Northland Ins. Companies v. Blaylock

Citation115 F.Supp.2d 1108
Decision Date25 September 2000
Docket NumberNo. 00-308(DSD/JMM).,00-308(DSD/JMM).
PartiesNORTHLAND INSURANCE COMPANIES, Plaintiff, v. Patrick BLAYLOCK, Defendant.
CourtUnited States District Courts. 8th Circuit. United States District Court of Minnesota

Michael J. McGuire, Raphael T. Wallander, and Rider, Bennett, Egan & Arundel, Minneapolis, MN, counsel for plaintiff.

Paul A. Ledford, and Saliterman & Siefferman, Minneapolis, MN, counsel for defendant.

ORDER

DOTY, District Judge.

This matter is before the court on plaintiff's motion for a preliminary injunction or alternatively for default judgment for defendant's alleged failure to abide by the parties' stipulation, and defendant's motion for dismissal under Rule 12(b)(6) for failure to state a claim.

For the reasons stated herein, the court denies the motion to dismiss, denies the motion for default judgment, and denies the motion for a preliminary injunction.

BACKGROUND

While the details of the underlying insurance coverage dispute between plaintiff and defendant is of limited relevance to the present claims, a basic overview may facilitate an understanding of how the current matter arose.

Defendant Patrick Blaylock owned a yacht that he insured with plaintiff. In May 1998, defendant's yacht was damaged. Defendant subsequently filed an insurance claim seeking reimbursement for alleged losses of $23,441.75.

A dispute over this claim escalated into litigation between the parties. Defendant sued plaintiff in conciliation court in California. Defendant prevailed, but his damage award was limited to the $5,000 jurisdictional limit of the conciliation court. Defendant subsequently sought payment from plaintiff for the remaining $17,341.75 of his original claim—an amount that he construes to have been "wrongfully denied" and reflective of "the unfair treatment he received at the hands of Northland Insurance Company." (Def.'s Supplemental Mem. Opp'n Prelim. Inj. at 1.)

Following the conclusion of the conciliation court case, and based upon what he perceived to be plaintiff's unfair business practices, defendant created two Internet web sites to house complaints and criticism of plaintiff's business. The first, at issue in this dispute, bears the domain name "northlandinsurance.com" and was registered with Network Solutions, Inc. ("NSI") on or about August 29, 1999. Defendant also registered a second domain name "sailinglegacy.com" on or about September 3, 1999. Defendant admits that the first domain name was specifically selected "to make his site more easily found by web surfers" who may be interested in Northland Insurance Company. (Def.'s Mem. Supp. Mot. to Dismiss at 17.) Defendant contends, however, that the purpose of this site is to showcase to an Internet audience his own experiences with plaintiff, his commercial commentary and criticism of plaintiff's business practices, and to provide a forum for other "victims" of the plaintiff to air their complaints of mistreatment.1

At this first web site, the Internet user sees line one which reads in small type font "Northland Insurance, Associates First Capitol, Yacht Insurance, Boat Insurance, Auto Insurance, Trucking Insurance, Business Insurance" and then below in larger and bolder font "Northland Insurance Companies ... Another Opinion! ... If you feel you have been ABUSED at the hands of Northland Insurance please click the link above. You're not alone." (McGuire Decl., Ex. B.) The user is then directed to the second web site that describes in detail defendant's complaints about the plaintiff, an extensive history of his legal dispute, his correspondence with plaintiff, and provides other links including a link to defendant's attorney in this matter.

Plaintiff contends that the name "Northland Insurance" is a protected mark and defendant's use of it as his domain name violates trademark laws and the recently enacted federal Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d) (Supp.2000). Plaintiff instituted this action alleging trademark infringement, dilution, unfair business practices, and a claim under the ACPA. Plaintiff now moves for a preliminary injunction or alternatively for default judgment based upon defendant's alleged failure to abide by the parties' stipulation to extend defendant's time to answer the complaint. Defendant moves for dismissal under Rule 12(b)(6) for failure to state a claim.

DISCUSSION
I. Defendant's Rule 12(b)(6) Motion to Dismiss

Rule 12(b)(6) provides that a party may move to dismiss a complaint where the complaint does not state a cause of action upon which relief can be granted. Fed. R.Civ.P. 12(b)(6). In considering a Rule 12(b)(6) motion to dismiss, the court takes all facts alleged in plaintiff's complaint as true. See Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir.1990). Further, the court must construe the allegations in the complaint and reasonable inferences arising from the complaint in the light most favorable to the plaintiff. See Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). The court will dismiss a complaint only when it appears plaintiff cannot prove any set of facts that support the claim. See Frey v. City of Herculaneum, 44 F.3d 667, 671 (8th Cir.1995).

