STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ZORBA, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 83-200

) ZORBA'S RESTAURANT AND LOUNGE, ) INC. and DEPARTMENT OF STATE, )

)

Respondents )

)

RECOMMENDED ORDER

This case was heard pursuant to notice on March 22, 1983, in Clearwater, Florida before Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case arose on the petition of Zorba, Inc. filed with the Department of State which alleged that Zorba's Restaurant and Lounge, Inc. had improperly reserved its corporate name and petitioning the Department of State to revoke the reservation of said name. The sole issue presented in this proceeding is whether the corporate names of the two corporations are deceptively similar, and which of the corporations, if any, has the right to the corporate name.

APPEARANCES

For Petitioner John G. Fatolitis, Esquire Zorba, Inc.: One North Pinellas Avenue

Tarpon Springs, Florida 33589

For Respondent Edwardo R. Latour, Esquire Zorba's Restaurant Yanchuck, Thompson & Young, P.A. and Lounge, Inc.: 1100 South Pinellas Avenue

Tarpon Springs, Florida 33589

For Respondent Department of

State: Was not represented and did not appear.

Both parties submitted post hearing proposed findings of fact in the form of a Proposed Recommended Order. To the extent the proposed findings of fact have not been included in the factual findings in this order, they are specifically rejected as being irrelevant, not being based upon the most credible evidence, or not being a finding of fact.

FINDINGS OF FACT

1. The name Zorba's Restaurant and Lounge has been continuously used by the Petitioner or its predecessors in business as the name of a restaurant and lounge located at 504-508-510 Athens Street, Tarpon Springs, Florida, for a period of over ten years. Kaliope Padides was at one time director of a

   corporation named Zorba Lounge, Inc. which originally owned and operated the aforementioned business. In 1975 this business was sold and the corporation, Zorba Lounge, Inc. was dissolved involuntarily on November 14, 1975. The purchaser was required to continue using the name Zorba Restaurant and Lounge. Two or three years thereafter, the brother-in-law of Kaliope Padides, Peter Padides, bought the business and operated it as a sole proprietorship until December, 1982. At that time, the business burned and Peter asked Kaliope and her husband, Nicholas, to assist him in operating the business. They elected to form a corporation and instructed their attorney to reserve the name Zorba's.

   
   

2. On December 23, 1982, counsel for Anthanasios and Linda Maillis sent a letter to the Division of Corporations, State of Florida, reserving the name Zorba's Restaurant and Lounge, Inc. The Maillises had instructed their counsel to reserve the name Zorba's Restaurant and Lounge, Inc. although they were aware of the business operated by Peter Padides, because they thought the name Zorba's Restaurant and Lounge, Inc. was not protected.

   
   

3. On December 27, 1982, counsel for Kaliope, Nicholas and Peter Padides sent a letter to the Division of Corporations, State of Florida, reserving the name Zorba, Inc.

   
   

4. On December 27, 1982, the Division of Corporations, State of Florida, reserved the name Zorba's Restaurant and Lounge, Inc. and Zorba, Inc. and forwarded to the respective parties confirmation of said name reservations.

   
   

5. On January 4, 1953, the Articles of Corporation for Zorba, Inc. were filed and sealed by the Secretary of State, State of Florida on January 13, 1983.

   
   

6. On January 6, 1983, the Articles of Corporation for Zorba's Restaurant and Lounge, Inc. were filed and sealed by the Secretary of State, State of Florida on January 10, 1983.

   
   

7. The Maillises reserved the name and incorporated in the name Zorba's Restaurant and Lounge, Inc. knowing the existence of the business operating in the name of Zorba's Restaurant and Lounge and with the intent to capitalize on the use of that name in operating a similar business located in the same geographic area. The reservation of this name was made in bad faith, and for the purpose of engaging in unfair competition.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Department of State, Secretary of State is charged under the provisions of Chapters 607 and 616, Florida Statutes, with regulating corporations within the State of Florida. This authority extends to the reservation of corporate names.

   
   

9. The Division of Administrative Hearings has authority to enter this Recommended Order pursuant to the provisions of Section 120.57, Florida Statutes.

   
   

10. Section 607.027, Florida Statutes, provides that a corporate name may be reserved if the Department of State finds that the name is available for corporate use. A name is available for use as a corporate name if the name is not deceptively similar to the name of another domestic corporation existing under the laws of the State of Florida or a foreign corporation authorized to transact business in the state, or a name that has been reserved or registered.

    Pursuant to the statutory provisions, the Department has an active rule 1N-1.04, which states:

    
    

    Corporate names are deceptively similar if on comparison of the names . . . there is an apparent difference, but the dif- ference or differences are of such character that the names are likely to be

    confused by persons giving oral or written information to this [Department of State] office, or by persons in the Office of the Secretary of State who are attempting to enter into or retrieve from the records

    of this [Department of State] office corporate information, or by persons at- tempting to receive written or oral informa- tion from the Office of the Secretary of State, or by judicial or law enforcement officers, or by persons in the general public who are attempting to identify

    a corporation solely on the basis of written or oral communications concerning its name, or by consumers who could be easily confused by similar names. Such names shall be re-

    jected by the Division and shall not be filed.

    
    

11. In this case, the Department of State reserved the two similar names on the same date. It is impossible to conclude which was reserved first. However, the facts revealed that the Petitioner had a previous right to the said name through the long and continued use of the name Zorba's Restaurant and Lounge. The attempt by the Respondent Maillis to reserve the corporate name Zorba's Restaurant and Lounge, Inc. was for the purpose of capitalizing on the business reputation of the unincorporated business which Maillis knew was already operating in the Tarpon Springs area under the same name.

    
    

12. Having a corporation with a name which is virtually identical to the name of an already established non-corporate business is confusing to the public and is not permitted. The Petitioner could seek protection of the courts for the use of the name Zorba's Restaurant and Lounge, and would have the right to use said name in the conduct of its business notwithstanding its corporate name. The Respondent corporation, Zorba's Restaurant and Lounge, Inc. would be precluded from using the name Zorba's Restaurant and Lounge as an infringement upon the business name of Petitioner's business regardless of its corporate name. The Respondent corporation's sole argument in support of its claim is that it should have the right to that corporate name by virtue of requesting its reservation first. However, the reservation of the name was in bad faith and intended to create the instant conflict. Based upon this fact, it is recommended that the corporation Zorba's Restaurant and Lounge, Inc. be divested of that name.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law it is recommended that the Respondent's name of Zorba's Restaurant and Lounge, Inc. be rejected and its reservation of the name revoked.

DONE and ORDERED this 28th day of April, 1983, in Tallahassee, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 28th day of April, 1983.

COPIES FURNISHED:

John G. Fatolitis, Esq. One North Pinellas Avenue

Tarpon Springs, Florida 33589

Edwardo R. Latour, Esq. Yanchuck, Thompson & Young, P.A. 1100 South Pinellas Avenue Tarpon Springs, Florida 33589

William G. Stevens, III, Esq. Office of General Counsel Department of State

The Capitol

Tallahassee, Florida 32301

Honorable George Firestone Department of State

The Capitol

Tallahassee, Florida 32301

Docket for Case No: 83-000200

Orders for Case No: 83-000200