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Russell Road Food and Beverage, LLC v. Galam

United States District Court, D. Nevada

March 28, 2018

RUSSELL ROAD FOOD AND BEVERAGE, LLC, Plaintiff,
v.
MIKE GALAM, et al., Defendants.

          ORDER

          RICHARD F. BOULWARE, II United States District Judge

         I. INTRODUCTION

         This case began as a dispute between owners of real property in Las Vegas: Plaintiff, who owns the Crazy Horse III trademark and gentlemen's club by the same name, and certain Defendants who alleged that they own the Crazy Horse Too mark and gentlemen's club. The parties initially asserted competing trademark infringement claims; Plaintiff and many of the Defendants claimed prior use of one mark over the other, and Plaintiff moved for summary judgment, as well as many of the Defendants in a joint motion. On April 13, 2016, the Court entered an order granting summary judgment in favor of Plaintiff, and finding that Plaintiff had priority of use of the Crazy Horse III trademark and that no Defendant acquired the Crazy Horse Too trademark. The Court now issues this order to clarify the liability of each Defendant.

         II. BACKGROUND

         A. Procedural History

         Plaintiff Russell Road Food and Beverage, LLC (“Russell Road”) filed suit in this Court on May 2, 2013 against Defendants Canico Capital Group, LLC (“Canico”), Rhino Bare Projects, LLC, Industrial Road 2440-2497, LLC, Crazy Horse Too Gentlemen's Club, LLC, and various related entities and individuals it alleges are members of those entities. In its Complaint, Russell Road claims trademark infringement and trademark dilution and seeks to cancel Defendants' trademark registration. The parties are familiar with the procedural history set forth in the Court's prior order, up to and including the hearing and order on the cross-motions for summary judgment filed in August 2014. (ECF Nos. 273, 276).

         The Court held a hearing on various disputes related to discovery and damages on February 7, 2017. (ECF No. 335). The Court stated that, in light of the representations by the parties, it would enter an order clarifying the individual liability of each Defendant, and permit the Defendants to file motions to reconsider the prior order on summary judgment, and allow Plaintiff to file motions for summary judgment as to the liability of respective Defendants. Defendants Crazy Horse Too Gentlemen's Club LLC, Michael Galam, Victor Galam, Jacqueline Galam Barnes, Rhino Bare Project 4824 LLC, and Rhino Bare Projects LLC (collectively, “Galam Defendants”) filed a Motion to Reconsider the Court's prior summary judgment order on March 7, 2017. (ECF No. 336). The same day, Defendants Abraham Assil, George Eshaghian, Soleiman Nazarian, SN & GE, LLC, and West Best Capital Group, LLC (collectively, “Assil Defendants”) and Defendants Canico Capital Group, LLC and Industrial Road 2440-2497, LLC (“Canico Defendants”) also filed a Motion to Reconsider. (ECF No. 337). Additionally, Defendants David Hakakian, El Marino, LLC, IJ Properties, LLC, Isaac Javdanfar, Knotting Hill, LLC, Morris Nejathaim, S Double, LLC, Mehran Sadighpour, Kamran Samooha, Sefox Investment, LLC, and Hamed Yazdanpanah (collectively, “Hakakian Defendants”) filed a Motion to Reconsider on March 7, 2017, as well as a request for judicial notice related to the Motion. (ECF Nos. 339, 338).

         On April 4, 2017, Plaintiff filed a Response to the Galam Defendants' Motion to Reconsider (ECF. No. 345), a Response to the Hakakian Defendants' Motion to Reconsider (ECF No. 347), and a Response to the Assil Defendants' Motion to Reconsider (ECF No. 350). Also on April 4, 2018, Plaintiff filed a Motion for Summary Judgment regarding Galam Defendants' liability (ECF No. 346), a Motion for Summary Judgment regarding Hakakian Defendants' liability, (ECF No. 348), and a Motion for Summary Judgment regarding Canico Defendants' and Assil Defendants' liability, (ECF No. 351). Galam Defendants filed a Reply to their Motion to Reconsider (ECF No. 352) and a Response to Plaintiff's Motion for Summary Judgment (ECF No. 353) on May 2, 2017. Hakakian Defendants filed their Reply to their Motion to Reconsider and Response to Plaintiff's Motion for Summary Judgment on May 2, 2017. (ECF No. 354). Assil Defendants also filed a Reply to the Motion to Reconsider (ECF No. 356) and a Response to Plaintiff's Motion for Summary Judgment (ECF No. 357) on May 2, 2017. Plaintiff filed Replies to its Motions for Summary Judgment on May 30, 2017. (ECF Nos. 358, 359, 360).

         On June 21, 2017, Plaintiff filed a Motion for Preliminary Injunction (ECF No. 361). Canico Defendants filed a Response on July 5, 2017. (ECF No. 362). Plaintiff filed its Reply on July 12, 2017. (ECF No. 363). Plaintiff additionally filed a Supplemental Notice regarding the Motion for Preliminary Injunction on February 26, 2018. (ECF No. 371). The Court held a hearing on the motions on Februray 28, 2018 and took the matter under submission. (ECF No. 373).

         B. Undisputed Facts Regarding Trademark Infringement

         The Court summarizes the undisputed facts as set forth in its prior order. The Crazy Horse Too club opened in 1984 at 2476 Industrial Road in Las Vegas, Nevada. Beginning in 1984, the Power Company, Inc. operated the Crazy Horse Too club and owned the Crazy Horse Too business and trademark. RicRiz, LLC (“RicRiz”) was formed in 2002 and, sometime on or before October 26, 2005, became the owner of the real property located at 2440-2497 Industrial Road, which includes the property on which the Crazy Horse Too club was located.

