Tuna Family Mgmt Inc. v. All Trust Management Inc.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 20-14017-CIV-SMM

(Consent Case)

TUNA FAMILY MGMT INC., et al.,

Plaintiffs,

v.

ALL TRUST MANAGEMENT INC., et al.,

Defendants.

________________________________________/

ORDER ON DEFENDANTS’ MOTION FOR

PARTIAL SUMMARY JUDGMENT (DE 102)

This lawsuit stems from a dispute regarding the sale of a corporation, All Trust

Management Inc. (“All Trust”), and a related a seafood restaurant known as The Twisted Tuna

(the “Restaurant”) in Stuart, Florida. In 2018, Plaintiffs Tuna Family Mgmt Inc. (“Tuna Family”),

Kenneth Gibbs III (“Gibbs”), and Rachelle Risley (“Risley”) sold All Trust and the Restaurant to

Defendants Mad Twist LLC (“Mad Twist”) and Mad Twist’s Director, Defendant Sidharth Sethi.

The sale took place through a series of financial transactions guaranteed by Sidharth Sethi and his

father Defendant Amit Sethi, who together owned and operated Defendant SamJ Investments Inc.

(“SamJ”) and Defendant Italeats Inc. (“Italeats”). SamJ and Italeats offered two other restaurants

– 125th Street Grill and Mad Pizza – as collateral for one of several loans used to purchase the

Restaurant. Tuna Family and Mad Twist also entered a Licensing Agreement granting Mad Twist

– through All Trust – an exclusive license to operate under The Twisted Tuna trademark and to

use intellectual property associated with the trademark within a ten-mile radius from the physical

address of the Restaurant (the “Territory”).

Since the sale, several disagreements have arisen regarding Defendants’ compliance with

the financing agreements and the Licensing Agreement, and the propriety of disclosures that

Plaintiffs made pertaining to the Restaurant’s sale. Both parties have filed motions for partial

summary judgment.1 This Order addresses Defendants’ Motion for Partial Summary Judgment

(DE 102).2 I have reviewed the motion and all pertinent portions of the record.3 For the reasons

stated herein, Defendants’ Motion is GRANTED IN PART AND DENIED IN PART.

BACKGROUND

The following facts are undisputed.

A. The Restaurant Sale and Financing Agreements

Gibbs and Risley opened the Restaurant in 2014. DE 84 at 33, ¶15; DE 85 at ¶15. They

owned the Restaurant through All Trust. DE 86-2 at ¶1; DE 91 at ¶1. On January 13, 2015, they

registered the name “The Twisted Tuna” as a federal trademark. DE 109 at ¶44; DE 116 at ¶44.

The registration, dated January 13, 2015, reflects that The Twisted Tuna mark (the “Mark”) is

registered on the principal register for “restaurant and bar services” and was first used in commerce

on March 1, 2014. DE 109-1 at 24, 69.

1Defendants’ Motion for Partial Summary Judgment is found in the record at DE 102. Plaintiffs’ Motion for Partial

Summary Judgment and/or in the Alternative, Motion to Strike Claims Relating to the Lease Issue (“Plaintiffs’

Motion”) is found in the record at DE 86.

2 On May 15, 2020, the parties jointly filed a Consent to Proceed Before United States Magistrate Judge (“Consent”).

DE 35. Pursuant to the Consent, United States District Judge Donald M. Middlebrooks issued an Order of Reference

referring the case to me for all further proceedings including trial and entry of judgment pursuant to 28 U.S.C.

§ 636(c)(1), Federal Rule of Civil Procedure 73, and the Magistrate Judge Rules of the Local Rules of the Southern

District of Florida. DE 36.

3 Among other filings, I have reviewed the briefing on Plaintiffs’ Motion (DE 92; DE 93), the statements of facts

related to Plaintiffs’ Motion (DE 86-2; DE 91; DE 94), the briefing on Defendants’ Motion for Partial Summary

Judgment (DE 108; DE 117), the statements of facts related to Defendants’ Motion for Partial Summary Judgment

(DE 103; DE 109; DE 116), all exhibits to the foregoing docket entries, and all other filings from this case that are

referred to in the foregoing docket entries.

In 2017, the Restaurant was listed for sale with Transworld Brokers. DE 86-2 at ¶3; DE

91 at ¶3. On or about June 28, 2018, Defendant Sidharth Sethi entered into a contract to purchase

the Restaurant (“Stock Sale Agreement”). DE 86-2 at ¶4; DE 91 at ¶4; DE 84-1. The Stock Sale

Agreement indicates that Plaintiffs Gibbs and Risley agreed to sell to Defendant Sidharth Sethi the

stock of All Trust and the parking lot for the Restaurant for $3,850,000. DE 84-1. Of the total

$3,850,000 purchase price, $3,000,000 was allocated to, inter alia, purchase of the All Trust stock,

and $850,000 was allocated to the purchase of the parking lot.4 DE 84-1; DE 103 at ¶7; DE 109

at ¶7. The closing occurred on November 29, 2018 (“Closing Date”). DE 86-2 at ¶13; DE 91 at

¶13. On the Closing Date, the parties executed a $1,750,000 note (the “$1.75MM Note”)

representing additional costs for the purchase, which brought the total purchase price for the

restaurant and parking lot to $5,600,000. DE 83-1 at 68; DE 103 at ¶7; DE 109 at ¶7.

Defendants obtained both third-party financing and seller-financing to accomplish the

purchase. DE 103-1; DE 83-1 at 68-71, 96-98. Defendant Mad Twist obtained third-party

financing through a loan from Midwest Regional Bank (the “Lender”) guaranteed by the Small

Business Administration (“SBA Loan”).5 DE 103 at ¶¶2-3, 12; DE 109 at ¶¶2-3, 12. Defendants

Gibbs and Risley provided seller financing consisting of a $490,000 note (“$490k Note”) in

4 As explained further below, Defendants received proceeds of a $2,991,000 SBA guaranteed loan of which

$1,860,000 was designated for purchase of the All Trust stock. DE 103-1.

5 The SBA Guaranty Authorization, issued on October 19, 2018, is for a 75% guarantee of a $2,991,000 loan (“SBA

Loan”) that Midwest Regional Bank (“Lender”) was to extend to Defendants All Trust and Mad Twist. DE 103-1 at

2, 14. The use of proceeds is stated to be: (i) $850,000 for purchase of land and improvements; (ii) $1,860,000 for

purchase of the ownership interest in All Trust; and (iii) $81,621.88 for the guaranty fee; (iv) $75,000 for the purchase

of inventory; (v) $49,378.12 for closing costs; and (vi) $75,000 for working capital. Id. at 6. Among other provisions,

the SBA guaranty authorization requires Lender to obtain a standby creditor’s agreement from Plaintiffs Gibbs and

Risley for the $490k Note, which provides for the subordination of the $490k Note to the SBA Loan. Id. at 11. The

provision expressly states that monthly payments of $5,440 may be made on the $490k Note so long as Defendants

are not in default on the SBA Loan. Id. The provision also prohibits Plaintiffs Gibbs and Risley from taking action

against Defendants All Trust and Mad Twist relative to the $490k Note without the Lender’s consent. Id.

addition to financing the additional purchase price amount of $1,750,000 through the $1.75MM

Note. DE 83-1 at 68-71, 96-98; DE 83 at ¶53; DE 84 at ¶53.

The $490k Note, made by Defendants Mad Twist and All Trust on November 29, 2018,

carries a 6% interest rate and is payable to Defendants Gibbs and Risley in 120 monthly

installments of $5,440.00 each. DE 83-1 at 96. The note is secured by a second lien on the business

assets of the Restaurant, pursuant to a Security Agreement (the “$490k Security Agreement”)

entered on the same date, behind the first lien of Midwest Regional Bank. DE 83-1 at 97; DE 103-

6. Defendant Sidharth signed the $490k Note as an individual guarantor of the note’s payment

and performance. DE 83-1 at 98.

