FILED

October 31, 1997

Cecil W. Crowson

Appellate Court Clerk

IN THE COURT OF APPEALS OF TENNESSEE

WESTERN SECTION AT NASHVILLE

VOLUNTEER BEER, INC., ) 

)

Plaintiff/Appellant, ) Davidson Chancery No. 96-13-III

)

VS. ) Appeal No. 01A01-9703-CH-00126

)

)

RALPH W. JOHNSON, JR., )

)

Defendant/Appellee. )

APPEAL FROM THE CHANCERY COURT OF DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE

THE HONORABLE ROBERT S. BRANDT, CHANCELLOR

G. KLINE PRESTON, IV

Nashville, Tennessee

Attorney for Appellant

LAURENCE M. McMILLAN, JR.

CUNNINGHAM, MITCHELL, HICKS & McMILLAN

Clarksville, Tennessee

Attorney for Appellee

REVERSED AND REMANDED

ALAN E. HIGHERS, J.

CONCUR:

W. FRANK CRAWFORD, P.J., W.S.

DAVID R. FARMER, J.
2

Plaintiff Volunteer Beer, Inc. (VBI), appeals the trial court’s final judgment dismissing

its claim for fraudulent registration of trademark against Defendant/Appellee Ralph W.

Johnson, Jr. The trial court granted summary judgment to Johnson based on the court’s

conclusion that Johnson did not intend to deceive anyone when he made a false statement

on his trademark application. We reverse because we conclude that Johnson’s affidavit

regarding his state of mind at the time he completed the trademark application was an

insufficient basis upon which to grant summary judgment.

This lawsuit began in January 1996, when VBI filed a complaint against Johnson

seeking declaratory and other relief. Specifically, VBI’s complaint alleged that Johnson

submitted an application to register the trademark Volunteer Beer to the Tennessee

Secretary of State’s office in August 1989; that Johnson falsely represented on his

application that the mark was first used in Tennessee on August 18, 1989, the date of

application; that the trademark Volunteer Beer, in fact, never was used in Tennessee by

Johnson; that Johnson fraudulently procured registration of such trademark; and that VBI

was the rightful owner of the Volunteer Beer mark. The complaint sought cancellation of

Johnson’s registration of the trademark, a declaration that VBI was the lawful registrant of

the mark, and an award of damages pursuant to section 47-25-510 of Tennessee’s Model

Trademark Act. 

Johnson filed an answer and counterclaim in which he sought damages for

trademark infringement, an injunction against VBI’s further use of the Volunteer Beer mark,

and other relief. 

VBI subsequently filed a motion for summary judgment contending, inter alia, that

the undisputed facts showed that Johnson fraudulently obtained registration of the

trademark Volunteer Beer. 

Johnson also moved for summary judgment. Johnson’s answers to interrogatories

indicated that he had neither brewed Volunteer Beer nor made any sales of Volunteer Beer
3

in Tennessee. Accordingly, in opposing VBI’s motion for summary judgment, Johnson

conceded that his registration of the Volunteer Beer mark was subject to cancellation

because Johnson never had sold goods under the mark. To rebut VBI’s claim that he had

fraudulently registered the Volunteer Beer trademark, however, Johnson filed a sworn

affidavit in which he explained why he wrote August 18, 1989, as the date of first use on

his trademark application:

2. In 1989, I submitted an application to the

Tennessee Secretary of State for registration of the mark

VOLUNTEER BEER for use on Class 48 goods, malt

beverages and liquors. Originally, when I completed the

blanks on the application form, I left blank the date of first use

on the application. . . .

3. Upon my inquiry regarding what was meant by

the date of first use of the VOLUNTEER BEER mark, a female

employee of the Tennessee Secretary of State’s office

instructed me to fill in the application date of August 18, 1989,

this being the date I made this inquiry (which was in person at

the Tennessee Secretary of State’s office). Based on this

instruction, I wrote August 18, 1989, on the application as the

date of first use. . . .

. . . .

