author: LEVAL, District Judge.

text:
    H. LUBOVSKY, INC., Plaintiff, v. ESPRIT DE CORP., Defendant.
    No. 81 Civ. 2161 (PNL).
    United States District Court, S.D. New York.
    Jan. 22, 1986.
    As Amended Jan. 28, 1986.

      Boris Haskell, Paris & Haskell, Washington, D.C., for plaintiff.
    Fredric W. Yerman, Randolph S. Sherman, Richard A. DeSevo, Kaye, Scholer, Fierman, Hays & Handler, New York City, for defendant.
   OPINION AND ORDER

LEVAL, District Judge.

This is a trademark infringement action pursuant to the Lanham Act § 32 et seq., 15 U.S.C. § 1114 et seq. Plaintiff, H. Lu-bovsky, Inc., the owner of the mark ESPRIT for women’s shoes, sues for damages and for an injunction barring defendant Esprit de Corp., from using Esprit and Esprit de Corp as marks on the defendant’s clothing, accessories and shoes.

A. History

1. Plaintiff.

Plaintiff is a small importer and wholesale distributor of women’s shoes. Its staff consists of two full-time and two part-time employees and eight commission salespeople. Its annual sales have ranged from a low of $692,000 in 1963 to a high of $3,318,000 in 1978. For the year ending June 30, 1983, sales were $1.8 million and for 1984, $2.4 million. Plaintiff markets its shoes nationwide, primarily through sales representatives and by showings at national and regional shoe shows.

On March 1, 1963, plaintiff adopted the label Esprit. On March 3,1964, it obtained a federal trademark registration of Esprit for women’s shoes (registration no. 765,-974). Since that time, plaintiff has continuously used Esprit as one of its trademarks. Plaintiff also markets its shoes under the trademark Robertina. For many of its larger customers, plaintiff does not use Robertina or Esprit but has the shoes made up showing the customer’s in-house brand.

Plaintiff displays the Esprit logo on the sock lining of Esprit shoes and on the shoe boxes. Beyond this, however, plaintiff does practically nothing to promote or publicize the Esprit mark. It does virtually no advertising. Its promotion expenses have slightly exceeded a total of $100,000 over twenty-two years, most of which has been spent entertaining buyers.

Plaintiff’s Esprit mark, so far as the evidence shows, commands virtually no public recognition. Consumers who buy-plaintiff’s shoes do not ask for them by the Esprit name. And buyers who place orders with plaintiff for stock rarely specify that the merchandise should bear the Esprit label.

Although plaintiff’s catalogue shows a variety of styles and types of shoes, it appears that the vast majority of its sales' are of traditional, dressy, high-heeled shoes with pointed toe.

Plaintiff’s business is exclusively limited to women’s shoes, as is its Esprit mark registration. Except for a foray several years ago into women’s handbags and hats (which bore no trademarks), plaintiff has marketed only women’s shoes since its business began thirty-seven years ago and it has no plans to expand beyond that area in the future.

2. Defendant.

Defendant, Esprit de Corp designs and markets sportswear, primarily women’s and children’s. Its merchandise is described as imaginative, trendy, forward fashion or avant-garde, appealing to a youthful, active, sporty clientele. It has been enormously successful, with sales increasing from $17.6 million in 1975, to $43.1 million in 1980 and to $211 million in 1984 (stip. facts pp. 18-19).

Defendant’s business began in 1968 under the name “Plain Jane”; in 1970 it incorporated and adopted its present name “Esprit de Corp.” During the following decade, defendant marketed its women’s sportswear under a variety of “divisional” trademarks and labels including, Plain Jane, Sweet Baby Jane, Cecily, In Good Hands, Jasmine Teas, Esprit’s Chemise, and Rose Hips. Around 1976, it began to use the mark Esprit on some of its merchandise. In 1978, to promote a distinctive unified image, the company began a trademark unification program aimed toward marketing under the single name Esprit. As part of the change a new Esprit logo was designed, using modern stencil block print and an E consisting of triple horizontal bars without the vertical staff. To preserve the goodwill established under the seven original divisional trademarks, defendant decided to make the transition gradually. Beginning in the 1979 holiday season, defendant added to its hangtags and labels the new Esprit logo under each of the seven divisional names, e.g., Plain Jane/Esprit, In Good Hands/Esprit, etc. The Esprit logo captioned defendant’s cat-alogues and advertisements. It was planned that as the second stage, Esprit would go into the dominant position, above the old trademarks, and finally that the old trademarks would be dropped, leaving Esprit alone to identify all defendant’s merchandise.

On November 13, 1978, defendant had filed an application to register the mark Esprit for clothing. The application was rejected by the trademark office on December 5, 1979 by reason of plaintiff’s previously registered Esprit mark for women’s shoes. Up to this point, defendant had never heard of plaintiff’s Esprit mark. It had sold already approximately $13 million of merchandise under the Esprit mark.

Defendant then took steps to learn whether plaintiff was using the Esprit mark and learned that it was. Defendant’s investigations showed four users of Esprit as a mark for clothing and accessories— plaintiff (for shoes), Mistee Lingerie, Inc. (for lingerie), Fuqua Cycle Corp. (for motorcycle boots, gloves and accessories) and Campus (for men’s clothing). In addition, an H.D. Lee Co. had used Esprit de Corps for wearing apparel.

In part because of the weakness of the mark, the number of users, the time during which defendant had already used Esprit and Esprit de Corp in its business, and the distance between shoes and clothes, defendant’s trademark attorney advised that plaintiff’s exclusive rights for women’s shoes should not bar defendant from use of the Esprit mark on clothing. He counseled, however, that Esprit not be used for the sale or advertising of shoes and that shoes not be offered through defendant’s Esprit mail order catalogues. Defendant, meanwhile, submitted a new application for registration, now based on the new stylized logo, which also was eventually rejected. The application did not include shoes or accessories.

Defendant meanwhile proceeded with its program of trademark unification. Having begun in 1979 to put “Esprit” below its various divisional marks, in 1981, defendant reversed the order placing Esprit above the divisional names. Then in 1982, the old divisional names were dropped leaving the name Esprit alone.

From 1979 to 1984, defendant spent $20 million advertising its fashion under the Esprit mark. Its advertisements appeared in all the major fashion magazines. In addition, it distributed 15 million mail order catalogues under the Esprit name.

Notwithstanding the advice of its attorney, defendant used the Esprit mark for shoes, in combination with its divisional mark “In Good Hands.” After plaintiff brought this action, defendant began to mark its shoes In Good Hands/Esprit de Corp and later, in 1983, Esprit de Corp. Throughout, however, contrary to its counsel’s advice, defendant marketed shoes in its mail order catalogues which featured the name Esprit prominently on the covers and throughout. (In tiny print inconspicuously placed on a page offering shoes, defendant places a legend “Footwear by Esprit de Corp.”)

Also, in 1984, defendant began to sell its merchandise in its own Esprit retail stores. As to shoes sold in those stores, although the sock linings and the shoe boxes say “Esprit de Corp.,” the shoes are nonetheless sold there under the Esprit mark in the sense that this mark dominates the store, and appears to cover all the merchandise.

Defendant’s sales of shoes have grown enormously. In 1983, defendant established the Esprit de Corp. shoe division and invested heavily in it. In 1983, shoe sales reached $3.3 million which exceeded the three prior years combined. In 1985, shoe sales have run at a rate of $1.3 million per month.

In January 1981, defendant made an offer to plaintiff to buy plaintiff’s Esprit mark, which was refused. While its second application for registration was pending, defendant negotiated to buy Mistee Lingerie’s mark from its new owner. Mistee had used Esprit since 1946 but had ceased to use it in July 1978 when its assets were sold off during a Chapter XI proceeding. Defendant’s purchase was concluded in 1981, a day before defendant received notification of the rejection of the second application (which was based in part on Mistee’s registration). Defendant then sought reconsideration, bringing this acquisition to the examiner’s attention.

In October 1982, the reconsideration was put on suspense pending termination of this suit. The trademark examiner indicated that he would have been inclined to publish the Esprit mark for clothing but for the pendency of this action (DX-403, pp 21-22). One year later, in November 1983, defendant’s application was removed from suspense and the Esprit mark was published for clothing only. The examiner indicated that plaintiff’s Esprit registration for shoes “stands as no bar to the registra-bility of applicant’s [Esprit] mark [for clothing]” (DX-403, pp 35-36). He further indicated that his decision to pass defendant's requested mark to publication was, among other factors, based on the fact that “registrant’s goods are shoes, applicant’s goods contain no footwear items” (DX-403, pp 35-36).

The Trademark Office then officially issued a notice of publication which stated that defendant’s mark for clothing “appears to be entitled to registration” and accordingly “[t]he mark will ... be published in the Official Gazette ... for the purpose of opposition by any person who believes he will be damaged by the registration of the mark” (DX-403 p. 48). Plaintiff opposed the registration and an opposition proceeding was scheduled. The proceeding has been suspended by stipulation of the parties, pending the outcome of this suit.

B. Discussion

I find that, as to defendant’s lines of clothing, plaintiff has failed to make out a cause of action. As to defendant’s sale of shoes, on the other hand, plaintiff has shown infringement and is entitled to relief.

1. Defendant’s Clothing Lines

Plaintiff has failed to show entitlement to relief resulting from defendant’s use of the Esprit mark on clothing.

A long and consistent line of cases in this Circuit starting with Judge Friendly’s powerful opinion in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir.1961), directs that analysis of this issue proceed with attention to a spectrum of relevant factors, as follows:

(a) Strength of plaintiffs mark. The “strength” of a mark implies its capacity, either inherent or acquired, to designate a source of the product. The strength of a mark is directly related to likelihood of confusion, for the stronger the mark, the more likely that the consumer will associate it with the familiar purveyor. For example, if a customer saw a doll in a toy store bearing a strong familiar trademark like “Exxon,” he might well assume that the oil company had gone into the toy business; if, on the other hand, he saw a doll bearing a familiar but weak laudatory trademark like Merit, he would be unlikely to assume that it is connected with the similarly named gasoline or cigarettes.

