Court Opinion

ID: 7825193
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:05:16.438472+00
Date Added: 2024-06-11T16:30:50.447707
License: Public Domain

Robert L. Brown, Justice, dissenting. I cannot agree that the trade name at issue here is Vowels rather than Vowels Office Supply. What was sold by the Williamses and purchased by the Spelics was “Vowels Office Supply.” The Offer and Sale Agreement reads in part as follows: BUSINESS TRADE NAME: Seller hereby (grants) grants (docs not grant)------Buyer effective at the time of closing of escrow, any and all rights which the Seller may have in the trade name Vowels Office Supply. “Vowels Office Supply” is written in by hand. The value assigned to the trade name was $1,500 out of a total purchase price of $80,000. The sale closed on May 31, 1988. Shortly thereafter, a joint letter went out to the customers of the former Vowels Printing and Supplies. It spoke of the division of the business into two entities — Vowels Printing Factory and Vowels Office Supplies — and read in part: On the first of June, Vowels Printing and Supplies officially became two entities. The printing and copying services, recently relocated at 319 South Church (across the street from the blue awninged Vowels), will be known in the future as Vowels Print Factory. Preston and Gayle Williams will continue as owners and managers of the Print Factory. Barbara, Amber, Donnie, and Gina will be here, as well, to assist you in meeting all of your printing and copying needs. The office supply sales will still be located at 324 South Church and be known as Vowels Office Supplies. The new owners, Richard and Barbara Spelic, will be happy to greet all our old customers. Come in and meet them, as well as Jennifer and Carol. Jonnas will remain at Vowels Office Supplies, also, and they all are eager to serve you. The letter had the names of the Williamses and Spelics typed at the bottom. Barbara Spelic later testified at trial that she did not approve of the letter’s being sent but acknowledged that she knew of it and did not tell the Williamses not to send it. The letter, in fact, apparently was sent with bills to customers of the former Vowels Printing and Supplies which benefitted both Vowels Print Factory and Vowels Office Supply. A few months after the sale, the Williamses put up a sign with the name “Vowels” in tandem with The Print Factory. The Spelics did not object to this. The Jonesboro City Directory in 1987-1988 listed both Vowels Print Factory and Vowels Office Supply with different addresses and different telephone numbers. The 1988-1989 Indian County Phone Book listed Vowels Print Factory. The Southwestern Bell Telephone Directory also listed both entries in 1988-1989 in both the white pages and yellow pages. Inexplicably, Barbara Spelic testified that she did not know whether she checked the telephone directories in 1988 to determine if Vowels Print Factory was listed separately. The genesis for this litigation was a complaint by the Williamses in August 1989 — more than a year after the sale — contending that the Spelics violated the covenant not to compete in the Offer and Acceptance Agreement by taking a printing order from a local bank. The chancellor enjoined this violation. The Spelics never complained about confusion between Vowels Office Supply and Vowels Print Factory until it filed a counterclaim to this lawsuit by the Williamses. The chancellor, nonetheless, enjoined the Williamses from using the trade name Vowels but in doing so found that Vowels had been accepted and acknowledged as a “local synonym for office supplies and/or printing.” In effect, the chancellor found that Vowels had a secondary meaning for both office supplies and printing. The fact that the trade name, Vowels Office Supply, was sold is undisputed. Subsequent events, including the letter to customers, evidenced two separate entities, both of which used the name Vowels. The majority concludes, however, that the chancellor was correct in finding that there was the likelihood of injury or dilution to Vowels, a “trade name valid at common law,” under the statute. See Ark. Code Ann. § 4-71-113(1987). The focus at trial, however, should have been on the trade name at issue, Vowels Office Supply. It is clear that the Spelics recognized that Vowels Print Factory would continue to be associated with an independent entity, based on the letter to customers which they had knowledge of. They undoubtedly also knew that both enterprises were listed in various telephone directories. Yet they never raised a complaint until they were sued for breach of the non-compete agreement more than a year after the sale. The chancellor expanded the scope of the trade name purchased by finding that the name Vowels had been bought for the Spelics’ exclusive use. That finding impinges on the retained rights of the Williamses in Vowels Print Factory. The chancellor did not find that Vowels had a secondary meaning associated only with the office supply business. On the contrary, he found that Vowels was synonymous with both businesses, which bolsters the Williamses’ argument. The statute, § 4-71-113, must be read to protect both trade names. I recognize the heavy burden inherent in holding that a chancellor’s factual findings are clearly erroneous. Flowever, I would do so in this case and reverse the chancellor’s order. Hour, C.J., and Glaze, J., join.