As discussed below, while the court concludes that there is an insufficient factual basis upon which to grant a preliminary injunction, the court does not similarly conclude that plaintiff's claims fail to state causes of action upon which relief can be granted.2 This is not "the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief." See Frey, 44 F.3d at 671 (quoting Bramlet v. Wilson, 495 F.2d 714, 716 (8th Cir. 1974)). Thus, defendant's motion for dismissal under Rule 12(b)(6) is denied.

II. Plaintiff's Motion for Default Judgment

Plaintiff moves for default judgment on grounds that defendant failed to comply with a stipulation between the parties extending the time period for defendant's answer.3 Because defendant did not file an "Answer" but rather filed a motion to dismiss under Rule 12(b)(6), plaintiff argues that defendant has breached the stipulation and default judgment should be entered.

Plaintiff's highly technical argument sidesteps Rule 12(b) of the Federal Rules of Civil Procedure, which provides that a party may file either a 12(b)(6) motion or an answer in conformity with the Rules. Moreover, the rule provides that "[a] motion making any one of these defenses [including 12(b)(6)] shall be made before pleading if further pleading is permitted" [emphasis added]. Fed.R.Civ.P. 12(b). When a motion to dismiss has been filed, no answer need be filed until ten days after the court disposes of the motion. See Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 1346 (3d ed.1992) (citing Jones v. Bales, 58 F.R.D. 453 (D.Ga.1972), aff'd, 480 F.2d 805 (5th Cir.)(holding plaintiff not entitled to default judgment when defendant did not file an answer but instead filed Rule 12 motion within time limit for response)); Rudnicki v. Sullivan, 189 F.Supp. 714 (D.Mass.1960) (holding that service of motion under 12(b)(6) by defendant stopped the running of time period to file an answer, and defendant was not in default).

While defendant did not strictly abide by the precise language of the stipulation agreement to file an "Answer," the court finds that the defendant did "answer," both in the broader sense of this word and under the requirements of the Federal Rules of Civil Procedure. Accordingly, the court denies plaintiff's motion for default judgment.

III. Plaintiff's Motion For Preliminary Injunction

The court considers four factors in determining whether to grant a motion for preliminary injunction:

1. Is there a substantial threat that the movant will suffer irreparable harm if relief is not granted;

2. Does the irreparable harm to movant outweigh any potential harm that granting a preliminary injunction may cause the nonmoving parties;

3. Is there a substantial probability that the movant will prevail on the merits; and

4. The public interest.

Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109, 114 (8th Cir.1981) (en banc). The court balances the four factors to determine whether injunctive relief is warranted. See id. at 113; West Pub. Co. v. Mead Data Cent., Inc., 799 F.2d 1219, 1222 (8th Cir.1986), cert. denied, 479 U.S. 1070, 107 S.Ct. 962, 93 L.Ed.2d 1010 (1987). The movant bears the burden of proof concerning each of them. See Gelco Corp. v. Coniston Partners, 811 F.2d 414, 418 (8th Cir.1987).

A. The Threat of Irreparable Harm

Plaintiff must first establish that irreparable harm will result without injunctive relief and that such harm will not be compensable by money damages. See In re Travel Agency Com'n Antitrust Litig., 898 F.Supp. 685, 689 (D.Minn.1995) ("[A]n injunction cannot issue based on imagined consequences of an alleged wrong. Instead, there must be a showing of imminent irreparable injury."). Possible or speculative harm is not enough. See Graham Webb Int'l v. Helene Curtis, Inc., 17 F.Supp.2d 919, 924 (D.Minn.1998). The absence of such a showing alone is sufficient to deny a preliminary injunction. See Gelco, 811 F.2d at 420; Roberts v. Van Buren Pub. Schs., 731 F.2d 523, 526 (8th Cir.1984). The court concludes that the record at this preliminary stage is devoid of any evidence or demonstration of irreparable harm.

Plaintiff asserts it will suffer irreparable harm if a preliminary injunction is not granted because Internet users are likely to presume that the domain name, "northlandinsurance.com," belongs to plaintiff and upon visiting that site become frustrated and fail to continue on to plaintiff's actual web site, "northlandins.com". Plaintiff thus far has not made a sufficient showing of this perceived harm, and the court finds this presumption of irreparable harm...

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