«IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE September 28, 1998 Session CORPORATE CATERING, INC. v. CORPORATE CATERING, ETC., LLC, ET AL. Appeal ...»
IN THE COURT OF APPEALS OF TENNESSEE
September 28, 1998 Session
CORPORATE CATERING, INC. v.
CORPORATE CATERING, ETC., LLC, ET AL.
Appeal from the Circuit Court for Davidson County
No. 96C-903 Walter C. Kurtz, Judge
No. M1997-00230-COA-R3-CV - Filed March 20, 2001
This appeal involves a dispute over the use of a defunct catering business’s trade name and menu.
The owner of the catering business filed suit in the Circuit Court for Davidson County seeking damages for conversion, breach of common-law copyright, and infringement of its business trade name and the distinctive names of its menu items. The trial court granted the defendants’ motions for directed verdict regarding the conversion and the common-law copyright claims. After the jury returned a $12,500 verdict on the infringement of the trade name claim, the trial court granted the defendants’ motion for a judgment in accordance with their motion for a directed verdict. In the alternative, the trial court, acting as thirteenth juror, set the verdict aside and granted a new trial. On this appeal, the defunct catering business asserts that the trial court erred by dismissing its claims for conversion and breach of common-law copyright. It also asserts that the trial court erred by failing to enter a judgment on the jury’s verdict on the trade name claim. We have determined that the trial court decisions are supported by the law, and therefore, we affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed WILLIAM C. KOCH, JR., J., delivered the opinion of the court, in which BEN H. CANTRELL, P.J., M.S., and WILLIAM B. CAIN, J., joined.
David O. Huff, Nashville, Tennessee, for the appellant, Corporate Catering, Inc.
Jay R. Slobey, Nashville, Tennessee, for the appellees, Corporate Catering, Etc., LLC and R.
OPINION Joseph Cheek started a catering business in 1988 called Corporate Catering, Inc. to provide food service to private airplanes flying in and out of Nashville’s airport. When this business proved successful, he began providing cafeteria service for several Nashville companies. By the early 1990s, Mr. Cheek’s company had over $1,000,000 in revenue and employed approximately sixty persons. Among the hallmarks of Mr. Cheek’s business were the creative names he gave to the sandwiches and other items on his menu. These names included: the “San Fran Cristo,” the “Key West Smuggler,” the “Maui Wow,” and the “Music City Jamwich.” Corporate Catering, Inc.’s success was short-lived. In 1992, Mr. Cheek made what he later characterized as a “bad business choice” when he contractedto provide on-site food service for a Nashville hotel. In November 1993, after losing approximately $250,000 on the hotel venture, Mr.
Cheek placed Corporate Catering, Inc. in Chapter 11 bankruptcy.
Mr. Cheek met Michelle Blaylock several months after he had placed his company in bankruptcy. Ms. Blalock had heard about Corporate Catering, Inc. from a friend who worked at the Nashville Airport and was interested in buying the business. Mr. Cheek was discouraged with his reorganization efforts and was receptive to Ms. Blaylock’s overtures. After several meetings in late October or early November 1994, Ms. Blaylock offered to buy Mr. Cheek’s business for $25,000.
Mr. Cheek rejected the offer, and the negotiations ended at that point. A short time later, Mr. Cheek converted the Chapter 11 proceeding to a Chapter 7 liquidation proceeding.
On November 29, 1994, Ms. Blaylock purchased most of Corporate Catering, Inc.’s tangible assets, as well as its telephone number, at a public auction conducted by the Chapter 7 bankruptcy trustee. Approximately four months later, on March 30, 1995, Ms. Blaylock incorporated Corporate Catering, Etc. LLC and opened for business at the same location and using the same telephone number that Mr. Cheek’s business had used. Ms. Blaylock also based her menu on the menu that Mr. Cheek’s business had used. Many of the names and descriptions of the menu items used by Ms.
Blaylock were identical to the names and descriptions that Mr. Cheek had used.
In the meantime, Mr. Cheek, now doing business as Access Food Service, went to work for Nortel, one of Corporate Catering, Inc.’s former clients. He did all of Nortel’s catering and ran the company’s in-house cafeteria. Eventually, he became upset when he learned that Ms. Blaylock was calling her business “Corporate Catering” and that she was using many of the menu names and descriptions that he had created. In retaliation, Mr. Cheek began to disparage Ms. Blaylock’s business and to tell others that Ms. Blaylock and her associates had stolen his business. In late November 1995, Mr. Cheek received a letter from Ms. Blaylock’s lawyer insisting that he cease and desist using the name “Corporate Catering” and impugning Ms. Blaylock’s integrity.
