Order Granting Motion For Partial Summary Judgment

Case 1:21-cv-01539-RLY-TAB Document 62 Filed 07/25/23 Page 1 of 28 PageID #: 1317
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
NOBLE ROMAN'S, INC., )

)
Plaintiff, )
)
v. ) No. 1:21-cv-01539-RLY-TAB
)
AMI STORES MANAGEMENT, INC. et al., )
)
Defendants. )
)
ENTRY GRANTING PLAINTIFF'S MOTION

FOR PARTIAL SUMMARY JUDGMENT
Plaintiff Noble Roman's, Inc., sues its former franchisees, AMI Stores
Management, Inc., AMI 57 LLC d/b/a AMI 70 Food Mart, AMI 63 LLC d/b/a AMI 63
Food Mart, and AMI 59 LLC (collectively, the "AMI Stores"), for breach of their
respective franchise agreements and for violations of the Lanham Act. The AMI Stores
counterclaim,1 alleging Noble Roman's violated Florida's Deceptive and Unfair Trade
Practices Act and fraudulently induced the AMI Stores to contract.2
Noble Roman's now moves for partial summary judgment, seeking to establish: (1)
the AMI Stores breached their franchise agreements in a variety of ways; (2) the AMI
Stores violated the Lanham Act by selling items likely to be confused for trademarked
1
AMI 59 brings these claims as a Third-Party Plaintiff, but the other three AMI Defendants
bring them as counterclaims.
2
After the present summary judgment motion was filed, AMI 57, AMI 63, and AMI Stores
Management filed a motion to amend their counterclaim to add new breach of contract claims
based on Noble Roman's unilateral termination of the applicable franchise agreements. (Filing
No. 58). That motion is unaffected by the resolution of this summary judgment motion.
1
Noble Roman's goods; (3) Noble Roman's did not fraudulently induce the AMI Stores to
enter into the franchise agreements; and (4) Noble Roman's did not violate Florida's
Trade Practices Act. Noble Roman's has not moved for summary judgment on its breach
of contract claims for underreporting sales or its trademark infringement claims against
AMI 59 for misuse of branded products. For the reasons that follow, Plaintiff's motion
for partial summary judgment is GRANTED.
I. Factual Background
A. General Background
The parties do not dispute the relevant facts.3 The AMI Stores operate a chain of
convenience stores, often at gas stations, in Florida and Georgia. (Filing No. 49, Hamid
Dep. at 27 (referring to the AMI Stores as convenience stores); Filing No. 56, Defs.'
Resp. at 15 (describing the stores as "gas station convenience store[s]")). Between
October 24, 2017, and February 26, 2021, Noble Roman's and the various AMI Stores
entered into six franchise agreements. (Hamid Dep. at 36–37 (The owner of the AMI
Stores stipulated to the authenticity of the franchise agreements and admitted he signed
them.)). Specifically, Noble Roman's entered into franchise agreements with the
following entities:
AMI 63, LLC, for the operation of a pizza restaurant at 3401 US-98 Bus,
Panama City, Florida 32401 ("AMI 63").
3
The AMI Stores "accept[] NRI's statement of the facts, save for footnote 1 thereof." (Filing No.
56, Defs.' Resp. at 5). Footnote 1 simply says that the pleadings misidentify the non-franchised
location where knock-off Noble Roman's pizzas were sold. Although the pleadings identify that
location as AMI 59 at 11000 Panama City Beach Parkway, Noble Roman's now believes it was
actually the Get it @ Carillon Beach store at 22917 Panama City Beach Parkway. The AMI
Stores apparently disagree.
2
AMI 57, LLC, for the operation of a pizza restaurant at 16766

Blountstown, Tallahassee, Florida 32310 ("AMI 57").
AMI Stores Management, Inc., for the operation of pizza restaurants at

the following locations:
o 213 Highway 71 South, Wewahitchka, Florida 32465

("Management Store 1").
o 403 East Crawford Street, Colquitt, Georgia 39837 ("Management

Store 2").
o 1500 MLK Boulevard, Panama City, Florida 32405

("Management Store 3").
o 17398 Panama City Beach Parkway, Panama City Beach, Florida

