United States District Court, S.D. Florida
PETERBROOKE FRANCHISING OF AMERICA, LLC, Plaintiff/Counter-Defendant,
MIAMI CHOCOLATES, LLC, et al., Defendants/Counter-Plaintiffs.
OMNIBUS ORDER ON MOTIONS FOR SUMMARY
G. COOKE, UNITED STATES DISTRICT JUDGE.
a breach of contract, trademark infringement, and unfair
competition action under the Lanham Act, 15 U.S.C. §
1114, and Florida state law. Peterbrooke Franchising of
America, LLC (“PFA”) alleges that its former
franchisee, Miami Chocolates, LLC (“Miami
Chocolates”) and its owners, Charles and Judy McDonald,
breached the parties' franchise agreement by, inter
alia, operating a competing business using valuable PFA
business assets, including registered trademarks. I have
jurisdiction under 28 U.S.C. §§ 1331 and 1367.
are PFA's Renewed Motion for Summary Judgment on its
Complaint and Defendants' Counterclaim (ECF No. 164), and
Defendants' Motion for Summary Judgment (ECF No. 167).
For the reasons that follow, I grant the Motions in part and
deny them in part.
August, 24, 2007, Miami Chocolates entered into a Franchise
Agreement (the “Franchise Agreement” or
“Agreement”) with franchisor Peterbrooke
Franchising, Inc. (“PFI”) for the right to
operate a Peterbrooke chocolatier shop in Miami (the
“Shop”). (ECF No. 166 ¶ 1). The McDonalds
purchased and assumed operation of the Shop in September
2010. (Id. ¶ 2).
Agreement sets forth specifications and procedures for
operating the Shop. It provides, inter alia, that
the owner/operator shall use and record all sales using a
computer register or point-of-sale (“POS”)
system. (ECF No. 1-1 at 14, § 4.6.1). In relevant part,
the Franchise Agreement states that:
When so instructed by Us, You shall procure and install for
the Shop such computerized cash register polling packages, a
POS register station, designated accounting software and
software options, associated computer hardware, required
dedicated telephone and power lines, modem(s) for polling
purposes, printer(s), and other related accessories or
peripheral equipment, and bar coding equipment as We specify
in our manual and otherwise. You shall provide any assistance
required by Us to bring such system on-line with Our system
at the earliest possible time and You expressly agree that We
shall thereafter have the free and unfettered right to
retrieve such data and information from Your system as We, in
Our sole and exclusive discretion, deem necessary or
appropriate. The cost of such retrieval shall be borne by Us.
You shall bear the sole cost of the foregoing items to be
installed or purchased and activities to be accomplished by
You and the delivery and installation cost of all hardware
(Id. at 14, § 4.6.2).
4.6.3 further provides, inter alia:
You further understand that it may become necessary for You
to replace or upgrade the entire cash register system with a
larger system capable of assuming and discharging all the
tasks and functions specified by Us. You further understand
and agree that as designs and functions change periodically,
We may be required to make substantial modifications to Our
specifications or to require installation of entirely
different systems during the term of this Agreement or during
the term of any renewal Franchise Agreement.
(Id. at 14-15, § 4.6.3).
You agree, at Your expense, to keep Your cash register system
in good maintenance and repair. Following Our testing and
determination that it will prove beneficial to You, You agree
to install at Your own expense such additions, changes,
modifications, substitutions and/or replacements to Your
hardware, software, telephone lines, power lines and other
related facilities as We direct on those dates and within
those times specified by Us in Our sole and exclusive
discretion in Our Operating Manual or otherwise.
(Id. at 15, § 4.6.4).
18 specifies that failure to comply with any provision is a
If you or any of Your Owners fail to comply with any
provision of this Agreement or any mandatory specification,
standard, or operating procedure prescribed by Us, We may
terminate this Agreement effective immediately upon delivery
of written notice of termination to You . . . .
(Id. at 50, § 18.1.1).
19 spells out the parties' post-termination rights and
obligations, including Miami Chocolates' obligation to
stop using Peterbrooke trademarks:
19.2.1 Upon the termination or expiration of this Agreement,
(a) not thereafter, directly or indirectly, at any time or in
any manner identify Yourself or any business as a current or
former Peterbrooke Chocolatier Shop or as a current or former
franchisee of or as otherwise associated with Us, or use any
Mark, any colorable imitation thereof or any mark
substantially identical to or deceptively similar to any Mark
in any manner or for any purpose, or utilize for any purpose
any trade name, trademark or service mark, Domain Name, or
other commercial symbol or trade dress that suggests or
indicates a connection or association with Us;
(b) remove all signs containing any Mark and return to Us or
destroy forms and materials containing any Mark or otherwise
identifying or relating to an Peterbrooke Chocolatier Shop;
* * *
19.2.2 You shall furnish to Us (a) within thirty (30) days
after the effective date of termination or expiration,
evidence satisfactory to Us of Your compliance with
Subparagraphs (a) and (c) of the foregoing obligations, and
(b) within thirty (30) days after the later of expiration of
Our option to purchase the Shop as provided in Section 19.6
or receipt of notice that We elect not to purchase the Shop
pursuant to Section 19.6, evidence satisfactory to Us of Your
compliance with the foregoing obligations.
(Id. at 52-53, §§ 19.2.1-19.2.2).
19 also includes a non-compete provision:
19.4.1 Upon termination of this Agreement by Us in accordance
with its terms and conditions, or by You without good cause .
. . neither You nor any of Your Principal Owners shall
directly or indirectly, through a member of the immediate
family of You or a Principal Owner or otherwise for a period
of two (2) years commencing on the effective date of such
termination or expiration or the date on which You cease to
operate the Shop, whichever is later: (a) have any interest
as a disclosed or beneficial owner in any Competitive
Business located or operating within a twenty five (25) mile
radius of the Shop or any other Peterbrooke Chocolatier Shop
. . . .
