule 26(a)(2) has been provided, such as lists of prior
testimony and publications). These objections need not extend to the admissibility
of the expert's proposed testimony. If such technical objections are served, counsel
shall confer or make a reasonable effort to confer before filing any motion based on
those objections.
10.

Supplementations of disclosures under Federal Rule of Civil Procedure 26(e) shall
be served at such times and under such circumstances as required by that rule. In
addition, such supplemental disclosures shall be served by September 22,2011. The
supplemental disclosures served forty (40) days before the deadline for completion
ofall discovery must identify the universe of all witnesses and exhibits that probably
or even might be used at trial other than solely for impeachment. The rationale for
the mandatory supplemental disclosures forty (40) days before the discovery deadline
is to put opposing counsel in a realistic position to make strategic, tactical, and
economic judgments about whether to take a particular deposition (or pursue followup "written" discovery) concerning a witness or exhibit disclosed by another party
before the time allowed for discovery expires. Counsel should bear in mind that
seldom should anything be included in the final Rule 26(a)(3) pretrial disclosures that
has not previously appeared in the initial Rule 26(a)(l) disclosures or a timely Rule
26(e) supplement thereto; otherwise, the witness or exhibit probably will be excluded
at trial. See Fed. R. Civ. P. 37(c)(l).
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11.

To avoid the filing ofunnecessary motions, the court encourages the parties to utilize
stipulations regarding discovery procedures.

However, this does not apply to

extensions of time that interfere with the deadlines to complete all discovery, for the
briefing or hearing of a motion, or for trial. See Fed. R. Civ. P. 29. Nor does this
apply to modifying the requirements of Federal Rule of Civil Procedure 26(a)(2)
concerning experts' reports.
12.

Discovery in this case may be governed by a protective order. If the parties disagree
concerning the need for, and/or the scope or form of, a protective order, the party or
parties seeking such an order shall file an appropriate motion and supporting
memorandum. If the parties agree concerning the need for and scope and form of a
protective order, their counsel shall confer and then submit a jointly proposed
protective order as soon as is practicable.
a.

A jointly proposed protective order shall include, in the first paragraph, a
concise but sufficiently specific recitation ofthe particular facts in this case
that would provide the court with an adequate basis upon which to make the
required finding of good cause for issuance of the protective order pursuant
to Federal Rule of Civil Procedure 26(c).

b.

Any proposed protective order shall set out the procedure for filing under seal
confidential documents, things, and/or information, pursuant to the
requirements of Stone v. University ofMaryland Medical System Corp., 855
F.2d 178,180-181 (4thCir. 1988). Specifically,aproposedprotectiveorder
shall include the following language: "Each time a party seeks to file under

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seal confidential documents, things, and/or information, said party shall
accompany the request with a motion to seal and a supporting memorandum
of law specifying (a) the exact documents, things, and/or information, or
portions thereof, for which filing under seal is requested; (b) where it is
necessary for the court to determine the source ofthe public's right to access
before a request to seal may be evaluated, whether any such request to seal
seeks to overcome the common law or the First Amendment presumption to
access; (c) the specific qualities of the material at issue which justify sealing
such material, taking into account the balance of competing interests in
access; (d) the reasons why alternatives to sealing are inadequate; and,
(e) whether there is consent to the motion. Finally, in addition to the motion
and supporting memorandum, said party must set out such findings in a
proposed order to seal for the court."
c.

Before ruling on any motion to seal the court will give the public notice ofthe
motion and a reasonable opportunity to challenge it. While individual notice
is unwarranted, the court will docket the motion reasonably in advance of
deciding the issue, or, where applicable, the court will notify persons present
in courtroom proceedings ofthe motion. The court will rule favorably upon
any motion to seal only after carefully weighing the interest advanced by the
movant and those interests favoring public access to judicial documents and
records, and only upon finding that the interests advanced by the movant
override any constitutional or common law right ofpublic access which may
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attach to the documents, things, and/or information at issue.
d.

The parties are directed to Section T of the court's Electronic Case Filing
Administrative Policies and Procedures Manual, available online at
http://www.nced.uscourts.gov/PDF_files/PolicyManual.pdf, for information
regarding how to file and serve sealed documents through the court's Case
Management / Electronic Case Filing system ("CM/ECF").

B.

Motions
1.

Any motion requesting relief shall be accompanied at time of filing with a proposed
form of order, stating its requested relief.

