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Privado Marketing Group LLC v. Eleftheria Rest Corp.

United States District Court, S.D. New York

March 27, 2017

PRIVADO MARKETING GROUP LLC, DC 115 CEDAR NR, LLC and Don Coqui HOLDING COMPANY, LLC, Plaintiffs,
v.
ELEFTHERIA REST CORP., Defendant. ELEFTHERIA REST CORP. and JOHN MANGAN, Counterclaim Plaintiffs,
v.
PRIVADO MARKETING GROUP LLC, DC 115 CEDAR NR, LLC and Don Coqui HOLDING COMPANY, LLC, Counterclaim Defendants.

          OPINION AND ORDER

          Edgardo Rantas, U.S.D.J.

         Privado Marketing Group LLC (“Privado”), DC 115 Cedar NR, LLC (“DCNR”), and Don Coqui Holding Company, Inc. (“DC Holdings”) (collectively “Plaintiffs”) bring this trademark infringement action against Eleftheria Restaurant Corp. (“Eleftheria”) and John Mangan (“Mangan”).[1] Plaintiffs allege trademark infringement and unfair competition at common law and under the Lanham Act, 15 U.S.C. §§ 1051 et seq., arising from the use of the trademark “Don Coqui” in connection with restaurants located in the New York area. Doc. 20. Plaintiffs now move pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment on all causes of action.

         For the following reasons, Plaintiffs' motion is DENIED.

         I. BACKGROUND

         The following facts are undisputed unless otherwise noted.

         A. The Parties

         This trademark infringement action involves a complex web of individuals and entities, some of whom are parties, and many of whom claim current or former partial ownership of the Don Coqui trademark. Plaintiffs Privado, DCNR and DC Holdings are organized and existing under the laws of the State of New York with a principal place of business at 115 Cedar Street, New Rochelle, New York. See Declaration of Olivera Medenica dated July 27, 2016 (“Medenica Declr.”) (Doc. 76), at Ex. E, ¶¶ 4-6, and Ex. F, ¶¶ 4-6.[2] Defendant Eleftheria is a corporation organized and existing under the laws of the State of New York with a principal place of business at 2818 31st Street, in the Astoria section of Queens, New York. Id. Ex. A, at ¶ II, and Ex. B, at ¶11. Eleftheria owns and operates a restaurant named Don Coqui located at this address in Astoria, Queens. Id. Counterclaim Plaintiff Mangan is a principal of Eleftheria. Id.

         B. Additional Relevant Individuals

         Non-party Jaime “Jimmy” Rodriguez (“Rodriguez”) is a restaurateur who owned and operated restaurants in New York City including Jimmy's Bronx Café, Jimmy's Uptown, Jimmy's Downtown, and Sofrito. Declaration of Jaime “Jimmy” Rodriguez (“Rodriguez Declr.”) (Doc. 79) ¶ 2. Rodriguez's daughters are Jaleene and Jewelle Rodriguez. Plaintiffs' Rule 56 Statement of Material Facts (“Pls.' Rule 56.1”) (Doc. 80) ¶ 10. Non-party Dimitrios Mitsios (“Mitsios”) is also a principal and owner of Defendant and Counterclaim Plaintiff Eleftheria. See Memorandum of Law in Opposition to Plaintiffs' Motion for Summary Judgment (“Defs.' Mem. L. Opp.”) (Doc. 85) at 3 n.1.

         C. Sofrito Xanadu LLC and the Inception of the “Don Coqui” Name

         In March of 2008, Rodriguez owned and operated a restaurant called “Sofrito” in Manhattan. Pls.' Rule 56.1 ¶ 15. Rodriguez was interested in expanding to another location, and together with Mangan, Mitsios, and his daughter Jewelle, was contemplating opening a Sofrito restaurant in the Meadowlands Xanadu, a shopping complex yet to be built at the Meadowlands, New Jersey. Id. ¶ 16.

         In furtherance of that effort, in March of 2008, Mangan, Mitsios, and Jewelle formed a New Jersey limited liability company named Sofrito Xanadu LLC (“Sofrito Xanadu”). Id. ¶ 12. Jewelle owns a minority interest of Sofrito Xanadu, while Mangan and Mistios, collectively, own a majority interest. Defendants' Separate Rule 56 Statement of Material Facts (“Defs.' Rule 56.1”) (Doc. 85-2) ¶ 8.[3] Mangan was listed as the agent for Sofrito Xanadu, and personally invested at least $110, 000 of his own funds to capitalize it. Id. ¶ 9. Rodriguez was also involved in the business and operations of Sofrito Xanadu. Pls.' Rule 56.1 ¶ 13.