(i) Inherent Strength. On the four-tier scale of trademark vitality, ranging from the unprotectible generic to the strongest arbitrary or fanciful marks, Esprit is not of particularly impressive strength. See Plus Products v. Plus Discount Foods, Inc., 722 F.2d 999 (2d Cir.1983); Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9-11 (2d Cir.1976); Procter & Gamble Co. v. Johnson & Johnson Inc., 485 F.Supp. 1185, 1196 (S.D.N.Y.1979), aff'd, 636 F.2d 1203 (2d Cir.1980). The word, although of French origin, has become an accepted part of the English language signifying vivacity or liveliness. As a mark, it seeks to suggest lively, colorful attributes. It is a type of laudatory mark. When a merchant adopts a laudatory claim as his mark, he gives up the inherent strength that is commanded by arbitrary or fanciful marks, in favor of this advertising message. See Supreme Wine Co. v. American Distilling Co., 310 F.2d 888 (2d Cir.1960); Procter & Gamble Co., supra at 1196; Exquisite Form Industries, Inc. v. Exquisite Fabrics of London, 378 F.Supp. 403 (S.D.N.Y.1974).

(ii) Strength derived from exploitation. A related issue to the inherent strength of a mark is market strength derived from the user’s exploitation of the mark in the marketplace. Even a mark which is low on the scale of inherent value can acquire a high capacity to identify the purveyor to the consuming public. Such acquired strength, known as “secondary meaning,” receives recognition in law. For example, it can render protectible an otherwise unprotectible descriptive mark. See Thompson Medical Co. Inc. v. Pfizer, 753 F.2d 208, 217-18 (2d Cir.1985); Procter & Gamble Co., supra, 485 F.Supp. at 1196; Mushroom Makers, Inc., 441 F.Supp. 1220, 1226 n. 25 (S.D.N.Y.1977).

Although plaintiff has sold shoes under the Esprit label since March 1, 1963, it has made no showing that its mark has built up any significant consumer recognition. Plaintiff has never advertised its mark to the consumer. Its meager promotional expenditures have consisted almost entirely of entertaining store buyers. One of plaintiffs sales representatives (Orent) testified to plaintiff’s failure to promote the mark. (Orent Dep. pp 103-04.) There is little indication that retail consumers ever asked for plaintiff’s shoes by the Esprit name. Indeed, the orders of merchants placed with plaintiff rarely specified that they wished merchandise bearing the Esprit label. A large portion of plaintiff’s retail customers had their merchandise made up with their own in-house labels. Also, much of plaintiff’s merchandise carried plaintiff’s Robertina label, rather than Esprit. Plaintiff kept no records and offered no reliable evidence showing how much of its merchandise carried the Esprit label.

The weakness of Esprit as a mark is confirmed by the trademark register and other evidence that a number of unconnected entities have used “esprit” as a mark on wearing apparel. See Lever Brothers Co. v. American Bakeries Co., 693 F.2d 251, 256 (2d Cir.1982) (the strength of even an arbitrary mark may be diluted by third-party use).

In short, plaintiff failed to show that its Esprit mark commanded any attention in the marketplace, that consumers were aware of the mark or identified it with plaintiff as supplier. I find that plaintiffs sales would not be significantly affected if it ceased using the Esprit label.

(b)Degree of Similarity between Plaintiffs and Defendant’s marks. Although plaintiff and defendant use the same word as a mark, there are differences of presentation, of merchandise (shoes/clothes), of style, of clientele, of marketplace and of image which effectively diminish likelihood of confusion. See Lever Brothers Co. v. American Bakeries, supra, 693 F.2d at 257 (“close similarity between two marks is not dispositive of the issue of likelihood of confusion”, other factors such as clientele and presentation must also be considered).

The marks are presented in quite different logos. McGregor-Doninger Inc. v. Drizzle Inc., 599 F.2d 1126, 1133-34 (2d Cir.1979) ([ljikelihood of confusion may be significantly reduced by the “alteration, addition or elimination of only two single letters from the mark”). Plaintiff, consistent with the traditional nature and appeal of its product, presents its Esprit logo in a stylized, semi-script that seeks to suggest the calligraphy of traditional high-fashion design:

Defendant’s logo is in modern broken stencil block print, the E represented by three parallel bars, lacking the linking staff.

These logos present very different images.

Plaintiff argues that its ownership of the mark does not limit it to use the form of logo it has used for twenty years. This is true, but it misses the point of the purpose of the inquiry, which is to determine the likelihood of consumer confusion.

(c) Proximity of Products. Without doubt there is proximity between women’s shoes and women’s sportswear, which was recognized in Avon Shoe Co. v. David Crystal, Inc., 279 F.2d 607, 612 (2d Cir.1960) and Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47-48 (2d Cir.1978). The proximity creates some likelihood of customer confusion.

On the other hand, there is also an appreciable distance between plaintiff’s shoes and defendant’s clothing which diminishes the likelihood of confusion. Shoes are generally sold in shoe stores or shoe departments of department stores. Most frequently, therefore, they are either in a different store, or a different department, from sportswear. Plaintiff’s and defendant’s lines, furthermore, exhibit quite different styles, aiming at different clienteles. The retail customers for plaintiff’s shoes are primarily women seeking traditional, dressy styles. Defendant’s merchandise aims at a youthful active modern sporty clientele. Plaintiff points to only ten stores that currently carry merchandise of both plaintiff and defendant. It is not shown, moreover, how many of those stores carry plaintiff’s Esprit label. Indeed, it appears that plaintiff’s larger customers carry plaintiff’s merchandise under their own in-house label, i.e., without exhibiting plaintiff’s Esprit mark.

There has been no showing of any customer overlap.

(d) Sophistication of Buyers. The sophistication-of-buyers factor reflects the concern that uninformed consumers might buy a junior trademark user’s merchandise believing it to be that of the senior, or might blame the senior for quality deficiencies in the junior’s products. There was little evidence on the subject of sophistication. There was showing that defendant’s mark is widely recognized and that plaintiff’s has virtually no recognition.

Because defendant’s line and mark are famous and plaintiff’s are not, there was some showing that on first seeing, or hearing of, plaintiff’s shoes, some wondered whether this was defendant’s merchandise. (See, e.g., Evans Dep. pp 13-14, 25-26; Fausone Dep. pp 27-30.) There is no evidence that any such confusion was more than momentary. Nor is there evidence that any potential customers for defendant’s merchandise ever believed that it came from plaintiff.

As noted above, it was not shown that the customers for plaintiff’s shoes have formed any attachment to plaintiff’s Esprit brand. It does not play a significant role in plaintiff’s sales. Plaintiff’s customers are shoe stores (or shoe departments) that buy plaintiff’s merchandise because it is suitable for sale to their customers. Plaintiff’s retail purchasers, it appears, are the customers of the shoe stores who are shown plaintiff’s shoes and find them satisfactory.

(e) Bridging the Gap. Where the junior user applies its mark to products different from those of the senior user, this Polaroid factor requires investigation into whether the senior user is likely to “bridge the gap” by expanding into the product lines being marketed by the junior. See Lever Brothers Co., supra, 693 F.2d at 258; American Footwear Corp. v. General Footwear Co., 609 F.2d 655 (2d Cir.1979). There is no such likelihood in this case. Plaintiff has no plans to expand into clothing, and no experience in that area.

(f) The Quality of Defendant’s Products. This factor “reflects the law’s recognition that a prior owner should not be subjected to the risk that the public perception of his product will suffer if it is associated with a product of inferior quality.” Procter & Gamble, supra, 485 F.Supp. at 1202. There is no showing that any quality deficiency in defendant’s products poses a risk to plaintiff’s reputation. Defendant’s lines have been extraordinarily successful in the marketplace. Its sales have grown tremendously over four years. This experience shows a huge and growing consumer demand for defendant’s products. There is no evidence of consumer dissatisfaction with defendant’s merchandise. See Lever Brothers Co., supra, 693 F.2d at 258; Mushroom Makers, Inc., supra, 441 F.Supp. at 1228.

Plaintiff makes a related argument that vulgarity and bad taste in defendant’s advertising create an adverse public reaction to the Esprit mark. Plaintiff overstates and fails to prove this claim. The claim is addressed particularly to a small number of defendant’s ads and catalogue illustrations that show young men and women in a manner suggesting sexual freedom. Plaintiff offered the testimony of a young woman lawyer who shares office space with plaintiff’s counsel. She testified that she found the ads repugnant both because of their sexual suggestiveness and because she considered them to demean women. Also, plaintiff offered evidence that one day in 1981 a handful of women organized as Women Against Violence and Pornography in the Media picketed the defendant’s place of business in San Francisco protesting one such ad on the grounds that it demeaned women.

The claim fails for numerous reasons. First, plaintiff has failed to establish that the ads are offensive to the average consumer or to any substantial segment of the marketplace. The fact that the young woman who shares office space with plaintiff’s counsel finds them offensive hardly establishes that they are offensive to the average consumer. Nor does the fact that on one day in 1981 a protest organization mustered a dozen women to protest an ad. One thing clearly demonstrated by defendant’s extraordinary success is that they must be doing something right. There was testimony from persons in the merchandising industry, including a buyer who stocks plaintiff’s line called as a plaintiff’s witness, as to how appealing and imaginative defendant’s advertising is. Furthermore, the same prominent fashion magazines in which the defendant’s allegedly offensive ad was placed also contained numerous other ads by leading producers of fashion and beauty products which were also found “offensive” by plaintiffs witness for similar reasons. It seems clear that her opinions are not representative.

