Opinion
No. A-08-404.
Filed January 6, 2009.
Appeal from the District Court for Platte County: ROBERT R. STEINKE, Judge. Affirmed.
Stan A. Emerson, of Sipple, Hansen, Emerson Schumacher, for appellant.
Jeffrey L. Hrouda for appellees.
Before: IRWIN, CARLSON, and CASSEL, Judges.
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. OF PRAC. 2E.
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
INTRODUCTION
Preister Well Backhoe, Inc. (Well Backhoe), filed a complaint alleging that Bob Preister, Chad Preister, and Preister Excavating, Inc. (collectively the appellees), had infringed upon its trade name by using the trade name Preister Excavating, Inc. (hereinafter Excavating). The district court denied Well Backhoe's request for a permanent injunction. Because the two trade names are easily distinguished, we affirm the district court's order denying the injunction.
BACKGROUND
Greg Preister owns Well Backhoe, a business which has used its corporate name as a trade name since its incorporation in 1999. Well Backhoe was originally established in the 1960's and was known by other trade names in the years prior to its incorporation. Bob and Chad operate Excavating, which was incorporated in 2004. Well Backhoe and Excavating offer substantially the same services. Both businesses offer backhoe, trenching, well drilling, well repair, irrigation line, water line, electrical line, septic system, and residential plumbing services. Excavating offers sprinkler installation service, but Well Backhoe only occasionally performs this service. Both sell and install Goulds pumps. In addition, both businesses serve customers in a nearly identical trade area.
The businesses are located approximately 6 miles apart. Well Backhoe's main office is currently in Cornlea, Nebraska, which has the same ZIP code as Humphrey, Nebraska. Excavating has its main office in Humphrey.
There are other commonalities between the two businesses. Bob and Greg are first cousins. Further, Bob has previously worked for Well Backhoe and its predecessor. From 1995 to 1996, Bob worked for Well Backhoe's predecessor, and from 2001 to March 2003, Bob worked for Well Backhoe. In the more distant past, Bob's father worked for Well Backhoe.
After Bob stopped working for Well Backhoe in 2003, he opened his own business which, until 2004, performed mostly excavation work. Prior to incorporating in 2004, Bob called his business Preister Excavating and Building Maintenance. From 2004 to 2006, Bob's business expanded its services to the extent listed above.
In 2006, Bob took steps to change his business' name from "Preister Excavating, Inc.," to Preister Excavating Well Service, Inc., to reflect the additional services that his business offered. He placed some advertisements, including telephone book advertisements, using this name and started to work on new incorporation documents containing this name. Bob halted all efforts to market his business as Preister Excavating Well Service upon receiving a letter from Gary's attorney requesting that he cease to do so. Bob reported that it was too late to change some advertisements placed in the 2006-07 telephone book, but that the next time he placed advertisements, he used only the name "Preister Excavating, Inc."
On June 27, 2006, Well Backhoe filed a "Complaint for Injunction" to request that the appellees be enjoined from using the trade names "Preister Excavating, Inc., or Preister Excavating Well Service, or Preister Excavating Building Maintenance or any other name which is . . . similar to . . . `Preister Well Backhoe, Inc.'"
On January 17, 2008, the parties tried this case before the district court. At the proceeding, Well Backhoe adduced evidence regarding public confusion of the two businesses. The appellees adduced evidence that the two businesses were easily distinguished. The court found that "although the two corporate business entities are located in close geographic proximity, compete in similar services, and are owned and operated by Preister family members, . . . a careful examination of the [trade] names . . . would prevent the public from being deceived" and denied Well Backhoe's request for an injunction.
Well Backhoe timely appeals.
ASSIGNMENTS OF ERROR
Well Backhoe alleges six assignments of error, which we restate and consolidate as follows: The trial court erred in failing to find that the appellees infringed on its trade name and in failing to award attorney fees and costs. We will not consider Well Backhoe's restated second assignment because it was not argued in the brief. An appellate court will not review errors that were not assigned and argued in a party's brief. Amanda C. v. Case, 275 Neb. 757, 749 N.W.2d 429 (2008).
STANDARD OF REVIEW
An action for injunction sounds in equity. Equitable Bldg. Loan v. Equitable Mortgage, 11 Neb. App. 850, 662 N.W.2d 205 (2003). In an appeal of an equitable action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another. Id.
ANALYSIS
Well Backhoe contends that because its business is substantially similar to the appellees' business, it is entitled to relief enjoining the appellees from using their current and past trade names or any other trade name that is substantially similar to Well Backhoe's name.
Trade name protection proscribes one party from availing himself of another's reputation through the use of a similar trade name. See Personal Finance Co. v. Personal Loan Service, 133 Neb. 373, 275 N.W. 324 (1937). In a case for trade name infringement, the plaintiff has the burden to prove by a preponderance of the evidence the existence of (1) a valid trade name entitled to protection and (2) a substantial similarity between the plaintiff's and the defendant's names, which would result in either actual or probable deception or confusion by ordinary persons dealing with ordinary caution. Nebraska Irrigation, Inc. v. Koch, 246 Neb. 856, 523 N.W.2d 676 (1994).
We need not determine whether Well Backhoe has met the first prong of this test because we resolve this appeal on other grounds. We assume without deciding that "Preister Well Backhoe, Inc." is a valid trade name.