The $1.75MM Note, made by Defendants Sidharth Sethi, SamJ, Italeats, Mad Twist, and

All Trust on November 29, 2018, carries a 6% interest rate and is payable to Defendants Gibbs

and Risley in 120 monthly installments of $19,428.59 each. DE 109-2 at 5. The note is secured

by a lien on the assets of 125th Street Grill and Mad Pizza pursuant to a Security Agreement (the

“$1.75MM Security Agreement”) entered on the same date. Id. at 6. The $1.75MM Security

Agreement was made by Defendants Sidharth Sethi, SamJ, Italeats, Mad Twist and All Trust as

Debtors, and pledges as security to Plaintiffs Gibbs and Risley the following: (1) all assets of SamJ,

Mad Twist, and All Trust; (2) the fixtures furniture, equipment, and inventory of 125th Street Grill,

owned by SamJ and located in Seattle, Washington; and (3) the fixtures, furniture, equipment, and

inventory of Mad Pizza, owned by Italeats and located in Seattle, Washington. Id. at 10-17. The

$1.75MM Security Agreement requires Defendants “[t]o retain possession of the Collateral during

the e[x]istence of [the Security] Agreement.” Id. at 11. As such, the $1.75MM Security

Agreement prohibits Defendants from selling, exchanging, assigning, loaning, delivering, leasing,

mortgaging, or otherwise disposing of the security pledged except for inventory sold in the

ordinary course. Id. Sidharth Sethi and his father, Amit Sethi, guaranteed the 1.75MM Note.

DE 86-2 at ¶¶10, 12; DE 91 at ¶10, 12; DE 86-2 at ¶12; DE 91 at ¶12; DE 109-2 at 18-23.

B. The Licensing Agreement

Contemporaneously with closing on the sale of the Restaurant, Tuna Family and Mad Twist

entered a Licensing Agreement on November 29, 2018. The Licensing Agreement was between

Tuna Family as Licensor and All Trust, owned and controlled by Mad Twist, as Licensee. DE 86-

2 at ¶20; DE 91 at ¶20; DE 84 at 54, ¶80; DE 85 at ¶80. The Licensing Agreement grants All Trust

a license to operate under The Twisted Tuna trademark within a ten-mile radius from the physical

address of the Restaurant (the “Territory”). DE 86-2 at ¶22; DE 91 at ¶22. Under the Licensing

Agreement, Tuna Family grants All Trust an exclusive license for use in the Territory and All

Trust may use Tuna Family’s intellectual property to make, use and apply the Mark in the course

of its business. DE 91 at ¶81; DE 94 at ¶81. As Licensor, Tuna Family retains exclusive rights to

the Mark outside the Territory; however, it cannot compete with All Trust, as Licensee, within the

Territory. Id. Tuna Family also agrees in the Licensing Agreement to provide updated operating

procedures, new recipes, and any other information necessary for All Trust to successfully operate

the business. Id.

The Licensing Agreement includes provisions restricting All Trust from: (a) contesting the

validity of Tuna Family’s rights outside the Territory; (b) taking actions which might impair or

interfere with Tuna Family’s rights outside the Territory; (c) associating or commingling Tuna

Family’s intellectual property with other intellectual property without Tuna Family’s prior

consent; (d) using Tuna Family’s intellectual property in an unauthorized manner; and (e) seeking

to register any trademark, copyright or industrial design registration anywhere in connection with

Tuna Family’s intellectual property. DE 86-2 at ¶¶23(a)-(d); DE 91 at ¶¶23(a)-(d). The Licensing

Agreement also provides: “Licensee shall not use the Trademark in a fashion that the Licensor

deems to be contrary or may cause a detriment to the brand or concept of the Trademark.” DE 86-

2 at ¶31; DE 91 at ¶31.

The Licensing Agreement includes provisions allowing regular, unscheduled, onsite visits

by Tuna Family to the Restaurant for inspection of the operations, purchases, policies, preparation,

inventory, equipment, recipes, financial, POS system, etc. DE 86-2 at ¶25; DE 91 at ¶25. Further,

the Licensing Agreement provides a thirty-day right to cure a default after receipt of formal notice

of same. DE 86-2 at ¶28; DE 91 at ¶28. As consideration for the Licensing Agreement, All Trust

is required to pay ten dollars per month as a licensing fee, which it has not paid for over a year.

DE 86-2 at ¶¶27, 35 (citing Exhibit A at ¶18); DE 91 at ¶¶27, 35; DE 86-3 at 107.

C. The Lease Agreement

Plaintiffs, through All Trust Management, LLC, as Tenant, entered into a Lease Agreement

for the premises housing the Restaurant beginning June 1, 2014, with Red Sky, Inc. as Landlord.

DE 86-3 at 205-28. The initial term of the lease was five years with provision for three subsequent

five-year renewals (“Option Terms”) to occur automatically in the absence of one-year advance

notice of intent not to renew. Id. at 206-07. The minimum base rent for the first year of the lease

was $15,000 per month, or $180,000 per year, with 3% increases for each of the following four

years such that rent was expected to be $16,882 per month, or $202,591 per year, in year five. Id.

at 208. The section of the Lease Agreement governing options to renew, section 1.04, states that

each of the five-year Option Terms shall be “on the same terms and conditions as this Lease, saving

and excepting this option and the minimum rent which shall adjust to the current fair market rents

at the time of renewal.” Id. at 206 (emphasis added). Further, this section of the Lease states that

“[t]he fixed minimum rent during the initial year of the three (3) Option Terms shall be Three

Percent (3%) higher than the last year of the previous term.” Id. at 207 (emphasis added). The

Lease also prohibits assignment without prior written consent of the Landlord and states that any

assignment or occupancy by another shall not release Plaintiffs, as Tenant, from performance

under the Lease. Id. at 217.

Plaintiffs knew the lease pertaining to the land and buildings housing the Restaurant was

below market rate and was one of the Restaurant’s most valuable assets. DE 91 at ¶66; DE 94 at

¶66. The Lease Agreement was provided to Defendant Sidharth Sethi approximately eleven (11)

months prior to the closing on the Restaurant for his review and study over that period, and he

reviewed the agreement without retaining counsel to review it. DE 86-2 at ¶¶38, 42-43; DE 91 at

¶¶38, 42-43. The Lease Agreement expressly states that the agreement is between All Trust

Management, LLC (as Tenant) and Red Sky, Inc. (as Landlord), and these entities are signatories

to the lease. DE 86-2 at ¶¶39-40; DE 91 at ¶¶39-40. Plaintiffs voluntarily dissolved All Trust

Management, LLC on March 4, 2014, which date was five days after entering into the subject

lease. DE 91-18 at 6, p.95:11-p.96:2; DE 91-28 at 6, p.128:14-p. 129:13. Plaintiffs did not provide

notice of the dissolution to the Landlord. Id. Plaintiffs incorporated All Trust Management, Inc.

on March 3, 2014, without notice to the Landlord, and Plaintiffs sold the capital stock of All Trust

Management, Inc. to Sidharth Sethi and Mad Twist without notice to the Landlord on November

29, 2018. DE 91-18 at 6, p.96:3-11; DE 91-28 at 6-7, p. 129:1-130:15. All Trust Management,

LLC never assigned the lease to All Trust Management, Inc. DE 91 at ¶68; DE 94 at ¶68. Plaintiffs

understood the implications – that the Landlord could change the lease rate and possibly add other

provisions. DE 91 at ¶69; DE 94 at ¶69; DE 91-29. Thus, Plaintiffs insisted on structuring the

sales transactions as a stock sale, representing that the leasehold interest would transfer and avoid

renegotiating a new lease with the Landlord. DE 91 at ¶70; DE 94 at ¶70; DE 91-29. Defendant

Sidharth Sethi never spoke to the Landlord prior to closing on the sale of the restaurant. DE 86-2

at ¶44; DE 91 at ¶44. On or around May 2019, Defendant Sidharth attempted to exercise the Lease

Option Term. DE 91 at ¶73; DE 94 at ¶73.

On May 27, 2019, Defendants, through All Trust Management, Inc. as Tenant, executed a

First Addendum to Indenture of Lease for The Twisted Tuna premises with Red Sky, Inc. as

Landlord (“Lease Addendum”). DE 91-20. The Lease Addendum, among other things, modified

the rent due under the Lease. Id. In particular, the Addendum provides that “the Parties agree the

appropriate rent, based upon the current ‘Fair Market Value’, effective June 1, 2019, is [$21,600]

per month.” Id. Although a partial forbearance structure was agreed upon, Defendant All Trust

became obligated for the minimum rent amount of $21,600 per month with 3% increases thereafter

in the following four years. Id.

D. The Fysh Bar & Grill Restaurant in Port Orange, Florida

In 2019, Defendant Sidharth Sethi began exploring an additional restaurant location near

Jacksonville, Florida. On April 10, 2019, Plaintiffs Gibbs and Riley signed a letter on behalf of

Tuna Family stating, in part, that “All Trust Management Inc may be granted permission to operate

additional business locations . . . in Licensor’s sole discretion.” DE 91-17. On June 26, 2019,

Defendant Sidharth Sethi executed a non-binding letter of intent issued by a broker indicating that

“Twisted Tuna” would be the tenant of an 8,000 square foot facility in Jacksonville, Florida.