The letter from Ms. Blaylock’s lawyer prompted Mr. Cheek, acting through Corporate Catering, Inc.,1 to file suit in the Circuit Court for Davidson County in March 1996 against Corporate Mr. Cheek had not relinquished the corporate charter for Corporate Catering, Inc. in the bankruptcy proceeding and had maintained the charter in good standing even though the corporation transacted no business after November 1994.
-2Catering, Etc., LLC, Ms. Blaylock, and two of Ms. Blaylock’s business associates.2 He alleged that Ms. Blaylock and her company had converted and infringed his corporate trade name “Corporate Catering” and that they had also breached his common-law copyright covering the names and descriptions of his menu items. Even though Ms. Blaylock sold the business in March or April 1997 to become a “stay-at-home-mom,” Mr. Cheek insisted on pressing his lawsuit forward.
The case was tried in July 1997. At the conclusion of Corporate Catering, Inc.’s case-inchief, the trial court granted a directed verdict on the claim that Ms. Blaylock has converted the plaintiff’s menu items. When Ms. Blaylock renewed her motion for a directed verdict at the close of all the evidence, the trial court directed a verdict on the common-law copyright claim. The remaining issue regarding trade name infringement went to the jury, and the jury awarded Corporate Catering, Inc. a $12,500 judgment against Ms. Blaylock and Corporate Catering, Etc., LLC.
Thereafter, Ms. Blaylock and Corporate Catering, Etc., LLC moved for a judgment in accordance with their earlier motions for directed verdict and, in the alternative, for a new trial. On September 25, 1997, the trial court granted the motion for directed verdict on the trade name infringement issue because “Mr. Cheek presented no competent evidence by which a jury could find value for the trade name Corporate Catering, Inc.” The trial court also expressly determined that, if its decision to grant the motion in accordance with the motion for directed verdict was in error, it would grant Corporate Catering, Etc., LLC and Ms. Blaylock a new trial “because the Court does not credit Mr. Cheek’s testimony for the valuation of the common law trade name in this matter.” Left with nothing to show for its efforts, Corporate Catering, Inc. has appealed.
THE STANDARD REVIEWOF Mr. Cheek takes issue with both the trial court’s decision to grant a directed verdict dismissing his conversion and copyright claims involving the menu items and its decision to grant the motion in accordance with the motion for a directed verdict dismissing his business trade name infringement claim. On appeal we apply the same principles when we review a trial court’s decision to grant either of these motions. Holmes v. Wilson, 551 S.W.2d 682, 685 (Tenn. 1977); Kaley v.
Union Planters Nat’l Bank, 775 S.W.2d 607, 611 (Tenn. Ct. App. 1988); Groover v. Torkell, 645 S.W.2d 403, 409 (Tenn. Ct. App. 1982).
Directed verdicts under either Tenn. R. Civ. P. 50.01 or 50.02 are appropriate only when reasonable minds cannot differ as to the conclusions to be drawn from the evidence. Alexander v.
Armentrout, 24 S.W.3d 267, 271 (Tenn. 2000); Eaton v. McClain, 891 S.W.2d 587, 590 (Tenn.
1994); Ingram v. Earthman, 993 S.W.2d 611, 627 (Tenn. Ct. App. 1998). A case should not be taken away from the jury, even when the facts are undisputed, if reasonable persons could draw different conclusions from the facts. Gulf, M. & O.R. Co. v. Underwood, 182 Tenn. 467, 474, 187 Ms. Blaylock denied that the two othe r individual d efendants we re connec ted with the op eration of C orporate Catering, Etc., LLC, and M r. Cheek did not pursue his claims against these per sons. Follow ing the trial, Corp orate Catering, Inc. dismissed these claims without prejudice.
-3S.W.2d 777, 779 (1945); Hurley v. Tennessee Farmers Mut. Ins. Co., 922 S.W.2d 887, 891 (Tenn.
Ct. App. 1995). A trial court may, however, direct a verdict with regard to an issue that can properly be decided as a question of law because deciding purely legal questions is the court’s responsibility, not the jury’s.
