Grout Doctor Global Franchise Corp. v. Swanson et al

Filing 26

ORDER DENYING 19 Defendant's Motion to Dismiss, and GRANTING 25 Plaintiff's Motion for Entry of Default. The defendant's Motion to Dismiss is denied as to Swanson and stricken as to Groutman and Doctor Plumber. The Court orders that default be entered against defendants Groutman and Doctor Plumber. Signed by US District Judge Terrence W. Boyle on 9/18/2014. (Fisher, M.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
No. 7:14-CV-105-BO

)
)
)
)
)
v.
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GROUTMAN, INC.; DOCTOR
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PLUMBER, LLC; and GARY SWANSON, )
)
Defendants.
)

GROUT DOCTOR GLOBAL
FRANCHISE CORP.,
Plaintiff,

ORDER

This cause comes before the Court on defendants' motion to dismiss [DE 19] and
plaintiff's motion for entry of default [DE 25]. For the reasons discussed below, defendants'
motion is DENIED and plaintiff's motion is GRANTED.

BACKGROUND
This matter arises out of a terminated franchise agreement between plaintiff and
defendants. The complaint states that this is an action to prevent a terminated franchisee and its
owner and affiliate from engaging in illegal conduct intended to attack and damage plaintiff, the
franchisor.

The actions allegedly taken by defendants in this regard include: infringing the

franchisor's trademarks and holding themselves out to be a franchisee after termination;
engaging in conduct which caused customers, who thought they were being served by an
authorized franchisee, to fear for their safety; making illegal disclosures of the franchisor's trade
secrets and confidential proprietary information; and repeatedly threatening and harassing the
franchisor's officers and employees.

Defendant Groutman, Inc. entered into a seven-year franchise agreement with plaintiff in
2006. A renewal agreement between the franchisor and franchisee was entered into on January
3, 2014. The agreement also included a limited, non-exclusive license to use Grout Doctor
trademarks, logos, and training materials, as well as providing for post-termination obligations.
Plaintiff terminated the franchise renewal agreement with Groutman on February 12, 2014, after
receiving two complaints from customers who complained both of faulty work as well as fear for
their safety due to the actions and statements of defendant Swanson, the sole shareholder of
Groutman. 1 Groutman, Inc. had further failed to pay the renewal fee or submit any gross sales
reports as required by the franchise agreement.
Following termination, defendant Swanson began what plaintiff contends is a vendetta
campaign against it. Swanson has left threatening voicemails for officers and employees of
Grout Doctor Global ("GDG") as well as for the web developer responsible for plaintiffs
website, www.groutdoctor.com. Plaintiff alleges that Swanson has continued to use plaintiffs
trademarks and continued to hold himself out as an authorized franchisee. Swanson has applied
to the United States Patent and Trademark Office for registration of marks already registered by
plaintiff, Cmp. Ex. M & N, and has published various e-books using plaintiffs marks and logos
on amazon.com.
DISCUSSION

Defendant Swanson has filed a pro se motion to dismiss. As an initial matter, the motion
to dismiss is denied as to Groutman and Doctor Plumber because corporations and limited
liability companies may only appear through counsel. In its order dated June 6, 2014, the Court
notified defendants "that a business entity may not appear in this Court without duly licensed
counsel." [DE 23] (citing Rowland v. Cal. Men's Colony, Unit II Men's Advisory Counsel, 506
1

Groutman, Inc. is further believed to be the sole member of defendant Doctor Plumber, LLC.
2

U.S. 194, 202 (1993); RZS Holdings AVV v. PDVSA Petroleo SA., 506 F.3d 350, 354 n.3 (4th
Cir. 2007)). The order noted that "Swanson has confirmed that he is not an attorney authorized to
practice law in this district, and thus may only appear for himself without the assistance of
counsel." [DE 23]. Because there is no dispute that defendants Groutman and Doctor Plumber
may only appear in this Court through Counsel and there is no dispute that defendant Swanson
does not qualify as counsel and there is no dispute that the motion to dismiss is only signed by
Swanson, and not by any licensed attorney, the motion to dismiss is invalid as to Groutman and
Doctor Plumber and is therefore stricken.
As the motion to dismiss applies to Swanson, it must also be denied. The motion does not
contend that plaintiffs complaint fails to properly plead any claim, but instead, citing no case
law or authorities, sets forth a list of unverified grievances Swanson appears to have with GDG.
The motion provides no basis to dismiss GDG's complaint and is therefore denied. See Microsoft
Corp. v. Computer Serv. & Repair, Inc., 312 F. Supp. 2d 779, 782 (E.D.N.C. 2004) (summarily

denying pro se defendant's motion to dismiss that did not demonstrate any deficiency in
plaintiffs complaint).
Because GDG caused a copy of the summonses and complaint in this action to be served
on Groutman and Doctor Plumber in compliance with Rule 4 of the Federal Rules of Civil
Procedure and the time for Groutman and Doctor Plumber to answer or otherwise respond to the
complaint has expired without their filing of any valid answer, motion to dismiss, motion for
extension, or any other response to the complaint, the Court now grants the motion for entry of
default and orders that a default be entered against defendants Groutman and Doctor Plumber.

3

CONCLUSION

For the foregoing reasons, defendants' motion to dismiss is DENIED as to Swanson and
STRICKEN as to Groutman and Doctor Plumber, and plaintiffs motion for entry of default is
GRANTED. The Court ORDERS that a default be entered against defendants Groutman and
Doctor Plumber.

SO ORDERED, this /

~ay of September, 2014.

~41.~

TE
NCE W. BOYLE
UNITED STATES DISTRICT JUDGE

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