DE 86-3 at 166-170. In September 2019, Sidharth Sethi sent an email discussing terms for a loan,

which contained a business plan for “a seafood restaurant in Port Orange” called Fysh Bar & Grill

(“Sept. 2019 Business Plan”). DE 86-3 at 142-144; 177-84; DE 103 at ¶47; DE 109 at ¶47; DE

109-11 at 3-9. In the email, the Sept. 2019 Business Plan includes, in part, the following

statements:

1. Summary of Fysh Bar & Grill. Fysh Bar & Grill will be a replication of our

current flagship restaurant, The Twisted Tuna. Fysh will consist of the same

highly successful waterfront, mixed dining concept with a few additions. Fysh

Bar & Grill will serve of [sic] a mix of authentic American, Japanese, and

Italian Cuisines within a family friendly atmosphere. It will have 4 separate

kitchens, 3 full bars, a 300-seat banquet facility, daily live entertainment, and

an authentic modernized gelato station.

2. Summary of The Twisted Tuna. The Twisted Tuna has been one of the most

successful family owned restaurants in Florida. The restaurant opened

approximately 5 year ago and has been increasing in revenue ever since. . . .

The Twisted Tuna concept consists of multiple different eatery and drinking

scenes under one roof along with daily live entertainment, all of which is right

on the waterfront. The restaurant’s phenomenal views, entertainment

attractions, and wide variety of eating options make The Twisted Tuna an

extremely unique and differentiated all-in-one concept.

3. Reason for Rebranding? The sellers of The Twisted Tuna currently own the

brand. All of our growth strategies need approval from them. Instead of being

limited under their name and policies, we have decided to create our own brand

while duplicating our Tuna concept. . . . Rebranding to Fysh would allow our

talented chefs and management team to come together and push ideas which

would further enhance our already successful concept.

. . .

Fysh Bar & Grill will be marketed as a sister company of The Twisted Tuna so

we can spread the word of our new brand and gain trust and interest from our

current customer base.

. . .

4. Management & Training. . . . We will use our main management members at

The Twisted Tuna to train our team in Port Orange. Our current management

understands the ins and outs of our business and will easily be able to train and

pass on their knowledge to our Fysh staff.

Furthermore, training will not be difficult since we are implementing the exact

same policies, procedures, and structure within Fysh as we currently have at

The Twisted Tuna.

. . .

5. Fysh’s menu will be extremely similar to our current menu at The Twisted

Tuna, which can be viewed on our website (thetwistedtuna.com). With that

being said, our chefs will train our kitchen staff at Fysh on how to make the

exact same food, which has been a pivotal part of our success at The Twisted

Tuna.

DE 109-11 at 3-9.

On January 27, 2020, Sidharth Sethi posted a 13-minute documentary video on YouTube

about the Fysh Bar & Grill in which he stated that the restaurant’s concept was “somewhat based”

on The Twisted Tuna. DE 103 at ¶48 (citing https://www.youtube.com/watch?v=ZUMHs3mJ-

wU); DE 109 at ¶48. Sidharth Sethi also commented that Fysh Bar & Grill would be a waterfront

concept with a large menu. DE 103 at ¶48; DE 109 at ¶48.

On March 10, 2021, Sidharth hosted a groundbreaking ceremony for the Fysh Bar & Grill

in Port Orange, Florida. DE 109 at 12, ¶38; DE 116 at ¶38. One of the pictures from the ceremony

shows a Twisted-Tuna-branded water bottle on a table. DE 109 at 12, ¶38; DE 116 at ¶38. The

following day, on March 11, 2021, the Daytona Beach News-Journal published an article about

the groundbreaking ceremony. DE 103-12. The article states in part:

Rick Julyia, [sic] director of operations for Twisted Tuna, was on hand to take part

in the groundbreaking as well as oversee the serving of samples of some of the food

Fysh Bar & Grill will offer to the more than 50 people in attendance.

“I will be moving here to oversee this location,” he said. “Great town.” We’ve

been coming here and looking at this location for (nearly) three years.”

Id. at 4.

STANDARD OF REVIEW

Summary judgment is appropriate where “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 dispute is genuine if “a reasonable trier of fact could return judgment for the non-

moving party.” Miccosukee Tribe of Indiana of Fla. v. United States, 516 F.3d 1235, 1243 (11th

Cir. 2008). A fact is material “if it would affect the outcome of the suit under the governing

law[.]”. Id.

When deciding a summary judgment motion, the Court views the evidence in the light most

favorable to the non-moving party and draws all reasonable inferences in that party’s favor.

Furcron v. Mail Ctrs. Plus, LLC, 843 F.3d 1295, 1304 (11th Cir. 2016). Courts do not weigh

conflicting evidence or make credibility determinations. Furcron, 843 F.3d at 1304; Skop v. City

of Atlanta, 485 F.3d 1130, 1140 (11th Cir. 2007). If a genuine dispute of material fact exists, the

Court must deny summary judgment. Skop, 485 F.3d at 1140.

The moving party bears the initial burden to demonstrate the absence of a genuine issue as

to any material fact. Fickling v. United States, 507 F.3d 1302, 1304 (11th Cir. 2007). “If the

moving party meets this burden, the nonmoving party must present evidence beyond the pleadings

showing that a reasonable jury could find in its favor.” Shiver v. Chertoff, 549 F.3d 1342, 1343

(11th Cir. 2008) (internal quotation marks and citation omitted). “[T]he plain language of Rule

56(c) mandates the entry of summary judgment . . . against a party who fails to make a showing

sufficient to establish the existence of an element essential to that party's case, and on which that

party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

DISCUSSION

On March 16, 2021, Plaintiffs filed a ten-count Third Amended Complaint (“Complaint”)

(DE 83) against the Defendants alleging the following causes of action:

Count Cause of Action Against

Sidharth Sethi

Infringement of U.S. Trademark No. 4670129 – 15 Mad Twist, LLC

I U.S.C. § 1114(1) All Trust Management, Inc.

Sidharth Sethi

Unfair Competition and False Designation of Origin Mad Twist, LLC

II – 15 U.S.C. § 1125(a) All Trust Management, Inc.

Sidharth Sethi

III Fraud Amit Sethi

Sidharth Sethi

SamJ Investments Inc.

IV Breach of Promissory Note - $1.75MM Italeats Inc.

Breach of Absolute Unconditional Continuing Gty Sidharth Sethi

V Agmt - $1.75MM Amit Sethi

VI Breach of Guaranty Agreement - $490k Sidharth Sethi

Declaratory Judgment (that Plaintiff Tuna Family

VII Mgmt Inc. is entitled to terminate License Agmt) All Trust Management, Inc.

VIII Breach of License Agmt All Trust Management, Inc.

Mad Twist, LLC

IX Breach of Promissory Notes ($490k and $1.75MM) All Trust Management, Inc.

Sidharth Sethi

X. Tortious Interference with a Business Relationship Amit Sethi

DE 83.

In their Motion for Partial Summary Judgment, Defendants seek summary judgment on

Counts I and II alleging trademark infringement, unfair competition, and false designation of

origin; Count IV alleging breach of the $1.75MM Note; Count V alleging breach of the guarantee

agreements securing the $1.75MM Note; Count VI alleging breach of the guarantee agreement

securing the $490k Note; and Count IX alleging breach of the promissory notes for $490,000 and

$1.75MM.

Regarding Counts I and II, Defendants argue that Plaintiffs’ trademark infringement, unfair

competition, and false designation of origin claims fail because Plaintiffs offer no evidence

showing a likelihood of consumer confusion or damages.

Regarding Counts IV, V, VI, and IX, Defendant argues that these claims – which all relate

to alleged breaches of the 1.75MM and 490k notes or the guarantees securing these notes – are

premature because the notes were obtained to satisfy SBA and Lender financing requirements,

which prohibit actions to enforce the notes unless the SBA Guaranteed Loan has been satisfied or

the Lender consents in writing. Since the SBA Guaranteed Loan has not been satisfied and no

evidence in the record demonstrates Lender consent, Defendants contend that Counts IV, V, VI,

and IX must be dismissed.6

I address these arguments in turn.

