Case Number: EC058649 Hearing Date: October 19, 2018 Dept: B

# 7

mediterranean best foods, inc., dba SHUSHAN BREAD, et al.,

Plaintiffs,

v.

KAREN GEVORKYAN, et al.,

Defendants.

Case No.: EC058649

Hearing Date: October 19, 2018

[TENTATIVE] order RE:

motion for order to show cause re contempt

BACKGROUND

This case arises from a dispute regarding a bakery business. A cross-action was filed, alleging trademark infringement and unfair competition. The matter proceeded to trial and on December 26, 2013 the jury rendered a verdict. On June 5, 2017, the Court of Appeal issued its order overruling the Court’s Final Statement of Decision. The Order on Remittitur was filed August 9, 2017 and an Amended Order on Remittitur was filed August 29, 2017.

On October 6, 2017, the Court granted the Cross-Complainants Karen Gevorkyan, Freedom Baking Company, Inc. and Freedom Candy, Inc.’s motion for permanent injunction, and enjoined Cross-Defendants Mediterranean Best Foods, Inc. dba Shushan Bread, Irina Aslanyan, and Arsen Kirakosyan from using the trademarks of the Cross-Complainants and any other marketing, packaging, or representations of Cross-Defendants’ products that would confuse the market that the nature of its products is the same as Cross-Complainants’ mark.

Cross-Complainant Karen Gevorkyan (“Gevorkyan”) moves for an order requiring Cross-Defendants Mediterranean Best Foods, Inc., Irina Aslanyan, and Arsen Kirakosian to show cause (“OSC”) why they should not be held in contempt for their willing and ongoing violation of the Court’s Order for Permanent Injunction issued on October 6, 2017.

The Court is not in receipt of an opposition brief.

Legal Standard

Disobedience of any lawful judgment, order, or process of the court constitutes contempt of the authority of the Court. (CCP §1209(a)(5).) A contempt proceeding is not a criminal action or proceeding, but it is a special proceeding, criminal in character, government by the CCP and is intended to implement the inherent power of the court to conduct the business of the court and enforce the lawful orders of the court—not to punish for an offense. (Pac. Tel. & Tel. Co. v. Superior Court for Los Angeles County (1968) 265 Cal.App.2d 370, 371-72.)

In order to make a finding of contempt for the failure to comply with an order, the Court must find that: (1) the order was issued, (2) the accused had knowledge of the order, (3) the accused had the ability to obey it, and (4) the accused willfully disobeyed the order. (In re Jones (1975) 47 Cal.App.3d 879, 881.) To satisfy due process, the judge must: (1) advise the accused of the above rights; (2) investigate the charges by receiving evidence and examining any witnesses; and (3) if necessary, adjourn the proceedings to afford the accused an adequate opportunity to gather evidence and prepare a defense. (CCP §1217.)

The Court may find the accused guilty of indirect contempt only if it is proved beyond a reasonable doubt that the accused knew of the order, had the ability to obey it, and willfully disobeyed it. The Court’s order must recite the issuance of an order, the accused’s knowledge of the order, the accused’s ability to obey it, and the accused’s willful disobedience. (In re Jones (1975) 47 Cal.App.3d 879, 881.)

If the Court finds the respondent guilty of contempt, a fine may be imposed of up to $1,000, or the respondent may be imprisoned for up to 5 days, or both, for each act of contempt. (CCP §1218.) When the contempt consists of the failure to perform an act which is yet in the power of the person to perform, he or she may be imprisoned until the act is performed. (CCP §1219.)

The judgment and order is final and conclusive and therefore not appealable. (CCP §§1222 and 904.1(a)(1).) Instead, the order is reviewed by a writ of certiorari. (CCP §1068.) If the order imprisons the accused, it may be reviewed by a writ of habeas corpus. (Penal Code §1473(a).)

DISCUSSION

Gevorkyan moves for an OSC re contempt, arguing that though the Court issued a permanent injunction against Cross-Defendants, Cross-Defendants continue to infringe on her trademarks.

However, the Court does not find that the declarations of Mher Asatry and Christopher Marzwanian are sufficient to constitute a charging affidavit. (See Rutter Guide, Cal. Prac. Guide Civ. Pro. Before Trial (June 2018 Update) Ch.9(II)-A, §9:711.) “When the contempt is not committed in the immediate view and presence of the court, or of the judge at chambers, an affidavit shall be presented to the court or judge of the facts constituting the contempt, or a statement of the facts by the referees or arbitrators, or other judicial officers.” (CCP §1211(a).) ‘The affidavit is like a complaint in a criminal case; it frames the issues and must charge facts which show a contempt has been committed.” (Reliable Enterprises, Inc. v. Superior Court (1984) 158 Cal.App.3d 604, 616.)

The Court addresses each factor—i.e., showing whether the order was issued, the accused had knowledge of the order, the accused had the ability to obey it, and the accused willfully disobeyed the order.

First, in support of the motion, Gevorkyan provides evidence that the Court of Appeal and this Court found that Cross-Defendants had been infringing on her trademark. The Court permanently enjoined them from using her marks.

