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Hyde Park Storage Suites, Inc. v. Crown Park Storage Suites, LLC

United States District Court, W.D. North Carolina, Charlotte Division

September 27, 2019

HYDE PARK STORAGE SUITES, INC., HPSSMC, LLC, HYDE PARK III, HYDE PARK STORAGE SUITES DAYTONA, LLC, THE KEVIN P. MAHL REVOCABLE TRUST, THE KEVIN AND MICHELLE MAHL REVOCABLE TRUST, KEVIN MAHL, and MICHELLE MAHL, Plaintiffs,
v.
CROWN PARK STORAGE SUITES, LLC, RICHARD A. LOMAN, and JOHN DOES 1-100, Defendants.

          ORDER

          ROBERT J. CONRAD, JR. UNITED STATES DISTRICT JUDGE

         THIS MATTER comes before the Court on Defendants’ Motion to Dismiss or in the Alternative Transfer Venue, (Doc. No. 5); the Magistrate Judge’s Memorandum and Recommendation (“M&R”), (Doc. No. 13); Plaintiffs’ Objections to the M&R, (Doc. No. 14); and Defendants’ Reply to Plaintiffs’ Objections, (Doc. No. 15).

         I. BACKGROUND

         Plaintiffs Hyde Park Storage Suites, Inc., HPSSMC, LLC, Hyde Park III, Hyde Park Storage Suites Daytona, LLC (collectively, “Hyde Park companies”), the Kevin P. Mahl Revocable Trust, the Kevin and Michelle Mahl Revocable Trust, Kevin Mahl, and Michelle Mahl (collectively with Hyde Park, “Plaintiffs”) initiated this action with the filing of a Complaint on December 21, 2018. (Doc. No. 1.)

         Kevin and Michelle Mahl, residents of North Carolina, control the Hyde Park companies. (Doc. No. 1, ¶ 10.) The Complaint alleges that the Hyde Park companies offer and lease highly distinctive luxury condominiums with a common and distinctive trade dress. (Doc. No. 1, ¶ 1.) The distinctive features constituting the Hyde Park companies’ trade dress include the packaging of condominium units as a wall surrounding a common community area, the inward-facing doors of the units that can only be accessed after passing through a gated facility entrance, and fortresslike towers on each side of the entrance. (Doc. No. 1, ¶ 3.) The Hyde Park companies have locations in Cornelius, North Carolina and Daytona Beach, Florida. (Doc. No. 1, ¶ 9.)

         Defendant Crown Park Storage Suites, LLC (“Crown Park”) is a Florida limited liability company. (Doc. No. 1, ¶ 15.) Defendant Richard A. Loman (“Loman”) is a resident of Florida, (Doc. No. 5-2, ¶ 3), and is the owner of Crown Park, (Doc. No. 1, ¶ 16).

         Plaintiffs allege that Loman, a former tenant of the Hyde Park facility in Daytona Beach, Florida, has devised a scheme to “knock off and trade off of” Plaintiffs’ trade dress and reputation. (Doc. No. 1, ¶¶ 6, 44.) Specifically, Plaintiffs allege that Defendants are planning to build or otherwise develop a facility of luxury custom garage condominiums that infringes on Plaintiffs’ trade dress and other intellectual property rights. (Doc. No. 1, ¶ 17.) The planned Crown Park facility will be located less than one mile from the Hyde Park facility in Daytona Beach, Florida. (Doc. No. 1, ¶ 7.) Plaintiffs allege that Loman has been handing out business cards inside the Hyde Park Daytona Beach facility to other Hyde Park tenants, bringing prospective Crown Park customers onto the Hyde Park Daytona Beach premises to use the inside of the facility to show prospective customers what Crown Park will offer, and approaching existing tenants at the Hyde Park Daytona Beach facility and soliciting them to move to Crown Park upon expiration of their lease. (Doc. No. 1, ¶ 47.) In addition, Plaintiffs allege that Loman, in breach of his Lease Agreement for a unit at the Hyde Park Daytona Beach facility, put Crown Park signage on his vehicle and then took pictures of the vehicle on the Hyde Park Daytona Beach premises to use as part of his promotional campaign for Crown Park. (Doc. No. 1, ¶¶ 48, 81.) Plaintiffs contend that the Crown Park facility will dilute Plaintiffs’ trade dress and cause a likelihood of confusion. (Doc. No. 1, ¶¶ 51–52.)

