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Century 21 Real Estate LLC v. Realtycomp.Com

United States District Court, N.D. California

March 6, 2015

REALTYCOMP.COM, et al., Defendants.


EDWARD M. CHEN, District Judge.

Plaintiff Century 21 Real Estate LLC (Century 21) "is one of the world's leading franchisors of real estate brokerages." Docket No. 20-12 at ¶ 3. Defendant is a former franchisee of Century 21 that sometimes did business as Century 21 ScottKeys Properties or Century 21 Scott Keys Properties. Id. at ¶ 1; see also Docket No. 1 at ¶ 6. Defendants Tjoman Subiono Buditaslim ( a.k.a. Joe Lim) (hereinafter Lim) and John Scott each signed a personal "Guaranty of Payment and Performance" in connection with RealtyComp's obligations under its Franchise Agreement with Century 21. Docket No. 1 at ¶ 18; see also Docket No. 20-17 (Franchise Agreement) at 48-49.

After Defendants failed to respond to Century 21's complaint, the Clerk of this Court entered default against the Defendants on December 10, 2014. See Docket No. 18. Century 21 thereafter moved this Court for entry of default judgment. See Docket No. 20. A hearing was held on March 5, 2015. Having considered the Plaintiff's brief and accompanying submissions, the Court hereby GRANTS the motion for default judgment.


On March 16, 2004, Defendant RealtyComp entered into a Franchise Agreement (the Agreement) with Century 21. Franchise Agreement at 46. Defendants Lim and Scott each signed the Agreement on behalf of RealtyComp as an "Authorized Officer and Individually." Id.

Under the Agreement, RealtyComp became a franchisee of Century 21 as a real estate brokerage business. Docket No. 20-16 at ¶ 4. According to the Agreement, Century 21 promised to (among other things) "grant a non-exclusive license to RealtyComp to utilize Century 21 trademarks and [its] marketing system." Id. at ¶ 5. In return, RealtyComp agreed (among other things) to pay to Century 21: (1) six percent of its gross revenues as "royalty fees"; and (2) two percent of its gross revenues for a "National Advertising Fund" (NAF). Id. "RealtyComp also agreed to permit Century 21 to audit its books and records at any reasonable time and agreed to pay, with interest, any sums determined to be owing based on [such an] audit." Id. Defendants Lim and Scott each signed "a Guaranty of Payment and Performance" in favor of Century 21, personally guaranteeing all of RealtyComp's obligations under the Agreement. See Franchise Agreement at 48-49 (providing that each "Guarantor does hereby, jointly and severally, to the extent herein provided, guaranty to CENTURY 21 the prompt payment and performance, when due of all obligations of Franchisee under [the] Franchise Agreement").

In addition to the Agreement, Defendants also entered into two "Account Balance Promissory Notes" (the Notes) in the amounts of $13, 876.72 and $15, 327.80 respectively. See Docket Nos. 20-18, 20-19 (Promissory Notes). Pursuant to the Notes, the Defendants promised to repay Century 21 the loaned amounts in eleven monthly installments of $500 commencing March 1, 2012, with a final balloon payment of $25, 128.70 due on February 15, 2013. Docket No. 20-16 at ¶ 8. Upon termination of the Franchise Agreement, the Notes "could be accelerated and [become] due immediately following termination." Id.

Finally, Defendant RealtyComp entered into a Security Agreement with Century 21 to secure its obligations under the Franchise Agreement and the Promissory Notes. See Docket No. 20-20 (Security Agreement). The Security Agreement grants Century 21 a security interest in certain collateral of RealtyComp, including "all accounts, accounts receivable, contract rights, leases, furniture... movable trade fixtures" and the like. Id.; see also Docket No. 20-16 at ¶ 10.

Sometime around October 2013, Century 21 learned that Defendants had "failed to report on closed transactions and pay fees when due, including royalty and NAF fees, constituting a breach of the [A]greement." Docket No. 20 at 5; see also Docket No. 20-16 at ¶¶ 12-13. Pursuant to Section 17M of the Agreement, Century 21 sent a "notice of intent to terminate and opportunity to cure" letter to Defendants stating that Defendants were in default, and giving Defendants until December 2, 2013, to cure the default by paying $47, 217.75 - the amount then due and owing Century 21 under the Agreement. Docket No. 20-16 at ¶ 13. Defendants failed to cure the default by December 2, 2013. Id. at ¶ 14. Consequently, Century 21 "exercised its rights under Sections 8, 9, 17B and 17M of the Franchise Agreement to terminate the [A]greement." Id. Century 21 sent a "Termination Letter" to Defendants on December 17, 2013. Id. That letter advised Defendants that the Agreement was terminated effective December 23, 2013, for "failing to pay fees when due and failing to report on closed transactions." Id. As of the date of termination, Century 21 claims that Defendants owed it $59, 589.94, "consisting of $49, 632.23 in unpaid fees and billings due on the Notes, plus $9, 957.71 in lost future profits as set forth in Section 19A of the Franchise Agreement." Id. at ¶ 15.

