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Sub-Zero, Inc. v. Sub Zero Ny Refrigeration & Appliances Services, Inc.

United States District Court, S.D. New York

April 1, 2014

SUB-ZERO, INC., Plaintiff,
v.
SUB ZERO NY REFRIGERATION & APPLIANCES SERVICES, INC., and NIKKI GROCHOWSKI, Defendants.

OPINION & ORDER

KIMBA M. WOOD, District Judge.

Plaintiff Sub-Zero, Inc. ("Sub-Zero" or "Plaintiff"), a Wisconsin corporation, brings this action asserting claims for trademark infringement and false advertising in violation of the Lanham Act, 15 U.S.C. §§ 1114, 1125(a)(1)(B), as well as common law trademark infringement and unfair competition under New York law against Defendant Sub-Zero NY Refrigeration & Appliances Services, Inc. ("Sub-Zero Refrigeration Service"), a New York corporation, and Defendant Nikki Grochowski ("Grochowski") (collectively "Defendants"), Sub-Zero Refrigeration Service's alleged owner. Defendants have failed to answer or otherwise appear in this action. Plaintiff now moves for entry of default judgment against Defendants, seeking a permanent injunction pursuant to 15 U.S.C. § 1116; an order requiring Defendants to deliver for destruction any infringing advertisements pursuant to 15 U.S.C. § 1118; and attorney's fees[1] of $9, 676.00 and costs of $1, 738.00 pursuant to 15 U.S.C. § 1117.

For the reasons set forth below, the Court GRANTS Plaintiff's motion for entry of default judgment. The Court further GRANTS Plaintiff's request for a permanent injunction as set forth below and for an order requiring Defendants to deliver for destruction any infringing advertisements. The Court awards Plaintiff $9, 676.00 in attorney's fees and $1, 738.00 in costs.

I. Background

The following summary is drawn from Plaintiff's Amended Complaint ("AC"), [Dkt. No. 4], motion for default judgment, [Dkt. No. 11], and exhibits and declarations attached thereto.

Plaintiff Sub-Zero, Inc. is a Wisconsin corporation that manufactures and distributes kitchen appliances, including Sub-Zero refrigerators, freezers, and wine storage units. (AC ¶ 4). Sub-Zero has developed an international reputation for high quality kitchen products. ( Id. ). Sub-Zero maintains a network of authorized repair service providers who are authorized to use Sub-Zero's trademarks. ( Id. ).

Sub-Zero has two registered trademarks: (1) the "Sub-Zero" word mark, (AC ¶ 7, Ex. A); and (2) the Sub-Zero logo, (AC ¶ 8; Ex. B). Both trademarks have been registered in connection with the installation, repair, and maintenance of kitchen repairs. ( Id. ). Sub-Zero has marketed its products under the "Sub-Zero" word mark since at least 1945 and has used its logo in marketing since at least 1964. (AC ¶ 7, 8).

Defendant Sub-Zero NY Refrigeration & Appliances Services, Inc. is a New York corporation that purports to be in the business of repairing Sub-Zero products. (AC ¶ 5). Defendant Nikki Grochowski is the owner of Sub-Zero Refrigeration Service. (AC ¶ 6). Sub-Zero Refrigeration Service does business under the names "Sub-Zero Refrigeration" and "Sub-Zero Refrigeration Service." (AC ¶ 11). Sub-Zero Refrigeration Service is not an authorized Sub-Zero repair service provider and is not endorsed or sponsored by, or affiliated, connected or associated with, Sub-Zero. (AC ¶¶ 5, 10).

Sub-Zero Refrigeration Service, at the direction and control of Grochowski, conducts its business in a manner that is purposely designed to confuse consumers into believing that Sub-Zero Refrigeration Service is endorsed or sponsored by, or affiliated, connected or associated with, Sub-Zero. (AC ¶ 10).

Sub-Zero Refrigeration Service and Growchowski have mislead consumers regarding Sub-Zero Refrigeration Service's qualifications for repairing Sub-Zero products, and have defrauded customers by improperly performing repairs, performing unnecessary repairs, and overcharging for repairs. (AC ¶ 16).

Sub-Zero Refrigeration Service operated a website at www.subzerorefrigerationservice.com, which stated, "[a]ll our service men are factory trained master Sub-Zero technicians."[2] (AC ¶ 12). On their invoices, Sub-Zero Refrigeration Service and Grochowski describe themselves as "specialists" in Sub-Zero repairs. (AC ¶ 15; Ex. D). However, none of Sub-Zero Refrigeration Service's employees have received any training from Sub-Zero. (AC ¶ 12).

