Hanna v. Ken's Foods, Inc.
| Citation | 2005 MBAR 667 |
| Decision Date | 26 January 2006 |
| Docket Number | 033815 |
| Parties | Michael Hanna on behalf of Kenneth M. Hanna v. Ken's Foods, Inc. et al.[1] |
| Court | Massachusetts Superior Court |
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): MacLeod-Mancuso, Bonnie H, J.
This case arises from the alleged unauthorized use of Kenneth M Hanna's ("Ken Hanna") name, image and likeness by the defendant Ken's Foods, Inc., ("KFI"). Michael Hanna, Ken Hanna's son, has brought this suit on behalf of his father's estate. The matter comes before this Court on the parties' cross-motions for summary judgment on the plaintiff's claims against KFI. The outstanding counts against KFI include: (I) Violation of G.L.c. 110, §4, seeking monetary relief; (III) Violation of G.L.c. 110, §4, seeking declaratory relief; (V) Violation of G.L.c. 110, §4, seeking injunctive relief; (VII) Unjust Enrichment; (IX) Violation of G.L.c. 93A, §11; (X) Unfair Competition [Ken Hanna]; and (XI) Unfair Competition [Legal Representatives of the Estate of Ken Hanna]. For the reasons stated herein, KFI's Motion for Summary Judgment is ALLOWED as to all counts and the Plaintiff's Cross-Motion for Summary Judgment is DENIED as to all counts.
In the early 1940s, Ken Hanna and his wife Florence Hanna purchased a restaurant in Framingham, Massachusetts known as McHale's Diner. The restaurant's legal name at the time was Cafe 41. In 1954, the Hannas legally changed the name of their restaurant to Ken's Steakhouse, Inc. ("KSH"). The restaurant proved to be a successful business venture for the Hannas. By all accounts, Ken Hanna's charm and affability in his capacity as a host was a substantial reason for the restaurant's success. Additionally, the restaurant's salad dressings had garnered some local renown and had grown in popularity among the restaurant's patrons.
In 1958, Ken and Florence Hanna along with Frank Crowley, a grocery store executive, and his wife, Louise Crowley, formed a corporation under the name Ken's Food Inc.[2] KFI was established with the intention of manufacturing, packaging and selling commercially the popular salad dressings as well as other food products. The four original founders each received a quarter share in the newly formed corporation.[3] In May 1958, Ken Hanna wrote a letter to the Massachusetts Department of Corporations, which stated:
I, Kenneth M. Hanna majority stockholder of "KEN'S STEAKHOUSE, INC." and commonly known and doing business as "KEN'S" authorizes the use of the name "KEN'S FOOD, INC." to the corporation recently formed and seeking the use of that name. My wife and I are majority stock holders of the corporation formed and known as "KEN'S FOOD, INC."
Ken Hanna held the position of President of KFI from its founding until 1983, and, thereafter, served as Chairman of KFI's Board of Directors until 1992. In short, KFI has proven to be a successful business venture as well. For example, in 2001 KFI claims to have shipped $87.8 million dollars worth of salad dressing products throughout 74% of the U.S. market.
In 1969, Morris Goldberg ("Goldberg"), the Hannas' personal tax consultant calculated the value of the Hannas' KFI stock. Goldberg determined the value of the Hannas' stock in KFI to be $222,800. Included in Goldberg's estimate was a determination that KFI's "Trade name and Company Name value" was $43,600. Goldberg stated in a letter to the Hannas that the $43,600 estimate included the value of "[t]he giving up of the use of the name 'Ken's Foods.' "
On April 8, 1970, Florence Hanna sold seventeen of her twenty-five shares in the corporation. In June 1973, Ken and Florence Hanna sold their remaining shares in KFI to their son, Timothy Hanna, and their son-in-law, Joseph Shay, for $155,000. This sale price was based on the valuation provided to the Hannas by Goldberg, which was lowered slightly due to Florence Hanna's previous stock sales, which had extinguished the Hannas' controlling interest in the company, thereby reducing the value of the Hannas' stock.
