SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: PART 49
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UNCLE STEVE, INC., STEVE SCHWARTZ Index No.121666/94
a/k/a SCHLOMO SCHWARTZ,

Plaintiff,

-against-

UNCLE TONY, INC., d/b/a UNCLE STEVE,
UNCLE STEVE CAR STEREO, INC., DAVID
MARVISI and FARHAD MARVISI,

Defendants.

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CAHN, J.:
Plaintiffs Uncle Steve, Inc. ("Uncle Steve") and Steve Schwartz a/k/a Schlomo Schwartz ("Schwartz") move to hold defendants in contempt for violation of an order dated September 1, 1994 (the "Prior Order") which enjoined defendants from, inter alia, using the name "Uncle Steve" in connection with their electronics and car stereo business. Defendant Uncle Steve Car Stereo, Inc. ("Car Stereo") cross-moves to vacate the Prior Order (or to declare that it is of no effect), to permit Car Stereo to serve an answer including counterclaims, to enjoin Schwartz from disrupting Car Stereo's business and from using the name "Uncle Steve" in connection with any electronics business. Defendants Uncle Tony, Inc., d/b/a Uncle Steve, David Marvisi and Farhad Marvisi1 (collectively, "Uncle Tony") also move to vacate the Prior Order, and for sanctions and attorney's fees.
This action was originally commenced in 1994. Plaintiffs allege, in the complaint and accompanying affidavit, that defendants engaged in unfair trade practices and violated General Business Law 133 by usurping plaintiffs' "Uncle Steve" trade name, logo and other corporate indicia in connection with the operation of two consumer electronics and stereo car businesses in lower Manhattan. Specifically, plaintiffs alleged that between 1975 and 1991, plaintiffs owned and operated an electronics/car stereo retailer at 343 Canal Street in Manhattan, spending approximately $5,000,000 to promote the "Uncle Steve" name in connection therewith. Soon after plaintiffs vacated the premises in 1991, defendant Uncle Tony (allegedly owned by defendant David Marvisi) opened an identical type of business at the same address under the name "Uncle, Uncle, Uncle."
In 1994, however, Uncle Tony placed the name "Uncle Steve Electronics" on a large awning on the front of its store, and represented to customers and suppliers that the "original" Uncle Steve had returned to the same location. Uncle Tony also declined to remove an old "Uncle Steve" sign which had apparently been painted on the side of the building during plaintiffs' tenure at the site. Also in 1994, David Marvisi's brother, defendant Farhad Marvisi, opened a similar store directly across the street at 334 Canal Street, and called it "Uncle Steve Car Stereo." The complaint sought to permanently enjoin defendants from using the "Uncle Steve" name and other incidentals in connection with their businesses.
On August 10, 1994, this court (Tolub, J.) issued a short form order granting plaintiffs' application on default. That order characterized plaintiffs' order to show cause as a motion for a preliminary injunction, although the box for "Final Disposition" at the bottom of the short form order was checked. Pursuant to the direction to "settle order, plaintiffs submitted a paper labeled "Judgment", which was signed by Justice Tolub on September 1, 1994. This document became the Prior Order. As relevant here, the Prior Order states:




