Moon Seed LLC v. Weidner
| Decision Date | 27 May 2022 |
| Docket Number | 3:20-cv-00104-RGE-SBJ |
| Citation | 604 F.Supp.3d 780 |
| Parties | MOON SEED LLC, Plaintiff, v. Dru WEIDNER and Moon Seed Service LLC, Defendants. |
| Court | U.S. District Court — Southern District of Iowa |
Timothy J. Zarley, John Gilbertson, Joshua James Conley, Zarley Law Firm PLC, Des Moines, IA, for Plaintiff.
Janice M. Thomas, Lamson, Dugan & Murray, LLP, West Des Moines, IA, Amanda Mestan Richards, Betty Neuman & McMahon PLC, Davenport, IA, Benjamin J. Kenkel, Bradshaw Fowler Proctor & Fairgrave, P.C., Des Moines, IA, for Defendants.
Plaintiff Moon Seed LLC sues Defendants Dru Weidner and Moon Seed Service LLC for unfair competition under the Lanham Act, common law trademark infringement under Iowa law, and unjust enrichment under Iowa law. Plaintiff moves for summary judgment on its claims for unfair competition and common law trademark infringement. Defendants filed a cross motion for summary judgment on all of Plaintiff's claims.
For the reasons set forth below the Court grants Plaintiff's motion for partial summary judgment. The Court denies Defendants’ motion for summary judgment.
The following facts are either uncontested or, if contested, viewed in the light most favorable to Plaintiff for purposes of Defendants’ motion for summary judgment. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
In the mid-1990s, Dennis Moon formed Moon Seed to sell corn seeds and soybean seeds to Iowa farmers. Pl.’s Sealed Statement Material Facts Supp. Mot. Partial Summ. J. ¶ 1, ECF No. 52-2. In 2011, Dan Anderson became a partner in Moon Seed. Id. ¶ 2. That same year, Anderson formally organized the business with the Iowa Secretary of State to create Plaintiff Moon Seed LLC. Id. ¶ 3; Pl.’s Sealed App. 1 Supp. Mot. Partial Summ. J. APP. 010–13, ECF No. 52-3. In 2015, Dennis Moon sold his ownership stake in Plaintiff to Anderson for $540,000. ECF No. 52-2 ¶ 4; see also Defs.’ Sealed Resp. Pl.’s Statement Material Facts ¶ 4, ECF No. 62-1. Prior to Dennis Moon's sale of his interest, Plaintiff utilized a warehouse owned by Dennis Moon in Brooklyn, Iowa. ECF No. 52-2 ¶ 6; ECF No. 62-1 ¶ 6; Defs.’ Sealed App. Part 1 Supp. Mot. Summ. J. Def. App. p. 28, ECF No. 63-2 (Dennis Moon's declaration). After Dennis Moon sold his interest in Plaintiff, he leased the warehouse to Plaintiff. ECF No. 52-3 at APP. 182–85. From at least 2000 until May 2021, Dennis Moon's property featured a "Moon Seed" sign. ECF No. 52-2 ¶ 7; ECF No. 62-1 ¶ 7; Defs.’ Sealed Statement Material Facts Supp. Mot. Summ. J. ¶ 140, ECF No. 63.
In 2014, Weidner began working for Plaintiff. Weidner Decl. ¶ 7, ECF No. 52-3 at APP. 166; ECF No. 52-2 ¶ 8; ECF No. 62-1 ¶ 8. As a salesperson for Plaintiff, Weidner established relationships with prospective customers, sold seed, and delivered seed to customers. ECF No. 52-2 ¶ 39. A feature of the seed sales industry is the relationship between salespersons and customers. Pl.’s Sealed Resp. Defs.’ Statement Material Facts ¶ 118, ECF No. 75-1. It is important for customers to have "trust and confidence" in their salesperson. Id. ¶ 119. Seed sales are conducted almost entirely through direct person-to-person transactions. ECF No. 52-2 ¶ 36. The season for seed sales starts in "August/September." ECF No. 75-1 ¶ 134. By mid-January, two-thirds of all seed sales should be complete. Id. ¶ 136. Some seed purchases take months to complete. See ECF No. 75-1 ¶ 131.
In 2019, Anderson struggled with alcohol. See ECF No. 52-2 ¶ 47. Anderson was hospitalized for some duration of November 2019. ECF No. 75-1 ¶ 166. Weidner stepped in to finalize some of Anderson's seed orders. ECF No. 75-1 ¶ 169. At the end of 2019, Weidner decided to go into business on his own. Weidner Dep. 105:2–10, ECF No. 52-3 at APP. 070. However, Weidner maintained his employment with Plaintiff until late July 2020. ECF No. 52-2 ¶ 15; ECF No. 62-1 ¶ 15. On July 17, 2020, before his resignation, Weidner filed with the Iowa Secretary of State to create "Moon Seed Service LLC." ECF No. 52-2 ¶ 17; ECF No. 62-1 ¶ 17.
