Chayt v. Darling Retail Shops Corp.

• Decision Date: 17 June 1959
• Docket Number: Civ. No. 11089.
• Citation: 175 F. Supp. 462
• Parties: Eli H. CHAYT and Edwin S. Chayt, co-partners t/a Darling Dress Shop, v. DARLING RETAIL SHOPS CORPORATION, a corporation organized under the laws of the State of Delaware.
• Court: U.S. District Court — District of Maryland

175 F. Supp. 462

Eli H. CHAYT and Edwin S. Chayt, co-partners t/a Darling Dress Shop, v. DARLING RETAIL SHOPS CORPORATION, a corporation organized under the laws of the State of Delaware.

Civ. No. 11089.

United States District Court D. Maryland.

June 17, 1959.

COPYRIGHT MATERIAL OMITTED

Edward Pierson, Baltimore, Md., for plaintiffs.

Frank A. Kaufman and Lawrence F. Rodowsky, Baltimore, Md., for defendant.

THOMSEN, Chief Judge.

Plaintiffs, who have operated women's wearing apparel stores under the name "Darling Dress Shop" in or near Washington, D. C., for more than twenty-five years, have brought this action to enjoin defendant from opening such a store in the Washington metropolitan area under the trade name "Darling Shop" or any other name using the word "Darling". Defendant is a Delaware corporation, one of the many wholly owned subsidiaries of Darling Stores Corporation. The latter corporation and its predecessor partnerships have operated "Darling Shops" throughout the United States for nearly thirty years. Defendant filed a counterclaim seeking to enjoin plaintiffs' continued use of the word "Darling", but at the trial defendant reduced its demands to a prayer that plaintiffs be required to disclaim any connection with defendant.

Darling Stores Corporation was formed in June 1936. Its common stock was issued in exchange for the assets of Max H. Gluck and George A. Gluck, who then constituted the partnership trading as "Darling Shops". Preferred stock was publicly offered. All of the common stock of Darling Stores Corporation is now owned by Max H. Gluck. The defendant corporation, its parent corporation and the several predecessor partnerships will be referred to collectively as defendants.

Facts

In August 1929 defendants opened a retail store under the name "Darling Shop" for the sale of women's wearing apparel in Olean, N. Y. In September 1929 defendants opened a second "Darling Shop" in Warren, Ohio.

In March 1931 defendants opened "Darling Shops" in Hagerstown, Md. and Cumberland, Md., and since then have continuously operated a "Darling Shop" in each of those cities. Those stores are now operated by the defendant corporation.

In September 1931 defendants registered in Maryland the trade-mark "Darling Shop", to be used in connection with the manufacture and sale of ladies' and children's wearing apparel, underwear, millinery, accessories, fancy goods and notions, stating that the mark is to be attached to the merchandise which they sell and to signs erected on store fronts. That registration has been regularly renewed.

In December 1932 defendants applied to the United States Patent Office for registration of the trade-mark "Darling Shop" for ladies' dresses, coats and hats, and stated that the trade-mark is applied or affixed to the goods or to the packages containing the same by placing thereon a printed label on which the trade-mark is shown.

In September 1933 Eli H. Chayt, one of the plaintiffs, opened a women's wearing apparel store at 707-709 8th Street, S.E., Washington, D. C., under the name "Darling Dress Shop". At that time defendants were operating twenty-two "Darling Shops" in New York, Ohio, West Virginia, Maryland, North Carolina, Tennessee, Virginia, Michigan, Georgia and Indiana. None of those shops was located in what was then or is now the Washington metropolitan area and none of them advertised in that area.

Sometime in 1935 Chayt opened another "Darling Dress Shop" at 811 Pennsylvania Avenue, N.W. (Market Place), in Washington, which remained open for about a year. At that time defendants had extended their operations to include forty-six "Darling Shops" in various states as far west as Missouri, but defendants had no store in the Washington metropolitan area and did not advertise there.