In a case of trademark confusion, it should not be necessary for the plaintiff to prove that the defendant’s ads are offensive to the general public if it proved that the ads were offensive to its customers and that the confusion caused adverse reactions to plaintiff among those customers. But plaintiff also has failed to show that.

(g) Actual Confusion. Plaintiff’s evidence shows some instances in which the identity of the Esprit name has caused confusion. To the extent that these relate to defendant’s sale of women’s shoes, they are discussed below. As to defendant’s clothing lines, the instances shown have been momentary and generally lacking in harm or prejudice to plaintiff’s business.

The instances generally have involved persons who were familiar with defendant’s lines wondering on seeing plaintiff’s Esprit name listed at a trade show whether this was defendant’s merchandise. In some cases, persons looking for defendant’s merchandise were referred to or called plaintiff. Evans Dep. (shoe buyer, Fla. dep’t store), pp 13-14, 26-29; Garber Dep. (shoe show manager/operator), pp 82, 115-17, 123-30; Garber Aff. at 2; Lubov-sky Dep. (Vol. I) pp 82 and 89, (Vol. Ill) pp 104-114, (Vol. VI) pp 85-144. No instance is shown of anyone being drawn to defendant's mark and merchandise because they are looking for plaintiff’s. Indeed, as noted above, it is not shown that customers sought out plaintiff’s merchandise by reference to its Esprit mark, see Programmed Tax Systems, Inc. v. Raython Co., 439 F.Supp. 1128 (S.D.N.Y.1977), nor that there was any customer dissatisfaction with defendant’s merchandise affecting plaintiff’s reputation.

(h) Defendant’s Good or Bad Faith. Plaintiff contends defendant acted in bad faith in adopting the Esprit mark with knowledge of plaintiff’s registration and use of the same mark. Bad faith, if found, can be of considerable significance in trademark disputes, in which equitable considerations play an important role, particularly as to remedy. However, where by reason of such factors as weakness of mark, differences in mark and distance between products, there is no infringement, the question of defendant’s good or bad faith loses importance. A malicious would-be-trespasser who enters what he believes to be his neighbor’s land has nonetheless committed no trespass if it turns out the land he entered was open to the public. See, People v. Jaffe, 185 N.Y. 497, 78 N.E. 169 (1909); People v. Teal, 196 N.Y. 372, 89 N.E. 1086 (1909).

But, in any event, plaintiff’s claims of bad faith as to defendant’s marketing of clothes are not convincing. Defendant began using the Esprit mark in 1976 or earlier without awareness of plaintiff’s rights. In 1979 it began using Esprit on all its merchandise. Defendant had sold some $13 million in merchandise bearing the Esprit mark without a ripple from the marketplace before it learned of plaintiff's mark through the December 5, 1979 trademark office rejection.

Indeed, even if defendant had earlier searched the trademark register and had found plaintiff’s registration, this need not have altered defendant’s plans to use Esprit on its clothing lines since plaintiff’s registration was for women’s shoes. “Plaintiff’s registration of its ... mark for shoes does not carry any presumption of an exclusive right to use that mark on noncompeting goods, such as the defendant’s sportswear. Its registration is prima facie evidence of its exclusive right to use the mark only ‘on the goods or services specified in the certificate.’ 15 U.S.C.A. § 1115(a).” Avon Shoe, supra at 613 n. 7. Thus, even after the trademark office had refused to register defendant’s mark by reason of plaintiff’s registration, defendant continued to use Esprit on its clothing lines on the correct advice of its trademark counsel that such use would not violate plaintiff’s rights. Although a junior user’s awareness of the senior user’s mark can, of course, be evidence of bad faith, it does not necessarily establish bad faith, even after trademark office rejection, if the junior reasonably believes his use does not infringe. See Mushroom Makers, supra, 441 F.Supp. at 1229-30 (no bad faith found despite two rejections of registration where plaintiff’s registration did not extend to defendant’s products). See also Thompson Medical Co. v. Pfizer, Inc., 753 F.2d at 218; McGregor-Doninger v. Drizzle, Inc., supra at 1137; Triumph Hosiery Mills, Inc. v. Triumph International Corp., 308 F.2d 196, 199 (2d Cir.1962). Nor does the junior user’s attempt to purchase the senior’s rights necessarily show bad faith. One can prefer to avoid problems, lawsuits and uncertainties, in spite of a good faith belief that one’s actions are justified. See Procter & Gamble, supra at 1202.

Plaintiff argues, in addition, that defendant exhibited bad faith in dealing with the trademark office when it applied for reconsideration after the second rejection. Plaintiff contends that defendant concealed from the trademark examiner the fact that defendant sold shoes and concealed also the fact that the Mistee mark, whose first use predated plaintiff’s, had been out of use for over two years before defendant acquired it. I find that these contentions have little importance in this litigation. The trademark office proceeding was stayed pending this litigation. It has had no effect on this case. Perhaps it would have been more forthright of defendant to disclose that defendant sold shoes and that the Mistee mark had been dormant for a period of time. I do not find that this constituted bad faith or that it has significance for this action. As to defendant’s sale of shoes, the registration was not being sought for shoes. As to the possible abandonment of Mistee’s mark during its insolvency, counsel had two legitimate ends to serve by pointing out the acquisition of the mark that were unaffected by the possibility of abandonment. First, Mistee’s registration had been cited as a bar to defendant’s registration. Second, counsel believed the acquisition of Mistee afforded a psychological reinforcement to his point that the rejection of defendant’s application was inconsistent with the trademark office’s prior position as between plaintiff’s registration and Mistee’s.

But in any event, the question whether defendant should have revealed additional facts to the trademark examiner in reviewing its application to register Esprit for clothing has no bearing on whether defendant’s use of Esprit for clothing infringed plaintiff’s shoe mark. See Avon Shoe Co., supra, 279 F.2d at 613 n. 8; Mushroom Makers, Inc., supra, 441 F.Supp. at 1230 n. 42.

Relative Harm to the Parties from Grant or Denial of a Remedy.

Where an injunction is sought, courts give considerable weight to a balancing of the relative harm resulting from its grant or denial on the respective parties. See Chandon Champagne Corp. v. San Marino Wine Corp., 335 F.2d 531, 536 (2d Cir.1964) (Friendly, J.); Avon Shoe Co., supra, 279 F.2d at 613 (“balancing the conflicting interests both parties have in the unimpaired continuation of their trademark use”). The factor of relative harm is easy to assess. Plaintiff is not shown to have developed any significant goodwill in the Esprit mark. Although plaintiff has placed the Esprit mark on some of its shoes for many years, it has never advertised the mark and has not built up any customer recognition of the mark. There is no showing that its sales would be affected if tomorrow it began using a different mark in its place.

In the defendant’s case, loss of the Esprit mark would be catastrophic. Defendant’s sales growth of 500% over five years to a volume exceeding $200 million has been directly related to its very successful promotion of its Esprit mark in connection with its merchandise. There is a huge consumer demand for the defendant’s Esprit trademark. Indeed, defendant’s clothing often displays the Esprit logo in large letters as part of the design of the clothing. There can be no doubt that the trademark, as developed by defendant, contributes enormously to its sales.

Likelihood of Confusion — Infringement— Relief

Although, no doubt, a possibility of confusion arises when the same word is used as a mark for both women’s shoes and women’s sportswear, see Avon Shoe, supra, at 612; Mushroom Makers, supra, 580 F.2d 44, 47-48; the likelihood of such confusion in this case is relatively small for the many reasons mentioned above in the discussion of the Polaroid factors.

Furthermore, any confusion that may occur here is not damaging to plaintiff and is not of the sort that involves the harms with which the trademark law usually concerns itself. Here, there has been no assumption on the part of consumers that the junior user’s goods come from a well-known senior. That kind of confusion permits a junior encroacher to trade on the senior’s reputation and threatens to weaken the public acceptance of the senior’s mark if inferior products emanating from the junior are associated by the public with the senior. No such risks arise here.

In this case, it is the junior user which has won public acceptance of its mark. There is no risk that consumers will buy defendant’s products because of plaintiff’s reputation. Nor is there risk of damage to the reputation of plaintiff’s mark resulting from mistaken assumptions as to the origin of defendant’s goods. The fact is that plaintiff’s Esprit mark has no significant reputation. If any confusion may occur, it will do no harm to plaintiff.

In addition, the likelihood of confusion is smaller here than in Mushroom Makers or Avon because in each of those cases, the trademark in question was of the strong, distinctive, arbitrary or fanciful type. Avon, supra, 279 F.2d at 610 (the “Hay-makers” mark ... as applied to women’s shoes is fanciful and arbitrary); Mushroom Makers, supra, 580 F.2d at 48 (“MUSHROOMS ... was ‘arbitrary and fanciful’ and therefore conceptually strong when applied to footwear.”). As noted above, the mark Esprit does not have distinctive, arbitrary or fanciful characteristics that would place it in a strong trademark class. Nor had plaintiff built up its strength by developing any significant consumer recognition. The distinctiveness of the “Mushroom” and “Haymaker” marks made confusion more likely because customers were more likely to assume that so distinctive a mark on related products must indicate the same source. The weakness of this plaintiff’s mark suggests a lower likelihood of confusion.

Notwithstanding the likelihood of confusion found in those cases, the Court of Appeals nonetheless affirmed denial of relief. For similar reasons, as discussed above, I find that defendant’s use of Esprit for sportswear has not infringed plaintiff’s rights to the Esprit mark for shoes.

2. Defendant’s Shoe Lines

As to defendant’s sales of shoes, the considerations are different. I conclude that defendant’s marketing of shoes does violate plaintiff’s rights in its mark Esprit.

