Robinson v. Hot Grabba Leaf, LLC

• Decision Date: 01 September 2021
• Docket Number: 19-cv-61614-GAYLES
• Citation: Robinson v. Hot Grabba Leaf, LLC, 19-cv-61614-GAYLES (S.D. Fla. Sep 01, 2021)
• Parties: MICHAEL ANDREW ROBINSON, Plaintiff, v. HOT GRABBA LEAF, LLC, Defendant.
• Court: U.S. District Court — Southern District of Florida

MICHAEL ANDREW ROBINSON, Plaintiff, v. HOT GRABBA LEAF, LLC, Defendant.

No. 19-cv-61614-GAYLES

United States District Court, S.D. Florida

September 1, 2021

ORDER

DARRIN P. GAYLES, UNITED STATES DISTRICT JUDGE

THIS CAUSE comes before the Court on Defendant Hot Grabba Leaf, LLC's Amended Motion to Vacate Default Pursuant to Federal Rules of Civil Procedure Rules 55(c) and 60(b) (the “Amended Motion”) [ECF No. 29].^[1] The Court has reviewed the Amended Motion and the record and is otherwise fully advised. For the reasons that follow, the Amended Motion is granted.

BACKGROUND

This action stems from an order by the United States Patent and Trademark Office's (“USPTO”) Trademark Trial and Appeal Board (“TTAB”) cancelling two federal trademark registrations that are owned by Plaintiff Michael Andrew Robinson and contain the words “GRABBA LEAF”. [ECF No. 1 at 1 ¶ 2]. In this action Plaintiff appeals the TTAB order and seeks its reversal. Id. at 1 ¶ 1.

I. The Trademark Trial and Appeal Board Decision

Plaintiff originally brought this action before the USPTO against Defendant, challenging Defendant's registration of the “HOT GRABBA NATURAL TOBACCO LEAF” trademark. Id. at 3 ¶ 12. Specifically, Plaintiff petitioned to cancel Defendant's registration and claimed that he was “the owner of Registration No. 4487117 for GRABBA LEAF for cigar wraps and of Registration No. 4461093 for GRABBA LEAF and design, also for cigar wraps .” [ECF No. 1-1 at 2]. Defendant filed a counterclaim in which it sought to cancel Plaintiff's “GRABBA LEAF” marks based on its descriptiveness. [ECF No. 1 at 3 ¶ 12]. On April 25, 2019, the TTAB denied Plaintiff's petition and granted Defendant's counterclaim to cancel Plaintiff's Registration Nos. 4487117 and 4461093, finding that the marks in those registrations were merely descriptive.^[2] [ECF No. 1-1 at 23]. As a result, the TTAB ordered the cancellation of Plaintiff's two registrations. [ECF No. 1 at 1 ¶ 2].

II. The Default Judgment in Federal Court

On June 27, 2019, Plaintiff brought this action against Defendant Hot Grabba Leaf, LLC, appealing the TTAB's decision and seeking reversal of the cancellation of Plaintiff's federal trademark registrations. [ECF No. 1]. On September 25, 2019, Plaintiff served Defendant with a summons and the Complaint at 45 Hempstead Turnpike, West Hempstead, New York 11552 (the “West Hempstead address”). [ECF No. 14]. On October 28, 2019, the Clerk of Court entered a default as to Defendant for its failure to plead or otherwise defend this action. [ECF No. 19]. On November 4, 2019, Plaintiff moved for entry of a default judgment against Defendant. [ECF No. 23]. On December 17, 2019, the Court granted the motion and entered a Final Default Judgment against Defendant, vacating the TTAB decision and cancelling Defendant's trademark registration for “Hot Grabba Natural Tobacco Leaf” (No. 4, 263, 417). [ECF Nos. 24 & 25]. On November 5, 2020, Defendant's counsel filed her Notice of Appearance before the Court. [ECF No. 27]. Defendant also filed a Motion to Vacate Default Pursuant to Federal Rules of Civil Procedure Rules 55(c) and 60(b). [ECF No. 28]. On November 6, 2020, Defendant filed its Amended Motion. [ECF No. 29].

III. The Underlying Factual Background

In June 2019, Defendant arranged to have its business offices moved in July 2019 from the West Hempstead address to a new office located at 49C North Franklin Street, Hempstead, New York 11550 (the “North Franklin address”). [ECF No. 28-2 at 1-2 ¶ 5]. After leaving the West Hempstead address, Defendant lost access to any mail and packages sent to that address. Id. In July 2019, Defendant instructed its bookkeeper/CPA to change Defendant's business address to the North Franklin address where required for business purposes. Id. at 2 ¶ 6. The bookkeeper/CPA changed the business address with the Internal Revenue Service but failed to do so with the New York State Secretary of State.^[3] Id. at 2 ¶ 7.