         On March 18, 2008, Jewelle, on behalf of Sofrito Xanadu, executed a commercial lease to open the restaurant at the Meadowlands Xanadu (“Xanadu Lease”). Id. ¶ 17; see also Declaration of Jewelle Rodriguez (“Jewelle Rodriguez Declr.”) (Doc. 78) Ex. A, at ¶ 00095. Rodriguez, Mangan, and Mitrios were the guarantors on the lease. Id. at P00019; see also Rodriguez Declr. ¶ 6. Subsequent to the execution of the Xanadu Lease, Rodriguez sold the Manhattan Sofrito restaurant, as well as his rights to use the name “Sofrito.” Pls.' Rule 56.1 ¶ 18. As a result, the name could not be used in connection with the proposed Xanadu restaurant. Id.

         Afterwards, Rodriguez, Mangan, and members of Mangan's staff at his marketing company, CIN Productions, spent several weeks choosing a new name for the Xanadu restaurant. Defs.' Rule 56.1 ¶ 11. The parties collectively determined to use the name “Don Coqui.” Id. [4]In September 2008, Mangan, through CIN Productions, registered various “Don Coqui” domain names, including doncoqui.com. Id. ¶ 11; see also Declaration of John Mangan (“Mangan Declr.”) (Doc. 87) Ex. B. Also in September 2008, Rodriguez and Mangan, as guarantors under the Xanadu Lease, executed a First Amendment of Lease agreement stating that the name “Sofrito” would be replaced by “Don Coqui.” Rodriguez Declr. Ex. C (“Amended Xanadu Lease”)[5] ¶ 7; see also Pls.' Rule 56.1 ¶ 19. The Meadowlands Xanadu project never came to fruition, and as a result, Don Coqui was never opened there. Pls.' Rule 56.1 ¶ 20.

         D. Rodriguez's “Intent-to-Use” Trademark Application

         On May 9, 2008, Rodriguez filed an “Intent-to-Use” trademark application with the United States Patent and Trademark Office (“USPTO”) for the Don Coqui mark in his own name (Registration No. 3, 764, 084) (the “Don Coqui Mark”). Id. ¶ 21; Doc 79-1 (the “Intent-to-Use Application”). Rodriguez did not discuss that he would be registering the Don Coqui Mark in his own name with Mangan. Defs.' Rule 56.1 ¶ 14.

         E. The New Rochelle Don Coqui Restaurant, DC Holdings and DCNR

         After the Xanadu Lease fell through, Rodriguez approached MacMenamin's Grill in New Rochelle, New York, about taking over the location to open a “Don Coqui” restaurant there. Pls.' Rule 56.1 ¶ 23. At the time, MacMenamin's Grill was in bankruptcy proceedings. Id. ¶ 24. MacMenamin's was converted to conform with the “Don Coqui” branding, and the restaurant opened as the New Rochelle Don Coqui in late January or early February 2009. Eleftheria Restaurant Corp.'s and John Mangan's Response to Plaintiffs' Rule 56.1 Statement (“Defs.' Rule 56.1 Resp.”) (Doc. 85-1) ¶ 26. News articles and other publically available information confirm the use of the name “Don Coqui” at the former MacMenamin's prior to March of 2009. Defs.' Rule 56.1 ¶ 26. Both Rodriguez and Mangan were involved in the opening of the Don Coqui restaurant in New Rochelle. Pls.' Rule 56.1 ¶¶ 25, 27.

         When Don Coqui initially opened, the MacMenamin's bankruptcy proceeding was still ongoing. Thus, Don Coqui opened under the prior restaurant's existing lease and liquor license, and its owner Brian MacMenamin continued to work at the restaurant. Id. ¶ 28; Defs.' Rule 56.1 ¶¶ 27-28. Shortly after its opening, however, in March of 2009, the bankruptcy trustee shut down the Don Coqui restaurant pending completion of the bankruptcy proceeding. Pls.' Rule 56.1 ¶ 30.

         After the trustee closed the restaurant, on April 8, 2009, DC Holdings and DCNR were formed as New York limited liability companies. Id. ¶ 31. DC Holdings is the sole member of DCNR. Id. ¶ 4. The purpose of DC Holdings and DCNR was to own and operate Don Coqui restaurants, including the New Rochelle location. Defs.' Rule 56.1 Resp. ¶ 32. Money from the account of Sofrito Xanadu, including the funds that Mangan personally contributed, were transferred to the accounts of DC Holdings and DCNR. Id. ¶ 24.

