Sanleda, Inc. d/b/a South Beach Inn v. LGS, LLC / Gene Sorrows
Claim Number: FA1206001448041
Complainant is Sanleda, Inc. d/b/a South Beach Inn (“Complainant”), represented by Teresa Ann Powell, Florida, USA .
Respondent is LGS, LLC / Gene Sorrows (“Respondent”), represented by Burton J. Green, Florida, USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <southbeachinn.com> (the “Domain Name”), registered with Network Solutions, LLC.
The undersigned certifies that he has acted independently and impartially and to the best of his knowledge has no known conflict in serving as Panelist in this proceeding.
Clive Elliott as Panelist.
Complainant submitted a Complaint to the National Arbitration Forum electronically on June 11, 2012; the National Arbitration Forum received payment on June 11, 2012.
On June 11, 2012, Network Solutions, LLC. confirmed by e-mail to the National Arbitration Forum that the Domain Name is registered with Network Solutions, LLC. and that Respondent is the current registrant of the name. Network Solutions, LLC. has verified that Respondent is bound by the Network Solutions, LLC. registration agreement and has thereby agreed to resolve domain disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On June 12, 2012, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of July 2, 2012 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to postmaster@southbeachinn.com. Also on June 12, 2012, the Written Notice of the Complaint, notifying Respondent of the e-mail addresses served and the deadline for a Response, was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.
A timely response was received and determined to be complete on July 2, 2012.
On July 9, 2012 a timely additional submission was received from Complainant.
On July 10, 2012, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the National Arbitration Forum appointed Clive Elliott as Panelist.
On July 16, 2012 a timely additional submission was received from Respondent.
Having reviewed the communications records, the Administrative Panel (the "Panel") finds that the National Arbitration Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules") "to employ reasonably available means calculated to achieve actual notice to Respondent" through submission of Electronic and Written Notices, as defined in Rule 1 and Rule 2.
Complainant requests that the Domain Name be transferred from Respondent to Complainant.
A. Complainant
Complainant advises that it is the owner of a hotel/motel located in Cocoa Beach, Florida called the South Beach Inn, and trades under that name, with its shareholders being David Sauder and Sandy Powell. It states that it purchased the property in 1980, when the motel was called Ocean Star Motel, and then on or around 1997 it changed the name of the motel to the South Beach Inn.
Complainant states that the SOUTH BEACH INN mark (“the Mark”) has been used continually since then to market and identify itself as a unique beach front motel which caters to families and pets, and submits that the Mark has become an integral part of the goodwill of the business. Complainant contends that use of the Mark in connection with its advertising and marketing began as early as 1999, for online sales and marketing to obtain business both locally through the State of Florida, nationally and internationally.
Complainant asserts that it first established the Domain Name on or before February, 1999 and contends that it had established various versions of its web-site over the years; but has used the Domain Name for the marketing and sales of its South Beach Inn business. Complainant claims that the Domain Name, and the advertising avenues that the South Beach Inn advertise through, have become synonymous with the business throughout the years, and more especially in the past ten years where close to 100% of the business is advertised through the Internet.
Complainant asserts that the property has many return guests who have come to rely upon the website to understand and tour the property and obtain a general understanding of the type of beach front property that they may choose to experience. Complainant states that it has had many return guests; and that, with the assistance of the internet advertising which is solely linked to the Domain Name, many guests have learned of and became loyal customers the South Beach Inn. Complainant advises that for many years it has advertised in a number of Internet areas using the Domain Name.
Complainant advises that Mr. Gene Sorrows, Director and Manager of LGS, LLC, entered into a Managerial Agreement and Contract (“the Contract”) with Complainant with a view to purchasing the Property, and that Mr. Sorrows and his wife Linda Sorrows resided at the Motel during this time.