On August 28, 2020, Defendant received a notice that the USPTO cancelled Defendant's trademark registration (No. 4, 263, 417). Id. at 3 ¶ 15. That same day, Defendant contacted its previous counsel in the TTAB Proceedings, who advised that Defendant obtain counsel in Florida. Id. at 4 ¶ 16. On August 31, 2020, Defendant obtained counsel and first learned that: (1) Defendant's bookkeeper/CPA failed to change Defendant's business address with the New York State Secretary of State to the North Franklin address; (2) Plaintiff filed this action on June 27, 2019; (3) Plaintiff served Defendant with a summons and the Complaint at the West Hempstead address on September 25, 2019; and (4) the Court entered a final default judgment on December 17, 2019, ordering that Defendant's trademark registration (No. 4, 263, 417) be cancelled. Id. at 4- 5 ¶¶ 18-23. In September 2020, Defendant changed its business address with the New York State Secretary of State to the North Franklin address. Id. at 5 ¶ 24.

LEGAL STANDARD

I. Federal Rule of Civil Procedure 55

Rule 55 requires that “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). A default judgment may then be entered by the clerk “[i]f the plaintiff's claim is for a sum certain or a sum that can be made certain by computation . . . .” Id. at (b)(1). Alternatively, a district court may enter a default judgment upon the party applying to the district court for a default judgment. Id. at (b)(2). In the Eleventh Circuit, there is a “strong policy of determining cases on their merits” and, therefore, “default judgments are generally disfavored.” Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1244-45 (11th Cir. 2015) (per curiam) (quoting In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003)). As such, default judgments are considered “to be a drastic remedy that should be used sparingly and only in extreme situations where no other forms of relief are available.” Graveling v. Castle Mortg. Co., 631 Fed.Appx. 690, 698 (11th Cir. 2015) (per curiam) (citation and internal quotation marks omitted). The pleadings must provide a sufficient basis for entry of a default judgment to be warranted, a standard that is “akin to that necessary to survive a motion to dismiss for failure to state a claim.” Estate of Faull by Jacobus v. McAfee, 727 Fed.Appx. 548, 552 (11th Cir. 2018) (per curiam) (quoting Surtain, 789 F.3d at 1245).

II. Federal Rule of Civil Procedure 60

A district court “may set aside a final default judgment under [Federal Rule of Civil Procedure] 60(b).” Fed.R.Civ.P. 55(c). “The exclusive method for attacking a default judgment in the district court is by way of a Rule 60(b) motion.” Nat'l Loan Acquisitions Co. v. Pet Friendly, Inc., 743 Fed.Appx. 390, 391 (11th Cir. 2018) (per curiam) (citing Gulf Coast Fans, Inc. v. Midwest Elects. Imps., Inc., 740 F.2d 1499, 1507 (11th Cir. 1984)). On a proper motion, and if appropriate, a district court may relieve a party from default judgment based on:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.

Fed. R. Civ. P. 60(b).

The movant seeking relief under Rule 60(b) “must demonstrate a justification so compelling that the [district] court [is] required to vacate its order.” Cano v. Baker, 435 F.3d 1337, 1342 (11th Cir. 2006) (per curiam) (first alteration in original) (quoting Cavaliere v. Allstate Ins. Co., 996 F.2d 1111, 1115 (11th Cir. 1993)). “By its very nature, the rule seeks to strike a delicate balance between two countervailing impulses: the desire to preserve the finality of judgments and the incessant command of the court's conscience that justice be done in light of all the facts.” Havana Docks Corp. v. Norwegian Cruise Line Holdings, Ltd., 454 F.Supp.3d 1259, 1268 (S.D. Fla. 2020) (citation and internal quotation marks omitted). “[W]hether to grant the requested [Rule 60(b)] relief is . . . a matter for the district court's sound discretion.” Aldana v. Del Monte Fresh Produce N.A., Inc., 741 F.3d 1349, 1355 (11th Cir. 2014) (alteration in original) (quoting Cano, 435 F.3d at 1342). However, the defaulting party must bring a Rule 60(b) motion “no more than a year after the entry of the judgment . . . .” See Fed. R. Civ. P. 60(c)(1); see also Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 393 (1993) (“If a party is partly to blame for the delay, relief must be sought within one year under subsection (1) and the party's neglect must be excusable.”).

ANALYSIS

Defendant argues that setting aside the default judgment is warranted because it can show that it has a meritorious defense vacating the default judgment would not prejudice Plaintiff and good cause exists for its failure to respond to Plaintiff's Complaint.^[4] Defendant also argues that setting aside the underlying default is warranted because its default was not culpable or willful, there would be no prejudice to Plaintiff, and Defendant has a meritorious defense. The Court finds that Defendant has met its burden of showing that it is entitled to relief from the default judgment under Rule 60(b) and good cause warrants relief from the...