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Maschino v. Tex A. Wayt

United States District Court, S.D. Indiana, Indianapolis Division

October 31, 2016

PHYLLIS MASCHINO et al., Plaintiffs/Counterclaim Defendants,
v.
TEX A. WAYT et al., Defendants/Counterclaim Plaintiffs

          ENTRY ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

          HON. WILLIAM T. LAWRENCE, JUDGE

         This cause is before the Court on the Defendants' motion for summary judgment (Dkt. No. 107). This motion is fully briefed, and the Court, being duly advised, GRANTS IN PART the motion for the reasons, and to the extent, set forth below.

         I. STANDARD

         Federal Rule of Civil Procedure 56(a) provides that summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” In ruling on a motion for summary judgment, the admissible evidence presented by the non-moving party must be believed and all reasonable inferences must be drawn in the non-movant's favor. Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487, 490 (7th Cir. 2007); Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) (“We view the record in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor.”). However, “[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial.” Hemsworth, 476 F.3d at 490. Finally, the non-moving party bears the burden of specifically identifying the relevant evidence of record, and “the court is not required to scour the record in search of evidence to defeat a motion for summary judgment.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001).

         II. BACKGROUND

         The facts that follow relate to the Plaintiffs' false advertising claim under the Lanham Act and are taken in the light most favorable to the Plaintiffs.[1] Additional relevant facts are included in the Discussion section below.

         Plaintiff Phyllis Maschino is the sole owner and operator of High Value Metal, Inc. (“High Value Metal”), 101 Blish Street B, LLC, 101 Blish Street A, LLC, and New Blast, LLC. In 1998, Maschino, through 101 Blish Street B, LLC, opened High Value Metal, a metal fabrication business in Seymour, Indiana. Maschino was assisted by her son, Fred, daughter, Plaintiff Rebecca Ritz, and son-in-law, Plaintiff Johnny Brasington, in the operation of High Value Metal, which was located at 101 Blish Street B, Seymour, Indiana.

         In 1999, Maschino built a sandblasting facility at 101 Blish Street A, Seymour, Indiana (the “Blish Street A Facility”), and purchased several pieces of sandblasting equipment. She transferred ownership of the Blish Street A Facility from herself to 101 Blish Street A, LLC. From June 1999 to March 30, 2012, Maschino's daughter and son-in-law, Defendants Tex A. Wayt and Ed Wayt (together, the “Wayts”), operated a sandblasting business, The Blast Shop, Inc., at the 101 Blish Street A Facility using Maschino's equipment. “The Wayts took all profit from the Blast Shop [] and operated the same through The Blast Shop, Inc., for which they were the only shareholders.” Dkt. No. 114 at 2. At no point in time did Maschino transfer or intend to transfer the sandblasting equipment she owned to the Wayts. Ed Wayt also operated a powdercoating business at a different location from around April 2005 until March 30, 2012, when he sold the powdercoating business to Crane Hill Machine & Fabrication, Inc. (“Crane Hill”), a competitor of High Value Metal, or to Marshall Royalty, Crane Hill's owner.

         On March 30, 2012, the Wayts attempted to sell Maschino's sandblasting equipment to Royalty. Royalty then met with Maschino and Tex Wayt to discuss renting the Blish Street A Facility. Maschino explained to Royalty that the Wayts did not own the equipment and that she would not lease the Blish Street A Facility to Royalty. As a result, Royalty pulled out of the sandblasting equipment sale, and Tex Wayt immediately returned to Royalty a check Maschino believed to be the initial down payment she had received from Royalty for the sandblasting equipment.

         The following day, April 1, 2012, Crane Hill hired Tex Wayt and Daniel Macintosh, who were working out of the Blish Street A Facility and using Maschino's sandblasting equipment. On or around June 18, 2012, Maschino learned that they were on Crane Hill's payroll. Maschino changed the locks and had Ritz and Brasington assume control and operation of the Blish Street A Facility. Maschino formed New Blast, LLC, on June 25, 2012, to operate a sandblasting business out of the Blish Street A Facility.

         After they were locked out of the Blish Street A Facility in June 2012, the Wayts told business owners throughout Seymour and Jackson County that the Blast Shop was closed or that Royalty had purchased it and moved it to Crane Hill.[2] Royalty, encouraged by Ed Wayt, placed signs on Highway 50, stating the following: “The Blast Shop & The Blast Shop Powder Coating Have Moved to Crane Hill Machine[.] For More Info call 812-358-3534[.]” Dkt. No. 1-3. That telephone number belonged to Crane Hill. From 1999 to a point in 2012, The Blast Shop, Inc.'s telephone number was (812) 524-8817.[3] The Plaintiffs also allege that in 2012, the Wayts created and maintained a website, www.theblastshopandpowdercoating.com, which listed 101 Blish Street as its address and 855-209-3101, which belonged to Crane Hill, as its telephone number. Although the evidence of record does not entirely support these allegations, the Court will assume they are true for the purpose of its Entry.

         The Plaintiffs filed this lawsuit on April 25, 2014, alleging a claim for false advertising under the Lanham Act and various state law claims against several defendants, including the Wayts. The Wayts brought various state law counterclaims against Plaintiffs Maschino, 101 Blish Street A, LLC, High Value Metal, and New Blast, LLC. In its Entry on Defendants' Motions to Dismiss (Dkt. No. 72), the Court dismissed Defendants William Braman; Jeffrey Lorenzo; Montgomery Elsner & Pardieck; and Lorenzo & Beavers from the case and also dismissed a number of claims and counterclaims. The Court approved the voluntary dismissal by the Plaintiffs and Defendants Royalty and Crane Hill of all remaining claims that these parties asserted against each other. See Dkt. No. 112. The Plaintiffs' Lanham Act claim and various state law claims against the Wayts and the Wayts' state law claims against Plaintiffs Maschino, 101 Blish Street A, LLC, High Value Metal, and New Blast, LLC remain.

         III. DISCUSSION

         A. ...


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