Well Backhoe argues that the district court erred in finding that it did not fulfill the second prong of the test. The second prong requires the plaintiff to prove that a likelihood for confusion exists. See ADT Security Servs. v. A/C Security Systems, 15 Neb. App. 666, 736 N.W.2d 737 (2007). This requires that the plaintiff "present[] circumstances from which courts might conclude that persons are likely to transact business with one party under the belief that they are dealing with another party." Id. at 688, 736 N.W.2d at 760 (quoting Nebraska Irrigation, Inc., supra). Although there are no precise rules regarding the circumstances constituting trade name confusion, we consider a nonexclusive list of factors. These include
(1) degree of similarity in the products offered for sale; (2) geographic separation of the two enterprises and the extent to which their trade areas overlap; (3) extent to which the stores are in actual competition; (4) duration of use without actual confusion; and (5) actual similarity, visually and phonetically, between the two trade names.
ADT Security Servs., 15 Neb. App. at 689, 736 N.W.2d at 760.
The parties primarily dispute whether there was "actual confusion" and the extent to which the trade names "Preister Well and Backhoe, Inc." and "Preister Excavating, Inc." are similar. They do not dispute that the two businesses offer similar products and services, are geographically close, and have nearly identical trade areas. Because the parties offer the exact same products and services in the same trade area, we assume that they are in competition.
Well Backhoe argues that there has been ongoing confusion because customers, suppliers, and even the State of Nebraska have confused the two businesses. Greg testified regarding customer confusion. He stated that customers believe that they have hired his business when they have actually hired Excavating. Regarding Bob, Greg testified that customers "think either he works for me or he is me, he is our business and that we were called out to perform the work." Greg testified that on average, he receives one call a week from customers mistakenly believing that his business was Excavating. An employee of Well Backhoe testified that she has received mail, telephone calls, and a fax that were for Excavating.
Most of the particular instances of mail and fax confusion were not related to customers. A longtime Well Backhoe customer testified that the advertisement in the white pages of a 2006-07 telephone book caused her to inadvertently call Excavating when she intended to call Well Backhoe. She stated that when she looked at the telephone book a second time, she realized that she had made a mistake. Greg offered evidence, which Bob corroborated, that suggested that another customer believed that Well Backhoe had performed work but that the work had actually been performed by Excavating.
The appellees adduced evidence that there has been no actual confusion because a reasonably prudent person would be able to discern that the entities were entirely separate. Bob stated that he did not intentionally advertise or represent that his business was related to Well Backhoe and never used Gary's name for his business. The appellees adduced evidence that their ads would allow customers to easily distinguish one business from the other. The parties' 2007-08 telephone book advertisements showed that Well Backhoe and Excavating had different addresses, telephone numbers, and ownership.
Finally, we must examine the similarity of the two trade names. This is the most important factor in determining whether trade name infringement has actually occurred. See, Equitable Bldg. Loan v. Equitable Mortgage, 11 Neb. App. 850, 662 N.W.2d 205 (2003); Dahms v. Jacobs, 201 Neb 745, 272 N.W.2d 43 (1978). We first observe that that the Nebraska Secretary of State determined that the corporate name "Preister Excavating, Inc." was "available" after having approved "Preister Well Backhoe, Inc." Both parties use their corporate name as their trade name. In considering the similarity of the two entities' names, we note that both contain the surname "Preister," but are otherwise completely distinct. Well Backhoe contends that because the terms "backhoe" and "excavating" describe similar services, this would cause confusion. We disagree because the words are entirely different in spelling and appearance.
Trade name confusion does not occur where trade names are similar but clearly distinguishable. One trade name is not an infringement of another if ordinary attention of persons or customers would disclose the differences. Dahms, supra. In Dahms, the court accorded evidentiary value to the fact that the Secretary of State had approved of the two similar trade names `"The Depot" and "The Denim Depot" — and thus had implicitly determined that the names were distinguishable. The court concluded pursuant to this evidence and its own inquiry that the names were "distinguishable" and that thus no trade infringement had occurred.
We conclude that there was no trade name infringement because the trade names in the instant case are no more likely to create confusion than those in Dahms. As in Dahms, the trade names in the instant case are visually distinct and the Secretary of State has approved of both names.
Although some customers may have been confused regarding the identity of the two businesses, factors unrelated to trade names may have caused the confusion. The owners of the two separate entities are related and share the same last name. Bob worked for Well Backhoe from 2001 to 2003. Bob's father also worked for Well Backhoe's predecessor in the more distant past.
We also find no basis for relief concerning Excavating's prior trade names. The appellees voluntarily dropped these trade names. Generally, "[i]njunctive relief will not lie to prevent that which in good faith has been discontinued, in the absence of any evidence that the acts are likely to be repeated in the future. . . ." 43 C.J.S. Injunctions § 25 at 810 (1978). The record demonstrates that the appellees entirely ceased using "Preister Excavating Well" in 2006 upon receiving a letter from Well Backhoe's attorney. The appellees discontinued the use of all other prior trade names of their own accord. There is no evidence suggesting that Excavating has any intention to resume usage of the discontinued trade names. Therefore, we find that injunctive relief will not lie to prevent the use of Excavating's prior trade names.
CONCLUSION
Because the parties' trade names are easily distinguished, we find that Well Backhoe is not entitled to an injunction against the appellees for trade name infringement. We therefore affirm the order of the district court.
AFFIRMED.