Tustin Community Hospital, Inc. v. Santa Ana Community Hospital Assn.

• Decision Date: 27 February 1979
• Citation: 153 Cal.Rptr. 76,89 Cal.App.3d 889
• Parties: , 205 U.S.P.Q. 83 TUSTIN COMMUNITY HOSPITAL, INC., Plaintiff, Respondent and Cross-Appellant, v. SANTA ANA COMMUNITY HOSPITAL ASSOCIATION, etc., et al., Defendants, Appellants and Cross-Respondents. Civ. 17808.
• Court: California Court of Appeals Court of Appeals

Page 76

153 Cal.Rptr. 76

89 Cal.App.3d 889, 205 U.S.P.Q. 83

TUSTIN COMMUNITY HOSPITAL, INC., Plaintiff, Respondent and Cross-Appellant, v. SANTA ANA COMMUNITY HOSPITAL ASSOCIATION, etc., et al., Defendants, Appellants and Cross-Respondents.

Civ. 17808.

Court of Appeal, Fourth District, Division 2, California.

Feb. 27, 1979.

Hearing Denied April 26, 1979.

Wenke, Taylor, Schumacher & Evans, and Gary L. Taylor, Santa Ana, for appellant

McGuire & Bauer, Ronald L. Bauer, and John D. McGuire, Tustin, for respondent.

OPINION

GROVER ^*, Associate Justice.

Defendants Santa Ana Community Hospital Association, a corporation, and Santa Ana-Tustin Community Hospital, a corporation, have appealed from a judgment enjoining them from using the name "Santa Ana-Tustin Community Hospital" for their hospital in the City of Santa Ana. The essential basis of the judgment is the finding that that name is confusingly similar to "Tustin Community Hospital," the name of plaintiff's nearby hospital which is located in the adjacent of City of Tustin. Plaintiff has cross-appealed from that portion of the judgment which refuses to enjoin defendants from using any other confusingly similar name.

From 1902 until 1941, defendants' predecessors operated hospitals in the City of Santa Ana, using the names Santa Ana Hospital, Santa Ana Valley Hospital and Santa Ana Community Hospital. Defendant Santa Ana Community Hospital Association was incorporated in 1941, and from that year until April 19, 1975, it operated a general, acute care hospital at 600 East Washington Avenue in the City of Santa Ana, using the name Santa Ana Community Hospital. Defendant Santa Ana-Tustin Community Hospital was incorporated March 15, 1972, and on April 19, 1975, it commenced operating a general, acute care hospital at 1001 North Tustin Avenue in the City of Santa Ana, using the name Santa Ana-Tustin Community Hospital. On April 19, 1975, the officers and directors of the two defendant corporations were the same, and the patients and employees of Santa Ana Community Hospital Association at the Washington Avenue hospital were transferred to the new hospital on Tustin Avenue, where they became the patients and employees of Santa Ana-Tustin Community Hospital. Most of the supplies and equipment at the older hospital were also transferred.

Plaintiff was incorporated in 1966, and since May 7, 1970, has operated a general acute care hospital in the City of Tustin, using the name Tustin Community Hospital.

In the complaint, filed June 11, 1974, plaintiff alleged that the defendants were then constructing the new hospital on Tustin Avenue, about one and one-half miles from plaintiff's hospital; that upon completion of construction, defendants planned to conduct business there under the name Santa Ana-Tustin Community Hospital; that defendants were already engaged in advertising and publicity involving the new name; and that use of the new name would cause public confusion, with resultant irreparable injury to plaintiff. In their answer, defendants denied that the services they provided were similar to plaintiff's; admitted that they planned to complete construction of the new hospital and then operate it under the name Santa Ana-Tustin Community Hospital; and denied that any public confusion would result from the use of that name. At the commencement of the trial, defendants were permitted to file an amendment to their answer setting up special defenses which alleged that plaintiff had failed to act with due diligence, that plaintiff was guilty of laches and that plaintiff failed to exhaust administrative remedies. Plaintiff's motion prior to trial to file a supplemental complaint seeking damages was granted, but later the request was withdrawn; the only relief ultimately requested, therefore, was an injunction.

A preliminary injunction was denied June 26, 1975.

Plaintiff's request for a jury trial was denied, and the case was tried without a jury in November and December of 1976.

At the conclusion of the trial, the court found that the name of defendants' new hospital is confusingly similar to the name of plaintiff's hospital, that this confusion persists, and that it will not abate with passage of time. The court concluded that irreparable damage to plaintiff and to the public has resulted, and that defendants' use of the trade name Santa Ana-Tustin Community Hospital constitutes unfair competition with plaintiff. In connection with the special defenses of the amendment to the answer, the court concluded that laches is not a proper defense to this action and ordered all evidence on that topic stricken; the court further concluded that plaintiff had lacked any effective administrative remedy.

