873 F. Supp. 2d 721
E.D. Va.2012Background
- East West, LLC sues Defendants Rahman and Caribbean Crescent, Inc. (CCI) for trademark/trade name infringement and related contract claims arising from a 2003 sale of Caribbean Crescent assets.
- Sale/transfer of Caribbean Crescent assets included the CARIBBEAN CRESCENT Mark and trade name, plus a non-compete and a grant of goodwill/derivatives to East West.
- Defendants allegedly used the trade name and mark within five miles of the Washington, D.C. area and filed a 2004 DC-based commission contract; disputes over commissions and non-compete duration ensued.
- East West alleges Defendants later registered the CARIBBEAN CRESCENT Mark in 2008 and engaged in competitive activity in 2011, with related misrepresentations about ownership.
- East West asserts interference with business relationships, misappropriation of trade secrets via a former East West employee, and other tort/contract claims; Defendants move to Dismiss several counts.
- The court applies Virginia law on limitations (borrowing statute considerations) and concludes some claims are timely while others are time-barred or should be dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What law governs the contract claim’s limitations period? | East West contends Virginia law applies; contract was made in VA with performance across multiple states. | DC law governs because performance occurred in DC and contract terms reference DC area. | Virginia law applies; VA statute of limitations governs the contract claim. |
| When did East West's breach of contract claim accrue? | Accrual not clearly established from pleadings; discovery not controlling for accrual. | Accrued in 2004 based on a letter alleging sales since 2004. | Accrual not clearly shown; claim survives for pleading purposes. |
| Is East West's unjust enrichment claim time-barred? | Unjust enrichment tied to the conduct post-sale; five-year period may apply depending on contract relation. | Three-year limitations apply since unjust enrichment is quasi-contractual in nature. | Dismissed with prejudice as untimely under Virginia three-year period. |
| Is the conversion claim viable for a trademark? | Trademark ownership and registration may constitute intangible property susceptible to conversion. | Trademarks are not subject to conversion; misalignment with Virginia law. | Conversion claim dismissed with prejudice; trademark is not the proper subject of conversion. |
| Are the Virginia Consumer Protection Act and Virginia Criminal Code claims time-barred? | New product introductions in 2011 re-trigger limitations; progressive encroachment may toll limitations. | Progressive encroachment does not apply to VCPA/Criminal Code claims; accrual on breach date governs. | Time-barred and dismissed with prejudice. |
| Is the tortious interference with business expectancy claim viable? | Defendants interfered with East West’s business relationships using Amin and other conduct. | Allegations are vague and fail to show improper methods or specific lost opportunities. | Dismissed without prejudice for lack of adequately pleaded facts. |
| Is the VUTSA misappropriation claim viable? | Amin possessed confidential information; Defendants misappropriated trade secrets. | No specific trade secrets or use described; conclusory allegations insufficient. | Dismissed without prejudice for lack of concrete facts. |
Key Cases Cited
- Lexie v. State Farm Mut. Auto. Ins. Co., 251 Va. 390 (Va. 1996) (law of the place where contract is made governs contract terms)
- Res. Bank-shares Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631 (4th Cir. 2005) (contract law determines accrual concepts for breaches)
- Belcher v. Kirkwood, 238 Va. 430 (Va. 1989) (unjust enrichment follows three-year statutory period)
- Airlines Reporting Corp. v. Pishvaian, 155 F.Supp.2d 659 (E.D. Va. 2001) (tortious interference and related doctrine require explicit relationships and terms)