32413 ("Management Store 4").
(Id.; Defs.' Resp. at 5 (accepting Plaintiff's facts)).
All of the above Noble Roman's franchises are owned by Ali Hamid—with the
exception of Management Store 2, which is "owned"4 by Hamid's brother unbeknownst
to Noble Roman's. (Hamid Dep. at 29–33, 80–81; Filing No. 49–13, Mobley Aff. ¶ 3).
In addition, Ali Hamid owns two AMI locations—at 11000 Panama City Beach Parkway
("Non-Franchised Store 1") and at 22917 Panama City Beach Parkway ("Non-Franchised
Store 2")—that sold Noble Roman's products but are not authorized Noble Roman's
franchises. (Hamid Dep. at 25, 33).
4
The parties agree Hamid's brother owned Management Store 2 and that Noble Roman's did not
know that fact; however, Ali Hamid testified that he signed the franchise agreement for
Management Store 2. (Hamid Dep. at 80–81).
3
The Franchise Agreements authorized the AMI Stores to open Noble Roman's
counters at their convenience stores. The following picture is an example of a Noble
Roman's counter at one of the AMI Stores:
(Filing No. 49-3, Picture of an AMI Store; see also Hamid Dep. at 48–50 (not disputing
accuracy of the picture); Defs.' Resp. at 5 (accepting Plaintiff's facts)).
B. Negotiations
During negotiations for the franchise agreements, Noble Roman's offered the AMI
Stores the option to pay Noble Roman's either (1) a continuing weekly royalty fee of
seven percent of the gross sales of Noble Roman's products sold at AMI locations or (2) a
4
continuing fee calculated on certain purchases by the AMI Stores from a Noble Roman's
approved distributor. (Filing No. 49-15, Branson Aff. ¶ 3). Also during negotiations,
Noble Roman's provided the AMI Stores with a "Franchise Disclosure Document."
(Filing No. 49, Hamid Dep. Ex. 7,5 Franchise Disclosure Document; Branson Aff. ¶ 4).
The Disclosure Document provides, in pertinent part:
The Company may also receive from time to time allowances, credits, or
rebates from other suppliers based on purchases by you. These amounts are
generally tied to specials or quantities purchased during given time periods.
Neither the Company nor any of its affiliates are approved suppliers. In the
most recent fiscal year, the estimated amount of such commissions and
allowances were approximately $1.0 million and was included in the general
revenue of the Company representing approximately 12.8% of the
Company's total revenue. The Company's total revenue for the most recent
fiscal year was $7.8 million.
(Franchise Disclosure Document at NRIAMI001343). The Disclosure Document also
warns franchisees that buying a franchise is a complex investment and both the Franchise
Agreements and the Disclosure Document should be shown to an advisor, "like a lawyer
or accountant." (Id. at NRIAMI001331). The Disclosure Document is incorporated by
reference into the Franchise Agreements. (Filing No. 49, Hamid Dep. Exs. 1–6 (the
"Franchise Agreements") § XIX(Q)).6
The AMI Stores ultimately contracted to pay the seven percent weekly royalty fee.
(Id. § IV(B)). Noble Roman's supplier also charges the AMI Stores a three percent
5
The exhibits attached to the Hamid Deposition are confusingly numbered. Although the
Franchise Disclosure Document is the seventh exhibit sequentially, it is marked as the eighth.
(See Filing No. 49 at 264).
6
Like the Franchise Disclosure Document, the Franchise Agreements are confusingly
numbered—often with two different exhibit numbers. The court cites them in the order they
appear in the electronically filed Hamid Deposition.
5
upcharge on Noble Roman's products and supplies. (Filing No. 8, Defs.' Answer and
Countercl. at 14–15).
C. Relevant Terms of the Contracts
Each of the materially identical Franchise Agreements authorized the AMI Stores
to sell Noble Roman's branded food items and use the "Noble Roman's" trademark in
connection with the sale of such food items. (See generally, Franchise Agreements).
When selling Noble Roman's food items and using its marks, the Franchise Agreements
required the AMI Stores to abide by certain conditions. (Id.).
The conditions require the AMI Stores to "sell or offer for sale all menu items,
products and services required by [Noble Roman's] and in the manner prescribed by
[Noble Roman's]." (Id. § VIII(E)(1)). For example, in addition to pizza, each of the AMI
Stores was required to sell Noble Roman's cheese sticks and subs. (Mobley Aff. ¶ 11).
Along with agreeing to sell all the items Noble Roman's required them to sell, the AMI
Stores also agreed to "sell and offer for sale only the menu items, products and services
that have been expressly approved for sale in writing by [Noble Roman's]." (Franchise
Agreements § VIII(E)(2) (emphasis added)).
The AMI Stores also agreed to maintain their stores to Noble Roman's standards.
They were required to maintain equipment in a "high degree of sanitation, repair and
condition." (Id. § VIII(B)). They also agreed to "require all advertising and promotional
materials, signs, decorations . . . and other items which may be designated by [Noble
Roman's] to bear the Marks in the form, color, location and manner prescribed by [Noble
Roman's]." (Id. § VIII(G)).
6
In the section of each Franchise Agreement labelled "Termination," the AMI
Stores acknowledged that each of their obligations described in the Agreement is "a
material and essential obligation of Franchisee; that nonperformance of such obligations
will adversely and substantially affect the Franchisor and the [Noble Roman's franchise]
System"; and that exercise of the remedies set forth in the Franchise Agreement is
reasonable. (Id. § XVII). The termination section also sets forth the conditions under
which Noble Roman's can terminate the Franchise Agreements—most of which provide
for some prior notice to the franchisee and an opportunity to cure. (Id.).
D. Discovery of the Alleged Breaches and Trademark Infringement
In April 2021, Noble Roman's learned that its branded products were being used to
make and sell pizzas at a non-franchised AMI store. (Mobley Aff. ¶ 4). On April 14,
2021, Noble Roman's inspected both the franchised and non-franchised AMI locations.
(Id. ¶ 5). After the inspection revealed a number of apparent violations of the Franchise
Agreements (detailed below), Noble Roman's sent a letter to the AMI Stores' counsel
detailing the conduct it discovered at each particular store, the provisions of the Franchise
Agreements that conduct violated, and a request for cure. (Filing No. 49-17, Default
Letter at 1–3). When the AMI Stores were apparently not able to achieve compliance by
May 10, 2021, Noble Roman's filed suit for breach of the Franchise Agreements and
trademark infringement.
Noble Roman's conducted another inspection in August 2022, while this lawsuit
was pending. (Mobley Aff. ¶ 12). The AMI Stores do not dispute that the April 2021
and August 2022 inspections revealed the following acts or omissions, nor do they
7
dispute that these acts or omissions were improper under the Franchise Agreements.
(Defs.' Resp. at 5–13; id. at 4 (noting that Noble Roman's "found certain admitted errors"
and used those errors to initiate suit) (emphasis added)).
1. AMI 63
AMI 63 failed to sell all the items it was required to sell. (Filing No. 49, Ex. 1,
