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Lawn Managers, Inc. v. Progressive Lawn Managers, Inc.

United States District Court, E.D. Missouri, Eastern Division

July 27, 2017

LAWN MANAGERS, INC., Plaintiffs,



         This action is before the court on the motion of plaintiff Lawn Managers, Inc., for partial summary judgment. (Doc. 53). Plaintiff moves for summary judgment on defendant Progressive Lawn Managers, Inc.'s defenses of collateral estoppel, consent, release, waiver, and unclean hands, as well as its counterclaim alleging abandonment of trademark. The court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1343. The court heard oral argument on June 27, 2017. For the reasons discussed below, the court grants the motion in part and denies the motion in part.

         I. Legal standard for summary judgment

         Summary judgment is proper “if there is no dispute of material fact and reasonable fact finders could not find in favor of the nonmoving party.” Shrable v. Eaton Corp., 695 F.3d 768, 770 (8th Cir. 2012); see also Fed. R. Civ. P. 56(a). The party moving for summary judgment must demonstrate the absence of a genuine issue of material fact and that it is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). A fact is “material” if it could affect the ultimate disposition of the case, and a factual dispute is “genuine” if there is substantial evidence to support a reasonable jury verdict in favor of the nonmoving party. Rademacher v. HBE Corp., 645 F.3d 1005, 1010 (8th Cir. 2011). The court must view the evidence in the light most favorable to the nonmoving party and accord it the benefit of all reasonable inferences. Scott v. Harris, 550 U.S. 372, 379-80 (2007). The burden shifts to the non-moving party to demonstrate that disputes of fact do exist only after the movant has made its showing. Id.

         II. Undisputed facts

         Unless otherwise noted, the parties do not dispute the following facts. Randy Zweifel is the principal owner of Lawn Managers. (Docs. 53, Ex. 1 at ¶ 1; 57 at ¶ 1).

         Linda Smith is the principal owner of defendant Progressive Lawn Managers. (Docs. 53, Ex. 1 at ¶ 2; 57 at ¶ 2). Prior to their divorce in May 2012, Linda and Randy each owned 50 percent of Lawn Managers and the marks at issue in this case. (Docs. 53, Ex. 1 at ¶ 1; 57 at ¶ 3, 19; 61, Ex. 1 at ¶ 19). The marital settlement agreement between Randy and Linda was incorporated into their divorce decree and provided that:

Development of New Business Linda will establish a new lawn care company using the name Progressive Lawn Managers, Inc. doing business as Lawn Managers. The parties agree that Linda may use the name Lawn Managers for a period of time no longer than two years from the date of dissolution of marriage. At the end of two years from the date of dissolution of marriage, or sooner if Linda wishes, Linda will use the name Progressive Lawn Managers, Inc. and will discontinue using the name Lawn Managers.
Enforcement and Construction of Terms The terms of this Agreement are expressly intended to be construed as contractual, with reference so RSMo. Section 452.325, as amended, and therefore nonmodifiable, except as may otherwise be expressly noted; however, the parties also expressly intend for this Agreement to be construed as decretal for the purposes of enforcement. The parties agree that failure of either party to insist upon strict performance of one or more of the terms and provisions of this Agreement shall not be construed as a waiver or relinquishment in the future of any such term and provision all of which shall continue in full force and effect. Further, no waiver of any default shall be deemed a waiver of a subsequent default. The validity and construction of this Agreement shall be determined in accordance with the laws of the State of Missouri.
Review and Modification of This Agreement No modification or waiver of any of the terms of this Agreement shall be valid unless it is in writing and signed by both parties and where necessary, approved by a court of competent jurisdiction as required by law.
Binding Effect This Agreement shall be binding on the heirs, representatives, and assigns of the parties except as to the specific paragraphs that contain provisions for termination of obligations on the death of either or both parties.

(Docs. 53, Ex. 1 at ¶ 5 and 57 at ¶ 5; Doc. 30 at Ex. 1)[1].

         Pursuant to this marital settlement agreement, Linda relinquished her share of Lawn Managers in exchange for certain consideration described in the court orders. (Doc. 57 at ¶ 4). The agreement divested Linda of her rights to the Lawn Managers marks, awarded Linda use of the name “Progressive Lawn Managers, ” and imposed rules on the conduct of business by both Linda and Randy. (Docs. 57 at ¶ 20; 61, Ex. 1 at ¶ 20). They each agreed not to solicit business in the zip codes awarded to the other. (Docs. 57 at ¶ 22; 61, Ex. 1 at ¶ 22). Linda started Progressive Lawn Managers in 2012. (Doc. 53, Ex. 1 at ¶ 4).

         Following their divorce, Linda and Randy filed cross motions for contempt for unrelated violations of the marital settlement agreement. (Docs. 53, Ex. 6 at ¶ 1; 57 at ¶ 6). The parties reached a settlement agreement on these motions in July 2014, which included the extension of Linda's permission to use the name “Lawn Managers” until December 31, 2014. (Docs. 53, Ex. 1 at ¶¶ 7-8; 57 at ¶¶ 7-8). This settlement agreement was incorporated into a judgment on July 25, 2014. (Doc. 57 at ¶¶ 7-8). Defendant argues but plaintiff denies that Randy violated and continues to violate the zip code restrictions and is advertising using one of Progressive's phone numbers. (Docs. 25 at ¶ 11; 57 at ¶¶ 23-25; and 61, Ex. 1 at ¶¶ 23-25;).

         Plaintiff alleges that defendant's logo continued to use the phrase “Lawn Managers” after December 31, 2014, in that the logo contains “Lawn Managers” in large type and the word “Progressive” in small type in an image to the left. (Doc. 1 at 18, Ex. 3). In November 2015, plaintiff's counsel sent a letter to defendant requesting that it change its logo, signage, and business practices. (Docs. 53, Ex. 1 at ¶ 13; 57 at ¶ 13). Defendant's counsel responded in December 2015 explaining defendant would not change its logo, signage, or business practices. (Docs. 53, Ex. 1 at ¶ 14; 57 at ¶ 14).

         On February 4, 2016, plaintiff filed the instant suit against defendant, alleging defendant's continued use of the names “Progressive Lawn Managers” and “Lawn Managers” infringed its trademark rights. (Docs. 53, Ex. 1 at ¶ 15; 57 at ¶ 15). In its amended answer to plaintiff's complaint, defendant alleges:

15. As a result of its allowing others to use the claimed LAWN MANAGERS marks without exercising control of the services or goods associated with the registered marks, LMI has nakedly licensed its marks and thereby abandoned the LAWN MANAGERS marks within the meaning of 15 U.S.C. § 1127.

(Docs. 53, Ex. 18 at ¶ 1; 57 at ¶ 18).

         Plaintiff asserts that “[i]n 2011, defendant's principal was aware of and participated in the discussions with trademark counsel.” (Doc. 53, Ex. 1 at ¶ 17) (citing Doc. 53, Ex. 4). Defendant denies this statement, and the court notes that the cited testimony refers only to an accidental phone call from plaintiff's counsel to Ms. Smith and the general statement with no elaboration from Ms. ...

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