Strobel v. Rusch

• Decision Date: 03 January 2020
• Docket Number: No. CIV 18-0656 RB/JFR,CIV 18-0656 RB/JFR
• Citation: 431 F.Supp.3d 1315
• Parties: Volker STROBEL, Heike Strobel, and Hans Baur, in their individual capacities and on behalf of UNC Holding LLC and V.I.P. Drinks Botting LLC, Plaintiffs, v. Uwe RUSCH and DR. Mabel Rusch, Defendants.
• Court: U.S. District Court — District of New Mexico

431 F.Supp.3d 1315

Volker STROBEL, Heike Strobel, and Hans Baur, in their individual capacities and on behalf of UNC Holding LLC and V.I.P. Drinks Botting LLC, Plaintiffs,

v. Uwe RUSCH and DR. Mabel Rusch, Defendants.

No. CIV 18-0656 RB/JFR

United States District Court, D. New Mexico.

Signed January 3, 2020

Jeffrey L. Squires, Peacock Law P.C., Albuquerque, NM, for Plaintiffs.

Eric James Menhart, Lexero Law, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT C. BRACK, SENIOR U.S. DISTRICT JUDGE

Mr. Uwe Rusch began developing a brand of cordials in 1998 under the name CORDIALS V.I.P. Drinks. Mr. Rusch asserts ownership in the copyright to the brand and also registered the trademark to the brand's logo (the "Royal Logo"), which has been used to sell CORDIAL V.I.P. Drinks since 2005, primarily in Europe. In 2012, he formed UNC Holding LLC ("UNC-FL") in Florida to establish his business in the United States. In 2013 Mr. Volker Strobel, Mrs. Heike Strobel, Mr. Hans Baur, and Mr. Gregor Fischer agreed to invest money with Defendants in the CORDIALS V.I.P. Drinks business. The parties later agreed to dissolve UNC-FL and re-establish the business in New Mexico under the name UNC-NM. At some point, their business relationship soured. Plaintiffs contend that Defendants violated the parties' agreement and brought this lawsuit for a variety of tort and contract claims. Defendants have filed 22 affirmative defenses and 14 counterclaims and argue that Plaintiffs' actions have infringed on their rights and have made any purported contract unenforceable. Plaintiffs move to dismiss the counterclaims and strike certain affirmative defenses. The Court will grant both motions in part.

I. Factual Background¹

Mr. Rusch began developing a line of cordials in 1998. (Doc. 40 (Answer & Countercl.) ¶ 10.) He designed the Royal Logo for the CORDIALS V.I.P. Drinks brand and asserts that he has "sole ownership in the copyright of the design logo ...." (Id. ¶¶ 11–14.) He registered the CORDIALS V.I.P. Drinks logo as an international trademark through the World Intellectual Property Organization (WIPO) and later transferred ownership of the trademark to his wife, Dr. Mabel Rusch. (Id. ¶¶ 24–25.) He also "granted Dr. Rusch a non-exclusive license to ... use the Royal Logo copyright ... in connection with the sale, advertising, marketing, and services of CORDIALS V.I.P. Drinks." (Id. ¶ 21.) Mr. Rusch has used the Royal Logo to market CORDIALS V.I.P. Drinks in Europe since 2005. (Id. ¶¶ 15–18.)

Defendants moved to Florida in 2008 to establish their cordials business in the United States. (Id. ¶ 27.) They met the Strobels in 2012, and the Strobels became acquainted with the Rusches' cordials business. (Id. ¶¶ 30–35.) Mr. Strobel invested in another of Mr. Rusch's businesses, but after that enterprise failed "Mr. Strobel approached Mr. Rusch about investing in the CORDIALS V.I.P. Drinks business." (Id. ¶¶ 36–45, 55.) Mr. Strobel, Mr. Rusch, and Mr. Baur met in Arizona in February 2013 to hammer out details of the agreement. (Id. ¶¶ 57–58.) The parties later brought Mr. Fischer into the partnership. (Id. ¶ 59.)

The parties' Partnership Agreement for UNC, Holding LLC (the "Partnership Agreement") provided that Dr. Rusch would convey to the business her trademark rights. (See Doc. 41-A at 2.) In May 2013 Dr. Rusch executed two documents that would initiate the transfer of the CORDIALS V.I.P. Drinks trademark to UNC-FL. (Answer & Countercl. ¶ 60.) Mr. Strobel was responsible for submitting the documents and the appropriate payments to the correct authorities. (Id. ¶ 61.) Mr. Strobel told his partners that the transfer had been initiated, but he never finalized the transfer and Dr. Rusch still owns the trademark. (Id. ¶¶ 62–65, 112.)

In March 2014, Mr. Strobel asked Mr. Rusch to dissolve UNC-FL effective April 18, 2014, giving Mr. Strobel time to set up UNC-NM. (Id. ¶ 66.) Defendants contend that, despite his representations to the contrary, Mr. Strobel failed to comply with all requirements necessary to re-establish the business in New Mexico, such as retaining an attorney or transferring funds from UNC-FL's bank account to UNC-NM's bank account. (Id. ¶¶ 67–74.) Mr. Strobel took other actions without the input or approval of Mr. Rusch, including changing the business's CPA and dissolving one of the business's two independent subsidiaries. (Id. ¶¶ 75–81.)

