Business

Legal battle between Charlotte coffee shops heats up

The legal battle between two Charlotte coffeehouses is heating up after the owner of a new coffee shop claimed in court documents that a longtime coffee purveyor harassed employees and committed deceptive business practices.

In documents filed this week, Philipp Gerlach, who in July opened Dilworth Espresso in the Kenilworth Commons shopping center, accuses Don Keen, founder of the 25-year-old Dilworth Coffee, of using deceptive trade practices to strong arm him into a licensing agreement that would have prevented him from buying coffee beans from other suppliers, according to a federal lawsuit.

He denies receiving any financial benefit from using Dilworth Coffee signs or logos, asserts that Keen is not the first to use the neighborhood name in association with a coffee house and claims Keen himself has deceived customers by continuing to list Dilworth Coffee’s location as 1235 East Blvd. in Kenilworth Commons.

Dilworth Espresso is in the same Kenilworth Commons site that was the original home of Dilworth Coffee. More recently, it was the site of Kenilworth East Coffee, a Dilworth Coffee licensee that sold its assets to Gerlach.

Gerlach’s response, filed in U.S. District Court in Charlotte, comes a month after Keen filed suit and accused Dilworth Espresso of violating federal trademark laws by mimicking his company’s name while in talks to become a Dilworth Coffee licensee.

Gerlach has also filed a counterclaim, alleging that Keen has called Dilworth Espresso by telephone, interfering with business operations and distracting employees.

Calling it harassment, Gerlach says Keen told the building’s landlord that Dilworth Espresso would use another business name, leading the landlord to delay reviewing the shop’s request for sign changes.

Gerlach wants a judge to order Keen to “stop harassing” Dilworth Espresso, reimburse the shop for slander and cease making derogatory statements against the shop, the counterclaim states.

Keen told the Observer that he only called Dilworth Espresso once to see how employees would answer the phone. They answered as “Dilworth Coffee,” he said.

“(The counterclaim) makes it seem like there was a stream of nagging,” he said. “There was none of that.”

He denied Gerlach’s other allegations, calling them invalid because they were filed without input from a “proper lawyer.” Gerlach, who is representing himself, declined to comment when reached on Friday.

Don and Aleyene Keen founded Dilworth Coffeehouse in November 1989. Since then, the company has changed its name to Dilworth Coffee and now operates four Charlotte-area locations. It also has licensing agreements with other shops in the Carolinas and Georgia.

Those licensing deals allow shop owners to advertise using the Dilworth Coffee logo, as well as receive pricing discounts when ordering from suppliers, Keen said.

Keen told the Observer that once Dilworth Coffee’s trademark was registered, no unlicensed coffee shops with a similar name could operate in the area. He worries that customers will be confused and think Dilworth Espresso is affiliated with his shop.

He is asking a judge to force Gerlach to stop calling his shop Dilworth Espresso. He also seeks payment for an unspecified amount representing the revenue Gerlach’s shop has earned while using that name.

Future unclear

The future of Gerlach’s counterclaim hangs in the balance if he is unable to hire an attorney, according to a court order signed by a judge on Thursday.

Federal law requires corporations and business entities to use lawyers to litigate in court. Dilworth Espresso is a limited liability corporation, which offers Gerlach personal liability protections in case of legal action.

If Gerlach fails to hire a lawyer in two weeks, he can still represent himself but a default judgment will be entered against the business, the order says.

That judgment could allow Keen to claim payment from Dilworth Espresso’s assets, said Stephen Ashley, a Charlotte patent attorney who is not involved in the case.

“His case will be in real bad shape if (Gerlach) doesn’t get a lawyer,” Ashley said.

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