United States District Court, E.D. California
PROGRESSIVE MARKETING, INC. Plaintiff,
v.
NUOVA RICAMBI S.R.L. AND MARCELLO ZANESI Defendants. NUOVA RICAMBI S.R.L. and MARCELLO ZANESI, Counterclaimants,
v.
PROGRESSIVE MARKETING, INC. Counterclaim-Defendant.
[PROPOSED] ORDER GRANTING
DEFENDANT AND COUNTERCLAIMANT NUOVA RICAMBI S.R.L. MOTION FOR
SUMMARY JUDGMENT
JOHN
A. MENDEZ JUDGE.
Defendant
and Counterclaimaint Nuova Ricambi, s.r.l.'s
("NRSRL") Motion for Summary Judgment or, in the
Alternative, Partial Summary Judgment (the
"Motion") came on for hearing on August 27, 2019.
The Court having considered the Motion, the opposition filed
by Progressive Marketing, Inc. ("Progressive"), any
oral argument, as well as the pleadings and documents on
file, and for all the reasons stated in the attached
transcript[1] rules as follows:
1. The
Court grants NRSRL's motion for summary judgment on
Progressive's first cause of action for infringement of a
federally registered trademark;
2. The
Court grants NRSRL's motion for summary judgment on
Progressive's second cause of action for federal
trademark infringement, false designation of origin and
unfair competition;
3. The
Court grants NRSRL's motion for summary judgment on
Progressive's third cause of action for common law
trademark infringement unfair petition;
4. The
Court grants NRSRL's motion for summary judgment on
Progressive's fourth cause of action for breach of
contract;
5. The
Court grants NRSRL's motion for summary judgment on
Progressive's fifth cause of action for unfair
competition under California Business & Professions Code
§ 17200, et seq.;
6.
Accordingly, the Court grants NRSLR's motion for summary
judgment on all causes of action Progressive brought against
NRSRL.
7. The
Court also grants NRSRL's motion for summary judgment on
its first cause of action for the cancellation of trademark
registration No. 3, 873, 210.
IT IS
SO ORDERED.
EXHIBIT
A
BEFORE
HONORABLE JOHN A. MENDEZ
REPORTER'S
CORRECTED TRANSCRIPT OF PROCEEDINGS PAGE 41, LINE 15 RE:
MOTIONS FOR SUMMARY JUDGMENT
For the
Plaintiff: MURPHY, CAMPBELL, ALLISTON & QUINN MARK A.
CAMPBELL JESSICA B. COFFIELD Attorneys at Law
For the
Defendant Sproparts, LLC and La Marzocco USA, LLC: PETERSON
WATTS LAW GROUP, LLP GLENN W. PETERSON Attorney at Law
For the
Defendant Nuova Ricambi, S.R.L. and Marcello Zanesi: FOX
ROTHSCHILD LLP JEFFREY H. GRANT Attorney at Law
Official
Reporter: KACY PARKER BARAJAS CSR No. 10915, RMR, CRR, CRC
Proceedings
recorded by mechanical stenography. Transcript produced by
computer-aided transcription.
SACRAMENTO,
CALIFORNIA, TUESDAY, AUGUST 27, 2019, 1:30 PM
THE
CLERK: Calling civil 17-2644, Progressive Marketing,
Incorporated versus Sproparts.
Can I
have counsel state their appearances, please.
MR.
CAMPBELL: Yes. I'm Mark Campbell for the plaintiff,
Progressive Marketing, Inc.
MS.
COFFIELD: Jessica Coffield here for plaintiff.
THE
COURT: Use the microphones, if you could.
MS.
COFFIELD: Sorry about that. Jessica Coffield.
MR.
GRANT: Jeff Grant on behalf of defendant and counterclaimant
Nuovo Ricambi and Marcello Zanesi.
MR.
PETERSON: Good afternoon, your Honor. Glenn Peterson,
Peterson Watts Law Group, for the defendants La Marzocco and
Sproparts.
THE
COURT: Okay. Have a seat. Make sure the microphones are in
front of you.
Mr.
Grant, are you on the pleadings?
MR.
GRANT: I entered a notice of appearance last week.
THE
COURT: Okay. So you are intimately familiar with the motion?
MR.
GRANT: Yes, your Honor.
THE
COURT: Okay. There are a number of motions for summary
judgment before the Court this afternoon, and we'll take
them up. Let me start with the evidentiary objections, give
you my reaction and response to those.
