Alfa Corp. v. Alfa Mortg. Inc.

• Decision Date: 11 June 2008
• Docket Number: Civil Action No. 2:06cv962-WKW.
• Citation: 560 F.Supp.2d 1166
• Parties: ALFA CORPORATION, an Alabama corporation, Plaintiff, v. ALFA MORTGAGE INC., an Indiana corporation, Defendant.
• Court: U.S. District Court — Middle District of Alabama

560 F.Supp.2d 1166

ALFA CORPORATION, an Alabama corporation, Plaintiff, v. ALFA MORTGAGE INC., an Indiana corporation, Defendant.

Civil Action No. 2:06cv962-WKW.

United States District Court, M.D. Alabama, Northern Division.

June 11, 2008.

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Juan C. Basombrio, Dorsey & Whitney LLP, Irvine, CA, Robert A. Huffaker, Rushton Stakely Johnston & Garrett PC, Montgomery, AL, for Plaintiff.

Alfa Mortgage Incorporated, Oakland, CA, pro se.

ORDER

W. KEITH WATKINS, District Judge.

On May 19, 2008, the Magistrate Judge filed a Recommendation (Doc. # 40) in this case to which no timely objections have been filed. After review of the Recommendation, and after an independent review of the entire record,

It is ORDERED that:

1. The Recommendation (Doc. # 40) is ADOPTED;

2. Plaintiffs Motion for Default Judgment (Doc. #36) is GRANTED in part, DENIED in part. It is GRANTED as to counts 1, 2, and 3 in the Complaint. It is DENIED as to counts 4 and 5 3. Default Judgment is to be ENTERED against the Defendant as to counts 1, 2, and 3 of the Complaint;

4. Counts 4 and 5 of the Complaint are DISMISSED without prejudice;

5. Plaintiff is entitled to and is hereby GRANTED a permanent injunction permanently enjoining the Defendant from:

(a) using the name or designation "Alfa" in connection with any mortgage, loan, construction or financial services or related services in the United States;

(b) prosecuting any application to register trademarks containing an "Alfa" name or designation in connection with any mortgage, loan, construction or financial services or related services in the U.S. Patent or Trademark Office or any other United States trademark authority;

(c) using any false designation of origin or false description or representation or any other thing calculated or likely to cause confusion or mistake in the mind of the trade or public or to deceive the trade or public into believing that Defendant's business and services are in anyway associated or affiliated with or related to Plaintiff of Plaintiffs services as described herein;

(d) filing any public record using the word "Alfa," and ordering that any such filings or registrations be withdrawn or rescinded;

(e) It is so ORDERED;

6. Defendant is ORDERED to transfer to Plaintiff ownership of the domain www. alfamtg.com and any other domains owned and/or controlled by Defendant which contain the word "Alfa;"

7. Defendant is ORDERED to deliver to Plaintiff for destruction or other disposition, within thirty (30) days after entry of final judgment, any and all labels, signs, prints, packaging, wrappers, documents and advertising or promotion materials in its possession or within its custody or control that bear any designation in violation of Plaintiffs rights as decreed herein, together with all plates, molds, matrices, and other means of making the same;

8. Defendant is ORDERED to file with the court and serve on counsel for Plaintiff within thirty (30) days after entry of any injunction issued by the court, a sworn statement of compliance as provided in 15 U.S.C. § 1116(a);

9. Plaintiff is entitled to attorney fees in the amount of $23,422.00 pursuant to 15 U.S.C. § 1117, and the same are hereby AWARDED.

RECOMMENDATION OF THE MAGISTRATE JUDGE

WALLACE CAPEL, JR., United States Magistrate Judge.

Pending before the Court is Plaintiff's "Motion for Entry of Default Judgment" (Doc. # 36). The undersigned gave Defendant Alfa Mortgage Inc. (Defendant) an opportunity to respond to the motion, but Defendant did not do so. Order of April 10, 2008 (Doc. #39). Upon consideration of the motion and Plaintiffs Memorandum in Support of the Motion, and for the reasons that follow, the Magistrate Judge RECOMMENDS the motion (Doc. #36) be GRANTED IN PART and DENIED IN PART without the necessity of a hearing.