In October 2016, Defendants received a letter from WIPO requesting renewal of the trademark, which was still listed under Dr. Rusch's name. (Id. ¶ 82.) Believing Mr. Strobel completed the transfer, Mr. Rusch had designed and printed product labels and updated the business's website to reflect that the trademark was owned by UNC, Holding LLC. (Id. ¶¶ 83–86.) Defendants asked Mr. Strobel to explain why the trademark had not been transferred, and he told them that the business had no money to pay for the renewal. (Id. ¶ 87.) Defendants contend that this statement was false. (Id. ¶ 88.) Defendants paid for the renewal costs themselves based on Mr. Strobel's representations that UNC-NM would repay them when it had funds. (Id. ¶ 89.)

In February 2018, Mr. Strobel asked Mr. Rusch to meet with him and Mr. Baur to discuss the future of UNC-NM, but Mr. Rusch refused to meet them without all of the members present. (Id. ¶¶ 94–95.) At Mr. Strobel's request, Mr. Rusch organized a General Meeting to be held on April 19, 2018. (Id. ¶¶ 96–97.) On the day of the meeting, Mr. Strobel emailed to cancel participation in the meeting on behalf of himself, Mrs. Strobel, and Mr. Baur. (Id. ¶ 98.) Mr. Rusch and Mr. Fischer, who together "formed a quorum with a majority of 56% of the voting rights" in the business, went forward with the meeting and voted to dismiss Mr. Strobel as CEO of the second independent subsidiary. (Id. ¶¶ 100–01.) Despite his dismissal, Mr. Strobel later "seized the bank account of" the subsidiary and wrote a check to the CPA. (Id. ¶ 103.) Mr. Strobel also discovered that Mr. Strobel had, through the CPA, "eliminated Mr. Rusch's ‘Income Shares’ in UNC-NM." (Id. ¶ 104.) In May 2018, Mr. Strobel transferred money from the UNC-FL bank account to his own personal bank account. (Id. ¶ 106.) On March 1, 2019, Defendants registered the Royal Logo with the United States Copyright Office. (Id. ¶ 114; see also Doc. 40-1.)

Plaintiffs filed this lawsuit on July 10, 2018, and contend that Defendants have infringed on UNC-NM's rights in the trademark and caused damage to Plaintiffs. (See Docs. 1; 62 (Am. Compl.).) Defendants assert 22 affirmative defenses and 14 counterclaims. (Doc. 40.) Plaintiffs now move to dismiss all of Defendants' counterclaims (Doc. 41) and to strike many of their affirmative defenses (Doc. 46).

II. Legal Standards

A. Motion to Dismiss Standard

In reviewing a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the Court "must accept all the well-pleaded allegations of the [counterclaim] as true and must construe them in the light most favorable to the [counterclaimant]." In re Gold Res. Corp. Sec. Litig. , 776 F.3d 1103, 1108 (10th Cir. 2015) (citation omitted). "To survive a motion to dismiss," the counterclaim does not need to contain "detailed factual allegations," but it "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.

"[W]hile ordinarily, a motion to dismiss must be converted to a motion for summary judgment when the court considers matters outside the complaint, see Fed. R. Civ. P. 12(d), matters that are judicially noticeable do not have that effect ...." Genesee Cty. Emps.' Ret. Sys. v. Thornburg Mortg. Sec. Tr. 2006-3 , 825 F. Supp. 2d 1082, 1122 (D.N.M. 2011) (citing Duprey v. Twelfth Judicial Dist. Court , 760 F. Supp. 2d 1180, 1192–93 (D.N.M. 2009) ).

[F]acts subject to judicial notice may be considered in a Rule 12(b)(6) motion without converting the motion to dismiss into a motion for summary judgment. This allows the court to take judicial notice of its own files and records, as well as facts which are a matter of public record. However, the documents may only be considered to show their contents, not to prove the truth of matters asserted therein.

Id. at 1122–23 (quoting Tal v. Hogan , 453 F.3d 1244, 1264 n.24 (10th Cir. 2006) ).

Plaintiffs ask the Court to take judicial notice of the Partnership Agreement (Doc. 41-A² ) attached to their motion, as it is referenced in the Amended Complaint and the Counterclaims, and it is central to the lawsuit. (See Doc. 41 at 2 (citing Radian Asset Assurance Inc. v. Coll. of the Christian Bros. of N.M. , No. CIV 09-0885 JB/DJS, 2011 WL 10977180, at *17 (D.N.M. Jan. 24, 2011) ).) See also Raja v. Ohio Sec. Ins. Co. , 305 F. Supp. 3d 1206, 1238 n.9 (D.N.M. 2018). Although Defendants question whether the Partnership Agreement is valid and enforceable, they do not dispute its existence or its authenticity. (See Doc. 49.) As the "[C]ourt may take notice only of the authenticity and existence of [judicially noticeable] documents, not the validity of their contents[,]" Port-A-Pour, Inc. v. Peak Innovations, Inc. , No. 13-CV-01511-WYD-BNB, 2015 WL 292913, at *3 (D. Colo. Jan. 20, 2015) (citation omitted), the Court finds it may consider the Partnership Agreement.

Similarly, the Court takes judicial notice of Defendants' March 1, 2019 registration of the Royal Logo with the United States Copyright Office, which they attached to their Answer and reference throughout their Counterclaims. (See Doc. 40-1.) While Plaintiffs contend that Mr. Rusch's claim to ownership of the copyright is invalid, they do not dispute the existence and authenticity of the...