Section 18 of the Agreement is entitled "Procedures After Termination, " and lays out a number of steps a terminated franchisee must take after its relationship with Century 21 ends. See Franchise Agreement at 30-32. For instance, RealtyComp agreed to "[i]mmediately and permanently discontinue the use of all CENTURY 21 Marks... [p]romptly destroy, or surrender to [Century 21], all stationary, letterheads, forms, [etc.]... containing CENTURY 21 Marks... [and] [i]mmediately and permanently discontinue all advertising as a CENTURY 21 franchisee." See id.; see also Docket No. 20-12 at ¶ 15. According to a Vice President of Customer Relationships for Century 21, one of the "purposes of Section 18 is to prevent the irreparable harm that Century 21 will suffer in the event of the continued use of its CENTURY 21® Marks by an unauthorized former franchisee, or hold-over franchisee, of Century 21." Docket No. 20-12 at ¶ 16.

Century 21 claims that Defendants failed to comply with the requirements of Section 18 after their franchise was terminated. Inspection reports filed by Century 21 indicate that Defendants were still using Century 21 marks and advertising on January 23, 2014, see Docket No. 20-14, and April 18, 2014. Docket No. 20-15. Consequently, counsel for Century 21 sent Defendants a cease and desist letter on July 18, 2014, reminding Defendants that the Agreement had been terminated and explaining Defendants' contractual promise to "comply with their post-termination obligations including ceasing all further use of the trade name, trademarks, services marks and logos of Century 21." Docket No. 20-1 at ¶ 2. Apparently, the Defendants did not cease and desist in their use of Century 21's intellectual property, and so counsel for Century 21 sent a second cease and desist letter to Defendants on September 23, 2014. Id. at ¶¶ 2-3. When this second letter went unheeded, Century 21 filed this lawsuit to enforce the terms of the Agreement. See Docket No. 1.

In its complaint, filed on October 27, 2014, Century 21 asks this Court for both a money judgment and injunctive relief consistent with the Defendants' obligations under the relevant contracts. Specifically, Century 21 asks this Court for the following relief: (1) a monetary judgment in the amount of $99, 330.94, which includes amounts due and owing under the Franchise Agreement and Notes, and trebled damages for Defendants' continued trademark infringement; (2) an attorneys' fees award, including costs, in the amount of $9, 574.75; and (3) a permanent injunction prohibiting Defendants from further use of Century 21's intellectual property. Docket No. 20 at 21-21.


A. Adequacy of Service of Process

As a threshold matter in considering a motion for default judgment, the Court must first "assess the adequacy of the service of process on the party against whom default is requested." Board of Trustees of the N. Cal. Sheet Metal Workers v. Peters, No. C-00-0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2, 2001). Fed.R.Civ.P. 4(h)(1) authorizes service upon a corporation "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process and - if the agent is one authorized by statute to receive service and the statute so requires - by also mailing a copy of each to the defendant." Fed.R.Civ.P. 4(h)(1). Rule 4(h)(1) also states that a corporation may be served "in the manner prescribed by Rule 4(e)(1) for serving an individual, " which, in turn, allows for service "following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made." Fed.R.Civ.P. 4(e)(1).

Under California law, a summons and complaint may be served on a corporation by delivering a copy of the documents: (1) to the person designated as agent for service under certain provisions of the California Corporations Code; or (2) to the "president or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a general manager, or a person authorized by the corporation to receive service of process." Cal. Code Civ. P. § 416.10(a), (b). A corporation may also be served under California law via "substituted service." That is,

If a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served, ... a summons may be served by leaving a copy of the summons and complaint at the person's dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address other than a United States Postal Service post office box, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left.

Cal. Code Civ. P. § 415.20(b).