In appeals from a directed verdict, the reviewing courts do not weigh the evidence, Conatser v. Clarksville Coca-Cola Bottling Co., 920 S.W.2d 646, 647 (Tenn. 1995); Benton v. Snyder, 825 S.W.2d 409, 413 (Tenn. 1992), or evaluate the credibility of the witnesses. Benson v. Tennessee Valley Elec. Coop., 868 S.W.2d 630, 638-39 (Tenn. Ct. App. 1993). Instead, they review the evidence in the light most favorable to the motion’s opponent, give the motion’s opponent the benefit of all reasonable inferences, and disregard all evidence contrary to that party’s position.
Alexander v. Armentrout, 24 S.W.3d at 271; Eaton v. McClain, 891 S.W.2d at 590; Smith v.
Bridestone/Firestone, Inc., 2 S.W.3d 197, 199 (Tenn. Ct. App. 1999).
A Tenn. R. Civ. P. 50.01 motion for directed verdict should not be granted if the evidence is sufficient to create an issue for the jury to decide. White v. Vanderbilt Univ., 21 S.W.3d 215, 231 (Tenn. Ct. App. 1999); Norman v. Liberty Life Assurance Co., 556 S.W.2d 772, 773 (Tenn. Ct. App.
1977). Likewise, a jury’s verdict should not be overturned in response to a Tenn. R. Civ. P. 50.02 motion in accordance with a motion for a directed verdict unless the evidence, including all the inferences that can reasonably be drawn from the evidence, does not support a verdict for the plaintiff under any of the theories that the plaintiff advanced at trial. Williams v. Brown, 860 S.W.2d 854, 857 (Tenn. 1993); Voss v. Shelter Mut. Ins. Co., 958 S.W.2d 342, 343 (Tenn. Ct. App. 1997).
II. THE COMMON-LAW COPYRIGHT CLAIM
Corporate Catering, Inc. first asserts that the trial court erred by directing a verdict at the close of all the proof with regard to its claim that Ms. Blaylock wrongfully reproduced its menu containing distinctive menu items. It argues that these items were entitled to common-law protection and that it made out a prima facie claim of common-law copyright infringement. The fatal flaw with Corporate Catering, Inc.’s argument is that common-law copyright claims no longer exist.
Despite the fact that U. S. Const. art. I, § 8, cl. 8 empowers Congress to protect copyrights, the states have concurrent power to protect copyrights as long as their copyright protections do not conflict with federal law. Goldstein v. California, 412 U.S. 546, 559-60, 93 S. Ct. 2303, 2311 (1973). The states’ regulatory prerogatives are still subject to preemption by Congress by virtue of the Supremacy Clause in U. S. Const. art. VI, cl. 2. However, prior to January 1, 1978, Congress had not occupied the field so completely that federal law displaced state law. Thus, up until 1978, state courts had jurisdiction to decide common-law copyright claims predicated on state law. State Dep’t of Health and Rehabilitative Servs. v. Southpointe Pharmacy, 636 So. 2d 1377, 1379 (Fla.
Dist. Ct. App. 1994).
-4Congress shifted the balance of power between the federal and state governments with regard to the enforcement of copyrights when it amended the Copyright Act in 1976. These amendments reflected Congress’s express intention to preempt state copyright regulation in any area where the federal copyright statutes apply. Jacob’s Wind Elec. Co. v. Department of Transp., 626 So. 2d 1333, 1336 (Fla. 1993). Accordingly, 17 U.S.C.A. § 301(a) (West 1996) states:
Thus, from and after January 1, 1978, the federal Copyright Act is the only source of protection against copying of copyrightable material. Bridgeman Art Library, Ltd. v. Corel Corp., 25 F. Supp.
2d 421, 429 (S.D.N.Y. 1998).
As broad as the language of 17 U.S.C.A. § 301(a) is, it does not preempt state claims involving rights that are not equivalent to the rights protected by the federal copyright statutes. For preemption to apply, the state law claim must fit the “subject matter requirement”3 and the “general scope requirement”4 of 17 U.S.C.A. § 301(a). National Basketball Ass’n v. Motorola, Inc., 105 F.3d 841, 848 (2d Cir. 1997). The “subject matter requirement” relates to the nature of the work in which these rights are being claimed; while the “general scope requirement” relates to the nature of the rights granted under state law. 1 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 1.01[B], at 1-10 (2000) (“Nimmer on Copyright”).
When called upon to determine whether federal copyright law preempts a state claim, the courts employ a two-part test. First, they determine whether the subject matter of the state claim falls within “subject matter of copyright as specified in sections 102 and 103.” Second, they determine whether the state claim protects rights equivalent to any of the exclusive rights of a federal copyright.