Complainant advises that when Mr. Sorrows was in contract to purchase the property he took over marketing duties and had authority to use the Domain Name; assist with the web-site and he was given the key passwords for the Domain Name. Complainant asserts that during this time Mr. Sorrows stopped advertising in a number of the internet websites Complainant had previously relied upon to generate on-going business.
Complainant asserts that it wrote to Mr. Sorrows on April 30, 2012 terminating the Contract after it became apparent that Mr. Sorrows and/or his company were not in agreement with Complainant regarding the purchase of the property, and that as at that date Mr. Sorrows’ managerial authority ceased.
Complainant states that Respondent, in his capacity as a potential purchaser of Complainant’s motel, was given authority to manage Internet marketing on behalf of the South Beach Inn. Complainant further states that Mr. Sorrows was never given authority to transfer ownership of the Domain Name to his company, LGS, LLC, yet on or about May 6, 2012, Mr. Sorrows represented to Network Solutions that he was the rightful owner of the Domain Name and the Domain Name was transferred to the name of LGS, LLC, without the authority of Complainant. Complainant asserts that upon termination of the Contract, Mr. Sorrows no longer had authority to represent the Complainant in this, or any other capacity.
Complainant asserts that it in an attempt to re-establish ties to the relevant advertising arenas it had previously relied upon to market its business in order to generate the business that was lost during Mr. Sorrow 's period as "owner "/ independent contractor in charge of managing the property, it had to establish a new domain name. Complainant advises that it established a domain name, <thesouthbeachinn.com>.
Complainant contends that in addition to the use of the Mark over the Internet, it has also invested substantial money on printed materials which reference <southbeachinn.com>, including post-cards, business cards, and other related marketing materials, all of which have been integrated in the community and relate directly to the goodwill of the business and the future of the business in this arena.
Complainant asserts that on or about May 5, 2012, Mr. Sorrows and his wife left the South Beach Inn and no longer had any contractual or managerial relationship with the Complainant. Complainant advises that upon review of the website, its agents made attempts to remove the website that Mr. Sorrows had created as at that stage it was unprofessional and listed a telephone number to a call line which offered stimulating conversation with an implied sexual reference.
Complainant advises that Network Solutions, the Domain Name registrar, was informed of their concerns, but was informed that as Mr. Sorrows was the current “Account Contact Person” for the Domain Name, he was the only person authorized to make changes to the account, unless a formal request to change the Account Contact was made on behalf of the South Beach Inn. Complainant states that these attempts were made in a prompt manner; but understands that in the meantime, Mr. Sorrows contacted Network Solutions, and advised them that Complainants had authorized the transfer of the Domain Name to his company, LGS, LLC. Complainant states that the web-site is currently listed as "Under Construction" due to the nature of this dispute.
Complainant submits that Mr. Sorrows has acted in bad faith, in his capacity as Managing Director of LGS, LLC and individually, and asserts that Mr. Sorrows and/or LGS, LLC have no legitimate rights to the Domain Name, and that the transfer of the Domain Name has been done for the purpose of harming the business interests of the Complainants.
Complainant asserts that the Domain Name is identical to its Mark and claims that because it has maintained its name through many forms of advertising; especially via the Internet by the use of the Domain Name, as such any use of the Domain Name by Respondent will cause confusion to the public as Mr. Sorrows and/or LGS, LLC will inaccurately reflect an association with the South Beach Inn.
Complainant asserts that Mr Sorrows and/or LGS, LCC have never been commonly known by the Domain Name, and the only authority ever provided to Mr. Sorrows was in his capacity as a potential purchaser wherein he gained management authority in order to learn the hotel business.
Complainant submits that Respondent is not making a legitimate noncommercial or fair use of the Domain Name, without intent for commercial gain to misleadingly divert consumers and to harm and dilute the reputation of the South Beach Inn name. Complainant further submits that Respondent's use of the Domain Name, or a name corresponding to the Domain Name, is not in connection with a bona fide offering of goods or services and appears to only be held in an attempt to use the name to have legal or other leverage with regard to legal interests that are not related in any manner to the Domain Name. Thus, Complainant requests that the Domain Name be transferred to it as it contends that Respondent's use is not legitimate and if permitted to use said Domain Name it would cause further confusion to the public and further harm to the business interests of the South Beach Inn.
