Opinion
NUMBER 13-14-00511-CV
02-11-2016
TESORO CORPORATION, Appellant, v. TESORO CORPORATION D/B/A TESORO PETROLEUM CORP., Appellee.
On appeal from the 206th District Court of Hidalgo County, Texas.
DISSENTING OPINION
Before Justices Garza, Benavides and Perkes
Dissenting Opinion by Justice Perkes
I respectfully dissent with the majority's holding affirming the denial of injunctive relief. I would conclude that appellant Tesoro Signs established the required elements for permanent injunctive relief, including the existence of irreparable injury, and that equitable considerations do not favor Tesoro Petroleum. Therefore, I would hold that the trial court abused its discretion in denying Tesoro Signs' request for a permanent injunction.
To remain consistent with the majority opinion, I will refer to appellant Tesoro Corporation as "Tesoro Signs" and to appellee Tesoro Corporation d/b/a Tesoro Petroleum Corp. as "Tesoro Petroleum."
I. PERMANENT INJUNCTION
As noted by the majority, an applicant for permanent injunctive relief must demonstrate the following: (1) the existence of a wrongful act; (2) the existence of imminent harm; (3) the existence of irreparable injury; and (4) the absence of an adequate remedy at law. Noell v. City of Carrollton, 431 S.W.3d 682, 712 (Tex. App.—Dallas 2014, pet. denied); Webb v. Glenbrook Owners Ass'n, Inc., 298 S.W.3d 374, 384 (Tex. App.—Dallas 2009, no pet.); Montfort v. Trek Res., Inc., 198 S.W.3d 344, 350 (Tex. App.—Eastland 2006, no pet.).
"We review a trial court's ruling on applications for permanent injunctions for an abuse of discretion." Montfort, 198 S.W.3d at 350 (citing Operation Rescue-Nat'l v. Planned Parenthood of Houston and Southeast Tex., Inc., 975 S.W.2d 546, 560 (Tex. 1998)). A trial court abuses its discretion when it acts without reference to any guiding rules or principles. Id. at 350-51 (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985)). In conducting our review, we consider the evidence in the light most favorable to the trial court's judgment. Id. at 351 (citing Stein v. Killough, 53 S.W.3d 36, 41 (Tex. App.—San Antonio 2001, no pet.)).
In reviewing for an abuse of discretion, legal and factual insufficiency claims are not independent grounds of error; they are factors we weigh in determining whether the trial court abused its discretion. Id. With respect to the resolution of factual issues, the appellant must establish the trial court reasonably could have reached only one decision. Emeritus Corp. v. Ofczarzak, 198 S.W.3d 222, 225-26 (Tex. App.—San Antonio 2006, no pet.). "If some evidence appears in the record that reasonably supports the trial court's decision, there is no abuse of discretion." Montfort, 198 S.W.3d at 351. A trial court does not abuse its discretion when its decision is based on conflicting evidence. Id. (citing Recon Exploration, Inc. v. Hodges, 798 S.W.2d 848, 851 (Tex. App.—Dallas 1990, no writ)). "However, an appellate court will find an abuse of discretion if the record reflects that the trial court's findings necessary to sustain an order are not supported by some evidence." Stein, 53 S.W.3d at 41 (citing Operation Rescue, 975 S.W.2d at 560). Further, where no findings of fact or conclusions of law are filed or requested, as here, the appellate court will imply that the trial court made all the necessary findings to support its judgment. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).
For the reasons set out below, I respectfully disagree with the majority's conclusion that "the evidence supported the trial court's implicit finding that Tesoro Signs suffered no irreparable injury as a result of the confusion."
II. IRREPARABLE HARM
"An injury is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard." Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). "Generally, money damages may be inadequate to compensate an injured party for the loss of property deemed to be legally 'unique' or irreplaceable." N. Cypress Med. Ctr. Operating Co. v. St. Laurent, 296 S.W.3d 171, 175 (Tex. App.—Houston [14th Dist.] 2009, no pet.). That is, the applicant must establish there is no adequate remedy at law for damages. Millwee-Jackson Joint Venture v. Dallas Area Rapid Transit, 350 S.W.3d 772, 782 (Tex. App.—Dallas 2011, no pet.). An adequate remedy at law is one that is as complete, practical, and efficient to the prompt administration of justice as is equitable relief. Id. Thus, a trial court may grant injunctive relief when the enjoined conduct threatens to disrupt an ongoing business. See, e.g., IAC, Ltd. v. Bell Helicopter Textron, Inc., 160 S.W.3d 191, 200 (Tex. App.—Fort Worth 2005, no pet.); Liberty Mut. Ins. Co. v. Mustang Tractor & Equip. Co., 812 S.W.2d 663, 666-67 (Tex. App.—Houston [14th Dist.] 1991, no writ); David v. Bache Halsey Stuart Shields, Inc., 630 S.W.2d 754, 757 (Tex. App.—Houston [1st Dist.] 1982, no writ).