         In approximately July 2009, Don Coqui in New Rochelle re-opened. Pls.' Rule 56.1 ¶ 35. When it re-opened, the equity owners of DC Holdings were real estate developer Larry Siegal (40%), attorney Joseph Calascibetta (10%), Jaleene Rodriguez (20%), Jewelle Rodriguez (20%) and Mangan (10%). Id. ¶ 37; Defs.' Rule 56.1 ¶ 33. Mangan maintained an office at the restaurant, and was himself responsible for all marketing for the New Rochelle Don Coqui. Defs.' Rule 56.1 ¶ 37. This included all signage, branding, usage and development, staff apparel, advertising, and promotions. Id. Rodriguez executed the DC Holdings Operating Agreement on October 1, 2009 as an “employee”-as opposed to an equity owner. Rodriguez Declr., Exh. F at 15.[6] Under the Operating Agreement, DC Holdings was controlled by a Management Committee, which was comprised of Siegel, Calascibetta, and Rodriguez -who was designated as the representative of the interests of Mangan, Jewelle, and Jaleene. Id. ¶ 3. The DC Holdings operating agreement refers to the Don Coqui Mark as a registered trademark. Pls.' Rule 56.1 ¶ 41. The parties agree, however, that the reference to the Mark as a registered trademark is incorrect.[7]

         F. Statement of Use in Connection with the Don Coqui Mark

         On December 23, 2009, Rodriguez filed a Statement of Use in connection with the Don Coqui Mark Application, alleging that the date of first use of the mark was July 3, 2009.[8]Pls.' Rule 56.1 ¶ 42; Doc. 76-15 (“Statement of Use”). The USPTO subsequently issued the Don Coqui Mark registration on March 23, 2010. Id. ¶ 43.

         G. Privado Marketing Group LLC and the Purported Assignment of the Don Coqui Mark

         On April 16, 2010, Jewelle and Jaleene Rodriguez executed an operating agreement for Privado, with each owning a 50% membership interest in Privado. Id. ¶ 44. Approximately one year later, on April 6, 2011, Rodriguez executed and recorded documents that purported to assign the entire interest and goodwill in the Don Coqui Mark to Privado, and recorded the assignment with the USPTO. Id. ¶ 45; Rodriguez Declr., Ex. L (“Trademark Assignment”). The parties dispute whether Rodriguez owned any interest in the Don Coqui Mark as of this date, and therefore whether this purported assignment transferred any interest to Privado. See Defs.' Rule 56.1 ¶ 49.

         H. Jaleene and Jewelle Rodriguez Purportedly Acquire DC Holdings

         On April 30, 2011 Joseph Calascibetta and Laurence Siegel entered into an agreement to sell their membership interest in DC Holdings to Jaleene and Jewelle. Pls.' Rule 56.1 ¶ 46. On July 26, 2011 Mangan entered into an agreement with Jaleene and Jewelle, under which Mangan purported to sell his 10% membership interest in DC Holdings to them in exchange for $100, 000 (“Mangan Share Agreement”). Defs.' Rule 56.1 ¶ 50. Jaleene and Jewelle executed promissory notes in favor of Mangan, each promising to pay him $50, 000 in regular installment payments. Id. Neither Jaleene nor Jewelle have made any payments to Mangan, however. Id. Plaintiffs claim that as a result of these transfers, Jaleene and Jewelle Rodriguez each became a 50% owner in DC Holdings, see Pls.' Rule 56.1 ¶ 47, but Defendants maintain that Mangan still owns his 10% share because he has not received any consideration for sale of his membership interest. Defs.' Rule 56.1 Resp. ¶ 47.

         I. Eleftheria Restaurant Corp. and the Astoria Don Coqui Restaurant

         Eleftheria is a corporation organized and existing under the laws of the State of New York with a principal place of business at 2818 31st Street, Queens, New York. Id. ¶ 5. Mitsios and Mangan are principals of Eleftheria. Pls.' Rule 56.1 ¶¶ 7-8. In 2008, as they were planning the New Rochelle Don Coqui, Jimmy, Jaleene and Jewelle Rodriguez and Mangan planned with Mitsios to simultaneously convert Mitsios' then-existing “Zodiac” Greek restaurant in Astoria into a second Don Coqui restaurant. Defs.' Rule 56.1 ¶¶ 19, 53, 54. As a part of the conversion, Mangan invested $50, 000 in Eleftheria. Id. ¶ 55. Eleftheria incurred substantial sums in connection with the work necessary for the conversion, including filings with the Secretary of State and State Liquor Authority, and changing the signage and physical structure of the restaurant to conform with the design of the New Rochelle Don Coqui. Id. ¶ 56.

         There has never been any written license agreement relating to the use of the Don Coqui Mark at the Astoria location. Pls.' Rule 56.1 ¶ 49. In October of 2011, the Don Coqui Astoria location opened. Id. ¶ 52. Both Rodriguez and Jaleene were on Eleftheria's payroll. Id. ¶ 55. Defendant Eleftheria made some payments to Privado, but the parties dispute the purpose of the payments and, specifically, whether they were licensing royalty payments for the use of the Don Coqui Mark. Id. ΒΆ 54; Defs.' Rule 56.1 Resp. ...


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