Arkansas Business Litigation Lawyer & Attorney : Allen Law Firm : Serving Little Rock, Fort Smith, North Little Rock

The Eastern District of Missouri granted a temporary restraining order based on trademark infringement in Sensient Technologies Corp. v. SensoryFlavors, Inc., 2008 WL 762092 (E.D. Mo. 3/21/08).

Sensient Technologies is the corporate umbrella that used to be Universal Foods Corporation. One of Sensient's companies is Sensient Flavors. SensoryFlavors is a competitor that was formed by Charles Nicolais, the former head of Sensient Colors, Inc., which is another of Sensient's subsidiaries.  Defendants argued they came up with the name SensoryFlavors without copying Sensient Flavors.

The court easily granted the TRO and only required a $25,000 bond. This case is a good reminder that trademark infringement turns on likelihood of confusion; it does not matter how the infringing mark was created.

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The district court of South Dakota denied a preliminary injunction in Universal Underwriters Ins. Co. v. Schmidt, 2008 WL 631197 (D.S.D. 3/6/08).

Schmidt was an employee of Universal selling property, casualty and life insurance products to automobile dealers. He signed a noncompete agreement that prohibited him from selling these products for 2 years after his employment. During his employment with Universal, Schmidt began selling finance products to automobile dealers. He quit his job with Universal and opened his own business selling these other finance products.

The court construed the noncompete agreement narrowly, finding that Schmidt's actions were not prohibited by the contract. The court indicated Universal might incur some harm because of Schmidt's business but concluded any such harm would not be irreparable. After 3 months of discovery and briefing, the court denied the preliminary injunction.

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The Western District of Missouri dismissed a declaratory action claiming no trademark infringement in Sustainable Community Development, LLC v. EMRO USA, Inc., 2008 WL 495603 (W.D. Mo. 2/20/08).

The parties have an interesting history. SCD filed suit in 2005, which the parties eventually settled. In August 2007, EMRO sent a cease and desist letter alleging trademark violations. Instead of responding, SCD filed this action in Missouri. One day after receiving service, EMRO filed suit in Texas and moved to dismiss this case. The court held that this lawsuit was a preemptive strike suit for declaratory relief. See Northwest Airlines, Inc. v. American Airlines, Inc., 989 F.2d 1002 (8th Cir. 1993). The court dismissed this case, and the parties' dispute will proceed in the Texas lawsuit.  

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The Court of Appeals affirmed a default judgment against an insurance company in Aegis Insurance Company v. Robertson, No. CA-07-872. The case started out commonly enough: the plaintiff filed suit in Benton County. "After receipt of service, counsel for appellant . . . contacted appellee’s attorney and requested a thirty-day extension of time to file a response. Appellee granted this request." Things got interesting after the 30-day extension expired:

[A]fter the expiration of that period [appellant's counsel] sent appellee a letter stating that its response had been delayed by stenographic and weather problems, that local counsel had been obtained, and that it would file a counterclaim for “abuse of process in a frivolous law suit” if appellee did not voluntarily dismiss her lawsuit.

Appellant filed an untimely answer one week later.

The Court of Appeals unceremoniously dealt with the idea that "stenographic and weather problems" were sufficient to justify setting aside a default judgment." Appellant also floated the argument that "grant of a default judgment in this case is contrary to the public policy preference for deciding cases on their merits." As the Court of Appeals noted, "that can be said of all default judgments."

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The Arkansas Court of Appeals affirmed the trial court's decision in Glenn Mechanical, Inc. v. South Arkansas Regional Health Center, Inc., No. 06-1473 (3/5/08).

Glenn obtained a contract to perform dirt work at SARHC. Glenn insisted on writing the contract, which provided that any work changes could only be performed with a written amendment. Soon after they began work, SARHC asked Glenn to undercut the parking lot. They did so without a written amendment, and SARHC refused to pay them for the extra work. The trial court held the contract applied to the undercutting and entered judgment for SARHC.