I would conclude that the evidence establishes irreparable injury as a result of Tesoro Petroleum's use of the trade name "Tesoro Corporation", and that the trial court's implicit finding to the contrary was not supported by any evidence. See Montfort, 198 S.W.3d at 351. Tesoro Signs presented evidence of the following events occurring after Tesoro Petroleum adopted its trade name:
• Tesoro Signs received correspondence from BNSF Railway Company regarding a hazardous shipment relating to Tesoro Petroleum.
• Tesoro Signs received correspondence from the Texas Department of Insurance concerning a report by a Tesoro Petroleum employee of a workers' compensation violation.
• Tesoro Signs received a letter meant for Tesoro Petroleum from a company regarding interest in a drilling site.
• On three separate occasions, Tesoro Signs received a letter from the Texas Attorney General concerning an order to withhold income for child support pertaining to a Tesoro Petroleum employee.
• Tesoro Signs received multiple faxes from Union Pacific Railroad requesting total payment of $34,895 for services rendered to Tesoro Petroleum.
• Tesoro Signs received correspondence from an asphalt and paving company located in Redmond, Washington, intended for Tesoro Petroleum.
• Tesoro Signs received a solicitation from a credit card company intended for Tesoro Petroleum.
• Tesoro Signs was served with an "Alaska Notice of Right to Lien" intended for Tesoro Petroleum concerning property located in Alaska.
• Tesoro Signs received an invoice for shipping charges from a company located in the Republic of Panama intended for Tesoro Petroleum.
• Tesoro Signs received a solicitation from a petroleum exploration and production company intended for Tesoro Petroleum.
• Tesoro Signs was served with a lawsuit filed in the State of Alaska in which the plaintiff sought damages for personal injuries sustained at a gas station owned by Tesoro Petroleum.
• Tesoro Signs brought a cause of action against one of its customers seeking to recover money owed for installation of a sign. The customer, believing Tesoro Signs was improperly using the name
Tesoro Corporation, filed a counter-claim alleging that Tesoro Signs had engaged in a deceptive trade practice. Although Tesoro Signs prevailed on the counterclaim, it was required to defend the allegation through trial.
In addition to the specific instances set out above, Paul Sullivan, president for Tesoro Signs, testified that the company continued to receive correspondence intended for Tesoro Petroleum demanding payment up to the date of trial. Sullivan testified as follows regarding the harm to Tesoro Signs as a result of Tesoro Petroleum's use of the trade name:
Well, every time that we get a—an e-mail or a telephone call, we have to take the time out of our daily production and respond to it. We have to answer to them. There's no other way that I—but this has been—there's—you know, it keeps going on. I don't know how to stop it.Sullivan also presented evidence showing that Cortera, a website that provides credit information on businesses, reports his company as having had a multi-million-dollar judgment rendered against it in a discrimination suit—even though the judgment was rendered against Tesoro Petroleum. Sullivan testified he is afraid "[t]hat my customers will see that information and it will hurt us on these contracts that we're putting out."
. . . .
Every time that we get these e-mails or we get phone calls, which there's a tremendous amount of phone calls still coming in, we have to explain to the parties who we are and why we are not them and where they should—who they should call. We even now have got the telephone number of San Antonio Tesoro on each phone.
. . . .
Well, it slows us down. It's affecting our day-to-day operation of the business.
. . . .
Well, let's put it this way, I'm just getting tired of having to explain who I am all the time. I—I've had instance just recently where I had to explain that my paycheck comes from Donna, Texas Tesoro Corporation, not from San Antonio. It's things like that, that every day throughout my business I'm having to explain to people. And it's just—it's getting to the point where it's interrupting our business every day.