While substituted service is, as a general matter, an easier form of service compared to personal delivery, it is not free of limitations. Before a party can resort to substituted service, personal service must first be attempted with "reasonable diligence." California courts have held that "[o]rdinarily, ... two or three attempts at personal service at a proper place should fully satisfy the requirement of reasonable diligence and allow substituted service to be made." Bein v. Brechtel-Jochim Group, Inc., 6 Cal.App.4th 1387, 1390 (1992). Also, "[s]ervice must be made upon a person whose relationship to the person to be served makes it more likely than not that they will deliver process to the named party." Id. at 1393 (internal quotation marks omitted).

The proof of service for the summons and the complaint indicate that the documents were served via substitute service at RealtyComp's principal place of business on November 10, 2014. See Docket Nos. 11-13. Specifically, the documents were served on a Ms. Suhsewin Songkamirin, who the process server described as the "Receptionist/Person Apparently In Charge Thereof." Id. An affidavit of reasonable diligence states that the process server previously attempted to serve RealtyComp on two prior occasions, but Ms. Songkamirin informed the process server that neither individual Defendant was "available at this time." Id. Substituted service was then completed by mail on November 10, 2014, and the summons and complaint were mailed to RealtyComp's business address. Id. Identical efforts were made to serve the two individual Defendants in their individual capacities. Id. The efforts described above are sufficient under California law vis-a-vis substituted service, and therefore the Court finds that service of process on Defendants was properly effectuated.

B. Merits of Motion for Default Judgment

As noted above, the Clerk entered default against Defendants on December 10, 2014. See Docket No. 18. After entry of default, a court may grant a default judgment on the merits of the case. See Fed.R.Civ.P. 55. "The district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). A court may consider the following factors in exercising such discretion:

(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Because default has already been entered in this case, the Court must construe as true all of "the factual allegations of the complaint, except those relating to the amount of damages." TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).

The Court finds that the Eitel factors weigh in favor of granting default judgment. For example, as to the first factor, if the motion for default judgment were to be denied, then Century 21 would likely be prejudiced as it would be left without a remedy. See Walters v. Shaw/Guehnemann Corp., No. 03-cv-04058, 2004 U.S. Dist. LEXIS 11992, at *7 (N.D. Cal. Apr. 15, 2004) ("To deny plaintiff's motion [for default judgment] would leave them without a remedy. Prejudice is also likely in light of the merits of their claims."); Pepsico, Inc. v. California Security Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002) ("If Plaintiffs' motion for default judgment is not granted, Plaintiffs will likely be without other recourse for recovery.").

As for the fourth Eitel factor, the sum of money at stake in this action is appropriate for resolution on default judgment, particularly because the total amount sought ($108, 905.69) is narrowly tailored to Defendants' specific misconduct. See Pepsico, 238 F.Supp.2d at 1176 (stating that "the court must consider the amount of money at stake in relation to the seriousness of Defendant's conduct"); see also Church Bros., LLC v. Garden of Eden Produce, LLC, No. 11-cv-04114, 2012 WL 1155656, at *3 (N.D. Cal. Apr. 5, 2012) ($212, 259.21 deemed "modest" and "far less than [the amount] contemplated by the court in Eitel "); Cf. Eitel, 782 F.2d at 1472 (dispute over $2, 900, 000, when considered in light of disputed issues of material facts, supported the court's decision not to enter judgment by default).

As to the fifth, sixth, and seventh Eitel factors, because Defendants have not filed an answer to the complaint, there is nothing to suggest that there is a possibility of a dispute concerning material facts. Nor is there any indication that Defendants' default was due to excusable neglect, as Plaintiffs adequately served the complaint at Defendants' business address. See Docket Nos. 11-13. And while public policy favors decisions on the merits, Eitel, 782 F.2d at 1472, Defendants' choice not to defend this action renders a decision on the merits "impractical, if not impossible." PepsiCo, 238 F.Supp.2d at 1177.

The only remaining factors that warrant additional analysis are the second and third Eitel factors - the merits of Century 21's substantive claims and the sufficiency of those claims. To prevail on its breach of contract claims Century 21 must establish four essential elements: "(1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff." Hamilton v. Greenwich Investors XXVI, LLC, 195 Cal.App.4th 1602, 1614 (2011) (citation omitted). Here, Century 21's complaint properly alleges all of the elements of a breach of contract action. See Docket No. 1 at ¶¶ 61-66. Indeed, Century 21 has provided significant evidence that Defendants bound themselves to the terms of the Franchise Agreement, Promissory Notes, and Security Agreement. See Docket Nos. 20-17 - 20-20 (filed copies of relevant contracts). Moreover, Plaintiffs filed signed copies of personal guarantees that provide that Defendants Lim and Scott agreed to be held jointly and severally liable with RealtyComp for any amounts due Century 21 under the relevant agreements. See Franchise Agreement at 48-49. Moreover, Century 21 alleges that Defendants breached the relevant agreements - and has submitted evidence in support of these allegations - causing Century 21 damages. See Docket No. 1. This Court must accept these allegations as true where the Defendants are in default. See TeleVideo Sys., Inc., 826 F.2d at 917. Consequently, Century 21 has successfully stated a claim for breach of contract.