Complainant claims Respondent had intentions to harm the business interests of Complainant and asserts that there is evidence of a long line of threats regarding litigation that had occurred throughout the relationship with Mr Sorrows.
Complainant alleges that despite Respondent advising the owners on at least two separate occasions, that he would voluntarily transfer the Domain Name to Complainant "tomorrow", this did not happen, and Complainant asserts that it has been forced to expend more time and money to defend against Respondent’s actions in order to obtain what they believe is rightfully theirs. Complainant states that instead of voluntarily transferring the Domain Name as promised, Respondent's attorney sent a proposed Agreement stating that Respondent would agree to transfer the Domain Name if Complainant would agree to not waive any Workman Compensation or Personal Injury Claims.
Complainant claims that the use of the Domain Name by Respondent has and/or will create a likelihood of confusion because Respondent's online location is not sponsored, approved, or mandated by Complainant. Complainant contends that the web page that was authorized by Respondent was not knowingly approved by Complainants, and that it is not professional and dilutes the hard earned reputation that the South Beach Inn had spent years establishing.
B. Respondent
Respondent states that he and Complainant entered into a contract for sale of the South Beach Inn on October 15, 2011, and that after entering into the Contract it was discovered that Complainant could not provide clear title to the property and a closing did not occur. Respondent claims that the title problem involved an encroachment of a portion of the property extending into the property of the adjoining owner, which was used as a public park.
Respondent asserts that there were several extensions to the closing date to keep the Contract alive while the parties worked to resolve the encroachment and various other issues.
Respondent advises that he continued to deal in good faith with Complainant to work out the title and other problems to close on the contract and that both parties believed that the problems could be worked out and conducted themselves in good faith toward that end. Respondent asserts that he expended over $20,000 of his money into upgrading and repairing the motel building and property of Complainant in the belief that Respondent would eventually close on the contract. Respondent Gene Sorrows and his wife were residing at the Inn during this period and Respondent advises that with the agreement of Complainant, Sorrows began to gradually handle the day-to-day management of the Inn as the parties believed that he would become the owner.
Respondent states that this management arrangement was eventually memorialized by the November 22, 2011 Management Agreement and Respondent formally assumed management of the Inn. Respondent submits that when it became clear that Complainant could not provide good title to the property and was not willing to solve other problems, Respondent advised Complainant that he would allow the contract to expire under its own terms on April 30, 2012. Respondent asserts that Complainant immediately terminated the sale contract with Respondent and the management agreement by letter dated April 30, 2012.
Respondent advises that with regard to circumstances surrounding Sorrows' purchase of the Domain Name, one of Complainant’s shareholders, David Sauder, received a notice from the company that Complainant had purchased the Domain Name, and that the Domain Name was up for renewal in approximately 1 month. Respondent states that a company called RezOvation hosted the website with a year to year contract. Respondent advises that he then called RezOvation to inform it that Complainant did not want to continue with the yearly contract and was told by RezOvation that it only hosted the website but did not register the Domain Name.
Respondent asserts that he researched that company on <whois.com> where he learned who the registrant was for the Domain Name and that the Domain Name ownership would expire in one month. Respondent advises that he then told the Complainant’s shareholders, Gloria Powell and David Sauder, that Sanleda Inc. would need to renew the Domain Name and get a new website. Respondent contends that the shareholders advised that they did not want to renew the yearly hosting agreement, with one concern being that the website was listed as a bed and breakfast website and Complainant was not conducting a bed and breakfast type operation.
