Petition — Texas State Optical Co. v. Royal International Optical Co.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1978

NO. 8-15 76

TEXAS STATE OPTICAL COMPANY, a Texas

Corporation, and DR. N. JAY ROGERS,

Individually and as a Partner of Texas

State Optical Company a/k/a TSO,

Petitioners

Vv

ROYAL INTERNATIONAL OPTICAL COMPANY,

d/b/a TEXAS OPTICAL, a Texas Corporation,

Respondent

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF THE

STATE OF NEW MEXICO

ROBERT Q. KEITH, Esquire

MEHAFFY, WEBER, KEITH

& GONSOULIN

1400 San Jacinto Building

Beaumont, Texas 77701

WILLIAM E. SNEAD, Esquire

ORTEGA & SNEAD

Post Office Box 2226

Albuquerque, New Mexico 87103

SUMNER G. BUELL, Esquire

_ JASPER & BUELL

Post Office Box 1626

Santa Fe, New Mexico 87501

Attorneys for Petitioners

Se eee SOME EY REL RRR ERE RATE AAT ER ORT TS

Alpha Law Brief Co., One Main Plaza, No. 1 Main St., Houston, Texas 77002

fh 6 6FFILED

APR 16 1979

MICHABL RODAK, JR., CLERK

SUBJECT INDEX

I ak os cast sees

Se a a

ar

SU ATeeer OF Tie CASE... 5.......... 00.0 0ee.

ee eee eee

ER ajay nr as Ea Ft ooee

REASON FOR GRANTING THE WRIT .............

The decision below raises significant questions con-

cerning the constitutionality of enforcing vague and

overbroad state court injunctions by contempt pro-

ceedings.

See ee nt See eee eee

eee ey es)

EXHIBIT “A” (Opinion Of The Court Of Appeals For

ee ee ee I NS hs cc ven ccs cdcccacccecs

LIST OF AUTHORITIES

CASES

Connally v. General Construction Co., 269 U.S. 385, 391

ET eee CE CEE POPE eee

Cramp v. Board of Public Instruction, 368 U.S. 278, 287

Rl eae ccna bua psinseeeecse

Ford v. Kammerer, 450 F.2d 279, 280 (3rd Cir. 1971) ...

H. K. Porter Co. v. National Friction Products Corp., 568

ne I Se ahi oa ere ov cla scss oes

In Re Berry, 436 P.2d 273, 286 (Ca. 1968) ............

International Longshoremen’s Association, Local 1291 v.

Philadelphia Marine Trade Association, 389 U.S. 64, 76

ee E aN CN Ce Rb Sine KE bbs a eccasevers

Swift and Co. v. United States, 196 U.S. 375 (1905) ...

Unifed States v. Richlyn Laboratories, Inc., 365 F. Supp.

re es shuncehsscensse's

Walker v. City of Birmingham, 388 U.S. 307, 317 (1967)

nm

> Ww NY

10

11

II

UNITED STATES STATUTES

Se Re PRETEND rea ha ded ws hrene gon seaends taeteas

FEDERAL RULES OF CIVIL PROCEDURE

BE GE cKSR abs debs yan ane <eawere assy eae’ «eens

TEXTS

McCarthy, Trademarks and Unfair Competition, Vol. 2,

§ 30:8, p. 334 (Lawyers Co-Operative Publishing Co.

PE Cine Cl ess KFC hees oeek eds Wee Ra Ceska Kearse’

IN THE

Supreme Court of the United States

OCTOBER TERM, 1978

NO. —

TEXAS STATE OPTICAL COMPANY, a Texas

Corporation, and DR. N. JAY ROGERS,

Individually and as a Partner of Texas

State Optical Company a/k/a TSO,

Petitioners

Vv.

ROYAL INTERNATIONAL OPTICAL COMPANY,

d/b/a TEXAS OPTICAL, a Texas Corporation,

Respondent

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF THE

STATE OF NEW MEXICO

The Petitioners, Texas State Optical Company and

Dr. N. Jay Rogers, respectfully pray that a Writ of

Certiorari issue to review the judgment of the Supreme

Court for the State of New Mexico entered in this pro-

ceeding on January 16, 1979.

2

OPINION BELOW

No opinion was rendered by the Supreme Court for

the State of New Mexico. The opinion of the Court of

Appeals for the State of New Mexico, which was not

reported, appears in the Appendix hereto. No opinion

was rendered by the District Court, County of Bernalillo,

State of New Mexico.

JURISDICTION

The District Court, County of Bernalillo, State of

New Mexico, entered its judgment on the mandate on

January 16, 1979. This Petition for Certiorari was filed

within ninety days of that date. This Court’s jurisdiction

is invoked under 28 U.S.C.. § 1257(3).

QUESTIONS PRESENTED

Whether a state court injunction can be so vague and

overly broad as to be constitutionally unenforceable by

contempt proceedings.