Although the prayer of the complaint was merely that the name Santa Ana-Tustin Community Hospital be enjoined, plaintiff's proposed judgment included an injunction against defendants' use of any other name confusingly similar to Tustin Community Hospital. Defendants' objection to this provision was upheld, and the judgment as signed enjoins only the use of the name Santa Ana-Tustin Community Hospital.

Findings of fact, conclusions of law and judgment were filed March 3, 1977.

In a contempt proceeding initiated by plaintiff, following defendants' continued use of the name Santa Ana-Tustin Community Hospital, the trial court ruled on April 14, 1977, that the judgment was stayed pending appeal. Plaintiff's Petition for Writ of Review to reverse that determination was denied by this court on September 14, 1977. (Tustin Community Hospital, Inc. v. Superior Court, No. 4 Civ. 19324.)

In requesting reversal, defendants contend: (1) that plaintiff's action is barred by laches; (2) that no "secondary meaning" of plaintiff's name was established; (3) that the cause of the claimed confusion was not established; and (4) that the appropriate solution is a public educational program rather than a change of defendants' name.

I.

We agree with defendants that laches can be a defense to an injunction case based on unfair competition ¹ and that the trial court should not have stricken the evidence on that subject. For this reason, the judgment must be reversed.

Lawyers and judges today so generally regard laches as including both tardiness and a resulting prejudice that it is well to remember that the word comes from the Latin "laxus" meaning loose, and that it is related to the word slack. Intrinsically, therefore, laches suggests no more than a failure to be timely or diligent. Of the five readily available general dictionaries we have consulted, all agree that laches is obsolete in ordinary speech and all agree that it has a current meaning in law. But not all of them agree that that legal meaning goes beyond the mere failure to be timely or diligent. The Random House Dictionary definition ends with: "esp. such delay as will bar a party from bringing a legal proceeding" and the Funk and Wagnalls New Standard Dictionary contains alternative definitions: "inexcusable delay in asserting a right; such delay as warrants a court in refusing relief." The three remaining dictionaries (American Heritage Dictionary, Oxford English Dictionary, and Webster's Third New International Dictionary) speak only of delay as such, without indicating that laches involves an additional element of prejudice to the opposing party. Consistent with this uncertainty, Pomeroy states that "in some of the cases" mere lapse of time can constitute the defense, nevertheless "the generally accepted doctrine" is that laches is not a mere matter of time but is principally a question of "the inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition or relations of the property or the parties." (2 Pomeroy on Equity Jurisprudence (5th ed. 1941) § 419d, p. 177.) Law dictionaries also include references to both meanings. (Black's Law Dictionary (4th ed.); Ballentine's Law Dictionary (3d ed.); Bouvier's Law Dictionary (3rd rev.).)

The word estoppel, which is also important in reviewing the conflicting authorities on the present question, is likewise ambiguous. All five of the general dictionaries just referred to again agree that the word is obsolete, or at least rare, in ordinary speech, and that it does have a current meaning in law. Four of them further agree that the essence of the legal use of the word is to deny to a party the right to take a position inconsistent with his former representations. The Oxford English Dictionary, on the other hand, suggests a more fundamental meaning of estoppel, that is, stopping, barring, hindering or precluding. This dictionary then adds: Chiefly . . . to be precluded by one's own previous act or declaration from doing or alleging something. " (Emphasis added.) We know from such legal concepts as estoppel by judgment and collateral estoppel that the Oxford definition is the more accurate. Perhaps the most helpful treatment of all is in Bouvier's Law Dictionary, where three different types of estoppel are discussed at some length: estoppel by deed, estoppel by record and estoppel in pais. Significantly, the last classification in Bouvier includes reference to a number of cases involving estoppel by silence cases in which a party's failure to speak or to take action is held to constitute a bar.

At least three California infringement cases have referred to "estoppel by laches." (Tomsky v. Clark, 73 Cal.App. 412, 420, 238 P. 950; Hotel Sherman Inc. v. Harlow, D.C., 186 F.Supp. 618, 620; Golden Door Inc. v. Odisho, D.C., 437 F.Supp. 956. See also Herminghaus v. Southern Calif. Edison Co., 200 Cal. 81, 103, 252 P. 607.) This phraseology is etymologically apt for it combines the essence of laches (laxness, inattention to duty) with the essence of estoppel (stopping, barring, precluding). Indeed Black's Law Dictionary (4th ed.) has a separate entry for "laches, estoppel by". A number of the text writers echo this approach ² and in...