On August 29, 2017, the Court granted Cross-Complainants’ motion to correct clerical errors of the Order on Remittitur. The Amended Order on Remittitur from the Court of Appeals stated, in part, judgment for Cross-Complainants on their trademark infringement cause of action for the trademarks, “Shushan Lavash,” “Sassoon Lavash,” “Eat Bread-Live Longer,” “Handmade Lavash Wraps,” “Tehran Lavash,” “Sandwich Lavash,” “Shiraz Lavash,” “Vanadzor Lavash,” “Shushan Barbari Bread,” “Shoti Bread,” “Shushan Bread,” “Romanoff Bread,” “Baltik Bread,” “Zaporosjskiy Bread,” “Stolichniy Bread,” and “Borodinsky Bread.” (See Asatryan Decl., Ex. A [Amended Order].) Thereafter, counsel for Cross-Complainants, Mher Asatryan, Esq., sent a cease-and-desist letter to Cross-Defendants, requesting that they stop production, promotion, and sale of goods bearing the aforementioned trademarks. (Id., Ex. B.)

Despite the Amended Order and Mr. Asatryan’s letter, Gevorkyan argues that Cross-Defendants still continued to use her trademarks on their products. (Asatryan Decl., ¶5.) Thus, on September 14, 2017, Gevorkyan filed a motion for preliminary injunction, which the Court granted on October 5, 2017. (Id., Exs. C-E.) In the Order for Permanent Injunction, Cross-Defendants were permanently enjoined from using Gevorkyan’s trademarks, any marks, names, designs, color schemes, layouts, signs, or indicia which are confusingly similar to Gevorkyan’s marks. They were also enjoined from producing, distributing, marketing, selling, etc. baked goods in any manner that may tend to give the general public the impression that Cross-Defendants are affiliated with, authorized by, or associated with Cross-Complainants. (Id., Ex. D.) Thus, Gevorkyan has established that a valid order exists.

Second, Gevorkyan provides evidence that she caused the Notice of the Order for Permanent Injunction (file November 6, 2017) to be served by mail on Cross-Defendants via their counsel. (See Asatry Decl., Ex. E.) In addition, according to the Court’s October 6, 2017 minute order and Gevorkyan’s Notice of Order, both parties were in attendance through their respective counsel. Although Cross-Defendants’ counsel attended the hearings and were served with the notice of the orders, there is no indication that Cross-Defendants themselves had personal notice of the permanent injunction order.

Third, Gevorkyan argues that there was nothing stopping Cross-Defendants from obeying the permanent injunction order to cease using her trademarks on their products. (Mot. at pp.11-12.) However, this is not stated in the declarations/affidavits showing Cross-Defendants’ ability (or lack thereof) to comply with the Court’s order. Thus, this issue has not been adequately addressed.

Fourth, Gevorkyan argues that Cross-Defendants willfully disobeyed the Court’s orders, despite the Court of Appeal’s Remittitur, Mr. Asatryan’s cease-and-desist letter, and the permanent injunction entered against Cross-Defendants. Gevorkyan argues that Cross-Defendants continued to use Gevorkyan’s trademark and design/packaging on their own products in contravention to the orders and permanent injunction for nearly a year.

For example, Gevorkyan argues that she discovered recently in August to September 2018 that Cross-Defendants were still using her trademarks and the same exact designs and packaging as Cross-Complainants. In support of this, Gevorkyan provides the declaration of Christopher Marzwanian (an employee of Cross-Complainants’ counsel), who states that he visited the Pasha Market and discovered that Cross-Defendants were still selling products using Gevorkyan’s trademarks and designs/packaging. (See Marzwanian Decl., ¶2, Exs. A-C.) Also, upon visiting Mediterranean Best Foods, Inc.’s location, he observed Cross-Defendants still using Gevorkyan’s trademarks and designs/packaging. (Id., ¶¶3, 8; Exs. D, J.) He also discovered that Mediterranean Best Foods, Inc. products were being sold on Amazon.com and other websites, and those vendors confirmed they obtained their products from Mediterranean Best Foods, Inc. (Id., ¶¶4-7, Ex. E-I.) Thus, Gevorkyan has provided evidence showing Cross-Defendants’ willful disobedience by using the trademarks and designs/packaging despite the many orders prohibiting them from doing so.

While there appears to be ongoing violations of the permanent injunction, there is no indication that Cross-Defendants themselves had personal notice of the content of the orders (though their counsel was on notice) and that they thereby willfully disobeyed the Court’s orders. Further, though Marzwanian states that he went to Mediterranean Best Foods, Inc.’s location, there is no statement that he requested Cross-Defendants to stop using Gevorkyan’s trademarks and packaging/designs. The Court also notes that the Notice of Order and cease-and-desist letter were sent to Cross-Defendants’ counsel and not served on Cross-Defendants personally. As such, the Court cannot make a determination based on the evidence provided whether Cross-Defendants themselves were given proper notice, the opportunity to obey those orders, and thus whether they willfully obeyed the Court’s orders.

The Court finds that the declarations submitted by Gevorkyan in support of this motion for OSC re contempt are not sufficient to rise to the level of a charging affidavit necessary to initiate a contempt proceeding against Cross-Defendants.

CONCLUSION AND ORDER

The Court continues the motion for OSC re contempt to November 16, 2018 at 8:30 a.m. in order to provide time for Gevorkyan to file a charging affidavit that clearly addresses each of the four issues involved in finding indirect contempt supported by factual statements. Gevorkyan is ordered to file this affidavit by October 29, 2018.
Gevorkyan shall provide notice of this order.

Posted 10/17/18 at 10:00 a.m.