Carroll v. Lordy

• Decision Date: 20 January 1982
• Docket Number: No. 4-581A13,4-581A13
• Citation: 431 N.E.2d 118
• Parties: Art CARROLL, Appellant (Plaintiff Below), v. William LORDY, Appellee (Defendant Below), v. Edwin J. SIMCOX, Appellee (Cross-Defendant Below).
• Court: Indiana Appellate Court

Page 118

431 N.E.2d 118

217 U.S.P.Q. 723

Art CARROLL, Appellant (Plaintiff Below), v. William LORDY, Appellee (Defendant Below), v. Edwin J. SIMCOX, Appellee (Cross-Defendant Below).

No. 4-581A13.

Court of Appeals of Indiana, Fourth District.

Jan. 20, 1982.

Thomas L. Hulse, Al S. Woolbert, Woolbert, Cunningham & Hulse, Anderson, for appellant.

Fred G. Yelton, Jr., Anderson, for appellee.

CONOVER, Judge.

STATEMENT OF THE CASE

Appellant Art Carroll filed a complaint in the Madison Superior Court, Division 1, charging William Lordy with violations of Carroll's registered trademark "elephant ears." The complaint asked for a temporary restraining order, injunctive relief and damages. A restraining order was granted on July 3, 1979, and notice was given of a hearing to be held on July 11, 1979. At that hearing Lordy was found to be in violation of the restraining order. The case was continued to permit Lordy to retain counsel. Lordy's motion to dissolve the restraining order was granted on December 7, 1979.

Lordy filed a motion to join the Indiana Secretary of State as a third party defendant. This motion was granted and Lordy cross-complained against the Secretary of State asking that the term "elephant ears" be declared a generic term and its registration cancelled. Lordy answered Carroll's complaint and filed a counterclaim on December 14, 1979. The counterclaim alleged that Carroll intentionally and maliciously sought and obtained a restraining order without notice against him without complying with the requirements of Trial Rule 65. Lordy asked for compensatory and punitive damages.

Lordy filed a motion for summary judgment on June 17, 1980, upon the complaint, cross-complaint and counterclaim. On July 25, 1980, the court granted the motion for summary judgment upon the complaint and cross-complaint and entered a default judgment upon the counterclaim against Carroll for not making a responsive pleading. The summary judgment held there was no material issue of fact, the previous determination of the United States Commissioner of Patents and Trademarks declaring "elephant ears" to be a generic term was res judicata, and that "elephant ears" was a generic term under the laws of Indiana. The court ordered cancellation of the Indiana trademark registration and set a trial date on the issue of damages. Trial was held on November 14, 1980, and judgment entered on December 12, 1980, awarding Lordy actual and punitive damages. Carroll timely filed his motion to correct errors which was overruled and now takes this appeal.

We affirm in part, reverse in part and remand.

ISSUES PRESENTED FOR REVIEW

1. Did the trial court err in granting Lordy's motion for summary judgment?

2. Was there error in entry of the default judgment?

3. Were punitive damages improperly awarded?

4. Was Carroll's motion to correct errors timely filed?

Both appellant Carroll and appellee Lordy are engaged in the business of selling a pastry known as elephant ears. Like many other itinerant vendors, Carroll and Lordy travel the fair circuit vending their goods to patrons of these fairs. It was during the Anderson Free Fair in 1979 that Carroll filed a complaint against Lordy for using his registered Indiana trademark "elephant ears" to identify Lordy's products.

Lordy was served with a temporary restraining order prohibiting him from using the term "elephant ears" to describe his pastry. Lordy changed the name on his signs to "Monster Ears." Although other vendors at the Anderson fair were selling under the name "elephant ears" Lordy was the only one upon whom a restraining order was sought.

The evidence shows that "elephant ears" first became the subject of Indiana trademark registration in August, 1972. The trademark was registered to Larry and Karn Bosley who assigned the trademark to Carroll in October 1973.

After changing his signs Lordy testified that his business declined sharply. After leaving the Anderson Fair Lordy changed his signs back to "elephant ears" even though the restraining order was issued statewide. Lordy also testified he was forced to abandon his planned Indiana fair schedule and take fair dates in other states where elephant ears are less popular. ¹ As a result of the changed schedule Lordy claims he lost thousands of dollars in profits and damage to his advertising signs.

In the affidavits submitted pursuant to their motion for summary judgment Mr. and Mrs. Lordy both stated they had been familiar with the term "elephant ears" used to describe a pastry product since 1965. They also stated they had observed at least ten other "elephant ear" concessions at the Anderson fair in addition to Lordy and Carroll.