STATEMENT OF THE CASE

Injunction

On February 26, 1975, the District Court, County of

Bernalillo, State of New Mexico entered an order which

stated in pertinent part:

Defendants . . . are hereby enjoined . . . from adver-

tising . . . or in any manner whatsoever, using the

trade name “Texas State Optical” or any other name

deceptively similar to . . . “Texas Optical.” (Tr.

~ 180)

3

Texas State Optical Company, Petitioner herein, ap-

pealed to the New Mexico Court of Appeals, arguing

the following: (1) Texas State Optical Company had

priority of use of its trade name, “Texas State Optical,”

throughout New Mexico; (2) the District Court’s findings

that Texas State Optical had not done business in the

Albuquerque trade area and had neither acquired nor

appropriated the trade name, “Texas State Optical,”

were without support in the evidence; and (3) the two

trade names in question, as a matter of law, were not

deceptively similar and findings to the contrary were not

supported by substantial evidence.

The New Mexico Supreme Court, holding that sub-

stantial evidence supported the trial court’s judgment,

reversed the New Mexico Court of Appeals and affirmed

the District Court judgment. Thereafter, on September

15, 1976, the District Court entered judgment on the

mandate and Petitioner ceased using the name “Texas

State Optical.”

Contempt

Petitioners began using the trade name “Texas State

Opticians.” Alleging that “Texas State Opticians” was

deceptively similar to “Texas Optical,” Respondent moved

the Court to hold Petitioner in contempt for violating the

injunction. After conducting several hearings, the District

Court, on March 31, 1977, orally held Petitioner in con-

tempt and fined Petitioner $5,000.00, which was to be

suspended if Petitioner stopped using the trade name

“Texas State Opticians” within thirty days. Accordingly,

on. April 13, 1977, Defendant ceased using the trade

name “Texas State Opticians,” began using the trade

name “TSO Opticians,” and filed a Certificate of Com-

pliance with the District Court. Thereafter, the District

4

Court entered its written findings that the trade name

“Texas State Opticians” was deceptively similar to the

trade name “Texas Optical,” and that, accordingly, Peti-

tioner was in contempt of Court for violating the injunc-

tion by using a deceptively similar trade name. The Court

fined Petitioner $5,000.00, but suspended that fine since

Petitioner “sad ceased using the trade name “Texas State

Opticians” within thirty days of March 31, 1977.

Defendant appealed. In the New Mexico Court of

Appeals, Petitioner argued, inter alia, that the District

Court’s injunction was vague, overbroad and ambiguous

to such an extent that it violated the due process clause

and was, therefore, unenforceable by the use of the

Court’s contempt powers. The Court of Appeals affirmed

the District Court, holding that the argument that the

injunction was vague and overly broad constituted an

impermissible collateral attack on the District Court’s

original judgment.

Texas State Optical Company raised the same point

again when it petitioned the New Mexico Supreme Court

to issue a writ of certiorari. The New Mexico Supreme

Court denied the Petition for Certiorari. The District

Court entered judgment on the mandate on January

16, 1979.

REASON FOR GRANTING THE WRIT

The decision below raises significant questions con-

cerning the constitutionality of enforcing vague and

overbroad state court injunctions by contempt pro-

ceedings.

“The most fundamental postulates of our legal order

forbid the imposition of a penalty for disobeying a com-

5

mand that defies comprehension.” International Long-

shoremen’s Association, Local 1291 v. Philadelphia Ma-

rine Trade Association, 389 U.S. 64, 76 (1967). Con-

sequently, this Court has held:

1. A defendant is denied due process if a penalty

is imposed for violation of a vague or overbroad

federal or state statute.’

2. A federal court injunction “need- be obeyed

only to the extent it reasonably specifies the con-

duct prohibited.’

However, this Court has yet to address the analogous

question: Whether a state court denies due process when

it holds a defendant in contempt for violating a vague

and overbroad state court injunction.

As indicated by this Court’s insistence upon specific

federal court injunctions, the specificity and breadth of

state court injunctions is a matter of considerable im-

portance. With respect to federal court injunctions, this

Court has stated that “defendants ought to be informed,

1. “. . . [A] statute which either forbids or requires the doing

of an act in terms so vague that men of common intelligence must

necessarily guess at its meaning and differ as to its application

violates the first essential of due process of law.” Connally v.

General Construction Co., 269 U.S. 385, 391 (1926).

Any penalty prescribed for the violation of an ambiguous law

“constitutes a denial of due process of law. It is not the penalty

itself that is invalid but the exaction of obedience to a rule or

standard that is so vague and indefinite as to be really no rule

or standard at all.” Cramp v. Board of Public Instruction, 368 US.

278, 287 (1961).

2. Ford v. Kammerer, 450 F.2d 279, 280 (3rd Cir. 1971).

See ‘also International Longshoremen’s Association, Local 1291 v.

Philadelphia Marine Trade Association, 389 U.S. 64 (1967); H. K.

