Slautterback v. Intech Management Services

• Decision Date: 07 July 1981
• Docket Number: No. 37079,37079
• Citation: 279 S.E.2d 701,247 Ga. 762
• Parties: SLAUTTERBACK et al. v. INTECH MANAGEMENT SERVICES et al.
• Court: Georgia Supreme Court

Page 701

279 S.E.2d 701

247 Ga. 762

SLAUTTERBACK et al. v. INTECH MANAGEMENT SERVICES et al.

No. 37079.

Supreme Court of Georgia.

July 7, 1981.

Dennis M. Hall, Atlanta, for Richard D. Slautterback et al.

C. B. Rogers, Phillip S. McKinney, Rogers & Hardin, Atlanta, for Intech Management Services, Inc., et al.

SMITH, Justice.

Appellants assert that the trial court erred in granting appellees' application for interlocutory injunction and in denying theirs. We affirm.

The trial court made the following findings of fact: Independent Truckers Insurance Underwriters, Inc. (Independent Truckers) and American Owner/Operator Association, Inc. (Association) were corporations organized by appellant Slautterback. The corporations were engaged in the business of selling property and casualty insurance to independent owner/operators of long-haul trucks. The policies were issued by various insurance companies, with the corporations acting as broker. In June, 1975, Independent Truckers procured the registered service mark "American Owner/Operator Underwriters, Inc." ¹ together with a logo incorporating the initials "AOO." Another service mark was obtained in September, 1975, which incorporated the same words as the service mark referred to above, but used a different arrangement and did not include the logo.

During 1976, several of the insurance companies that issued the policies of Independent Truckers alleged that Mr. Slautterback failed to remit premiums due on certain policies. These allegations led to litigation which resulted in consent judgments against Independent Truckers and Mr Slautterback in amounts exceeding $500,000. The insurance programs were cancelled.

Mr. Slautterback obtained a new program of insurance with Frank Feit and Associates, Inc., and organized a new corporation, American Owner/Operator Underwriters, Inc. (Underwriters). In furtherance of the reorganization, Independent Truckers and Underwriters entered into an agreement on August 24, 1976, under which Independent Truckers conveyed to Underwriters, in exchange for royalty payments, the exclusive right to use the service marks. The agreement provided in part: "INDEPENDENT (TRUCKERS) hereby grants to AMERICAN (UNDERWRITERS) the exclusive, non-transferable license to use the trade name, trademark and registered service mark and logo "AMERICAN OWNER/OPERATOR UNDERWRITERS, INC." as registered under the attached Exhibits "A" and "B", for the operation of a longhaul owner/operator truck insurance program, together with related goods and services, for a period of 5 years, beginning August 24, 1976, up through and inclusive of August 23, 1981, upon the terms and conditions hereinafter set forth ...

"In consideration for the license by INDEPENDENT to AMERICAN of said service mark and logo, AMERICAN agrees to pay INDEPENDENT 21/2% of gross monthly premiums received by AMERICAN from the sale of physical damage, cargo and liability insurance sold by or through AMERICAN and its authorized and duly licensed State Agents, to long-haul owner/operator truckers. Payments shall be due immediately upon execution of this agreement and shall be paid by AMERICAN to INDEPENDENT on or before the 15th day of November, 1976, and continuing on the 15th of each month thereafter, during the term hereof ...

"AMERICAN is granted the right to grant sublicenses for the use of said trademark, service mark and registered logo, to such other persons as it deems advisable in its sole discretion, without the payment of any additional compensation to INDEPENDENT."

Subsequent to the service mark agreement, Underwriters entered into a number of exclusive agency agreements ("state agent contracts") with various insurance agencies throughout the nation. These contracts, entered into at a time when Mr. Slautterback was president of both Underwriters and Independent Truckers, state that "(Underwriters) is the owner as assignee of the registered service mark 'AMERICAN OWNER OPERATOR UNDERWRITERS' and accompanying logo ..." The contracts could be terminated "upon 30 days written notice by either party."

On June 23, 1978, the insurance program offered by Underwriters was terminated by Frank Feit and Associates, which had accused Mr. Slautterback of failing to remit premiums. Due to this and other problems, Underwriters sought the assistance of Intech Management Services, Inc. (Intech). Intech agreed to perform services on behalf of Underwriters, as well as provide loans to the beleaguered corporation. In exchange, Underwriters agreed to pay Intech certain fees and commissions and to repay the loans plus accrued interest. The agreement led to a series of demand notes, secured by a general lien upon and assignment of all agreements to which Underwriters was a party as of August 1, 1978, concerning Underwriters' right to offer or sell, or to grant to any person the right to offer or sell insurance contracts. Some of these notes were negotiated by Intech to an affiliated holding company and were secured by a pledge of all of Underwriters' stock.

In March, 1980, Underwriters went into default on the demand notes. Assets of Underwriters were assigned to Intech in satisfaction of the outstanding debt. Intech, in effect, took control of the corporation. Appellant Slautterback resigned his position as president.

After Intech gained control of Underwriters, the royalty payments for the service marks held by Independent Truckers ceased.

As indicated above, the Association is also engaged in marketing insurance. It is however, a separate entity from Underwriters. Although reference is made to the Association in the state agent contracts, it is not a party to the agreements. Neither is Independent Truckers.

Appellees brought an action alleging that after Mr. Slautterback lost control of Underwriters, he and the Association began a "campaign of correspondence" with state agents for the purpose of inducing them to breach or terminate their state agent contracts with Underwriters. They prayed, inter alia, that "the Defendants, their officers, directors, stockholders, agents, employees and individuals acting in concert with them be temporarily restrained and preliminarily and permanently enjoined: (a) from soliciting or otherwise approaching the State Agents or any of them in an effort to induce the State Agents to breach their contracts with Intech or to enter into agency contracts or similar contracts with the Defendants or any other corporations or other entities, whether or not affiliated with the Defendants, and (b) from representing to any individual or entity, including but not limited to the State Agents, that Intech or Underwriters or the State Agents or any of them are not authorized to use the Service Marks or are subject to litigation for any such use ..."

Appellants filed several counterclaims, one of them alleging that Underwriters has breached its licensing agreement with Independent Truckers regarding the service marks. They prayed that Underwriters...