HEAVICAN, C.J.
Following a bench trial, Pathways to Compassion, LLC (Pathways), appeals from the decision of the Douglas County District Court granting Prime Home Care, LLC, a permanent injunction and attorney fees. Prime Home Care sought a permanent injunction pursuant to Neb.Rev.Stat. § 87-217 (Supp.2011), part of the statutes governing the protection of trade names, and Neb.Rev.Stat. § 87-303 (Cum.Supp. 2010), part of the Uniform Deceptive Trade Practices Act,
Jacqueline K. Ross, the owner and operator of both Prime Home Care and "Compassionate Care Hospice," testified during the bench trial that she had been a partner in Nurses in Motion, L.L.C., which registered the trade name "Compassion Care Hospice" in 2003. At trial, Ross testified that "Compassion Care Hospice" was a typographical error and that the company had always presented itself as "Compassionate Care Hospice." Nurses in Motion assigned the registration of the trade name "Compassion Care Hospice" to Prime Home Care in September 2005.
In November 2006, pursuant to Neb. Rev.Stat. § 87-130 (Reissue 2008), Prime Home Care filed an application to register the trade name "Compassionate Care Hospice" with the Secretary of State. In that application, Prime Home Care stated that the name had been in use since October 1, 2006. At the same time, apparently in order to clear up any confusion, Prime Home Care filed with the Secretary of State a notice of "Consent to Use of Similar Trade Name," allowing Prime Home Care to use both "Compassion Care Hospice" and "Compassionate Care Hospice." The Secretary of State allowed Prime Home Care to register both names.
Judith Grey is the chief operating officer of "Compassionate Care Hospice Group," which operates hospice facilities in 19 different states. When the group expanded into Nebraska in 2009, it filed a request with the Secretary of State to form a limited liability corporation under the name "Compassionate Care Hospice of Nebraska, LLC." The Secretary of State sent out a rejection notice on March 11, which stated:
At that point, Grey formed a limited liability corporation under the name "Pathways to Compassion, LLC." Grey was listed as the registered agent, but was not at the time a Nebraska resident as required under Neb.Rev.Stat. § 21-2609 (Reissue 2007). However, at some point during the proceedings, Pathways named a Nebraska resident as its registered agent.
From the time it expanded into Nebraska, Pathways did business as "Compassionate Care Hospice of Nebraska," even after Pathways had received the above notice and had discovered that a company called "Compassionate Care Hospice" was doing business in the Omaha, Nebraska, area. One of the managers of Pathways approached Ross to request permission to use the name "Compassionate Care Hospice of Nebraska," which permission Ross denied. Ross' attorney sent Pathways a cease-and-desist letter, requesting that it not use the trade name "Compassionate Care Hospice." Grey testified that she continued using the name after receiving the cease-and-desist letter. Grey acknowledged that she also received a letter from the Nebraska Attorney General's office informing her that the use of "Compassionate Care Hospice" could result in criminal charges for deceptive trade practices. At trial, when asked about the letters, Grey repeatedly said, "I turned [them] over to my attorney." She eventually admitted that she was waiting for the outcome of this case to decide whether to cease using the name "Compassionate Care Hospice."
Prime Home Care filed this action alleging that Pathways' use of "Compassionate Care Hospice" injured Prime Home Care's business and caused confusion in the market, constituting a deceptive trade practice.
Pathways assigns, consolidated and restated, that the district court erred in (1) granting Prime Home Care's request for a permanent injunction and attorney fees; (2) finding that Pathways violated the Uniform Deceptive Trade Practices Act; and (3) admitting exhibit 37, a document entitled "Assignment of Registration of Trade Name" between Nurses in Motion and Prime Home Care.
In its cross-appeal, Prime Home Care assigns that the district court erred in (1) denying its motion for default as a result of Pathways' failure to designate a proper registered agent, (2) not awarding the full amount of attorney fees requested, and (3) admitting Pathways' expert witness testimony.
An action for injunction sounds in equity.
In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.