Porter Co. v. National Friction Products Corp., 568 F.2d 24 (7th

Cir. 1978).

6

as accurately as the case permits, what they are forbidden

to do.” Swift and Co. v. United States, 196 U.S. 375

(1905). In view of the danger that vague and unintel-

ligible injunctions will issue, federal courts, under Rule

65(d), are required to frame their “orders so that those

who must obey them will know what the court intends

to require and what it means to forbid.” International

Longshoremen’s Association, Local 1291 v. Philadelphia

Marine Trade Association, 389 U.S. 64, 76 (1967).

In dicta, courts have implied that Rule 65(d) has

constitutional underpinnings:

“The breadth and vagueness of the injunction itself

would also unquestionably be subject to substantial

constitutional question.” Walker v. City of Birming-

ham, 388 U.S. 307, 317 (1967).

“The most fundamental postulates of our legal order

forbid the imposition of a penalty for disobeying

a command that defies comprehension.” International

Longshoremen’s Association v. Philadelphia Ma-

rine Trade Association, 389 U.S. 64, 76 (1967).

“. . . [W]e would have doubts concerning the consti-

tutionality of using contempt sanctions for unin-

tentional failure to comply with a decree so broad

as simply to recite a statutory standard.” United

-. States v. Richlyn Laboratories, Inc., 365 F. Supp.

805, 808 (E.D. Pa. 1973).

The identical concerns and dangers which exist when

a federal court injunction issues under Rule 65(d) exist

when a state court injunction issues.* Unfortunately,

Rule 65(d) does not protect state court defendants from

3. The California Supreme Court has held that “[a] valid judg-

ment of contempt cannot be based upon a” vague, overbroad and

ambiguous injunction. Jn Re Berry, 436 P.2d 273, 286 (Ca. 1968).

7

vague and overbroad injunctions. While the due process

clauses probably protect defendants from such decrees,

this Court has not so held for the following reasons:

1. Rule 65(d) adequately protects defendants from

vague and overbroad federal court injunctions.

2. This Court infrequently has the opportunity to

review the specificity and breadth of state court

injunctions. :

Accordingly, this Court should issue its writ of cer-

tiorari to the New Mexico Supreme Court and should de-

cide whether Respondent’s rights under the Fourteenth

Amendment’s due process clause were violated when Re-

spondent was held in contempt for violating an injunc-

tion which “enjoined [respondent] . . . from advertis-

ing . . . or in any manner whatsoever, using the trade

name “Texas State Optical” or any other name de-

ceptively similar to . . . “Texas Optical.”

On its face, the injunction entered against Texas State

Optical Company was so vague and overbroad that men

of common intelligence must necessarily guess at its

meaning and differ as to its application. Petitioner, when

enjoined from using a name deceptively similar to

Texas Optical, could not know with any certainty

whether the use of any particular trade name violated

the injunction. As one commentator says:

A court order should be phrased in terms of ob-

jective actions, not legal conclusions. An injunction

which merely forbids a defendant from performing

- “acts of unfair competition,” or from “infringing

upon plaintiff's trademarks and trade secrets” adds

nothing to what the law already requires. If an

g

injunction is so worded, then the factual elements

of what exactly is “unfair competition” or “trade-

mark infringement” must be re-hashed all over

again in a contempt hearing.

McCarthy, Trademarks and Unfair Competition, Vol. 2,

§ 30:8, p. 334 (Lawyers Co-Operative Publishing Co.

1973).

The accuracy of Mr. McCarthy’s observation is demon-

strated in this case in which the injunction ordered Peti-

tioner to refrain from using a “deceptively similar” trade

name. In essence, Petitioner was told to obey the law.

Consequently, the trial court, in connection with the

contempt proceeding, was forced to retry the issue of

what constitutes a deceptively similar trade name.

As the injunction in this case shows “[t]he judicial

contempt power is a potent weapon. When it is founded

upon a decree too vague to be understood, it can be a

deadly one. . . . The most fundamental postulates of

our legal order forbid the imposition of a penalty for

disobeying a command that defies comprehension.” Jnter-

national Longshoremen’s Association Local 1291 v. Phil-

adelphia Marine Trade Asociation, 389 U.S. 64, 76

(1967). Therefore, the protection accorded federal court

defendants under Rule 65(d) should be extended to state

court defendants under the due process clauses of the

United States Constitution.

9

CONCLUSION

For this reason, writ of certiorari should issue to

review the judgment of the New Mexico Supreme Court.