Respondent asserts that he then called Network Solutions, in the presence of Gloria Powell and David Sauter, to renew the Domain Name and web hosting on behalf of Complainant. Respondent alleges that the shareholders had told him to do whatever he wanted at his own expense if he wanted it since he was going to own the business. Respondent asserts that he made it clear to both of them that if he paid for the renewal and hosting agreement that he would put it under the name of his company, LGS, LLC, and that LGS, LLC would then own the Domain Name and web site and further asserts that Powell and Sauter told him to do it and if he did, that it would be his.
Respondent asserts that he consequently purchased the Domain Name on December 8, 2011, for a 1 year term through Network Solutions; and he then extended the ownership of the Domain Name for a 5 year term through Network Solutions on May 7, 2012. Respondent alleges that at the time of purchase he believed that the Domain Name was important in continuing the business because the use of this Domain Name for the business of Complainant had an established history as promoting this business and had market value.
Respondent acknowledges that that the management contract between Sorrows and Complainant was still in place, when he purchased the Domain Name but asserts that he did so to protect Respondent’s business interest and for no other reason, as he believed that similarly named businesses in Texas or Hilton Head or Vero Beach could be interested in purchasing the Domain Name.
Respondent denies that he has used the Domain Name to cause damage or injury to Complainant and agrees that he has refused to transfer it back to Complainant now that the purchase contract for the property has been terminated, however Respondent admits that the Domain Name does have some value for him as he might be able to offer the Domain Name for sale to another business operating under the name South Beach Inn, including the Texas business that showed an earlier interest in the Domain Name that are not competing with Complainant.
Respondent states that after the contract for the sale of the property was terminated the relationship between the parties became acrimonious, and Teresa Powell, on behalf of Complainant, demanded that Respondent gratuitously transfer to Complainant the Domain Name ownership. Respondent further advises that he refused to simply give Complainant the Domain Name that he believed he had legitimately purchased but in order to settle disputes with Complainant, he proffered it a settlement agreement resolving any disputes between the parties' dealings with each other and as part of that agreement agreed to transfer back the Domain Name. Respondent states that Complainant advised Respondent by letter it's refusal to enter into that agreement.
Respondent asserts that he placed the "under construction" notice on the site and not Network Solutions, because the web site was not then intended for the benefit of Complainant as he owned the rights to the website.
Respondent alleges that he and his wife were initially staying at the Complainant Motel as guests and during the period they each sustained injuries due to the negligence of Complainant and for which they believed Complainant to be legally liable to them.
Respondent advises that the settlement agreement was limited to a settlement of issues related to the relationship of the parties arising from the contract for sale of the Complainant motel and it excluded other personal matters so as to preserve their rights to pursue the negligence matters should they decide to pursue those matters.
Respondent states that he purchased the Domain Name on November 8, 2011, when there was a valid contract for the purchase of the Motel by Respondent, and that it was a legitimate business decision to protect Respondent as it believed that it would need that Domain Name when it became the owner of the South Beach Inn motel. Respondent goes on to state that as he already owned the Domain Name, his renewal of the Domain Name for a 5 year term on May 12, 2012, was a legitimate action by a lawful owner of the Domain Name.
Respondent denies that he has intended to injure Complainant and claims that Complainant relinguished its legal claim to the Domain Name when it refused to renew the Domain Name in November, 2011. Respondent claims that anything he may have done after his lawful purchase of the Domain Name was intended solely to protect his legitimate ownership interest.
Respondent denies all other allegations.
C. Additional Submissions
Complainant’s Additional Submissions
Complainant admits that it granted limited authority to Sorrows, to act on behalf of Sanleda, Inc., d/b/a South Beach Inn, but denies that it did not want to renew the Domain Name, or that its shareholders, Sandy Powell and/or Dave Sauder, did not want to pay for the Domain Name. Complainant further denies that Powell and/or Sauder stated that Respondent "can do whatever he wanted at his own expense", regarding communications with Network Solutions and/or Rezovation and claims that the authority was limited to act on behalf of Sanleda, Inc., d/b/a South Beach Inn.