Disruption to a business can constitute irreparable injury. Frequent Flyer Depot, Inc. v. Am. Airlines, Inc., 281 S.W.3d 215, 227 (Tex. App.—Fort Worth 2009, pet. denied). "[A]ssigning a dollar amount to such intangibles as a company's loss of clientele, goodwill, marketing techniques, and office stability, among others, is not easy." Id. Further, the Fifth Circuit has observed that, in the context of trademark infringement, "'[a]ll that must be proven to establish liability and the need for an injunction against infringement is the likelihood of confusion—injury is presumed.'"Abraham v. Alpha Chi Omega, 708 F.3d 614, 627 (5th Cir. 2013) (quoting MCCARTHY ON TRADEMARKS & UNFAIR COMPETITION § 30:2 (4th ed. 2001)). The Fifth Circuit explained, "there seems little doubt that money damages are 'inadequate' to compensate [owner] for continuing acts of [infringer]." Id.
"The issues in a common law trademark infringement action under Texas law are no different than those under federal trademark law." All Am. Builders, Inc. v. All Am. Siding of Dallas, Inc., 991 S.W.2d 484, 488 (Tex. App.—Fort Worth 1999, no pet.) (citing Waples-Platter Cos. v. General Food Corp., 439 F.Supp. 551, 583 (N.D. Tex. 1977)). --------
Tesoro Signs offered specific, undisputed evidence of confusion of its trade name resulting in disruption to its business and damage to the company's goodwill. I would conclude that the evidence establishes irreparable injury. See Zapata Corp. v. Zapata Trading Int'l, Inc., 841 S.W.2d 45, 49-50 (Tex. App.—Houston [14th Dist.] 1992, no pet.) (concluding appellant produced probative evidence regarding irreparable injury in trademark infringement action, including evidence that appellant was served in debt collection suits meant for appellee).
Further, I do not believe there is any evidence to support the trial court's implicit finding to the contrary. The majority cites the testimony of forensic economist Gene Trevino before concluding that "[t]he trial court could have reasonably concluded from this testimony that Tesoro Signs' injury, if any, could be sufficiently compensated by the award of damages and that the amount of damages could be measured by pecuniary standards." Trevino testified that "a good approximation of what it cost [Tesoro Signs] on an ongoing basis to deal with this [confusion]" could be calculated by "document[ing] the time spent dealing with phone calls and letters and so forth" and multiplying that figure by "$13 an hour, which is the average wage rate for an employee or administrative employee at [Tesoro Signs]." However, Trevino offered no opinion as to any damages associated with such intangibles as a company's loss of clientele, goodwill, marketing techniques, and office stability. Therefore, I do not believe that there is any evidence on which the trial court could have reasonably concluded that Tesoro Signs' injury could be adequately compensated by an award of damages.
III. BALANCING OF THE EQUITIES
I also disagree with the majority's conclusion that "[t]he trial court's judgment was further justified based on its balancing of the equities."
An injunction is an equitable remedy; therefore, a trial court must weigh the respective conveniences and hardships of the parties and balance the equities. Noell, 431 S.W.3d at 712; Webb, 298 S.W.3d at 383-84. In balancing the equities, a trial court may compare evidence of harm that could result to the defendant and the public by granting the injunction with the evidence of harm to be sustained by the complainant if the court denies the injunction. See Storey v. Central Hide & Rendering Co., 226 S.W.2d 615, 618-19 (Tex. 1950). "If the court finds that the injury to the complainant is slight in comparison to the injury caused the defendant and the public by [granting the injunction], relief will ordinarily be refused." Id. at 619.
Tesoro Petroleum offered evidence that the issuance of a permanent injunction denying the company the right to use the trade name "Tesoro Corporation" in Texas would require the company to change its name in Delaware where it is incorporated, but offered no evidence as to the resulting cost. Further, the evidence reflects that Tesoro Petroleum made the decision to use the trade name in Texas despite knowing that Tesoro Signs was the senior user of the name "Tesoro Corporation." Therefore, any harm associated with the issuance of a permanent injunction is of Tesoro Petroleum's own making. On the other hand, Tesoro Signs offered extensive evidence of injury associated with Tesoro Petroleum's use of its trade name. Therefore, I disagree with the majority's conclusion that the trial court did not err "in implicitly finding that equitable considerations favored Tesoro Petroleum."
IV. CONCLUSION
I would reverse the judgment of the trial court. For the foregoing reasons, I respectfully dissent.
GREGORY T. PERKES
Justice Delivered and filed the 11th day of February, 2016.