Century 21 has similarly stated a sufficient claim for trademark infringement under the Lanham Act. To prevail on its claim, Century 21 must demonstrate that (1) it has a protected ownership interest in the Century 21 marks, and (2) Defendants' use of the Century 21 marks, or similar marks, is likely to cause consumer confusion, thereby infringing upon Century 21's rights. See Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1124 (9th Cir. 2014). Here, Century 21 alleges that it has registered various marks with the United States Patent and Trademark Office, including the word Century 21. See Docket No. 1 at ¶¶ 9-15. And Century 21 also alleges that Defendants continue to use the Century 21 name, or other similar marks, after the termination of the Agreement, and that such actions have "caused and continues to cause a likelihood of confusion." See id. at ¶¶ 35-38. Thus, Century 21 has successfully stated a claim for trademark infringement.

Finally, Century 21 has stated a sufficient claim for permanent injunctive relief prohibiting Defendants from further use of the Century 21 marks or other marks sufficiently similar as to cause consumer confusion. In order to be entitled to permanent injunctive relief, Century 21 must show: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). Here, Century 21 has adequately alleged all four elements of the eBay test for a permanent injunction. See, e.g., Docket No. 1 at ¶ 37; Docket No. 20-12 at ¶¶ 2-7, 16-19; see also PepsiCo., 238 F.Supp.2d at 1178 (granting permanent injunction in Lanham Act case where defendant defaulted). Most importantly, Century 21 has provided testimony that it will suffer irreparable harm if Defendants are allowed to continue to hold themselves out as a Century 21 franchisee when, in fact, they are not. See, e.g., Docket No. 20-12 at ¶ 16. Such testimony is consistent with common sense: if customers who otherwise would use an actual Century 21 brokerage choose instead to use Defendants' brokerage believing it to be an authorized Century 21 location, Century 21 could suffer significant lost profits and harm to its goodwill. See Presidio Components, Inc. v. American Technical Ceramics Corp., 702 F.3d 1351, 1363 (Fed. Cir. 2012) (explaining that finding of lost profits strongly suggests that plaintiff has suffered irreparable injury that can only be remedied by entry of an injunction); Sennheiser Electronic Corp v. Eichler, No. CV 12-10809 MMM (PLAx), 2013 WL 3811775, at *10 (C.D. Cal. 2013) (explaining that continued trademark infringement that causes lost profits or otherwise damages "goodwill and business reputation [] will often constitute irreparable injury").[1] Moreover, the fact that Defendants' brokerage is directly competing for customers with actual Century 21 franchisees further supports a finding of irreparable harm. See generally Presidio Components, 702 F.3d at 1363 (holding that "[d]irect competition in the same market is certainly one factor suggesting strongly the potential for irreparable harm"). Thus, the Court finds the remaining Eitel factors warrant entry of default judgment against Defendants.

C. Damages and Other Relief

Because the Court concludes that default judgment is warranted, it must determine what damages or other relief is appropriate. Plaintiffs have the burden of "proving up" their damages or the need for other requested relief. See Board of Trustees of the Boilermaker Vacation Trust v. Skelly, Inc., 389 F.Supp.2d 1222, 1226 (N.D. Cal. 2005) ("Plaintiff has the burden of proving damages through testimony or written affidavit."); see also Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003) (noting that "Plaintiff's burden in proving up' damages is relatively lenient").

In their motion for default judgment, Century 21 seeks to recover all outstanding amounts due and owing under the Franchise Agreement and Promissory Notes, interest and liquidated damages, and attorneys' fees and costs. Century 21 also requests an injunction restraining Defendants from continuing to infringe upon Century 21's trademark rights.

