Motions to Dismiss

One Attempt at Personal Service Insufficient to Resort to Substitute Service through SOS

The Indigo Road Hospitality Group, LLC d/b/a Oak Steakhouse and Oak Atlanta, LLC v. The League, LLC d/b/a Oak Atlanta, Civil Action No. 1:21-cv-02840-SCJ (N.D. Ga. June 3, 2022)

Plaintiffs Indigo Road Hospitality Group owns and operates restaurants, including OAK STEAKHOUSE restaurants, in Atlanta, Charlotte, Raleigh, and other cities throughout the southeastern United States. Defendant The League owns and operates a restaurant and nightclub business known as OAK ATLANTA in Atlanta. On July 15, 2021, Plaintiffs filed a complaint against Defendant in the Northern District of Georgia (Atlanta Division) asserting claims for trademark infringement and unfair competition pursuant to Sections 32(1) and 43(a) of the Lanham Act, 15 U.S.C. 1114(1) and 1125(a) and Georgia common law. Generally speaking, Plaintiffs allege that they own a federal trademark registration for OAK STEAKHOUSE, which it has used in connection with its restaurant services since at least as early as 2005. Defendant, on the other hand, operates its own restaurant and night club under the mark OAK ATLANTA. The Complaint alleges that Defendant has had knowledge of Plaintiffs’ trademark rights in the mark OAK STEAKHOUSE since at least February 2021, when Plaintiffs notified Defendant of its mark and allegations of infringement. Despite receiving such notice, the Complaint alleges that Defendant has continued to infringe Plaintiffs’ mark, which is likely to cause confusion in the minds of consumers as to the source of Plaintiffs’ services. The case was assigned to Judge Steve C. Jones.

On December 17, 2021, Plaintiffs filed a motion for entry of default against Defendant. In the Motion, Plaintiffs alleged that it served Defendant with process by delivering a copy of the summons and complaint to the Georgia Secretary of State, since the registered agent listed on the Secretary of State’s website was no longer present at the registered address, on August 16, 2021. Despite being served with process, Plaintiffs alleged that Defendant had failed to file an answer or other responsive pleading within the time permitted by the federal rules. On December 23, 2021, Plaintiffs filed an affidavit of due diligence attesting that Plaintiffs made “multiple attempts” to serve Defendant’s registered agent at its registered address and at its place of business. Specifically, the affidavit averred that Plaintiffs’ process server attempted to serve Defendant (1) at its registered agent address but instead found a “weight loss clinic” which did not have any signage indicating an affiliation with Defendant and (2) at its principal place of business which did not have any signage and appeared to be empty. The Clerk entered default on December 23, 2021.

On January 13, 2022, Defendant filed a Motion to set aside default, to dismiss for insufficient service and, in the alternative, to enforce the parties’ settlement agreement. In the Motion, Defendant argues that Plaintiffs failed to exercise or demonstrate reasonable diligence in attempting to serve Defendant’s registered agent, who Defendant alleged “has always been available for service at the address on file with the Secretary of State,” before resorting to substitute service upon the Georgia Secretary of Service. The Motion further argues that Plaintiffs and Defendant reached a “binding and enforceable settlement agreement resolving all issues” through a series of email exchanges between Plaintiffs’ counsel and Defendant in August 2021 whereby Plaintiffs were to prepare and file a consent order to dismiss the case. In circulating a draft of the proposed consent order, Plaintiffs included additional terms that were not part of the parties agreement and, as a result, the consent order was never filed.

In an Order dated June 3, 2022, the Court granted Defendant’s Motion to set aside default and to dismiss for insufficient service, which rendered Defendant’s alternative motion to enforce the settlement agreement moot. In so ordering, the Court found that:

“Defendant has met its burden of describing how the attempted service of process failed to meet the procedural requirements of Rule 4 and O.C.G.A. 14-11-209(f) as, without more, one visit to the registered agent’s address and finding a closed sign does not establish that a company has failed to maintain a registered agent in the state or that the registered agent cannot with reasonable diligence be found at the registered office.”

The Court was not persuaded by the fact that the registered address appeared to house a weight loss clinic, finding that fact “not determinative under the plain language of Georgia statutory law.” The Court further was unimpressed by the fact that the Plaintiffs’ process server only made one visit to the registered agent’s address and failed to make any contact with a receptionist or other individual located at that address. Having found Plaintiffs’ attempts at service insufficient, there was good cause to set aside the clerk’s entry of default and the case was dismissed without prejudice.

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