A. Counts I & II: Trademark, Unfair Competition, and False Designation

Defendants move for summary judgment as to Counts I and II on the basis that Plaintiffs

have not produced any evidence to sustain their claims for trademark infringement and unfair

competition under the Lanham Act. DE 102 at 15. Defendants make two arguments as to these

counts. First, Defendant argue that Plaintiffs have produced no evidence of a likelihood of

consumer confusion, which is necessary to sustain claims for trademark infringement and unfair

competition. Id. Second, Defendants contend that the claim of unfair competition separately fails

because Plaintiffs have not established any likelihood of damages.7 Id. at 22.

Plaintiffs must prove the same elements both for trademark infringement under § 32(1),

codified at 15 U.S.C. § 1114(1), and for false designation of origin, also referred to as “a federal

cause of action for unfair competition,” under § 43(a), codified at 15 U.S.C. § 1125(a). Savannah

Coll. of Art & Design, Inc. v. Sportswear, Inc., 872 F.3d 1256, 1261 (11th Cir. 2017) (citations

omitted). Specifically, Plaintiffs must establish “enforceable trademark rights in a mark or name”

and “unauthorized use of its marks such that consumers were likely to confuse the two.” Id.

(internal quotation marks and citation omitted).

6 Because I find that Defendants are entitled to summary judgment in their favor as to Counts, IV, V, VI, and IX, I do

not address Defendants’ Ninth Defense that these claims are barred by doctrines of waiver and estoppel and because

they are premature, unauthorized and/or Plaintiffs have failed to satisfy conditions precedent. DE 84 at 29.

7 Defendants posit that the claim fails even if it is separate from the trademark infringement claim because Plaintiffs

provide no evidence addressing the likelihood of damages. DE 102 at 22. Because I find that the trademark

infringement and unfair competition claims, are coextensive, I do not address Defendants’ argument regarding

likelihood of damages.

Here, the parties do not dispute the first element. Indeed, “[t]he owner of a mark on the

principal register enjoys . . . a presumption that the mark is valid.” United States Pat. & Trademark

Off. v. Booking.com B. V., 140 S. Ct. 2298, 2302-04 (2020). Because The Twisted Tuna Mark is

registered on the principal register, it is presumptively valid. Furthermore, Defendants contest

neither the Mark’s validity nor that Plaintiffs own it. Accordingly, Plaintiffs have enforceable

trademark rights in The Twisted Tuna name and Mark.

As to the second element, “the touchstone of liability in a trademark infringement action is

not simply whether there is unauthorized use of a protected mark, but whether such use is likely

to cause consumer confusion.” Custom Mfg. & Eng'g, Inc. v. Midway Servs., Inc., 508 F.3d 641,

647 (11th Cir. 2007). See also John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 972

(11th Cir. 1983) (“[T]he critical question in most actions under § 32(1) is whether there is a

likelihood of confusion, mistake, or deception between the registered mark and the allegedly

infringing mark”); Original Appalachian Artworks, Inc. v. Toy Loft, Inc., 684 F.2d 821, 831 (11th

Cir. 1982) (“The essential element of an action under § 43(a) is proof by the plaintiff that the

alleged infringement by the defendant creates a likelihood of confusion on the part of consumers

as to the source of the goods.”).8 Indeed, claims under both § 1114 and § 1125 “generally turn[]

on the confusion analysis.” Savannah Coll. of Art & Design, Inc., 872 F.3d at 1261.

To determine if likelihood of confusion exists, courts consider and weigh seven factors: (1)

the type/strength of the asserted mark; (2) the similarity of the marks; (3) the similarity of the

8 “Section 32(1) of the Lanham Act, 15 U.S.C.A. § 1114(1), governs lawsuits for the infringement of a federally

registered trademark.” John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 972 (11th Cir. 1983) (“A defendant

is liable for infringement if, without the consent of the registrant, he uses “in commerce any reproduction, counterfeit,

copy, or colorable imitation of a registered mark” which “is likely to cause confusion, or to cause mistake, or to

deceive.”). “[Section] 43(a) . . . expressly prohibit[s] the use of any ‘word, term, name, symbol, or device,’ or ‘false

or misleading description of fact’ that is likely to cause confusion as to ‘affiliation, connection, or association ... with

another person,’ or as to ‘sponsorship, or approval’ of goods.” Dastar Corp. v. Twentieth Century Fox Film Corp.,

539 U.S. 23, 32, n. 5 (2003) (quoting 15 U.S.C. § 1125(a)).

products and services the marks represent; (4) the similarity of the parties’ retail outlets (trade

channels) and customers; (5) the similarity of the parties’ advertising media; (6) the alleged

infringer’s intent; and (7) actual confusion. Aronowitz v. Health-Chem Corp., 513 F.3d 1229,

1239 (11th Cir. 2008); see also Tana v. Dantanna’s, 611 F.3d 767, 774–75 (11th Cir. 2010). A

court must “fully consider the seven factors, … evaluate the weight to be accorded the individual

factors, which varies with the circumstances of the case, and then make its ultimate decision only

after doing so.” J-B Weld Co., LLC v. Gorilla Glue Co., 978 F.3d 778, 794 (11th Cir. 2020); see

also Custom Mfg. & Eng'g, Inc., 508 F.3d at 649 (recognizing that application of the multi-factor

test “entails more than the mechanistic summation of the number of factors on each side; it involves

an evaluation of the ‘overall balance’”). Among the seven factors, “the type of mark and the

evidence of actual confusion are the most important.” Planetary Motion, 261 F.3d at 1201 n.22

(citing Dieter, 880 F.2d at 326). “Although likelihood of confusion is a question of fact, it may be

decided as a matter of law.” Alliance Metals, Inc., of Atlanta v. Hinely Indus., Inc., 222 F.3d 895,

907 (11th Cir. 2000). Courts routinely weigh the likelihood-of-confusion factors on summary

judgment. Tana, 611 F.3d at 775 n. 7 (citations omitted).

Defendants argue that Plaintiffs have produced no evidence of consumer confusion.

DE 102 at 9-10, 15-22. Plaintiffs respond that Defendants are illegally using the Mark outside of

the geographic area permitted under the License Agreement to gain interest in and support for their

new endeavor. Id. at 15-16. Plaintiffs contend that this use of the Twisted Tuna Mark in

association with the opening of the Fysh Bar & Grill results in “certainty of confusion as a matter

of law.” DE 108 at 15-16.

“Ordinarily, trademark infringement cases are predicated on the complaint that the

defendant employed a trademark so similar to that of the plaintiff that the public will mistake the

defendant’s products for those of the plaintiff.” Burger King Corp. v. Mason, 710 F.2d 1480,

1491-92 (11th Cir. 1983) (citing Exxon Corp. v. Texas Motor Exchange of Houston, Inc., 628 F.2d

500 (5th Cir. 1980). However, “falsely suggesting affiliation with the trademark owner in a

manner likely to cause confusion as to source or sponsorship constitutes trademark infringement”

as well. Id. at 1492 (citing Professional Golfers Ass’n of America v. Bankers Life & Casualty Co.,

514 F.2d 665, 670 (5th Cir. 1975), cert. denied, 449 U.S. 1022 (1980)) (emphasis in original).

“Thus, a trademark infringement case need not just involve imitation of the registrant’s mark. The

unauthorized use of a trademark which has the effect of misleading the public to believe that the

user is sponsored or approved by the registrant can constitute infringement.” Id. (citing

Professional Golfers Ass’n, 514 F.2d at 670.

Plaintiffs’ causes of action under the Lanham Act are based on the theory that by using the

Twisted Tuna Mark in association with the opening of their new restaurant, the Fysh Bar & Grill,

Defendants falsely suggest that Fysh Bar & Grill is sponsored by and affiliated with the Twisted

Tuna. This type of infringement is cognizable under the Lanham Act. I therefore examine

Plaintiffs’ proof in light of this enforceable (albeit less common) claim for trademark infringement.

As an initial matter, I consider Plaintiffs’ assertion that under the circumstances present

here there is a likelihood of confusion “as a matter of law.” DE 108 at 16-17. For support,

Plaintiffs rely on a line of cases in which courts in this Circuit have held that a terminated

franchisee’s continued operations create “a certainty of confusion” among consumers that the

terminated franchisee’s products actually are the certified products of the franchisor. See, e.g.,

McDonald’s Corp. v. Robertson, 147 F.3d 1301, 1309 (11th Cir. 1998); see also Burger King

Corp. v. Mason, 710 F.2d 1480, 1492 (11th Cir. 1983); Burger King Corp. v. Agad, 911 F. Supp.

