Buyers & T. Serv., Inc. v. Car Maintenance Spec., Etc.

290 So. 2d 753
CourtLouisiana Court of Appeal
DecidedMay 17, 1974
Docket9637
StatusPublished
Cited by8 cases

This text of 290 So. 2d 753 (Buyers & T. Serv., Inc. v. Car Maintenance Spec., Etc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buyers & T. Serv., Inc. v. Car Maintenance Spec., Etc., 290 So. 2d 753 (La. Ct. App. 1974).

Opinion

290 So.2d 753 (1974)

BUYERS AND TRADERS SERVICE, INC., Plaintiff-Appellee,
v.
CAR MAINTENANCE SPECIALISTS OF BATON ROUGE, LA., INC., Defendant-Appellant.

No. 9637.

Court of Appeal of Louisiana, First Circuit.

February 11, 1974.
Rehearing Denied March 18, 1974.
Writs Refused May 17, 1974.

*754 Victor L. Roy, III, Baton Rouge, for defendant-appellant.

Bailey E. Chaney, Baton Rouge, for plaintiff-appellee.

Before SARTAIN, TUCKER[*] and WATSON, JJ.

SARTAIN, Judge.

Plaintiff by this suit seeks the cancellation of a lease and franchise agreement between plaintiff and defendant. Plaintiff also seeks damages for the alleged breach of the lease and for the alleged misappropriation of the name "Kar Klinik" granted to defendant in the franchise. Following trial on the merits, the trial court rendered judgment in favor of plaintiff ordering the lease and franchise agreement cancelled and awarding damages to plaintiff in the sum of $4,594.20. An award of $1,050.53 was also made to plaintiff for rentals due on the lease as of January 1, 1973.

The plaintiff corporation was formed in 1959 shortly after Mr. Leo Wroten opened the auto repair business known as "Kar Klinik" located on leased premises at 3960 Florida Boulevard in the City of Baton Rouge. On June 29, 1959, plaintiff registered the trade name "Kar Klinik" with the Louisiana Secretary of State. According *755 to the registration records, which were introduced in evidence at trial, the name was to be used to designate a particular place of business and particular business.

In 1961 Mr. Wroten and Mr. Randolph Stewart incorporated the defendant corporation. Under an agreement between plaintiff corporation and defendant corporation, Kar Klinik was operated by both corporations until April 26, 1963. On that date the agreement here at issue was entered into by plaintiff and defendant. By this 1963 agreement Mr. Wroten sold his shares of stock in defendant corporation to Mr. Stewart and the 1961 agreement was cancelled.

The April 26, 1963 contract contains a sale of a going business, a sublease by plaintiff to defendant of the Florida Boulevard premises, and the grant by plaintiff to defendant of a franchise or license to use the name "Kar Klinik". The terms of the sublease provided that defendant was to pay five (5%) percent of the gross monthly sales of Kar Klinik #1, based on the monthly state sales tax report, or a minimum of $525.00 per month, whichever was greater, as monthly rental. The term of the lease was from April, 1963 to August 31, 1974.

In February of 1972 defendant registered the trade name "Kar Klinik" with the Louisiana Secretary of State in its name. Mr. Leo Wroten, president of plaintiff corporation, learned of this action in the fall of 1972 at a meeting between Mr. Wroten, Mr. Randolph Stewart, Mrs. Stewart and Mr. Stewart's son. At this meeting a disagreement arose between Wroten and the Stewarts over the meaning of the 1963 contract.

Plaintiff filed this suit on November 8, 1972 alleging that defendant had breached several provisions of the contract and seeking cancellation of the lease and franchise agreement, the transfer and assignment of the trade mark and registration, damages in the amount of $20,000.00, reasonable attorney fees, legal interest and all costs. The alleged breaches of the agreement consisted of a failure by defendant to comply with certain requirements of the lease, namely, failure to keep the lights burning on the premises at all times, failure to furnish a certificate to customers on the necessity of all work done, and a failure to furnish plaintiff with certificates of insurance. Plaintiff also alleged the attempted appropriation of the trade mark and trade name and an anticipatory breach of the lease by a stated intention to quit the premises in February of 1973 as additional causes for cancellation of the lease and franchise.

Defendant answered the suit in December of 1972 denying the allegations of plaintiff and alleging that by virtue of plaintiff's suit its peaceful possession of the leased premises was disturbed, thereby entitling defendant to seek cancellation of the lease. Defendant left the premises as of January 1, 1973.

The trial court rendered judgment for the plaintiff holding defendant's actions in registering the trademark or trade name in its own name and in failing to comply with certain conditions of the lease and franchise agreement to constitute a breach of the agreement. Thus, the trial court declared the lease and franchise cancelled; ordered the defendant to transfer to plaintiff the registration of the name "Kar Klinik"; and awarded plaintiff damages in the sum of $1,050.53, plus twenty percent attorney's fees and legal interest.

From this judgment defendant has suspensively appealed asserting that the trial court erred in finding that the trademark or trade name had not been conveyed to it in the April, 1963 contract, in finding that plaintiff was entitled to the trademark, and in awarding damages and attorney fees for breach of the lease.

THE TRADEMARK OR TRADE NAME

The trial court found that the trademark or trade name "Kar Klinik" had not been permanently conveyed to defendant by the 1963 agreement and that plaintiff had only granted defendant the right to use the *756 name in the City of Baton Rouge via the franchise portion of the 1963 agreement. Thus, the trial court held that the franchise agreement was cancellable for cause and that the registration by defendant of the trade name as its own was sufficient cause to justify cancellation of the agreement.

Defendant contends on appeal that the trial court erred in finding that the trademark "Kar Klinik" was not permanently conveyed to it by the 1963 agreement. In support of this argument defendant cites the following language from paragraph 10 of the 1963 agreement:

"In and for the same consideration hereinabove expressed, grantor does by these presents grant, bargain, sell, convey, transfer, assign, set over and deliver unto grantee the following:
That certain going business known as `Kar Klinik # 1', located at 3960 Florida Boulevard in the City of Baton Rouge, Louisiana, including all its goodwill, equipment, goods, merchandise, supplies, cash on hand, open accounts, and other assets and credits excluding the items described in Paragraph 2'b' hereinabove."

In Paragraph 2b certain equipment in the business is described.

Defendant argues that under the above quoted provision of the 1963 agreement plaintiff sold to it the going business of Kar Klinik #1 including all of its assets and good will. Defendant contends that the trademark or trade name "Kar Klinik" was included in this sale as a part of the good will of the business, thereby resulting in defendant's obtaining the permanent use of the trademark or trade name.

In support of this contention defendant cites a long line of federal jurisprudence to the effect that a trademark cannot stand alone and apart from the good will it symbolizes and that no rights in or to a trademark can be transferred or assigned apart from the business with which the trademark is associated. See: Mister Donut of America, Inc. v. Mister Donut, Inc., 418 F.2d 838 (9th Cir. 1969) and the cases therein cited.

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290 So. 2d 753, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buyers-t-serv-inc-v-car-maintenance-spec-etc-lactapp-1974.