         Based on the foregoing allegations, Plaintiffs assert claims for (1) trade dress infringement, unfair competition, and false designation of origin under the Lanham Act, (Doc. No. 1, at 24); (2) trade dress dilution under the Lanham Act, (Doc. No. 1, at 26); (3) unfair or deceptive trade practices under the Florida Deceptive and Unfair Trade Practices Act, (Doc. No. 1, at 27); (4) breach of the Lease Agreement, (Doc. No. 1, at 28); (5) conversion, (Doc. No. 1, at 29); and (6) tortious interference with business relations, (Doc. No. 1, at 29).

         Defendants filed the Motion to Dismiss or in the Alternative Transfer Venue on February 11, 2019, contending that the Court lacks personal jurisdiction over Defendants. (Doc. No. 5.) In support thereof, Defendants filed an affidavit of Loman in which Loman avers that he is a Florida resident, he works and conducts all of his business matters in Florida, he has never lived in North Carolina, he has never conducted any business in North Carolina, he has never otherwise availed himself of the privilege of conducting activities in North Carolina, and all business of Crown Park is conducted in Florida. (Doc. No. 5-2.) In the alternative, Defendants request that the Court transfer this case to the Middle District of Florida.

         In opposition to Defendants’ motion, Plaintiffs filed affidavits of Kevin Mahl and Matthew Hewlett (“Hewlett”). Kevin Mahl avers that Plaintiffs transact all of their business from Cornelius, North Carolina, the luxury condominium unit concept Plaintiffs developed targets and has had vast appeal to the NASCAR community and NASCAR and the teams that compete in the series are almost entirely based in North Carolina, and the Hyde Park Daytona Beach facility has owners and lessors from Florida, North Carolina, Massachusetts, Texas, Iowa, Minnesota, North Dakota, Virginia, Missouri, and Ontario, Canada. (Doc. No. 8-17.)

         According to Hewlett’s affidavit, Plaintiffs hired Hewlett, a private investigator, and his company to investigate Crown Park and Loman to obtain details pertaining to Crown Park’s building layout, storage unit pricing, financing options, and any literature or other promotional material available to prospective customers. (Doc. No. 8-2, ¶ 7.) The investigation occurred from November 8, 2018 through December 7, 2018. (Doc. No. 8-2, ¶ 8.) Hewlett’s affidavit sets forth the following communications between Loman and Hewlett:

• On November 13, 2018, Hewlett called Crown Park from his North Carolina phone number. (Doc. No. 8-2, ¶ 10.) Loman answered Hewlett’s call, and Hewlett explained to Loman that he was looking for storage units for his father’s forty-foot RV and they would like to store it in the Daytona Beach, Florida area. (Doc. No. 8-2, ¶ 10.) Loman advised Hewlett that he could purchase or lease a unit in Crown Park’s facility. (Doc. No. 8-2, ¶ 11.) Loman offered to mail Hewlett a Crown Park information packet, and Hewlett gave Loman a North Carolina mailing address. (Doc. No. 8-2, ¶ 12.) Later that day, Loman called Hewlett to make sure that Hewlett was seriously considering a unit because his assistant discovered that the address Hewlett provided was for a storage facility. (Doc. No. 8-2, ¶ 13.)
• On November 20, 2018, Hewlett called Loman because he had not received the information packet. (Doc. No. 8-2, ¶ 14.) Loman advised Hewlett that it was mailed, and Hewlett received the information packet later that day. (Doc. No. 8-2, ¶¶ 14-15.) Hewlett then called Loman and requested that Loman email him the information packet, which Loman did that same day. (Doc. No. 8-2, ¶¶ 16-17.)
• On December 4, 2018, Hewlett called Loman and informed Loman that he was considering leasing or purchasing a Crown Park unit and wanted additional details. (Doc. No. 8-2, ¶ 19.) Loman provided Hewlett with detailed information regarding broker, escrow, and financing options. (Doc. No. 8-2, ¶ 19.) Also, Loman went into detail about how the Crown Park idea developed and his experiences with Hyde Park, indicating that he got the idea from two gentlemen in Charlotte, North Carolina who had opened Hyde Park. (Doc. No. 8-2, ¶ 19.) After the phone call, Loman texted ...

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