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HomeMy WebLinkAbout2004-2247 Civil JOHN E. SCHOENBERGER, Plaintiff IN THE COURT OF COMMON PLEAS OF FRANKLIN COUNTY, PENNSYLVANIA v. W.L. WAGNER, INC., Defendant NO. 2004 - 2247 CIVIL TERM CIVIL ACTION - LAW IN RE: BENCH TRIAL BEFORE GUIDO. J. OPINION AND VERDICT Plaintiff s grandfather started a restaurant using the "Schoenberger" name in 1913. The restaurant was moved to its current location at 348 Lincoln Way East a short time later. It was operated by the Schoenberger family until it was sold in the fall of 1964. At the time it was sold, the restaurant was owned by a partnership consisting of Plaintiff and his now deceased parents. They were doing business as "Schoenberger's Tap Room". On September 18, 1964 the three Schoenbergers entered into an agreement with Lawrence A. Wagner and Ruth I. Wagner for the sale of the business. Of particular relevance to this case is paragraph nine of the agreement which provides: The parties of the first part agree to, and do hereby, assign to the parties of the second part, conditioned upon the terms of this agreement, to be used by the parties of the second part or by a corporation in which they or their son, William L. Wagner, and Carolyn B. Wagner, his wife, are and remain the principal shareholders, the right to use the name "Schoenberger's" in connection with the operation of said business. (emphasis added).l 1 See Plaintiff's Exhibit # 1. NO. 2004 - 2247 CIVIL TERM Subsequent to the execution of the agreement, but before settlement, the Wagners formed the defendant corporation for the purpose of operating the business. Defendant corporation has continuously owned and operated the business since 1964. Since that time, the restaurant has always been known as "Schoenberger's" in some form or another. William L. Wagner has managed the restaurant since his parents bought it in 1964. He and his wife eventually acquired all of the shares in defendant corporation. They divorced in 1991 and she was no longer a stockholder after 2000. Schoenberger is not a common name in Franklin County. There are only 15 Schoenbergers in the county and they are all related to the plaintiff. Early on in his operation of the business, some patrons made the mistake of calling William Wagner "Mr. Schoenberger". However, that has not happened for many years. In August of 2003 William Wagner entered into an agreement to sell his shares in Defendant Corporation. The shares are to be transferred in installments, with Mr. Wagner eventually becoming a minority shareholder. However, because he has been integral part of the business for so long, he will remain an employee indefinitely into the future. When plaintiff discovered that Mr. Wagner had agreed to sell his interest in the defendant corporation, he commenced the instant action to enjoin the continued use of the "Schoenberger" name. Plaintiff contends that the defendant corporation was allowed to use the name only so long and William L. Wagner was a majority shareholder therein. He relies upon the provision of the 1964 agreement quoted above. 2 NO. 2004 - 2247 CIVIL TERM Citing Ress v. Barent, 378 Pa. Super. 397, 548 A.2d 1259 (1998) plaintiff argues that "the Agreement created a restrictive covenant concerning the use of the name.,,2 However, even assuming that such a restrictive covenant was created it is not enforceable in this case. "It is a well established principle of law that a contract cannot legally bind persons not party thereto." In the matter of the Estate of Barilla, 369 Pa.Super 213,219, 535 A.2d 125, 128 (1987). To the extent that a restrictive covenant was created, it would be enforceable only against the parties to the agreement. The defendant was not a party to the agreement nor is there any evidence that it ever agreed to be bound by the terms thereof. 3 Furthermore, to be enforceable a restrictive covenant must, inter alia, "be reasonably limited in both time and territory." See Ress v. Barent, supra, 548 A.2d at 1262. In the instant case, the plaintiff is seeking to enforce a restrictive covenant that was negotiated more than forty years ago. While there is no bright line test to determine what constitutes a reasonable limitation for the time component of a restrictive covenant, we are convinced that 40 years is patently unreasonable. Plaintiff argues that without the 1964 Agreement, defendant would not have been able to use his family name in connection with its business. Therefore, he contends that defendant should no longer be able to use the "Schoenberger" name without his permission. We do not agree. In support of his position plaintiff cites Restatement (Second) Torts, S 652 which provides that use of someone' s name, without license, is an invasion of privacy. See Vogel v. W T Grant, 458 Pa. 124,327 A.2d 133 (1974) adopting S 652. He also cites 42 2 See Plaintiff's Post Trial Brief, p. 8. 3 In Ress v. Barent, supra, the corporation bearing the plaintiff's name was a party to both the agreement and the lawsuit. 3 NO. 2004 - 2247 CIVIL TERM Pa. C. S.A. S 8316 which prohibits the commercial use of a person's name without written consent. Plaintiff or his parents may have been in a position to prevent defendant from using their name in 1964. However, the use of the name was licensed in the agreement at that time. Notwithstanding plaintiffs argument that the license has now expired, we are satisfied that the right to use the name is no longer dependent upon such license. The record clearly shows that the "Schoenberger" name as it is now used in connection with the restaurant is not in any way associated with plaintiff or his family. To the contrary, the name is now integrally linked to the business at 348 Lincoln Way East. Any commercial value that the "Schoenberger" name now possesses is as a direct result of the defendant's operation of the restaurant at the same location for more than 40 years. Plaintiff no longer has any more right to stop defendant's use of the "Schoenberger" name than John Goodyear would have to enjoin the use of his family name on the blimp. ORDER OF COURT AND NOW, this 11 TH of APRIL, 2006, for the reasons set forth in the accompanying opinion Plaintiff s request for an injunction requiring Defendant to cease using the Schoenberger name is DENIED. By the Court, Isl Edward E. Guido Edward E. Guido, 1. 1. McDowell Sharpe, Esquire 257 Lincoln Way East Chambersburg, Pa. 17201 William C. Cramer, Esquire 414 Chambersburg Trust Company Bldg. Chambersburg, Pa. 17201 4