National Motor Club of Mo., Inc. v. Noe

• Decision Date: 10 January 1972
• Docket Number: No. 2,55087,Nos. 55159,s. 55159,2
• Parties: NATIONAL MOTOR CLUB OF MISSOURI, INC., a Missouri Corporation, Appellant, v. Jerry L. NOE et al., Respondents
• Court: Missouri Supreme Court

Page 16

475 S.W.2d 16

NATIONAL MOTOR CLUB OF MISSOURI, INC., a Missouri

Corporation, Appellant, v. Jerry L. NOE et al., Respondents.

Nos. 55159, 55087.

Supreme Court of Missouri, Division No. 2.

Jan. 10, 1972.

David W. Bernhardt, Kenneth W. Johnson, Bussell, Hough, Greene & Bernhardt, Springfield, for appellant.

Donald W. Jones, James K. Prewitt, Church, Prewitt, Jones, Wilson & Karchmer, Springfield, for respondents.

PRITCHARD, Commissioner.

In a seven count second amended petition, appellant, National Motor Club of Missouri, Inc., brought actions against defendants generally alleging unfair competition (and asking for damages and injunctions) in a motor service club business system in which National claims the exclusive use. Further damages and injunctive relief are claimed against individual defendants based upon alleged stockholder and employee contracts of noncompetition. Count II of the second amended petition was voluntarily dismissed, and the remaining counts pray for damages against all defendants of about $140,000.

On September 22, 1969, the trial court granted defendants' motion for summary judgment on all counts of National's second amended petition. On October 4, 1969, National filed a motion to set aside the summary judgment. On October 10, 1969, this motion came on for hearing with the parties present by counsel, and the trial court entered an order modifying the summary judgment of September 22, 1969, by omitting reliance on paragraph No. 5 of the summary judgment motion. On November 1, 1969, defendants filed a motion to dismiss this appeal upon the ground that it was not timely filed. One question is whether the hearing of October 10, 1969 constituted a ruling upon National's motion to set aside the summary judgment, the court's order of that date merely mentioning the modification and not expressly touching upon the request to set aside the summary judgment. Defendants do not cite any case holding that the trial court's action (apparently on its own motion) in modifying the summary judgment also constituted a ruling upon National's motion to set it aside. It must be held that there was never any ruling upon the motion to set aside the summary judgment other than by the automatic operation of Rule 82.05(a), V.A.M.R.--ninety days after the filing of the motion. In the case of In re Franz' Estate, 359 Mo. 362, 221 S.W.2d 739, 740(1), respondents filed a motion to set aside an order of dismissal of a claim for trustee's compensation. It was held that the motion was nothing more than a motion asking the court to reconsider its ruling. 'It was, in fact, simply a motion for rehearing or new trial.' It thus postponed the finality of the judgment. See also In re Jackson's Will, Mo.App., 291 S.W.2d 214, 219(7, 8). The finality of the summary judgment against National was postponed for ninety days from the time it filed its motion to set it aside. The notice of appeal, filed November 1, 1969, was within that time, and, although prematurely filed, under Rule 82.05(b) it is considered as filed immediately after the time the judgment became final for purposes of appeal. Defendants' cited case of Heard v. Frye's Estate, Mo.App., 319 S.W.2d 685, is distinguishable because there the notice of appeal was filed more than ten days after the court overruled a motion to reinstate the case.

Defendants say the appeal should be dismissed for the further reason that appellant did not request the court reporter to prepare a transcript within thirty days after the notice of appeal. The record shows that to be true, but the requirements and the reason for Rule 82.19 were satisfied in this case by defendants' request for a transcript within such time on their cross-appeal. The reporter was fully apprised of the need for a transcript, and the matter of sharing the cost was discussed in defendants' letter to the reporter, even though at the time National had not filed its notice of appeal. The trial court was thus authorized to extend the time for filing the transcript. There was also good reason for this court to order a further extension of time to file transcript to July 25, 1970, in that the court reporter was unable to complete it prior to the time it was due, April 25, 1970. For the reasons indicated, defendants' motion to dismiss National's appeal is overruled.