Prior to July 2020, Plaintiff sold seed from Wyffels, Stine, and Kruger. See Anderson Dep. 99:17–19, ECF No. 63-3 at Def. App. p. 89. On July 24, 2020, Wyffels terminated its seed representative agreements with Plaintiff. ECF No. 52-2 ¶ 21; 62-1 ¶ 21. That same day, Weidner resigned from his employment with Plaintiff. ECF No. 52-2 ¶ 15; ECF No. 62-1 ¶ 15. On August 19, 2020, Weidner, on behalf of Moon Seed Service, entered into a seed representative agreement with Wyffels. ECF No. 52-2 ¶ 23; ECF No. 62-1 ¶ 23. That same month, Stine terminated its dealer agreement with Moon Seed and entered into a dealer agreement with Weidner and Moon Seed Service. ECF No. 52-2 ¶ 24; ECF No. 62-1 ¶ 24. Around that time, Kruger also terminated its dealer agreement with Moon Seed and entered into a dealer agreement with Weidner and Moon Seed Service. ECF No. 52-2 ¶ 25; ECF No. 62-1 ¶ 25. When Weidner first met with clients in his capacity as the owner of Moon Seed Service, he informed them he "parted ways with Dan [Anderson]." Weidner Dep. 169:15–20, ECF No. 52-3 at APP. 109.
In November 2020, Dennis Moon entered into a lease agreement with Weidner and Moon Seed Service to rent the Brooklyn, Iowa warehouse to Moon Seed Service. ECF No. 52-2 ¶ 27; see ECF No. 63-1 at Def. App. p. 317. In December 2020, Dennis Moon and Plaintiff entered into a "Settlement Agreement and Release" whereby Dennis Moon terminated Plaintiff's lease agreement for the Brooklyn, Iowa warehouse and released Plaintiff from obligations under the lease as of January 1, 2021. ECF No. 52-3 at APP. 140. Some customers drove their own vehicles to the Brooklyn, Iowa warehouse to pick up their seed orders. See ECF No. 52-2 ¶ 37; ECF No. 62-1 ¶ 37. Moon Seed Service sells seed from Wyffels, Stine, and Kruger—the same brands Plaintiff used to sell. Weidner Dep. 169:7–14, ECF No. 52-3 at APP. 109; see Anderson Dep. 99:17–19, ECF No. 63-3 at Def. App. p. 89. The "Moon Seed" sign remained in front of the Brooklyn, Iowa warehouse until May 2021, when it was removed in response to a preliminary injunction issued by the Court. ECF No. 62-1 ¶ 28. Defendants contend Weidner had no authority to remove the sign. ECF No. 75-1 ¶¶ 141–42. At the hearing on the parties’ motions, Defendants’ counsel represented the sign was not "removed by [Defendants]." Mots. Hr'g Tr. 30:3, ECF No. 78. In a deposition following the hearing on the parties’ motions, Dennis Moon testified he "suppose[d]" Weidner removed the sign, but he was not there when "they ... took it down." Moon Dep. 134:13–135:6, Pl.’s Ex. 3 Supp. Emergency Mot. Show Cause, ECF No. 79-2 at 012–13.
Weidner testified that he chose his business name to honor Dennis Moon. See Weidner Dep. 144:4–13, ECF No. 52-3 at APP. 092. Weidner further testified he added the word "Service" to his business name because he could not "call it exactly what Dan [Anderson] calls [his business]." Id. at 143:15–20.
In 2020, Defendants sponsored Pheasants Forever of Poweshiek County's Annual Banquet. ECF No. 75-1 ¶¶ 236–38. Plaintiff had sponsored the Annual Banquet in previous years. Id. ¶ 237. Each year, the Annual Banquet sponsors were recognized in a booklet. Id. ¶ 236. When Defendants sponsored the Annual Banquet, volunteers for Pheasants Forever created a sponsor recognition page featuring "Moon Seed Service" with the same font and appearance as the "Moon Seed" logo. See Ryan Decl. ¶ 28, ECF No. 63-2 at Def. App. p. 34 ; compare ECF No. 52-3 at APP. 159, with id. at APP. 172. Rick Ryan, the President of Pheasants Forever, is a former independent contractor for Plaintiff and current sub-representative for Moon Seed Service. See ECF No. 75-1 ¶¶ 234–35; Weidner Dep. 210:17–25, ECF No. 52-3 at APP. 115. Ryan states he advised Pheasants Forever volunteers Moon Seed Service was a new sponsor. Ryan Decl. ¶ 28, ECF No. 63-2 at Def. App. p. 34. Ryan states the volunteers used the template from the previous year's booklet to create Moon Seed Service's sponsorship recognition page. Id. ¶ 27. Weidner had no input in the design for the sponsorship recognition page. Weidner Decl. ¶¶ 37–38, ECF No. 52-3 at APP. 170.
Plaintiff filed an action in this Court alleging, in part, claims for unfair competition in violation of the Lanham Act (Count I); common law trademark infringement under Iowa law (Count II); and unjust enrichment under Iowa law (Count III). Second Am. Compl., ECF No. 68; see also Compl., ECF No. 1. Plaintiff also moved for a preliminary injunction under the Lanham Act to enjoin Defendants from using the "Moon Seed" mark or any similar mark. ECF No. 25. The Court granted Plaintiff's motion. ECF No. 38. Plaintiff now moves for summary judgment on its unfair competition and trademark infringement claims in Counts I and II. ECF No. 53. Defendants resist Plaintiff's motion. ECF No. 60. Defendants filed a cross motion for summary judgment on all Plaintiff's claims. ECF No. 61. Plaintiff resists Defendants’ motion. ECF No. 75.
The parties’ motions came before the Court for hearing on February 2, 2022. Mots. Hr'g Mins, ECF No. 77. Attorneys John Gilbertson and Joshua Conley appeared on behalf of Plaintiff. Id. Attorney Amanda Richards appeared on behalf of Defendants. Id. Having considered the parties’ oral arguments and supporting briefs and exhibits, the Court rules on the parties’ pending motions.
Additional facts are set forth below as necessary.
Under Federal Rule of Civil Procedure 56, the Court must grant a party's motion for summary judgment if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, ...
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