La Habra Products, Inc. v. Patio Industries (In Re Patio Industries)

220 B.R. 672, 1996 U.S. Dist. LEXIS 22132, 1996 WL 938929
CourtDistrict Court, C.D. California
DecidedOctober 15, 1996
DocketED CV 95-00388-RT, Bankruptcy No. SB 94-23827-MG
StatusPublished
Cited by1 cases

This text of 220 B.R. 672 (La Habra Products, Inc. v. Patio Industries (In Re Patio Industries)) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
La Habra Products, Inc. v. Patio Industries (In Re Patio Industries), 220 B.R. 672, 1996 U.S. Dist. LEXIS 22132, 1996 WL 938929 (C.D. Cal. 1996).

Opinion

*675 OPINION AFFIRMING ORDER GRANTING PERMANENT INJUNCTION IN FAVOR OF LA HABRA PRODUCTS AND AGAINST PATIO INDUSTRIES

TIMLIN, District Judge.

I.

PROCEDURAL HISTORY

Patio Industries (Patio) is the debtor-in-possession in a Chapter 11 ease (Bankruptcy Court Case No. SB 94-23827 MG). Randall Humphreys (Randall) and Robert Hum-phreys (Robert) are apparently controlling principals, shareholders, and/or directors of Patio. Patio and La Habra Products Inc. (La Habra) both manufacture and distribute exterior stucco.

On or about January 24, 1995, La Habra filed an adversary action against Patio, Randall and Robert (collectively Patio) alleging that in connection with its exterior stucco business, Patio had engaged in conduct which constituted:

(1) trade dress infringement under 15 U.S.C. section 1125(a);
(2) unfair competition under 15 U.S.C. section 1125(a);
(3) unfair competition under California Business and Professions Code sections 17000 et seq.;
(4) unjust enrichment;
(5) dilution of trade name under California Business and Professions Code section 14330;
(6) intentional interference with business advantage; and
(7) intentional interference with contract.

The complaint sought injunctive relief; an accounting; a recall of all infringing Patio advertising materials; delivery of same, plus the means of producing them, to La Habra; a copy of all business records related to Patio’s advertising, sale, and distribution of exterior stucco; punitive damages, attorney fees, costs, and such other relief as might be just and proper.

On February 9, 1995 the bankruptcy court heard La Habra’s application for a temporary restraining order.- The application asserted that Patio was infringing La Habra’s trade dress, and was engaging in unfair competition under both state and federal law. The application stated that it was supported by declarations from James Powell, Jerry Hannifan, David Hernandez, Ted Jones and Patricia Holbrook.

At that hearing, the bankruptcy court announced its intent to grant the TRO. It discussed with both sides’ attorneys how Patio could change the format of its brochures so that, in the court’s opinion, the brochure would not constitute an infringement of La Habra’s trade dress. It told Patio’s attorney to submit a copy of the changed brochure to La Habra’s counsel to make sure there was no disagreement over whether the changes were sufficient to satisfy La Habra. (Transcript 39-61.)

Also at the February 9 hearing, Patio waived its right to have a preliminary injunction hearing within 15 days, and the court set a tentative date of March 28 on which the parties could return for “further marching orders” if the parties had not resolved their differences. (Transcript 61-62.) The court also indicated that its decision essentially resolved the 'ease, and that therefore once the preliminary injunction had been complied with, it would become permanent. Patio did not object to this method of resolving the action, nor did it demand an opportunity to put on additional evidence or to go to a jury trial. (Transcript 34:19-24; 37:3-6; 55:24-56:2.) 1

On March 6, 1995, the bankruptcy court signed an order temporarily restraining Patio from “utilizing, making, manufacturing or distributing any advertising or packaging which is similar to, or which closely resembles and imitates, the advertising or packaging for any products of La Habra Products, Inc., including without limitation Patio’s brochure entitled ‘Rainbow Stucco — World of *676 Color,’ ” but allowing Patio for a limited time to utilize its existing brochure if it covered the wording on the back page of the brochures with new wording sufficiently different from that used by La Habra so that no confusion would occur. In addition, Patio was ordered not to use a plasterer icon on the second and third pages of its brochure, to change the back page as noted above, and to change the configuration of the color chips/samples of stucco color available.

On August 21,1995, the bankruptcy court’s order granting a permanent injunction against Patio was entered. 2 That injunction provides, in relevant part:

“[T]he court finds that this is a proper case for granting of a permanent injunction and that unless the injunction prayed for in the complaint and application be granted irreparable injury will result [to La Habra]:

“IT IS ORDERED that [Patio] ... shall be and hereby [is] enjoined permanently from acting in, committing or performing, either directly or indirectly, any of the following:

“1. From utilizing, making, manufacturing or distributing any advertising or packaging which is similar to, or which closely resembles and imitates the advertising or packaging for any products of La Habra Products, Inc. including but not limited to the brochure entitled ‘Rainbow Stucco— World of Color.’

“2. This order is made on the basis that [Patio] intentionally copied the La Habra Products, Inc. Stucco Brochure and that the similarity of [Patio’s] brochures to those of [La Habra] created confusion in the marketplace.

“3. In the event that the permanent injunction is violated by [Patio], the Court will consider significant sanctions against [Patio].”

On August 29, 1995, Patio filed a timely notice of appeal from that order.

II.

APPELLATE JURISDICTION, STANDARD OF REVIEW, AND APPEL LANT’S BURDEN OF AFFIRMATIVELY SHOWING PREJUDICIAL ERROR

The United States District Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 158(a)(2). See also In re The Chisholm Company, 166 B.R. 706, 712 (D.Colo.1994). An appeal from a permanent injunction is proper under 28 U.S.C. section 1292(a)(1) even though there is no final judgment in the action itself.

On appeal, the district court reviews the bankruptcy, court’s decision by applying a clearly erroneous standard of review to findings of fact and a de novo standard of review to conclusions of law. In re Daniels-Head & Associates, 819 F.2d 914, 919 (9th Cir.1987); Harbour Lights Marina, Inc. v. Wandstrat, 153 B.R. 781, 782 (S.D.Ohio 1993).

Appeals to the district court are governed by Bankruptcy Rules 8001 through 8019, as well as by Rule 9005 related to harmless error. Thus, the parties are required to provide references to the record when; for example, they claim that a certain fact was found to be true or that there was evidence in support of a finding. Bankr.Rule 8010.

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Bluebook (online)
220 B.R. 672, 1996 U.S. Dist. LEXIS 22132, 1996 WL 938929, Counsel Stack Legal Research, https://law.counselstack.com/opinion/la-habra-products-inc-v-patio-industries-in-re-patio-industries-cacd-1996.