Denali Real Estate, LLC, a Nebraska limited liability company, doing business as Denali construction and Denali Homes, appellee,
Denali Custom Builders, Inc., a Nebraska corporation, appellant.
Injunction: Equity. An action for injunction
sounds in equity.
Equity: Appeal and Error. On appeal from an
equity action, an appellate court decides factual questions
de novo on the record and, as to questions of both fact and
law, is obligated to reach a conclusion independent of the
trial court's determination.
appeal from an equity action, when credible evidence is in
conflict on material issues of fact, the court considers and
may give weight to the fact that the trial court observed the
witnesses and accepted one version of the facts over another.
Statutes: Appeal and Error. Statutory
interpretation is a question of law, which an appellate court
resolves independently of the trial court.
Rules of the Supreme Court: Pleadings.
Nebraska courts will look to federal decisions interpreting
corresponding federal rules for guidance in interpreting
similar Nebraska civil pleading rules.
Rules of the Supreme Court: Motions to Dismiss: Moot
Question. Generally, the denial of a motion to
dismiss under Neb. Ct. R. Pldg. § 6-1112(b)(6) becomes
moot after trial.
Pleadings: Judgments: Appeal and Error. A
party who unsuccessfully moves for judgment on the pleadings
must either file additional pleadings or go to trial on the
issues joined by the original pleadings, and, by saving
exception to the action of the trial court in overruling his
or her motion, obtain a review thereof on appeal from the
final judgment, if adverse.
Pleadings: Judgments. Even when a party does
not move to amend pleadings, a court may constructively amend
pleadings on unpleaded issues in order to render a decision
consistent with the trial.
Neb. 985] 9. Directed Verdict: Waiver: Appeal and
Error. A defendant who moves for a directed verdict
at the close of the plaintiff's evidence and, upon the
overruling of such motion, proceeds with trial and introduces
evidence, waives any error in the ruling on the motion.
Names: Words and Phrases. A designation is
"used" as a trade name when the designation is
displayed or otherwise made known to prospective purchasers
in the ordinary course of business in a manner that
associates the designation with the goods, services, or
business of the user.
Names: Proof. In a case for trade name
infringement, the plaintiff has the burden to prove by a
preponderance of the evidence the existence of (1) a valid
trade name entitled to protection and (2) a substantial
similarity between the plaintiff's and the
defendant's names, which would result in either actual or
probable deception or confusion by ordinary persons dealing
with ordinary caution.
Names. The evil sought to be eliminated by
trade name protection is confusion.
Names: Proof. The likelihood of confusion in
the use of trade names can be shown by presenting
circumstances from which courts might conclude that persons
are likely to transact business with one party under the
belief they are dealing with another party. If the similarity
is such as to mislead purchasers or those doing business with
the company, acting with ordinary and reasonable caution, or
if the similarity is calculated to deceive the ordinary buyer
in ordinary conditions, it is sufficient to entitle the one
first adopting the name to relief.
Names. Among the considerations for
determining whether trade name confusion exists are (1)
degree of similarity in the products offered for sale; (2)
geographic separation of the two enterprises and the extent
to which their trade areas overlap; (3) extent to which the
stores are in actual competition; (4) duration of use without
actual confusion; and (5) the actual similarity, visually and
phonetically, between the two trade names.
Corporations: Names. Under Neb. Rev. Stat.
§ 87-302 (Cum. Supp. 2018), a corporation engages in a
deceptive trade practice when, in the course of its business,
it causes the likelihood of confusion or of misunderstanding
as to the source, sponsorship, approval, or certification of
goods or services or affiliation, connection, or association
with, or certification by, another.
Claims: Names: Deceptive Trade Practices.
While a claim for the misuse of a trade name considers only
the trade name seeking protection, a claim for a deceptive
trade practice expands the consideration to issues of image
and trade dress.
Torts: Intent: Proof. To succeed on a claim
for tortious interference with a business relationship or
expectancy, a plaintiff must prove (1) the [302 Neb. 986]
existence of a valid business relationship or expectancy, (2)
knowledge by the interferer of the relationship or
expectancy, (3) an unjustified intentional act of
interference on the part of the interferer, (4) proof that
the interference caused the harm sustained, and (5) damage to
the party whose relationship or expectancy was disrupted.
___: ___: ___ . One of the basic elements of tortious
interference with a business relationship requires an
intentional act that induces or causes a breach or
termination of the relationship or expectancy.
