D. H. Pace Co. v. Aaron Overhead Door Atlanta LLC

• Decision Date: 12 February 2020
• Docket Number: CIVIL ACTION FILE NO. 1:17-CV-3430-MHC
• Citation: 522 F.Supp.3d 1315
• Parties: D. H. PACE COMPANY, INC. d/b/a Overhead Door Company of Atlanta, Plaintiff, v. AARON OVERHEAD DOOR ATLANTA LLC, Jeremy Ryan Lucia, and Stephenie Lucia, Defendants.
• Court: U.S. District Court — Northern District of Georgia

522 F.Supp.3d 1315

D. H. PACE COMPANY, INC. d/b/a Overhead Door Company of Atlanta, Plaintiff,

v.AARON OVERHEAD DOOR ATLANTA LLC, Jeremy Ryan Lucia, and Stephenie Lucia, Defendants.

CIVIL ACTION FILE NO. 1:17-CV-3430-MHC

United States District Court, N.D. Georgia, Atlanta Division.

Signed February 12, 2020

Jennifer Fairbairn Deal, Richard Charles Henn, Jr., Kilpatrick Townsend & Stockton, LLP, Atlanta, GA, for Plaintiff.

Lisa Pavento, Meunier Carlin & Curfman, LLC, Atlanta, GA, Michael C. Kendall, Kendall Mandell, LLC, Samantha Rose Mandell, Kendall Law Group, LLC, Douglasville, GA, for Defendants.

ORDER

MARK H. COHEN, United States District Judge

Plaintiff D.H. Pace Company, Inc. d/b/a Overhead Door Company of Atlanta ("Pace") brings this action based on allegations that Defendants Aaron Overhead Door Atlanta LLC ("Aaron"), Jeremy Ryan ("Ryan") Lucia, and Stephenie Lucia (collectively, "Defendants") have been operating a garage door business that uses a domain name, social media handles, and other words and phrases that are designed to mislead and confuse consumers into believing that Aaron is the same company or somehow affiliated with Pace. Compl. [Doc. 1]. This case comes before the Court on Plaintiff Pace's Motion for Partial Summary Judgment [Doc. 81], and Defendants’ Motion for Summary Judgment on Counts VI and VII of Plaintiff's Amended Complaint (Libel and Slander) [Doc. 86].¹

I. BACKGROUND²

A. Pace's Business and Distributorship Agreements

Since 1921, Overhead Door Corporation ("ODC"), an Indiana corporation, has been engaged in the business of designing, manufacturing, selling, and servicing upward-acting doors and the equipment for operating such doors. Distributor's Agreement (Nov. 15, 1981) ("1981 Agreement") [Doc. 105-1] at 1. ODC is a subsidiary of Sanwa Holdings Company, a Japanese company. Pace's Add'l SMF ¶ 25; Aaron's Resp. to Add'l SMF ¶ 25. ODC markets its products nationwide through authorized ODC distributors, giving them the right to use ODC's trademarks and tradenames, "Overhead Door Corporation" and "Overhead Door," in connection with selling and marketing ODC's products. 1981 Agreement at 1. In 1981, Pace obtained an ODC authorized distributorship in Georgia. Id.

Pace is a Delaware corporation with its principal place of business in Olathe, Kansas. Pace's SMF ¶ 2; Aaron's Resp. to Pace's SMF ¶ 2. Pace's principal place of business for its ODC operations is in Atlanta, Georgia. Pace's Add'l SMF 21; Aaron's Resp. to Add'l SMF ¶ 21. Pace's parent company is E.E. Newcomer Enterprises, Inc., and is owned by people or trusts within the United States. Id. ¶ 22.

In the past decade, Pace has invested over $8.5 million in advertising and promoting ODC's brand in the Atlanta area marketplace. Pace's SMF ¶ 14; Aaron's Resp. to SMF ¶ 14; Decl. of John Nale ("Nale Decl.") [Doc. 83] ¶¶ 12-13. Specifically, Pace advertised under the name "Overhead Door Company of Atlanta" (the "ODC Tradename") on its website, and on social media platforms, global search engines, other online and printed service directories, and radio programs. Nale Decl. ¶¶ 13-21. Pace has alleged its specific sales volumes in Georgia under the ODC Tradename for the years 2007 through 2016.³ Pace's SMF ¶ 32; Aaron's Resp. to Pace's SMF ¶ 32.

B. Aaron's Business

In 1968, a garage door company, "Aaron Overhead Door," was founded in California and later acquired by the Conte family. Dep. of Larry Conte (June 4, 2018) ("Conte Dep.") [Doc. 122-3] at 9:17-22, 17:11-15. Larry Conte ("Conte"), the son of the family, hired Ryan around 2006 as a marketer for Aaron Overhead Door. Conte Dep. at 38:6-11. After his parents retired and stopped the company, Conte started "Aaron Overhead Doors," with a different name and a different tax ID number. Id. at 10:17-25, 11:5-24. Ryan visited Conte in California to receive training on how to sell, install, and repair garage doors. Id. at 43:9-21. Conte understood that Ryan owned the name "Aaron Overhead Doors" in Georgia, and they had a verbal agreement that if Ryan ever sold his business, he would give Conte fifteen percent of the profits. Id. at 49:8-14, 57:14-20.