Progressive,
the plaintiff, has objected to paragraphs 20 and 21 of the
defendants' statement of undisputed facts. In paragraph
20, the statement says Progressive cannot create a genuine
dispute of material fact that the attorney who represented it
before PTO, all in caps, in 2010 did not know the difference
between a trade name and a trademark. And paragraph 20 of the
undisputed facts statement says Progressive cannot create a
genuine dispute of material fact as to whether the PTO relies
on an applicant's declaration of superior use.
Progressive
objected to these facts on the grounds that the
plaintiff's attorney is not a party to the action, and
second, the purported facts are not actually facts. That is
correct. These are statements or conclusions of law, not
facts. So the Court sustains the objections.
We're
going to refer to Nuovo Ricambi, S.R.L. as NRSRL, all in
caps. They've raised objections to Exhibit 118 in
Progressive's opposition as well as a number of
statements in Mr. Lemos's declaration. They've also
objected to Exhibit 106. In terms of the exhibits, Exhibit
118, it's a web page that Mr. Campbell found on La
Marzocco, L-a M-a-r-z-o-c-c-o, on their website. An
evidentiary objection is raised that the exhibit lacks
foundation and it's hearsay. The statement of a party
opponent is not hearsay, and Mr. Campbell has established
personal knowledge. The objection to that exhibit is
overruled.
On
Exhibit 106, which is the bill of sale, a company in the
asset sale agreement, the defendants object arguing that Mr.
Lemos failed to establish personal knowledge of the exhibit,
that argument I didn't find to have much merit. The
objection to that exhibit would be sustained only to the
extent that the statements in this agreement are offered for
the truth of the matter asserted.
And
then there were a number of objections to several statements
made in Mr. Lemos's declaration. In particular,
paragraphs 11, 18 and 19, 31, 44 through 45 and 47 on the
grounds that Mr. Lemos lacks personal knowledge. Those
objections to those specific statements have been and are
going to be sustained, other than if they're offered for
state of mind. The Court has considered them for that
purpose. Paragraph 45 is hearsay. There is no exception to
the hearsay rule, and the objection is sustained.
And
then La Marzocco and Sproparts, that's spelled
S-p-r-o-p-a-r-t-s, also challenged Mr. Lemos's
declaration a bit more generally that his declaration is
replete with unsupported conclusory statements that are
patently outside the scope of his personal knowledge, and in
particular they point to paragraphs 18 and 34. The objections
to both of those are sustained.
Having
made those rulings, quite honestly it makes little or no
difference to the Court's overall view of the motions for
summary judgment. Courts self-police in terms of evidentiary
objections. Lawyers feel the need to make them, I understand,
but again they carry little or no weight in terms of the
actual merit or lack thereof of the motions for summary
judgment.
Okay.
Let me start with the motion made by the individual Mr.
Zanesi, Marcello, M-a-r-c-e-1-l-o, Zanesi. Mr. Campbell, you
named him in a counterclaim after answering the counterclaim
filed by NRSRL. It honestly was somewhat difficult to figure
out why you brought a claim or what the claim was for. It
appears to be a breach of contract claim since the allegation
says, let's see, if for some reason Zanesi's claim to
be successor in interest to the Nuovo Ricambi USA, LLC is
successful, he is then liable for the LLC's breach of
contract. So I'm assuming it's a breach of contract
claim.
Mr.
Zanesi correctly points out that he's not a party to the
contract, and the contract doesn't purport to confer
Progressive rights to the Nuovo Ricambi USA trademark. You
didn't file any specific opposition to his motion for
summary judgment. Normally when that happens, I take that as
a concession that there really isn't any basis for
bringing a claim against him, so I'm not sure what you
think is the basis for allowing the counterclaim against him
to go forward. I'll give you an opportunity to hear from
you, but I didn't see anything in your opposition that
addressed that specifically.
MR.
CAMPBELL: Yes, your Honor. I was taken by surprise by that
motion. I guess in hindsight maybe I could have assumed that
they were going to file a motion for Mr. Zanesi on his
individual claim, but that was never part of our
meet-and-confer process. So I think if I had it to do all
over again I would have brought it up at the time at the meet
and confer.
But so
when I got it, I mean, I looked at it and I said, well, the
basis for this, they're admitting here that he's not
a party to the contract. And if he's not a party to the
contract, he can't sue on the contract. So his
action's barred by that admission, and I felt like with
that out of the way, then they were right.
THE
COURT: Okay. So you're conceding that you don't - you
can't bring a counterclaim. I'm not - I don't
have his counterclaims - MR. CAMPBELL: I understand.
THE
COURT: -- in front of me. I'm just focusing on what is
before me.
MR.