A trial court's ruling in receiving or excluding an expert's testimony which is otherwise relevant will be reversed only when there has been an abuse of discretion.
Pathways' brief lists multiple assignments of error related to the district court's decision to grant Prime Home Care's motion for an injunction and attorney fees and in the related findings of fact. We address these assignments of error together.
Pathways first argues that the trial court erred in granting Prime Home Care's request for an injunction and attorney fees pursuant to § 87-217, part of the statutes governing the protection of trade names, and § 87-303, part of the Uniform Deceptive Trade Practices Act. Pathways' argument rests on its contention that "Compassionate Care Hospice" is merely descriptive and therefore is not a protectable trade name.
The registration of trade names in Nebraska is governed by the Trademark Registration Act.
Section 87-217 provides in part:
The evil sought to be eliminated by trade name protection is confusion.
Pathways' argument rests on the premise that "Compassionate Care Hospice" is merely descriptive and has not acquired secondary meaning. Under § 87-209(5)(a), a trade name shall not be registered if it is "merely descriptive or misdescriptive." The district court found that "Compassionate Care Hospice" was not merely descriptive but that even if it was, the name had acquired secondary meaning, which requires that the consuming public associates the name with the source, rather than with the product itself.
Although existing Nebraska case law mentions "secondary meaning," this court has not yet had cause to address what evidence is required to prove such.
Pathways claims that Prime Home Care did not present sufficient evidence to prove secondary meaning. We disagree.
One of the factors to be considered as to whether a trademark has acquired secondary meaning is whether actual purchasers of the product bearing the claimed trademark associate the trademark with the producer.
Pathways claims that Prime Home Care should have presented a great deal more testimony from actual consumers, but the evidence at trial suggested Prime Home Care had a relatively small market share. Ross testified that at the time of trial, Prime Home Care had only 12 patients. Ross further testified that the Omaha hospice market was very small and that "Compassionate Care Hospice" served fewer clients than did some of the other hospice providers in the area. Prime Home Care argues that the number of people who did testify is proportionate to the actual consuming public and thus sufficient to show that consumers associated "Compassionate Care Hospice" with Ross and her company.
Prime Home Care also entered as evidence advertising it had utilized, including business cards, brochures, telephone book advertisements, pill boxes, pens, and note pads. Although some of the items advertised Prime Home Care and "Compassionate
During trial, Ross was asked how much Prime Home Care had spent on advertising for "Compassionate Care Hospice" since 2003. Ross stated her accountant told her that Prime Home Care had spent $120,000 during that time period but that she believed that number was not an accurate reflection of funds actually spent on advertising. Ross stated that the figure did not include her salary or the salaries of other marketers and that it was her opinion that $500,000 to $600,000 would be a more accurate figure.
A nurse marketer for Prime Home Care testified that she worked on marketing and increasing Prime Home Care's client base. She stated that she had given presentations to physicians and social workers regarding Prime Home Care's hospice care services. She testified that Prime Home Care is a small, local operation and that it did business as "Compassionate Care Hospice."
Pathways has several assignments of error related to the district court's admission of evidence and findings of fact regarding Prime Home Care, or its predecessor's, use of the name prior to October 1, 2006. Pathways' arguments rest on two assumptions. The first assumption is that Prime Home Care's complaint constituted a judicial admission and that no evidence of its use prior to October 1, 2006, should have been admitted. And the second assumption is that the record does not support a finding that Prime Home Care established secondary meaning through continuous use. We discuss the admission of exhibit 37, the "Assignment of Registration of Trade Name," below, and determine that Prime Home Care's complaint was not a judicial admission that precluded admitting evidence of Prime Home Care's use of "Compassionate Care Hospice" prior to October 1, 2006.