While Ken Hanna was a stockholder and/or officer of KFI he recorded a number of advertisements for the company's products. Ken Hanna also appeared in numerous print advertisements promoting KFI's products. These advertisements generally described the history of KFI, including Ken and Florence Hanna's role in the founding and development of the corporation. Additionally, the labels affixed to KFI's products use Ken Hanna's name and include a statement that reads, "Satisfaction or your money back from Ken." This label has been used on KFI's salad dressings for approximately thirty years and continues to be used today. At the time that these advertisements and labels were initially recorded or printed by KFI, Ken Hanna signed shareholder meeting minutes, which "ratified, approved, and adopted [the actions of the officers and directors of KFI] as and for the action of the Corporation."[4]
In 1979, KFI registered the trademarks "Ken's" and "Ken's Steak House" with the U.S. Patent and Trademark Office. In 1985, KFI and KSH jointly opposed a trademark registration by a third party, "Ken's Pizzeria." According to a deposition given by KFI's and KSH's joint counsel, William Scofield ("Scofield"), KFI and KSH jointly alleged that the trademark "Ken's" had been used as early as the 1940s. KFI and KSH were apparently successful in their opposition to the third party's registration of its trademark. KFI and KSH are presently engaged in a separate legal dispute in federal court regarding the use of the trademarks "Ken's" and "Ken's Steak House."
In November 1995, Ken Hanna died. Michael Puzo ("Puzo"), an attorney, was named the administrator of Ken Hanna's estate. In 1997, Michael Hanna requested information from KFI regarding its authority to use Ken Hanna's name to market its food products. KFI claimed to have authority to use Ken Hanna's name and referred Michael Hanna to its trademark registration rights. In 2001, believing that KFI lacked the proper authority to use his father's name to market its products, Michael Hanna requested that Puzo bring legal action against KFI on behalf of Ken Hanna's estate. Subsequently, Puzo declined to bring suit against KFI based on KFI's claim of lawful authority as well as the expected expense and complexity of such a suit. Michael Hanna, unhappy with Puzo's decision, brought a number of claims against KFI on behalf of his father's estate under G.L.c. 230, §5, which are the subject of the parties' cross-motions for summary judgment.
Summary judgment shall be granted where there are no genuine issues as to any material fact and where the moving party is entitled to judgment as a matter of law. Mass.R.Civ.P. 56(c); Cassesso v. Commissioner of Corr., 390 Mass. 419, 422 (1983); Community Nat'l Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue, and that the summary judgment record entitles the moving party to judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). The moving party may satisfy this burden either by submitting affirmative evidence that negates an essential element of the opposing party's case or by demonstrating that the opposing party has no reasonable expectation of proving an essential element of his case at trial. Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). The mere assertion of a genuine factual dispute by the nonmoving party, "absent factual material upon which the assertion might be proved, is not sufficient to defeat summary judgment." Massachusetts Mun. Wholesale Elec. Co. v. City of Springfield, 49 Mass.App.Ct. 108, 113 (2000) (additional citations omitted).
Count I, III and V: Violation of G.L.c. 110, §4;[5]
Count IX: Violation of G.L.c. 93A, §11.
Counts I, III and V of the plaintiff's complaint directly allege that KFI has violated G.L.c. 110, §4, respectively seeking monetary, declaratory and injunctive relief. Similarly, Count IX, which alleges a violation of G.L.c. 93A, hinges on a derivative finding that KFI has violated G.L.c. 110, §4. This Court finds, as a matter of equity, that KFI has not violated G.L.c. 110, §4. Accordingly, all of the aforementioned plaintiff's claims, which depend on a finding that KFI violated G.L.c. 110, §4, must fail as a matter of law.
KFI has correctly directed this Court's attention to the case of Caines v. Caines Coll., of Physical Culture, Inc., 247 Mass 402 (1924), for guidance on these counts. In Caines, the plaintiff, Richard Caines ("Caines"), had established in 1904 and subsequently incorporated, in 1907 the Caines School of Physical Culture ("Caines School"). Id. at 404. Shortly after incorporation, Caines sold "the business... rights, franchises, and good will of the business now owned by... [him], known as Caines College of Physical Culture" to the new corporation for $9,600 in capital stock. Id. Following this transaction, Caines continued his affiliation with the school by serving as its president, treasurer, general manager and director. Id. During his affiliation with the Caines School, Caines was active in its promotion. Id. Caines signed multiple documents using the Caines School's letterhead and also signed the stock certificates issued in the corporation's name. Id. at 405. Caines was discharged from the Caines School in 1920, though he retained his stock in the company. Id. at 404.
...
To continue reading
Request your trial