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ClaimSolution, Inc. v. Claim Solutions, LLC

United States District Court, D. Kansas

May 22, 2017

CLAIMSOLUTION, INC., Plaintiff,
v.
CLAIM SOLUTIONS, LLC, Defendant.

          MEMORANDUM AND ORDER

          GWYNNE E. BIRZER, UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on Defendant's Motion for Leave to File Answer or Otherwise Respond Out of Time (ECF No. 6). For the reasons set forth below, Defendant's motion is GRANTED.

         I. Background[1]

         A. Nature of the Case

         This trademark infringement dispute originated from, as one may guess from the caption, two apparently similar business names. Plaintiff ClaimSolution, Inc.-a Missouri corporation with a principle place of business in Overland Park, Kansas- provides insurance claims processing and administration services for insurance companies, in connection with both commercial and personal lines of business. It also offers adjusting and appraisal services for insurance companies, fleet and self-insured entities. Plaintiff has been in the insurance business for more than 20 years, and operates over 40 offices nationwide. As a part of its business, Plaintiff owns, and currently uses, the United States trademark “CLAIMSOLUTION.”

         Defendant Claim Solutions, LLC, a Colorado corporation, is also in the business of insurance claims processing and insurance claims administration, but unlike Plaintiff, it represents insureds. Plaintiff claims Defendant offers its services throughout the Denver metropolitan area and into western Kansas, although Defendant disputes any presence in Kansas.[2] As a part of its business, Defendant markets itself as “Claim Solutions.” Defendant has also registered the internet domain name “www.claimsolutionspa.com” and uses the website in its marketing and promotions.

         Plaintiff contends “Claim Solutions” is confusingly similar to its registered trademark, CLAIMSOLUTION. Because Plaintiff represents insurers, and Defendant represents insureds, it alleges Plaintiff's customers have, and will continue to be, misled into believing Plaintiff represents both sides of the insurance claims process.

         In May 2016, Plaintiff notified Defendant of its potential infringement on its registered trademark, demanding that Defendant remove any similar marks from its website and marketing materials, surrender its internet domain name to Plaintiff, and cease use of the name “Claim Solutions.” Several months after Defendant failed to respond or comply with Plaintiff's demands, Plaintiff filed its lawsuit in this Court. Plaintiff asks the Court to permanently enjoin Defendant from using the “ClaimSolution” and “Claim Solutions” trademarks, along with other confusing identifiers, such as website and email. Plaintiff also requests the Court order Defendant to undertake corrective advertising. Plaintiff seeks actual damages and all profits of Defendant attributable to Defendant's infringement, as well as statutory damages under both the Trademark and Anti- Cybersquatting Protection Acts.

         B. Procedural Posture

         Plaintiff filed its Complaint on January 4, 2017 (ECF No. 1), and on January 25, 2017, Plaintiff served Defendant with the Summons and Complaint by private process server (ECF No. 5). Defendant's answer or responsive pleading was due, under Fed.R.Civ.P. 12(a)(1)(A)(i), on or before February 15, 2017. However, Defendant failed to timely respond, and on March 1, 2017, filed the instant motion, seeking to respond out of time.

         In his sworn declaration, Defendant's founder and managing partner, Russell Scott Benglen, states he communicated with his Colorado business counsel regarding the Complaint, and the Colorado attorney began drafting an answer.[3] But, due to apparent miscommunication, Mr. Benglen believed his counsel was securing local Kansas counsel to handle the case, while Colorado counsel believed Mr. Benglen was looking for representation in Kansas. After realizing their miscommunication, Mr. Benglen attempted unsuccessfully to locate willing Kansas counsel to handle the case. He then engaged current defense counsel on the afternoon of February 23, 2017-eight days after the answer deadline. The next day, Defendant's counsel contacted counsel for Plaintiff to inquire whether Plaintiff would oppose Defendant's motion for leave to respond out of time. After Plaintiff's counsel indicated he would need to investigate his client's position, and then receiving no further response, Defendant filed the instant motion (ECF No. 6) on March 1, 2017. Plaintiff formally opposes the belated filing (ECF No.8), all related briefing is complete, and the issue is now ripe for decision.

         II. Motion for Leave to File Out of Time (ECF No. 6)

         A. Legal Standard

         The standard for permitting a party to file its pleading out of time is well established. Fed.R.Civ.P. 6(b)(1)(B) provides in pertinent part, “When an act may or must be done within a specified time, the court may, for good cause, extend the time . . . on motion made after the time has expired if the party failed to act because of excusable neglect.”[4]

         “It is clear that ‘excusable neglect' under Rule 6(b) is a somewhat ‘elastic concept' and is not limited strictly to omissions caused by circumstances beyond the control of the movant.”[5] The court generally considers four factors when determining whether a party's actions establish excusable neglect, including:

(1) the danger of prejudice to the opposing party,
(2) the length of delay caused by the neglect and its impact on ...

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