         The Crazy Horse Too club closed in September of 2006 or 2007. On August 16, 2007, the real property at 2440-2497 Industrial Road and the Crazy Horse Too business, including the Crazy Horse Too trademark, were forfeited to the United States government. These assets were ordered to be sold and applied to certain forfeiture and restitution obligations in connection with the judgments entered in a criminal case involving the owners and operators of Crazy Horse Too.

         However, the government still had not sold the property after three and a half years, and on February 28, 2011, the court in the criminal case permitted Canico to conduct a non-judicial foreclosure sale of the property. On July 1, 2011, Chicago Title of Nevada, Inc., on behalf of Canico, conducted a foreclosure sale of the real property secured by a Deed of Trust, and the real property was sold to Industrial Road 2440-2497, LLC. No. Defendant in this case was a party to the underlying the Deed of Trust.

         On September 4, 2009, after the Crazy Horse Too club had closed and before the purchase of the real property at the foreclosure sale, Russell Road began using the “Crazy Horse III” mark in connection with its gentlemen's club by the same name in Las Vegas. There were no other strip clubs in Las Vegas operating under the Crazy Horse name when Russell Road opened the Crazy Horse III club on September 4, 2009, and Russell Road has continuously used the Crazy Horse III mark since that date. Russell Road has also invested significant resources in promoting its Crazy Horse III club, including through advertising and booking celebrities to appear at the club.

         After purchasing the real property at 2440-2497 Industrial Road, certain Defendants began using the Crazy Horse Too mark to promote the re-opening of the Crazy Horse Too club in April 2013. The Court now makes findings to determine which Defendants were involved in the use of the Crazy Horse Too mark following Russell Road's prior use.

         C. Undisputed Facts Regarding Involvement of Galam Defendants

         Defendant Michael Galam and Defendant Crazy Horse Too Gentlemen's Club LLC (“Crazy Horse Too GC”), in their Motion to Reconsider and Response to Plaintiff's Motion for Summary Judgment, admit to use of the Crazy Horse Too mark after Russell Road established prior use and trademark priority. Michael Galam managed and ran the Crazy Horse Too GC. This included approving marketing and promotional activities regarding the opening and operation of the club. Defendant Rhino Bare LLC (“Rhino Bare”) and Defendant Rhino Bare 4824 LLC (“Rhino 4824”) admit to participation in the decision to use the Crazy Horse Too mark after Russell Road established prior use and trademark priority.

         Regarding Victor Galam's involvement, the Court finds the following facts to be undisputed. Victor Galam had a 85% ownership interest in Crazy Horse Too GC. He owned and used the Crazy Horse Too trademark. He used the Crazy Horse Too trademark in commerce prior to the year 2013. Victor Galam submitted an Affidavit for an exotic dance license for the Crazy Horse Too GC in October 2014. (ECF No. 346-17 at 2). This affidavit indicated that he was the 100% and sole owner of Rhino Bare, which holds a 59.93% interest in Canico. On October 22, 2014, Victor Galam signed a lease with Industrial Road on behalf of Crazy Horse Too GC that included an addendum of trademark license to the GC. (ECF No. 301-1 at 30, 32). Victor Galam indicated on the lease that he was a “manager” of Crazy Horse Too GC. (ECF No. 301-1 at 30, 32).

         Regarding Jacqueline Galam Barnes' involvement, the Court finds the following facts to be undisputed. Jacqueline Galam Barnes had a 5% ownership interest in the Crazy Horse Too GC. She admitted that she did own and use the Crazy Horse Too trademark. She applied for licenses under the Crazy Horse Too name. She admitted to participating in other licensing and permitting efforts before local authorities in support of the opening and operation of the Crazy Horse Too Gentlemen's Club. She also used the Crazy Horse Too trademark in commerce prior to the year 2013.

         D. Undisputed Facts Regarding Involvement of Hakakian Defendants

         Hakakian Defendants include David Hakakian (“Hakakian”), El Marino, LLC (“El Marino), Isaac Javdanfar (“Javdanfar”), IJ Properties, LLC (“IJ Properties”), Knotting Hill, LLC (“Knotting Hill”), Morris Nejathaim (“Nejathaim”), S Double, LLC (“S Double”), Mehran Sadighpour (“Sadighpour”), Kamran Samooha (“Samooha”), Sefox Investment, LLC (“Sefox”), and Hamed Yazdanpanah (“Yazdanpanah”).

         The Court finds the following facts to be undisputed. Hakakian is manager of El Marino, which is a former or current member of Canico. Yazdanpanah is a manger of Knotting Hill, which is a former or current member of Canico. Nejathaim is a manager of Sefox, which is a former or current member of Canico. Javdanfar is a manager of IJ Properties, which is a former or current member of Canico. Javdanfar himself is also a former or current member of Canico. Sadighpour is a member of S Double, which is a former or current member of Canico. Sadighpour himself is a former or current member of Canico. Samooha is a former or current member of Canico.

         Collectively, Hakakian Defendants purchased the real property at 2476 Industrial Road for $3 million, which included the good will and “all intellectual property” of the Crazy Horse Too Gentlemen's Club in 2009. At the time of the purchase, these Defendants were members of Canico, either as individuals or through the LLCs they managed. As of July 23, 2009, Canico intended to reopen the Crazy Horse Too GC in Las Vegas, Nevada. The individual Defendants - Hakakian, Javdanfar, Nejathaim, Sadighpour, Samooha, and Yazdanpanah - voted to transfer their ownership interest in Canico to Rhino Bare in February 2013, prior to the Crazy Horse Too Gentlemen's Club opening. On April 22, 2016, in separate litigation, a ...


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