AMI 63 Franchise Agreement at 10; (Mobley Aff. ¶ 11)). At the time of the August 2022
inspection, no Noble Roman's subs or cheese sticks were sold at AMI 63. (Mobley Aff.
¶¶ 11, 18).
In addition to not selling all the items it was required to sell, AMI 63 also sold
items it was required not to sell. AMI 63 sold a competing food item—an apple fritter—
from a Noble Roman's counter. (Id. ¶ 6). The following is a picture of the warmer rack
at the Noble Roman's counter of AMI 63, the accuracy of which is undisputed:
8
(Filing No. 49-2, Picture of AMI 63 Counter).7 The apple fritters can be seen on the
bottom rack on the right, next to what appears to be a box of Noble Roman's pizza.
Finally, AMI 63 failed to display signs in the manner prescribed by Noble
Roman's. (AMI 63 Franchise Agreement at 11). Noble Roman's electronic menu signs at
AMI 63 were turned off during business hours at the time of the August 2022 inspection.
(Mobley Aff. ¶ 17). Again, AMI 63 has not contested that this was improper under the
Franchise Agreements.
2. AMI 57
AMI 57 had glaring operational issues. Though AMI 57 had agreed to maintain
equipment in a "high degree of sanitation, repair and condition," (Filing No. 49, Ex. 2,
AMI 57 Franchise Agreement at 9), in April 2021, it was missing one of its two oven
decks, and the other one was out of order, (Mobley Aff. ¶ 9).
The operational oven deck had been moved to Non-Franchised Store 1. (Hamid
Dep. at 55–56). Noble Roman's never granted AMI 57 permission to move its oven deck
to a non-franchised location. (Mobley Aff. ¶ 9). Perhaps because it had no oven decks,
AMI 57 offered no Noble Roman's products for sale in August 2022. (Id. ¶ 18). The
applicable franchise agreement required AMI 57 to offer Noble Roman's products for
sale. (AMI 57 Franchise Agreement at 10).
AMI 57 claims that persistent—but intermittent—electrical problems beyond its
ability to repair made it "impossible for us during that time [when the problems were
7
Noble Roman's attached pictures of other AMI Stores, but as none of the facts are disputed, the
court omits the rest of the pictures for space considerations.
9
occurring] to use any oven to cook Noble Roman's products." (Filing No. 57-1, Clayton
Aff. ¶ 3). AMI 57 also claims that the COVID-19 pandemic made it "difficult always
and impossible sometimes" to maintain staff "at any price." (Id. ¶ 4). Despite these
difficulties, AMI 57 claims it "generally . . . always sold the appropriate Noble Roman's
products." (Id. ¶ 6).8
3. Management Store 1
Management Store 1 failed to sell all the products it was required to sell. (Filing
No. 49, Ex. 3, Management Store 1 Franchise Agreement at 10). In April 2021,
Management Store 1 offered only one pizza for sale and failed to offer Noble Roman's
cheese sticks or subs. (Id. ¶¶ 10, 18). By August 2022, it offered no Noble Roman's
products at all. (Id.).
Management Store 1 also sold competing food items from its Noble Roman's
counter—specifically, corndogs. (Id. ¶ 6; Filing No. 49-5, Pictures of Management Store
1 Counter (showing corndogs offered for sale in a clearly marked Noble Roman's counter
and next to a box of Noble Roman's pizza)).
Like other stores, Management Store 1's Noble Roman's menu signs were turned
off at the time of inspection. (Mobley Aff. ¶ 17; Management Store 1 Franchise
Agreement at 11). It also displayed menu boards with graphics not approved by Noble
8
The court does not read this statement to dispute any of Noble Roman's factual allegations.
The AMI Stores accepted Noble Roman's facts, including that AMI 57 had no operational oven
decks and that it offered no Noble Roman's products for sale in August 2022. Moreover, the
AMI Stores have produced no other evidence suggesting AMI 57 sold the appropriate Noble
Roman's products. So the statement that AMI 57 "generally . . . always sold the appropriate
Noble Roman's products," (Clayton Aff. ¶ 3 (emphasis added)), is effectively meaningless.
10
Roman's—including names of Noble Roman's pizzas next to pictures of pizzas that were
not Noble Roman's pizzas and a Noble Roman's logo that "comprised neither of [Noble
Roman's] registered trademark nor its trade name font." (Mobley Aff. ¶ 19).
Management Store 2 failed to maintain Noble Roman's Pizza in a "high degree of
sanitation, repair and condition," and to adhere to Noble Roman's operating standards and
specifications. (Filing No. 49, Ex. 4, Management Store 2 Franchise Agreement at 9).
During the August 2022 inspection, Management Store 2's warmer rack was dirty, and a
breakfast pizza remained in the warmer in the middle of the afternoon. (Mobley Aff.
¶ 14). Noble Roman's operating manual provides that the maximum holding time for a
pizza in a warmer is forty-five minutes. (Id. ¶ 15). In addition, the Noble Roman's
electronic menu signs at Management Store 2 were turned off. (Id. ¶ 17; Management
Store 2 Franchise Agreement at 11)). And Management Store 2 failed to sell Noble
Roman's cheese sticks and subs. (Management Store 2 Franchise Agreement at 10;
Mobley Aff. ¶ 11).
Management Store 3 failed to sell cheese sticks and subs, sold a Philly cheesesteak
packaged in a Noble Roman's branded box even though the cheesesteak was not an
authorized menu item, and displayed menu boards and graphics in the same unapproved
manner in which Management Store 1 displayed them. (Filing No. 49, Ex. 5,
Management Store 3 Franchise Agreement at 10, 11; Mobley Aff. ¶¶ 6, 11, 19).
11
Like all the other stores, Management Store 4 failed to sell Noble Roman's cheese
sticks and subs. (Mobley Aff. ¶ 11; Filing No. 49, Ex. 6, Management Store 4 Franchise
Agreement at 10). It also offered a host of unauthorized menu items. In April 2021,
Management Store 4 sold macaroni and cheese, cheeseburgers, green beans, and chicken
tender sandwiches from the Noble Roman's counter. (Mobley Aff. ¶ 6). In August 2022,
it was still selling each of these unauthorized items. (Id. ¶ 13).
Management Store 4 also had familiar signage issues. (See Management Store 4
Franchise Agreement at 11). Its Noble Roman's electronic menu signs were turned off,
and one of its Noble Roman's signs was partially torn. (Mobley Aff. ¶¶ 16–17).
II. Legal Standard
The court may grant summary judgment only 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." Fed. R. Civ. P. 56(a). "A genuine dispute of material fact exists 'if the evidence
is such that a reasonable jury could return a verdict for the nonmoving party.'" Skiba v.
Ill. Cent. R.R., 884 F.3d 708, 717 (7th Cir. 2018) (quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986)). When considering a motion for summary judgment, the
court must consider the evidence in the record in the light most favorable to the non-
moving party and draw all reasonable inferences from that evidence in favor of the party
opposing summary judgment. Feliberty v. Kemper Corp., 98 F.3d 274, 277 (7th Cir.
1996).
12
III. Discussion
Noble Roman's moves for summary judgment on four sets of claims: (1) whether
the AMI Stores breached the respective Franchise Agreements; (2) whether the AMI
Stores violated the Lanham Act; (3) whether Noble Roman's fraudulently induced the
AMI Stores to enter into the Franchise Agreements; and (4) whether Noble Roman's