Count I of National's second amended petition, after its voluntary deletions, alleges that it is a Missouri corporation with principal offices in Springfield. National is in the business of maintaining and operating a motor service club within this state to motor vehicle owners for their welfare, convenience and safety for which it collects fees for memberships, and that it has expended great effort and large sums of money in establishing its organization and in soliciting memberships. Defendants Noe, Sitters and Oldham, with others, have organized United Automobile Association, Inc., a Nebraska corporation authorized to sell motor club memberships in Missouri in competition with National. Each defendant wrongfully appropriated National's business system, including original and unique sales methods and techniques, prepared sales presentations and business forms, intending to injure it and deprive it of gains and profits which it otherwise would have gained, and 'did wrongfully, knowingly, injuriously, deceitfully and fraudulently, against the will, and without the consent of the plaintiff imitate and copy the said business system, including the original and unique sales methods and techniques, the prepared sales presentations and forms and business forms for use by the defendant corporation, United Automobile Association, Inc.,' in Missouri in order to denote to Missouri citizens that memberships being offered for sale by United were the same as those sold by National for the purpose of unlawfully competing with National in Missouri. Damages in the amount of $100,000 were prayed, as was injunctive relief against the use of or communication of the business systems, sales methods, and techniques of National. Two noncompetition contracts among stockholders of the National Motor Clubs of several states and by employee Joe Sitters were attached to the second amended petition.

Count VI alleged further that National had confidential membership lists showing membership and renewal dates which constituted trade secrets and which were entrusted to Noe, Sitters and Oldham, who used the lists and records to change memberships from National to United; and that Noe, Sitters and Oldham have severed relations with National and have conspired together and with United to entice key employees away from National. Damages in the amount of $10,000 and an injunction are prayed for in Count VI.

The answers to Counts I and VI are largely general denials with an allegation that the contracts attached to the second amended petition were void as against public policy, fraudulently procured, and lacked consideration.

Defendants say the appeal should be denied because National did not controvert the motion for summary judgment and its supporting affidavit by any affidavit under Rule 74.04(e). The depositions and interrogatories and all exhibits may be considered as evidence in opposition to the motion. Reis v. Metropolitan St. Louis Sewer Dist., Mo., 373 S.W.2d 22. What National has pleaded in Count I is that defendants have used its material in passing off as United's the automobile club services of National. What does appear by exhibits is that parts of sales brochures of National and United do show similarities and, in part, exact duplications, for example: 'Personalized Touring Service' on National's brochure sheet shows on United's sheet, 'Personalized Travel Service,' and a drawing on a travel log or guide is exactly the same on both. On another, a clock drawing is exactly the same, as are these words, 'Famous Last Words . . . 'I'm a Safe Driver$ That Happens to the Other Fellow.' The National Safety Council Says:--One Human Being is Now Dying Each 12 Minutes. . . .'

National's president, James C. Craig, admitted in his deposition and interrogatory answers that National's sales kit, brochures and other documents claimed by it to be unique were copies from other motor clubs, were widely known in the business, and were of necessity exhibited to potential customers by National's sales representatives. It is doubtful because of those facts that this material constituted trade secrets as claimed under National Rejectors, Inc. v. Trieman, Banc, Mo., 409 S.W.2d 1, 18, 19(2), quoting Restatement of Torts, § 757. The basis for the allegation of Count I is unfair competition. That action is defined in 87 C.J.S. Trade-Marks, Etc. § 13, p. 241: 'Unfair competition is a form of unlawful business injury. * * * It consists, essentially, in passing off or attempting to pass off, on the public, the goods or business of one person as and for the goods or business of another, or in the conduct of a trade or business in such a manner that there is either an express or an implied representation to that effect. In fact it has been said that it is nothing but a convenient name for the doctrine that no one should be allowed to sell his goods as those of another; and it may be stated broadly that any conduct, the natural and probable tendency and effect of which is to deceive the public so as to pass off the goods or business of one person as and for the goods or business of another, constitutes actionable unfair competition.' See also 52 Am.Jur. Trademarks, Tradenames, Etc., § 86, p. 586 et seq.; and 2 A.L.R.3d 748, 749, § 2, discussing the matter of unfair competition in the use of material (or slogan) which has acquired a 'secondary meaning,' i.e., where it has become identified in the mind of the public with plaintiff as the source of goods or services which the material (or slogan) advertises; and the telephone directory cover annotation, 63 A.L.R.2d 1101, § 6, p. 1100 quoting ...