I. BACKGROUND

Prior to commencing this lawsuit, Plaintiff, Alfa Corporation (Plaintiff), sent a cease and desist letter to Defendant. Compl. (Doc. # 1) at ¶ 23; Def.'s Exh. 1 (Doc. # 37-2). Plaintiff also verbally advised Defendant about Plaintiffs ALFA trademarks. Compl. (Doc. #1) at ¶ 23. Because Defendant continued to use the ALFA name, Plaintiff commenced this action on October 25, 2006, alleging violations of the Lanham Act, 15 U.S.C. §§ 1114(1), 1125(a)(1)(A), as well as supplemental state law claims. Compl. (Doc. #!l) at ¶¶ 1, 23. Plaintiff properly served Defendant with a Summons and a copy of the Complaint (Doc. # 6). Defendant initially filed an unsuccessful Motion to Dismiss, and later, after counsel withdrew, informed the Court it would not participate in this litigation. Mot. to Dismiss (Doc. #10); Order of October 2, 2007, (Doc. # 20);¹ Doc. # 30 at 1 (stating Defendant is withdrawing from this case). Despite three extensions of time, Defendant did not file an Answer or participate any further in the suit. Plaintiff then obtained an entry of default from the Clerk of this Court pursuant to Rule 55(a) of the Federal Rules of Civil Procedure. Entry of Default (Doc. # 33). Plaintiff now seeks a default judgment (Doc. # 36) against Defendant; a permanent injunction; an order directing Defendant to deliver to Plaintiff for destruction all items which "bear any designation in violation of Plaintiffs rights as decreed" in this suit; an order directing Defendant to file a sworn statement as provided in 15 U.S.C. § 1116(a); an order directing "Defendant to account and turn over to Plaintiff its profits arising from the conduct complained of herein" and "trebling such award of profits as appropriate;" and reasonable attorney's fees, costs, and disbursements of this action. Compl. (Doc. # 1) at 8-9. In support of its Motion for Default Judgment, Plaintiff relies on the following facts set forth in its Complaint.

Plaintiff, a Delaware company with its principal place of business in Montgomery, Alabama, is a financial services conglomerate, operating nationwide through a number of wholly owned subsidiaries, divisions, and related companies under the name ALFA. See Compl. (Doc. # 1) at ¶¶ 8, 13, 16.² Plaintiffs business includes, among other things, insurance and reinsurance services, and it holds licenses for those services in a number of states, such as Alabama and Indiana. Plaintiff also provides, through itself or related companies, equity lines of credit on residential real estate and other mortgage services, commercial leasing services, and realty and building services. Comp. (Doc. # 1) at ¶ 13. Plaintiff has expanded and continues to expand the breadth and scope of its operations into areas such as diversified insurance, banking, mortgage, and securities. Id. at ¶ 14.

Plaintiff holds several valid federally registered trademarks incorporating the word ALFA, such as ALFA INSURANCE (Registration No. . 2671861), ALFA INSURANCE & design (Registration No. 2088673), and ALFA REALTY & design (Registration No. 2671857). These trade-marks are registered in various classes, like insurance and underwriting services. Plaintiff began using its various "ALFA" trademarks before Defendant could claim to have commenced use of the ALFA name. Compl. (Doc. # 1) at ¶ 16.

Plaintiff also possesses a number of pending trademark applications on file with the U.S. Patent and Trademark Office. As an example, it holds: CALL ALFA, MY ALFA, ALFA INSURANCE, ALFA COMPANIES, ALFA CORPORATION, and ALFA FINANCIAL. These applications seek registration in a variety of classes, including mortgage and lending services. Compl. (Doc. # 1) at ¶ 17.

Since registration of its ALFA trademarks, Plaintiff and its related companies have invested millions of dollars in advertising and promoting its goods and services, generating billions of dollars in sales. Id. at ¶ 18. As a result, the ALFA trademark has become a symbol of consumer goodwill and its value is incalculable. Id.

Defendant is a Indianapolis-based corporation organized under the laws of the State of Indiana. Id. at ¶ 5. Defendant owns and operates the following website: www.alfamtg.com. Id. at ¶¶ 19, 20. The website states Defendant's business offers residential mortgage loans, residential construction loans, and commercial loans on a national basis and is licensed currently in the states of Indiana, Illinois, Minnesota, and Oregon. Id. at ¶ 20; Def.'s Exh. 5 (Doc. # 37-2).

In support of its Motion for Default Judgment, Plaintiff contends its Complaint sets forth sufficient allegations to satisfy each Count alleged. Plf.'s Mem. Supp. Mot. Default Judgment (Doc. # 37-1) at 7. Plaintiff asserts the following five Counts in its Complaint: (1) federal trademark infringement, (2) violations of Section 43(a) of the Lanham Act, (3) common law trademark infringement, (4) common law unfair competition, and (5) trademark dilution under Ala.Code § 8-12-17. Based upon the Complaint and the evidentiary record, as well as Plaintiffs arguments and the authorities cited in Plaintiffs brief, the undersigned finds Plaintiff has satisfied the requirements for entry of default judgment on Counts 1, 2, 3, but not Counts 4 or 5. The Court will discuss each count in turn after setting forth the standard for analyzing Plaintiffs motion.

II. DISCUSSION

A. Legal Standard for Default Judgment

A defendant, who has been properly served, is required to respond to a complaint within twenty days of the date of service, see Fed.R.Civ.P. 12(a), or risk entry of default against it pursuant to Rule 55 of the Federal Rules of Civil Procedure. There are two steps to obtaining judgment by default: the entry of default and the subsequent entry of judgment by default. See Fed.R.Civ.P. 55(a)-(b).

As provided in Rule 55(a), the clerk may enter a party's default with regard to a claim for affirmative relief where the elements of default are shown by an affidavit or other competent proof. See Fed. R.Civ.P. 55(a). In this case, the clerk has entered default against Defendant, and Plaintiff has...