Actions: Names: Injunction. Neb. Rev. Stat.
§ 87-217 (Reissue 2014) authorizes a registrant of a
trade name to proceed by suit to enjoin the use or display of
imitations of its trade name.
Deceptive Trade Practices: Injunction. Neb.
Rev. Stat. § 87-303(a) (Cum. Supp. 2018) authorizes a
court to grant an injunction against a person committing a
deceptive trade practice.
Equity. In an equitable action, the district
court is vested with broad equitable powers and discretion to
fashion appropriate relief.
Jurisdiction: Appeal and Error. Once an
appellate court acquires equity jurisdiction, it can
adjudicate all matters properly presented and grant complete
relief to the parties.
from the District Court for Lancaster County: Robert R. Otte,
Catlett, of Law Office of Matt Catlett, for appellant.
C. Byam, of Byam & Hoarty, for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik,
and Freudenberg, JJ.
company using registered trade names obtained a permanent
injunction, statutory damages, and attorney fees against a
corporation using a similar name. The corporation appeals,
contending that it used only its legal corporate name. But
because evidence showed otherwise and actual confusion
resulted, the corporation's central argument fails. We
first consider whether the denials of the corporation's
pretrial motions to dismiss and for judgment on the pleadings
survive the trial, reaching only the latter motion. Upon de
novo review, we uphold the [302 Neb. 987] judgment on the
company's claims of trade name infringement and deceptive
trade practices, but not its claim for intentional
interference with a business relationship. Otherwise finding
no merit to the appeal, we affirm the judgment.
Real Estate, LLC (DRE), doing business as Denali Construction
and Denali Homes, is a Nebraska limited liability company
with an office in Omaha, Nebraska. It filed a certificate of
organization with the Nebraska Secretary of State in 2014. In
September 2015, DRE registered with the Secretary of State
the trade names "Denali Construction" and
"Denali Homes." That same month, it began building,
advertising, and selling new homes under the name
"Denali Homes." DRE markets its homes in eastern
Nebraska and has built homes in Douglas, Lancaster, and Sarpy
Custom Builders, Inc. (DCB), is a Nebraska corporation with
an office in Lincoln, Nebraska. It filed articles of
incorporation and commenced business on February 29, 2016. It
builds new homes in Lancaster County.
2016, DRE demanded that DCB stop using the name "Denali
Custom Builders, Inc." in its business. DCB continued to
use the name, and DRE filed suit in the district court in
alleged misuse of trade name, claiming that DCB's
"use of the trade name 'Denali Custom Builders,
Inc.' has caused confusion, mistake, and deception among
purchasers and potential purchasers of homes in
Nebraska." DRE sought injunctive relief and damages
attributable to DCB's "wrongful use of [DRE's]
trade name," including lost profits and reasonable
Neb. 988] DRE also alleged deceptive trade practices in
violation of the Uniform Deceptive Trade Practices
It alleged that DCB's use of DRE's trade name caused
confusion and misunderstanding as to DCB's affiliation
with DRE. On this claim. DRE sought an injunction and
DRE alleged interference with a business relationship. It
claimed that DCB was "deceiving the members of the
public" into believing that DCB's advertising was
that of DRE. thereby interfering with DRE's
"business relationships with the public generally."
responded by filing a motion to dismiss, alleging that the
complaint failed to state a claim upon which relief may be
granted. The district court denied the motion.
the denial of DCB's motion to dismiss, DCB filed an
answer. As an affirmative defense, it alleged that
"[t]he Complaint fails to state a claim upon which
relief can be granted because 'Denali Custom Builders,
Inc.' is [DCB's] legal name, not [DCB's] trade
the close of the pleadings, DCB moved for judgment on the
pleadings. The court overruled the motion. In doing so, the
court stated that "there is a reasonable dispute as to
whether there's a misuse of the trade name or of the
names used by [DCB]" and that the factual allegations in
the complaint were sufficient to support the causes of
days after a pretrial conference, DRE moved to amend its
complaint and the joint pretrial conference memorandum. DRE
sought to add Roger Watton, a potential home-buyer, as a
witness and to add as exhibits two bills from a Lincoln
utility. DCB filed an objection, noting that the trial was
set to begin in 13 days and that DRE had had more than 1 year
to amend its complaint. DCB also alleged that it would [302
Neb. 989] be prejudiced by any amendment to the complaint.