Respectfully submitted,

RoBERT Q. KEITH, Esquire

MEHAFFY, WEBER, KEITH

& GONSOULIN

1400 San Jacinto Building

Beaumont, Texas 77701

WILLIAM E. SNEAD, Esquire

OrTEGA & SNEAD

Post Office Box 2226

Albuquerque, New Mexico 87103

SUMNER G. BUELL, Esquire

JASPER & BUELL

Post Office Box 1626

Santa Fe, New Mexico 87501

Attorneys for Petitioners

Of Counsel

10

CERTIFICATE OF SERVICE

I hereby certify that on this the day of April,

1979, three copies of the Petition for Writ of Certiorari

were mailed, postage prepaid, to Mr. E. Douglas Latimer,

Esquire, E. Douglas Latimer, P.A., Suite No. 10006,

American Bank of Commerce Complex, 200 Lomas,

N.W., Albuquerque, New Mexico 87102 and to Charles

C. Spann, Esquire, Charles C. Spann, P.A., Post Office

Box 1031, Albuquerque, New Mexico 87103. I further

certify that all parties required to be served have been

served.

ROBERT Q. KEITH

1400 San Jacinto Building

Beaumont, Texas 77701

Counsel for Petitioners ~

11

EXHIBIT “A”

IN THE COURT OF APPEALS OF THE

STATE OF NEW MEXICO

No, 3 l 12

ROYAL INTERNATIONAL OPTICAL

COMPANY, d/b/a TEXAS OPTICAL,

a Texas corporation,

Plaintifj-A ppellee,

v

TEXAS STATE OPTICAL COMPANY,

a Texas corporation, and DR. N. J. ROGERS,

individually and as a partner of

Texas State Optical Company, a/k/a, TSO,

Defendants Appellants.

Filed September 12, 1978

APPEAL FROM THE DISTRICT COURT

OF BERNALILLO COUNTY

BACA, Judge

E, DouGLas LATIMER

E. Douglas Latimer, P.A.

Albuquerque, New Mexico

CHARLES C. SPANN

Charles C. Spann, P.A.

Albuquerque, New Mexico

Attorneys for Appellee

WILLIAM E. SNEAD

Ortega & Snead

Albuquerque, New Mexico

SUMNER G, BUELL

Jasper & Buell

Santa Fe, New Mexico

ROBERT Q. KEITH

Beaumont, Texas

Attorneys for Appellant

12

OPINION

SUTIN, Judge

This is the second appeal of the defendants. The first

appeal arose from a judgment that restrained defendants

from using the trade name “Texas State Optical” or any

other name deceptively similar to plaintiff's trade name

“Texas Optical.” This judgment was affirmed by the

Supreme Court in Royal Intern’l Optical Co. v. Texas

State Optical Co., 90 N.M. 21 559 P.2d 398 (1976).

The second appeal arises out of a judgment that awarded

plaintiff damages, and, by way of contempt proceedings,

an attorney fee for defendants’ use of the trade name

“Texas State Opticians.”

Because the Opinion of this Court in the first appeal

was ordered by the Supreme Court not to be published,

and the opinion of the Supreme Court was perfunctory,

a resume of the history of this case follows:

In the original trial, the court found that plaintiff and

defendants were doing business in Albuquerque, New

Mexico. Plaintiff registered to do business in April, 1971,

under the trade name of “Texas Optical,” and opened

for business at that time. It had done business continu-

ously under its trade name in the Albuquerque and Santa

Fe trade areas. In September, 1974, defendants opened

for business in competition with plaintiff, under the trade

name of “Texas State Optical.” “Texas Optical” and

“Texas State Optical” were confusingly similar to the

public within the trade areas and by reason thereof,

plaintiff would likely suffer dilution of its trade name

and clientele and would suffer irreparable injury to its

business, trade, and business reputation.

13

The trial court concluded that plaintiff had the prior

right to the exclusive use of the trade name “Texas

Optical” in the Albuquerque and Santa Fe trade areas.

On February 26, 1975, a Judgment and Restraining

Order was entered. (1975 Judgment.) Defendants were

“enjoined and restrained from advertising their product

or in any manner whatsoever, using the trade name

Texas State Optical, or any other name deceptively similar

to plaintiff's trade name Texas Optical. . . .” [Emphasis

added. ]

Defendants appealed the 1975 Judgment to this Court.

The injunction was suspended during this appeal.

The unpublished majority opinion of this Court, Judge

Sutin dissenting, reversed the judgment rendered in the

trial court.

By way of certiorari, the Supreme Court in Royal,

supra, reversed the opinion of this Court in the following

language.

There being substantial evidence to support the

judgment of the trial court, its decision is affirmed.

Thereafter, the trial court entered Judgment On Man-

date. The 1975 Judgment was affirmed. The order sus-

pending the injunction had expired and was no longer

in force, and the court retained jurisdiction to determine

the amount of damages sustained by plaintiff and to

grant judgment accordingly.

Without seeking the guidance of the court, defendants

began to use the trade name “Texas State Opticians”

in place of “Texas State Optical,” and a second action

arose in the same court. Plaintiff moved the court to

14

hold defendants in contempt for use of the trade name

“Texas State Opticians” because it was deceptively similar

to plaintiff's trade name and in violation of the 1975

Judgment. Three hearings were held on the issues of

contempt and damages.

