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TLOC Senior Living, LLC v. Bingham

Supreme Court of Vermont

April 8, 2016

TLOC Senior Living, LLC
v.
Albert R. (Alpine) Bingham III

On Appeal from Superior Court, Addison Unit, Civil Division Robert A. Mello, J.

Alison J. Bell of Langrock Sperry & Wool, LLP, Burlington, for Plaintiff-Appellee.

Albert (Alpine) Bingham III, Pro Se, Middlebury, Defendant-Appellant.

PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.

SKOGLUND, J.

¶ 1. Defendant Albert Bingham appeals pro se from the trial court's declaratory judgment order. We affirm.[*]

¶ 2. Plaintiff owns and operates a senior living community in Middlebury, Vermont, doing business as "The Lodge at Otter Creek." In July 2013, Bingham registered the name "The Lodge at Otter Creek" under his own name with the Vermont Secretary of State's Office after plaintiff lapsed in its re-registration of the name. In December 2013, plaintiff filed a complaint alleging slander of title, trade infringement, unfair competition, and tortious interference with contract. Plaintiff claimed that despite Bingham's actions, his registration of the name did not bestow him with any rights to actually use it as a trade name. Rather, plaintiff contended that it retained the exclusive common law rights to the continued use of "The Lodge at Otter Creek" as its trade name. Bingham filed several counterclaims. He argued in relevant part that by registering the name "The Lodge at Otter Creek" as his business name, he effectively foreclosed any right that plaintiff had to the name.

¶ 3. In February 2014, Bingham filed a motion to dismiss as well as a motion for summary judgment. In May 2014, Bingham filed a motion for a default judgment in his favor. Plaintiff subsequently moved for summary judgment in its favor. Following a motion hearing, the court denied both motions for summary judgment. The court also dismissed Bingham's motion for default judgment wherein he argued that plaintiff's failure to timely respond to his motion for summary judgment entitled him to a default judgment. The court had previously issued an entry order notifying the parties that it would consider the merits of all pending motions in the context of both parties' motions for summary judgment. Citing Desjarlais v. Gilman, 143 Vt. 154, 158-59, 463 A.2d 234, 237 (1983) (stating that rules concerning default judgment "should be liberally construed in favor . . . of resolving litigation on the merits, to the end that fairness and justice are served").

¶ 4. Turning to the merits, the court recounted the following. With respect to the business name "The Lodge at Otter Creek, " plaintiff alleged that the name had been continuously used in a commercial capacity since 2005. Plaintiff stated that in addition to itself, "The Lodge at Otter Creek" moniker had been used by affiliated corporate entities, including TLOC Real Estate. Because these corporate entities were using "The Lodge at Otter Creek" as an alternative business name, it was necessary to register the name with the Secretary of State. See 11 V.S.A. § 1623(a) (providing that limited liability corporation doing business in Vermont under any name other than that of limited liability company must file sworn returns identifying name under which such business is carried on, as well as name of town wherein such business is to be carried on, brief description of kind of business transacted under such name, and limited liability company name and location of principal office of such corporation or limited liability company). The name was first registered in 2005 by plaintiff's parent company, Middlebury Heights Holding Company, LLC (MHHC). In 2011, however, MHHC failed to re-register "The Lodge at Otter Creek" pursuant to 11 V.S.A. § 1635. Thus, when Bingham registered "The Lodge at Otter Creek" under his own name, it was not registered with any other entity.

¶ 5. The court discussed the nature of a "trade name, " relying on the Restatement (Third) of Unfair Competition (2015). The court found no dispute that plaintiff and its affiliated corporate entities were the first to appropriate the designation of "The Lodge at Otter Creek." At the time of plaintiff's complaint, plaintiff had been doing business under the designation for more than five years. The court concluded that plaintiff had established under common law that it acquired rights to "The Lodge at Otter Creek" as its trade name. For reasons not relevant here, the court found no evidence to support plaintiff's unfair competition claim. The court further found that even though plaintiff retained common law rights to the trade name, the court could not declare that plaintiff was entitled to the actual use of that name because to do so would run afoul of 11 V.S.A. § 1623(a), which required the registration of business names. Nonetheless, the court cautioned that its conclusion should not be read as providing Bingham with any rights to actually use "The Lodge at Otter Creek" as his own trade name. Additionally, the fact that Bingham registered "The Lodge at Otter Creek" with the State was not enough, standing alone, to support Bingham's counterclaim of unfair competition. See Restatement (Third) of Unfair Competition § 12 cmt. c; see also Bingham v. Inter-Track Partners, 600 N.E.2d 70, 73 (Ill.App.Ct. 1992) ("State registration of a trade name does not establish any substantive rights which would not otherwise exist."); First Wis. Nat'l Bank of Milwaukee v. Wichman, 270 N.W.2d 168, 171 (Wis. 1978) ("Common law rights in a trademark or trade name are created and preserved by use and not by registration.").

¶ 6. The court concluded that although Bingham had been able to register "The Lodge at Otter Creek, " plaintiff's failure to re-register the name did not allow Bingham to use it. As support, the court cited the Restatement (First) of Torts § 752 cmt. b (1938) ("If [a] trademark or trade name has considerable market reputation, it may continue for some time after the cessation of the use to be regarded in the market as identifying the goods, services or business of the person who discontinued the use. If he remains in business during that period, he is entitled to relief . . . against others who use the trade-mark or trade name in a manner which thus confuses prospective purchasers."). At all times relevant to this proceeding, the court explained, plaintiff was using "The Lodge at Otter Creek" as its trade name. Certainly, the court concluded, plaintiff's common law rights to the trade name had not dissipated to an extent that permitted Bingham's usage. Indeed, even if plaintiff ceased using "The Lodge at Otter Creek" as a trade name, the court found that it would be some time before another person or entity could properly acquire rights to its actual use, given how well-established the name was with plaintiff's business. The court therefore denied Bingham's motion for summary judgment on his related counterclaim.

¶ 7. The court gave both parties thirty days to show why their respective claims should not be dismissed in their entirety. Plaintiff then sought a declaratory judgment that it retained the right under common law principles to use "The Lodge at Otter Creek" as its trade name. Bingham sought his own declaratory judgment, requiring plaintiff to cease all use of "The Lodge at Otter Creek." Bingham cited to Vermont's trademark laws in seeking all profits derived from plaintiff's allegedly wrongful use of the name, and requested that one of plaintiff's corporate executives be fined and imprisoned.

¶ 8. After the parties filed their responses, the court issued an entry order granting declaratory relief to plaintiff. It declared that plaintiff had established common law rights to the trade name, "The Lodge at Otter Creek, " and that, notwithstanding Bingham's registration of the name as a business name with the Vermont Secretary of State, Bingham was not entitled to use the trade name without violating those rights. The court found its decision supported by the undisputed facts and applicable law. It dismissed all remaining claims and counterclaims. Bingham appealed.

ΒΆ 9. Bingham asserts that because he registered the trade name with the Secretary of State, his rights trump plaintiff's common law rights and his counterclaim should have been granted. He suggests that plaintiff's parent company was the only entity that could have acquired any common law rights to the name and asserts that that company had not used the name in more than seven years. Bingham also argues that plaintiff ...


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