CAMPBELL: Yes.
THE
COURT: Okay. So I am going to grant summary
adjudication/summary judgment in favor of Mr. Zanesi on his
motion for summary judgment on the breach of contract
counterclaim.
Okay.
And I want to turn to NRSRL's motion for summary judgment
just on the claims brought by Progressive. So on the
complaint itself, there's five claims, and beginning with
the breach of contract claim, again I'm not sure your
theory as to how you think you can file a breach of contract
claim against NRSRL under the asset sales agreement when they
weren't a party to that contract. There's two reasons
that they give as to why they think you can't maintain
that claim. One is that they weren't a party to the asset
sale agreement, and second, and we'll get into this, but
that the asset sale agreement in fact didn't purport to
transfer ownership of any trademark. Just focusing on that
first reason though, again it's undisputed, right?
They're not a party to that asset sale agreement?
MR.
CAMPBELL: Well, in the sense of being - appearing with that
name of that entity on a signature line, that's the case.
But we contend that Mr. Zanesi, Sr. provided a broad
authorization to his son to act on behalf of that entity.
That is 101, Exhibit 101.
THE
COURT: It's attached to your complaint too, right?
MR.
CAMPBELL: No. That is not.
THE
COURT: The agreement for purchase and sale of assets?
MR.
CAMPBELL: It's a different document. I was referring to
--
THE
COURT: Isn't that the contract we're talking about?
MR.
CAMPBELL: I think it's part of the group of documents
that makes up the contract as a whole.
THE
COURT: Well, your breach of contract claim is for that - an
alleged breach of that agreement, right?
MR.
CAMPBELL: We didn't know of the existence of this Exhibit
101 at the time it was filed. We contended in the complaint
that Mr. Zanesi was acting - Mr. Zanesi, Jr. was acting as an
agent of the S.R.L. at the time of the negotiations and at
the time the written agreement was drafted, redrafted, and
signed. Subsequently, we -
THE
COURT: But the contract itself contradicts that. I mean,
there's nothing in here that mentions NRSRL at all,
unless I'm looking at the wrong contract, but I don't
think I am. Am I incorrect, Mr. Grant?
MR.
GRANT: No, your Honor.
THE
COURT: Your client's not a party to this contract.
MR.
GRANT: That's correct, your Honor.
MR.
CAMPBELL: There is a letter from Mr. Zanesi, who is the CEO
of the SNC, stating that he's giving his son --
THE
COURT: That's fine. But the contract still doesn't
include -- again, if that's your argument, I understand
it. I don't in any way think it allows you to maintain
the breach of contract claim, but if that's all, I read
that argument in your opposition. Is there anything else
you're relying on other than that?
MR.
CAMPBELL: Well, all of the circumstances surrounding the
negotiation of the written agreement, the fact that Mr.
Zanesi, Jr. was working for SNC at the time, admittedly was
spending half of his time in Italy working there and half in
the United States, the fact that he pled in his answer and
counterclaims that he was in charge of the export function of
that entity and was present negotiating, all of those things
go into our allegation that, when he made the representations
that are contained in that written contract, he was
authorized to do that expressly by the letter of authority
and also impliedly by all the circumstances.
THE
COURT: Okay. I understand your argument. The second part of
the argument as to why you can't maintain the breach of
contract claim is in fact the contract itself doesn't
transfer ownership of a trademark. It transfers ownership of
a trade name and, as you point out, goodwill. Your response
in the statement of undisputed facts in the opposition brief
is that transfer of goodwill in effect is, as a matter of
law, a transfer of the trademark. I'm simplifying but
that basically was your response to the argument. You
didn't get a trademark.
You got
a trade name and goodwill in the asset purchase agreement.
There's nothing in any contract that I've seen
that's been submitted by the parties that uses the phrase
trademark or purports to transfer a trademark in this asset
purchase agreement, again reading the four corners of the
documents.
So am I
understanding your argument right that because the word
"goodwill" is included in the contract, your
argument is, as a matter of law, I should consider that to be
a transfer of the trademark?
MR.
CAMPBELL: I think when a trade name is conveyed in
conjunction with the goodwill, I rely upon the cases that say
the goodwill is inseparable from the trademark, and there are
several cases like that. So that's -- that is our
argument.
THE
COURT: Okay.
Okay. I
think you covered this in your briefs, Mr. Grant, but I
wanted to give you a chance to respond if you want or add
anything to what's already in your briefs.
And Mr.
Peterson, I'm not sure, but I don't -- maybe I'm
wrong, but I didn't get the impression that your clients
...