Mayo v. Engel, 83-3119

• Decision Date: 04 June 1984
• Docket Number: No. 83-3119,83-3119
• Citation: 733 F.2d 807
• Parties: William L. MAYO, Plaintiff-Appellant, v. Max P. ENGEL, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 807

733 F.2d 807

William L. MAYO, Plaintiff-Appellant, v. Max P. ENGEL, et al., Defendants-Appellees.

No. 83-3119.

United States Court of Appeals Eleventh Circuit.

June 4, 1984.

John P. Graves, Jr., Sarasota, Fla., for plaintiff-appellant.

Patrick E. Geraghty, Fort Myers, Fla., for Fried, Aaronson & Cohn.

Patrick H. Dickinson, Sarasota, Fla., for Engel & Chlipala.

Appeal from the United States District Court for the Middle District of Florida.

Before FAY, VANCE and HATCHETT, Circuit Judges.

FAY, Circuit Judge:

Appellant, Dr. William L. Mayo, ¹ sued attorneys Max P. Engel and Gerald Chlipala for professional negligence and misrepresentation. This lawsuit stems from legal work done for Dr. Mayo in connection with a business he started. Dr. Mayo conceived of the idea to commercially undertake sales of used furniture, clothing and other small items similar to that done in charitable thrift shops. Attorney Chlipala incorporated "Re-Sell-It Shops, Inc." in Florida and contracted with a trademark search company (Government Liaison Services) for Dr. Mayo, to search the name for purposes of registering and acquiring a trademark. Although Dr. Mayo knew that no determination had been made regarding the use by others of the name Re-Sell-It, he started his business under the assumption that the name would be his exclusively. He then sold all the rights, including the name, to a franchising company (Franchise Concepts, Inc.) for $500,000 and warranted the exclusivity of the name. Unfortunately, the name Re-Sell-It turned out to be "used" by three shops in St. Louis. The used name cost Dr. Mayo $325,000 in expected sale proceeds when the contract of sale with Franchise Concepts was renegotiated. Dr. Mayo brought this lawsuit under diversity jurisdiction in the United States District Court for the Middle District of Florida. At the conclusion of discovery, the district court granted the appellees' motion for summary judgment, finding that there was no genuine issue of material fact and that the appellees were entitled to judgment as a matter of law. Dr. Mayo appealed and we affirm.

We must determine if the district court erred in finding that there are no issues of material fact and that the attorneys are entitled to judgment as a matter of law. The district court's order is not a matter of discretion and is thus independently reviewed in this court. Morrison v. Washington County, 700 F.2d 678, 682 (11th Cir.1983). We evaluate whether the moving party has met its burden of showing that there is no genuine issue of material fact. Fed.R.Civ.P. 56. The record is viewed in the light most favorable to the summary judgment opponent. Arnett v. Kennedy, 416 U.S. 134, 139-140, 94 S.Ct. 1633, 1637-1638, 40 L.Ed.2d 15 (1974).

FACTS

The record consists largely of the depositions of the prime actors in this sad tale of the used Re-Sell-It trademark. Dr. Mayo stated that he got the Re-Sell-It idea in 1979. While living in Punta Gorda, Florida for the winter Dr. Mayo received the Ft. Myers newspaper. He was impressed by the size and frequency of advertisements in that paper by the law firm of Engel, Aaronson, Fried, Cohn, and Chlipala. ² Dr. Mayo recalled that the firm advertised that it handled "business and contract law, stocks, divorces and other types of legal problems." (Mayo Dep. at 6-7). He telephoned the firm and a secretary arranged an appointment with Mr. Chlipala.

Dr. Mayo met with Mr. Chlipala in January 1980. He explained his idea for Re-Sell-It Shops to Mr. Chlipala and requested legal advice and service to incorporate and assure the trademark for his shops. Dr. Mayo had recently attended a seminar on franchising in Orlando and was very taken with the possibility for his shops. He told Mr. Chlipala of his vision of a national franchise with a Re-Sell-It Shop in every town. Dr. Mayo testified that Mr. Chlipala indicated that he would immediately incorporate Re-Sell-It in Florida and that he "could handle" the trademark search. (Id. at 8). This interview lasted approximately thirty minutes and concluded with an understanding Mr. Chlipala would initiate these matters and call Dr. Mayo in a few days.

Mr. Chlipala stated that "I told him [Dr. Mayo] we could incorporate him, and check out the name of Re-Sell-It Shops, Incorporated; which we did. As far as the trademark goes, I told him we did not do trademarks, however, I was aware of a company that did do trademarks, or did handle that, and if he wanted, I would assist him in contacting this company and seeing what they could do." (Chlipala Dep. at 17). Mr. Chlipala did call Government Liaison Services on February 8, 1980 and initiated a national trademark name search for Re-Sell-It. Five days later Dr. Mayo returned to sign the incorporation documents. Dr. Mayo has no complaints with the corporate organization work.