As noted in the recitation of the facts above, defendant paid little heed to the part of its attorney’s advice that cautioned not to use Esprit in the marketing of shoes and not to market shoes through the Esprit catalogues. Until the institution of this lawsuit, defendant included shoes along with its clothing lines in its trademark unification program, using Esprit together with the old divisional label “In Good Hands.” When the lawsuit was brought, Esprit was modestly changed to Esprit de Corp. However, shoes continued to be offered through the Esprit mail order catalogues, with tiny inconspicuous legends noting that “footwear [is] by Esprit de Corp.” Also, shoes were advertised under the name Esprit and sold in Esprit stores.

Polaroid Factors Applied to Defendant’s Sale of Shoes

Although the Polaroid factors were originally set forth in the context of evaluation of “different” or “non-competing” products, see Polaroid, supra at 498; McGregor-Doninger, supra, 599 F.2d at 1139; Scarves By Vera, Inc. v. Todo Imports, Ltd., 544 F.2d 1167, 1173 (2d Cir.1976), it has been recognized that the exercise is pertinent also where the products are “competing” or “substantially similar.” Thompson Medical Co., Inc. v. Pfizer, supra, 753 F.2d at 214; American International Group, Inc. v. London American International Corp., 664 F.2d 348, 351 n. 21 (2d Cir.1981); Vitarroz v. Borden, Inc., 664 F.2d 960, 967-68 (2d Cir.1981).

Evaluation of the Polaroid factors pertaining to defendant’s sale of women’s shoes leads to the conclusion that defendant has infringed plaintiff’s mark.

(a) Strength of Plaintiffs Mark. The issue of the strength of plaintiff’s mark is discussed above and does not change with respect to defendant’s sale of shoes.

(b) Similarity of Marks. Defendant contends that it markets shoes under a mark different from plaintiffs in that its shoes and boxes are labeled Esprit de Corp., rather than Esprit. As a factual matter, however, notwithstanding its placement of Esprit de Corp. on the shoes and boxes and its use of a distinctively designed box, defendant is, nonetheless, using the Esprit mark very substantially in its selling of shoes.

Defendant’s advertising shows its shoes, together with its clothing, under the name Esprit. Nothing in the ads suggests that the shoes go under a different name. See, e.g., DX-220 pp 9, 21, 27; 221 p. 2; 268.

The defendant markets its shoes in its own Esprit stores devoted exclusively to the defendant’s merchandise. Although the shoe departments are labeled Esprit de Corp, the store itself is called Esprit and is dominated by the Esprit name.

The shoes also are sold to the public through mail order catalogues that promote the entire Esprit line under the Esprit mark. The name Esprit dominates the catalogues appearing on the cover in big letters and on most pages. Defendant relies on the fact that its catalogues advise “Footwear by Esprit de Corp.” (In 1982 the catalogue contained the advice “Shoes by In Good Hands, Division of Esprit De Corp.”, DX 258, p. 14 N.) While it is true that this message is in the catalogue, it would require an unusually interested and meticulous reader to notice it. The message is in tiny print, inconspicuously placed. See, e.g., DX-230 p 7; 231 pp 13, 14, 19, 21, 22, 25; DX-232A pp 2, 5, 7, 9, 11, 13, 15, 16, 19, 20, 23, 24; 265 (last page), Winter ’84 catalogue (unnumbered exhibit) at pp 22-23 and 39. Most pages of the catalogue over the years have shown models apparently dressed top to toe in Esprit garb, including shoes. The “Shoes by Esprit de Corp” legend does not appear on some pages which, while showing shoes, do not provide purchase information, see, e.g., DX-268. In fact, some pages that do furnish shoe purchase information do not show the legend. See, e.g., DX-220 pp 9, 21, 27, 31 and DX-221 p. 2.

When a customer orders shoes out of the catalogue, she places the order on a form dominated by the Esprit mark; the merchandise arrives in packaging materials labeled Esprit and with packing slips showing the Esprit mark.

It is also noteworthy that under the circumstances, given especially the fame of defendant’s Esprit name, the Esprit de Corp mark in the shoes lends itself to contraction into simple “Esprit.” There was evidence that customers buying defendant’s shoes refer to them as “Esprit shoes.”

Defendant stresses that the major part of its merchandise is sold in independent stores, and that in such outlets shoes are separated from clothing; in shoe stores, there is no clothing at all so that the only merchandise from defendant would be that bearing the Esprit de Corp label, and in department stores, shoe departments would be separate from the departments where defendant’s Esprit clothing is shown. These facts, however, are neither complete nor satisfactory answers to the problem. While in large department stores the shoe department may be quite distant from the clothing, in smaller sportswear shops the two may be elbow to elbow. Also, it would be to the store’s advantage to make much of defendant’s popular Esprit label; defendant cannot prevent salesmen from directing their Esprit-seeking customers to the defendant’s “Esprit shoes.” It would be in the interest of such merchants to minimize the trademark difference between defendant’s Esprit clothes and defendant’s Esprit de Corp shoes. For example, if a customer entered a store that carried defendant’s but not plaintiff’s shoes, and asked, “Do you have Esprit shoes?,” it can be assumed the customer would not be turned away.

In sum, although the defendant has made some effort to distance its shoes from its Esprit mark, that effort has been modest at best and correspondingly unsuccessful. The record suggests that the average fashion conscious consumer would understand the words “Esprit shoes” as a reference to defendant’s merchandise.

(c) Proximity of Products and Bridging the Gap. Defendant contends that to describe plaintiff’s and defendant’s merchandise simply as women’s shoes overstates the proximity of the products. It points to style differences between its merchandise and plaintiff’s, as well as to the different clienteles they appeal to. Plaintiff’s merchandise is more formal and traditional. Defendant’s shoes are contemporary in their designs and colors, far more sporty and informal. Defendant argues it is unlikely that the customers for either one would have much interest in the merchandise of the other.

Although defendant’s observations have some merit, I question how much weight they are entitled to. First, although plaintiff and defendant may have few shared customers, their shoe merchandise is sold largely in the same channels of commerce and through the same types of outlets. The fact that they have few retail outlets in common is as much a consequence of plaintiff’s lack of success in promoting its line as it is of differences in the type of merchandise. Merely by better buying, better marketing or more aggressive advertising plaintiff could increase the number of stores that might potentially carry both lines.

Also, the distance between their merchandise is less than defendant contends. Although plaintiff’s most successful line appears to be a traditional dressy high-heeled shoe with pointed toe (Victor Dep., pp 17-18, 20; Orent Dep., pp 80, 94), plaintiff’s catalogue has included a number of sport models including sandals and low-heeled thong shoes. See, e.g., PX-28, Nos. 11, 19, 26; PX-30, Nos. 1, 2, 10, 11, 15, 47, 53; PX-31, Nos. 28, 29; PX-32, Nos. 7, 9, 10, 31-33; PX-34, Nos. 1,12, 20, 67, 80, 87; PX-35, No. 17; PX-36, Nos. 3, 18, 53, 60; PX-37, Nos. 3, 5, 6, 8, 12, 15, 16, 24, 29, 38, 46; PX-40, Nos. 6, 11, 15; PX-42, Nos. 18505, 37506, 77504. By more aggressive and successful promotion of such existing lines, plaintiff could compete more directly with defendant.

Nor is it correct that defendant restricts itself to low-heeled sport models. In the expansion of its shoe division, defendant has also sold dressy, high-heeled, narrow-toed models. See DX-223, p. 25, No. 7013; DX-225 p. 17, No. N8018; defendant’s Winter ’84 catalogue (unnumbered exhibit) at pp 22-23. Although these shoes no doubt exhibit some difference from plaintiff's, they are generally of similar type, for the same kinds of occasions, and in a roughly similar price range.

(d) Quality of Defendant’s products. The quality factor does not play any significant role in this litigation as to defendant’s shoes (any more than as to defendant’s clothing). Although some of defendant’s shoe products have been inexpensive canvas shoes, particularly in the earlier years, plaintiff has not shown that poor quality has caused customer dissatisfaction of a sort that could harm plaintiff’s reputation by reason of confusion. See Mushroom Makers Inc., supra, 580 F.2d 44, 49; Lever Brothers Co., supra, 693 F.2d at 258; and Procter & Gamble, supra, 485 F.Supp. at 1202.

(e) Customer Sophistication and Actual Confusion.

It is not surprising that the record reflects a number of instances of actual confusion. For example, Turner (Turner Dep., pp 8-11); Shapiro (Shapiro Dep., pp 12-14), and Eckhardt (Eckhardt Dep., pp 66-68), all of whom sell plaintiff’s Esprit shoes, testified that customers ask whether the shoes come from the defendant. Evans, a buyer for a large store called plaintiff looking for defendant’s shoes. (Evans Dep., pp 13-14, 26-29.) Lubovsky, the owner of plaintiff, testified to numerous such instances of confusion and also to the concern that customers might believe plaintiff was infringing on defendant’s rights to the mark Esprit. (Lubovsky Dep., pp 3, 90-92, PX 128, 131.) One shoe store owner, Fausone, who carried plaintiff’s Esprit shoes, testified that customers who had seen defendant’s shoes offered for less believed his merchandise was defendant’s and that he was overcharging. He testified he was forced to cut the price on plaintiff’s Esprit shoes by one-half to unload them. (Fau-sone Dep., pp 27-30.) Orent, a salesman of plaintiff’s merchandise, testified that he encountered resistance to carrying plaintiff’s Esprit label because of the likelihood of confusion with defendant’s merchandise. In addition, there was evidence of considerable confusion at a shoe show featuring both plaintiff and defendant when telephone calls seeking plaintiff were misrout-ed by the operator to defendant, and vice versa. (Garber Dep., pp 114-15.)