Furthermore, after our de novo review of the record, we find the record does support the following facts: Ross and her partner in Nurses in Motion first registered "Compassion Care Hospice" in 2003. Ross testified that the name on the registration was a typographical error and that Nurses in Motion had actually used the name "Compassionate Care Hospice" continuously since 2003. Nurses in Motion assigned the name to Prime Home Care in 2005, and Prime Home Care filed a trade name registration for the name in 2006. At the same time, Prime Home Care filed a notice allowing the use of a similar trade name. Therefore, at the time of trial, Prime Home Care or its predecessor had been using the name "Compassionate Care Hospice" for 6 years or more. Ross further stated that Prime Home Care's hospice services were certified by Medicare and licensed by the State of Nebraska under the name "Compassionate Care Hospice."
After Pathways began doing business in Nebraska, Prime Home Care took immediate steps to protect its trade name. Although Pathways had operated outside Nebraska as "Compassionate Care Hospice"
The district court found that Prime Home Care had met its burden to show that "Compassionate Care Hospice" had attained secondary meaning as related to Prime Home Care's hospice services. Specifically, the district court found that Prime Home Care, or its predecessor, had been using the name continuously since 2003, and referral sources testified that they associated "Compassionate Care Hospice" with Ross of Prime Home Care. We review the district court's findings de novo on the record. Given the evidence outlined above, we find that the district court did not err.
Having determined the district court did not err when it found that "Compassionate Care Hospice" had secondary meaning, we next turn to whether the district court erred when it granted Prime Home Care's request for a permanent injunction.
Under § 87-209(6), protection is given to trade names registered in this State. Section 87-217 provides that "[a]ny registrant of a trade name may proceed by suit to enjoin the use, display, or sale of any counterfeits or imitations thereof, and a court of competent jurisdiction may restrain such use, display, or sale on terms which the court deems just and reasonable...."
We set forth the requirements for granting an injunction to protect a trade name in Nebraska Irrigation, Inc. v. Koch.
The likelihood of confusion in the use of trade names can be shown by presenting circumstances from which courts might conclude that persons are likely to transact business with one party under the belief they are dealing with another party. If the similarity is such as to mislead purchasers or those doing business with the company, acting with ordinary and reasonable caution, or if the similarity is calculated to deceive the ordinary buyer in ordinary conditions, it is sufficient to entitle the one first adopting the name to relief.
In this case, the two trade names are essentially identical. Prime Home Care used "Compassionate Care Hospice" and sometimes "Prime Home Care and Compassionate Care Hospice." Pathways did business as "Compassionate Care Hospice of Nebraska." Ross testified at trial that at least on one occasion, a Pathways representative stated that she worked for "Compassionate Care Hospice." Furthermore, both Pathways and Prime Home Care offer identical or nearly identical services.
Both Prime Home Care and Pathways operate within the Omaha area, and both market to the same groups. One of Ross' business associates informed Ross that she had seen the name "Compassionate Care Hospice" on a building in the same geographic region. Ross also testified that she was at a seminar when a representative from Pathways was present and was using the name "Compassionate Care Hospice." From the record, it is clear that Prime Home Care and Pathways were operating in the same geographical area and competing for the same or similar clients.
Several witnesses for Prime Home Care testified that they were confused by Pathways' use of the name. Witnesses who had referred clients to Prime Home Care testified that they had been confused by the appearance of "Compassionate Care Hospice of Nebraska" in the area. Prime Home Care's community outreach director testified that one of Prime Home Care's clients had mistaken Pathways for Prime Home Care. The confusion appears to have arisen very soon after Pathways expanded into Nebraska.
Prime Home Care presented sufficient evidence to show that Pathways was operating a business with a nearly identical name in the same geographical area and serving the same or similar clients. Prime Home Care also presented evidence that consumers had been confused between the two names. We find the district court did not err when it found that confusion existed as a result of Pathways' use of Prime Home Care's protected trade name.
We next turn to Pathways' claim that the trial court erred in its award of attorney fees. Prime Home Care sought attorney fees under both § 87-217, which addresses trade name infringement, and § 87-303, which is part of the Uniform Deceptive Trade Practices Act. We therefore address Pathways' argument that the district court erred in finding that Pathways had violated the Uniform Deceptive Trade Practices Act, in conjunction with its argument that the district court erred when it awarded Prime Home Care attorney fees. As discussed below, we find that Prime Home Care could have recovered attorney fees under either § 87-217 or § 87-303.
