Monday, March 31, 2008

Review granted in 'D.L. Anderson’s Lakeside Leisure Co. v. Anderson Marine'

This case involves claims that a non-compete clause was violated and that a common law trade-name infringement occurred after the execution of an asset purchase agreement involving businesses in the Waunakee area.

D.L. Anderson’s Lakeside Leisure Co., Inc., M. Scott Statz and Steven Statz seek review of a decision affirming in part, reversing in part, and remanding a judgment entered on a jury’s verdict against Donald Anderson and Anderson Marine, LLC.

Some background: In October 2000, the Statzes purchased D.L. Anderson Marine Contractors, which also operated under the name D.L. Anderson Co. The agreement included a non-compete clause, stating that for seven years within a 120-mile radius of Waunakee, Donald Anderson would not permit his name to be used by any competing business.

Around January 2002, Anderson began working as a dealer representative for a pier manufacturer and boat-lift distributor in Wisconsin and four other states. In the fall of 2003, Anderson formed another business, Anderson Marine, LLC, which operated under the name "The Sailboat House at Anderson Marine", which sold boats and marine accessories about a mile away from the Statzes’ business.

The Statzes sued, and, after a three-day trial, a jury found Anderson breached the non-compete clause and awarded $15,000 in compensatory damages. The jury also found Anderson had infringed on the D.L. Anderson Co. trade name and awarded $75,000 in compensatory damages on this claim, $160,000 in punitive damages against Anderson Marine, LLC. The court extended the duration of the non-compete clause and awarded $118,435 in attorney fees for both claims in accordance with the contract.

The Andersons appealed. The Court of Appeals [2007 WI App 269] first determined sufficient evidence supported the jury’s finding of breach of the non-compete clause and the $15,000 in compensatory damages. Second, it concluded sufficient evidence supported the finding of trade name infringement but the $75,000 compensatory damage award was unsupported. Therefore, it reversed both the compensatory and punitive damage award on the trade name infringement. Third, it ruled that with one geographical modification, the injunctive relief extending the duration of the non-compete provision was proper. Finally, it held that based on the contract language, the attorney fee award must be reduced and remanded for that purpose.

Both sides have asked the Supreme Court to review. A decision by the Supreme Court could develop the area of law involving trademark infringement, damages and non-compete clauses. From Dane County. Justice Annette Kingsland Ziegler did not participate.