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Reynolds v. Banks

United States District Court, E.D. Michigan, Southern Division

February 12, 2015

LARRY REYNOLDS, a/k/a L.J. REYNOLDS, and LARRY DEMPS, Plaintiffs,
v.
SANDRA BANKS, WILLIE FORD, et al., Defendants.

ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT (ECF NO. 69) AND STAYING THIS MATTER

PAUL D. BORMAN, District Judge.

On September 5, 2014, the Court held a hearing on Plaintiffs' Motion for Summary Judgment. (ECF No. 69.) Defendants filed a response (ECF No. 71) and Plaintiffs filed a Reply (ECF No. 73). Following the hearing, the Court directed the parties to continue to operate under the Stipulated Standstill Order that this Court entered on May 11, 2012, and to report back to the Court regarding related proceedings in the Wayne County Probate Court.

Having had no contact from the parties since the hearing, the Court now DENIES the Motion for Summary Judgment and STAYS this case pending notification of the outcome of the related proceedings in the Wayne County Probate Court.

INTRODUCTION

This action involves competing interests in the name of the rhythm and blues group "The Dramatics." Following the sudden death of Ron Banks, one of the founding members of the group, his widow, Defendant Sandra Banks, began asserting her right to continue to use the name "The Dramatics, " applying for and obtaining a service mark for "The Dramatics" in 2010. In this action, Reynolds, a member of The Dramatics, and co-Plaintiff Larry Demps (a former member of The Dramatics) contest Sandra Banks' right and/or interest in the name "The Dramatics" and have filed this action against Banks and Willie Ford (also a former member of The Dramatics) for trademark infringement and breach of contract, essentially accusing both Ms. Banks and Mr. Ford of attempting to establish a rival and counterfeit group using the name "The Dramatics, " to the exclusion of both Reynolds and Demps. Ms. Banks and Mr. Ford respond that Reynolds is the actual counterfeit actor and that he is without rights to the name The Dramatics. In this motion for summary judgment, Plaintiffs appear to seek judgment in their favor on the sole issue of whether Ron Banks' rights or interest in the name "The Dramatics, " in particular his one-third share in an LLC, passed to his wife upon his death.[1]

I. BACKGROUND

The Dramatics are a "legendary soul/pop/rhythm & blues vocal group." Reynolds began performing with The Dramatics as "lead" singer in 1972 or 73. (ECF No. 51, Third Amended Compl. ¶ 3.) Plaintiff Demps was a founding/original member of The Dramatics, credited with suggesting the group's name, who was active with the group until some time in early 1980's. Id. ¶¶ 4-6. Defendant Willie Ford also was a member of the group but left The Dramatics some time in 2012. Id. ¶ 8. Ron Banks died suddenly on March 4, 2010, while the group, including Reynolds and Ford, was actively performing at various venues around the country.

This is not the first time that there has been litigation over the ownership of The Dramatics name. Defendants offer the December 5, 1973 Findings of Fact and Conclusions of Law issued by former Wayne County Circuit Court Judge Honorable James L. Ryan, in a case in which Defendant in the instant case, Willie Ford, along with Plaintiff Larry Demps and the now-deceased Ron Banks, as members of the group "The Dramatics, " sought to enjoin former Dramatics members William Howard and Elbert Wilkins from using the name "The Dramatics." (ECF No. 20, Defs.' Resp., Amended Ex. 4, December 5, 1973 Findings of Fact and Conclusions of Law) ("1973 Opinion"). In his findings of fact and conclusions of law, Judge Ryan found that the five members had formed an unwritten partnership and that the name "The Dramatics, " was an asset and property of that partnership. Id. at 4. Judge Ryan further found that when Howard and Wilkins withdrew from the group in 1973, the partnership was dissolved by operation of law. Id. at 5. Finally, Judge Ryan concluded that: "[U]pon dissolution of the partnership, the title, "The Dramatics, " the name sometimes called service mark, "The Dramatics, " not having been disposed of upon dissolution, is the property of the partners in common and belongs to each of them with the right to use it in common, but not to the exclusion of the other partners." Id. at 5. Judge Ryan denied the plaintiffs' request for preliminary injunctive relief, which was premised upon a claim to exclusive use of the name "The Dramatics." Id. at 6.