(Id. at 53-54, § 19.4.1).
the Agreement requires Miami Chocolates to de-identify the
Shop as a former Peterbrooke franchise upon termination or
expiration, specifically requiring that it:
[M]ake such modifications and alterations, including removal
of all distinctive physical and structural features
associated with the Trade Dress of Peterbrooke Chocolatier
Shops, as may be necessary to distinguish the Site of the
Shop so clearly from its former appearance and from other
Peterbrooke Chocolatier Shops as to prevent any possibility
that the public will associate the Site with Peterbrooke
Chocolatier Shops and any confusion created by such
(Id. at 53, § 19.2.1(g)).
purchased PFI's rights and responsibilities under the
Franchise Agreement in January 2012. (ECF No. 63 ¶ 14).
Under a separate agreement with Peterbrooke Idea Company,
LLC, PFA also possesses the right to use Peterbrooke
trademarks worldwide to operate chocolate stores and to grant
franchises and licenses to third parties to do the same. (ECF
No. 63 ¶ 10), and to pursue legal action against third
parties, including former franchisees, for infringement and
unfair competition. (Id.).
the McDonalds purchased Miami Chocolates, Peterbrooke stores
used an Iciniti Corp POS. (ECF No. 166 ¶ 6). According
to Defendants, initial discussions about transitioning away
from the Iciniti Corp POS began in 2012. (Id. ¶
7). In November 2013, PFA sent Miami Chocolates a notice
requiring it to change over to a Micros Simphony System (the
“Micros System”). (Id. ¶ 8). Miami
Chocolates refused, asserting that the Micros System was not
appropriate for a chocolatier shop and did not meet
Peterbrooke specifications. (Id. ¶ 10).
October 14, 2015, PFA sent Miami Chocolates another notice
requiring it to change its POS system, this time to the NCR
Silver POS System with Simplebox software (the “New POS
System”). (Id. ¶ 21; ECF No. 163 ¶
10). Miami Chocolates refused for the same reasons it refused
to install the Micros System. (ECF Nos. 163 ¶
22, 166 ¶¶ 30-31). On December 2, 2015, PFA sent
Miami Chocolates a Notice of Default. (ECF No. 163
¶ 24). Miami Chocolates responded by confirming
its refusal to change over to the New POS System
(Id. ¶ 25), prompting PFA to send the Notice of
Termination on January 28, 2015. (ECF Nos. 20, 163 ¶
Chocolates continued operating following the termination (ECF
No. 163 ¶ 16-17), but Defendants claim they took several
steps to disassociate it from PFA and its
trademarks. (ECF No. (ECF No. 166 ¶¶ 48-49).
It was not until PFA filed for emergency preliminary
injunctive relief in this Court . . . that Defendants made
any effort to cease operating as a Peterbrooke shop. But even
those efforts were woefully inadequate and ineffective.
Defendants took half-hearted measures (e.g., sloppily spray
painting over the word “Peterbrooke” on the
distinctively shaped and colored outdoor Peterbrooke
Chocolatier sign, placing a garbage bag over another
prominent exterior sign) that actually harmed PFA, making the
premium Peterbrooke Chocolatier brand look
déclassé and unreliable. . . .
Even after removing the word “Peterbrooke” from
the premises, Defendants continue to still use PFA's
trade dress, phone numbers, social media pages, and operate
at the location in violation of the Franchise Agreement's
valid non-compete provision.
(ECF No. 163 ¶¶ 18-20).
filed this lawsuit on February 4, 2016. (ECF No. 1). The
five-count Amended Complaint alleges: (1) Lanham Act
infringement (Count I); (2) Lanham Act false designations
(Count II); (3) common-law trademark infringement (Count
III); (4) common-law unfair competition (Count IV); and (5)
breach of the Franchise Agreement (Count V). (ECF No.
The trademark infringement claims (Counts I, II, and III) and
the unfair competition claim (Count IV) are against all
Defendants. The breach of contract claim (Count V) is against
Miami Chocolates alone.
February 25, 2016, Defendants asserted five counterclaims:
(1) breach of contract (Count I); (2) breach of the implied
covenant of good faith and fair dealing (Count II); (3)
violation of the Florida Deceptive and Unfair Trade Practices
Act, Fla. Stat. § 501.203(3) (“FDUTPA”)
(Count III); and (4) two requests for declaratory relief
(Counts IV, V). (ECF No. 6). I granted PFA's motion to
dismiss Counts IV and V on August 1, 2016. (ECF No. 73).
Defendants filed the instant motions for summary judgment on
June 29, 2018 (ECF No. 164) and July 1, 2018 (ECF No. 167),
respectively. Both sides seek dismissal of the other
side's claims. PFA also asks for summary judgment on its
own claims. Defendants do the same, but only as to Count I,
their breach of contract claim.
judgment “shall be granted if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law.” Allen v. Tyson Foods, Inc., 121 F.3d 642
(11th Cir. 1997) (quoting Fed.R.Civ.P. 56(c)) (internal
quotations omitted); Damon v. Fleming Supermarkets of
Florida, Inc., 196 F.3d 1354, 1358 (11th Cir. 1999).
Thus, the entry of summary judgment is appropriate
“against a party who fails to make a showing sufficient
to establish the existence of an element essential to that
party's case, and on which that party will bear the
burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986).
moving party bears the initial burden to show the district
court, by reference to materials on file, that there are no
genuine issues of material fact that should be decided at
trial.” Clark v. Coats & Clark, Inc., 929
F.2d 604, 608 (11th Cir. 1991). “Only when that burden
has been met does the burden shift to the non-moving party to