At the end of the last hearing held on March 31,

1977, the trial court orally ordered defendants to be in

contempt. Defendants were fined $5,000.00, suspended

if defendants would, within 30 days, stop the use of the

trade name “Texas State Opticians.” On April 13, 1977,

defendant filed a Certificate of Compliance and changed

its trade name to “TSO Opticians.”

Thereafter, the trial court entered its findings that the

trade name “Texas State Opticians” was deceptively simi-

lar to the name “Texas Optical”; that the defendants —

had been found in contempt of court for a willful viola-

tion of the plain wording of the Court Mandate and

were fined $5,000.00; that the fine was suspended pending

compliance with the court’s Order; and that plaintiff

suffered damages in the total sum of $4,175.00.

Judgment was entered accordingly, and, in addition

thereto, plaintiff was awarded an attorney fee of $2,500.-

00 “incurred in biinging the proceedings to enforce the

Court’s Order.”

Defendants appeal. We affirm.

Defendants raise three points on appeal:

(1) The injunction in the 1975 Judgment is vague,

overbroad and not sufficiently definite to support a judg-

ment of contempt for using a trade name said to be

“deceptively similar” to the name “Texas Optical.”

15

(2) The name “Texas State Opticians” is not decep-

tively similar to the name “Texas Optical” as a matter

of law.

(3) Any damage award or award of attorney’s fees

is not supported by substantial evidence and was unlawful.

A. Defendants are barred from

attacking the 1975 Judgment.

Plaintiff moved the court for an order requiring defend-

ants to show cause why they should not be held in con-

tempt of court for continued use of the trade name “Texas

State Opticians,” in violation of the 1975 Judgment, a

name deceptively similar to plaintiff's trade name “Texas

Optical.”

By way of response, defendants attacked the validity

of the following language in the 1975 Judgment:

“... any other name deceptively similar to plaintiff's

trade name Texas Optical.”

The basis for the attack is the claim that the words

“deceptively similar” are vague, overbroad and ambig-

uous, insufficiently defiuite to support a judgment of con-

tempt; that “there is no guidance anywhere in the trial

court’s judgment that would give TSO any notice as to

what it is restrained from doing.”

Defendants have not explained, nor given any reasons

why they did not seek the guidance of the court before

they adopted the use of the trade name “Texas State

Opticians.” Neither have the defendants explained nor

given any reasons why they did not directly attack the

1975 Judgment by motion to vacate or set aside the

Judgment because of the vagueness of the language.

16

- Plaintiff claims that defendants’ made a collateral at-

tack on the judgment and this they cannot do. We agree.

“The general rule is that a judgment is not subject to

collateral attack where the court had jurisdiction of the

subject matter and of the parties. . . .” 46 Am.Jur.2d

Judgments, § 621 (1969). “ .. . [It] is not open to

contradiction or impeachment, in respect of its validity,

verity, or binding effect, by parties or privies, in any

collateral action or proceeding, except . . . for fraud

in its procurement.” 49 C.J.S. Judgments, § 401 (1947).

However, where lack of jurisdiction affirmatively ap-

pears on the face of the judgment, the judgment is void

and therefore open to collateral attack. St. Paul Fire and

Marine Insurance Co. v. Rutledge, 68 N.M. 140, 359

P.2d 767 (1961). But where the lack of jurisdiction does —

not affirmatively appear on the face of the record, the

judgment is not subject to collateral attack. McDonald

v. Padilla, 53 N.M. 116, 202 P.2d 970 (1948); Arthur

v. Garcia, 78 N.M. 381, 431 P.2d 759 (1967).

If defendants wanted to challenge the validity of the

1975 Judgment, it had to be done by way of a direct

attack, exampled by motion to vacate or set aside the

Judgment. Barela v. Lopez, 76 N.M. 632, 417 P.2d 441

(1966).

Beginning almost 60 years ago, in Acequia Llano v.

Acequia Las Joyas, 25 N.M. 134, 142, 179 P. 235

(1919) the Supreme Court said:

. . . The universal rule adhered to by the courts

is that the judgment or final order of a court having

jurisdiction of the subject-matter and the parties,

however erroneous, irregular or informal such judg-

ment or order may be, is valid until reversed or set

17

aside. Black on Judgments, § 190. And the general

rule is that an error of law does not furnish ground

for collateral attack on a judgment. 15 R.C.L. 861.

[Emphasis added.]

It was repeated in McDonald v. Padilla, supra; In

re Field’s Estate, 40 N.M. 423, 60 P.2d 945 (1936);

and in State v. Patten, 41 N.M. 395, 69 P.2d 931

(1937).

