Garden Catering-Hamilton Ave., LLC v. Wally's Chicken Coop, LLC

• Decision Date: 28 February 2014
• Docket Number: Civil No. 3:11cv1892 JBA.
• Citation: 30 F.Supp.3d 117
• Court: U.S. District Court — District of Connecticut
• Parties: GARDEN CATERING–HAMILTON AVENUE, LLC, et al., Plaintiffs, v. WALLY'S CHICKEN COOP, LLC, et al., Defendants.

30 F.Supp.3d 117

GARDEN CATERING–HAMILTON AVENUE, LLC, et al., Plaintiffs

v.WALLY'S CHICKEN COOP, LLC, et al., Defendants.

Civil No. 3:11cv1892 JBA.

United States District Court, D. Connecticut.

Signed Feb. 28, 2014.

Order Denying Reconsideration April 4, 2014.

Gerard N. Saggese, III, James C. Riley, Whitman, Breed, Abbott & Morgan, Greenwich, CT, for Plaintiffs.

Anthony J. Medico, Law Offices of Medico and Napolitano, Greenwich, CT, James P. Doyle, Jr., Rhodes Technologies, Coventry, RI, for Defendants.

RULING ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

JANET BOND ARTERTON, District Judge.

Plaintiffs Garden Catering–Hamilton Avenue, LLC (“Garden Catering”) and Frank J. Carpenteri, Sr. allege that former employee Defendant Michael Natale prepared to open a rival restaurant, Defendant Wally's Chicken Coop, LLC (“Wally's”) while employed by Garden Catering, and in doing so, and in the subsequent operation of Wally's, (1) Defendant Natale breached his fiduciary duty to Garden Catering (Count One); (2) Defendants violated the Lanham Act, 15 U.S.C. § 1125(a) by this unfair competition (Count Two); (3) Defendants violated Connecticut common law prohibitions against unfair competition (Count Three); (4) Defendants violated the Connecticut Unfair Trade Practices Act (“CUTPA”) (Count Four); and (5) Defendants were unjustly enriched (Count Five). (See Compl. [Doc. # 1] ¶¶ 64–89.).

Defendants now move [Doc. # 68] for summary judgment on all counts. For the reasons that follow, Defendants' motion is granted in part and denied in part.

I. Facts

Garden Catering, founded in Greenwich, Connecticut in 1977 and currently run by Plaintiff Frank J. Carpenteri, Sr. is a restaurant chain with multiple locations in Connecticut and New York. (Carpenteri, Sr. Aff., Ex. 17 to Pls.' Loc. R. 56(a) 2 Stmt. [Doc. # 72] ¶¶ 5–8.).

Defendant Michael Natale worked at Garden Catering on an occasional part-time basis as a cashier from the 1990s until August 2011. Starting in March or April 2011, Natale had a discussion with another Garden Catering employee, Philip Michael Pittocco, in which Natale expressed his interest in opening a restaurant in the Storrs area and asked Pittocco to look for an available space near the University of Connecticut campus. (See M. Natale's Resp. to Pls.' 1st Req. for Admis. (“Natale Admis.”), Ex. 5 to Pls.' 56(a)2 Stmt. ¶¶ 1, 2.) During approximately the same period, Natale prepared a business plan and budget for his contemplated restaurant, communicated with Garden Catering's food supplier, U.S. Foods, Inc., and inquired about leasing a space for his restaurant in Storrs. (Lisa Natale Dep. Tr., Ex. 14 to Pls.' 56(a)2 Stmt. at 75–76, 89; Carpenteri, Jr. Decl., Ex. 19 to Pls.' 56(a)2 Stmt. ¶ 33.).

By June 2011, with his brother Jeffery Natale, who had also worked for Garden Catering on an occasional basis for a number of years, Defendant Natale had formed Wally's as a limited liability company in Connecticut and entered into a lease for what would become “Wally's Chicken Coop” at 134 North Eagleville Road in Storrs, Connecticut. (Natale Admis. ¶¶ 1, 6–7.) In July 2011, Defendant Natale signed a lease for a residential apartment in Tolland, Connecticut for himself, his brother, and another employee. (M. Natale Dep. Tr., Ex. 10 to Pls.' 56(a)2 Stmt. at 228–31.) In an early August 2011 meeting with a sales manager for Garden Catering's food supplier, U.S. Foods, Jeffrey Natale explained that Wally's would be “just like” Garden Catering. (Dutton Decl., Ex. 23 to Pls.' 56(a)2 Stmt. ¶ 10.) On August 8, 2011, Garden Catering's head fry cook, Marcos Zuniga unexpectedly announced his intention to resign in two weeks. Zuniga had never previously shown signs of discontent and was initially evasive when Carpenteri, Jr. confronted him. He later explained that Natale was opening a restaurant in Storrs, and had offered him a higher wage and room and board as an enticement to join.¹ Up to that point, Natale had been able to keep his plans secret from Plaintiffs, and when Carpenteri, Jr., confronted him by telephone, he denied that he was planning to open a competing business. Plaintiffs' attempts to convince Zuniga to remain at Garden Catering were initially successful, but ultimately he announced that he was leaving to join Defendants. (Carpenteri, Jr. Decl. ¶¶ 22–29.).

