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Enterprise Rent-A-Car Company v. Rent-A-Wreck of America, Inc.
Citations: 181 F.3d 906; 51 U.S.P.Q. 2d (BNA) 1213; 1999 U.S. App. LEXIS 13998; 1999 WL 437253Docket: 98-2807
Court: Court of Appeals for the Eighth Circuit; June 25, 1999; Federal Appellate Court
Rent-A-Wreck of America, Inc. (RAW) appeals a district court order that enforced a settlement agreement with Enterprise Rent-A-Car Company (Enterprise) and dismissed all claims in a trademark infringement suit. Enterprise owns three registered service marks used in its advertising, while RAW began using a similar phrase in January 1996. Enterprise filed a lawsuit against RAW for service mark infringement on April 7, 1998, and RAW countered by seeking cancellation of Enterprise's service marks. On April 20, 1998, RAW’s counsel proposed a settlement to discontinue using its phrase and offered alternative phrases for advertising. Enterprise interpreted this as a settlement offer and accepted three of the alternatives on April 22. However, RAW later claimed its initial letter was not a settlement offer but merely an exploration of Enterprise's position. Following RAW's disavowal of the settlement, Enterprise threatened to seek court enforcement. RAW contended that no settlement had been reached due to unresolved conditions, including payment of costs and attorneys' fees, and cited the existence of similar advertising by competitors. On May 5, 1998, Enterprise moved to enforce the settlement agreement, and during the motion hearing, the district court restricted RAW's ability to present evidence regarding a competitor's use of similar advertising language. The Eighth Circuit upheld the district court's decision. The district court determined that a binding settlement agreement was formed on April 22, 1998, when Enterprise accepted RAW's settlement offer made in a letter dated April 20. The agreement required RAW to stop using the phrase "And Of Course They'll Pick You Up" and replace it with one of three approved alternatives. The court dismissed both parties' actions with prejudice, ordering each to bear their own costs and attorneys' fees. RAW appealed, arguing that the district court erred in finding the existence of a settlement agreement. On appeal, the court reviewed the district court's factual findings for clear error. It upheld the district court's conclusion that RAW's April 20 letter was indeed a settlement offer, as it manifested an intention to enter a bargain. The acceptance of this offer was based on conflicting testimonies from both parties regarding a subsequent April 22 phone call. Enterprise's counsel, Mr. Telscher, testified that he accepted the offer and indicated which phrases were acceptable. In contrast, RAW's counsel, Mr. Painter, claimed he did not intend the letter as an offer and disputed that any agreement was reached. The appellate court found the district court's conclusions plausible based on the evidence presented and did not find any clear error in the determination of the settlement agreement's existence or its acceptance by Enterprise. Resolution of the acceptance issue is based on credibility determinations, which are solely the responsibility of the district court and not subject to appellate review. The district court correctly credited the testimony of Telscher and found that a letter dated April 20 constituted a settlement offer, which was orally accepted on April 22. Therefore, the enforcement of the settlement agreement is affirmed. Regarding the exclusion of evidence, RAW contended that the district court improperly excluded evidence related to Advantage Rent-A-Car's use of the "Pick You Up" phrase. However, the court actually allowed RAW to present relevant correspondence and question Enterprise's witness about it. The court did limit RAW's further questioning of its witness on this matter after counsel indicated it was not pertinent to the motion to enforce the settlement, a decision deemed not an abuse of discretion. The judgment of the district court is affirmed, finding no merit in RAW's claims regarding the settlement agreement's enforceability or the exclusion of evidence.