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Local businesses declared victims of fraudulent scheme

Foley Bezek Behle & Curtis, LLP, on behalf of two local business owners brought a class action lawsuit for numerous Southern California bars and restaurants alleging that they were sold fake liability insurance under the pretense that the policies were underwritten by Lloyd’s of London. Named Plaintiffs in the case were James Fletcher, owner of Jimboz, and Mike Bastanchury, owner of Tiburon Tavern. Plaintiffs were tipped off to the fraudulent scheme when they received a letter from Lloyd’s of London informing them that their policies were fake. The policies were issued on counterfeit “Lloyd’s of London” letterhead. While the insurance brokers were unaware that the policies were fake, they had a duty to ensure that the policies were legitimate, argued Plaintiffs’ attorneys. Defendants in the case included Brown & Brown of California, United Restaurant Insurance Services, and Richard Peterson.

After a lengthy litigation and several mediations, Santa Barbara Superior Court Judge James W. Brown gave final approval of a settlement that called for distribution of $600,000 in settlement funds.

Several years ago, B&B Hardware, a fastener manufacturer and holder of a federally registered trademark, filed a trademark infringement case against a competing manufacturer. At trial, the jury found that B&B Hardware’s trademark was merely descriptive and had not acquired a secondary meaning, and therefore it was not entitled to protection. Judgment was entered against B&B Hardware.

Shortly thereafter, the competitor filed to register the same mark in its own name with the US Patent and Trademark Office. B&B Hardware hired Foley, Bezek, Behle & Curtis, LLP, who promptly went to work opposing the competitor’s application to register the mark. After a trial before the Trademark Trial and Appeal Board, FBB&C prevailed and the competitor was denied registration of the trademark. FBB&C then filed a new trademark infringement action against the competitor. The District Court initially dismissed the claim, stating that B&B Hardware had already had its day in court.

An appeal was taken to the Eighth Circuit Court of Appeals. In a victorious turnaround, the Court of Appeals reversed dismissal vindicating FBB&C’s position and analysis. The Court held that because B&B Hardware’s mark had become incontestable, it could no longer be challenged for mere descriptiveness. With its claims resurrected, B&B Hardware is now positioned to obtain profits and damages from the competing manufacturer whose sales of infringing products exceed $25,000,000.