Once Natale opened Wally's, Plaintiffs allege that he infringed a number of their trademarks. Plaintiffs hold a registered trademark for the name and logo of “Garden Catering,” and claim a number of common law trademarks: “Bits” (for chicken nuggets), “Cones” (for battered and fried mashed potato balls), “the Hotsy” (referring to the various sandwiches topped with chili), “the Special” (a combination meal with half a pound of chicken nuggets, one side, and a soda), “the Junior Special” (“the Special” with a quarter pound of chicken), “the Boss Special” (“the Special” with a pound of chicken), and the “Homerun Special” (consisting of chicken nuggets with chili and cheese, a side and a soda). (Carpenteri, Sr. Decl. ¶¶ 11–12, 26.) Plaintiffs claim that Wally's menu, marketing, and products have infringed these trademarks.

It is undisputed that Wally's refers to its chicken nuggets as “bits,” offers “puds,” which are identical to Garden Catering's “Cones,” and offers two “Topsy” sandwiches, both of which are topped with chili. (Wally's Resp. to Pls.' 1st Req. for Admis, Ex. 6 to Pls.' 56(a)2 Stmt. ¶¶ 9, 11.) Wally's also offers several “combo” meals that track the “specials” offered by Garden Catering.² “The Wally” is a medium portion of “chicken bits” and is available with small fries and a can of soda for an extra $1. A smaller version of this combination is referred to as “The Mini” and larger versions are “The Mongo,” and “The Husky.” (Wally's September 2011 Menu, Ex. 27 to Pls.' 56(a)2 Stmt.).

Wally's pricing tiers for its combination meals and sides correspond with the tiers offered by Garden Catering, and Wally's serves some of its orders in insulated bags similar to those used by Garden Catering. (Wally's Admis. ¶¶ 18–22.) Plaintiffs contend that these similarities have led customers to incorrectly conclude that there is an affiliation between Wally's and Garden Catering. As evidence, it appends postings from Wally's Facebook page, that include various comments from members of the public linking the two, such as a user comment that “Anyone who likes Garden Catering, or who is looking to eat some great food for a great price needs to check out Wally's Chicken Coop.” Another posting stated “Thank god someone has brought the joy of GC to Storrs.” (Wally's Chicken Coop Facebook Page, Ex. 1 to Pls.' 56(a)(2) Stmt. at 1; Wally's Admis. ¶ 36–37.)

Defendants acknowledge that some customers have referenced “Garden Catering” while at Wally's, and Wally's employees have told customers that some of the food served by Wally's is similar to that served at Garden Catering. (Wally's Admis.

¶¶ 32–35.) For example, shortly after Wally's opened, a former Garden Catering employee visited Wally's at the direction of Carpenteri, Sr., and Pittocco told him that Wally's was “like Garden Catering, but we're better” and that the “Wally's Special” was the same as Garden Catering's “The Special.” Natale said that “we are kinda like” Garden Catering. (Delisi Decl., Ex. 25 to Pls.' 56(a)2 Stmt. ¶¶ 6, 8.).

Plaintiffs assert that Defendants have wrongfully appropriated their confidential business information and intellectual property in their operation of Wally's. As the owner of Garden Catering's registered and common law trademarks, Carpenteri, Sr. derives substantial revenue from selling licenses to use such intellectual property as well as from his own operation of Garden Catering restaurants and catering services. Plaintiffs assert that they have invested significant capital, time, and effort into the development of their brand, developing a reputation for high quality restaurants, and consumer goodwill. As a result, Garden Catering's trademarks and business information are extremely valuable assets. (See Carpenteri, Sr. Decl. ¶¶ 7–22.) Plaintiffs inform their employees that certain information is confidential, such as the manner in which its chicken nuggets are prepared, and require them to sign a confidentiality agreement.³ Certain of Plaintiffs' agreements with suppliers also include confidentiality provisions regarding information such as pricing terms. (Id. ¶¶ 31–34.).

Plaintiffs assert that Defendant Natale exhibited disloyalty and unfairly competed with them while he was still employed by Garden Catering when he recruited two of Plaintiffs' employees, developed a business plan using Garden Catering's confidential business information, met with its food distributor, and took all the necessary steps to incorporate and open up his competing venture.

II. Discussion ⁴

Defendants contend that because Wally's is located approximately 104 miles away from Plaintiffs' store, and Plaintiffs hold no patents or other propriety protection on any of their menu items, they have not engaged in unfair competition. (Defs.' Mem. Supp. [Doc. # 68–2] at 2–3.) Plaintiffs contend that that Defendants' admitted sales of similar products “conclusively establish” Plaintiff's liability under the Lanham Act and unfair competition under both Connecticut common law and CUTPA. (Pls.' Opp'n [Doc. # 71] at 10.) Although Plaintiffs have not cross-moved for summary judgment, they “request that the Court grant them summary judgment sua sponte. ” (Id. at 11.).

A. Local Rule 56

Plaintiffs contend that Defendants are not entitled to summary judgment because they have failed to comply with the requirements of Local Rule 56. That rule requires that a party moving for summary judgment must submit a “Local Rule 56(a)1 Statement,” which sets forth “a concise statement of each material fact as to which the moving party contends there is no genuine issue to be tried,” D. Conn. Loc. R. 56(a) 1, “followed by a specific citation to (1) the...