Complainant admits that authority was granted to Sorrows "because he was going to own the business", however, the authority was limited to the business and ceased upon termination of the Management Agreement and the Contract for Sale. Complainant also denies that any authority regarding the Domain Name existed beyond the scope of acting on behalf of Sanleda Inc., d/b/a, South Beach Inn.
Complainant denies that Respondent made it clear to "both of them" that if he paid for the renewal and hosting agreement that he would put it under the name of his company, LGS, LLC, and that LGS, LLC would then own the Domain Name and website. Complainant also denies that Powell and Sauder told Respondent to renew the Domain Name and if he did "that it would be his."
Complainant notes that by Respondent’s own admission, Respondent did not change the ownership of the Domain Name until May 7, 2012, close to a week after the Management Agreement and Contract for Sale were terminated.
Complainant denies that at the time of the purchase of the Domain Name on December 8, 2011, Respondent communicated that he believed "the Domain Name was important in continuing [his] business because the use of the Domain Name for Complainant had established history of promoting his business and had market value," as the business that was promoted was Sanleda Inc., d/b/a South Beach Inn, not Gene Sorrows or LGS., LLC.
Complainant denies that purchasing the Domain Name in order to sell the Domain Name to similarly named businesses in Texas or Hilton Head or Vero Beach is a valid business interest and asserts that the desire to sell a well-established domain name to a third party supports Complainant's arguments and factual assertions that the transfer was made improperly, fraudulently, and in bad faith because this would actually result in further confusion to the public and cause further harm to the Complainant.
Complainant denies that "one of the major problems with Complainant's then current website hosted by Rezovation was that it was bed and breakfast website and Complainant was not conducting a bed and breakfast type operation." Complainant asserts that there was no issue with the then current website as far as they were concerned; and that it was Respondent who wanted to change the website to one that Sorrows had created.
Complainant denies that Sorrows had authority to transfer their Domain Name to LGS, LLC, and Respondent offers no evidence to support that he had authority to purchase the Domain Name for his own benefit or that of LGS, LLC.
Respondent’s Additional Submissions
Respondent submits that this dispute comes down to a single issue of the circumstances under which Respondent purchased the Domain Name.
Respondent contends that Complainant alleges Respondent fraudulently transferred from Complainant, who was the rightful owner, the Domain Name on or about May 6, 2012, whilst Sorrows was engaged as its manager for the Motel.
Respondent further contends that Complainant claims that he legitimately purchased the Domain Name on December 12, 2011, and that he only extended ownership for a 5 year period on May 6, 2012.
Respondent claims that at the time of the original purchase, being December 12, 2011, it was then under contract with Complainant to purchase the Motel, and that Complainant's principals, Powell and Sauder, told him that they did not want to pay for the renewal of the Domain Name and that both principals agreed to Respondent paying for the Domain Name and putting it in the name of his company
Respondent submits that Complainant has failed to meet is burden of proof because Respondent purchased the Domain Name on December 12, 2011. Respondent further submits that Complainant's second amended complaint is based not on that purchase, but on the purchase of the extension of ownership on May 6, 2012. Respondent asserts that as he was the actual owner of the Domain Name on May 6, 2012, and had been since December 12, 2011, the May 6, 2012 transaction was not made in bad faith as alleged by Complainant. Respondent submits that the arbitrator cannot amend the basis of the complaint by relating the claim back to December 12, 2011.
Respondent submits that all of the documentary and other evidence submitted clearly establishes that Respondent was actively engaged in attempting to purchase the motel, and which fact was not disputed by Complainant. Respondent asserts that it has been established of both his active efforts to purchase the motel and the difficulties encountered in Complainant have being able to provide sufficient clear title to the property. Respondent further submits that issues Complainant has raised regarding encroachment, and others, were all legitimate dealings and which have all been clearly established and reported.