(f) Defendant’s Good or Bad Faith. The issue of defendant’s good faith as to its sale of shoes differs substantially from its sale of clothing. First, defendant was constructively on notice by reason of plaintiff’s registration. And while plaintiff’s registration for shoes was of little consequence as to defendant’s right to use Esprit for clothing, it was of great consequence as concerned defendant’s right to use Esprit for shoes.

Furthermore, when defendant became aware of plaintiff’s rights, it acted with considerable disregard for those rights. After defendant had learned that plaintiff possessed valid rights to exclusive use of Esprit for women’s shoes and had received its lawyer’s advice not to use Esprit in selling or advertising shoes, defendant, nonetheless, proceeded to use the mark on shoes. In making a small change to Esprit de Corp after plaintiff brought suit while continuing to sell shoes under the umbrella of its heavy publicizing of its Esprit mark, defendant has failed to accord reasonable deference to plaintiff’s exercise of its lawful trademark rights. In disregard of its counsel’s advice, defendant has continuously sold its shoes through the Esprit cat-alogues where, notwithstanding tiny inconspicuous legends that “Footwear [is] by Esprit de Corp.,” the shoes are presented as Esprit merchandise. The sale of shoes in defendant’s Esprit shops also presents them as Esprit merchandise, notwithstanding the labels Esprit de Corp. on the boxes and sock linings.

It was greatly to defendant’s advantage to use its highly successful Esprit mark in connection with its sale of shoes. That is essentially what it has done, under thin disguise.

As sins go in the area of trademark infringement, this was far from the most heinous. It does not compare, for example, to free riding on another’s reputation, deceiving the public. See W.E. Bassett Co. v. Revlon, Inc., 305 F.Supp. 581 (S.D.N.Y.1969), rev. in part on other grounds, 435 F.2d 656; Stix Products Inc. v. United Merchants & Mfrs. Inc., 295 F.Supp. 479 (S.D.N.Y.1968); Monsanto Chemical Co. v. Perfect Fit Products Mfg. Co., 232 F.Supp. 493 (S.D.N.Y.1963). It is not so much a question of bad faith as of disregard for plaintiff’s rights. Defendant first adopted the Esprit mark for clothes in the correct perception that this would not infringe plaintiff’s rights for shoes. Then as defendant successfully built the mark into a powerful commercial force and wished to reap the benefits, it used the mark also to promote its sale of shoes, with little regard for plaintiff’s rights to exclusive use in that area.

(g) Relative Harm. The relative harm from grant or denial of an injunction falls far more heavily on the defendant than on the plaintiff. As noted above, the Esprit mark is of no great value to plaintiff in selling shoes. Plaintiff has made no showing that any significant part of its business depends on the exploitation of the Esprit mark. Defendant, on the other hand, has built up a huge goodwill in favorable consumer recognition of its Esprit mark and has used this most successfully in building its shoe sales to a $15 million volume. Although defendant's success in selling shoes has resulted in part from its imaginative selection of merchandise and its lively, successful publicity, there can be no doubt that the success of the shoe line has benefited enormously from defendant’s success in building up the Esprit name and would suffer from its loss.

Likelihood of Confusion — Infringement— Remedy

I find that plaintiff has shown a substantial likelihood of confusion and infringement resulting from defendant’s use of Esprit in the sale of shoes. Defendant argues that since it is “reverse confusion,” i.e., consumer assumption that the senior user’s merchandise emanates from the junior, the plaintiff has suffered no harm and is entitled to no relief. Defendant’s argument goes too far.

Plaintiff has shown harm resulting from the confusion. It has shown both loss of sales and loss of efficiency. I have no doubt that plaintiff is entitled to some relief.

What the relief should be is more puzzling and is left by the parties’ stipulation to the next phase of this split trial.

It is clear plaintiff is entitled to whatever modest damages it is able to show it has incurred by reason of the infringement. But it is unlikely plaintiff will be able to show the defendant has profited from the infringement, 15 U.S.C. § 1117, for none of defendant’s sales were attributable to plaintiff’s goodwill in the mark.

More troublesome is whether plaintiff is entitled to an injunction and, if so, of what scope and nature. A broad, far-reaching injunction barring defendant from selling shoes in any manner connected to its Esprit mark would cost the defendant millions. So far as the evidence shows, on the other hand, plaintiff’s business would be virtually unaffected whether an injunction is granted or denied. There is no convincing showing that plaintiff would lose a single sale if it dropped Esprit and instead used Robertina, or another mark. At present, the principal value of the Esprit mark to plaintiff lies in the price plaintiff can extract from defendant for its sale. A far reaching injunction would so damage defendant that it would permit plaintiff to demand a very high price.

It is surely not the proper function of an equitable decree to give plaintiffs mark an extortion value far beyond the value it possess in plaintiff’s business. From this point of view, it may be questioned whether plaintiff should receive any injunction at all.

On the other hand, plaintiff has used its mark continuously in its business for many years. The trademark law promises it exclusive rights within a limited area resulting from such use. It should not be penalized for having avoided the risks of heavy investment in brand advertising. Surely plaintiff should not be forced either to drop its mark or suffer unacceptable encroachment on an area reserved to it by law, merely because a new infringing venturer has been bold, aggressive and successful.

Perhaps the fairest solution will be to award an injunction of modest provisions, that will not excessively deprive defendant of the benefit of the valuable goodwill it has built up (and, accordingly, does not give plaintiff 'a lever for unconscionable extortion), but which requires the defendant to take more effective steps to distinguish its shoe mark from Esprit and to avoid potential confusion. Plaintiff would be left with wider scope for exercise of its trademark rights but would not receive the benefit of high extortion value premised on the loss inflicted on defendant by the injunction.

SO ORDERED.

      . Webster's Third New International Dictionary (3d ed. 1976) defines esprit as "cleverness and vivacity (as of spirit and mind); sprightly wit, an inherent and native lively and colorful quality-"

      . Plaintiff contends its mark is fanciful and in the highest protectible category. Defendant disputes this, contending, correctly in my view, that the mark is not strong. For obvious reasons, however, with an eye to the future, defendant does not contend the mark is so weak as to belong in the descriptive category. As I have not had both sides of the issue presented to me, I make no ruling as to where the mark stands, beyond ruling that it falls distinctly below the arbitrary or fanciful category claimed by plaintiff.

      . Although some of plaintiffs catalogues have exhibited less formal styles, see, e.g., PX-28, Nos. 4, 19, 26; PX-37 Nos. 3, 5, 6, 8, 12, 15, 16, 24, 29, 38, 46, the testimony of plaintiff’s salesmen and customers shows that the vast majority of plaintiffs sales is in dressier shoes. See, e.g., Orent Dep., pp 80, 94; Victor Dep., pp 17-18, 20.

      . Plaintiff points to 29 stores that have at some time carried plaintiffs and defendant's merchandise, not necessarily simultaneously, again without showing that such stores carried plaintiffs Esprit label.

      . Plaintiffs witness Carol Turner, a shoe seller, found defendant’s ads “beautiful" (Dep., p. 8); Gail Miller, a sportswear buyer stated: "Everyone loves defendant’s catalogues" (Dep., pp 8-9).

      . Orent testified (by affidavit) that he believed this had occurred in connection with Bullock’s, Nordstrom and J.W. Robinson. I recognize that this testimony was somewhat undermined. Bullock’s buyer, Putnam, did not remember the conversation and doubted he had made the statement. Robinson’s buyer Fowler, who carries defendant’s shoes and testified they were doing great, denied Orent’s story. He said he had no interest in buying from Orent because Orent was always selling different stuff. Defendant also showed that Bullock's and Nord-strom carried plaintiffs merchandise on their private label rather than in the Esprit label. In my view, the attempted impeachment was partially but not wholly successful. Bullock’s and Robinson’s buyers might well have said such a thing notwithstanding lack of memory of it. And as to private labeling, it is only done for substantial orders. The fact that these stores ordered most of their merchandise from plaintiff in bulk and in private label does not exclude the possibility that they might have considered ordering additional styles in smaller quantities not justifying the private labeling. Another possibility is that Orent correctly remembered the incidents but erred in his identification of the accounts. I see no reason to believe that Orent, who unhesitatingly testified unfavorably to plaintiff on other issues, fabricated these incidents. More importantly, regardless of the accuracy of Orent’s testimony, it does not seem unlikely that such might happen in the future. A store that carried defendant’s shoes might well wish to avoid the potential confusion that might result from its carrying other unrelated merchandise marked Esprit.


source: Caselaw Access Project

author: RICE, District Judge.

license: Public Domain

text:
    Joseph L. HOWARD, et al., Plaintiffs, v. Deborah J. SIKULA, et al., Defendants.
    No. C-3-84-986.
    United States District Court, S.D. Ohio, W.D.
    Jan. 23, 1986.

      Eugene Robinson, Dayton, Ohio, for plaintiffs.
    Gerald F. Kaminski, Asst. U.S. Atty., Dayton, Ohio, for defendants.
   DECISION AND ENTRY OVERRULING PLAINTIFFS’ MOTION TO REMAND; DECISION AND ENTRY ORDERING PLAINTIFF TO SHOW CAUSE WHY DEFENDANT NANCY A. GUEST SHOULD NOT BE DISMISSED; DECISION AND ENTRY CONSTRUING DEFENDANTS’ MOTION TO DISMISS OR IN THE ALTERNATIVE FOR SUMMARY JUDGMENT AS A MOTION FOR SUMMARY JUDGMENT AND SUSTAINING SAME

RICE, District Judge.

This case is presently before the Court on Plaintiffs’ Motion to Remand (Doc. # 3) and on Defendants’ Motion to Dismiss or in the Alternative for Summary Judgment (Doc. # 12). For the reasons set forth below, Plaintiffs’ Motion to Remand is overruled, and Defendants’ Motion to Dismiss or in the Alternative for Summary Judgment is treated as a motion for summary judgment and granted.