During a hearing on the motion to amend and the objection,
DRE represented that neither the utility bills nor the
testimony of Watton were known to DRE at the time of
completing the pretrial conference memorandum "because
this has just occurred in the last couple weeks." The
court overruled the motion to amend the complaint, but
sustained the motion to add the witness and exhibits to the
pretrial joint conference memorandum.
days before trial, DCB moved for attorney fees under Neb.
Rev. Stat. § 25-824(2) and (4) (Reissue 2016). It
alleged that the action was frivolous and was brought to
court bifurcated the trial, with the initial portion of the
trial addressing liability and a second portion being
reserved for consideration of remedies.
time of trial, DRE had built approximately 10 homes. It was
building a home "within half a mile" of a home that
DCB was building. DCB's signage and its website
identified it as "Denali Custom Builders" and,
according to DRE's managing partner, used the same fonts
and colors as DRE.
adduced evidence demonstrating confusion regarding DRE and
DCB. Internet searches for "denali construction
nebraska" or "denali home construction
nebraska" directed the searcher to DCB's website.
DRE received a document from a lumber company with which it
frequently transacted business that identified DRE as both
"Denali Custom Homes" and "Denali Custom
Builders." A bill from a utility for one of DRE's
projects identified the customer as "Denali Custom
Builders." Another time, DRE returned materials to an
Omaha furniture store but the store gave the credit to DCB.
An employee testified that there was confusion as to which
entity should get the credit. An appliance sales associate
for the same furniture store testified that an order
belonging to DRE ended up in the store's system under
DCB, which caused confusion. Watton testified that in
September 2017, [302 Neb. 990] he and his wife met with
representatives of DRE in Omaha to discuss the process for
building a home. The following weekend, Watton and his wife
toured some homes in Lincoln and there was a home built by an
entity containing the name "Denali." After touring
the home, Watton did not know what entity had built it.
Watton subsequently spoke with a representative of DRE, who
clarified that DRE had not built that particular house.
DRE presented its case in chief, it asked that the pleadings
be amended to conform to the evidence presented.
Specifically, DRE wanted the complaint to be amended to show
that DCB used names other than its true legal name. DCB
objected. The court overruled the motion, because "this
is already incorporated into the allegations that have been
made and consistent with the matters that we've addressed
before." DCB moved for a directed verdict, which the
court denied. The only evidence DCB offered was an attorney
Interlocutory Order and Final Judgment
the first phase of the trial, the court entered an order
finding in favor of DRE on the issue of liability. The court
found that DRE and DCB were operating the same type of
business, which generally consisted of building new homes. It
found that both businesses advertised on social media, that
they were building homes in Lincoln within a half mile of
each other, and that they have signs using
the court determined that DCB generally did not use its
corporate name when conducting business, but, rather,
typically removed '"Inc."' and used
'"Denali Custom Builders.'"
court also determined that DRE's evidence provided a
reasonable basis for concluding that there was confusion and
that it was likely for such confusion to exist in the future.
The court found that DRE's right to use
"'Denali'" was superior [302 Neb. 991] to
that of DCB, noting that DRE used and registered the trade
name for a home construction business first and that it had
used the trade name in the ordinary course of business in a
manner that associated its business with that name. The court
concluded that DRE had met its burden of proof and
established its claim for relief for misuse of a trade name.
court also found that DRE met its burden of proof and
established its claim for relief against DCB for engaging in
deceptive trade practices. The court noted that both parties
were in the home construction business, that both parties
transacted business and advertised in Lancaster County, and
that there had been actual confusion by suppliers and the
consuming public. The court observed that DCB used similar
colors, type fonts, images, and design as those used by DRE.
with regard to interference with business relationships, the
court found that DCB's use of
'"Denali"' interfered with DRE's
business relationships. The court found that DRE had a valid
business relationship with its suppliers and an expectancy of
a business relationship with the consuming public. The court
stated that DCB's "failure to terminate the use of
the name after being aware of [DRE's] use creates
intentional interference under the law."
the second phase of the trial, the court entered judgment. It
permanently enjoined DCB from using or displaying
"'Denali'" in its business in any manner
and gave it a set amount of time to remove
"'Denali'" from anywhere it used or
displayed that word, including "registration of its
corporate name or trade name with the Nebraska Secretary of
State and from any signage, website, advertising, social
media (including but not limited to Facebook and
Twitter)." The court awarded DRE statutory damages of