General Adjustment Bureau, Inc. v. Fuess

• Decision Date: 17 February 1961
• Docket Number: Civ. A. No. 9059.
• Citation: 192 F. Supp. 542
• Parties: GENERAL ADJUSTMENT BUREAU, INC., Plaintiff, v. Lawrence J. FUESS and Frank D. Powell dba General Adjustment Service, Defendant.
• Court: U.S. District Court — Southern District of Texas

192 F. Supp. 542

GENERAL ADJUSTMENT BUREAU, INC., Plaintiff, v. Lawrence J. FUESS and Frank D. Powell dba General Adjustment Service, Defendant.

Civ. A. No. 9059.

United States District Court S. D. Texas, Houston Division.

February 17, 1961.

Thompson, Coe & Cousins, Vernon Coe, Dallas, Tex., Fulbright, Crooker, Freeman, Bates & Jaworski, Newton Gresham, Houston, Tex., for plaintiff.

Downman & Lott, Jap C. Lott, Houston, Tex., for defendant.

HANNAY, Chief Judge.

Findings of Fact

Plaintiff is a New York corporation, with its principal office in New York City, and with a permit to do business in the State of Texas.

Defendants are individual residents of Harris County, Texas, doing business in Harris County, Texas and elsewhere as General Adjustment Service, with its principal place of business in Houston, Texas.

The business of plaintiff is the adjustment of losses under contracts of insurance issued by fire and casualty insurance companies.

All stock shares of plaintiff are held only by stock insurance companies or a nominee thereof, and at the time of the filing of this suit there were approximately 260 of such companies.

Plaintiff is operated under a General Manager, and there are five Regional Departments, each of which is headed by a departmental General Manager, giving services in every state in the Union. Within the five regional departments, there were at the time of the filing of this suit, approximately 324 branch offices situated in 35 states and the District of Columbia. The staff included some 2,000 adjusters and over 1,700 clerks.

Plaintiff and its predecessors have been in the business of adjusting losses for more than 40 years and have emphasized in the building of this service the knowledge, ability and integrity of each associate of the organization. The manner in which plaintiff conducts its assignments is an important factor in developing good will toward the entire insurance business, and as a result of excellent service plaintiff has a reputation for knowledge, ability and integrity.

The name of the most immediate predecessor of General Adjustment Bureau, Inc. was Fire Companies Adjustment Bureau, Inc., which latter name was used from the period beginning about 1930 until June, 1947, at which time the Fire Companies Adjustment Bureau, Inc. became General Adjustment Bureau, Inc. Since June, 1947, plaintiff has had that name in continuous use, and its services have been offered to its patrons under same. Services have been performed for member and non-member companies during the period of plaintiff's existence as an adjustment bureau.

The Southwestern Department of General Adjustment Bureau, Inc. has its headquarters at Dallas, Texas, and includes the states of Texas, Oklahoma, Arkansas and Louisiana. One of the branch offices is located in Houston, Texas.

Long before the acts of the defendant herein complained of, plaintiff has been adjusting claims and rendering its services under the name General Adjustment Bureau, Inc., and the value to it of the unimpaired use of such name, and the value to it of the use of its name without unfair competition from defendants, or without infringement upon its right to use its name by defendants, is in excess of the amount of $3,000, exclusive of interest and costs. Plaintiff under such name handled claims in the years 1953 and 1954 as follows:

                                                         No. of Claims    Amount of Money
                        Territory                Year       Handled           Paid Out   
                In the whole United States       1953       905,089       $400,173,037.00
                In the whole United States       1954     1,056,775        440,041,226.00
                Southwestern Department          1953       191,351         77,673,576.00
                Southwestern Department          1954       158,571         72,992,378.00
                Houston Branch Office            1953         4,302            161,674.00
                Houston Branch Office            1954         3,895            179,021.00
                

Plaintiff employed in its Houston Office at the time of the filing of this suit 18 persons, 11 of whom were adjusters; in its Southwestern Department over 600 employees; and in the United States approximately 3,700 employees.

Defendants, without the consent of plaintiff, began about December, 1954, to use the name "General Adjustment Service" as a partnership owned and operated by Lawrence J. Fuess and Frank D. Powell. The services offered under such name were complete investigations and multiple line insurance adjustments. Since so beginning, defendants have been engaged in the business aforesaid in direct competition with plaintiff. The offering of the services of defendants under the name General Adjustment Service makes use of the two word combination "General Adjustment" in the offer of such services and in the handling of adjustments in a manner which plaintiff claims is confusing to persons dealing with both plaintiff and defendants by reason of the similarity of name of defendants' organization to the name of plaintiff. Plaintiff claims that this similarity is such as to constitute unfair competition because plaintiff says that the words "General Adjustment" in that combination have come to have a secondary meaning in the United States, including Harris County and adjoining areas, as referring to the services of the plaintiff. Those persons having claims for adjustment plaintiff claims rely upon services rendered by plaintiff because of its knowledge, ability and integrity for effecting equitable adjustment of claims.

Plaintiff further claims that the use of the name adopted by defendants for advertising, furnishing and handling of its service is such as to constitute an infringement of plaintiff's trade-name and trade rights, and that same constitutes an unfair practice by defendants against plaintiff's business and good will, and results in a deflection of those who attempt to procure the services of plaintiff but through error or misunderstanding procure the services of the defendants. Plaintiff says that because of the confliction of names, the similarity of names, and the identity of the two word combination "General Adjustment" appearing in such names is misleading and should be enjoined.

The actions of defendants in the adoption and the use of the name General Adjustment Service came to the attention of the plaintiff on or about December 20, 1954, and on December 28, 1954 defendants were placed upon notice by plaintiff that the General Adjustment Bureau, Inc. could and it would be damaged by infringement upon its good will by forwarding the following letter to defendants:

"December 28, 1954 "Registered—Return Receipt Requested "Mr. Frank D. Powell, and "Mr. L. J. Fuess "2524 Tangley Street "Houston, Texas "Gentlemen:

"We represent the General Adjustment Bureau, Inc., a corporation, in the writing of this letter. The subject to which the letter pertains has been referred to us for study and handling.

"It has come to the attention of the management of General Adjustment Bureau that you are operating under the assumed name "General Adjustment Service". We further understand that you are partners in the handling of the adjustment of casualty, workmen's compensation, fire and allied lines, bond and inland marine claims.

"The General Adjustment Bureau is a corporation that operates nationwide, and over a period of many years has built up a nation-wide reputation and good will. The name has come to have a secondary meaning which entitles it to protection from encroachment by other names so similar as to mislead the public.

"It is our opinion after a study of the authorities and a consideration of the similarity of your name to that of General Adjustment Bureau that you can be restrained through court action from continuing to use the name `General Adjustment Service'.

"At this writing we have not been advised of any specific damage as a result of your operations, but it goes without saying that the General Adjustment Bureau could be damaged by any infringement upon the good will that it has created by its long service to people in the insurance business. We are aware of the fact that your announcement of the opening of your business has only recently been made, one such announcement dated December 17,

1954 having come to your attention. Since your announcement points out that you are experienced and skillfully trained to

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