I. Factual Background

Plaintiff Joseph Howard, at the time the events underlying this lawsuit occurred, was an Air Force Reservist assigned as the non-commissioned officer in charge of nursing services for the 906th TAC Fighter Group, Wright-Patterson Air Force Base. Defendants at that time were also members of the Air Force Reserve assigned to that unit.

At that time, Joseph Howard and Defendants were on inactive duty status, but each attended unit training assemblies conducted over two days on one weekend in each month. On November 5, 1983, the Defendants, while attending one of these unit training assemblies, presented the commander of their unit with written charges alleging that Joseph Howard had discovered and informed them that the chief nurse who was then scheduled for immediate assignment to the group was not liked in her previous assignment. These charges also indicated that Mr. Howard had suggested a “sick-in” demonstration should occur to protest the assignment of the new chief nurse. The written statements were given to the commander of the unit, allegedly at his official direction, during the course of his investigation of possible misconduct. These statements were used by the commander as evidence to support a letter of reprimand issued to Mr. Howard on November 6, 1983.

This lawsuit was filed on November 4, 1984 in the Common Pleas Court of Greene County, Ohio. It was removed to this Court on December 4, 1984. Plaintiffs claim that these statements were defamatory and caused Plaintiff Joseph Howard actual damages. Plaintiff Joanna Howard, Joseph Howard’s wife, claims damages for loss of consortium and for emotional injury-

11. Motion to Remand

Plaintiffs’ Motion to Remand (Doc. #3) argues three grounds for its conclusion that this action was improperly removed from the Greene County Common Pleas Court. First, Plaintiffs argue that at all relevant times Defendants were not officers of the United States or members of the Armed Forces. Second, Plaintiffs argue that the Defendants were not required or permitted by their duties to volunteer the statements in question. Finally, Plaintiffs argue that not all of the Defendants have joined in this Petition for Removal (Doc. # 1). Because the Court finds each of these three arguments not to be well taken, the Motion to Remand is overruled.

Defendants have removed this action from state court under 28 U.S.C. §§ 1442(a)(1) and 1442a. Section 1442(a)(1) provides:

(a) A civil action or criminal prosecution commenced in a State court against any of the following persons may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:
(1) Any officer of the United States or any agency thereof, or person acting under him, for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue.

Section 1442a provides:

A civil or criminal prosecution in a court of a State of the United States against a member of the armed forces of the United States on account of an act done under color of his office or status, or in respect to which he claims any right, title or authority under a law of the United States respecting the armed forces thereof, or under the law of war, may at any time before the trial or final hearing thereof be removed for trial into the district court of the United States for the district where it is pending in the manner prescribed by law, and it shall thereupon be entered on the docket of the district court, which shall proceed as if the cause had been originally commenced therein and shall have full power to hear and determine the cause.

In the present action, the Court must determine whether Defendants were either members of the Armed Forces, per § 1442a, or officers of the United States, per § 1442(a)(1), and if so, whether they were acting under color of office in submitting their statements to their commander.

“Armed Forces” is not defined in Title 28 of the Code. However, 10 U.S.C. § 101(4) states: “ ‘Armed forces’ means the Army, Navy, Air Force, Marine Corps, and Coast Guard.” “Air Force” is defined in 10 U.S.C. § 8062(d)(1) as consisting of “the Regular Air Force, the Air National Guard of the United States, the Air National Guard while in the service of the United States, and the Air Force Reserves_”

In this action, it is undisputed that the Defendants were members of the Air Force Reserve. See Complaint (attached to Doc. # 1) at ¶ 1. Plaintiffs cite State of Missouri ex rel. Drane v. Adams, 335 F.Supp. 691 (W.D.Mo.1971), for the proposition that national guard members are not members of the armed services for removal purposes. However, Air Force Reservists are always a component of the Air Force; National Guard members are only a component of the Air Force when they are on active duty with the United States. Compare 10 U.S.C. § 8076 with 10 U.S.C. §§ 8078 and 8079. Thus, under the statute the Defendants are undisputably members of the Armed Forces. It is unnecessary for the Court to decide whether the Defendants are also officers of the United States.

The undisputed facts in this action further show that the Defendants were acting under color of office at all times relevant to Plaintiffs claims. In Willingham v. Morgan, 395 U.S. 402, 409, 89 S.Ct. 1813, 1817, 23 L.Ed.2d 396 (1969), the Supreme Court examined the color of office test in the context of removal from state court:

In a civil suit of this nature, we think it was sufficient for petitioners to have shown that their relationship to respondent derived solely from their official duties.... In this case, once petitioners had shown that their only contact with respondent occurred inside the penitentiary, while they were performing their duties, we believe that they had demonstrated the required “causal connection.” The connection consists, simply enough, of the undisputed fact that petitioners were on duty, at their place of federal employment, at all relevant times. If the question raised is whether they were engaged in some kind of “frolic of their own” in relation to respondent, then they should have the opportunity to present their version of the facts to a federal, not a state, court. This is exactly what the removal statute was designed to accomplish. Petitioners sufficiently put in issue the questions of official justification and immunity; the validity of their defenses should be determined in the federal courts.

(footnotes omitted). See also Stein-Sapir v. Birdsell, 673 F.2d 165 (6th Cir.1982) (applying Willingham to slander action and finding removal appropriate even absent federal defenses); Abrams v. Playle, 414 F.Supp. 634, 636 (D.Guam 1976) (defamation claims arising solely out of contacts in official capacity removable to federal court).

In the present action, all of the contacts between Joseph Howard and Defendants relevant to the defamation claim occurred while these parties were performing duties at least apparently required by their capacities as Air Force Reservists. While Defendants have indicated that contacts with the Plaintiff Joseph Howard may have occurred prior to the weekend in which they were attending unit training assemblies, the allegedly defamatory statements were undisputedly made during that weekend. See Affidavit of Joseph L. Howard (attached to Doc. # 15) at 7-12. Thus, under the Willingham test, Defendants have shown sufficient causal connection between their official duties and the alleged injury to Plaintiffs for this Court to find that they were acting under color of office.

Finally, Plaintiffs argue that removal was improper because all Defendants have not joined the Petition to Remove. Defendant Nancy A. Guest has not been served to date in this action, and accordingly she did not join in the Petition to Remove. However, as Plaintiffs themselves apparently concede (see Doc. # 15 at 9), if removal is premised upon Defendants being members of the Armed Forces or officers of the United States, all Defendants need not join in the Petition. See Hood v. Security Bank of Huntington, 562 F.Supp. 749, 750 (S.D.Ohio 1983); Howes v. Childers, 426 F.Supp. 358, 359 (E.D.Ky.1977).

Therefore, because the Court finds that Defendants in this action were members of the Armed Forces and acting under color of office at all times relevant to Plaintiffs’ claim, Plaintiffs’ Motion to Remand is overruled.

III. Failure to Serve Defendant Nancy A. Guest

In reviewing this case, it appears that Plaintiffs have failed to serve the summons herein upon Defendant Nancy A. Guest. Under Rule 4(j):

If a service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint and the party on whose behalf such service was required cannot show good cause why such service was not made within that period, the action shall be dismissed as to that defendant without prejudice upon the court’s own initiative without notice to such party or upon motion.

Therefore, Plaintiffs are given seven days from receipt of this decision to show good cause why this action should not be dismissed as against Defendant Nancy A. Guest. Failure to make such a showing, will result in the Court dismissing sua sponte the portion of the Complaint as it applies to said Defendant.

IV. Motion to Dismiss or in the Alternative for Summary Judgment

Having found that this action is properly removed, and having ordered Plaintiffs to show cause why Defendant Nancy A. Guest should not be dismissed from this action, the Court now turns to the remaining Defendants’ Motion to Dismiss or in the Alternative for Summary Judgment (Doc. # 12). Because the parties have presented, and the Court has considered, material outside of the pleadings, this motion will be considered as one brought under Rule 56 for summary judgment. See Fed.R.Civ.P. 12(b). Because the Court finds that this action is precluded under the Feres doctrine, summary judgment is granted to the remaining Defendants.

The Feres doctrine arises out of the Supreme Court’s decision in Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950). In that case, the Supreme Court held that “the Government is not liable under the Federal Tort Claims Act for injuries to servicemen where the injuries arise out of or are in the course of injuries incident to service.” Id. at 146, 71 S.Ct. at 159. Subsequently, the doctrine has been expanded to provide immunity from liability in lawsuits between members of the Armed Forces. See Mollnow v. Carlton, 716 F.2d 627 (9th Cir.1983); Stanley v. CIA, 639 F.2d 1146, 1152 (5th Cir.1981); Bailey v. DeQuevedo, 375 F.2d 72 (3d Cir.1967).

The Sixth Circuit, in Woodside v. United States, 606 F.2d 134 (6th Cir.1979), examined the meaning of “incident to service” as a prerequisite to application of the doctrine. The court noted:

Feres requires that there be some proximate relationship between the service member’s activity and the Armed Forces. Where the two are closely associated or naturally related, the activity will be deemed “incident to service” even though not an essential or integral part of the mission of the Armed Forces and even though not directly involving a command relationship between the soldier and the military.

Id. at 141. Among the factors to be considered are whether the injury was in the line of duty, whether the injured is subject to military duty at the time of injury, whether the injured is on active duty at the time of the injury, and, finally, whether the activity is provided directly by the military or if there is substantial involvement of the Armed Forces in the activity. Id. at 141-42.