State v. Patten, involved an injunction restraining an

election. In subsequent contempt proceedings for viola-

ting the injunction, the court held that the judgment was

conclusive against collateral attack. The court said:

. . . The appellees having disobeyed the injunction,

cannot now claim that the injunction decree was er-

roneous. The judgment of a court having jurisdiction

is to be obeyed, no matter how clearly it may be

merely erroneous. The method of correcting error

is by appeal, and not by disobedience. A party pro-

ceeded against for disobedience to an order or judg-

ment is never allowed to allege as a defense for his

misconduct that the court erred in its judgment. He

must go further, and make out that in point of law

there was no order and no disobedience by showing

that the court had no right to judge between the

parties upon the subject. [41 N.M. at 402.] [Em-

phasis added.]

See, State ex rel Mix v. Newland, 560 P.2d 255 (Or.

1977).

Furthermore, the contempt proceeding was one under-

taken to enforce the 1975 Judgment.

“A proceeding to enforce a judgment is collateral to

the judgment, and therefore no inquiry into its regularity

18

or validity can be permitted in such a proceeding.” 49

C.J.S. Judgments § 409 (1947); Pitts v. Dallas Nurseries

Garden Ctr., Inc., 545 S.W.2d 34 (Tex. Civ. App.

1976); Travelers Ins. Co. of Hartford, Conn. v. Staiger,

157 Or. 143, 69 P.2d 1069 (1937); Friesen v. Friesen,

196 Kan. 319, 410 P.2d 429 (1966).

Pitts was a post-judgment garnishment proceeding

against State Farm Insurance Companies as garnishees

and holders of monies owed to Pitts. Pitts intervened

and sought to quash the writ of garnishment because the

judgment was “too vague and indefinite.” The Court

said:

. . . Appellant’s [Pitts] questioning of the original

judgment in the garnishment proceedings was a

collateral attack upon the judgment and is not per-

mitted, [citation omitted]. The original judgment

does not appear to be fatally defective upon its

face... . [545 S.W.2d at 37.]

Defendant’s response is not clear. They claim that

plaintiff entirely missed defendants’ point. Defendants’

point is that the phrase “any other name deceptively

similar to plaintiff's trade name Texas Optical” was so

vague and indefinite that the 1975 Judgment could not

be enforced by contempt proceedings; that a “collateral

attack is an attempt to impeach the judgment by matters

dehors the record, in an action other than that in which

it was rendered,” and “that matters dehors the record

were not presented to the trial court, nor are they being

presented to this Court.” Defendants rely on Barela v.

Lopez, supra. Defendants misinterprets this case.

Defendants seem to dance around the doctrine of col-

laterul attack, and attempt to pole vault to reversal

without a pole.

19

We hold that the defendants are barred from attacking

the 1975 Judgment.

B. The name “Texas State Opticians” is deceptively

similar to the name “Texas Optical.”

Defendants’ second point is that “The name ‘Texas

State Opticians’ is not deceptively similar to the name

‘Texas Optical’ as a matter of law.” [Emphasis added.]

The trial court found:

3. The name “Texas State Opticians” is deceptively

similar to the name “Texas Optical.”

4. There has been confusion to the public by the

use of the trade name Texas State Opticians by

respondent and the name Texas Optical by petition-

ers.

Plaintiff had the exclusive use of the trade name

“Texas Optical” from April 1, 1971 to June 2, 1977,

the date the judgment was entered, a period of over six

years.

There was substantial evidence to support the trial

court’s findings of fact, and such findings supported by

substantial evidence cannot be disturbed on appeal.

Boone v. Boone, 90 N.M. 466, 565 P.2d 337 (1977).

Defendants claim that the trade names are not de-

ceptively similar as a matter of law because plaintiff did

not prove that the word “Texas” had acquired a “second-

ary meaning,” and the trial court made no such finding;

that -in the absence of a specific finding that the word

“Texas” had acquired a “secondary meaning,” defendants

were free to use the trade name “Texas State Opticians.”

20

Defendants acquired their “secondary meaning” theory

from the trade mark case of G. & C. Merriam Co. v.

Saalfield, 198 F. 369 (6th Cir. 1912), a case followed

generally in the United States. With reference to “second-

ary meaning,” the court said:

. .. It contemplates that a word or phrase originally,

and in that sense, primarily, incapable of exclusive

appropriation with reference to an article on the

market, because geographically or otherwise de-

scriptive, might nevertheless have been used so long

and so exclusively by one producer with reference

to his article that, in that trade and to that branch

of the purchasing public, the word or phrase had

come to mean that the article was his product; in

other words, had come to be, to them, his trade-

mark. So it was said that the word had come to

have secondary meaning. . . . [Emphasis added.] |

[198 F. at 373.]

If we understood defendants’ position correctly, the

failure to specifically find that the word “Texas” has a

geographical descriptive word in plaintiff's trade name

meant “Texas” to the trade and to the public, then the

trade names were not deceptively similar as a matter of

law.