In 2015, Ryan began installing, repairing, and selling garage doors in Atlanta, Georgia. Pace's SMF ¶ 40; Aaron's Resp. to Pace's SMF ¶ 40. Owned by Ryan, Aaron is headquartered in Buford, Georgia, and advertises using the names "Aaron Overhead Doors Atlanta, Aaron Overhead Door Atlanta, and Aaron Overhead Doors." Id. ¶ 44. Until approximately April 2018, Aaron used the following logo:

Pace's SMF ¶ 54; Aaron's Resp. to SMF ¶ 54. Aaron began using the following modified logo around April 2018:

Pace's SMF ¶ 55; Aaron's Resp. to SMF ¶ 55. Aaron admits there is overlap between its business and Pace's business, and that there is similarity in the goods and services offered and how they are advertised, marketed, and promoted. Aaron's Resp. to SMF ¶ 145. Aaron also admits that it, like Pace, is in the business of offering garage door products and garage door installation and repair services. Id. ¶¶ 147-49.

C. The ODC Trademarks and Tradename

ODC owns U.S. Reg. No. 1,807,028, registered on November 30, 1993, which covers the below ribbon mark:

Trademark Principal Register No. 1,807,028 [Doc. 83-1 at 2]. ODC also owns U.S. Reg. No. 5,149,005, registered on February 28, 2017, which covers the below red ribbon mark:⁴

Trademark Principal Register No. 5,149,005 [Doc. 83-1 at 3-4]. Mark number 5,149,005 was registered for the use of metal and non-metal overhead doors and the electronic controls for operating such doors. Id. Finally, ODC owns U.S. Reg. No. 5,149,006, also registered on February 28, 2017, which covers the red ribbon mark below:

Trademark Principal Register No. 5,149,006 [Doc. 83-1 at 5-6]. Mark number 5,149,006 was registered for the use in connection with providing services in the field of metal and non-metal overhead doors and the electronic controls for such. Id.

Pace alleges that ODC incorporates the registered red ribbon mark with the words, "Overhead Door" into the below logo:

Pace's SMF ¶10. However, this combined mark is not registered. Pace's SMF Reply ¶ 11; see also Pl.’s Mem. in Supp. of its Partial Mot. for Summ. J. ("Pace's MPSJ") [Doc. 84-1] at 3 n.5. Notably, ODC's legal counsel stated in 2007, in reference to enforcing trademark rights in Iowa,

we do not have exclusive rights to the words "Overhead" or "Overhead Door" ... Unless we have some concrete evidence that they are holding themselves out to the public as your distributorship or that they are using our logos ... it is unlikely that we will be able to prevent them from using the "Overhead" wording in their ads.

E-mail from Christine S. Johnson, Legal Counsel, Overhead Door Corporation, to Martin Fauchier (May 8, 2007) [Doc. 97-4] at 1.

D. Pace's Allegations of Trademark Infringement and Customer Confusion

On March 14 and April 14, 2017, Pace sent letters to Aaron alleging unfair competition and demanding that Aaron "cease and desist from all of the use of the trade name ‘Overhead Door’ in connection with [Aaron's] good and services" as well as other confusing "titles/phrases" that are similar to "Overhead Door Company of Atlanta." [Doc. 82-22]. In addition, Pace also sent demand letters or e-mails requesting the same to ten other Georgia companies who are alleged to have been using some combination of the terms "Overhead Door," "Atlanta," or both in their business names or in their advertising [Docs. 106-2, 106-3, 106-4, 106-5, 109-9, 110-2, 110-3, 110-4].

Pace attached to its motion thirty-three phone call transcriptions between potential customers and Aaron representatives, where customers called requesting services from "Overhead Door," but were unclear if they reached the correct business or were unsure if Aaron performed their prior service or not. [Docs. 82-31, 82-33 through 82-35, 82-37, 82-38, 82-40, 82-42, 82-44, 82-45, 82-47, 82-49, 82-51, 82-53, 82-55, 82-57, 82-59, 82-60, 82-62, 82-64, 82-66, 82-68, 82-70, 82-72, 82-73, 82-75, 82-76, 82-78, 82-80, 82-82 through 82-84, 82-86]. Pace also exchanged internal emails about potential customer confusion, and received documented customer complaints, about at least seven other Georgia companies with the term "overhead door" in their business name or in their advertising [Docs. 109-10, 110-5, 111-2 through 111-8].

E. Pace's Allegations of Libel and Slander

At the conclusion of fact discovery, this Court granted Pace leave to amend its initial Complaint to add claims of libel and slander, after it discovered the content of certain calls and text conversations. Nov. 27, 2018, Order [Doc. 71]. Pace asserts that the following three conversations constitute evidence to support its additional claims:

(1) Customer Vicky Oquendo called Ryan on January 7, 2017 and asked if Aaron was the company that had originally fixed her garage door.

The call proceeded as follows:

Oquendo: So there is a lot of overhead garage door people with the same name, so my question is, I'm wondering if there is any way I can find out if it's your company I used to repair my door.

....

Ryan: Yeah I don't think it was us. We just started this location in August 1, 2015. So we're just like a year and a half old.

Oquendo: Oh, you're not the ones then. Not that it matters, I'm just saying you're not the ones that repaired it last time.

....

Oquendo: ... My little control thing says Liftmaster.

Ryan: Okay, yeah, so The Overhead Door Company does not install Liftmaster. They actually bought Genie out. They're a Japanese owned company. And they have acquired Genie and they install Genie's now.

Oquendo: Oh, okay. So what are they called ... Overhead Company?

Ryan: Yeah, the Overhead Door Company of Atlanta or The Overhead Door Company of Greater Hall County. Yeah, those two companies.

Vicky Oquendo Call Transcription (Jan. 6, 2017) ("Oquendo Call") [Doc. 82-45] at 2.

(2) Customer Annette Dunn called Ryan on February 27, 2017, requesting help with her garage door:

Dunn: Ya'll [sic], when I

...