In April 1936 defendants' attorneys wrote to plaintiffs, saying "we are informed that your use of a name very similar to our clients is primarily for the purpose of availing yourselves of the good will and reputation established by our clients in this country where it operates over fifty stores", and suggested that plaintiffs refrain from continued use of the name "Darling Dress Shops", "as otherwise our clients feel sufficiently aggrieved to take such steps in the matter as they deem necessary to afford them the protection to which they are entitled". Plaintiffs' attorney replied that "their trade name—Darling Dress Shops—has never been and will never be used to take advantage of the good will and reputation established by your clients or any other group of stores". Defendants' attorney wrote that this letter was unsatisfactory and asked that "a more definite statement issue in the form that your client will no longer continue to use the name now employed by it or any derivation thereof sufficient to cause mistake in identification or in connection with our client." Plaintiffs' attorney replied that he had been misunderstood; that he had not made any promise, and that the name which Chayt was using "is definitely based on a good will which he has established in the City of Washington". Defendants took no action and there was no further communication between the parties until September 1954.

In July 1937 the defendant corporation qualified to do business in Maryland, and in September 1937 notified the State Tax Commission that it had adopted its present name.

In 1937 defendants acquired the Goldrab chain of stores, and for about two years after August 1, 1937, defendants operated the former Goldrab store at 1207 G Street, N. W., Washington, D. C., under the name of "Darling Shop". This store was closed on June 30, 1939, when the lease expired.

In 1947 Edwin Chayt became a partner of Eli Chayt and plaintiffs opened another "Darling Dress Shop", a small store in the Coral Hills Shopping Center, in Prince George's County, Md. Coral Hills Shopping Center is a neighborhood center just over the southeast boundary of the District of Columbia, at the point where Alabama Avenue and Benning Road join to form the Marlboro Road, one of the principal roads connecting the City of Washington with communities in Prince George's County. At that time defendants were operating approximately one hundred "Darling Shops", but none of them was located in the Washington metropolitan area and none of them advertised in that area.

In October 1951 plaintiffs opened a store under the name "Darling Dress Shop" in the Langley Park Shopping Center, at the intersection of New Hampshire Avenue and University Boulevard in the northern part of Prince George's County, quite near the Silver Spring area of Montgomery County, almost due north of the Capitol. Plaintiffs' Langley store is somewhat larger than their Coral Hills store. At that time (1951) defendants were operating approximately one hundred fifteen "Darling Shops" but none of them was located in the Washington metropolitan area and none of them advertised in that area. The stores in Hagerstown and Cumberland were still the only stores which defendants operated in Maryland. Hagerstown is 70 miles from Washington, Cumberland, 135 miles.

In September 1954 attorneys for defendants wrote plaintiffs, again calling on them to cease using the name "Darling Dress Shop" and stating: "Not only does your use of the name `Darling Dress Shop' infringe upon the long-established rights of our client but can serve only to mislead the public in Maryland where our client's business is wellknown. * * * We ask that you write to us at once advising that you will cease promptly the use of the name Darling Dress Shop." Plaintiffs' counsel replied, asking for the locations and names of defendants' stores "in this area" and when each began business, so that he could state plaintiffs' position. Neither defendants nor their attorneys made any reply to that letter.

In 1955 plaintiffs closed their store on 8th Street in southeast Washington, because the neighborhood had greatly changed.

In October 1958 the defendant corporation signed a ten year lease for a store in the Penmar Shopping Center in District Heights, Prince George's County, Md. The center is on the Marlboro Road about three miles southeast from the Coral Hills Shopping Center, where one of plaintiffs' stores is located. Defendants' executive vice-president stated that he would not have signed the lease if he had thought there was any doubt about his being able to use the name "Darling"; but he knew of the correspondence between defendants' counsel and plaintiffs', and he made no effort to learn, by means of the telephone book or otherwise, whether any women's wearing apparel stores were using the name "Darling" in the Washington area. It is hard to believe that some representative of defendants had not canvassed the shopping centers in the Washington area before the lease was signed; defendants must have known of plaintiffs' stores.

Plaintiffs and defendants both specialize in low-cost women's wear. Defendants confine their operations to a narrow, deep line of such merchandise, which is often made up for them exclusively by manufacturers. Most of defendants' coats, suits, dresses and similar merchandise carry a label imprinted with the trade-mark "Darling", although other trade-marks are sometimes used. Defendants do not sell nationally advertised brands. Most of defendants' stores are known as "Darling Shops" with the word "Darling", "Darling Shop" or "Darling Shops" over the doors and on their boxes and bags. Defendants have, however, for one reason or another, operated a number of stores under other names from time to time. Defendants' executive vice-president conceded that they could operate the Prince George's County store under another name, with unmarked boxes and bags, but only at considerable inconvenience and some expense, and with a loss of the good will associated with the name "Darling Shops" by people who have dealt with defendants in other cities, have seen their stores, or heard of their...