United States District Court, S.D. New York
SCORES HOLDING COMPANY INC. and SCORES LICENSING CORP., Plaintiffs,
CJ NYC INC., Defendant.
MEMORANDUM OPINION & ORDER
ABRAMS, United States District Judge
Scores Holding Company Inc. ("SCRH") is the owner
of various marks that Defendant CJ NYC Inc. was authorized to
use pursuant to an agreement between Defendant and Plaintiff
Scores Licensing Corp. ("SLC"). Plaintiffs allege
that Defendant breached the agreement by failing to pay
royalties and that Defendant has been using SCRH's marks
and trade name without authorization since SLC terminated the
agreement in November 2016. Defendant has not appeared in
this action, and Plaintiffs move for a default judgment.
Plaintiffs' motion is granted.
commenced this action on January 3, 2017. Defendant was
served with a Summons and Complaint on January 11, 2017. Dkt.
7. On February 27, 2017, the Clerk of Court entered a
certificate of default against Defendant. Dkt. 16. The same
day, Plaintiffs filed the instant motion and the Court issued
an order requiring Defendant to show cause at a conference
scheduled for April 5, 2017 why a default judgment should not
be entered in Plaintiffs' favor. Dkts. 17, 20. Defendant
was served with Plaintiffs' motion papers and the
Court's order on March 2, 2017. Dkt. 22. No one appeared
at the April 5 conference on behalf of Defendant.
a wholly-owned subsidiary of SCRH that is authorized to
license certain marks owned by SCRH (the "Scores
Marks"). Compl. ¶ 12. On or about November 10,
2015, SLC entered into a license agreement with Defendant
that allowed Defendant to use the Scores Marks at an adult
entertainment club in Woodside, New York that was to be
operated under the name "Scores Queens."
Id. ¶ 13; see also Id. Ex. 1
("License Agreement"). The parties agreed that upon
termination or expiration of the agreement all rights granted
to Defendant would "immediately revert to SLC and/or
[SCRH]" and that Defendant would be obligated "to
immediately return to SLC all original artwork, models,
samples, prototypes, renderings and drawings incorporating
the [Scores Marks] and to cease all uses of the [Scores
Marks]." License Agreement ¶ 7(h). Scores Queens
began operating on or about November 13, 2015. Compl. ¶
15; Gans Aff. ¶ 6.
honeymoon period of three months, Defendant was required to
pay fixed-fee royalties of $10, 000 per month for the first
two years of the agreement. See License Agreement
¶ 2(a). On November 10, 2016, "[h]aving received
almost no payments toward royalties" from Defendant,
Compl. ¶ 19, SLC sent a letter advising Defendant that
it was "in violation of a material obligation under [the
agreement]" and that SLC would terminate the agreement
if Defendant failed to cure its default within ten days,
id. Ex. 2. Defendant did not respond. Id.
¶ 20. On November 22, 2016, SLC exercised its right to
terminate the agreement, giving Defendant until November 30,
2016 to discontinue all use of SCRH's marks and trade
name. Id. Ex. 3; see also License Agreement
¶ 12(a) (permitting SLC to terminate the agreement ten
days after a notice of default based on a failure to pay
royalties). At the time of the termination, Defendant owed
SLC $85, 000 in unpaid royalties. Compl. ¶ 17, Ex. 2;
Gans Aff. ¶ 6.
being notified of the termination, Defendant advised
Plaintiffs "that it was taking steps to cease all use of
SCRH's marks and trade name. Compl. ¶ 21; see
also Gans Aff. ¶ 9. However, it became clear that
no steps were in fact being taken. Compl. ¶ 21.
Defendant still identifies its club as Scores Queens and
"continues to use the [Scores] name and trademarks in .
. . connection therewith." Id. ¶ 23;
see also Gans Aff. ¶¶ 9-10. Defendant also
continues to use the domain name
"scoresqueens.com." Compl. ¶ 24;
see also Gans Aff. ¶ 10.
court may . . . enter a default judgment if liability is
established as a matter of law when the factual allegations
of the complaint are taken as true." Bricklayers
& Allied Craftworkers Local 2, Albany, N.Y. Pension Fund
v. Moulton Masonry & Constr., LLC, 779 F.3d 182, 187
(2d Cir. 2015). "[A] default is an admission of all
well-pleaded allegations against the defaulting party."
Vermont Teddy Bear Co. v. 1-800Beargram Co., 373
F.3d 241, 246 (2d Cir. 2004). "There must be an
evidentiary basis for the damages sought by plaintiff, and a
district court may determine there is sufficient evidence
either based upon evidence presented at a hearing or upon a
review of detailed affidavits and documentary evidence."
Cement & Concrete Workers Dist. Council Welfare Fund
v. Metro Found. Contractors Inc., 699 F.3d 230, 234 (2d
Cir. 2012). A court is required to "ascertain the amount
of damages with reasonable certainty." Credit
Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151,
155 (2d Cir. 1999).
Plaintiffs asserted nine claims in this action, they seek a
default judgment with respect to only three: (1) breach of
contract; (2) trademark infringement; and (3) unfair
competition. Plaintiffs seek damages, costs, and a permanent
Complaint establishes liability for breach of contract as a
matter of law. To state a claim for breach of contract under
New York law, a complaint must "allege (1) the existence
of an agreement, (2) adequate performance of the contract by
the plaintiff, (3) breach of contract by the defendant, and
(4) damages." Eternity Glob. Master Fund Ltd. v.
Morgan Guar. Trust Co. of N. Y., 375 F.3d 168, 177 (2d
Cir. 2004) (quotation marks omitted). Defendant entered into
a contract with SLC, which SLC performed by allowing
Defendant to use SCRH's marks and trade name.
See License Agreement; Compl. ¶ 15; see
also Gans Aff. ¶ 6. Defendant breached the contract
by failing to make $85, 000 in royalty payments. Compl.
¶ 17; Gans Aff. ¶ 6; see also Compl. Exs.
2 & 3. SLC is thus entitled to $85, 000 in breach of
Complaint also establishes liability for trademark
infringement and unfair competition. Under the Lanham Act,
the analysis for these claims is essentially the same.
See TechnoMarine SA v. Jacob Time, Inc., 905
F.Supp.2d 482, 487 (S.D.N.Y. 2012); see also Chambers v.
Time Warner, Inc.,282 F.3d 147, 155 (2d Cir. 2002)
("Section 43(a) is a broad federal unfair competition
provision which protects unregistered trademarks similar to
the way that section 32(1) of the Lanham Act, 15 U.S.C.
§ 1114(1), protects registered marks."). A
plaintiff must demonstrate (1) that it holds a mark entitled
to protection and (2) that the defendant's use of a
similar mark is likely to cause consumer confusion. See
Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding,
Inc.,696 F.3d 206, 216-17 (2d Cir. 2012); Lang v.
Ret. Living Publ'g Co.,949 F.2d 576, 579 (2d Cir.
1991). Taking the allegations in the Complaint as true, the
Court finds that SCRH's marks and trade name are entitled