violated the Florida Deceptive and Unfair Trade Practices Act. The court discusses each
in turn.
A. Whether the AMI Stores Breached the Franchise Agreements.
Noble Roman's first argues that each of the AMI Stores—except AMI 59—
breached an applicable Franchise Agreement. "Under Indiana law, the elements of a
breach of contract action are the existence of a contract, the defendant's breach thereof,
and damages." Bible v. United Student Aid Funds, Inc., 799 F.3d 633, 644 (7th Cir.
2015) (citations omitted). The only contested element here is breach. (See Defs.' Resp.
at 5–13). The AMI Stores admit that all of the alleged "defaults" occurred, but they argue
the defaults did not amount to material breaches and they were not given sufficient notice
and opportunity to cure. (Id.).
Respectfully, the AMI Stores' argument is off-base. The provisions of the
Franchise Agreements pertaining to notice and an opportunity to cure are in the
"Termination" section of the contracts. However, "[a] contractual obligation to provide
notice and an opportunity to cure a default prior to terminating a contract does not
necessarily affect the aggrieved party's right to sue for breach." Wis. Alumni Rsch.
Found. v. Xenon Pharms., Inc., 591 F.3d 876, 888 (7th Cir. 2010) (applying Wisconsin
13
law); see also Frazier v. Mellowitz, 804 N.E.2d 796, 807 (Ind. Ct. App. 2004) (noting
that regardless of whether breach was material, plaintiff was entitled to recover damages)
(citing Restatement (Second) of Contracts § 242 cmt. a ("[S]ince any breach gives rise to
a claim, a party who has cured a material breach has still committed a breach, by his
delay, for which he is liable in damages.")).
The only case the AMI Stores cite with respect to their notice and cure argument is
one in which the "central question" was whether the agreement was properly terminated.
EraGen Biosciences, Inc. v. Nucleic Acids Licensing LLC, 540 F.3d 694, 696 (7th Cir.
2008). Even in that case, the Seventh Circuit cautioned against conflating breach and
termination. Id. at 698. It specifically noted: "While other occurrences might give rise to
a lawsuit and damages, only certain enumerated breaches of contract are regarded as
serious enough to justify termination." Id. at 697–98. Noble Roman's has not moved for
any determination that termination in December 2022 was appropriate. (See Defs.' Resp.
at 4 (noting the Franchise Agreements were terminated in December 2022)). Rather, it
has moved—based on facts uncovered in the April 2021 and August 2022 inspections—
for a determination that the AMI Stores breached the Franchise Agreements. The AMI
Stores have effectively conceded they breached the Agreements long before termination
occurred. (Defs.' Resp. at 4–13).
In any case, none of the AMI Stores' arguments succeed when faced on their own
terms. They argue that the defaults in this case were not material, but under Indiana law:
"where a contract itself provides the standard for what constitutes a material breach, this
is the standard that governs." State v. Int'l Bus. Machines Corp., 51 N.E.3d 150, 158
14
(Ind. 2016) (citations omitted). Here, the Franchise Agreements themselves
unambiguously provide that "each of Franchisee's obligations described in this
Agreement is a material and essential obligation of Franchisee." (Franchise Agreements
§ XVII(A)(1)).
The AMI Stores also argue that they were not provided sufficient notice, citing
EraGen, 540 F.3d at 701. But in EraGen, the notice was insufficient because, "at the end
of [a] laundry list of provisions" the defendant had supposedly failed to satisfy, the letter
made a "fleeting reference" to the section used as grounds for termination without any
accompanying detail. Id. at 701. The Default Letter sent by Noble Roman's is not so
subtle. (See Default Letter at 1–3). It describes the alleged breaches, the particular store
at which the breach occurred, and the section of the applicable Franchise Agreement that
was breached. For example, the letter explains:
At the AMI [57] Food Mart (Tallahassee), one of the two oven decks required
for opening under the Noble Roman's procedures manual is absent and the
other is noted as being out of service, resulting in a cessation of operations.
This is a breach. . . . AMI Stores must . . . immediately cure the default at
the AMI [57] Food Mart by re-starting required business operations. See,
generally, Sec. VIII (E)(8) and XVII(A)((3)(f).
(Default Letter at 2).
Having been sufficiently notified of the defaults, the AMI Stores do not
meaningfully contest that they failed to cure them. Rather, they argue that electrical
problems at one of the stores and the COVID-19 Pandemic were acts of God that
rendered performance impossible. (Defs.' Resp. at 12–13). That will not do.
15
For a contract to be legally impossible to perform, the party asserting impossibility
must show that performance is "not merely difficult or relatively impossible, but
absolutely impossible, owing to the act of God, the act of law, or the loss or destruction
of the subject-matter of the contract." Wagler, 980 N.E.2d at 378 (citations omitted).
The AMI Stores argue that electrical issues and the pandemic "have resulted in periodic
failures" that have left AMI 57 "at times unable to operate." (Defs.' Resp. at 12
(emphases added)). Indeed, AMI 57 represents it has "been successful in maintaining
sales of [Noble Roman's] products typically on most occasions." (Id.). Other stores have
suffered staffing shortages due to the pandemic, but have "operate[d] as fully as [they]
can and sell[] [Noble Roman's] products as best as [they are] able." (Id. at 13). At most,
the AMI Stores have established that performance was difficult—not "absolutely
impossible." Wagler, 980 N.E.2d at 378.9
In sum, there is no genuine dispute of material fact that the Franchise Agreements
were breached. (Defs.' Resp. at 5 ("For the purpose of the instant motion only AMI
Stores accepts NRI's statements of the facts[.]"); see also id. at 5–11 (not disputing that
any of the alleged breaches occurred)). Therefore, Noble Roman's is entitled to summary
judgment on its breach of contract claims, with the exception of its breach of contract
claim for underreporting sales that was not a part of its motion.
9
Regardless, impossibility of performance is an affirmative defense, Wagler v. W. Boggs Sewer
Dist., Inc., 980 N.E.2d 363, 378 (Ind. Ct. App. 2012), which the AMI Stores were required to
include in their answer, see Fed. R. Civ. P. 8(c). Despite raising no fewer than eight affirmative
defenses in their response to the pleadings, the AMI Stores failed to raise impossibility of
performance. (Filing No. 8, Defs.' Answer, Countercl., Joinder Claim at 4–7).
16
B. Whether the AMI Stores Violated the Lanham Act.
Noble Roman's next claims the AMI Stores' sale of off-brand food commingled
with Noble Roman's food constitutes trademark infringement. Specifically, Noble
Roman's asserts trademark infringement claims because the AMI Stores sold the
following food items from counters containing "Noble Roman's" displays:
AMI 63 sold an apple fritter.
Management Store 1 sold corndogs.
Management Store 3 sold a Philly cheesesteak packaged in a Noble