5. I am not an attorney, nor was I represented by an

attorney during the application and registration of the mark

VOLUNTEER BEER. I was unfamiliar with the provisions of

Tennessee’s trademark law and statutes at the time that I

submitted my application. In connection with the application

process, I made no representations or declarations, verbally or

in writing, that were false or fraudulent, nor was it my intention

to mislead anyone in any way. To the contrary, in stating the

date of my first use of the mark VOLUNTEER BEER, I acted

upon the advice of the representative of the Tennessee

Secretary of State’s office. 

Based on the undisputed evidence that Johnson never used the trademark within

the meaning of section 47-25-501(b)(1) of the Model Trademark Act, the trial court entered

a judgment canceling Johnson’s registration of the mark Volunteer Beer. The trial court

further ruled that VBI had priority in all of its trademarks bearing the Volunteer Beer mark

by virtue of VBI’s prior use of such mark. Lastly, the trial court dismissed all of Johnson’s

counterclaims. 
4

In its final judgment, the trial court dismissed VBI’s remaining claim for damages

under section 47-25-510 of the Model Trademark Act based on VBI’s failure to submit any

proof that Johnson made a false or fraudulent misrepresentation in his August 1989

trademark application. The trial court reasoned:

The Model Trademark Act establishes liability against

one who procures the filing or registration of a [trademark] “by

knowingly making any false or fraudulent [representation].”

[T.C.A.] § 47-25-510. The asserted misrepresentation is the

insertion of “8-18-89" on the form where it asks for the date the

applicant first used the mark.

Johnson’s version of how that happened is undisputed.

He typed in the information requested by the fill-in-the-blank

form and took it to the Secretary of State’s office. He did not

fill out the “first used” blank as he was unsure what “used”

meant. When he asked someone in the Secretary of State’s

office what was meant by “first used,” Johnson was instructed

to insert the then current date. He did so.

Use, according to the Act, means that the goods were

sold or otherwise distributed. [T.C.A.] § 47-25-501(b)(1).

Johnson’s version of the beer had never been sold or

distributed, so when he filled in the blank with a date, he made

a false statement. The question is . . . whether the false

statement [was] made “knowingly.”

The Model Trademark Act does not describe

“knowingly.” Courts defining the term have usually done so in

the context of criminal statutes that require that acts be

committed “knowingly” before they constitute crimes. In that

context, knowingly means that the person charged possessed

facts which made him aware he could not lawfully do the act

charged. State v. Summers, 692 S.W.2d 439, 446 (Tenn.

Crim. App. 1985).

The damage section of the Model Trademark Act is

captioned “fraudulent registration” and refers to “any other

fraudulent means.” This implies that for a false statement to

have been made knowingly, it must have been done with some

intent to deceive someone.

There is no evidence that Johnson’s misrepresentation

that he had used the [trademark] was done with any intent to

deceive anyone. To the contrary, he did not know what to put

down and only followed the instruction or suggestion of

someone in the Secretary of State’s office. Johnson was

obviously uncertain what “used” meant. His misrepresentation

made out of ignorance was not made knowingly. 

On appeal, the sole issue for this court’s consideration is whether the trial court

erred in dismissing VBI’s claim for fraudulent registration of trademark under section

47-25-510 of the Model Trademark Act.
5

We first address the trial court’s interpretation of the statutory requirements of

section 47-25-510. That section provides that

Any person who, on behalf of such person or any other

person, procures the filing or registration of any mark in the

office of the secretary of state under the provisions hereof, by

knowingly making any false or fraudulent representation or

declaration, verbally or in writing, or by any other fraudulent

means, shall be liable to pay all damages sustained in

consequence of such filing or registration, to be recovered by

or on behalf of the party injured thereby in any court of

competent jurisdiction.

T.C.A. § 47-25-510 (1988).