2.

Any motion for leave to join additional parties or to otherwise amend the pleadings
shall be filed by June 15,2011.

3.

Provided that such defenses have been timely preserved, any motions to dismiss for
lack ofpersonal jurisdiction, venue, propriety ofthe parties, or failure to state a claim
upon which relief may be granted shall be filed by June 15,2011.

4.

All other potentially dispositive motions shall be filed by December 1, 2011. All
motions to exclude testimony of expert witnesses pursuant to Federal Rules of
Evidence 702, 703, or 705, Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
579 (1993), Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), or similar case
law, shall be filed by the deadline set for dispositive motions.

5.

Any motion to compel discovery shall be filed and served within 30 days of the act
or omission in discovery complained of, after good faith effort between the parties
to resolve the matter, unless the time for filing such a motion is extended for good

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cause shown. Prior to any filing, the complaining party shall convene a conference
among the parties and this court by telephone through the office of Christa Baker,
case manager, at [phone]. In the event of a discovery dispute of or relating
to written discovery, the party convening the conference shall send via facsimile
transmittal directed to the case manager at [phone], the submissions in
discovery most directly bearing on the particular dispute, for the court's review in
advance oftelephonic conference. Motions to compel filed after the deadline and/or
without advance conference with the court, absent extenuating circumstances,
summarily will be denied. Disputes in discovery which are reduced to writing, timely
filed, and where conference with this court in advance of filing has been unable to
resolve said dispute, ordinarily will be referred to a magistrate judge for ruling.
6.

Any motion to continue must conform with the requirements set forth in Local Civil
Rule 6.1, and also include a detailed statement as to the reason for the requested
continuance or extension of time together with the proposed order. Continuances
will be granted only upon showing of good cause, particularly focusing upon the
evidence of diligence by the party seeking delay and of prejudice that may result if
the continuance is denied.

C.

Alternative Dispute Resolution ("ADR")
1.

A settlement procedure is required in virtually every case, to be conducted before the
close of discovery if the case is automatically selected for mediation pursuant to
Local Civil Rule 101.1 a(b), or before the final pretrial conference ifnot automatically
selected.
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2.

This case has been automatically selected for mediation. Reference is made to Local
Civil Rule 101.1 et. seq. Pursuant to those rules, there shall be conducted a mediated
settlement conference any time during the discovery period, as agreed by the parties.
The parties shall provide joint letter with the court by May 1,2011, identifying the
mediator and date selected for mediation.

3.

If at any time a settlement is reached, it shall be reported immediately to this court.
The parties shall refer to Local Civil Rule 101.1 e for their specific obligations.

D. Other Matters
1.

The court has not scheduled an initial pretrial telephonic conference in this matter.
Plaintiff does not request that such a conference be held prior to entry of the case
management order.

Frederich requests a conference; however, given the

straightforward nature ofthe case, the court declines to hold a telephonic conference.
2.

The court considered the following scheduling issue(s) presented by one or more of
the parties: The parties present no scheduling issues bearing on the administration of
this case at this time.

E. Pretrial and Trial
1.

This case is set for a jury trial on the court's docket for that term of court beginning
May 21, 2012, at the United States Courthouse, New Bern, North Carolina. The
parties did not provide the court an estimate of anticipated trial length.

2.

Pursuant to Federal Rule of Civil Procedure 16(e), a final pretrial conference will be
scheduled before the undersigned at the United States Courthouse, New Bern, North
Carolina at a date and time approximately two weeks in advance of trial pursuant to
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notice of the clerk of court which shall issue approximately two months prior to the
trial term. Each party appearing in this action shall be represented by the attorney
who is to have charge of the conduct of the trial on behalf of such party.
3.

At the final pretrial conference the court will:
a.

Rule upon any dispute concerning the contents of the final pretrial order.
Local Civil Rule 16.1(d)(l).

b.

Rule upon any dispute where video depositions are to be used and the parties
have been unable to reach agreement on editing. Local Civil Rule 16.1 (b)(2).

c.

Rule upon motions relating to admissibility of evidence, to the extent
possible in advance of trial. Where the evidentiary question or issue can be
anticipated before the final pretrial conference, motion contemplated by Local
Civil Rule 39.1 (a), shall be filed fourteen (14) days prior to the final pretrial
conference, thereby permitting sufficient time for any written response in
advance of conference. Where the question or issue bearing on admissibility
of evidence cannot reasonably be contemplated in advance of the final
pretrial conference, any motion in limine must be filed not later than seven
days prior to the start of the trial session. Local Civil Rule 39.1 (a).

d.