Roman's box.
Management Store 4 sold macaroni and cheese, cheeseburgers, green

beans, and chicken tender sandwiches.
To prove a claim of trademark infringement under the Lanham Act, 15 U.S.C.
§ 1125(a), a plaintiff must show (1) that its trademark may be protected and (2) that the
relevant group of buyers is likely to confuse the infringer's products with the products of
the plaintiff. H-D Michigan, Inc. v. Top Quality Serv., Inc., 496 F.3d 755, 759 (7th Cir.
2007). The parties agree that the "Noble Roman's" trademark is protected, so this case
turns on the second element: likelihood of confusion.
The Seventh Circuit has identified seven factors to determine whether consumers
are likely to be confused as to the source of the product: (1) the similarity between the
marks in appearance and suggestion; (2) the similarity of the products; (3) the area and
manner of concurrent use; (4) the degree of care likely to be exercised by consumers; (5)
the strength of the plaintiff's mark; (6) any evidence of actual confusion; and (7) the
intent of the defendant to "palm off" his product as that of another. Sorensen v. WD-40
17
Co., 792 F.3d 712, 726 (7th Cir. 2015). No single factor is dispositive; however, usually
the similarity of the marks, the defendant's intent, and actual confusion are particularly
important. AutoZone, Inc. v. Strick, 543 F.3d 923, 929 (7th Cir. 2008).
Likelihood of confusion is a question of fact ordinarily to be determined by the
jury. Id. It can only be decided at summary judgment "if the evidence is so one-sided
that there can be no doubt about how the question should be answered." Id. (citation
omitted).
1. Similarity of the Marks
A typical trademark infringement case involves one mark that mimics another
mark, so as to confuse consumers. See, e.g., id. at 930 (reasoning that defendant's mark
"Oil Zone," with the letters in the same font and slanted in the same direction as
"AutoZone," "may very well lead a consumer . . . to believe" that AutoZone had entered
the oil-change market). This is a somewhat unusual case because it involves the exact
same marks, not just a confusingly similar mark. That makes this factor easy. Because
the AMI Stores used Noble Roman's exact marks, this factor favors Noble Roman's.
Maui Jim, Inc. v. SmartBuy Guru Enters., 459 F. Supp. 3d 1058, 1093 (N.D. Ill. 2020)
(finding first factor favored plaintiff where defendants used plaintiff's exact marks).
2. Similarity of the Products
"The relevant inquiry with respect to the similarity of the products factor is not
whether the products are interchangeable, but whether the products are the kind the
public might very well attribute to a single source." Sorensen, 792 F.3d at 728–29. In
other words, the products need not be identical. If the menu items sold by the AMI
18
Stores using Noble Roman's marks are closely related to other items in Noble Roman's
product line, the public might attribute such menu items to Noble Roman's. See id. at
729.
The thrust of the AMI Stores' argument opposing summary judgment is that the
products they sold from counters adorned with Noble Roman's displays were simply not
foods Noble Roman's offers and so no reasonable customer would confuse them for a
Noble Roman's product. (Defs.' Resp. at 14–15). In light of the caselaw above, however,
this argument misses the mark.
Here, the AMI Stores sold apple fritters, corndogs, Philly cheesesteaks, macaroni
and cheese, cheeseburgers, green beans, and chicken tender sandwiches from clearly
marked Noble Roman's counters, typically next to boxes of Noble Roman's pizza. Given
that the AMI Stores were contractually bound to sell pizza, subs, and cheese sticks from
the same counters, and taking into account that the unauthorized menu items were
commingled with actual Noble Roman's food bearing Noble Roman's exact marks, "a
reasonable consumer may very well be led to believe" that Noble Roman's had expanded
its menu options to include other variants of fast food. AutoZone, 543 F.3d at 931
(reasoning that oil-change and car-wash services were similar to AutoZone's products,
taking into account the similarity of the marks); see also CAE, Inc. v. Clean Air Eng'g,
Inc., 267 F.3d 660, 678 (7th Cir. 2001) (finding similarity of products weighed in favor of
likelihood of confusion where consumers "might reasonably expect" that the trademark
owner would expand its business to offer the closely related products offered by the
defendant).
19
Moreover, Noble Roman's product line has historically included hamburgers,
sandwiches, chicken wings, and dessert items. (Mobley Aff. ¶ 8). So even a Noble
Roman's regular may not be particularly surprised to see the AMI Stores selling
cheeseburgers and chicken tender sandwiches at Noble Roman's counters. Such offerings
are not outside Noble Roman's wheelhouse. Because the AMI Stores have offered no
evidence to the contrary, this factor favors Noble Roman's.
3. Area and Manner of Concurrent Use
The third factor assesses "whether there is a relationship in use, promotion,
distribution, or sales between the goods or services of the parties." AutoZone, 543 F.3d at
932 (citation omitted). Relevant facts generally include whether the goods are sold next
to each other, target the same consumers, or are advertised through the same channels.
See Sorensen, 792 F.3d at 730.
The AMI Stores do not address this factor in their response, perhaps because it
indisputably favors Noble Roman's. The AMI Stores sold the off-brand food off the
same racks they sold Noble Roman's pizzas (to the extent they sold pizzas at all). Thus, it
was unavoidable that the Noble Roman's food and the off-brand food would be targeted
at the same consumers.
4. Degree of Care Exercised by Consumers
The fourth factor assesses the degree of care likely to be exercised by consumers
in purchasing the products in question. CAE, 267 F.3d at 682. When a product is less
expensive, consumers are less likely to exercise a high degree of care in selecting the
product, which in turn produces a higher likelihood a consumer will confuse the
20
infringing product with the trademarked product. Id. In reverse, consumers will typically
exercise more care when choosing expensive products, so they are less likely to be
confused. Id.
Both Noble Roman's and the AMI Stores seem to get this factor exactly
backwards. Noble Roman's argues this factor is "satisfied" because any customer visiting
