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September 20, 2005.


The opinion of the court was delivered by: CHARLES SIRAGUSA, District Judge



  This is an action for, inter alia, trademark infringement and breach of contract, in which plaintiff Allied Van Lines, Inc. ("Allied") alleges that defendants wrongfully continued to use Allied's registered trade marks after Allied terminated the agency agreement that had previously allowed defendants to use the marks. Now before the Court are plaintiff's motion for a permanent injunction, plaintiff's motion for summary judgment, and a cross-motion for summary judgment by defendants Triple C Transportation, Inc. ("Triple C"), Christopher Klee ("Klee"), and Craig Baravalle ("Baravalle"). For the reasons that follow, Baravalle's motion for summary judgment is granted, to the extent that he is dismissed from this action, defendants' applications are otherwise denied, and plaintiff's applications are otherwise granted.


  Unless otherwise noted, the following are the undisputed facts. Allied and its agents provided moving and transportation services. Triple C was owned by Klee and Baravalle, each of whom owned twenty-five percent of the company, and John Current ("Current") who owned the remaining 50 percent. Current was Triple C's President, Baravalle its Vice President, and Klee its Secretary. However, Current ran Triple C, while Baravalle and Klee had little or no involvement in the company's day-to-day operations.

  Triple C contracted with Allied to act as one of Allied's agents. On or about August 2, 1995, Allied and Triple C entered into an "Agency Contract."*fn1 The stated term of the agreement was July 1, 1995 to December 31, 1998. In the contract, Allied was designated as "CARRIER," and Triple C was designated as "AGENT." The 20-page agreement included section 3.8 ("the liquidated damages provision"), which stated:
CARRIER grants AGENT, for the term of this contract and not thereafter, limited license to use CARRIER's corporate name and registered service marks (trademark) in connection with AGENT's own business name, in advertising CARRIER's service, subject to CARRIER's prior approval. . . . Upon termination of this contract AGENT will no longer used the said names, trade names, trademarks, service marks, slogans, color combinations, designs, logos, copyrights and patents, etc., in any manner or in any capacity whatsoever. Upon AGENT's failure to fully comply with the provisions of this paragraph, AGENT shall pay CARRIER the sum of $75.00 per day for each day during which such failure continues, beginning with the 31st day following termination of this contract, the aforesaid sum being agreed upon by CARRIER and AGENT as the amount by which CARRIER has been damaged, it being impossible to ascertain or prove the actual damage sustained.
The trademarks to which the contract refers include the terms "Allied," "Allied Van Lines," and the "disappearing highway" design. As for the slogans, color combinations, designs, and logos referred to, Allied's tractor trailer trucks are orange and prominently display Allied's "disappearing highway" mark, along with the words, "Allied The Careful Movers."

  On July 1, 1995, Allied and Triple C signed a "Conversion Agreement." The title of the agreement referred to the "conversion" of Triple C's equipment to publicly identify it as an agent of Allied, and provided for a grant of up to $65,000.00 from Allied to Triple C, "to assist [Triple C] in identifying itself as an Agent of Allied on, among other things, its vehicles, offices and stationery."

  On July 24, 1995, both Klee and Current signed forms entitled "Guaranty of Payment" to Allied. Each guaranty stated, in relevant part, that it was
necessary and essential to the existence of continuation of an agency relationship between Allied and [Triple C] that Allied be furnished with additional security in the form of this Guaranty for the prompt payment of all monetary obligations due or to become due from the aforesaid company pursuant to the Agency Agreement and successor agency agreements and Allied's Rules and Regulations.
The guarantees further stated that they would
continue until all the terms of the foregoing contract have been satisfactorily performed or otherwise discharged by Triple C Transportation Co., Inc. d/b/a Advance Moving & Storage; and the Guarantor shall not be released of its obligation hereunder so long as any claim of Allied against Triple C Transportation Co., Inc. d/b/a Advance Moving & Storage arising out of the foregoing contract is not settled or discharged in full.
Pl. Appendix to Stmt. of Facts, Exs. E-F.

  On or about June 3, 1996, Allied and Triple C entered into another "Agency Contract" that was substantially similar to the previous agency agreement, except that it covered the term April 1, 1996 to April 30, 1999. This agency agreement was signed on behalf of Triple C by Current. Similar to the previous agreement, this contract contained a section dealing with Triple C's use of Allied's "names, trade names, trademarks, service marks, slogans, color combinations, designs, logos, copyrights and patents, etc." Section 3.8(C) of the agreement contained a liquidated damages provision that is essentially identical to the one contained in the 1995 Agency Contract, except that it increased the daily liquidated damage amount to $100.00 per day.*fn2

  In or about January 2002, Klee and Baravalle ousted Current as President of Triple C. Current subsequently had no involvement in the operation of Triple C, and he informed Allied of that fact. On June 10, 2002, Allied informed Triple C in writing that it was terminating the Agency Contract, effective September 10, 2002. On October 15, 2002, Allied wrote to Triple C, reminding it that, pursuant to § 3.8 of the Agency Contract, "your company had 30 days to discontinue use of the Allied name, trade names, trademarks, service marks, slogans, color combinations, designs, logos, copyrights and patents, etc. in any manner or in any capacity whatsoever. That 30 days expired on October 10, 2002." Allied requested that Triple C confirm in writing that it had complied with § 3.8. Triple C did not provide such confirmation, and on December 4, 2002, Allied again wrote to Triple C, stating that, although Triple C had not confirmed that it had ceased using Allied's trademarks, logos, etc., Allied would assume that Triple C had complied with § 3.8. Allied reiterated, however, that if it learned that Triple C was still using Allied's marks, it would "pursue legal action against [Triple C] for the recovery of damages as outlined in Section 3.8 of the Agency Contract."

  Although Allied terminated the agency relationship with Triple C, it continued to use Triple C's services on occasion to "service Allied customers." Klee Aff. ¶ 22.

  Allied subsequently sent a private investigator to inspect Triple C's property at 83 Hammond Street, Big Flats, New York, on or about January 9, 2003. The investigator, William F. Mitchell, Jr. ("Mitchell"), reported in an affidavit that there were "numerous trailers and semi-trucks containing the Allied marks and trade dress" on the premises. Photographs taken by Mitchell and attached to his affidavit depict numerous trailers, bearing Allied's orange color, the "disappearing highway" symbol, and the words "Allied The Careful Movers." The photos also depict at least one orange trailer truck bearing the words "Operated By Allied Van Lines, Inc." Mitchell inspected Triple C's premises again on January 28, 2004, and again on April 26, 2004. He states in an affidavit that, on both occasions, "there were numerous trailers and semi-trucks that still contained the Allied marks and trade dress." Mitchell's photographs taken on January 28, 2004, showed the presence of the same semi-trucks and trailers as before, however the name "Allied" had been painted over. The "disappearing highway" symbol was still clearly visible on the trailers, although that portion of the symbol consisting of a highway sign bearing the number "1" had been painted over. The words "The Careful Movers" were still visible on at least one of the trailers. Boxes bearing the Allied name and logo were visible on Triple C's loading dock. ...

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