Sub-Zero Refrigeration's website, invoices, advertisements, and promotional materials display the "Sub-Zero" word mark and logo without permission from Sub-Zero. (AC ¶¶ 12-14, Ex. C & D). Sub-Zero's website also displays a Sub-Zero refrigerator without authorization from Sub-Zero. (AC ¶ 12).

Sub-Zero filed the present action after being contacted by a customer of Sub-Zero Refrigeration Service who claimed that Sub-Zero Refrigeration Service defrauded her by charging her $9, 500.00 for repairs that her Sub-Zero product did not need and that were not properly performed. (AC ¶ 15). The website www.yellowbot.com, contains three complaints against Sub-Zero Refrigeration Service. (Simmons Decl. ¶ 6 [Dkt. No. 12]). Two of the complaints describe Sub-Zero Refrigeration Service as a "scam" and the third claims that the company "sabotaged" the customer's Sub-Zero product. (Simmons Decl. Ex. B).

Sub-Zero commenced this action on April 17, 2013. [Dkt. No. 1]. Sub-Zero served an Amended Complaint on Sub-Zero Refrigeration Service via the New York Secretary of State on June 17, 2013, [Dkt. No. 6], and on Grochowski at her home on June 15, 3013, [Dkt. No. 7].

On or about July 15, 2013, counsel for Grochowski contacted counsel for Sub-Zero to discuss dismissing Grochowski from this action. (Simmons Decl. ¶ 7). Counsel for Grochowski asserted that Grochowski did not control Sub-Zero Refrigeration Service. ( Id. ). Sub-Zero's counsel forwarded Grochowski's counsel a copy of a report that listed Grochowski as the company's contact person, and requested that Grochowski inform Sub-Zero who she contended actually controlled the company and its website. ( Id.; Ex. C). Grochowski's counsel did not respond to Sub-Zero's request and has not contacted Sub-Zero's counsel since. (Simmons Decl. ¶ 7).

Neither Defendant has filed an answer or otherwise appeared in this action. The Clerk of the Court entered a default against both Defendants on July 18, 2013. [Dkt. No. 8].

II. Discussion

"[A] party's default is deemed to constitute a concession of all well pleaded allegations of liability." Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). "However, a district court need not concur that the alleged facts in the complaint constitute a valid cause of action and must evaluate whether the allegations in the complaint are sufficient to establish liability." Rolex Watch U.S.A., Inc. v. Rolex Deli Corp., 11 Civ. 9321, 2012 WL 5177517, at *1 (S.D.N.Y. Oct. 18, 2012) (Jones, J.). "Accordingly, the Court must determine whether the well pleaded allegations in the Complaint, admitted by Defendants on this motion, are sufficient to establish liability for the claimed causes of action." Id. Plaintiff here asserts claims for trademark infringement and false advertising in violation of the Lanham Act, 15 U.S.C. §§ 1114, 1125, as well as common law trademark infringement and unfair competition under New York law.

A. Liability

1. Lanham Act Claims

i. Trademark Infringement

"To succeed in establishing liability for infringement under the Lanham Act, a plaintiff must prove: (1) that it owns a valid, protectible trademark; (2) that the defendant used the trademark in commerce and without consent; and (3) that there was a likelihood of consumer confusion." C=Holdings B.V. v. Asiarim Corp., 12 Civ. 928, 2013 WL 6987165, at *8 (S.D.N.Y. Dec. 16, 2013) (Sullivan, J.). Sub-Zero has proven all prongs of this test and has therefore established liability for trademark infringement under the Lanham Act.

(1) Valid, Protectable Trademark

Sub-Zero has two valid, protectable trademarks. Sub-Zero has secured trademark registration for its "Sub-Zero" word mark in connection with the installation, repair, and maintenance of kitchen appliances. (AC ¶ 7). The registration for the "Sub-Zero" word mark is U.S. Reg. No. 3507324. ( Id.; Ex. A). Sub-Zero has also secured trademark registration for its logo in connection with the installation, repair, and maintenance of kitchen appliances. (AC ¶ 8). The registration for Sub-Zero's logo is U.S. Reg. No. 1625853. ( Id.; Ex B).

(2) Defendants' Use In Commerce Without Consent

Sub-Zero's allegations have sufficiently established that Defendants used Sub-Zero's trademarks in commerce without Sub-Zero's consent. Sub-Zero alleges that Defendants use the trademarked "Sub-Zero" word mark in their business names-" Sub-Zero NY Refrigeration & Appliances Services, Inc., " "Sub-Zero Refrigeration" and "Sub-Zero Refrigeration Service"- without permission. (AC ¶ 11). Sub-Zero also alleges that Defendants' invoices, website, www.subzerorefrigerationservice.com, advertisements, and other ...


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