In the present action, the Court has already found that Plaintiff Joseph Howard and the Defendants were members of the Armed Forces under the applicable statutes. Applying the test of Woodside to the undisputed facts in the record herein, it is apparent that Plaintiff Joseph Howard was injured incident to his service in the Armed Forces. While Plaintiff apparently was not on active duty when the alleged defamation occurred, he was undisputedly subject to military duty at the time of the injury and was involved in an activity at that time that was provided directly by the military. See Affidavit of Joseph L. Howard (attached to Doc. # 15) at 4; Affidavits of Joseph R. Kraynak (Exhibits E-H attached to Doc. # 13). Further, the injury alleged grew directly out of the military disciplinary process. Id. In view of these facts, the Court must apply the Feres doctrine. Accordingly, summary judgment must be granted against the claims of Joseph Howard, and in favor of the remaining Defendants.

Because the Court has granted summary judgment on Joseph Howard’s claims, it must do the same to Joanna Howard’s claims for loss of consortium. Under Ohio law, claims for loss of consortium are derivative from the primary claim and thus must be dismissed when the primary claim fails. See Messmore v. Monarch Machine Tool Co., 11 Ohio App.3d 67, 463 N.E.2d 108, 110 (1983) (“[A] cause of action based upon a loss of consortium is a derivative action. That means that the derivative action is dependent upon the existence of a primary cause of action and can be maintained only so long as the primary action continues.”). Accordingly, summary judgment is granted against Plaintiff Joanna Howard and in favor of the remaining Defendants.

In sum, the Court has overruled Plaintiffs’ Motion to Remand, and has granted summary judgment in favor of all Defendants except for Nancy A. Guest. Plaintiffs are given seven days to show good cause why service has not been executed upon Ms. Guest. Failure to make such a showing will result in dismissal of the remaining claims in this action.

      . Plaintiffs also apparently argue that under United States v. Caputo, 18 M.J. 259 (C.M.A.1984), a reservist on inactive duty cannot be considered a member of the Armed Forces. The Court rejects this argument for two reasons. First, the Court believes that the broader definition found in the statutory sections cited above . is in conformity with the § 1442a objectives of preventing state court interference in national military affairs. Second, the Court reads Capu-to as failing to reach the issue of whether inactive reservists are under the jurisdiction of the Uniform Code of Military Justice, and instead deciding the case on the rule that re-entry into military service does not revive jurisdiction over an offense committed prior to termination of service. See id. at 266-68. Other courts have held that a reservist who accepts enlistment orders is subject to the Uniform Code of Military Justice. See Wallace v. Chafee, 451 F.2d 1374 (9th Cir.1971).

      . The Court notes, however, that under Montana v. Christopher, 345 F.Supp. 60 (D.Mont.1972), a member of the Armed Forces is considered an officer of the United States if he or she is acting under orders of a superior officer. In the present action, it appears that the Defendants’ statements were made at least in part under their commanding officer’s orders. See Affidavit of Joseph L. Howard (attached to Doc. # 15 at 7-8) ("At this mass meeting, Captain Ray requested all of the medical technicians to prepare written statements pertaining to this Affi-ant_”).

      . The Court also finds that Plaintiffs’ claims are barred by the immunity the Defendants enjoyed as federal officials. See Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959). It is clear from the affidavits of the Defendants and of Major Joseph R. Kraynak (Exhibits A-H attached to Doc. # 12) that the acts alleged in the Complaint were within the required duties of the Defendant. Accordingly, the Defendants enjoyed absolute immunity from liability for the acts alleged. See Gray v. Bell, 712 F.2d 490, 505 (D.C.Cir.1983); Claus v. Gyorkey, 674 F.2d 427, 431 (5th Cir.1982).

      . The Court notes, without deciding, that the reasoning requiring that summary judgment be granted in favor of these Defendants would also likely require that the Court grant summary judgment in favor of Defendant Nancy A. Guest, were she to be served with summons in this action.


author: NORGLE, District Judge.

text:
    NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY, a Minnesota corporation, Plaintiff, v. Daniel COMM, individually, and Royal Oaks Apartments Associates, a limited partnership, Defendants.
    No. 84 C 10230.
    United States District Court, N.D. Illinois, E.D.
    Jan. 23, 1986.

      Robert R. Tepper, Lester Rosen, Martha A. Warren, Rosenthal and Schanfield, Chicago, Ill., for plaintiff.
    Norman Hanfling, Norman Hanfling & Assoc., Chicago, Ill., for defendants.
   ORDER

NORGLE, District Judge.

Plaintiff has filed a motion for partial judgment on the pleadings or, in the alternative, for partial summary judgment. The motion for judgment requires this court to interpret certain provisions of a partnership Agreement (“Agreement”) between the parties appended to the motion and the complaint. Defendants have opposed the motion and have submitted exhibits and documents along with their opposition brief.

This is a single count action. Thus, the proposed “partial” summary judgment is not partial at all as it will dispose of the question of liability. Because we have considered matters outside of the pleadings, we treat this motion as one for summary judgment under Fed.R.Civ.P. 56(c).

The alignment of the parties in this case is needlessly complex. Simply stated, plaintiff and defendants are partners in a limited partnership. The plaintiff is the limited partner (30% interest); the defendant is the general partner (70% interest). The partnership was formed exclusively to construct, rent, manage, and operate a rental apartment complex (“premises”). (See Partnership Agreement, 112.02, Ex. A.) The only question presented to this court at this time is the meaning of key provisions of the partnership agreement relating to the distribution of proceeds arising from the sale of the premises.

At the outset we restate established principles regarding summary judgment. A motion for summary judgment should be granted when there are no genuine issues of material fact and judgment may be rendered as a matter of law. Fed.R.Civ.P. 56. The burden of demonstrating that there are no material facts in issue is on the moving party, but the opposing party may not avoid summary judgment by baldly asserting the existence of a disputed fact. Atchison, Topeka & Santa Fe v. United Transp. Union, 734 F.2d 317, 320 (7th Cir.1984). We understand defendants to object only to Plaintiffs proferred interpretation of the Agreement and not to the existence of any material issue of fact.

Neither party has provided the court with any meaningful statement of Illinois law regarding the interpretation of limited partnership agreements. Because the parties have asked this court to interpret their Agreement we shall begin with a brief statement of the controlling law.

The Uniform Limited Partnership Act, (adopted in Illinois and codified at Ill.Rev. Stat. ch. 106 1/2, § 44 et seq. (1985)), governs the rights and obligations arising out of limited partnerships. The act expressly incorporates provisions of the Uniform Partnership Act, Ill.Rev.Stat. ch. 106 1/2, § 1 et seq. (1985), which, in turn, incorporates common law principles of agency and es-toppel. Id. at § 4. A partnership is a contractual relationship, Ramacciotti v. Simpkins, 130 Ill.App.2d 733, 266 N.E.2d 700 (1970), to which the principles of contract law are applicable. Allen v. Amber Manor Apartments Partnership, 95 Ill. App.3d 541, 51 Ill.Dec. 26, 420 N.E.2d 440 (1981). While the parties need not produce articles of partnership to create a valid partnership, Peck v. Peck, 16 Ill.2d 268, 157 N.E.2d 249 (1959); Urban v. Brady, 86 Ill.App.2d 158, 230 N.E.2d 65 (1967); Keller v. Keller, 4 Ill.App.3d 89, 280 N.E.2d 281 (1972), the partners have the right to establish between themselves by agreement their rights, duties, and obligations as far as the partnership is concerned. Saballus v. Timke, 122 Ill.App.3d 109, 77 Ill.Dec. 451, 460 N.E.2d 755 (1983); McKay’s Estate v. Moses, 35 Ill.App.3d 458, 343 N.E.2d 45 (1976). The parties’ ability to create and enforce a private contractual relationship, of course, is limited by the competing concerns of public policy.

When parties, such as plaintiff and defendant, do reduce their partnership to an agreement, a presumption is raised that the writing expresses the mutual intentions of the parties. Vallarta v. Lee Optical of Missouri, 12 Ill.App.3d 112, 298 N.E.2d 212 (1973). Where that agreement is clear and unambiguous, the intent expressed in the agreement must be ascertained from the agreement alone. AZL Resources Inc. v. Bromagen, 79 Ill.App.3d 76, 34 Ill.Dec. 617, 398 N.E.2d 292 (1979); Greenberg v. Goodman, 52 Ill.App.3d 258, 9 Ill.Dec. 870, 367 N.E.2d 304 (1977). The primary objective of the court is to ascertain the intent of the parties and to give it effect. Schek v. CTA, 42 Ill.2d 362, 247 N.E.2d 886 (1969); Ancraft Prod. Co. v. Universal Oil Prods., 100 Ill.App.3d 694, 695, 427 N.E.2d 585 (1981).

The interpretation of a contract is a question of law to be decided by the court. Fitzsimmons v. Best, 528 F.2d 692 (7th Cir.1976) (per curiam); Mazanek v. Rockford Drop Forge, 98 Ill.App.3d 956, 54 Ill.Dec. 368, 424 N.E.2d 1271 (1981). The provisions of the partnership agreement which the parties ask this court to interpret concern the distribution of net proceeds from the sale of the real estate that formed the basis of the partnership.

The Agreement provides for termination and dissolution of the partnership upon the sale of the premises or all of the beneficial interest of the premises. (Agreement ¶ 10.-01(b).) The relevant paragraphs of the Agreement are as follows:

10.02 Effect of Termination. Upon termination and dissolution, as provided for in 10.01 hereof the General Partner ... shall immediately proceed to wind up and terminate the Partnership and realize upon its assets ... Such General Partner ... shall cause to be made a proper accounting of all of the assets and liabilities of the Partnership and of the net profit or net loss of the Partnership from the date of the last previous accounting to the date of dissolution, all prepared and audited by a reputable firm of independent certified public accountants. The General Partner or Liquidating Trustee, as aforesaid, shall cause all of the Partnership’s liability and obligations to creditors to be paid in the order of priority as provided by law and, thereupon, notwithstanding the provisions of Chapter IO6V2, Section 66, Illinois Revised Statutes, or any other law to the contrary, the assets of the Partnership of the proceeds of their sale (herein called “Remaining Assets”) shall be distributed among the Partners in accordance with their respective Partnership interest as set forth in Section 6.01 hereof (Emphasis added).