Where trial of a matter involves a jury trial, discuss generally the nature of
the parties' anticipated proposed jury instructions, to discern areas of
agreement and disagreement. Proposed instructions are required to be filed
after the conference, seven days prior to the start of the trial session. Local
Civil Rule 51.1. Counsel also shall submit an electronic copy of said
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proposed jury instructions to chambers,

In

WordPerfect format, at the

following email address:

[e-mail].
e.

Where trial of a matter involves a jury trial, consider proposed verdict form
jointly required to be submitted by counsel to chambers (but not filed),
together with the parties' pretrial order referenced in paragraph D below,

seven days prior to the final pretrial conference, and where there is
disagreement as to form, this jointly prepared submission shall disclose the
basis for a party's objection and a proposed alternative verdict form. Counsel
shall also submit an electronic copy of said documents to chambers, in
WordPerfect format, at the following email address:

[e-mail].

f.

Where this conference presents the final opportunity to prevent wasting trial
time on pointless or undisputed matters, endeavor to streamline the trial,
including but not limited to, where applicable, consideration of: bifurcation;
presentation ofnon-critical testimony by deposition excerpts; stipulations as
to the content oftestimony; submission at bench trial ofwitnesses' testimony
as narrative written statements, which can be received at trial in lieu ofdirect
testimony subject to objections and cross-examination of witnesses; and
qualification of experts by admitted resumes; and

g.
4.

Explore once more the opportunities for settlement.

Not later than seven days prior to the final pretrial conference, counsel shall submit
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to chambers (but not file) the parties' proposed pretrial order. Local Civil Rule
16.1 (b). This submission shall comply with the form specified in Local Civil Rule
16.l(c). Pursuantto Local Civil Rule 16.l(c)(3), and Federal Rule ofCivil Procedure
26(a)(3), objections not disclosed in the pre-trial order are waived unless excused by
the court for good cause. The parties shall submit at the beginning of the trial copies
of all exhibits. Local Civil Rule 39.1 (b).
5.

Injury cases, the court will conduct the examination ofjurors. Not later than seven
days prior to the start of the trial session, counsel shall file a list of any voir dire

questions counsel desires to ask the jury. Local Civil Rule 47.1(b). Failure to timely
file proposed questions will be deemed a waiver of any supplemental inquiry.
6.

Injury cases, ajoint statement ofthe case will be read by the court to the prospective
panel of jurors before commencement of voir dire. Counsel shall file a joint
statement of the case not later than seven days prior to the start of the trial session.
Unless the case is extremely complex, this statement, the purpose of which is to
acquaint the jury with the nature of the case and to provide a basis for certain voir
dire questions, should not exceed one paragraph.

7.

Counsel are required to receive training on the evidence presentation system in the
courtroom in advance ofinitial use. Counsel should review all related documentation
appearing on the court's website, including information concerning formatting of
evidentiary DVDs. Procedures are described for scheduling training in advance, as
required, on system use generally, and for verifying compatibility of evidentiary
DVDs in advance of presentation at hearing or trial.
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This case management order shall not be modified except by leave of court upon a showing
of good cause, and all requirements set forth in the court's Local Civil Rules governing pretrial and
trial procedures not altered herein shall be strictly observed.
CONCLUSION

In addition to the scheduling requirements set forth above, Sensational Realty is ORDERED
to retain counsel to provide a defense in this matter within fourteen days of date of entry of this
order. If no notice of appearance is reflected on the docket at that time, plaintiff will be directed to
proceed according to Rule 55 to reduce the matter to judgment as to Sensational Realty.
Defendants' motion to appoint counsel (DE #17) is DENIED. Defendants' motion for
change ofvenue (DE #17) is DENIED. Plaintiffs motion to strike (DE #18) is DENIED AS MOOT
as to the motion for change of venue, but is GRANTED as to the purported answer by Sensational
Realty. Defendants' motion for a hearing (DE #21) is DENIED. Defendants' motion to dismiss (DE
#17) is STRICKEN as to Sensational Realty, and DENIED without prejudice as to Frederich.
SO ORDERED, this the31- day of April, 2011.

u{

FLAN~

LOUISE W.
Chief United States District Court Judge

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