a Noble Roman's counter is inherently exercising care to purchase Noble Roman's
products. (Filing No. 48, Pl.'s Br. at 19). The AMI Stores argue: "Anyone who actually
believes that a person buying products from a counter at a gas station convenience store
automatically has made their choice based upon 'the exercise of inherent care' to buy
[Noble Roman's] products is detached from reality." (Defs.' Resp. at 15).
The AMI Stores have the right of it. The consumer base for inexpensive fast food
at a gas station food counter is unlikely to exercise a great deal of care to ensure they
choose a particular brand. See, e.g., Sorensen, 792 F.3d at 730 (reasoning that
inexpensive rust-prevention sprays under $12 could be characterized as impulse
purchases and are unlikely to inspire much care in their selection). While in some cases a
well-known mark can lead customers to exercise a higher degree of care, Barbecue Marx,
Inc. v. 551 Ogden, Inc., 235 F.3d 1041, 1045 (7th Cir. 2000), the AMI Stores are correct
that Noble Roman's did not cite any evidence in the record supporting the inference that
its marks are so famous that they inspire a higher degree of care, (Defs.' Resp. at 15).
There is also no evidence that either the consumer base of the AMI Stores or the
consumer base of Noble Roman's are particularly sophisticated or deliberative. See
AutoZone, 543 F.3d at 923.
21
Unfortunately, the AMI Stores win the argument for the wrong side. The record
before the court suggests consumers are unlikely to exercise a great deal of care in
choosing between Noble Roman's fast food and the off-brand food offered by the AMI
Stores at the same counters. This factor favors Noble Roman's.
5. Strength of the Plaintiff's Mark
A "strong" mark is one that is distinctive, meaning it has a greater "propensity to
identify the products or services sold as emanating from a particular source." Sorensen,
792 F.3d at 731. "The stronger the mark, the more likely it is that encroachment on it
will produce confusion." AutoZone, 543 F.3d at 933 (citation omitted). "The strength of
a mark usually corresponds to its economic and marketing strength." Id.
The AMI Stores again do not mention this factor, and Noble Roman's says only
that the strength of its mark is established by the fact that "Noble Roman's" has been a
registered trademark since 1974. (Mobley Aff. ¶ 7). Neither party has pointed to
evidence of the mark's distinctiveness (or lack thereof), consumer surveys or testimony
establishing the public's awareness of the Noble Roman's mark, or sales data showing
that Noble Roman's pizzas are so widely sold that a jury could infer many consumers are
aware of the mark. Sorensen, 792 F.3d at 731. Although the AMI Stores failed to raise
any argument on this point, Noble Roman's bears the burden at summary judgment and
failed to supply sufficient evidence indicating its mark is strong. This factor slightly
favors the AMI Stores.
22
6. Actual Confusion
Noble Roman's has pointed to no evidence of actual confusion, but evidence of
actual confusion is not necessary to prove that a likelihood of confusion exists. Id. This
factor is neutral.
7. Defendant's Bad Faith Intent to "Palm Off"
"[T]he defendant's intent is relevant to the issue of likelihood of confusion only if
he intended 'to palm off his products as those of another,' thereby profiting from the
confusion." Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 961 (7th Cir.
1992) (emphasis added) (quoting F. Corp. of N. Am. v. F., Ltd., 903 F.2d 434, 439 (7th
Cir. 1990)); see also CAE, 267 F.3d at 686 (same).
Mr. Hamid's deposition (which neither party cites with any particular precision),
offers no conclusive evidence of intent. While a jury might infer bad faith from the fact
that the AMI Stores' food was offered from Noble Roman's counters, a jury could also
fairly conclude Mr. Hamid's employees disobeyed his instructions and placed the AMI
food on Noble Roman's warmer racks out of laziness. (See, e.g., Hamid Dep. at 83).
Because the available evidence does not establish the AMI Stores' intent to palm off its
products as those of Noble Roman's, intent is irrelevant in this case. CAE, 267 F.3d at
686.
8. Weighing the Factors
To recap, the court has found that the similarity of the marks, the similarity of the
products, the area and manner of concurrent use, and the degree of care exercised by
23
consumers all weigh in favor of a finding of likelihood of confusion. Only the strength of
the plaintiff's mark weighs against.
Although the similarity of marks, evidence of actual confusion, and the
defendant's intent are typically the most important factors, there is no requirement that all
three must weigh in the plaintiff's favor to find a likelihood of confusion. Id. at 687.
"Rather, the district court must give appropriate weight to the factors that are particularly
important based on the facts of each case." Id. at 687–88.
Here, the court finds the similarity of the marks (they are the exact same), the
similarity of the products (AMI's food is not out of place beside Noble Roman's food),
and the area and manner of concurrent use (AMI's products and Noble Roman's products
were placed on the same Noble Roman's warmer racks) are most important in this case.
Because the AMI Stores' off-brand food was sold side-by-side with Noble Roman's food
from counters clearly marked "Noble Roman's," likelihood of confusion is inescapable.
Even if the Noble Roman's mark is not particularly strong, a reasonable customer buying
fast food from a counter emblazoned with Noble Roman's actual mark must believe that
it is Noble Roman's food.
In most cases, likelihood of confusion is a question of fact for the jury. AutoZone,
543 F.3d at 929. In this case, however, there is no genuine dispute of material fact, and
the evidence is so one-sided that likelihood of confusion can be properly determined at
the summary judgment stage.10 See CAE, 267 F.3d at 687 (affirming district court's entry
10
To emphasize how one-sided the evidence is, the AMI Stores cite to evidence exactly twice in
their section on the Lanham Act. First, they cite to the Mobley Affidavit for the fact that
24
of summary judgment for plaintiff on likelihood of confusion based on the strength of the
other factors where there was a paucity of evidence of actual confusion, no bad faith
intent, and many of the parties' customers were sophisticated).
C. Whether Noble Roman's Fraudulently Induced the AMI Stores to