The court of appeals affirmed, holding that Glenn is bound by the contract it wrote. Glenn assumed the risk by performing additional work without a written agreement when it was required by the contract.

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The appellants in Castleberry v. Fohn, No. CA07-1040, a Ouachita County medical malpractice case, fell victim to the final order rule when the Arkansas Court of Appeals dismissed their case. The plaintiff, Donald Castleberry, who was suing on behalf of the estate of Bobby L. Castleberry, filed a medical malpractice action against the Ouachita County Medical Center, Dr. Charles H. Fohn, Dr. Charles H. Fohn, M.D., P.A., and six John Doe defendants. Ouachita Circuit Judge David Guthrie dismissed the suit as to Dr. Fohn and his professional association on the basis of the statute of limitations. The order dismissing the Fohn defendants did not cover the Doe defendants or Ouachita County Medical Center. In a per curiam opinion, the en banc Court of Appeals quickly held that the order was not appealable.

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The Arkansas Supreme Court answered a question certified to it by Judge J. Leon Holmes of the Eastern District of Arkansas, in Essex Insurance Company v. John Holder et al., No 07-803.

Tom and Kara Baumgartner contracted with J&H Enterprises to build their new home. They sued J&H in an Arkansas state court under a variety of contract and tort theories alleging damages due to "[J&H]’s delays, employment of incompetent subcontractors, and defective or incomplete construction." The owner of J&H invoked commercial general liability policies issued to him by Essex Insurance Company and demanded that Essex defend him against the Baumgartners. Essex responded by filing a declaratory judgment action in federal court, seeking a ruling that it had no duty to defend J&H under the GCL policies it issued to J&H.

The policies defined an "occurrence"--an event triggering the policy--as an "accident." The Baumgartners argued that the term "accident" in the policy was ambiguous and cited the well-known rule that an ambiguous insurance policy is construed against the drafting insurance company.

After surveying Arkansas precedent and conducting a survey of other jurisdictions, the Court disagreed and held that "[f]aulty workmanship is not an accident; instead, it is a foreseeable occurrence, and performance bonds exist in the marketplace to insure the contractor against claims for the cost of repair or replacement of faulty work." (emphasis supplied).

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The Arkansas Court of Appeals affirmed dismissal in Bibbs v. Community Bank, No. 07-808 (3/5/08).

The plaintiffs defaulted on a loan to Community Bank. The bank sued for foreclosure in 2003, and the plaintiffs filed for bankruptcy. In 2005, they filed this action claiming the bank's misconduct forced them into bankruptcy. In 2007, the bank moved for summary judgment, arguing that only the bankruptcy trustee could have standing. The plaintiffs amended the complaint to add the trustee, but the trial court dismissed the case because the statute of limitations had run.

The court of appeals affirmed because the relate back doctrine could not apply in this case. Because the plaintiffs did not have standing, the original complaint was void. The amended complaint had nothing to relate back to, and the statute of limitations had run.

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The Arkansas Supreme Court affirmed dismissal in City of Dardanelle v. City of Russellville, No. 07-195 (2/28/08).

This case involves a long-standing dispute about where Russellville can build a sewage pipeline. They originally chose a location near Dardanelle City Park. Dardanelle protested and proposed a location further downstream that would have cost an additional $6 million to build (which Russellville did not have). On May 10, 2002, after years of disagreement, the parties signed a Joint Resolution where they agreed to work together to get funding to build the pipeline at Dardanelle's suggested location.

The parties worked together until 2006, but they were unable to obtain additional funding. Russellville then obtained its permit to build the pipeline at the original location. Dardanelle filed suit, claiming the Joint Resolution was a binding contract that Russellville breached. The trial court dismissed the claim, finding the Joint Resolution was not a contract. The supreme court affirmed, stating the Joint Resolution was too vague to be a contract.

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