The “secondary meaning” theory was not raised in the

district court:

Defendants did not point to any place in the contempt

proceedings where this “secondary meaning” theory was

mentioned or presented. The record shows that defendants

made no reference to any duty of plaintiff to shoulder

this burden as a condition precedent to recovery or to any

such defense stated in their response to plaintiff’s motion,

or to any evidence on the subject or to any requested

21

finding by defendants on this issue. It came to plaintiff

and to this Court like a comet out of the sky, and like

the comet, plaintiff's attack disappears from view. “It

is fundamental that matters not brought into issue by the

pleadings and upon which no decision of the trial court

was sought, or fairly invoked, cannot be raised on ap-

peal.” Groendyke Transp., Inc. v. New Mexico St. Corp.

Com’n, 85 N.M., 718, 723, 516 P.2d 689 (1973).

We note that at the 1975 trial defendants submitted a

finding of fact and conclusion of law that the trade

name “Texas State Optical” had acquired a secondary

meaning and that defendants were entitled to protection

as a common law trade name. Defendants’ position lay

at rest there. It was not revived.

It has long been the rule that a final judgment is con-

clusive as to a claim in controversy between the parties

as to every matter which was offered to sustain or defeat

the claim. “Public policy requires that there be an end

to litigation and that rights once established by a final

judgment shall not again be litigated in any subsequent

proceeding.” Ealy v. McGahen, 37 N.M. 246, 251,

21 P.2d 84 (1933). This rule of law has been consistently

followed. Board of County Com’rs of Quay County v.

Wasson, 37 N.M. 503, 24 P.2d 1098 (1933); Miller v.

Miller, 83 N.M. 230, 490 P.2d 672 (1971). The right

and the power of plaintiff to recover against defendants

was established in the 1975 trial. It is too late in the

day for defendants in a contempt proceeding to attempt

to defeat plaintiff's claim for failure to establish a “sec-

ondary meaning” of the word “Texas.”

If we assumed that the contempt proceeding was a

different cause or demand, defendants are estopped by

22

judgment or collateral estoppel. The judgment in the prior

action operated as an estoppel as to those matters which

were actually litigated and determined in the first pro-

ceeding. Once a party has fought a matter in litigation

he cannot later renew that duel. State v. Nagel, 87 N.M.

434, 535 P.2d 641 (1975); Atencio v. Vigil, 86 N.M.

181, 521 P.2d 646 (1974); State v. Tijerina, 86 N.M.

31, 519 P.2d 127 (1973); Town of Atrisco v. Monohan,

56 N.M. 70, 240 P.2d 216 (1952). The “secondary

meaning” theory was decided in the 1975 Judgment.

Defendants’ second attempt to defeat plaintiff's claim is

thwarted.

Finally, when the Supreme Court in Royal Intern’l

Optical Co., supra, affirmed the judgment of the trial

court, the “law of the case” doctrine became effective. -

It established the right and power of plaintiff to further

prosecute its claim against defendants irrespective of the

“secondary meaning” concept. The law of the case,

whether right or wrong, is controlling on the second ap-

peal. This doctrine applies to questions which might have

been, but were not, raised or presented in the prior appeal.

Sanchez v. Torres, 38 N.M. 556, 37 P.2d 805 (1934);

Davisson v. Bank, 16 N.M. 689, 120 P. 304 (1911).

It also applies to those questions which are necessarily

involved in reaching the decision. Fmrs.’ S. Bank of Tex-

homa v. Clayton N. Bk., 31 N.M. 344, 245 P. 543

(1926); United States v. D. & R. G. Railroad, 11 N.M.

145, 66 P. 550 (1901).

We affirm the finding of the trial court that the name

“Texas State Opticians” is deceptively similar to the

name “Texas Optical.”

23

C. The damage award was supported by substantial

evidence.

The trial court found:

7. The issue was presented to the Court by agree-

ment of the parties as to any damages that might

have been suffered by petitioners by respondents

use of the trade name “Texas State Optical” during

the pendency of the appeal in this matter between

the entry of the original order of the Court on

February 26, 1975, and the final order of September

15, 1976.

8. The Court has found the petitioners have suf-

fered damages in the amount of $2,750.00 to the

East Central Store and $1,425.00 damages to the

Five Points Store for a total judgment of $4,175.00.

At the close of the case, the court orally announced:

As everybody’s mentioned here, the calculation

of damages is indeed difficult, that there is no pre-

cise way of calculating damages. The evidence that

has been presented to the Court in certain instances

is rather sophomoric and rather elemental, and per-

haps even the way that this Court will calculate

damages admittedly is not precise but I think the

cases hold the difficulty of calculating damages is

no way a bar to the—to the awarding of damages

if there is some basis in the proof, the evidence

before the Court.

“Ts

We're talking about a 19 month period and we’ve

talked about 30-day months, that’s approximately

570 days, 570 business days, probably less than that

and .. . it would appear to the Ccurt that two stores

particularly have been shown to me to have suffered

some loss.

* * *

24

I think a fair measure would be $5.00 a day, and

the Court is going to award damages of $2,750.00

on the East Central Store and half that amount on

the Five Points store of $1,425.00, for a total of

$4,175.00.

