Teddys Red Tacos, Corp. v. Theodore Vasquez

[7] 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA [11] 12 T CE aD lD iY f’ oS r niR aE D l iT mA iC tO eS d CORP., a C V 19-03432-RSWL-AS x 13 liability company, SUPPLEMENTAL ORDER re: Defendant and Counter14 Plaintiff, Claimant Theodoro Vazquez Solis’ Application for 15 v. Default Judgment [61] 16 THEODORO VAZQUEZ SOLIS dba TEDDY’S RED TACOS, an 17 individual, TEDDY’S ORIGINAL RED TACOS dba 18 TEDDY’S RED TACOS, an unknown business entity, 19 WAEL KHALIL dba TEDDY’S RED TACOS, an individual, 20 SILENT PARTNER ENTERPRISES LLC dba TEDDY’S RED TACOS, 21 a California limited liability company, and 22 DOES 1 through 50, inclusive, [23] Defendants. [24] THEODORO VAZQUEZ SOLIS, an 25 individual, 26 Counter-Claimant, 27 v. 28 TEDDY’S RED TACOS CORP. 1 dba TEDDY’S RED TACOS, a corporation, NANCY GOMEZ, 2 an individual, JORGE GOMEZ, an indivi dual, and 3 DOES 1 through 50, inclusive, [4] Counter-Defendants. [5] 6 Counter-Claimant Theodoro Vazquez Solis dba Teddy’s 7 Red Tacos (“Vazquez”) applied for a default judgment 8 against Counter-Defendants Teddy’s Red Tacos, Jorge 9 Gomez, and Nancy Gomez (collectively, “Counter10 Defendants”) for counterclaims related to Counter11 Defendants’ infringement of Vazquez’s trademark. See 12 generally Appl. for Default J. (“Appl.”), ECF No. 61. 13 On August 16, 2021, the Court granted in part the 14 application as to Vazquez’s counterclaims for false 15 designation/unfair competition under 15 U.S.C. § 1125 (a) 16 and declaratory relief against Counter-Defendants and 17 Vazquez’s counterclaims for breach of contract and 18 unjust enrichment against Jorge Gomez and Nancy Gomez 19 (the “Gomezes”) and denied the application as to 20 Vazquez’s remaining counterclaims. See Order re: Def. 21 and Counter-Claimant Theodoro Vazquez Solis’ Appl. for 22 Default J. (“Prior Order”) 33:2-8, ECF No. 63. The 23 Court enjoined Counter-Defendants from activities 24 enumerated in Vazquez’s requested injunction and 25 permitted Vazquez to submit a supplemental brief on his 26 request for damages, attorney’s fees, and costs. Id. at 27 33:9-34:8. 28 /// 1 On August 31, 2021, Vazquez submitted a 2 supplemental brief with two exhibits and a supporting 3 declaration from his counsel. See generally Suppl. 4 Brief for Proof of Damages in Supp. of Appl. for Default 5 J. (“Suppl. Brief”), ECF No. 64; Ex. A, ECF No. 64-1; 6 Ex. B, ECF No. 64-2; Decl. of Shahrokh Shei k in Supp. of 7 Suppl. Brief (“Suppl. Sheik Decl.”), ECF No. 64-3. 8 The Court incorporates by reference the factual and 9 procedural background set forth in the Prior Order as if 10 fully set forth herein. See Prior Order 2:25-6:20. 11 I. DISCUSSION 12 A. Damages 13 Vazquez previously established entitlement to 14 $33,000 in restitution but failed to sufficiently 15 support his request for $150,000 in damages, which he 16 claimed to be his fifty-percent share of profits from 17 the Pico Location. See id. at 21:24-25:20 ; Appl. 8:2118 9:22. The only evidence Vazquez submitted in support of 19 his damages request was a declaration stating that 20 Vazquez “believe[s] the Gomezes have realized over 21 $300,000 in profits from the use of [his] Mark and 22 recipes” and that “[t]his number is based on observation 23 of the Pico Location prior to [his] being locked out and 24 based on [his] own expertise in the restaurant 25 business.” Decl. of Theodoro Vazquez Solis in Supp. of 26 Appl. ¶ 24, ECF No. 61-2. In the Prior Order, the Court 27 found that these statements were insufficient to support 28 his damages request but afforded Vazquez an opportunity 1 to submit further evidence. See Prior Order 25:2-20. 2 Vazquez timely filed a supplemental brief, in which 3 he states: [4] It has been difficult for Counter-Claimant to 5 obtain the necessary discovery to show proof of his loss. As stated in Counter-Claimant’s 6 supporting declaration for the Default 7 Judgment Application, Counter-Claimant is relying on his expertise as an experienced [8] restauranter and businessman based in Los 9 Angeles to calculate his damages. CounterClaimant calculates, based on his observation 10 of the Pico Location from the documents and 11 sales he could review prior to being locked out, that the Pico Location did substantial 12 business from use of his Mark and recipes. 13 Thus, Counter-Claimant requests that the Court award him damages in the amount of $150,000. [14] 15 Suppl. Brief 2:15-21. Vazquez essentially reiterates 16 the statements made in his earlier declaration, 17 providing no additional declaration or other evidence to 18 substantiate his requested damages.1 19 Although the well-pleaded factual allegations of a 20 complaint are deemed true upon default, the plaintiff 21 “must ‘prove up’ the amount of damages.” Landstar 22 Ranger, Inc. v. Parth Enters., Inc., 725 F. Supp. 2d 23 916, 923 (C.D. Cal. 2010) (citations omitted); see 24 TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915 , 917-18 [25] 26 1 Moreover, it remains unclear whether Vazquez seeks $150,000 in damages for breach of contract or lost profits under 27 the Lanham Act. See Prior Order 25:18-20 (“If Vazquez chooses to submit further evidence, he must also clarify whether he seeks 28 damages by way of breach of contract or 15 U.S.C. § 1117 (a).”). 