1. Damages for Failure to Pay Franchise Fees

Century 21 asserts that as of the time of Defendants' default, they owed $49, 632.23 in unpaid royalty and NAF fees under the Franchise Agreement and Notes. See Docket No. 20 at 12; Docket No. 20-16 at ¶ 18. Century 21 provided a declaration from a Senior Director of Real Estate Financial Services for Century 21 attesting to this figure, Docket No. 20-16, as well as a copy of a "Custom Account Status Report" which documents in significant detail the amounts due Century 21. See Docket No. 20-23; see also Philip Morris USA, 219 F.R.D. at 498 (noting that a court "can rely on declarations submitted by the plaintiff" in determining damages). Specifically, the Custom Account Status Report provides itemized calculations of the precise royalty and NAF fees owed to Century 21 as of December 6, 2013, the sums of which equal the amount sought in this action ( i.e., $49, 632.23). Docket No. 20-23. The Court is satisfied that the amounts listed on the Custom Account Status Report are accurate, and thus finds that Century 21 is entitled to the full amount of past-due franchise fees owed by Defendants as of the date of the termination of their Century 21 franchise.

Century 21 also seeks to recover $9, 957.71 in lost profits, which is alleges it is entitled to under Section 19A of the Franchise Agreement. Section 19A of the Agreement provides that Century 21 is entitled to recover lost profits in the event of an "early termination" of the Franchise Agreement, which includes a termination "for cause" triggered by Century 21. Franchise Agreement at 33-34; see also Docket No. 20-16 at ¶ 16. Section 19A further provides that lost profits will be calculated by taking the average monthly royalty and NAF fees payable by the Defendants while they were franchisees, and multiplying that average figure by the number of months remaining on the term of the Franchise Agreement. Id. That amount is then discounted by 8% to account for the present day value of the lost profits award. Id.

Here, Century 21 provided sufficient evidence to support its request for lost profits under the Agreement. Specifically, Century 21 averred that Defendants paid Century 21 average monthly royalties of $1, 960.43 during the life of the Agreement, and that 5.26 months were remaining in the term of the Franchise Agreement went it was terminated. Docket No. 20-16 at ¶ 16. The Court is sufficiently satisfied that the product of these figures, when discounted to present value as specified in the Agreement, is the amount of lost profits sought here by Century 21 ( i.e., $9, 957.71).

In sum, the Court finds that Century 21 has adequately proven contract damages in the amount of $59, 589.94, which is the sum of the franchise fees due and owing in December 2013 ($49, 632.23) and the lost profits to which Century 21 is entitled as a result of the early termination of the Franchise Agreement ($9, 957.71).

2. Damages for Willful Trademark Infringement

Century 21 also seeks a damages award for Defendants' ongoing infringement of Century 21's trademarks. At a minimum, Century 21 claims it is entitled to actual damages of $13, 247.00. Docket No. 20 at 15. The Court is sufficiently convinced that Century 21 has, in fact, suffered actual damages for trademark infringement in the amount suggested by Century 21. As Plaintiff has explained, its actual damages constitute its lost franchise fees for the office that Defendants continued to operate under the Century 21 trademarks without permission. Century 21 proved that under the Agreement, Defendants were obligated to pay minimum royalty and NAF fees in the amounts of $500 and $519, respectively. See Franchise Agreement at 6 (providing that "there shall be a minimum royalty fee of Five Hundred Dollars ($500) per month"); see id. at 11 (providing that Defendants shall pay a minimum NAF fee of $519 per month). Thus, at a minimum, Century 21 would have received $1, 019 per month from Defendants in exchange for Defendants' use of (among other things) Century 21's trademarks and other intellectual property. Century 21 has alleged, and the Court must accept as true, that Defendants have continued to use Century 21's trademarks without permission for 13 months, and thus the Court finds that Century 21 is entitled to the full $13, 247 in actual damages requested ( i.e., $1, 019 multiplied by 13).

Century 21 further argues that it is entitled to an award of treble damages because Defendants have been wilfully infringing its trademarks since the Agreement was terminated. Where a defendant's trademark infringement is willful, Congress has provided for the recovery of treble damages "absent extenuating circumstances." See Sega Enterprises Ltd. v. MAPHIA, 948 F.Supp. 923, 941 (N.D. Cal. 1996); 15 U.S.C. § 1117(a)-(b). Here, the Court is sufficiently convinced that Defendants' trademark infringement since the termination of the Agreement is willful. Century 21 provided the Court with a copy of the Termination Letter it sent to Defendants on December 17, 2013, indicating that Defendants' franchise was being terminated for breach of the Franchise Agreement. Docket No. 20-22. In that letter, Century 21 makes it perfectly clear to Defendants that they "must immediately cease the use of all CENTURY 21® Trademarks, " and informs Defendants that an "inspection will be conducted to confirm that you have ceased identifying yourself as a CENTURY 21 franchise and that you are not utilizing the CENTURY 21 name in any respect." Id. The Termination Letter goes on to describe the required "de-identification" procedures laid out in Section 18 of the Franchise Agreement in significant detail. Furthermore, Century 21 provided copies of two subsequent cease-and-desist letters sent to Defendants regarding their continued unauthorized use of the Century 21 marks. See Docket No. 20-2; Docket No. 20-3.