Whether we agree or disagree, we compliment a dis-

trict judge who lays his/her cards on the table for guide-

lines of attorneys and appellate courts. It is important

that we know the basis upon which the trial court reaches

its decision. “It is hornbook law that the decision of a

trial court will be upheld if it is right for any reason.”

Scott v. Murphy Corporation, 79 N.M. 697, 700, 448

P.2d 803 (1968).

While damages must be susceptible of ascertainment

otherwise than by mere speculation, conjecture, or sur- .

mise, it is now generally held that uncertainty which

prevents a recovery is uncertainty as to the fact of the

damage, and not as to the amount; and that where it is

certain that damage has resulted mere uncertainty as to

the amount will not preclude the right to recovery. J. R.

Watkins Co. v. Eaker, 56 N.M. 385, 244 P.2d 540

(1962); Nichols v. Anderson, 43 N.M. 296, 92 P.2d

781 (1939).

Defendants committed a willful violation of the order

of the 1975:Judgment and were held in contempt. We

deem this such a case of wrongdoing that sound policy

requires that the risk involved in the estimation of dam-

ages by the district court should be a burden of the

defendants. We decline to quible over the question of

whether the exact damages have been clearly established.

We experience no misgiving in sustaining the findings of

the trial court under circumstances like those here present,

25

where willful conduct and contempt are established.

Stewart v. Potter, 44 N.M. 460, 104 P.2d 736 (1940).

To view the vexatious difficulty in ascertaining damages

in an injunction proceeding see Gonzales v. Rivera, 37

N.M. 562, 25 P.2d 802 (1933). For an extensive review

of damages for misuse of a trade secret, see DeVries v.

Starr, 393 F.2d 9 (10th Cir. 1968).

4 Callmann, Unfair Competition Trademarks and Mo-

nopolies (3d Ed. 1970). Section 89.1(a), p. 247-248

says:

“Damages” as a term of art has acquired a clear

and definite legal meaning; it is limited to the actual

pecuniary loss sustained by the plaintiff. Whether

the damage results from infringement in the strict

sense of the patent or trademark law or from unfair

competition, it can seldom be measured with any

assurance of mathematical accuracy. Sometimes, the

plaintiff's claim of damages is judicially characterized

as an attempt to seek unjust enrichment at the de-

fendant’s expense. The difficulty besetting any show-

ing of damages to intangible values and the radial

repercussions of a competitive injury can hardly be

over-estimated. The competitive tort does not differ

from other torts and a wrongdoer should answer for

all the consequences naturally resulting from his

wrongful act, whether anticipated or contemplated.

Recoverable damages, therefore, include compensa-

tion for all injury to a plaintiff's business naturally

and proximately caused by the defendant’s tortious

act. This includes injury to reputation or goodwill,

loss of busines, additional expenses incurred because

of the tort, such as change of name, and all other

elements of injury to the business.

We hold that the trial court’s finding on damages was

a fair determination of the loss suffered by plaintiff.

26

D. Plaintiff was entitled

to an attorney fee.

Defendants decry the award of attorney fees to plaintiff.

We disagree. “An injunction while it is in force must be

obeyed in order to preserve respect for and obedience to

the mandate of the court. Any other approach would be

intolerable.” Thomas v. Wollen, 255 Ind. 612, 266 N.E.

2d 20, 22 (1971); State Ex Rel. Mix, supra. In civil

contempt, “the punishment is remedial and designed to

reimburse complainants for the wrong done as a result

of the noncompliance with a valid order of the court.”

Nelson v. Progressive Realty Corp., 81 R.I. 445, 104

A.2d 241, 243 (1954). Reimbursement includes attorney

fees. In the prosecution of the contempt proceedings the

trial court in its discretion may allow the complainant |

a reasonable attorney’s fee to be assessed against the

violator as a part of the expenses and costs incurred by

the complainant. R. E. Harrington v. Frick, 446 S.W.2d

845 (Mo. App. 1969), 43 A.L.R.3d 787 (1972); Folk

v. Wallace Business Forms, Inc., 394 F.2d 240 (4th

Cir. 1968); Chas. Pfizer & Co. v. Davis-Edwards Pharma-

cal Corp., 385 F.2d 533 (2d Cir. 1967); Lyon v. Bloom-

field, 355 Mas. 738, 247 N.E.2d 555 (1969); Novo

Industrial Corp. v. Nissen, 30 Wis.2d 123, 140 N.W.2d

280 (1966); Lewis v. Lorenz, 144 Colo. 23, 354 P.2d

1008 (1960). See, Costilla Co. v. Allen, 15 N.M. 528,

110 P. 847 (1910).

Plaintiff was entitled to an award of $2,500.00 as an

attorney fee for successfully pursuing the contempt pro-

ceeding.

Affirmed.

27

IT IS SO ORDERED.

/s/ LEWIS SUTIN

Judge

WE CONCUR:

/s/ B. C. HERNANDEZ, J.

/s/ REECE LOPEZ, J.