Line Enterprises, Inc. v. Hooks & Matteson Enterprises, Inc.
| Decision Date | 19 August 1983 |
| Docket Number | No. 07-81-0185-CV,07-81-0185-CV |
| Citation | 659 S.W.2d 113 |
| Parties | LINE ENTERPRISES, INC., et al., Appellants, v. HOOKS & MATTESON ENTERPRISE, INC., d/b/a Adam's Rib, et al., Appellees. |
| Court | Texas Court of Appeals |
Kirt H. Kiester, Brandes & Kiester, Austin, for appellants.
Oscar P. Fields and Daniel W. Burrows, Stokes & Fields, Amarillo, for appellees.
Before REYNOLDS, C.J., and DODSON and COUNTISS, JJ.
Appellants, Line Enterprises, Inc., The County Line, Inc., The State Line, Inc., The Roadhouse, Inc., and Streeterville Food Service, Inc., appeal from a take-nothing judgment rendered in their actions for injunctive relief against and to recover damages from appellees Hooks & Matteson Enterprise, Inc., d/b/a Adam's Rib, Gabriel Marcus Vasquez, and Hooks & Matteson Investments, on their unfair competition claim. On appeal, appellants complain, among other things, that the charge submitted by the court imposed a greater burden of proof on them than is required to prove an unfair competition claim. We agree. Reversed and remanded.
Line Enterprises, Inc., a management corporation, was incorporated in 1977 to help manage the operations of The County Line and The State Line corporations which, respectively, operate The County Line Restaurant in Austin and The State Line Restaurant in El Paso, both specializing in the preparation of barbeque in plush surroundings. Later, Line Enterprises, Inc. established The Roadhouse, Inc. for the purpose of selling franchises of its restaurant business. In January of 1979, The Roadhouse, Inc. entered into a franchise agreement with Streeterville Food Service, Inc. to set up The Roadhouse Restaurant in Lubbock. At all relevant times prior to January 1979, appellants had not registered any marks with the State of Texas and were never in direct competition with appellees.
Appellee Hooks & Matteson Enterprise, Inc. was involved in several business ventures, among which was included the restaurant business. On October 23, 1978, appellee opened the Adam's Rib Restaurant in Amarillo, specializing in the serving of barbeque. Gabriel Vasquez, who worked in The County Line Restaurant, was employed to manage the kitchen. Several people connected with Adam's Rib became familiar with the operation of the restaurants associated with appellants and attempted to duplicate and incorporate some of the same techniques, etc., in the operation of Adam's Rib.
Shortly after the opening of Adam's Rib, appellants learned that its operations were very similar to appellants' businesses. Specifically, appellants gained information that appellees intended to duplicate the concepts, menus and recipes of the restaurants owned and operated by appellants. Believing that those acts would mislead the public into thinking appellees' restaurant operation was operated and owned by appellants, and further that such acts would prevent appellant Streeterville Food Service, Inc. from entering the Amarillo area, appellants initiated their unfair competition action.
Generally, appellants alleged that appellees entered into unfair competition by wrongfully appropriating and using recipes, menus, slogans, logos and other confidential information of appellants, without their knowledge or consent, in opening and operating Adam's Rib, thereby creating the deception that appellees' restaurant was operated by appellants and causing appellants to sustain the loss of a market area and profits. Appellants sought to permanently enjoin appellees from using, and to recover monetary damages for their use of, the appropriated matters. Appellees answered with a general denial.
Trial was to a jury, which answered all of the submitted special issues in favor of appellees and against appellants, except for special issue no. 3. In response to that issue, the jury found that appellees Hooks & Matteson Investments and/or Hooks & Matteson Enterprise, Inc., misappropriated the recipes, barbeque techniques and menus of The County Line, Inc., The State Line, Inc. and/or Line Enterprises, Inc., and used them in the operation of Adam's Rib. However, in answering special issue no. 4 the jury failed to find that the misappropriation was a proximate cause of any monetary loss to Line Enterprises, Inc. Based upon the jury's verdict, the trial court rendered a take-nothing judgment from which appellants have appealed with eleven points of error.
Appellants requested, but the court refused, the submission of a special issue and accompanying instruction reading as follows:
SPECIAL ISSUE NO. 6
Do you find from a preponderance of the evidence that H. & M. Ent. Inc. and/or H. & M. Investments were passing off their goods and services at Adam's Rib Rest. as those of the County Line Restaurant, the State Line Restaurant and/or the Road House Restaurant and thereby causing a likelihood of confusion?
In connection with this Special Issue you are instructed that "passing off" products as the products of another means that a customer of ordinary intelligence and perception in the exercise of ordinary care would be confused as to the origin of such products.
Instead, the court submitted, over appellants' objections, this issue and instruction:
SPECIAL ISSUE NO.1
Do you find from a preponderance of the evidence that Hooks & Matteson Investments and/or Hooks & Matteson Enterprises, Inc., d/b/a Adam's Rib Restaurant engaged in unfair competition with the restaurants of Line Enterprises, Inc.?
Instruction--In order to find unfair competition you must believe and find from the evidence that the Adam's Rib Restaurant is "deceptively similar" to the State Line and/or County Line Restaurants, that Adam's Rib is "passing off" their products as the products of the State Line and/or County Line Restaurants and that the Adam's Restaurant is employing marketing devices and practices of the State Line and/or County Line Restaurants for the purpose of inducing customers to buy Adam's Rib food in the false belief that they are buying the food of Line Enterprises Inc.
(a) "Deceptively similar" means that a person of ordinary intelligence would confuse the Adam's Rib Restaurant operation with the Line Enterprise Inc., restaurant operations so that in choosing to eat at the Adam's Rib Restaurant such an ordinary person would believe that he had purchased and received the food and services of the Line Enterprises Inc., restaurants.
(b) "Passing off" products as the products of another means that a customer of ordinary intelligence and perception in the exercise of such reasonable care and observation as customers may be expected to exercise would probably believe that foods served at the Adam's Rib Restaurant were the foods of the Line Enterprises, Inc., restaurant operations.
Considering the above instructions answer the foregoing Special Issue "We do" or "We do not."
Answer: __________
The jury answered, "We do not."
Nine of appellants' eleven points of error are utilized in their attack on the court's refusal to submit their requested special issue and instruction together with their requested, but refused, issues on damages related thereto, and on the court's submission of special issue no. 1 with its accompanying instructions. These points will be addressed topically rather than seriatim.
At the outset, we observe that the court cannot be faulted in the formulation of the special issue submitted. The court is required to submit the controlling issues made by the written pleadings and the evidence, Rules 277 and 279; 1 yet, Rule 277 gives the court discretion whether to submit issues as to each element of a cause or to submit issues broadly, Members Mutual Ins Co. v. Muckelroy, 523 S.W.2d 77, 81-83 (Tex.Civ.App.--Houston [1st Dist.] 1975, writ ref'd n.r.e.), even to the extent of a global submission. Pope and Lowerre, The State of the Special Verdict--1979, 11 St. Mary's L.J. 1, 9 (1979). The discretion exercised will not be overturned unless there is a clear showing of abuse. DeAnda v. Home Ins. Co., 618...
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