1499, 1504 (S.D. Fla. 1995). Plaintiffs emphasize that it is “well settled that when a terminated

franchisee continues to use the former franchisor’s trademarks without authorization, that conduct,

by its very nature, confuses consumers and constitutes trademark infringement.” DE 108 at 17

(citing Peterbrooke Franchising of Am., LLC v. Miami Chocolates, LLC, 312 F. Supp. 3d 1325,

1339 (S.D. Fla. 2018)). Thus, Plaintiffs contend that I may find likelihood of confusion here

without undertaking the seven factor likelihood of confusion test.

Plaintiffs’ case is distinct, however, from one in which a franchisor has terminated a

franchise agreement and the franchisee continues to operate under the franchisor’s mark despite

the termination of the agreement authorizing it to do so. In such a case,

Common sense compels the conclusion that a strong risk of

consumer confusion arises when a terminated franchisee continues

to use the former franchisor’s trademarks. A patron of a restaurant

adorned with the Burger King trademarks undoubtedly would

believe that [Burger King Corporation] endorses the operation of the

restaurant. Consumers automatically would associate the trademark

user with the registrant and assume that they are affiliated. Any

shortcomings of the franchise therefore would be attributed to

[Burger King Corporation]. Because of this risk, many courts have

held that continued trademark use by one whose trademark license

has been cancelled satisfies the likelihood of confusion test and

constitutes trademark infringement.

Mason, 710 F.2d at 1492-93.

Here, Plaintiffs have not terminated the License Agreement. Defendants remain authorized

to use the Mark according to the terms of the License Agreement. And Plaintiffs are not operating

any Twisted Tuna branded restaurant without a valid License Agreement or outside the Territory

permitted by the Licensing Agreement. Thus, the “certainty of confusion cases” are not applicable

here.

Having dispensed with Plaintiffs’ “certainty of confusion as a matter of law” argument, I

turn to the question of whether Plaintiffs have put forth sufficient evidence showing Defendants

used the Mark in violation of the License Agreement in a manner likely to cause consumer

confusion to survive summary judgment. I find that they have. The record contains evidence

showing that Defendants used the Twisted Tuna Mark outside the geographic area and in a manner

not contemplated by the License Agreement in the following ways:

On June 24, 2019, Defendants filed an application attempting to register the Mark with the

Florida Department of State. DE 109 at ¶34(a). Defendant Amit Sethi testified that he attempted

to do this independent of Plaintiffs. DE 109-9 at 4. Defendants argue that this filing was a

misunderstanding and not an attempt to register the Mark in violation of the Licensing Agreement.

Defendants contend, rather, that they received a letter from the government regarding the

trademark needing to be renewed as a matter of urgency and that Defendant Amit Sethi submitted

the paperwork in an effort to comply and informed Plaintiffs afterwards. DE 116 at ¶34(a).

Plaintiffs maintain that Defendants’ attempt to register the Mark was done in conjunction with

their efforts to open an unauthorized Twisted Tuna restaurant and that “[a]t no time did Defendants

state there was a mistake or mix-up.” DE 109-1 at 5:¶17; 50:¶17. This is a genuine dispute of

material fact that warrants a trial.

On June 25, 2019, Sidharth Sethi executed a Letter of Intent regarding the opening of a

Twisted Tuna Restaurant at Beachwalk in St. Johns County, Florida. DE 109-10 at 2-11. St. Johns

County is outside of the Geographic Territory contemplated by the License Agreement. Plaintiffs

contend that Sidharth Sethi executed the Letter of Intent without their written permission. DE 109

at 34(b). Defendants contend, however, that the parties negotiated an agreement in April 2019 that

allowed Sidharth to explore the St. Johns County opportunity. DE 116 at 34(b) (citing DE 91-17).

This is a genuine dispute of material fact that warrants trial.

A few months later, on September 22, 2019, Sidharth Sethi presented a business plan for

Fysh Bar & Grill (which subsequently opened in St. Johns County) which stated that Defendants’

new restaurant “will be a replication of our current flagship restaurant, The Twisted Tuna.” DE

109-11 at 2-3. Plaintiffs contend that, having been unsuccessful in obtaining written approval for

a Twisted Tuna restaurant, Defendants “decided to just change the name of the prospective

restaurant and use all of the Twisted Tuna concepts and menu.” DE 109 at 10, ¶34(b). Defendant

Sidharth Sethi testified in October 2020 that “nothing has been done, nor will [this business plan]

be done.” DE 109-8 at 20, 212:23-24. Defendants contend that they “have not informed anyone

the Fysh Bar & Grill will ‘be based on the Twisted Tuna concept or otherwise licensed, affiliated

or sponsored by Tuna Family.’” DE 116 at 7, ¶34(b). This is a genuine dispute of material fact

that warrants a trial.

On August 23, 2019, a newspaper article in The Daytona Beach News-Journal quoted

Sidharth Sethi as stating that the Fysh Bar & Grill concept was “based off the company’s Stuart

restaurant, called the Twisted Tuna.” DE 83-1 at 49. On January 27, 2020, Sidharth Sethi posted

a 13-minute documentary video on YouTube about the Fysh Bar & Grill in which he stated that

the restaurant’s concept was “somewhat based” on The Twisted Tuna. DE 103 at ¶48 (citing

https://www.youtube.com/watch?v=ZUMHs3mJ-wU); DE 109 at ¶48. On March 10, 2021,

Sidharth Seth hosted a groundbreaking ceremony for the Fysh Bar & Grill and one of the pictures

from the ceremony shows a Twisted-Tuna-branded water bottle being used on a table as part of

the table’s display set-up. DE 109 at 12, ¶38; DE 116 at ¶38. The following day, on March 11,

2021, the Daytona Beach News-Journal published an article about the groundbreaking ceremony

which states in part:

Rick Julyia, [sic] director of operations for Twisted Tuna, was on hand to take part

in the groundbreaking as well as oversee the serving of samples of some of the food

Fysh Bar & Grill will offer to the more than 50 people in attendance.

“I will be moving here to oversee this location,” he said. “Great town.” We’ve

been coming here and looking at this location for (nearly) three years.”

DE 103-12 at 4. Plaintiffs contend this is proof that Defendant Sidharth Sethi attempted to

unlawfully associate and comingle the Mark with Fysh Bar & Grill, and to suggest that Fysh Bar

& Grill came from the same source or was sponsored by The Twisted Tuna. DE 108 at 3-4.

Defendants either deny or minimize Plaintiffs’ claims. This is a genuine dispute of material fact

that warrants a trial.

In considering whether Defendants use of the Mark in association with the Fysh Bar &

Grill was likely to cause consumer confusion, I find that the record contains sufficient evidence on

the relevant factors to warrant a trial. Although some factors – such as similarity of the marks at

issue – do not apply, other factors are quite helpful to the analysis.

1. Type of Mark

The first factor requires the Court to determine “the strength and distinctiveness of

plaintiff’s mark.” John H. Harland Co., 711 F.2d at 973. The Eleventh Circuit explains that this

factor is “the second most important factor in the balance.” Caliber Auto. Liquidators, Inc. v.

Premier Chrysler, Jeep, Dodge, LLC, 605 F.3d 931, 938 (11th Cir. 2010). The fact that a Mark is

registered indicates that it is deserving of strong protection. 15 U.S.C. § 1057(b) (stating, inter

alia, that registration is “prima facie evidence of the validity of the registered mark and . . . of the

owner's exclusive right to use the registered mark in commerce on or in connection with the goods

or services specified in the certificate”). See also United States Pat. & Trademark Off. v.

Booking.com B. V., 140 S. Ct. 2298, 2302 (2020) (instructing that the most distinctive marks are

those that qualify for registration). Here, the Mark is registered for restaurant and bar services.

DE 83-1 at 2. Therefore, I find that it qualifies for strong protection.

Furthermore, “[o]nly distinctive marks are entitled to trademark protection under the

Lanham Act.” Superior Consulting Servs., Inc. v. Shaklee Corp., No. 19-10771, 2021 WL

4438518, at *6 (11th Cir. Sept. 28, 2021) (internal quotations omitted)). Marks are recognized as

falling into four categories in descending order of distinctiveness: (1) arbitrary or fanciful; (2)

suggestive; (3) descriptive; and (4) generic. Welding Servs., Inc. v. Forman, 509 F.3d 1351, 1357

(11th Cir. 2007). “The categories are based on the relationship between the name and the service

or good it describes.” See Frehling Enterprises, Inc. v. Int’l Select Grp., Inc., 192 F.3d 1330, 1335

(11th Cir. 1999). “Also important in gauging the strength of a mark is the degree to which third

parties make use of the mark. The less that third parties use the mark, the stronger it is, and the

more protection it deserves.” Frehling Enterprises, Inc., 192 F.3d at 1336 (citations omitted).