Enter into the Franchise Agreements.
Next, Noble Roman's moves for summary judgment on the AMI Stores' fraudulent
inducement claims. Recall that the AMI Stores were offered the option to either pay: (1)
a continuing weekly royalty fee of seven percent of the gross sales of Noble Roman's
products sold at AMI locations or (2) a continuing fee calculated on certain purchases by
the AMI Stores from Noble Roman's approved distributor. They chose the former.
However, the AMI Stores recently discovered that AMI's supplier was charging the AMI
Stores a three percent upcharge on Noble Roman's goods, a portion of which Noble
Roman's received as a rebate.
The parties agree on all that. They depart on this: the AMI Stores say Noble
Roman's instructed the supplier to charge three percent more on their purchases and to
send it back to Noble Roman's and this somehow violates the Franchise Agreements.
First of all, the AMI Stores cite no caselaw and no evidence to support their fraudulent
inducement claims. Second, the Franchise Disclosure Document, which was
incorporated into the Franchise Agreements, disclosed that Noble Roman's "may also
receive from time to time allowances, credits, or rebates from other suppliers based on
Management Store 3 sold a Philly cheesesteak in a Noble Roman's box. (Defs.' Resp. at 14).
Second, they cite generally to the entire Hamid Deposition for the proposition that "there was
never any intent to infringe upon [Noble Roman's] marks." (Id. at 15).
25
purchases by you." (Franchise Disclosure Document at NRIAMI001343). It even goes
on to provide the percentage of the company's revenue that was derived by such
commissions in the most recent fiscal year. (Id.). Nothing in any of the Franchise
Agreements says Noble Roman's may not receive such rebates on top of the other fees the
AMI Stores elected to pay.
The AMI Stores insist this is a question of fact. It is not a genuine dispute, though.
When, at summary judgment, Noble Roman's came forth with evidence—the Franchise
Disclosure Document—directly undermining the AMI Stores' claims, it became time for
the AMI Stores to "put up or shut up."11 Weaver v. Champion Petfoods USA Inc., 3 F.4th
927, 938 (7th Cir. 2021) (citation omitted). The AMI Stores have simply not "put up."
As a consequence, no reasonable jury could find that Noble Roman's committed fraud in
the inducement.
D. Whether Noble Roman's Violated the Florida Deceptive and Unfair