6.01 Interests. Notwithstanding any disproportion in the capital accounts of the General Partner and the Limited Partner at any time, and subject always, to the terms and provisions of Article VII and VIII hereof, the General Partner shall have a Seventy Percent (70%) interest in the Partnership and the Limited Partner shall have a Thirty Percent (30%) interest in the Partnership.

6.02 Profits and Losses. Subject to the terms and provisions of Article VII, all profits and losses from the Partnership shall be borne by the General Partner and the Limited Partner in the ratio of their respective interests as provided for in Section 6.01 hereof, provided, that nothing herein contained shall render the Limited Partner personally liable for any debts of the Partnership or any of the losses thereof beyond the amount of its capital contribution made and to be made as provided for in Section 3.02 hereof.

Plaintiff’s argument in support of its interpretation of the Agreement is straightforward. Paragraph 10.2 governs the effect of a termination of the partnership, which was triggered by the sale of the premises (¶ 10.1). Paragraph 10.2 expressly reverses the ordinary rule regarding distribution of assets upon dissolution. Section 66 of the Illinois Revised Statutes, chapter IO6V2, generally requires payment of liabilities first to creditors other than partners, then to limited partners, and finally to general partners. This scheme is not followed in ¶ 10.2 of the Agreement. Paragraph 10.2 states that following payment of liabilities to outside creditors, “notwithstanding the provisions of Chapter 10672, Section 66, Illinois Revised Statutes, the assets of the Partnership or the proceeds of their sale ... shall be distributed among the Partners in accordance with their respective Partnership interests as set forth in Section 6.01 hereof.” Thus, the effect of 1110.02 is to partially replace the statutory method of distribution of assets among the partners with the method provided in 116.01.

Paragraph 6.01 expressly states that “Notwithstanding any disproportion in the capital accounts of the General Partner and the Limited Partner at any time, ... the General Partner shall have a Seventy Percent (70%) interest in the Partnership and the Limited Partner shall have a Thirty Percent (30%) interest in the Partnership.” The effect of this provision is that the proceeds of the sale shall be distributed in accordance with the 70-30 ratio notwithstanding any capital investment (see K117.02 & 7.03). This provision clearly contemplates a potential disparity in the capital contribution of the limited and general partners and provides that such disparity will have no effect on the distribution of assets or proceeds. The Agreement further provides that the limited partner’s capital contribution would not exceed the initial contribution. (See 113.02). Any disparity in capital contribution, absent an amendment in the Agreement, would necessarily have arisen from the defendant-general partner’s increased capital contribution. Thus, what was contemplated by the Agreement was in fact what occurred. Therefore, plaintiff’s interpretation is that the proceeds from the sale of the premises were to be diminished by payment of costs and outside creditor liabilities. Then, the division of net proceeds was to take place in accordance with the interests of the parties. Only after that distribution occurred, were the capital contributions to be returned to the limited and general partners.

The effect of this scheme of distribution is that the plaintiff-limited partner will realize an extraordinary profit ($104,706.00) in comparison to its initial capital investment, while defendant-general partner, which will be forced to recoup its capital contribution through its 70% share, will end up losing approximately $75,000.00. Defendant contends that this gross disparity, combined with other factors, demonstrates conclusively that such an interpretation cannot have been the parties’ intent in drafting these provisions.

Defendants’ attack on plaintiff’s interpretation is not always clear but it seems to take on several facets. As the court understands their argument, defendants contend

1) the history of the parties’ relationship demonstrates that the accounting between the partners was always done one way and now, upon the sale of the premises, plaintiff is attempting to adopt a new procedure of calculating payments, (in effect, plaintiff is es-topped from claiming a different interpretation of the Agreement);
2) U 10.02 is ambiguous, vague, and confusing and therefore should be construed against the draftsman (plaintiff-limited partner);
3) the inequitable result that would arise if plaintiff’s interpretation is adopted demonstrates a) that plaintiff’s interpretation is wrong and the agreement does not reflect the real intention of the parties (in effect a reformation argument), and b) that such a construction is unreasonable and absurd and should not be adopted by this court.

The court addresses each of these contentions in turn.

Defendants first argue that the relationship among the parties prevents the plaintiff from claiming any interpretation of the Agreement inconsistent with their previous understanding. The Glen Avenue Associates has been in existence since 1970. During the fourteen years of its existence, the partnership ran smoothly. The limited partner is alleged to have taken tax write-offs that existed based on an established method of accounting, one which is contrary to the current interpretation.

Although defendants never state as much, they apparently argue an estoppel theory. The court rejects this theory for several reasons. First the theory is unsubstantiated. Defendants do not provide any evidence which would demonstrate that such an understanding between the parties existed during the fourteen years. They merely rest on assertions made in their brief. Such assertions do not create issues of fact. Second, the defendants have not offered a contrary means of interpreting the agreement, they simply state that there was one. Without a plausible argument of an alternative means of distributing proceeds, the court has no way of knowing whether the agreement is ambiguous. Third, we find the agreement to be clear on its face. We think it clearly provides that distribution of proceeds is to occur prior to repayment of capital contributions. Finally, we do not think that the method of payment of proceeds on prior occasions would necessarily control the method of distribution upon dissolution of the partnership because the limited partnership has never been dissolved before. The court cannot conclude that the previous history (unsubstantiated as it is) of the parties supplies a sufficient basis to depart from the clear language of the Agreement.

Next defendants argue that paragraph 10.02 is ambiguous and vague and therefore should be construed against the plaintiff-draftsman. See, e.g., Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197 (2d Cir.1970); see generally Restatement (Second) of Contracts § 206 & comment a (1981). Defendants argue that if plaintiff wanted its interpretation to control, “all it had to do was have paragraph 10.2 state that notwithstanding any disproportion in capital accounts or monies advanced by the general partner or loans made by the general partner, in the event of a sale,” Northwestern should receive 30% of the proceeds of sale before paying any capital contributions. (See Defendants’ Brief at 9.) The express language of paragraph 10.2, through reference to ¶ 6.01 & 6.02, provides exactly that. (See ¶¶ 6.01 & 6.02). Therefore, we reject defendant’s contention that the Agreement is ambiguous.

Finally, defendants argue that the effect of Plaintiff’s interpretation would produce harsh results to defendant demonstrating that such interpretation is unfair and/or unreasonable. See Pennsylvania R. Co. v. Chicago R.I. & P.R. Co., 12 Ill.2d 574, 147 N.E.2d 363 (1958) (court should choose construction which is a natural one and not forced or contrived); Wachta v. First Fed. Savings & Loan Ass’n of Waukegan, 103 Ill.App.3d 174, 58 Ill.Dec. 676, 430 N.E.2d 708 (1981) (court should choose construction which is fair and reasonable and which does not lead to absurd results). These cases are unavailable to defendants for three reasons. First, the Agreement is clear and the court need not construe it further. Second, even if the Agreement were not clear, defendants have provided no alternative interpretation. The court has no way of knowing whether the other interpretation is more reasonable or fair. Finally, we do not believe that plaintiff’s interpretation is unreasonable or unfair. It is true that the defendant may suffer a loss, but we suppose that is a natural risk that the parties contemplated in signing the Agreement. Had the partnership been dissolved earlier, the distribution might have been different. The validity of the Agreement is not questioned. The two parties are sophisticated enough to have engaged in an enterprise that involved limited partnerships within limited partnerships to construct and manage a real estate complex. They reduced that agreement to writing and operated under the terms of the Agreement for fourteen years. This court will not interfere with the private contractual agreement that two parties reached at arm’s length and within the boundaries of public policy.

Conclusion

Thus, the plaintiff’s motion for summary judgment on the interpretation of the Agreement is granted. The defendants have calculated the distribution of the net proceeds of the sale ($345,687.56) to be that plaintiff-Northwestern is to receive ($104,-706.00) (30%) and defendant-ROAA is to receive ($240,981.00) (70%). The distribution of the proceeds from the sale of the premises, however, is not fixed and this calculation is uncertain.

The plaintiff is therefore given 14 days from the date of this order to present proposed findings of the net proceeds of the sale (with supporting data) and their distribution in accordance with this opinion, and defendants are given 14 days for response. A reply, if necessary, is due 7 days thereafter.

IT IS SO ORDERED.

      . Neither party has filed a statement of uncontested facts or a statement of genuine issues in compliance with Local Rules 12(e) & (f). This may be understandable given that plaintiff filed alternatively a motion for judgment on the pleadings and for summary judgment. We have treated this motion as one for summary judgment and conclude that because plaintiff framed its motion in the alternative and defendant attached documents to its response, adequate notice has been provided. See generally Slevin v. Pedersen Assocs., Inc., 540 F.Supp. 437, 438 & n. 2 (S.D.N.Y.1982); 5 C. Wright & A. Miller, Federal Practice and Procedure, Civil § 1371 (1969).

      . Defendant also apparently argues that both plaintiff and defendant have been involved in other partnerships concerning real estate and that in no case has the partnership agreement been interpreted as plaintiff suggests. While this argument has in one sense greater rele-vanee to the current agreement (demonstrating a course of dealing between the parties on the issue of the distribution of proceeds upon dissolution of a partnership), it has even less significance on the current dispute. First, as with the claims regarding this partnership agreement, those claims are unsubstantiated by any evidence. Second, those transactions involved different agreements, different property, and different circumstances. Therefore, we do not consider those arguments persuasive in any event.