1 (9th Cir. 1987). “[C]ourts have accepted less precise 2 estimates of damages where a defendant frustrates the 3 discovery of a precise amount by defaulting in the 4 action.” Wecosign, Inc. v. IFG Holdings, Inc., 845 F. 5 Supp. 2d 1072, 1084 (C.D. Cal. 2012). Nevertheless, 6 Vazquez must establish a reasonable basis f or 7 calculating his requested damages. See Cal. Civ. Code 8 § 3301 (“No damages can be recovered for a breach of 9 contract which are not clearly ascertainable in both 10 their nature and origin.”); Lindy Pen Co. v. Bic Pen 11 Corp., 982 F.2d 1400, 1407 (9th Cir. 1993) (“As a 12 general rule, damages which result from a tort must be 13 established with reasonable certainty. The Supreme 14 Court has held that ‘[d]amages are not rendered 15 uncertain because they cannot be calculated with 16 absolute exactness,’ yet, a reasonable basis for 17 computation must exist.” (citation omitted) (quoting 18 Eastman Kodak Co. v. S. Photo Materials Co., 273 U.S. 19 359, 379 (1927))), abrogated on other grounds by 20 SunEarth, Inc. v. Sun Earth Solar Power Co., Ltd., 839 21 F.3d 1179 (9th Cir. 2016) (en banc). 22 While the Court understands that it is difficult 23 for Vazquez to measure damages given Defendants’ lack of 24 participation in this action, it cannot use Vazquez’s 25 vague and speculative statements to award damages. 26 Vazquez has not given the Court sufficient information— 27 such as sales data, the relevant time period for such 28 sales, or the types of documents reviewed—that would 1 allow the Court to conclude that Vazquez’s estimate is 2 reasonable. Nor has Vazquez sought to quantify his own 3 lost profits. Based on the evidence submitted, the 4 Court cannot estimate either Counter-Defendants’ profits 5 or Vazquez’s lost profits.2 Accordingly, the Court has 6 no option but to conclude again that Vazque z has failed 7 to establish entitlement to $150,000 in damages. 8 B. Attorneys’ Fees and Costs 9 When a party properly requests attorneys’ fees in 10 excess of the schedule provided in Local Rule 55-3, “the 11 court is obliged to calculate a ‘reasonable’ fee” using 12 the lodestar method. Vogel v. Harbor Plaza Ctr., LLC, [13] 893 F.3d 1152, 1159 (9th Cir. 2018). “[T]he lodestar 14 amount is calculated by multiplying ‘the number of hours 15 reasonably expended on the litigation by a reasonable 16 hourly rate.’” Id. at 1160 (citation omitted). “A 17 reasonable hourly rate is ordinarily the prevailing 18 market rate in the relevant community.” 3M Co. v. Am. 19 Dental Equip., LLC, No. 5:20-CV-02128-JWH-SHKx, 2021 WL 20 3473560, at *4 (C.D. Cal. July 26, 2021) (quoting Kelly 21 v. Wengler, 822 F.3d 1085, 1099 (9th Cir. 2016)). 22 Vazquez previously sought $48,767.34 in actual 23 attorneys’ fees and costs, see Appl. 10:3-4, and now 24 seeks $47,044.84, see Suppl. Brief 2:7. In support of 25 his request, Vazquez submitted a declaration from his [26] 2 The Lanham Act provides that, subject to the principles of 27 equity, a trademark owner may “recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of 28 the action.” 15 U.S.C. § 1117 (a). 1 counsel as well as the relevant billing records and cost 2 invoices from his counsel’s previous and current law 3 firms. See generally Suppl. Sheik Decl.; Exs. A-B. 4 Counsel for Plaintiff billed hourly rates of $325 and 5 $375 for a partner; $225, $275, and $335 for associates; 6 and $125 and $150 for paralegals. See Supp l. Sheik 7 Decl. ¶ 3. 8 Having reviewed these documents, the Court finds 9 that the time expended and the expenses incurred were 10 reasonable, particularly in light of the complexity and 11 duration of this case and the fact that Counter12 Defendants initially appeared in this action. The Court 13 also finds the rates charged by Vazquez’s counsel to be 14 reasonable and generally consistent with rates billed in 15 trademark infringement cases within this district. See, 16 e.g., Athena Cosms., Inc. v. Timbo Trading Co., No. EDCV 17 20-418 JGB (SPx), 2020 WL 4805470 , at *3 (C.D. Cal. June 18 19, 2020) (finding rates of $495, $395, and $245 19 reasonable in trademark infringement case); Energizer 20 Brands, LLC v. Lumintop Tech. Co., No. CV 19-04360-AB 21 (ASX), 2020 WL 1279456 , at *3 (C.D. Cal. Feb. 3, 2020) 22 (finding billed rates of $505.75 and $701.25 for 23 partners, $333.75 for an associate, and $259.25 for a 24 paralegal to be reasonable despite being “at the high 25 end”). Accordingly, Vazquez’s request for $47,044.84 in 26 attorneys’ fees and costs is GRANTED. 27 /// 28 /// 1 II. CONCLUSION 2 Based on the foregoing, the Court awards $33,000 in 3 restitution and $47,044.84 in attorneys’ fees and costs 4 to Vazquez. 5 IT IS SO ORDERED. [6] 7 DATED: September 29, 2021 /s/ Ronald S.W. Lew HONORABLE RONALD S.W. LEW [8] Senior U.S. District Judge