For approximately five years following the issuance of the Prior Order, until 1999, the case remained dormant. No answers or other pleadings were served, no discovery was had, and plaintiffs never sought the entry of the permanent injunction demanded by the complaint. According to the court's records, in 1997 the action was administratively marked off and the case marked "disposed."
Plaintiffs claim that for most or all of the period of inactivity, defendants were in compliance with the Prior Order. However, in early 1999, they assert that defendants began to violate the order by using the "Uncle Steve" name on various signs, invoices and business cards. On April 23, 1999, plaintiffs prepared a Notice of Entry of the Prior Order, indicating that it had been entered on September 26, 1994, and served the notice on defendants on April 30, 1999. The instant order to show cause was brought some time thereafter.
Plaintiffs' Motion to hold Defendants in Contempt
The motion to hold defendants in contempt is denied. "To sustain a civil contempt, a lawful judicial order expressing an unequivocal mandate must have been in effect and disobeyed" (McCain v Dinkins, 84 NY2d 216, 226 [1994]. Furthermore, "the party to be held in contempt must have had knowledge of the court's order, although it is not necessary that the order actually have been served upon the party" (Id.). Finally, "prejudice to the rights of a party to the litigation must be demonstrated" (Id.). Plaintiffs have not established any of the prerequisites to contempt.
First, the court finds that the Prior Order was not "in effect" at the time it was allegedly violated in 1999. By its terms, the Prior Order was to be effective only "during the pendency of this action." This action has not been, in any meaningful way, "pending" since 1997. Plaintiffs were not entitled to rely on the preliminary injunction indefinitely, as "[i]t is well settled that the granting or denial of a motion for a preliminary injunction does not constitute the law of the case or an adjudication on the merits of the claim for a permanent injunction and, therefore, the issues must be tried as if no application for a preliminary injunction had been made" (Ratner v Fountains Clove Road Apts., 118 AD2d 843, 843 [2d Dept 1986]; Walker Memorial Baptist Church, Inc. v Saunders, 285 NY 462 [1941]). Plaintiffs took no steps to proceed with the action and establish their entitlement to a permanent injunction, electing instead to rely upon the terms of a preliminary injunction which itself had never been litigated on the merits. Moreover, as to defendant Car Stereo, the complaint does not even plead allegations in support of a permanent injunction. Rather, the second cause of action, although identifying Car Stereo in the heading, repeats verbatim the allegations against Uncle Tony contained in the first cause of action.
Additionally, the Prior Order did not express an "unequivocal mandate" that it was to endure indefinitely. To the contrary, the injunction was by its terms temporary and preliminary. Defendants were entitled to reasonably conclude, at least by 1999, that a preliminary injunction order issued in an action which had been dormant since 1994, and which had administratively marked "disposed" when no further proceedings were had for several years, was of questionable efficacy, and/or that the action had been abandoned.
Plaintiffs have also failed to establish that defendants had knowledge of the Prior Order. Although plaintiffs allege that the Prior Order with notice entry was served upon defendants, the record establishes otherwise. Plaintiffs' own papers demonstrate that at most, a copy of a proposed order with notice of settlement was served on defendants on August 29, 1994. Plaintiffs do not purport to have served the final order, which was not signed until September 1, 1994. While plaintiffs did serve a certified copy of the Prior Order in 1999, as noted above, the order was no longer in effect by that time.
Finally, plaintiffs have not established prejudice on account of defendants' alleged violation of the order. Assuming, arguendo, that the Prior Order is still in effect, plaintiffs have not shown that they are engaged in any business activity which would be affected by defendants' use of the "Uncle Steve" name or logo. Indeed, plaintiffs have not alleged any meaningful use of the name by them for nearly a decade. While plaintiffs indicate that they registered the name for internet use in 1998, they do not suggest that they have used it in that or any other venue since leaving the Canal Street site in 1991.
Defendants' Cross-Motions to Vacate the Prior Order
For the reasons cited above, the court also formally vacates the Prior Order. Under CPLR 6314 a court may vacate or modify a preliminary injunction at any time. Even assuming that this action has been in some sense pending since 1994, plaintiffs' failure to pursue permanent injunctive relief constitutes an abandonment of its right to continued preliminary relief.
Additionally, defendants have raised substantial questions of fact as to whether plaintiffs would now have a likelihood of success on their application for a permanent injunction. Plaintiffs' apparent failure to use the "Uncle Steve" name over the past nine years, including the five that have passed since the action was commenced, may constitute abandonment of the name. "[R]ights in a trade name may be lost by abandonment" (Nercessian v Homasian Carpet Enterps., 60 NY2d 875, 877 [1983]; Neva-Wet Corp. v Never Wet Processing Corp., 277 NY 163 [1938]). "A trademark is a mere incident of a business which cannot exist except as appurtenant to a business . . . [w]hen the business itself actually ceases for such a length of time and under such circumstances that the trademark actually no longer signifies that business in the mind of the public, the right to the trademark may be lost, despite the existence of the 'intent' on the part of the user to re-engage in business and resume the use of the trademark at some indefinite time in the future" (Heras v Mena, 52 Misc2d 396, 397 [Sup Ct NY Co 1966]). As noted, plaintiffs have not actually used the name in connection with a business since 1991. Apart from the registration of the name for internet use, plaintiffs point to nothing except attempts to "look for space" to continue the business at another site, and negotiations (apparently unsuccessful) to acquire other retailers for the purpose of using the "Uncle Steve" name.
Uncle Tony's motion for attorney's fees is denied as unsupported and contrary to the American Rule (Hunt v Sharp, 85 NY2d 883 [1995]). The motion for sanctions is denied in the court's discretion.