Given the evidence that Defendants were on notice of their obligation to cease using Century 21's marks as of December 2013, the Court will award the full amount of requested treble damages: $39, 741.00.

3. Injunctive Relief

Century 21 also seeks a permanent injunction prohibiting Defendants from continuing to use Century 21's marks without authorization. As noted above, Century 21 has sufficiently alleged all four elements necessary to obtain a permanent injunction under eBay, including that Century 21 will suffer irreparable harm from Defendants' continued unauthorized use of Century 21's marks. See, e.g., Docket No. 20-12 at ¶ 16 (explaining that by "failing to de-identify, a former franchisee, such as Defendants, confuse the public into believing that they are in fact still affiliated with Century 21, when such is not the case... and that "such unauthorized use prevents Century 21 from exercising any control over such use of its CENTURY 21® Marks, thereby further causing irreparable harm to Century 21's reputation and goodwill"). Moreover, Century 21 notes that the Franchise Agreement expressly provides that Century 21 may obtain a permanent injunction to protect its rights under the Agreement. Franchise Agreement at 34. Thus, the Court concludes that Century 21 is entitled to the entry of a permanent injunction enjoining Defendants from continuing to infringe Century 21's intellectual property.

4. Attorneys' Fees and Costs

Century 21 finally requests that it be awarded its attorneys' fees and costs incurred in litigating this lawsuit. Specifically, Century 21 asks for $9, 574.75 in attorneys' fees and costs. See Docket No. 20-1 at ¶¶ 15-16. Here, the Franchise Agreement expressly provides that:

Should either party incur attorneys' fees in order to enforce the terms and conditions of this Agreement, including post-term covenants, whether or not a legal action is instituted, the party not in default shall be entitled to reimbursement of such attorneys' fees and costs, in addition to other remedies either party may have at law or in equity. Should any legal action be instituted in connection with this Agreement, the prevailing party shall be entitled to recover all costs and expenses, including attorneys' fees.

Franchise Agreement at 34; see also Docket No. 20-16 at ¶ 22.

Given the above contractual provision in the Agreement, Century 21 appears to be entitled to an award of its attorneys' fees and costs litigating this action. Having reviewed Century 21's attorneys' billing records in detail, the Court finds that spending approximately 37.4 billable hours on this case was both reasonable in light of the relative simplicity of this matter, as well as necessary to its effective prosecution. See Docket No. 20-1; Docket No. 20-10; Docket No. 20-11; see also The Bd. of Trustees v. Charles B. Harding Construction, Inc., No. C-14-1140 EMC, 2014 WL 7206890, at *6 (N.D. Cal. Dec. 18, 2014) (finding that 39 hours of billable time to prosecute ERISA default judgment action was reasonable). Further, the Court finds that the hourly rate charged by the attorneys ($300 per hour for associates, and $365 per hour for partners) is reasonable in this legal market for attorneys of similar skill and experience. See, e.g., Charles B. Harding Construction, 2014 WL 7206890, at *6 (finding that rates between $275 and $325 an hour are reasonable in this market for prosecution of ERISA collection action); Rosenfeld v. U.S. Dept. of Justice, 903 F.Supp.2d 859, 878 (N.D. Cal. 2012) (Chen, J.) (finding hourly billing rates between $500 and $700 reasonable for successful prosecution of FOIA action). Therefore, the Court awards the requested amount of $9, 574.75 in attorneys fees and costs[2] in full.


The Court GRANTS Century 21's motion for default judgment in the amount of $99, 330.94, which includes $49, 632.23 for amounts due and owing under the Franchise Agreement and Notes, $9, 957.71 for future lost profits under the Agreement, and treble damages for willful trademark infringement in the amount of $39, 741.00. The Court further awards Century 21 $9, 574.75 in attorneys' fees and costs, for a total monetary award of $108, 905.69.[3] The Court also GRANTS Century 21's request for injunctive relief, and hereby permanently enjoins Defendants from using or in anyway infringing on Century 21's trademarks or other intellectual property.

Century 21 shall serve this Order on Defendants and shall file a proof of service with the Court within seven (7) days from the date of this Order.

This order disposes of Docket No. 20.


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