American Home Mortgage Corp. v. American Home Mortgage Corp.
American Home Mortgage Corp. v. American Home Mortgage Corp.
Opinion of the Court
The opinion of the court was delivered by
Plaintiff, American Home Mortgage Corporation, commenced this action in August 1999 by order to show cause and verified complaint seeking permanent injunctive relief against defendant, American Home Mortgage of New York asserting claims of unfair competition and tradename infringement.
Plaintiff is a New Jersey corporation incorporated on November 12, 1987 and licensed since that time through the New Jersey Department of Banking and Insurance to conduct business as a
Defendant was initially incorporated in New York in April 1988 as Michael Strauss, Inc. and it was granted a certificate of authority to conduct business in New Jersey under that name on November 18, 1993. On February 10, 1994, defendant registered “American Home Mortgage” as an alternate name under which to conduct business with the New Jersey Secretary of State, and it received a mortgage banker’s license in that name from the Department of Banking and Insurance on March 29, 1994. By corporate resolution passed in April 1999, defendant changed its name to “American Home Mortgage Corporation” and adopted the name “American Home Mortgage Corp. of New York” for use in the State of New Jersey. It obtained an amended certificate of authority from the New Jersey Department of the Treasury under the name “American Home Mortgage Corporation d/b/a American Home Mortgage Corp. of New York” in the same month. Defendant had an office in Parsippany for many years and also maintained office locations in Mount Laurel from January 19, 1998 through November 30, 1999. Its main method of securing business is through advertising, both in newspapers of general circulation, including The Star Ledger, and in the Yellow Pages for certain northern counties. The great majority of defendant’s business comes from loans originating in counties to the north of Mercer and Middlesex and is heavily concentrated in Bergen, Morris and Essex counties.
At the oral argument of the motions, plaintiff conceded that it was not asserting that the use of the name was unfair competition. Rather, plaintiff contended that its claim against defendant was for trade name infringement. The judge rejected that claim on the ground that mere confusion, in the absence of either an unauthorized use of the name or evidence of wrongdoing, was insufficient to support plaintiffs demand for injunctive relief. The judge granted summary judgment in defendant’s favor. Plaintiffs motion for reconsideration, which asserted that genuine issues of fact precluded relief, was denied.
We owe no special deference to the decision of the motion judge on matters of law. Manalapan Realty, L.P. v. Township Committee, 140 N.J. 366, 378, 658 A.2d 1230 (1995). The standard we employ in our review of this summary judgment order, therefore, is identical to that utilized by the trial court. Prudential Property & Cas. Ins. Co. v. Boylan, 307 N.J.Super. 162, 167, 704
Trade name infringement is a form of unfair competition.
Not every name under which one elects to do business, however, is entitled to protection against the use of that name or a similar one by one’s competitors. Edison Electric Co. v. Edison Contracting Co., 203 N.J.Super. 50, 52, 495 A.2d 905 (Ch.Div. 1985). Trade names that are purely arbitrary, in general, are entitled to more protection than those that are merely descriptive
Nor is there any evidence that the plaintiffs name had acquired a secondary meaning sufficient to afford it protection. Because plaintiffs trade name is merely descriptive and generic, it must demonstrate that the name has acquired a secondary meaning in order to cloak it with protection against use by others. See American Shops, Inc., v. American Fashion Shops, supra, 13 N.J.Super. at 422, 80 A.2d 575; cf. Squeezit Corp. v. Plastic Dispensers, Inc., supra, 31 N.J.Super. at 223, 106 A.2d 322 (“it must show that the product has attained a primary significance in the mind of the consuming public which is attached to the producer and not to the utilitarian function of the product”). In order to do so, plaintiff must demonstrate that its “name which originally was descriptive or geographical in nature ... [became] uniquely
Plaintiffs proofs respecting secondary meaning are absent. It has not demonstrated that the purely descriptive name it chose for its business has in any sense become associated with its particular product or service. It is, therefore, unlike other purely descriptive names found deserving of protection. For example, the religious institution in Christian Science Bd. of Dir. v. Evans, 199 N.J.Super. 160, 488 A.2d 1054 (App.Div. 1985), aff'd, 105 N.J. 297, 520 A.2d 1347 (1987), gained protection for some uses of its name but not others. While the descriptive name for the church was merely generic and not protected in general, the designation when used for its library, or reading room, had become so synonymous with that particular religious institution that it had acquired a secondary meaning. Id. at 171, 488 A.2d 1054. In the record before us, however, there was no evidence that the descriptive generic name plaintiff chose has risen to that level. Plaintiffs own officers conceded that they had never heard of plaintiff prior to accepting employment there. Plaintiff stipulated that there are several other entities offering residential mortgages with similar names, including American Home Funding, American Homestead, and American Mortgage Source. At most, plaintiff offered the court anecdotal evidence of confusion among customers, but that confusion was evident not only between these parties but as among the other entities with similar names as well. Even so, mere confusion is insufficient to support an injunction based on a claim of unfair competition or trade name infringement. See Edison Elec. Co. v. Edison Contr. Co., supra, 203 N.J.Super. at 52, 495 A.2d 905. In the absence of evidence establishing that the entirely generic and descriptive name, “American Home Mortgage” had achieved secondary meaning, plaintiff was not entitled to an injunction and defendant was properly granted summary judgment.
The matter is, therefore, remanded for entry of an order which should be modified to require defendant to utilize its complete authorized name “American Home Mortgage Corp. of New York” for all purposes in the State of New Jersey. The order appealed from is in all other respects affirmed.
While defendant contends, for reasons we will address, that it is entitled to conduct business in New Jersey under the name “American Home Mortgage" without reference to "of New York," for ease of reference and for purposes of clarity, we will refer to the parties as “plaintiff" and “defendant" except where otherwise necessary. To the extent that a reference to the corporations by a different designation is required, we will refer to the plaintiff as "American Home Mortgage Corp." and to the defendant as “American Home Mortgage of New York."
Plaintiff’s motion before this court which sought to supplement the record by adding further evidence in support of this contention was denied prior to the oral argument. R. 2:5 — 4(a); Atlantic Employers Ins. Co. v. Chartwell Manor School, 280 N.J.Super. 457, 467, 655 A.2d 954 (App.Div. 1995).
Plaintiff on appeal appears to have revived the unfair competition aspect of the complaint. While technically impermissible, R. 2:6-2(a)(l); see Triffin v. Somerset Valley Bank, 343 N.J.Super. 73, 79-80, 777 A.2d 993 (App.Div. 2001), we address it as a part of our analysis of the trade name infringement complaint nonetheless.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.