Defendant Car Stereo's Motion to Answer and for Injunctive Relief

Defendant Car Stereo's motion to serve an answer and counterclaims is somewhat problematic. First, in connection with its motion to vacate the Prior Order, Car Stereo alleged not only that it had not received a copy of the order, but that it also had never been served with the underlying complaint. Thus, Car Stereo has urged, in effect, a lack of jurisdiction.2 Defendants' allegation that service never occurred, or that, at most, plaintiffs served a mere corporate employee operating a cash register who was not authorized to accept service (and who rejected the papers), would ordinarily require a hearing (see, CPLR 311; Fashion Page v Zurich Ins. Co., 50 NY2d 265 [1980]; Martinez v Church of St. Gregory, 261 AD2d 179 [1st Dept 1999]; Matter of Pullo, 224 AD2d 698 [2d Dept 1996]; Weiss v Glass Pack Kosher, 138 AD2d 591 [2d Dept 1988]).
Although Car Stereo's request to serve an answer and counterclaims, and its request for other affirmative relief, may be deemed to waive the alleged lack of jurisdiction (Flaks, Zaslow & Co. v Bank Computer Network Corp., 66 NY 363 [1st Dept 1979]), this does not completely resolve the problem. As this court has noted, the action was effectively abandoned and is not really pending. Additionally, as noted, the complaint does not contain any specific allegations as against Car Stereo, and events occurring since the original commencement of the action may require amendment of the complaint.
Accordingly, the most practical way out of this procedural morass would to be to deem the action as restored and direct plaintiffs to serve an amended, updated complaint detailing its claims against all defendants, and including any additional attempts by plaintiffs to use or protect their trade name. Defendants may thereafter serve an answer with counterclaims. If plaintiffs do not serve an amended complaint within thirty days of service of a copy of this decision and order with notice of entry on their attorney, the action will be dismissed. In that event, any of the defendants will be free to commence a new action.
Car Stereo's motion for a preliminary injunction is denied. Apart from the fact that Car Stereo has not served a pleading containing claims upon which such relief would be based, there are substantial issues of fact concerning its entitlement to the exclusive use of the "Uncle Steve" name. First, plaintiffs allege that it was only in 1999 that Car Stereo resumed making use, or at least prominent use, of the name. Second, Car Stereo itself alludes to an "agreement" (disputed by plaintiffs), whereby plaintiffs promised not to "bother" Car Stereo as long as it used the name "Uncle Steve Car Stereo" rather than "Uncle Steve Inc." Finally, Car Stereo's demand that plaintiff Schwartz be enjoined from engaging in harassment is denied as unnecessary, as Car Stereo relies upon nothing but a single, isolated visit to the store by Schwartz in April 1999, immediately preceding the initiation of this motion practice. This denial, of course, does not constitute a license for plaintiffs to engage in such behavior.
Further, plaintiffs assert that at least one unnamed individual at the premises of defendant Uncle Tony, has been holding himself out as Steve Schwartz, one of the plaintiffs. If plaintiffs, or any of them, feel aggrieved by this alleged conduct, an action to stop such practice and/or to recover damages, may be commenced.
Accordingly, it is
ORDERED, that plaintiffs' motion for contempt is denied, and it is further
ORDERED, that the "Judgment" dated September 1, 1994 in this action is hereby vacated, and it is further
ORDERED that defendant Car Stereo's motion to serve an answer and counterclaims is denied without prejudice, and it is further
ORDERED that this action shall be dismissed unless, within thirty days of notice of entry of this order, plaintiffs serve an amended complaint consistent with this decision, and it is further
ORDERED that defendants shall serve answers to the amended complaint, if any, within twenty days of service of the amended complaint, without prejudice to defendants' right to commence a new action if plaintiffs elect not to serve an amended complaint, and it further

ORDERED that Car Stereo's motion for injunctive relief is denied.

 

Dated: March , 2000

ENTER:




_______________________

J.S.C.






1

Uncle Tony Inc. has apparently reincorporated under the name Original Uncle Steve, Inc., which is owned by non-party Steve Marvisi and his wife. Defendants David and Farhad Marvisi

(brothers of Steve, and of Michael Marvisi, the President and sole shareholder of Car Stereo) are apparently no longer affiliated with the family businesses.

2

The Uncle Tony defendants have not denied service of the underlying action. Although they did not serve an answer, plaintiffs did not, as noted attempt to secure a default judgment on the complaint for a permanent injunction, but merely procured an order on default of the motion for the preliminary injunction.