Court Opinion

ID: 8976579
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:02:16.822305+00
Date Added: 2024-06-11T17:10:34.439420
License: Public Domain

WIDENER, Circuit Judge,
dissenting:
I respectfully dissent.
Any contract analysis must originate with the language of the contract. “[Cjourts look to the language of the instrument and to the intention of the parties and impose a construction which is fair and reasonable.” TSC Indus., Inc. v. Tomlin, 743 S.W.2d 169, 173 (Tenn.Ct.App.1987).1
In this case, the contract could not be more clear. The Virginia Schoenbaums have acquired the exclusive right to use the “Shoney’s System” in the tidewater area of Virginia. The “Shoney’s System” under the terms of the contract “include[s]” “the name ‘Shoney’s’.” The contract explicitly defines "Shoney’s System” as a "system of opening and operating restaurants" (emphasis added). Indeed, even the district court found no ambiguity within the agreement and that the agreement addressed only restaurants. So, it is at once apparent that the operation of an inn or motel does not fall within the terms of the agreement.
This conclusion is supported by the fact that two separate and distinct service marks, “Shoney’s” (Reg. No. 1,088,370, Mar. 28, 1973) and “Shoney’s Inn” (Reg. No. 1,190,289, Feb. 16, 1982), were in existence when the contract was made. The presumption of an exclusive right to use a registered mark “extends only so far as the goods or services noted in the registration certificate_” Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 48 (2d Cir.1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979). 15 U.S.C. § 1115(a) similarly provides that the registration of the mark is prima facie evidence of the exclusive right to use the mark in commerce in connection with the goods and services specified in the registration.2 The registration certificate for the “Shoney’s” mark limits its use to “restaurant services.” The certificate for “Shoney’s Inn” is limited to “motel services.” Both service marks existed at the time the contract was made but only “Shoney’s” was mentioned in the contract. Thus, only restaurant services having been addressed by the contract, which is corroborated by the existence of the two service marks, the use of “Shoney’s Inn” was neither permitted nor intended to be included under the words “Shoney’s System.”
When a court is presented with alternate constructions, “one of which makes it fair, customary and such as prudent men would naturally execute, while the other makes it inequitable, unusual or such as reasonable men would not be likely to enter into, the interpretation which makes a rational and probable agreement must be preferred.” Wilkerson v. Williams, 667 S.W.2d 72, 79 (Tenn.Ct.App.1983), quoting Commerce Street Co. v. Goodyear Tire & Rubber Co., 31 Tenn.App. 314, 215 S.W.2d 4 (1948).
It is beyond argument that the Virginia Schoenbaums do not have the right to operate a Shoney’s Inn within the area in which they are licensed to operate Shoney’s Systems, an area consisting of 9 counties and 11 cities in eastern Virginia, making up substantially all the heavily populated and thriving Virginia Beach, Norfolk, and Hampton Roads area of the State. That much was decided by the district court and underscored by the majority opinion in this case:
[T]he [Virginia] Schoenbaums were granted only the right to open and operate restaurants and nothing else. This protects the ... [Tennessee Schoenb-*99aums] from the [Virginia] Schoenbaums’ using the name Shoney’s on anything but a restaurant — not on grocery stores, dry cleaners, motels or any other type of establishment.
To this holding no exception is taken. So it is patent from the papers before us that the Virginia Schoenbaums have no right to operate a Shoney’s Inn within the territory. Indeed they seek no right to operate such a motel within their territory. Their claim, quite simply, is that no one may operate a Shoney’s Inn motel within the territory assigned for Shoney’s restaurants to the Virginia Schoenbaums.
I suggest that this construction of the contract by the Virginia Schoenbaums, and adopted by the district court and our court, is nothing more nor less than a dog in the manger construction.3 While the Virginia Schoenbaums do not wish to operate Sho-ney’s Inns within the contested area, they wish to assure that no one else may do so. That construction, in the words of the Tennessee courts, which we are bound to follow, in my opinion, is “inequitable, unusual or such as reasonable men would not be likely to enter into.” It is not an agreement which is “fair, customary and such as prudent men would naturally execute.”
Not only does the majority take the strained construction of the contract instead of an “interpretation which makes a rational and probable agreement ... preferred”, it expands without support, I submit, the wording of the contract which includes only the operation of “restaurants” to include that of “motels.” I find no justification for this departure from the explicit contract terms, either in the documents themselves or in the record.
I would reverse.

. I note that the contract between the parties provides that Tennessee law applies.

. "(a) Any registration issued ... or of a mark registered on the principal register ... shall be prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant's ownership of the mark, and of the registrant’s exclusive right to use the registered mark in commerce on or in connection with the goods and services specified in the registration_” (Emphasis added.)

. Dog in the manger [so called fr. the fable of the dog who would not allow a horse or ox to eat the hay in a manger, even though he did not want it himself]: a person who selfishly withholds from others something that he himself cannot use or does not need. Webster’s Third New International Dictionary, 1971.