As Defendants correctly observe, Plaintiff Reynolds was not a party to the 1973 action and was not adjudged at that time to have any rights in the name "The Dramatics." Defendant Ford, in his Affidavit submitted in response to Plaintiffs' earlier-filed motion for preliminary injunction, explains that after the conclusion of the 1973 lawsuit, he, Ron Banks and Demps entered into an agreement with Howard and Wilkins to buy out the latter two members's interest in the name "The Dramatics." (ECF No. 17, Defs.' Amended Resp. to Prelim. Inj. Mot. Ex. 2, June 11, 2012 Affidavit of Willie Ford ¶ 5.) This version of events is corroborated by the sworn affidavit of Don Davis, who was the former president and owner of Groovesville Production, Inc., an entity that produced musical recordings in the City of Detroit in the 1960's through the 1980's and who produced under contract for "The Dramatics." (ECF No. 19, Defs.' Amended Resp. to Prelim. Inj. Mot. Ex. 5, June 11, 2012 Affidavit of Don Davis ¶¶ 1-3.) Davis states in his affidavit that only Ron Banks, Willie Ford and Larry Demps were under contract with Groovesville as official members of the group and that Plaintiff Reynolds was one of the performers with The Dramatics during this time but was under a separate contract with Groovesville. Id. at ¶¶ 5-6.

Ford states in his affidavit that he has never sold or assigned his ownership interest in the name "The Dramatics." (Ford. Aff. ¶ 7.) Mr. Ford testifies in his affidavit that in 2007, he entered into an Operations Agreement with Plaintiff Reynolds and Ron Banks for the purpose of organizing a limited liability company (LLC) to govern the business of The Dramatics. (Id. ¶ 8; ECF No. 16, Defs.' Resp. to Prelim. Inj. Ex. 7, November 30, 2007 Operations Agreement (the "2007 Operations Agreement".) The 2007 Operations Agreement was executed by Plaintiff Reynolds, Defendant Willie Ford and Ronald Banks and provided that "[t]he name The Dramatics will be equally owned and used by each member regardless of who acts as the registering agent." The 2007 Operations Agreement further provides that any action performed by a member that is not disclosed to the other members is action taken outside the scope of the Agreement. (ECF No. 16, Defs.' Resp. to Prelim. Inj. Mot. Ex. 7.) Defendant Ford understood the 2007 Operations Agreement to have been signed for the purpose of helping to organize the business of The Dramatics and did not believe that he transferred any rights to use the name "The Dramatics" to the LLC. (Ford Aff. ¶ 9.) Beginning on December 4, 2007, Articles of Organization for "Dramatics the Singing Group, LLC" were filed with the Michigan Bureau of Commercial Services, and Plaintiff Reynolds was listed as the LLC's resident agent. (ECF No. 16, Defs.' Resp. to Prelim. Inj. Mot. Ex. 6.)

Defendant Ford was unaware that Plaintiff Reynolds organized another LLC a year later, on December 5, 2008, purporting to have only two members, Mr. Banks and Mr. Reynolds, and filed Articles of Organization and served as resident agent for this new LLC, "The Dramatics LLC." (ECF No. 16, Defs.' Resp. to Prelim. Inj. Mot. Exs. 8, 9) (the "2008 Operations Agreement"). It is in part upon this subsequent 2008 Operations Agreement that Plaintiff Reynolds bases his right to exclusive use of the name The Dramatics. Defendant Ford states in his affidavit that he never authorized Plaintiff Reynolds to organize a new LLC for the same purpose and with the same assets as the 2007 LLC and believes the formation of the 2008 LLC to have been prohibited by the earlier 2007 Operations Agreement. (Ford Aff. ¶¶ 10-11.)

On February 10, 2009, group members Ron Banks, Plaintiff Larry Reynolds and Willie Ford obtained a trademark, as co-registrants, for the word mark "Dramatics the Singing Group" from the United States Patent and Trademark Office. (ECF No. 7, Pl.'s Mot. for Prelim. Inj. Ex. 1.) The mark covered the following goods and services: "Hats, T-shirts, Sweat shirts, Jackets, Scarves, Sweaters, Tuxedo belts, Baseball Caps, Cap visors, Waist belts." Id. At the June 18, 2012 hearing on Plaintiff's motion for preliminary injunctive relief, Plaintiffs' counsel conceded that no effort has ever been made to cancel the 2009 mark, which is registered jointly to the now-deceased Banks, Plaintiff Reynolds and Defendant Ford.

On April 21, 2010, after her husband's death and while acting as the Personal Representative of his Estate, Sandra Banks applied for a service mark for "The Dramatics, " which was registered to her March 6, 2012. (Pl.'s Compl. Ex. 3.) The mark was designated for "Entertainment in the nature of live performances by a musical group, " and "for audio and video recordings featuring music and artistic performances; digital music downloadable from the internet." Id. Plaintiff Reynolds has filed a cancellation proceeding in the United States Patent and Trademark Office (USPTO"), seeking to have Banks's mark cancelled. (Pl.'s Mot. Ex. 8.) Discovery in the USPTO ...


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