United States District Court, D. Connecticut
FUNNY 4 FUNDS, LLC. Plaintiff,
v.
TREEHOUSE COMEDY PRODUCTIONS, LTD. and BRAD AXELROD, Defendants.
RULING ON APPLICATION FOR PREJUDGMENT REMEDY
KARI
A. DOOLEY UNITED STATES DISTRICT JUDGE.
The
Plaintiff, Funny 4 Funds, LLC, (“F4F”) brings
this action against the Defendants, Treehouse Comedy
Productions, Ltd. (“Treehouse”) and Brad Axelrod
(“Axelrod”) (collectively, the
“Defendants”), alleging trademark infringement
and related claims. Concurrent with the filing of the
Complaint, F4F filed an application for prejudgment remedy
seeking to attach or secure $100, 000.00 as a reasonable
estimate of its provable damages (the
“Application”). The Court held a hearing on the
Application on April 23, 2019. For the reasons set forth in
this Order, the Application is GRANTED in part and DENIED in
part.
Factual
Allegations and Procedural History
F4F and
Treehouse are competitors in the comedy show market. Each
provides, with some variation, a soup to nuts comedy show for
clients hoping to raise funds for a charity or other worthy
cause. F4F typically charges a fee of $1, 200.00 for its
services, and it pays for the comics who appear and other
costs associated with the event itself.
In
September 2015, F4F and Treehouse embarked on a joint venture
as means of expanding the F4F brand into Connecticut. F4F
provided education and experience to Treehouse and Treehouse,
in turn, began branding its comedy shows under both the
Treehouse and F4F's then- unregistered “FUNNY 4
FUNDS” mark. This was a Gentleman's Agreement not
memorialized in writing. Thereafter, Treehouse began using a
fusion logo, which combined the “FUNNY 4 FUNDS”
mark and the Treehouse logo (“fusion logo”), in
the marketing, advertising, and promotion of its fundraising
comedy shows. It is not disputed that between September 2015
and June or July of 2018, Treehouse had unfettered access to
and permission to use the F4F's name and mark. By
agreement, Treehouse did not pay F4F any compensation for the
use of the “FUNNY 4 FUNDS” mark. Both parties
believed the relationship to be mutually beneficial.
On
September 6, 2016, F4F submitted applications to the United
States Patent and Trademark Office for the registration of
two marks - “FUNNY 4 FUND$” and “FUNNY 4
FUNDS” (individually and collectively, the
“Marks”). The registration of the Marks was
completed on October 31, 2017. Thereafter, F4F began entering
into written licensing agreements with individuals and
groups, known as “branches, ” who wish to market
and sell comedy shows under the F4F brand name and use the
Marks. F4F has nine “branches” in several states.
For each show marketed and sold using the Marks, F4F receives
a licensing fee of $150.00 and “transaction” fees
of approximately $180.00. F4F has no actual involvement in
the staging of the shows arranged by the
“branches.”
After
the registration of the Marks, Treehouse continued to use the
Marks, with permission under the pre-existing Gentleman's
Agreement, until approximately June or July 2018. At that
time, F4F began discussing the terms of a potential licensing
agreement with Treehouse whereby, presumably, Treehouse would
become a “branch.” The discussions broke down in
October 2018 with no agreement being reached. F4F understood
that Treehouse would thereafter begin phasing out its use of
the fusion logo and the Marks and announce a new brand or
marketing plan.
Nevertheless,
Treehouse continued to use the Marks in its marketing and
advertisement through the end of 2018. On January 8, 2019,
F4F sent a cease and desist letter to Treehouse regarding the
use of the Marks. Following receipt of that letter, Treehouse
acknowledges that it continued using the Marks.
On
March 26, 2019, F4F instituted this action against Treehouse
and its president, Brad Axelrod. In the Complaint, F4F
asserts claims for violations of the Lanham Act, trademark
common law, and the Connecticut Unfair Trade Practices Act
(“CUTPA”). With the filing of its complaint, F4F
further filed the Application.
Discussion
Standard
for Issuance of a Prejudgment Remedy
In
federal court, “throughout an action, every remedy is
available that, under the law of the state where the court is
located, provides for seizing a person or property to secure
satisfaction of the potential judgment.” Fed.R.Civ.P.
64(a). Accordingly, this Court can issue a prejudgment remedy
pursuant to Conn. Gen. Stat. §§ 52-278a, et
seq. Under that statute,
[a] prejudgment remedy is available upon a finding by the
court that ‘there is probable cause that a judgment in
the amount of the prejudgment remedy sought, or in an amount
greater than the amount of the prejudgment remedy sought,
taking into account any defenses, counterclaims or set-offs,
will be rendered in the matter in favor of the plaintiff. . .
.'
TES Franchising, LLC v. Feldman, 286 Conn. 132, 137
(2008) (quoting Conn. Gen. Stat. § 52- 278d(a)(1)).
Probable cause requires less proof than that which is
required for a fair preponderance of the evidence. TES
Franchising, LLC, 286 Conn. at 137. “[P]robable
cause is a bona fide belief in the existence of the facts
essential under the law for the action and such as would
warrant a man of ordinary caution, prudence and judgment,
under the circumstances, in entertaining it.”
Id. (internal quotation marks omitted). Probable
cause is “a flexible common sense standard” that
“does not demand that a belief be correct or more
likely true than false.” Id. (internal
quotation marks omitted). In assessing a motion for a
prejudgment remedy, “the trial court's function ...