Good 'Nuff Garage, LLC v. McCulley
| Decision Date | 26 September 2022 |
| Docket Number | Civil Action 3:21cv571 |
| Parties | GOOD 'NUFF GARAGE, LLC, D/B/A GNG MOTORSPORTS, Plaintiff, v. COLIN MCCULLEY, CAITLYN VEHRS, and CHESTER DOG ENTERPRISES LLC, Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
M Hannah Lauck United Stares District Judge
This matter comes before the Court on Defendants' Motion to Dismiss (the “Motion”) pursuant to Federal Rules of Civil Procedure 12(b)(1)[1] and 12(b)(6).[2] (ECF No. 17.) Plaintiff Good 'Nuff Garage, LLC (“Good 'Nuff Garage”) responded to the Motion, (ECF No. 20), and the Defendants replied, (ECF No. 23). Accordingly, this matter is ripe for adjudication. The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. The Court exercises jurisdiction pursuant to 28 U.S.C. §§ 1331,[3] 1367(a).[4] For the reasons stated below, the Court will deny Defendants' Motion to Dismiss.
I. Factual and Procedural Background
This matter stems from actions taken by Defendants Chester Dog Enterprises LLC (“Chester Dog”), Caitlyn Vehrs and Colin McCulley regarding alleged infringement of the “GNG” and “GNG Motorsports” marks and Defendants' refusal to return the administrative access to the GNG business Facebook profile. In its Complaint, Good 'Nuff Garage seeks both damages as well as preliminary and permanent injunctive relief under the Lanham Act, 15 U.S.C. § 1125(a), and the Computer Fraud and Abuse Act (the “CFAA”), 18 U.S.C. § 1030.[5] (ECF No. 1 ¶¶ 106,121.)
On January 20, 2017, Good TSIuff Garage, LLC assumed the name of “GNG Motorsports”-an abbreviation of “Good 'Nuff Garage” followed by the generic term “Motorsports.” (ECF No. 1 ¶¶ 22, 28.) After assuming this name, GNG Motorsports established itself as a “go-to service provider” for the Subaru motorsport community within the greater Richmond area and the entire Commonwealth of Virginia. (ECF No. 1 ¶ 20.) Since that time, Good *Nuff Garage has used the marks “GNG” and “GNG Motorsports” continuously within commerce, both in association with products and services offered as well as in communications directed toward the customers and vendors with whom Good 'Nuff Garage maintains active relationships. (ECF No. 1 ¶¶ 25-26.)
• In addition to appearing on Good 'Nuff Garage's place of business, the “GNG” and “GNG Motorsports” marks appeared within both traditional physical merchandising media and sponsored promotions that were disseminated using the Facebook profile affiliated with Good 'Nuff Garage. (ECF No. 1 ¶¶ 30-35.) Good 'Nuff Garage maintains that both “GNG” and “GNG Motorsports” are either “arbitrary or otherwise inherently distinctive mark[s] in commerce.” (ECF No. 1 ¶ 29.) Indeed, Plaintiff asserts that through the “continuous and exclusive use ... in commerce for numerous years” the “GNG” and “GNG Motorsports” marks “have become well and favorably known throughout Virginia.” (ECF No. 1 ¶ 38.) Good *Nuff Garage states that the highly specialized nature of the products and services they offer places special emphasis on existing relationships with repeat customers, which exacerbates any threat to the goodwill associated with the “GNG” and “GNG Motorsports” marks. (ECF No. 1 ¶ 27.)
Good Nuff Garage employed Defendant Colin McCulley as the shop manager, though McCulley was not a partial owner or member of the business. (ECF No. 1 ¶ 39). However, on or around June 14,2021, McCulley approached the owner of Good Nuff Garage, Joshua Barnhill, and indicated a desire to purchase Good 'Nuff Garage. (ECF No. 1 ¶ 49.) After Barnhill revealed the purchasing price for Good 'Nuff Garage, “McCulley became upset.” (ECF No. 1 ¶ 50.)
On July 12,2021, McCulley resigned from the position as shop manager. (ECF No. 1 ¶ 51.) Following McCulley's resignation, two Good 'Nuff Garage employees, Defendants Adam Meade and Caitlyn Vehrs, also resigned from their respective positions. (ECF No. 1 ¶ 52.), “McCulley solicited [both] employees to resign their employment with [Good *Nuff Garage] to start a competing business.” (ECF No. 1 ¶ 54.) Because Meade and McCulley were the only auto technicians able to service vehicles,” their respective resignations forced Good Nuff Garage's “to delay servicing customers.” (ECF No. 1 ¶ 58.) Due to this delay, Plaintiff “lost substantial business.” (ECF No. 1 ¶ 58.) As of the filing of the Complaint, Good 'Nuff Garage “has lost $97,000 in revenue and $14,500 in lost profit” and has been required to “return at least $22,411.05 to customers.” (ECF No. 1 ¶¶ 59-60.)
