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GENERAL CAR & TRUCK v. LANE & WATERMAN12/18/1996
[557 NW2d Page 276]
Plaintiff, General Car & Truck Leasing System, Inc., sought the assistance of defendant, Lane & Waterman, in applying for and renewing the registration of its service mark. This registration was later canceled due to misrepresentations made in supporting affidavits signed by General Car officers. General Car brought this legal malpractice action to recover consequential damages, claiming the untrue statements in the affidavits were made at the direction of Lane & Waterman. The district court granted Lane & Waterman's motion for summary judgment, relying on two defenses: (1) General Car's action was not filed within the applicable statute of limitations; and (2) General Car's misrepresentations invoked the doctrine of in pari delicto, thereby barring recovery by General Car. These issues are before us on General Car's appeal, together with two discovery rulings involving the production of attorney/client materials. Because we conclude General Car and Lane & Waterman acted in pari delicto in perpetrating a fraud on the Patent and Trademark Office, we affirm.
I. Scope of Review.
We review a summary judgment ruling for error. Gerst v. Marshall, 549 N.W.2d 810, 811 (Iowa 1996). The district court correctly enters summary judgment when the record shows "no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Iowa R. Civ. P. 237(c). Thus, on review, we examine the record before the district court to decide whether any material fact is in dispute, and if not, whether the district court correctly applied the law. Benavides v. J.C. Penney Life Ins. Co., 539 N.W.2d 352, 354 (Iowa 1995). In considering the record, we view the facts in the light most favorable to the party opposing the motion for summary judgment. Gerst, 549 N.W.2d at 812.
II. Background Facts and Proceedings.
The record before the district court, when viewed in the light most favorable to General Car, shows the following facts. General Car is an Iowa corporation in the business of leasing automobiles, trucks and other motor vehicles. Lane & Waterman served as General Car's outside counsel from 1971 until the spring of 1993. This case involves legal services rendered by Lane & Waterman attorneys to General Car in connection with its registration of a service mark in 1977 and its renewal of that mark in 1985.
A. Registration of mark. In 1977, Gene Ehlers, president of General Car, asked C.D. Waterman, Jr. (Waterman), of Lane & Waterman, how General Car could protect its name and logos, "GENERAL" and "GL." Waterman suggested General Car obtain a federal registration of these service marks; General Car hired Lane & Waterman to do so. Only the events surrounding the "GENERAL" mark are at issue here.
Waterman contacted a trademark attorney in Virginia, Harold L. Stowell, to assist with the registration. In response to a request for information from Stowell, Gene Ehlers wrote to Waterman in June 1977, listing General Car's "operations as presently envisioned." This listing included leasing of [557 NW2d Page 277]
automobiles, trucks, tractors, trailers, aircraft and boats. In fact, General Car had never leased aircraft or boats and Gene Ehlers informed Waterman of this fact. Waterman told Gene Ehlers General Car could register its mark for use with any or all services within a particular classification.
Stowell drafted an application to register the "GENERAL" service mark, based in part on the June 1977 letter from Gene Ehlers. The application was supported by an affidavit, also prepared by Stowell. The affidavit, signed by Gene Ehlers,
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