Here, I find that Plaintiffs’ Mark is at least “suggestive” on the spectrum of distinctiveness.

Welding Servs., Inc., 509 F.3d at 1357. Nothing about the words “Twisted Tuna” describes a

restaurant in the manner that “vision center” describes a place where eyeglasses are sold, which

exemplifies a mark that is descriptive if not generic. Frehling Enterprises, Inc., 192 F.3d at 1335.

Rather, because Tuna is used as food, the Mark could suggest an eatery similar to the way the word

penguin suggests a refrigerator (because it is cold). Id. Since the mark is at least suggestive, it

qualifies for strong protection on this basis.

Defendants argue that the Mark is weak based upon third party use because there are

restaurants and bars in Florida that have names that begin with “Twisted” or include the word

“Tuna.” DE 103 at ¶54 (citing, e.g., Twisted Fin, Twisted Crab, Twisted Fork, Twisted Tavern,

Tuna’s Raw Bar & Grille). Defendants maintain that a cursory Google search indicates that at

least 30 restaurants or bars, many in Florida, use “Twisted” or Tuna” in their names. DE 102 at

20. Defendant relies on Fla. Int’l Univ. Bd. of Trustees v. Fla. Nat’l Univ., Inc., where the Eleventh

Circuit found that Florida International University (“FIU”) “operates in a crowded field of similar

names” because of third party use of “Florida” and “University.” 830 F.3d 1242, 1257-59. Even

so, the Circuit Court emphasized that “in assessing the impact of third-party uses, we consider the

entire name a third party uses, as well as the kind of business in which the user is engaged.” Id. at

1247 (emphasis added) (internal quotation marks and citation omitted). Here, there is no evidence

that third parties, including restaurants or bars, commonly use both terms together, “Twisted” and

“Tuna.” Thus, given the Mark’s registration and its inherent distinctiveness, I conclude that the

record contains sufficient evidence to show that the Mark warrants protection and that Plaintiffs’

claims should survive summary judgment.

2. Similarity of the Products and Services the Marks Represent

“This factor requires a determination as to whether the products are the kind that the public

attributes to a single source, not whether or not the purchasing public can readily distinguish

between the products of the respective parties.” Frehling Enterprises, Inc., 192 F.3d at 1338.

Here, The Twisted Tuna, like the planned Fysh Bar & Grill, provides restaurant, bar and

entertainment products and services at waterfront locations, including seafood with a large menu.

In fact, Defendants acknowledge that the Fysh Bar & Grill’s concept is similar to The Twist Tuna.

See DE 102 at n. 9 (stating that Defendants’ references to Fysh Bar & Grill being similar in concept

to The Twisted Tuna “are true statements” but denying that the statements can for a basis for

Plaintiffs’ Lanham Act claims). In a March 2021 article in The Daytona Beach News-Journal, the

developer of the location for Fysh Bar & Grill stated that, after “visit[ing] Twisted Tuna in 2019

to check it out, he immediately knew he wanted [Defendant Sidharth Sethi] as the restaurant

operator” for the location. DE 103-12 at 2. Based upon Defendant Sidharth Sethi’s Sept. 2019

Business Plan, a reasonable inference is that the developer carried an expectation that “Fysh Bar

& Grill will be a replication of . . . The Twisted Tuna . . . consist[ing] of the same . . . waterfront,

mixed dining concept with a few additions.” DE 109-11 at 3. Furthermore, the same March 2021

article reported that “Rick Julyia, director of operation for Twisted Tuna” stated that “[he] will be

moving [there] to oversee th[e] [Fysh Bar & Grill] location.” Id. at 4. The inference is that such

a staff move will be in furtherance of making the Fysh Bar & Grill similar to The Twisted Tuna.

Therefore, I find that Plaintiffs have put forth evidence sufficient on this factor to proceed to trial.

3. Similarity of the Parties’ Retail Outlets (Trade Channels) and Customers

The next factor directs a comparison of the parties’ sales methods and customer base.

Tana, 611 F.3d at 778 (accepting the District Court’s finding that two restaurants had identical

sales outlets as both served food in retail restaurant establishments but finding that, because the

restaurants’ products were dissimilar, the restaurants at issue had different customer bases). Here,

both The Twisted Tuna and the planned Fysh Bar & Grill involve similar retail outlets—waterfront

seafood restaurant establishments. Although the distance between the restaurants (160 miles)

weighs against customer overlap to some degree, the record contains evidence that Defendant

Sidharth Sethi acknowledged an overlap in the customer base. DE 109-8 at 18-20, 210:14-212:24

(Sidharth Sethi acknowledging in his deposition that the Sept. 2019 Business Plan states that Fysh

Bar & Grill would “be marketed as a sister company of The Twisted Tuna [in order to] gain trust

and interest from [The Twisted Tuna’s] current customer base”). Thus, there is sufficient evidence

in the record on this factor to warrant a trial.

4. Similarity of Advertising Media

Next, courts determine whether the parties “engage in similar methods of advertising.”

Tana, 611 F.3d at 778. Although the record contains scant details on this factor, it establishes at

least a potential for overlap in the types of advertising media used by The Twisted Tuna and Fysh

Bar & Grill. There is record evidence indicating that The Twisted Tuna has a website, a social

media presence and sells branded promotional items. DE 86-3 at 131:10-137:19; DE 109-12; DE

109-1 at ¶¶14-16. With respect to the Fysh Bar & Grill, the record indicates use of, or planned use

of, Internet (a website), social media (Facebook), news media, the selling of branded promotional

items and YouTube for documentary-type video distribution. DE 86-3 at 131:10-137:19; 147:10-

148:1; DE 109-11; DE 103 at ¶¶46-49. 55. Furthermore, evidence in the record indicates that

Defendants planned to replicate successful practices from The Twisted Tuna location to promote

the Fysh Bar & Grill. DE 109-11 at 3. In their September 2019 business plan, Defendants discuss

social media tactics and state that “social media platforms . . . allowed us to present weekly online

promotions, menu updates, special events, or other attention-grabbing scenarios [and] was the

primary reason for our rocket sales increases at . . . current restaurant projects. We will use the

same methods with Fysh.” Id. at 9 (emphasis added). Thus, Plaintiffs establish sufficient evidence

on this factor to merit a trial.

5. Defendant’s Intent

The next factor requires a court to consider [w]hether the defendant intended that

purchasers would confuse his service mark with the plaintiff's mark.” Jellibeans, Inc. v. Skating

Clubs of Georgia, Inc., 716 F.2d 833, 840 (11th Cir. 1983). Here, there is clear evidence in the

record that Defendants intended to duplicate The Twisted Tuna by opening the Fysh Bar & Grill

in Port Orange, Florida. Specifically, Defendant Sidharth Sethi’s Sept. 2019 Business Plan for

Fysh Bar & Grill declared that Defendants planned to replicate The Twisted Tuna. DE 109-11 at

3. The same business plan stated that Defendants would “use [the] main management members at

The Twisted Tuna to train [the] team in Port Orange” and also stated that “training [would] not be

difficult since [they] would be implementing the exact same policies, procedures and structure

within Fysh as [they] currently have at The Twisted Tuna.” Id. at 3-4. In his deposition, Defendant

Sidharth Sethi also acknowledged his intent to market Fysh Bar & Grill as a sister company of The

Twisted Tuna to “gain trust and interest from [the] current customer base”. DE 109-8 at 20,

212:10-24. On January 27, 2020, Defendant Sidharth Sethi indicated in a YouTube video that the

Fysh Bar & Grill’s concept was “somewhat based” on The Twisted Tuna. See

https://www.youtube.com/watch?v=ZUMHs3mJ-wU (last visited Jun. 15, 2022). Further, in a

September 22, 2021 news article that Defendants themselves put on the record, Defendant Sidharth

Sethi reported the move of The Twisted Tuna’s Director of Operations, Rick Julylia, to Port

Orange as Fysh Bar & Grill’s Director of Operations. DE 116-3 at 3. Thus, Defendants are well-

positioned to carry out the replication declared in the Sept. 2019 Business Plan. Accordingly, the

record evidence regarding this factor is sufficient to justify a trial.