“[P]rior to ... giving [his] notice of resignation,” McCulley approached numerous customers to convince them to remove their vehicles from Good Nuff Garage's premises and bring them to his competing business. (ECF No. 1 ¶ 57.) Within twenty-four hours of the employees' resignations, “numerous customers of [Good Nuff Garage] removed their vehicles from” the shop. (ECF No. 1 ¶ 55.) Some “of those customers specifically removed their vehicles [from Good 'Nuff Garage's shop] to take their vehicles to Defendant McCulley for service.” (ECF No. 1 ¶ 56.)
Following McCulley, Meade, and Vehrs's resignations, Good 'Nuff Garage found itself unable to service its existing customers. (ECF No. 1 ¶ 78.) Asa result, Good 'Nuff Garage elected “to sell its existing inventory and parts at an undervalued price” and terminate its lease of its garage space. (ECF No. 1 ¶ 78.) Since the termination of that lease, Cambo Auto Center, LLC-an auto service provider now leasing the garage space-“has ... permitted Defendants (either individually or through [Defendant Chester Dog Enterprises (‘Chester Dog')]), to lease” or else “otherwise use Plaintiff's prior garage to start a repair and service shop.” (ECF No. 1 ¶79.)
Chester Dog has created a repair and service shop at Good 'Nuff Garage's former premises operating under the name “GNG Performance” that uses a mark resembling the marks that Good TSIuff Garage had previously publicized at that location. (ECF No. 1 ¶¶ 80-81.) Indeed, the similarity between the GNG Motorsports and GNG Performance marks has led to several instances of actual confusion between the parties among both consumers and vendors. (ECF No. 1 ¶¶ 72-73, 93.) For example, Good 'Nuff Garage avers that several Facebook posts made during August of 2021 indicated to the viewer that GNG Performance was a continuation of GNG Motorsports. (ECF No. 1 ¶¶ 82-83.) Good 'Nuff Garage further submits that Defendants, either individually or through the collective organization of Chester Dog, acted to impair Good 'Nuff Garage's existing contracts or to substitute GNG Performance for Good 'Nuff Garage within existing contractual relationships. (ECF No. 1 ¶¶ 86-92.)
Prior to both his employment with Good 'Nuff Garage and the official creation of Good 'Nuff Garage as a business enterprise, McCulley generated a GNG Motorsports page under the initial name “Good Nuff Garage [sic]” using his personal Facebook account. (ECF No. 1 ¶ 45.) Following the organization of Good 'Nuff Garage as a business entity, McCulley “assisted Plaintiffin transferring the ‘Good Nuff Garage [sic]' page to Plaintiff s business Facebook page, which included changing the ‘Good Nuff Garage [sic] Facebook page to Plaintiff s business page under the name ‘GNG Motorsports,”' (ECF No. 1 ¶ 46). After this transfer, the Facebook page was used for Good 'Nuff Garage's business purposes, including that Good 'Nuff Garage had at several points paid for promotions on the Facebook platform using that page. (ECF No. 1 ¶48.)
■ McCulley continued to use the GNG Motorsports Facebook page after his employment with Plaintiff terminated and refused to return the administrative access to the page. (ECF No. 1 ¶¶ 61-62.) On July 12, 2021, McCulley made post on the page, stating that the message was “a personal post by Colin [McCulley]” despite the page's designation as a business page. (ECF No. 1 ¶ 61.) McCulley also used his administrative privileges to change the contact email associated with the page to one which Good 'Nuff Garage could not access, effectively preventing them from reassuming control of the page. (ECF No. 1 ¶ 63.) Good 'Nuff Garage made several attempts to contact McCulley regarding the return of the administrator privileges, but McCulley failed to return the access to the page. (ECF No. 1 ¶¶ 64, 67.)
On July 17,2021, Good 'Nuff Garage's outside counsel sent McCulley a cease and desist letter requesting the return of the administrator credentials to Good 'Nuff Garage. (ECF No. 1 ¶ 67.) However, on or before July 26, 2021, in response to the cease and desist letter, McCulley deleted the GNG Motorsports Facebook page. (ECF No. 1 ¶ 68.)
On September 2, 2021, Good 'Nuff Garage filed its eight-count Complaint. (ECF No. 1) In Count I, Good 'Nuff Garage alleges that Defendants engaged in False Designation of Origin and/or Trademark Infringement under the Lanham Act (15 U.S.C. § 1125(a)). (ECF No. 1 ¶ 106.) In Count II, Good Nuff Garage submits that McCulley and Chester Dog violated the Computer Fraud and Abuse Act, (18 U.S.C. § 1030). (ECF No. 1 ¶ 121.) In Counts III and IV, Good Nuff Garage claims that McCulley and Vehrs breached their duty of loyalty and fiduciary duty of loyalty under Virginia law. (ECF No. 1 ¶¶ 132,141.) Finally, in Counts V through VIII, Good Nuff Garages alleges tortious interference with existing or expected contractual relations and prospective business, unfair competition in violation of Virginia law, and violations...
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