Respondent admits that it believed that the Domain Name had potential value to several then identifiable existing businesses and that Respondent believed it important to protect that Domain Name if it was to own the motel. Respondent asserts that he was concerned that potential third parties might purchase the Domain Name and thereby deprive Respondent of the continued use of it and the history and goodwill that went with it.
Respondent denies that the proposed Agreement submitted to Complainant after the contract for sale terminated was a threat and asserts that the proposal for settlement was sent to dispose of issues between the Respondent and Complainant and to clearly state what was not included in the proposed settlement. Respondent asserts that the offer to turn over the Domain Name to Complainant was made as a part of the overall settlement.
Thus, it is submitted, Complainant has not met its burden to prove all three of the required elements. Specifically, Complainant has failed to prove that Respondent has no rights or legitimate interests in respect of the Domain Name or that the Domain Name was registered and is being used in bad faith.
The Panel concludes that for the reasons set out below the Domain Name should be transferred to Complainant.
Paragraph 15(a) of the Rules instructs this Panel to "decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable."
Paragraph 4(a) of the Policy requires that Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:
(1) the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and
(2) Respondent has no rights or legitimate interests in respect of the domain name; and
(3) the domain name has been registered and is being used in bad faith.
Complainant makes no contention regarding ownership of a trademark registration with any trademark authority. However, Policy ¶ 4(a)(i) does not require a trademark registration as long as Complainant can demonstrate common law rights in the mark. See Great Plains Metromall, LLC v. Creach, FA 97044 (Nat. Arb. Forum May 18, 2001) (“The Policy does not require that a trademark be registered by a governmental authority for such rights to exist.”).
Complainant claims that it uses the SOUTH BEACH INN mark in connection with a hotel/motel located in Cocoa Beach, Florida. Complainant alleges that it began using the SOUTH BEACH INN mark in 1997. Complainant provides a copy of its application for registration of a fictitious business name that it filed with the state of Florida for the SOUTH BEACH INN name. See Complainant’s Exhibit 3, 6, 7. Complainant contends that Complainant registered the Domain Name and began using the Domain Name on February 2, 1999 but that Respondent fraudulently transferred the Domain Name on May 6, 2012. See Complainant’s Exhibit 8.
Complainant claims that it has continuously used the SOUTH BEACH INN mark in connection with its business since 1997. Based on the evidence provided the Panel is satisfied that Complainant owns common law rights in the SOUTH BEACH INN mark under Policy ¶ 4(a)(i). See Congregation Shuvah Yisrael, Inc. v. Neckonoff, FA 1043126 (Nat. Arb. Forum Sept. 7, 2007) (finding that a complainant’s mark had established secondary meaning where the complainant had previously held the registration for a domain name identical to the mark).
The Domain Name is, for all intents and purposes, the same as Complainant’s SOUTH BEACH INN mark and the use of the Domain Name on or in relation to a competing motel/hotel business, particularly one which advertises and promotes itself heavily on the Internet, would be liable to cause confusion or deception.
Complainant thus meets this element of the Policy.
Rights and Legitimate Interests
Complainant is required to first make a prima facie case that Respondent lacks rights and legitimate interests in the Domain Name under Policy ¶ 4(a)(ii). If it does so the burden shifts to Respondent to show it does have rights or legitimate interests.
Complainant argues that Respondent is not commonly known by the Domain Name. Complainant accepts that it previously contracted with Respondent for Respondent to manage Complainant’s motel/hotel business and that Respondent and Complainant were negotiating about Respondent’s purchase of Complainant’s business. However, Complainant contends that Respondent’s contract was terminated and the negotiations finished prior to Respondent’s fraudulent transfer of the Domain Name. Therefore, Complainant contends that Respondent did not have any contractual or business relationship with Complainant when Respondent transferred the Domain Name.
