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Edgewater Beach Apts. v. Edgewater Beach Mgt.

JUNE 22, 1973.

EDGEWATER BEACH APARTMENTS CORPORATION, PLAINTIFF-APPELLEE,

v.

EDGEWATER BEACH MANAGEMENT CO., INC., ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. FRANCIS T. DELANEY, Judge, presiding.

MR. PRESIDING JUSTICE DRUCKER DELIVERED THE OPINION OF THE COURT:

Rehearing denied July 23, 1973.

Defendants bring this interlocutory appeal from an order granting plaintiff a preliminary injunction prohibiting defendants from using the word "Beach" in close connection with the word "Edgewater" in conjunction with the sale, rental or advertisement of apartments.

On appeal defendants contend that plaintiff was not entitled to preliminary relief (as was granted) under either the Uniform Deceptive Trade Practices Act (Ill. Rev. Stat. 1971, ch. 121 1/2, par. 313) or the Illinois Trademark Act (Ill. Rev. Stat. 1971, ch. 140, par. 22) the latter of which has been referred to as the "Anti-Dilution Statute."

An evidentiary hearing was held prior to the issuance of the preliminary injunction wherein the following facts were elicited: Plaintiff is an Illinois corporation which has operated a cooperative apartment building called "Edgewater Beach Apartments" since 1949. The building is located at 5555 North Sheridan Road in Chicago. Defendants are developers of an apartment complex on property once occupied by the Edgewater Beach Hotel. The complex is located to the immediate south of plaintiff's building.

The Edgewater Beach Hotel was built in 1916. At the time it was 20 feet from Lake Michigan and had a private beach. Ownership of the hotel was transferred in 1950 and again in the 1960s when it was sold to the H.R. Weissberg Corporation (Weissberg). Weissberg operated the hotel until 1967 when it underwent reorganization in proceedings in the Federal District Court. The defendants purchased all the real estate owned by Weissberg prior to and during the reorganization proceedings. In addition they purchased from the trustee of Weissberg the following:

"* * * all the rights, title and interest * * * [held by the Trustee] in and to the good will relating to the operation of the Edgewater Beach Hotel including but not limited thereto, the use of the name "Edgewater Beach Hotel" and any and all trade names, * * *, either registered or unregistered, which have related to the operation of said Edgewater Beach Hotel."

While the Edgewater Beach Hotel was operating it was referred to as "The Edgewater Beach." It had both transient and permanent guests both of whom were entitled to use the hotel swimming pool, tennis courts and other related activities.

In 1928 the original owners of the hotel built a luxury type apartment building which is now owned by plaintiff. It was called "The Edgewater Beach Apartments." Occupancy was on a rental basis. Plaintiff corporation was formed in 1949 and has operated the "Edgewater Beach Apartments" since that time. The building contains 309 apartments. In order for one to lease an apartment he must be a shareholder in the cooperative which runs the building. Plaintiff advertises under the name "Edgewater Beach Apartments" in newspapers and printed brochures. There are commercial tenants who are not members of the cooperative who occupy stores on the ground floor. They use the name "Edgewater Beach Apartments" in designating their trade or business. There is a staff of about 80 persons to maintain and operate the building. A prospective tenant (and thus a prospective shareholder in the cooperative) must fill out an application and credit information sheet and these are turned over to a screening committee for approval. If the prospective seller and buyer agree on a price and the committee approves the application, the old shares are transferred by the seller to the cooperative and new shares are issued to the buyer.

George Kemp, president of the realty firm which operates plaintiff's building, testified that the general public forms a "nomenclature" with respect to Chicago buildings; that plaintiff's building, like other prestigious buildings in the area, has come to be known by its name rather than its address; that the name "Edgewater Beach Apartments" has acquired distinctiveness in the real estate community of Chicago and nationally as well.

In 1971, after reorganization of Weissberg, defendants began the construction of an apartment complex immediately to the south of plaintiff (on the site of the old hotel). The first apartment building constructed was named "Edgewater Plaza." The second building was named "Edgewater Beach" or "5445 Edgewater Beach." The local media has referred to the complex as the "Edgewater Beach Apartments." All prospective tenants must fill out application forms and undergo a credit check in some instances before a lease is issued. Defendants plan the construction of more apartment buildings and commercial space. A hotel will not be constructed. The complex is bounded in part by a private street called "North Edgewater Beach Drive" which was constructed by defendants after the reorganization proceedings.

Little confusion existed between plaintiff's apartment building and defendants' complex until defendants' second apartment building called "Edgewater Beach" or "5445 Edgewater Beach" was built. Since that time plaintiff's witnesses stated that its building has been "flooded" with telephone calls and complaints properly directed to defendants' building. Prospective tenants of defendants are calling plaintiff's switchboard to rent apartments. Furniture movers have been confused as to the proper building to make deliveries. Newspaper articles relating to defendants' complex have referred to it as "The Edgewater Beach Apartments." No vacancies in plaintiff's building have occurred since the partial construction of defendants' complex, and over the years the share value of stock held by members of the cooperative has risen.

There was evidence submitted as to whether the name "Edgewater Beach" was descriptive of a geographical location. Defendant introduced into evidence two Rand-McNally maps (dated 1938 and 1947) both of which had the words "Edgewater Beach" printed at the relevant location. A Chicago Transit Authority "L" stop was called "Berwyn-Edgewater Beach" until 1971 when the words "Edgewater Beach" were deleted therefrom. Two witnesses for plaintiff, both in the real estate business, testified that the community wherein the buildings involved are situated is called "Uptown," and the sub-community is called "Edgewater." There is no sub-community called ...


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