Government Liaison Services responded on March 5, 1980 in a letter that concluded, with the exception of a similar name used in Houston, the name Re-Sell-It was not being used. (Ex. 1-17). The Government Liaison Services report had searched the name in a category for businesses buying and selling securities, which does not include the sale of thrift shop items contemplated in Dr. Mayo's idea. ³ Dr. Mayo received a copy of the report in March and immediately noted the mistake in the category searched. (Mayo Dep. at 30). Dr. Mayo knew that aside from a call to the Florida Secretary of State to search the name for incorporation purposes and the incorrect search done by Government Liaison Services, no other search had been conducted. On March 30, 1980, Dr. Mayo sent Mr. Chlipala an artist's rendition of the logo for Re-Sell-It and asked that it be included in the trademark search and registration work Mr. Chlipala was doing for the name.

Dr. Mayo had returned to his permanent home in Vermont sometime in February. He was going forward with the plan to open a Re-Sell-It Shop and had chosen a site in White River, Vermont. The shop opened in May, 1980. During the first week of May, 1980, Dr. Mayo contacted a Norwich, Vermont attorney, Mr. Jonathan Brownell. (Brownell Dep. at 5). Dr. Mayo told Mr. Brownell of his plans for Re-Sell-It and asked for his help. Mr. Brownell advised dissolving the Florida corporation and reincorporating in Vermont for tax advantage and because Vermont would be the center of corporate activity. Dr. Mayo told Mr. Brownell that he wished to employ him to reincorporate in Vermont and to arrange for foreign corporation licenses to do business nationwide. He told Mr. Brownell that "he would not need any work done on trademark for his proposed enterprise, which was Re-Sell-It Shops, Inc. as he had done all that work in Florida already ..." (Id. at 7-8). Dr. Mayo further indicated that he would have the Florida attorney send Mr. Brownell any necessary papers.

On April 8, 1980, Mr. Chlipala asked Government Liaison Services to send him a copy of the forms needed to register a trademark. The forms were not immediately forthcoming because a recent Federal Register had published a new form. On April 21st Mr. Chlipala renewed his request for the forms and on May 13th or 14th the pertinent pages of the Federal Register were sent to Mr. Chlipala. Mr. Chlipala testified in deposition that about this time he requested Dr. Mayo take the trademark work to his attorney in Vermont because he was uncertain about the nature of Dr. Mayo's business:

Dr. Mayo had told me that he was going to be buying and reselling securities.

Q. What kind of securities?

He just indicated to me securities. And, that was you know, the question there, and also the fact of whether or not what he was doing--or what he indicated to me that he was doing was good. At that point in time, you know, I knew that I was getting confused by the whole thing. And, I told him, you had better take this whole thing to your other attorney in Vermont, who Dr. Mayo indicated knew the stuff very well, and make sure you know what you are doing.

(Chlipala Dep. at 36-37).

Mr. Chlipala, at Dr. Mayo's direction arranged for the dissolution of the Florida corporation in mid-May. Thereafter, Mr. Chlipala performed no legal services for Dr. Mayo. Mr. Chlipala stated that "[h]e told me that his attorney was going to handle everything out of Vermont, and was going to take care of getting the trademark, and everything else." (Chlipala Dep. at 38). Mr. Chlipala never proceeded with the trademark registration. Mr. Brownell prepared the registration papers as indicated. By letter dated May 15, 1980, Mr. Chlipala again warned Dr. Mayo "I would suggest that you consult with your counsel in Vermont to be absolutely sure as to what you are doing. As I indicated to you, this matter has gotten rather confusing and Government Liaison Services has not been of much help." (Plaintiff's Ex. 1). Mr. Chlipala also told Dr. Mayo in that letter that he considered all business between them concluded and that he would "close his file."

In early June, Dr. Mayo asked Mr. Brownell to prepare the trademark registration papers for his signature. He made it clear that all he wanted Mr. Brownell to do was to fill out the forms. The papers were prepared and sent to Dr. Mayo. In late June, Mr. Brownell's secretary brought to his attention the fact that the tradename Re-Sell-It had appeared inconsistently capitalized in documents she was filing. Mr. Brownell called Dr. Mayo to inquire about the possible problem and Dr. Mayo told him not to concern himself with the trademark that he was working with the Franchise Concepts staff on the trademark. (Id. at 12).

Franchise Concepts, Incorporated conducted the franchise seminar in Orlando that Dr. Mayo had attended in late 1979 or early 1980. Its president, Donald Boroiam, had spoken with Dr. Mayo then and was very interested in his ideas. Dr. Mayo contacted Mr. Boroiam in late spring 1980 and asked him to come look over his Vermont store and advise Dr. Mayo how to put...