N.Y. Real Estate Inst., Inc. v. Jammula

Citation: 379 F. Supp. 3d 266Docket: 17 Civ. 8698 (VM)

Court: District Court, S.D. Illinois; May 7, 2019; Federal District Court

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Plaintiff New York Real Estate Institute, Inc. initiated a legal action against defendants Rao Jammula, Shobha Jammula, and New York Real Estate Insurance Institute, Corp., alleging breaches of the Lanham Act, the Anticybersquatting Consumer Protection Act, and New York state law. The defendants removed the case to federal court on November 9, 2017. A settlement was reached prior to trial, but no settlement agreement was filed. On June 21, 2018, the plaintiff informed the court that the defendants had not complied with the settlement terms. The court ordered the defendants to respond, warning that failure to do so could result in enforcement of the settlement. After no further communication from the parties, the court requested a status report from the plaintiff on November 9, 2018, which indicated ongoing violations by the defendants. The plaintiff subsequently filed a motion for contempt to enforce the settlement. The defendants claimed they had not violated the agreement. Following a status conference, the motion was referred to Magistrate Judge Katharine H. Parker, who recommended on March 29, 2019, that the motion be denied and the case dismissed without costs. Neither party objected to this recommendation. The district court reviewed the report and concluded that it was not clearly erroneous or contrary to law, adopting the recommendations in full.

The Report and Recommendation by Magistrate Judge Katharine H. Parker, dated March 29, 2019, is fully adopted. The Plaintiff's motion for contempt is denied, and the case is dismissed without costs to either party. The Clerk of Court is instructed to terminate any pending motions and close the case. The Plaintiff, New York Real Estate Institute, Inc. (NYREI), and Defendants, New York Real Estate Insurance Institute Corp. (NYREII) and Rao and Shobha Jammula, initially reported a settlement regarding claims of service mark infringement in April 2018, but failed to file a formal settlement agreement. In June 2018, NYREI notified the Court that the Defendants did not perform as agreed, prompting a request to reinstate a trial date. After a contempt motion was filed in November 2018 due to Defendants' alleged failure to comply with the settlement, the Court held a hearing in January 2019. The Court determined that the Plaintiff did not prove the necessary elements for contempt, as there was no clear and unambiguous court order violated, since the settlement terms were never submitted for approval. Consequently, the recommendation was for the denial of the contempt motion due to insufficient evidence of a violation.

The plaintiff must prove that the defendant, NYREII, lacked reasonable diligence in complying with their settlement agreement, which required them to cease using the name "New York Real Estate Insurance Institute" and to change their corporate name with the New York State Department of State. The plaintiff alleges two violations: (1) NYREII's continued use of "NYREII" in online marketing and (2) the delay in changing its corporate name. 

For the first allegation, the plaintiff presented evidence of third-party websites using "NYREII," but failed to establish that this constituted a violation since the defendants have no control over such sites. Moreover, the defendants complied with the settlement by transferring the domain name "NYREII.com" to the plaintiff. 

Regarding the second allegation, although the plaintiff criticized the speed of the name change to "A1 Real Estate Insurance Institute," the settlement's requirement to change names "as soon as practical" was deemed ambiguous. The defendants began the name change process on March 19, 2018, and received confirmation from the Department of State on November 26, 2018, after fulfilling necessary documentation requirements. The defendants could not control the processing time of the government agency.

As the plaintiff did not provide clear and convincing evidence of a violation, the court finds no prima facie case of contempt. Therefore, the court recommends denying the plaintiff's motion for contempt and dismissing the action without costs to either party.