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August 2012

Los Angeles Office Garners Hard-Fought Victory for Franchisor Client

The Los Angeles Commercial Litigation Team of Calvin Davis, Lisa K. Garner, Aaron Rudin, and Paulette DePaolo, with help from paralegal Randall Stubblefield, obtained a complete victory on a hotly-contested matter for Gordon & Rees’s client, a national real estate franchisor.  The client had terminated its former franchisees, which had offices in Northern California and Hawaii, for, among other things, failing to pay royalties.  The client sought to obtain past due royalties, liquidated damages, and injunctive relief on trademark infringement claims against the former franchisees and the individual guarantors (“Defendants”).  Defendants counter-claimed for breach of contract, fraud, violation of California and Hawaii franchise laws and unfair competition. 

The first step toward this final victory involved a preliminary injunction by which our attorneys sought to enjoin Defendants from continuing to use the client’s trademarks, while at the same time the Defendants sought injunctive relief to have them reinstated as franchisees.  In January 2011, the Court held an evidentiary hearing on that issue, which Lisa handled without having the benefit of depositions or discovery to cross-exam the Defendants.  The Court granted our client injunctive relief, while denying the Defendants’ request.  The parties proceeded to litigate this matter thoroughly.

In June 2012, we filed a motion for summary judgment that, due to the complex nature of the claims and counterclaims, involved extensive briefing and evidence.  On August 8, 2012, after oral argument by Lisa and Aaron, the Court granted the Motion in full, awarding over $895,000 in damages, including liquidated damages and treble damages against Defendants for willful trademark infringement after termination.  The Court also granted the motion in favor of our client on all the claims brought against them by Defendants.  Our next step will be to proceed to obtain an award of attorney fees, as the franchise agreements provide for attorney fees to the prevailing party.

The Los Angeles Team would like to thank Ron Giller and Elior Shiloh of the New Jersey office for their invaluable assistance on this case and thank both the Sacramento and Atlanta offices for their hospitality and support.

Calvin E. Davis
Lisa K. Garner
Aaron P. Rudin