Barrera v. Ciolino

636 So. 2d 218, 1994 WL 172207
CourtSupreme Court of Louisiana
DecidedMay 5, 1994
Docket92-C-2844
StatusPublished
Cited by19 cases

This text of 636 So. 2d 218 (Barrera v. Ciolino) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barrera v. Ciolino, 636 So. 2d 218, 1994 WL 172207 (La. 1994).

Opinion

636 So.2d 218 (1994)

Joan Dantonio, Wife of and Joseph A. BARRERA and
Suzanne Sabrio, Wife of and Douglas H. Boudreaux
v.
Mrs. Mary Fontana, Wife of and Felix J. CIOLINO.
CIOLINO PHARMACY, INC.
v.
Joan Dantonio, Wife of and Joseph A. BARRERA, and
Suzanne Sabrio, Wife of and Douglas H. Boudreaux.

No. 92-C-2844.

Supreme Court of Louisiana.

May 5, 1994.

*219 Eugene M. McEachin, Jr., Robert A. Knight, Bernard, Cassisa, Saporito & Elliott, Metairie, for applicants.

William C. Credo, Metairie, for respondents.

LEMMON, Justice.[*]

This case involves the 1977 credit sale of a pharmacy business, with its good will, its movables and its prescriptions on file, for $1,350,000. The principal issue is the effect to be given to the following contractual provision:

[P]urchasers shall have the right to use the business name of "Ciolino Pharmacy" for the conduct of their business at 4650 West Esplanade Avenue ..., until such time that vendor gives to purchaser six months prior advance notice to cease and desist.... Should purchaser use the said business name after notice ..., the purchasers agree to pay vendors, as liquidated damages, the sum of $100.00 per day ... [plus] attorney fees for ... any necessary action by vendors to enjoin the unauthorized use of said business name.

We now reverse the judgments of the lower courts refusing to enforce the clear provisions of the business name provision as totally inconsistent with the $1,350,000 sale price when parol evidence showed that, after deduction of the value of the physical assets, the sum of $827,851 was attributable to good will. Both the pertinent Civil Code articles and the prior decisions of this court, including one squarely holding that the sale of good will does not impliedly include a business name using the seller's family name,[1] dictate the opposite result.

I

Felix Ciolino, a licensed pharmacist for over forty years, opened the Ciolino Pharmacy in Metairie in 1974. On July 7, 1977, by written act of sale and chattel mortgage for *220 the single, non-itemized, all-credit price of $1,350,000,[2] he and his wife sold to pharmacists Joseph A. Barrera and Douglas H. Boudreaux (who worked in the Ciolino Pharmacy) and their wives the following:

I. The trade, business and asset known as "Ciolino Pharmacy", together with all the good will thereof, located at 4650 West Esplanade Avenue, Metairie, Louisiana;
II. All of the movables and property of the said business ... described as follows:
(1) The entire stock of merchandise....
(2) Carrier Air Conditioner Unit and Compressors (25 tons) [and fixtures, equipment, furniture, furnishings, etc., described in detail, plus 30,000 prescriptions on file].

The typewritten act further provided in the last paragraph:

It is agreed that purchasers shall have the right to use the business name of "Ciolino Pharmacy" for the conduct of their business at 4650 West Esplanade Avenue, Metairie, Louisiana, including the right to use same on any signs, prescriptions, labels or any form of advertising, until such time that vendor gives to purchaser six months prior advance notice to cease and desist with the use of said business name of "Ciolino Pharmacy." Should purchaser use the said business name after notice to cease and desist has been given as hereinbefore provided, the purchasers agree to pay vendors, as liquidated damages, the sum of $100.00 per day for as long as such violation shall continue, in addition to reasonable attorney fees for the institution and prosecution of any necessary action by vendors to enjoin the unauthorized use of said business name.[3]

The buyers thereafter made some use of the name Ciolino Pharmacy, but at least as early as 1982 the name used in their full-page newspaper advertisements was not "Ciolino Pharmacy," but "Ciolino B & B Pharmacy."[4]

On August 13, 1987, more than ten years after the sale, the Ciolinos gave the Barreras and Boudreauxs a six-month notice to cease using the name Ciolino Pharmacy. In the meantime Felix Ciolino had formed a corporation named Ciolino Pharmacy, Inc. and had registered Ciolino Pharmacy as a trade name. And shortly after giving the notice to cease using the name Ciolino Pharmacy, he placed a sign advertising "Ciolino Pharmacy open soon" on a building on Veterans Boulevard in Metairie.

On September 11, 1987, the Barreras and Boudreauxs sued to enjoin the Ciolinos from using the name Ciolino Pharmacy. The Ciolinos reconvened for a declaratory judgment declaring (1) that the contract gave the buyers only a non-exclusive right to use the name (even during the contract's six-month notice period); (2) that that right would terminate on February 13, 1988, six months after the notice; and (3) that the buyers must pay the liquidated damages of $100 for every day thereafter they use the name, plus attorneys' fees if action to enjoin becomes necessary.[5]

On October 22, 1987, the district court preliminarily enjoined the Ciolinos from using the name Ciolino Pharmacy.

*221 On October 29, 1987, at the Veterans Boulevard site, Ciolino and his pharmacist son Steven opened "C's Discount Pharmacy."[6]

At the trial on the merits, the judge ruled inadmissible several offers by the Barreras and Boudreauxs of parol evidence, while allowing proffers (oral statements before or after the contract, as well as a 1976 "agreement to purchase and sell" with no mention of good will, nor of name, and for a different price). In excluding this parol evidence, the judge noted more than once the absence of any pleading of fraud or duress or even of mutual mistake.

Judgment was rendered (1) declaring buyers "the sole and rightful owners of the trade name `Ciolino Pharmacy'"; (2) declaring invalid the Ciolinos' registration of the trade name Ciolino Pharmacy and the corporate name Ciolino Pharmacy, Inc.; (3) permanently enjoining the Ciolinos "from using the name `Ciolino Pharmacy' in any commercial capacity"; and (4) dismissing the Ciolinos' demand for declaratory judgment.[7] Citing parol evidence by a certified public accountant who, by deducting what he deemed to be the value of the physical assets of the pharmacy from the $1,350,000 credit sale price, calculated Barrera and Boudreaux had paid $827,851 for the good will of the business, the trial judge reasoned that payment of that amount for good will "had to" include the name Ciolino Pharmacy.[8] The judge further stated that the reputation of the Ciolino Pharmacy was continued over a ten-year period through the work and effort of Barrera and Boudreaux, and that "[t]o allow a seller an indefinite period to reclaim a name after the buyer's work has made that name into a commercially identifiable name would fly in the face of presumed equitable dealings as envisioned by our Civil Code."[9] Accordingly, the judge ruled that the business name Ciolino Pharmacy was included in the good will and was sold in 1977 with the sale of inventory, equipment and furnishings, and that the 1977 contract's limitation on the use of the sellers' name was "totally void and inconsistent with the sale" for that amount. He not only refused to enjoin Barrera and Boudreaux from using the name in accordance with the contract's name clause, but, quite the reverse, he enjoined the Ciolinos from using their own name for their pharmacy.

The court of appeal affirmed, with one judge concurring.

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Bluebook (online)
636 So. 2d 218, 1994 WL 172207, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barrera-v-ciolino-la-1994.