The parties put forward starkly competing positions as to the circumstances under which the Domain Name was transferred to Respondent. The factual allegations, understandings and recollections of the parties are entirely contradictory and it is impossible for the Panel to resolve the competing contentions. Much of the voluminous material put forward by the parties is also not just heavily disputed but irrelevant to the matter over which the Panel has jurisdiction, namely he Domain Name. The Panel simply observes that this appears to be at heart a relationship dispute involving complex factual and legal issues, many of which are beyond the proper scope of the Policy.
Nevertheless, as noted above, it is apparent that Complainant has used the SOUTH BEACH INN mark in connection with its business and that Complainant owns common law rights in the SOUTH BEACH INN mark. It is equally clear that Respondent is not commonly known by the Domain Name, and does not purport to be; pursuant to Policy ¶ 4(c)(ii). Indeed, on the face of it, it is difficult to conceive of any legitimate use of the Domain Name by either Complainant or Respondent, other than in connection or association with the property and hotel/motel business identified with the SOUTH BEACH INN mark or the Domain Name.
Complainant alleges that the Domain Name formerly resolved to a website that contained a telephone number with references to adult-oriented content. However, Respondent indicates that this was an error and was corrected. This again is one of many factual allegations made and denied by the parties. As before the Panel cannot be expected to resolve and place reliable weight on such allegations or to reliably resolve such disputed facts.
However, Complainant goes on to assert that the Domain Name currently resolves to an under construction website. Even though Complainant fails to provide screenshots of the inactive website Respondent does not deny these allegations. The Panel is thus able to and finds that Respondent’s failure to make an active use of a confusingly similar Domain Name evidences Respondent’s lack of rights and legitimate interests in the Domain Name pursuant to Policy ¶¶ 4(c)(i) and (iii).
Accordingly, Complainant satisfies this element of the Policy.
Registration and Use in Bad Faith
Complainant alleges that Respondent offered to transfer the Domain Name back to Complainant in exchange for Complainant not waiving any Workman Compensation or Personal Injury Claims. The Panel infers from the evidence of record and the overall circumstances that the offer to sell or return the Domain Name in return for some form of waiver is valued at more than Respondent’s out-of-pocket costs. That being so, the Panel infers that Respondent registered and has used the Domain Name in bad faith under Policy ¶ 4(b)(i). See Gutterbolt, Inc. v. NYI Bldg. Prods. Inc., FA 96076 (Nat. Arb. Forum Dec. 29, 2000) (finding that the consideration demanded in exchange for a domain name registration does not have to be monetary in nature to run afoul of Policy ¶ 4(b)(i), but can be anything of value that exceeds the amount spent in registering and maintaining the domain name).
Complainant contends that Respondent is disrupting Complainant’s business through Respondent’s registration and use of the Domain Name. In particular, Complainant contends that Respondent’s registration and use of the Domain Name creates a likelihood of confusion. The Panel considers that the Domain Name has acquired a secondary significance and that the SOUTH BEACH INN mark and the Domain Name is primarily identified with the hotel/motel business of the Complainant.
The Panel accepts that Respondent is attempting to commercially benefit either from the above likelihood of confusion or more to the point in offering to return the Domain Name in return for Complainant withdrawing or waiving or not waiving certain rights or claims against Respondent.
Even though Respondent is not a competitor of Complainant Mr. Sorrows was contracted to run Complainants hotel/motel business. Given that the Domain Name was at the time an integral part of the business the Panel infers that any steps taken to renew or protect the Domain Name should have been taken for the benefit of the business/Complainant not the Respondent. Accordingly, any retention and use now of the Domain Name is bound to interfere with and disrupt Complainant's legitimate business interests and such actions on Respondent's part are indicative of bad faith on its part.
Accordingly, for the reasons set out above the Panel is satisfied that this third element of the Policy has been met.
Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the <southbeachinn.com> Domain Name be TRANSFERRED from Respondent to Complainant.
Clive Elliott, Panelist
Dated: August 2, 2012
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