A third affidavit was submitted by John Libbert, a member of the Board of Directors of the Outdoor Amusement Business Association, Inc. In his affidavit Libbert asserted that he had been familiar with a fried pastry product known as elephant ears since the late 1960's. Libbert and the Lordy's all stated they believed the term "elephant ears" to be generic. Attached to Libbert's affidavit were numerous exhibits supporting his sworn statements. These exhibits were comprised of letters, pictures and excerpts from newspapers. These affidavits and exhibits formed the basis for the ruling that "elephant ears" was a generic term. Libbert's exhibits also contained material relating to a previous ruling by the Commissioner of Patents and Trademarks holding that "elephant ears" was incapable of federal registration as a generic term. This is apparently the material that supported the court's ruling that the finding of the Commissioner of Patents and Trademarks was res judicata.

After the entry of summary judgment and default judgment trial was held on the issue of damages. Lordy was awarded $2,750.00 actual damages and $4,250.00 punitive damages.

I. SUMMARY JUDGMENT

Carroll makes several arguments concerning the propriety of entering summary judgment. They will be treated in turn.

A. Material Issue of Fact

When a motion for summary judgment is made it is the duty of the moving party to show that no material issue of fact remains in dispute. Ind.Rules of Procedure, Trial Rule 56. When reviewing a grant of summary judgment we must determine if the movant has shown the absence of a material issue of fact and if the law was correctly applied by the trial court. Lynch v. Indiana State University Board of Trustees, (1978) Ind.App., 378 N.E.2d 900, 902. Any doubts are resolved against the movant. Barr v. State, (1980) Ind.App., 400 N.E.2d 1149, 1150. Although Carroll did not oppose the motion for summary judgment this does not entitle Lordy to an automatic summary judgment. The moving party still bears the burden of showing the propriety of summary judgment. T.R. 56(C); Levy Co., Inc. v. State Board of Tax Commissioners, (1977) 173 Ind.App. 667, 365 N.E.2d 796, 798; Tekulve v. Turner, (1979) Ind.App., 391 N.E.2d 673.

Carroll contends the affidavits of the Lordys and Libbert do not demonstrate a lack of any material issue of fact. A fact is "material for purposes of summary judgment if it facilitates resolution of any of the issues involved." Carrow v. Streeter, (1980) Ind.App., 410 N.E.2d 1369. The factual issue resolved by the summary judgment was the genericness of the term "elephant ears." Therefore we must look to the affidavits submitted to determine if they settle the question of the generic use of the term elephant ears.

The affidavits consistently testify that "elephant ears" is used in a descriptive manner to describe a deep fried pastry and has been used in that manner since 1965. The exhibits attached to Libbert's affidavits present an overwhelming and uncontradicted witness to the use of "elephant ears" as a generic term. Nothing in the record opposes the evidence and we are forced to conclude the factual issue was not in dispute after the submission of the affidavits, all that remained for the court to do was to apply the law to the facts.

B. Affidavits

Carroll makes two related arguments concerning the affidavits submitted with the motion for summary judgment. He challenges the affidavits as containing inadmissible conclusions and opposes certain documents attached to Libbert's affidavit as inadmissible hearsay.

Carroll's position is that conclusions or opinions are never admissible in evidence. While this rule was once followed inflexibly by the courts of Indiana, the rule has been modified so substantially that the former rule is now the exception. A trial judge may in an appropriate case, permit opinion testimony on any ultimate fact issue. State v. Bouras, (1981) Ind.App., 423 N.E.2d 741, 745. In Rieth-Riley Construction Co., Inc. v. McCarrell, (1975) 163 Ind.App. 613, 325 N.E.2d 844, the court, after noting the continual erosion of the rigid exclusionary approach to opinions said,

"Thus the per se exclusion rule has been abrogated, and the trial judge at his discretion, may in an appropriate case, permit such evidence. In exercising his discretion, the trial judge should consider the nature of the issue and the offered opinion in light of all attendant circumstances of the particular case. This court will review such an exercise in judicial discretion only for an abuse thereof."

Id. 325 N.E.2d at 852-53.

An abuse of discretion which would permit a reviewing court to overturn the ruling of the trial court is "an erroneous conclusion and judgment, one clearly against the logic and effect of facts and circumstances before the court or the reasonable, probable and actual deductions to be drawn therefrom." Godfrey v. State, (1978) Ind.App., 380 N.E.2d 621, 623; Dunbar v. Dunbar, (1969) 145 Ind.App. 479, 483, 251 N.E.2d 468, 471.

The genericness of a term is an ultimate fact issue. Any given term's proper categorization is a factual issue. Salton, Inc. v. Cornwall, (D.N.J.1979) 477 F.Supp. 975. The affiants were competent to form opinions about the term "elephant ears." They have traveled...