Other states have adopted virtually the identical provision from the Model

Trademark Act. See Gragg v. Rhoney, 884 P.2d 443, 446-47 (Kan. Ct. App. 1994) (citing

K.S.A. 81-120); Vance v. Huff, 568 So. 2d 745, 750-51 (Ala. 1990) (citing Ala. Code 1975,

§ 8-12-15); Brewer v. Egyptian Sports, Inc., 462 N.E.2d 520, 525 (Ill. App. Ct. 1984) (citing

Ill. Rev. Stat. 1981, ch. 40, par. 18). Our research, however, has revealed only one

decision in which a state court interpreted the statute’s requirement of “knowingly making

any false or fraudulent representation or declaration.” In Gragg v. Rhoney, 884 P.2d 443,

449 (Kan. Ct. App. 1994), the court indicated that, in order to be fraudulent within the

meaning of the statute, “an untrue statement of fact must be known to have been untrue

by the party making it and must have been made with the intent to deceive or recklessly

made with disregard for the truth.” In accordance with this construction, we hold that the

imposition of liability under section 47-25-510 requires proof of three elements: (1) that the

applicant’s representation or declaration was false; (2) that the applicant knew the

representation or declaration was false; and (3) that the applicant made the representation

or declaration either with the intent to deceive or with reckless disregard for the truth.

In interpreting the statute, the trial court ruled that, in order for a false or fraudulent

representation to be actionable, the representation must have been made with intent to

deceive. We conclude that this ruling was not entirely correct because, under the

foregoing standard, the imposition of liability under section 47-25-510 does not depend

upon a showing of intent to deceive; it is sufficient if the representation or declaration was
6

made with reckless disregard for the truth, a lesser standard than that applied by the trial

court.

Our delineation of the proper standard to be applied under section 47-25-510,

however, does not end our inquiry because we still must determine, in light of the

appropriate standard, whether the trial court erred in granting Johnson’s motion for

summary judgment. We begin our analysis of this issue with the premise that

[W]here a claim of fraud is presented, ordinarily only upon a

full trial of the action can the issue properly be developed. As

a general rule, summary judgment is not an appropriate

procedure for the disposition of such an issue.

Fowler v. Happy Goodman Family, 575 S.W.2d 496, 49 (Tenn. 1978). This is because

“[t]he issue of fraud, by its nature, is one which requires for determination the actual

hearing and viewing of witnesses whose credibility is of paramount concern for the trier of

facts.” Long v. State Farm Fire & Cas. Co., 510 S.W.2d 517, 519 (Tenn. App. 1974).

For similar reasons, summary judgment also is inappropriate “in cases where the

outcome hinges squarely upon the state of mind, intent, or credibility of the witnesses.”

Knapp v. Holiday Inns, Inc., 682 S.W.2d 936, 941-42 (Tenn. App. 1984). As one court

explained,

The court should be cautious in granting a motion for summary

judgment when resolution of the dispositive issue requires a

determination of state of mind. Much depends upon the

credibility of the witnesses testifying as to their own state of

mind. In these circumstances the jury should be given an

opportunity to observe the demeanor, during direct and crossexamination, of the witnesses whose states of mind are at

issue.

Croley v. Matson Navigation Co., 434 F.2d 73, 77 (5th Cir. 1970), quoted in McDowell v.

Moore, 863 S.W.2d 418, 421 (Tenn. App. 1992); Knapp v. Holiday Inns, Inc., 682 S.W.2d

936, 942 (Tenn. App. 1984). In particular, summary judgment should not be granted based

upon the affidavit of an interested witness if the finder of fact would be at liberty to

disbelieve the assertions contained in the affidavit. Knapp, 682 S.W.2d at 942.
7

In McDowell v. Moore, 863 S.W.2d 418 (Tenn. App. 1992), for example, the

defendant was sued for defamation. The defendant filed a motion for summary judgment,

citing evidence which, he argued, conclusively established that the plaintiff was a public

figure and that the matters complained of were published without malice. Id. at 419. In

support of his motion, the defendant attached an affidavit in which he asserted that he

believed the incidents described by him to be true. Id. at 420. The trial court granted the

motion, but this court reversed. Citing Knapp and Croley, supra, this court reasoned:

[W]e are called upon to determine whether the affidavit of the

defendant, . . . wherein he deposed that he believed and

continues to believe that the incidents described by him were

true, is sufficient to establish a lack of malice. While such

testimony, if accredited by a trier of fact, would be sufficient to

support such a finding, we cannot agree that, without more,

such a finding is appropriate on motion for summary judgment.