6. Actual Confusion

“The last factor, actual confusion in the consuming public, is the most persuasive evidence

in assessing likelihood of confusion.” Tana, 611 F.3d at 779. Here, the Fysh Bar & Grill had not

yet opened so evidence of actual customer confusion does not exist since there have not been actual

customers yet. The Court looks, therefore, at other evidence showing a potential of consumer

confusion. The record indicates that news articles have associated Fysh Bar & Grill with The

Twisted Tuna. For example, Plaintiffs’ complaint asserts that, after a Daytona Beach News-

Journal story was published on August 23, 2019, they received numerous phone calls from friends,

family and industry professionals inquiring whether they were associated with the Fysh Bar &

Grill endeavor. DE 83 at ¶¶22-23, 77. Although evidence of record to support this assertion is

lacking, the article itself credits Defendant Sidharth Sethi with saying that the Fysh Bar & Grill

“concept is based off the company’s Stuart restaurant called the Twisted Tuna.” DE 83-1 at 49.

Plaintiffs also note an instance of confusion after Defendants renewed their efforts with

Fysh Bar & Grill in March 2021 and another article appeared then in the Daytona Beach News-

Journal featuring “Twisted Tuna branded merchandise (e.g., branded cups in center facing camera)

and food items.” Id. Plaintiffs contend that, following that March 2021 article, one vendor

contacted them believing Fysh Bar & Grill “was a Twisted Tuna enterprise.” Id. at 5. Plaintiffs

proffer a May 20, 2021 email from the broker, who was soliciting Plaintiffs to lease property,

stating as follows:

We are looking for a 20 year term + renewals. Asking price is $150/year. We will

allow some credit back for rent to offset construcion costs. I was talking to Port

Orange City Manager earlier this week and he was telling us about your project. I

think you could be a great fit for the Port as well.

DE 109-15. Although I noted that the vendor’s email came well after the March 2021 article for

purposes of Plaintiffs carrying their burden to show cause for a preliminary injunction, I find that

this evidence, along with other evidence, is sufficient to survive summary judgment. DE 119 at

13. As previously discussed, there is evidence of Defendants’ intent to leverage the reputation of,

and duplicate, The Twisted Tuna in the record. Therefore, I consider the issue of likely consumer

confusion best addressed at trial.

In sum, a trademark claim is established so long as the trademark was employed in a

manner that was likely to cause confusion, mistake or to deceive. Burger King v. Mason, 710 F.2d

1480, 1491-92 (11th Cir. 1983). Plaintiffs have put forth evidence of several representations by

Defendants from which a patron of Fysh Bar & Grill could believe that the Twisted Tuna endorses

the operation of the Fysh, Bar and Grill. Depending on the level of similarity between the two

restaurants, which has yet to be proven at trial, consumers could associate the Fysh Bar and Grill

with the Twisted Tuna and assume they are affiliated. Any shortcomings of Fysh Bar & Grill

could therefore be imputed to the Twisted Tuna. Because of this risk, I find that Plaintiffs have at

minimum set forth sufficient facts to survive summary judgment.

Accordingly, because I find that Plaintiffs’ Mark warrants strong protection and because

Defendants have so blatantly indicated an intent to replicate The Twisted Tuna in Port Orange

through their planned opening of Fysh Bar & Grill, I conclude that Defendants fail to carry their

burden to establish the absence of a genuine dispute as to a material fact relative to Counts 1 and

2. Thus, Defendants’ motion for partial summary judgment on Counts 1 and 2 is denied.

B. Counts IV, V, VI, and IX: Breach of the Notes and Guarantees

Defendants argue that Plaintiffs have not satisfied conditions precedent to maintain their

claims on the $490k Note and the $1.75MM Note. I agree. Under Florida law, contract

interpretation begins with plain meaning of words used, and words are “to be given their natural,

ordinary meaning.” See Ferox, LLC v. ConSeal Int’l, Inc., 175 F. Supp.3d 1363, 1371 (S.D. Fla.

2016). Where a contract is unambiguous, it must be interpreted in accordance with its plain

meaning so as to give effect to the contract as a whole. Wash. Nat’l Ins. Corp. v. Ruderman, 117

So.3d 943, 948 (Fla. 2013). Courts may draw reasonable inferences from unambiguous contract

language to determine what the parties intended. Bombardier Capital Inc. v. Progressive Mktg.

Grp., Inc., 801 So.2d 131, 134 (Fla. 4th DCA 2001).

The record is undisputed that to obtain SBA guaranteed financing to purchase the

Restaurant, Mad Twist and All Trust had to obtain “subordinate funding,” specifically “the

proceeds of a loan from Kenny Gibbs and Rachelle Risley in the amount of $490,000 for a term

of not less than 10.0 years.” SBA Authorization (SBA 7(a) Guaranteed Loan), DE 103-1 at 10.

The SBA required the $490,000 loan “be subordinate to the SBA Loan.” Id. The SBA also

required a “Standby Creditor’s Agreement from Kenny Gibbs and Rachelle Risley for $490,000,

plus all accrued and future interest (Standby Debt).” Id. at Section I.6. Moreover, the SBA

required that:

Standby Creditor must subordinate any lien rights in collateral

securing the Loan to Lender’s rights in the collateral and take no

action against Borrower or any collateral securing the Standby Debt

without Lender’s consent. Lender must attach a copy of the Standby

Note evidencing the Standby Debt to the Standby Creditor’s

Agreement. Lender may use its own form or SBA Form 155.

Section I.6.

Pursuant to this SBA requirement, Gibbs and Risley loaned $490,000 to Mad Twist and

All Trust and signed a Standby Creditors Agreement “[t]o induce Midwest Regional Bank

(Lender) to make an SBA guaranteed loan.” DE 103-9. The Standby Creditors Agreement

acknowledged that All Trust and Mad Twist owed $490,000 (the Standby Loan) to Plaintiffs.

Plaintiffs agreed in the Standby Creditors Agreement “to take no action to enforce claims” against

Mad Twist & All Trust on the Standby Loan “until the Lender’s Loan is satisfied.” Id. at ¶3. They

also agreed “to sign appropriate documentation required by Lender to subordinate to Lender’s

Loan secured interests in collateral that secures the Standby Loan.” Id. at ¶5. Further, Plaintiffs

agreed “to take no action against” Mad Twist and All Trust’s “collateral, without written consent

from the Lender, until Lender’s Loan is satisfied.” Id. at ¶4. They also agreed that “Additional

Loans made by Standby Creditor will be subject to the terms of this Agreement, unless Lender

agrees otherwise in writing.” Id. at ¶8. Moreover, by its plain language, the Standby Creditors

Agreement “applies to … guarantors or sureties of the Standby Creditor Loan.” Id. at ¶7.

It is undisputed that the SBA guaranteed a loan of $2,991,000 to finance the Restaurant

sale. It is also undisputed that, to induce the Lender to make that loan, Plaintiffs agreed to be

“Standby Creditors”; in other words, Plaintiffs would “standby” by subordinating any lien rights

in collateral securing their loan to the SBA Lender’s rights in the collateral and by taking no action

against the borrower (here, Defendants All Trust and Mad Twist) or on any collateral securing the

Standby Debt without the Lender’s approval. The record contains no evidence showing that the

SBA Guaranteed Loan has been satisfied or that Plaintiffs have obtained written consent from the

Lender. Therefore, pursuant to the plain language of the Standby Creditors Agreement, Plaintiffs

may not take action to enforce obligations under the $490k Note (the Standby Debt). Plaintiffs

also may take no action against collateral securing the $490k Note. Likewise, Plaintiffs’ loan of

1.75MM to Mad Twist and All Trust constitutes an “[A]dditional Loan[] made by the Standby

Creditor.” As such, it also is subject to the plain terms of the Standby Creditor’s Agreement absent

Lender agreement otherwise. Id. at ¶8. Plaintiffs therefore may not take action to enforce

obligations under the 1.75MM Note or against any collateral securing the $1.75MM Note.

In Count IX of the Complaint, Plaintiffs sue Mad Twist and All Trust for breach of the

$490k and $1.75MM Promissory Notes. As set forth above, both Notes are covered by the Standby

Creditors Agreement. Thus, Plaintiffs may not take action to enforce these Notes absent

satisfaction of the Lender’s Loan or the Lender’s express written consent.