Pathways claims the trial court could award attorney fees only if Prime Home Care can prove that it willfully engaged in a trade practice it knew to be deceptive. But § 87-217, quoted above, provides that a trade name registrant may receive reasonable attorney fees in a case for trade name infringement where no such deception is required. As discussed above, the district court did not err in granting Prime Home Care's request for an injunction and Prime Home Care showed that a likelihood of confusion existed. Under § 87-217, Prime Home Care is entitled to reasonable attorney fees.
Prime Home Care also sought attorney fees under § 87-303, part of the Uniform Deceptive Trade Practices Act. Pathways claims that because it had a good faith
As noted above, Prime Home Care presented evidence that Pathways knew the trade name "Compassionate Care Hospice" was already in use when it expanded into Nebraska. Pathways continued to do business under that name even after being notified by the Secretary of State that "Compassionate Care Hospice" was in use and after Ross' attorney sent a cease-and-desist letter.
Hence, we find that the district court did not err in determining that Pathways had engaged in deceptive trade practices or in granting Prime Home Care's request for attorney fees under either § 87-217 or § 87-303. These assignments of error are without merit.
In its next assignment of error, Pathways argues that the trial court erred by admitting exhibit 37, which was the "Assignment of Registration of Trade Name" between Nurses in Motion and Prime Home Care. Prime Home Care's amended complaint stated that it had "registered the trade name `Compassionate Care Hospice,' under which it had conducted business in Nebraska since October 1, 2006 in connection with its home healthcare and hospice care business." Exhibit 37 appears to support Prime Home Care's contention that some form of the name "Compassionate Care Hospice" was in use prior to October 1, 2006, the date of the trade name registration. Pathways claims that because Prime Home Care made a judicial admission in its amended complaint, exhibit 37 should not have been admitted.
The admission of evidence is reviewed for abuse of discretion where the Nebraska Evidence Rules commit the evidentiary question at issue to the discretion of the trial court.
Pathways claims that based on the doctrine of judicial admissions and Prime Home Care's amended complaint, October 1, 2006, should be considered the first date Prime Home Care used "Compassionate Care Hospice." Prime Home Care counters by stating that "[j]udicial admissions must be unequivocal, deliberate, and clear,
Prime Home Care argues that its amended complaint makes no mention of its use of "Compassionate Care Hospice" prior to October 1, 2006. Prime Home Care also argues that even if the statement in its amended complaint could be read in such a way, it would be inadvertent.
We find that the trial court did not abuse its discretion by admitting exhibit 37, because Prime Home Care's admissions cannot be said to have been unequivocal, deliberate, or clear. Pathways' final assignment of error is without merit.
In its cross-appeal, Prime Home Care assigns that the district court erred when it denied its motion to default. Prime Home Care argues that § 21-2609 requires a limited liability corporation to have a properly designated registered agent. Because we found that the district court properly granted Prime Home Care's request for an injunction, we need not address this assignment of error.
Next, Prime Home Care argues that the district court committed an abuse of discretion by not granting the full amount of attorney fees. It alleges that by the end of the trial, its attorney fees totaled $55,700.50 and that the district court awarded only $27,500. In its order, the district court stated that it had
As Prime Home Care noted, we review the award of attorney fees for an abuse of discretion.
The attorney invoices appear to support Pathways' contention that some of the fees were incurred on unrelated matters. The district court appears to have considered the appropriate factors in its award of attorney fees, and its finding is not clearly untenable. We therefore find that the district court did not abuse its discretion in the amount of attorney fees it awarded. This assignment of error is without merit.
Finally, Prime Home Care argues that the trial court erred in admitting the expert
We find that the name "Compassionate Care Hospice" acquired secondary meaning as related to Prime Home Care's hospice services. We further find that the district court did not err in granting an injunction and attorney fees to Prime Home Care. Finally, we find that Prime Home Care's assignment of error on cross-appeal regarding attorney fees is without merit.
AFFIRMED.
WRIGHT, J., not participating in the decision.