. . . .

In this case, the credibility of the affiant, . . . is clearly in

issue. . . . [H]e is a party and his testimony must be weighed

in the balance against his natural bias, prejudice or interest in

the outcome of the case. . . .

McDowell, 863 S.W.2d at 420-21.

Although this case presents a close question, we conclude that the trial court erred

in granting summary judgment based on Johnson’s affidavit. In his affidavit, Johnson

swore that he was unfamiliar with the provisions of Tennessee’s trademark statutes at the

time he submitted his application; that he was acting upon the advice of an employee of

the Secretary of State’s office when he wrote August 18, 1989, on the application as the

date of first use; and that he did not intend to mislead anyone in any way. If ultimately

believed by the finder of fact, these assertions well might establish a defense to VBI’s claim

for fraudulent registration of trademark under section 47-25-510 of the Model Trademark

Act. Nevertheless, we conclude that these assertions did not entitle Johnson to summary

judgment.

 As we explained previously, in order to succeed on its claim for fraudulent

registration of trademark, VBI ultimately must prove that Johnson acted either with the

intent to deceive or with reckless disregard for the truth. The foregoing authorities reveal
1

In the trial court, VBI challenged this assertion by filing the affidavit of Mary E. Costner, the manager

of the Statutory Filing Department at the Secretary of State’s office in Nashville. In her affidavit, Costner

asserted that 

It is the policy of our Department not to give legal advice or to interpret the

meaning or requirements of the application for potential registrants. Our

policy is to advise a registrant to consult with an attorney as to any questions

they may have. W e do not give legal advice or suggest how to complete

trademark applications.

Costner, however, did not work at the Secretary of State’s office in August 1989, when Johnson completed

his tradem ark application. Costner began working at that office in October 1990. 

2Under the Model Trademark Act, a trademark is deemed to be “used” on goods “when it is placed

in any manner on the goods or their containers or the displays associated therewith or on the tags or labels

affixed thereto and such goods are sold or otherwise distributed in the state.” T.C.A. § 47-25-501(b)(1)

(1988).

8

that summary judgment is particularly inappropriate in fraud cases such as this where the

outcome hinges upon the defendant’s state of mind, intent, or credibility. The critical

assertions contained in Johnson’s affidavit all relate to Johnson’s subjective state of mind

or intent at the time he made the false representation on his trademark application.

Moreover, Johnson, as the defendant to this action, is by definition an interested witness

whose testimony the finder of fact would be entitled to disbelieve. The fact-finder, for

example, might reject Johnson’s testimony that he was unfamiliar with Tennessee

trademark law, as well as his testimony that he was unaware that he had made a false

statement on the trademark application. 

For purposes of these summary judgment proceedings, we accept as true

Johnson’s sworn factual assertion that an employee of the Secretary of State’s office

instructed him to fill in August 18, 1989, as the date of first use on the trademark

application.1 Even if accepted as true, however, this fact is not determinative of Johnson’s

state of mind or intent when he completed the application. The evidence was undisputed

that Johnson never sold goods under the Volunteer Beer mark. It is possible, therefore,

that Johnson initially left blank the date of first use on the application because he knew he

never had used the mark.2 Issues regarding Johnson’s state of mind and credibility should

be resolved by the finder of fact in an evidentiary hearing and not by summary disposition.

In conclusion, we reiterate that, if believed by the fact-finder, the assertions

contained in Johnson’s affidavit well might provide a defense to VBI’s claim for fraudulent
9

registration of trademark. At this point in the proceedings, however, it was premature to

grant summary judgment based on Johnson’s sworn assertions as to his state of mind at

the time he completed the trademark application.

The judgment of the trial court is hereby reversed, and this cause is remanded for

further proceedings consistent with this opinion. Costs of this appeal are taxed to

Appellee, for which execution may issue if necessary.

 

HIGHERS, J.

CONCUR:

 

CRAWFORD, P.J., W.S.

 

FARMER, J.