In Count VI of the Complaint, Plaintiffs sue Siddharth Sethi for breach of his agreement to

guarantee the $490k Note. Plaintiffs cannot proceed on Count VI because the Standby Creditors

Agreement prohibits Plaintiffs from taking action against Mad Twist and All Trust “to enforce

claims . . . until the Lender’s Loan is satisfied.” DE 83-1 at 98; DE 103-9 at ¶3. Plaintiffs agreed

not to pursue their right to collect the $490k Note, which rights are pursued, at a minimum, by

taking action to declare Mad Twist and All Trust in default. Sidharth Sethi’s guaranty on the face

of the $490k Note states that he “guarantees the payment and performance of th[e] Note . . . in the

event of [Mad Twist’s and All Trust’s] default.” DE 83-1 at 98. Thus, collecting from Defendant

Sidharth Sethi on his guarantee would require Plaintiffs to declare Mad Twist and All Trust in

default in order to enforce their right to receive repayment of the $490,000 loan. Plaintiffs agreed

not to take such action before the Lender’s Loan was repaid. Consistent with Plaintiffs’ agreement

to not take such action, the SBA Authorization refers to the $490k loan as “Subordinate Funding,”

and requires that the $490,000 loan “be subordinate to the SBA Loan.” DE 103-1 at 10. The

subordination carried through in the Standby Creditor’s Agreement, via the provision, among

others, that allowed Lender to “[d]eclare a default . . . and notify Standby Creditor to stop accepting

payments.” DE 103-9 at ¶6(f). Accordingly, Plaintiffs may not take any action to enforce the

guaranty agreement securing the $490k Note at this time because they agreed to take no action

against Mad Twist and All Trust to enforce their rights to collect.

In Count IV of the Complaint, Plaintiffs sue Sidharth Sethi, SAMJ Investments and Italeats

for breach of the 1.75MM Note and related Security Agreement. Since the 1.75MM Note and the

related Security Agreement are “Additional Loans” subject to the terms of the Standby Creditors

Agreement, including the no-action clause, Plaintiffs may not take action to enforce the 1.75MM

Note or its related Security Agreement at this time.

In Count V of the Complaint, Plaintiffs sue Siddharth Sethi and Amit Sethi for breach of

their agreements to guarantee the 1.75MM Note. Plaintiffs cannot proceed on Count V at this time

for the following reasons. First, under the Standby Creditors Agreement, Plaintiffs are not allowed

to take action to enforce claims against Mad Twist and All Trust on “Additional Loans.” DE 103-

9 at ¶¶3,8. The guarantee agreements state that the guarantors “agree to pay and/or perform

punctually each . . . Obligation which is not paid or performed as and when due and payable by

[Sidharth Sethi, SamJ, Italeats, Mad Twist and All Trust as Makers].” DE 109-2 at 18, 21. As

previously explained, Plaintiffs’ action to collect upon guarantees given non-payment by the

Makers constitutes an action to enforce their claims—here, as to Additional Loans—which they

agreed not to do. Second, in their Response, Plaintiffs argue that the Standby Creditor’s

Agreement does not prevent action against Siddharth and Amit Sethi as guarantors, but this view

is based on their mistaken premise that the Standby Creditor’s Agreement does not “mention or

even reference the Guarantors.” DE 108 at 7. That is plainly incorrect. The Standby Creditor’s

Agreement, which is only two pages long, states clearly in paragraph 7 that “[t]his Agreement

applies to … guarantors or sureties of Standby Creditor Loan.” DE 103-9 at ¶7. Given this plain

language, Plaintiffs’ other arguments, which are based on various tenets of contract interpretation,

are inapplicable. As Plaintiffs themselves point out, “when the language of a contract is clear and

unambiguous, courts must give effect to the contract as written and cannot engage in interpretation

or construction as the plain language is the best evidence of the parties’ intent.” Talbott v. First

Bank Fla., FSB, 59 So.3d 243, 245 (Fla. 4th DCA 2011). “[T]he courts task is to apply the parties’

contract as written, not ‘rewrite’ it under the guise of judicial construction.” City of Pompano

Beach v. Beatty, 222 So.3d 598, 600 (Fla. 4th DCA 2017).

Third, even if this Court found an ambiguity existed with respect to pursuit of guarantors,9

the intent of the parties as evident from the contemporaneously executed documents would

contradict Plaintiffs’ contention that the guarantees are outside the Standby Creditor’s Agreement.

See Gold Crown Resort Mktg. Inc. v. Phillpotts, 272 So. 3d 789, 792 (Fla. 5th DCA 2019)

(“Contracts should be construed to give effect to the intentions of the parties.”); MV Ins.

Consultants v. NAFH Nat. Bank, 87 So. 3d 96, 99 (Fla. 3d DCA 2012) (finding it appropriate to

construe documents as a single contract that were “executed contemporaneously, . . .

interconnected, and relate[d] to the same transaction”). As previously discussed with respect to

the $490k Note, the loan documents indicate that the parties intended for Standby Debt to be

9 The provision regarding “guarantors or sureties,” follows language referring to any “successor” or “assignee” of the

Standby Creditor or Standby Creditor’s loan including guarantors or sureties. Therefore, the provision may arguably

refer to guarantors or sureties that become successors or assignees. Even so, for reasons herein explained, the

transaction viewed as a whole indicates that the parties intended that the Standby Creditor’s Agreement would limit

Plaintiffs’ ability to pursue collection of the $490k Note and $1.75MM Note without Lender’s consent before Lender’s

loan was satisfied.

subordinate to the Lender’s Loan. The subordination was to be effected by the Standby Creditor’s

Agreement, which agreement also applies to Additional Loans.10 Thus, Plaintiffs may not take

action against guarantors securing the Standby Debt (i.e., the $490k Note) or against guarantors

securing “Additional Loans” (i.e., the $1.75MM Note) without Lender consent.

Here, the language of the Standby Creditor’s Agreement – which Plaintiffs signed – is clear

and unambiguous. Plaintiffs’ obligation under the Standby Creditor’s Agreement they voluntarily

entered was not to take any action to enforce the terms of the loans against Mad Twist and All

Trust directly or to collect indirectly from guarantors or security by declaring Mad Twist and All

Trust in default without Lender’s consent. While Plaintiffs may be frustrated by breaches of the

debt, security, and/or guarantee agreements, they cannot at present take any action to compel

payment due to the bargain they made. Accordingly, Defendants’ motion for summary judgment

on Counts IV, V, VI, and IX is therefore granted without prejudice. Plaintiffs may refile these

claims after meeting the preconditions set forth in the Standby Creditor’s Agreement.

10 Standby Creditor’s Agreements routinely serve to subordinate repayment of standby creditor loans and cash

injections in SBA guaranteed loan transactions. See, e.g., United States v. Norris, No. 08-CR-343, 2011 WL

13127987, at *8 (N.D.N.Y. May 23, 2011) (noting in a bank fraud case that the “SBA required [a purported standby

creditor] to sign a Standby Creditor's Agreement whereby [he] agreed not to accept repayment of [an] $834,000 equity

or cash infusion until the subject [SBA] loan had been repaid”); MPB Collection LLC v. Everest Nat'l Ins. Co., No.

CV-17-04022-PHX-GMS, 2019 WL 5789469, at *1-3 (D. Ariz. Nov. 6, 2019), judgment entered sub nom. MBP

Collection LLC v. Everest Nat'l Ins. Co., No. CV-17-04022-PHX-GMS, 2020 WL 4692463 (D. Ariz. Jan. 27, 2020)

(noting that Standby Creditor’s Agreements provided “that the creditors would not accept payments on [borrower’s]

debt to them [for a certain period] and that the creditors would turn over any payments received from [borrower] in

violation of the Agreement”); In re Green Goblin, Inc., No. CIV.A. 12-4076, 2014 WL 5800601, at *6 (E.D. Pa. Nov.

6, 2014) (finding that standby creditors understood “they would be deferring the right to be repaid as well as their

right to exercise contract default remedies” in SBA guaranteed loan transaction). As the In re Green Goblin, Inc.

Court found, the SBA lender in that case demanded restrictions on standby creditors’ collection rights “to maximize

its ability to obtain repayment of its loan;” and, without the standby agreement, “[lender] would not provide the . . .

financing.” 2014 WL 5800601, at *6-7.

CONCLUSION

Accordingly, for the foregoing reasons, it is hereby

ORDERED AND ADJUDGED that Defendants’ Motion for Partial Summary Judgement

(“Motion”) (DE 102) is GRANTED IN PART AND DENIED IN PART. Defendants’ Motion

is GRANTED on Counts IV, V, VI, and IX, and those Counts are dismissed without prejudice.

Defendants’ Motion is DENIED on Counts 1 and 2, and those Counts shall proceed to trial.

DONE AND ORDERED in Chambers at Fort Pierce, Florida, this 22nd day of June, 2022.

Seossn Nayod

SHANIEK M. MAYNARD

UNITED STATES MAGISTRATE JUDGE

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