Trade Practices Act.
Finally, Noble Roman's moves for summary judgment on the AMI Stores' claim
that Noble Roman's violated Florida's Deceptive and Unfair Trade Practices Act in two
ways: (1) by offering the royalty fee arrangement described above and then
surreptitiously charging both fees, and (2) by improperly threatening litigation.
First, the AMI Stores' repackaged claims based on the royalty fee arrangement can
be quickly dispensed with. Under Florida law, "a party who signs a contract whose terms
11
Noble Roman's also came forth with plenty of law on the elements of fraudulent inducement,
to which the AMI Stores did not respond. The court need not reach these issues, however,
because the AMI Stores lack any evidence to support their claims.
26
contradict the alleged misrepresentations on which he relied is barred 'from seeking relief
pursuant to [the Trade Practices Act], as he acted unreasonably.'" TRG Night Hawk Ltd.
v. Registry Dev. Corp., 17 So. 3d 782, 784 (Fla. Dist. Ct. App. 2009) (quoting Rosa v.
Amoco Oil Co., 262 F. Supp. 2d 1364, 1368 (S.D. Fla. 2003)). As noted above, the
Franchise Agreements incorporate the Franchise Disclosure Document and directly
contradict the AMI Stores' theory of fraud. This theory fails.
Second, the AMI Stores claim Noble Roman's unfairly threatened them with
litigation if they did not purchase another franchise. These are the undisputed facts: after
Noble Roman's discovered that a non-franchised AMI location was using Noble Roman's
branded products without its authorization, Noble Roman's called Mr. Hamid and offered
him the chance to purchase a new franchise for that location in settlement of any claims
Noble Roman's might have. (Branson Aff. ¶ 5; Mobley Aff. ¶ 4). Mr. Hamid rejected
the offer. (Branson Aff. ¶ 5). The AMI Stores say this alleged extortion "would make a
Mafia Don proud." (Defs.' Resp. at 19). But the AMI Stores' raw rhetorical force is once
again not backed up by any evidence or law. (See id. at 18–20 (failing to cite any
supporting evidence or law)).
Florida's Trade Practices Act prohibits unfair practices that offend public policy
and are "immoral, unethical, oppressive, unscrupulous or substantially injurious to
consumers." PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So. 2d 773, 777 (Fla. 2003)
(citations omitted). Florida favors the "amicable settlement of disputes and the avoidance
of litigation." De Witt v. Mia. Transit Co., 95 So. 2d 898, 901 (Fla. 1957). As does the
Seventh Circuit. See, e.g., Metro. Hous. Dev. Corp. v. Vill. of Arlington Heights, 616
27
F.2d 1006, 1013 (7th Cir. 1980). Because the AMI Stores have provided no evidence this
was anything but an ordinary, amicable settlement offer, it cannot support a claim based
on Florida's Trade Practices Act.
IV. Conclusion
Plaintiff's Motion for Partial Summary Judgment (Filing No. 47) is GRANTED.
The court reiterates that Noble Roman's did not move for summary judgment on its
breach of contract claims for underreporting sales or its trademark infringement claims
against AMI 59 for misuse of branded products.
IT IS SO ORDERED this 25th day of July 2023.
s/RLY
Distributed Electronically to Registered Counsel of Record.
28

Order Granting Motion For Partial Summary Judgment

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Case 1:21-cv-01539-RLY-TAB Document 62 Filed 07/25/23 Page 1 of 28 PageID #: 1317

UNITED STATES DISTRICT COURT

NOBLE ROMAN'S, INC., )

ENTRY GRANTING PLAINTIFF'S MOTION

Practices Act and fraudulently induced the AMI Stores to contract.2

for partial summary judgment is GRANTED.

Resp. at 15 (describing the stores as "gas station convenience store[s]")). Between

AMI 57, LLC, for the operation of a pizza restaurant at 16766

AMI Stores Management, Inc., for the operation of pizza restaurants at

o 213 Highway 71 South, Wewahitchka, Florida 32465

o 403 East Crawford Street, Colquitt, Georgia 39837 ("Management

o 1500 MLK Boulevard, Panama City, Florida 32405

o 17398 Panama City Beach Parkway, Panama City Beach, Florida

(Id.; Defs.' Resp. at 5 (accepting Plaintiff's facts)).

exception of Management Store 2, which is "owned"4 by Hamid's brother unbeknownst

franchises. (Hamid Dep. at 25, 33).

counters at their convenience stores. The following picture is an example of a Noble

Roman's counter at one of the AMI Stores:

accuracy of the picture); Defs.' Resp. at 5 (accepting Plaintiff's facts)).

The Disclosure Document provides, in pertinent part:

or accountant." (Id. at NRIAMI001331). The Disclosure Document is incorporated by

"Franchise Agreements") § XIX(Q)).6

C. Relevant Terms of the Contracts

required the AMI Stores to abide by certain conditions. (Id.).

Agreements § VIII(E)(2) (emphasis added)).

Roman's]." (Id. § VIII(G)).

In the section of each Franchise Agreement labelled "Termination," the AMI

material and essential obligation of Franchisee; that nonperformance of such obligations

D. Discovery of the Alleged Breaches and Trademark Infringement

and used those errors to initiate suit) (emphasis added)).

Finally, AMI 63 failed to display signs in the manner prescribed by Noble

sale. (AMI 57 Franchise Agreement at 10).

AMI 57 claims that persistent—but intermittent—electrical problems beyond its

products." (Id. ¶ 6).8

products at all. (Id.).

counter—specifically, corndogs. (Id. ¶ 6; Filing No. 49-5, Pictures of Management Store

and next to a box of Noble Roman's pizza)).

Management Store 2 failed to maintain Noble Roman's Pizza in a "high degree of

Mobley Aff. ¶ 11).

it was still selling each of these unauthorized items. (Id. ¶ 13).

II. Legal Standard

A. Whether the AMI Stores Breached the Franchise Agreements.

breached an applicable Franchise Agreement. "Under Indiana law, the elements of a

and opportunity to cure. (Id.).

Respectfully, the AMI Stores' argument is off-base. The provisions of the

Franchise Agreements pertaining to notice and an opportunity to cure are in the

"Termination" section of the contracts. However, "[a] contractual obligation to provide

delay, for which he is liable in damages.")).

at 4 (noting the Franchise Agreements were terminated in December 2022)). Rather, it

occurred. (Defs.' Resp. at 4–13).

(Ind. 2016) (citations omitted). Here, the Franchise Agreements themselves

unambiguously provide that "each of Franchisee's obligations described in this

Agreement is a material and essential obligation of Franchisee." (Franchise Agreements

was breached. For example, the letter explains:

(Default Letter at 2).

For a contract to be legally impossible to perform, the party asserting impossibility

(emphases added)). Indeed, AMI 57 represents it has "been successful in maintaining

impossible." Wagler, 980 N.E.2d at 378.9

B. Whether the AMI Stores Violated the Lanham Act.

with Noble Roman's food constitutes trademark infringement. Specifically, Noble

following food items from counters containing "Noble Roman's" displays:

AMI 63 sold an apple fritter.