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Fernandez v. Jones

September 2, 2009

MARGARITA FERNANDEZ, ET AL., PLAINTIFFS,
v.
TIMOTHY A. JONES, SR., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge

MEMORANDUM OPINION

This case is before the Court on Defendants' motion for summary judgment. See Dkt. # 29. Humbert Fernandez, Sr., and Cecil Jones, Sr., established MCM Parking Co., Inc., decades ago to operate parking garages in the District of Columbia. The business was owned in equal shares, 50/50 between them. Both men are now deceased and their descendants collectively still own MCM 50/50, although only the Jones family sons were still active in it when it ceased operations. The old relationship has since frayed. Mr. Fernandez's family sued Cecil S. Jones and Timothy A. Jones in a sixteen count Complaint for "hijacking the Company." Diversity jurisdiction is not asserted and only two of the counts expressly allege violations of federal law: Count VIII alleges "Unfair Competition under Common Law and Lanham Act § 43(a): Trade Name and Trade Dress Infringement" and Count IX alleges "Unfair Competition under Lanham Act § 43(a): Deceptive Trade Practices; Passing Off."*fn1 The Court finds that Defendants are entitled to summary judgment on the Lanham Act claims, and it will decline to exercise supplemental jurisdiction over the remaining local law claims. The local law claims will be dismissed without prejudice.

I. FACTS*fn2

MCM Parking Co., Inc. was formed in 1968. It was "in the business of owning and/or operating automobile and other motor vehicle parking and storage lots in and around the District of Columbia and elsewhere." Compl. ¶ 16. The Defendants, known familiarly as "Rocky" and "Timmy" Jones, became employees of MCM Parking Co., Inc., in the mid-1970s. At that time, MCM was owned by Mr. Jones, Sr., and Mr. Fernandez, Sr., with each holding a 50% interest. The younger Joneses became shareholders of the company in 1991, each owning 15% of the stock purchased from their father's share. Each continued to be a working employee of MCM.

Mr. Jones, Sr., became ill in 1998 and was rendered unable to work.*fn3 At that point, Mr. Jones, Sr., transferred his remaining shares to his sons, the Defendants here, so that each owned 25% of MCM stock. Because of the additional responsibilities assumed by Defendants, they also renegotiated their salaries.

Mr. Fernandez, Sr., died in March 2006. Shortly after the funeral, Mr. Fernandez, Jr., came to the MCM office to collect his father's personal items. As Mr. Fernandez described this encounter, cleaning out the desk was the main purpose of his visit. See Pls.' Opp'n, Ex. E (Deposition of Humbert Fernandez, Jr. at 8. However, while he was there and "just to get things to move forward," then I proposed that everybody gets paid equally. I don't know exactly what there was beforehand, but just to go forward, everybody be equal and just go on from there.

Q: Can you recount for me as close as you can the actual conversation, the words you said and the words that they said in regard to that subject.

A: Well, I proposed that we add up all the salaries [i.e., the salaries of Mr. Fernandez, Sr. and the two Jones' sons] and then divide it by three, and I asked Timmy and I asked Rocky, because they were both there, and I said, "How does this sound? Is this okay?" And Timmy looked at Rocky, and they said, "Okay."

Q: Okay to what?

A: To splitting the salary. Adding all the salaries together, and then splitting it evenly.

Id. at 8-9. This proposal was designed "[j]ust to continue the business. I know my father was not there anymore, so they were going to be there by themselves, and so there I thought that would be a fair compromise." Id. at 9. Exactly the reason for a "compromise" was not provided by Mr. Fernandez, Jr., since he did not propose that he or any of his siblings work at the business. Id. at 9-10. At that time, MCM operated four parking lots but the buildings at three of those lots were up for sale.*fn4 Thus, explained Mr. Fernandez, Jr., "we never knew exactly if MCM was going to last three months or six months or so forth." Id. at 13. As a result, the duration of Mr. Fernandez, Jr.'s proposal "was kind of hard to say. So this was kind of like a month-to-month thing until we knew something more definite." Id.

MCM made payments in April 2006 to Margarita Fernandez, the widow of Mr. Fernandez, Sr., constituting one-third of the total salaries but such payments were not continued past that month. The attorney for the Fernandez shareholders wrote to the Messrs. Jones on May 22, 2006, responding to an email from them:

You mentioned that the arrangement made with Bert Jr. covered April 2006 only. That was not our understanding. We understood that dividing the administrative income into equal thirds would be a permanent arrangement, with checks issued to our father's name being an interim step until we reached an agreement on how to move forward with the distribution of the administrative income. . . . [Paying Bert Sr.'s salary to his heirs] was just a short-term solution (as was done in April). It was our intention to then establish a more permanent arrangement of how the two families could continue to operate the business.

Pls.' Opp'n, Ex. F (Letter from Thomas J. Nehilla, Esq., dated May 22, 2006). The lawyer's letter also noted that "the three (3) month-to-month [MCM-operated garage] locations are for sale and, of course, we have previously advised you that our 50% ...


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