The opinion of the court was delivered by: John A. Ross United States District Judge
This matter is before the Court on the Supplemental Motion of Defendants to Dissolve or, in the Alternative, to Modify Permanent Injunction ("Motion"; ECF No. 33).*fn1 On February 24, 2012, the Court held a hearing regarding the Motion and both parties called witnesses. (ECF No. 48). The parties also filed post-hearing briefs. (ECF Nos. 51, 52). This matter is ready for disposition.
Prior to 1972, William H. Beggs was the sole stock shareholder of Plaintiff Pioneer Orchards Company. (Plaintiff's Trial Brief ("Tr. Brief"), ECF No. 36, p. 3). William H. Beggs had three sons, William J. Beggs, Stanley Beggs, and Sam K. Beggs. (Id.). William J. Beggs is the father of William W. Beggs ("Bill Beggs"). (Id.).
In the early 1970s, Pioneer Orchards Company did a tax-free re-organization whereby its assets were transferred to three new corporations: Pioneer Orchards Company of Jackson ("POJ") for Stanley, Pioneer Orchards Market Company for Sam, and Pioneer Development and Orchards Company for William J. Beggs. (Memorandum of Defendants in Support of their Supplemental/Amended Motion to Modify Permanent Injunction ("Memorandum"), ECF No. 38, p. 2; Plaintiff's Proposed Findings of Fact and Conclusions of Law ("Plaintiff's Findings"), ECF No. 52, ¶9)). Defendants assert that "[a] central question in this case is what happened to the 100 shares of stock owned by William H. Beggs in Pioneer Orchards Company, the original family corporation" and the corporation acting as Plaintiff in this case. (Memorandum, p. 3; Defendants' Revised Proposed Findings of Fact and Conclusions of Law ("Defendants' Findings", ECF No. 51, ¶6). Plaintiff and Defendants have two different versions of events regarding the 100 shares of stock.
Under Plaintiff's version of events, in 1972, the Pioneer Orchards Company's real estate in Cape Girardeau was collateral for an $80,000.00 note it owed to the bank. (Tr. Brief., p. 4). William J. Beggs testified that he agreed with his father, William H. Beggs, that he would pay the $80,000.00 debt, and that the 100 shares of stock in Pioneer Orchards Company would be placed in William J. Beggs' name so that he could represent the company in connection with its loan and any renewals with the Federal Land Bank. (Id.; Plaintiff's Findings, ¶13). William J. Beggs testified that his father endorsed the stock certificate to him and that a certificate for 100 shares of stock was issued in his name. (Tr. Brief., p. 4; Plaintiff's Findings, ¶15). Thereafter, William J. Beggs transferred the 100 shares of stock to Bill Beggs in 1985. (Tr. Brief., p. 4 Plaintiff's Findings, ¶¶18, 19). The stock certificate and the corporate minute book were misplaced or lost by counsel. (Tr. Brief., p. 4; Plaintiff's Findings, ¶21).
In the mid 1990s, Bill Beggs attempted to locate the certificates and minute book. (Id.). When he could not find them, counsel prepared an Affidavit of Lost Certificate ("Affidavit"). (Tr. Brief., p. 4; Plaintiff's Findings, ¶22). Bill Beggs signed the Affidavit before a notary public on November 30, 1996--15 years before this action commenced. (Tr. Brief., p. 4; Plaintiff's Findings, ¶23). The Affidavit states that William J. Beggs was the owner of all 100 shares of stock of Pioneer Orchards Company, he transferred those shares to Bill Beggs in 1985, and they have been unable to locate the stock certificates after a diligent search. (Tr. Brief., p. 4; Plaintiff's Findings, ¶24). As further support of Plaintiff's claim, the annual registration reports for Pioneer Orchards state that William J. Beggs was the President of Pioneer Orchards Company until 1985, and that Bill Beggs has been the president of Pioneer Orchards Company since that date. (Tr. Brief, p. 5; Plaintiff's Findings, ¶25).
Defendants, however, assert that they never heard of any transfer of stock from William H. Beggs to William J. Beggs (or to Bill Beggs). (Memorandum, p. 3). Defendants also note that the debt associated with the property transferred to POJ was twice as much as the debt that was secured by collateral transferred to Pioneer Development and Orchards Company (the company established for William J. Beggs). (Id.; Defendants' Findings, ¶7).*fn2 In addition, Defendants point out that well into the 1970s, Stanley and Sam Beggs were listed as directors of Pioneer Orchards Company, which they claim indicates that Pioneer Orchards Company continued to be owned by William H. Beggs, but was inactive. (Memorandum, p. 3; Defendants' Findings, ¶8).
POJ forfeited its charter in July 1990. (Tr. Brief, p. 5; Memorandum, p. 14). Stanley Beggs ceased operating POJ in the mid 1990s. (Tr. Brief, p. 5). Nevertheless, for the past two years, Stanley Beggs has used the name "Pioneer Orchards" for a Harvest Festival. (Id.). Defendants, however, claim that from the early 1970s until the injunction suit was filed, all three Beggs brothers used the term "Pioneer Orchards" continuously in their business. (Memorandum, pp. 3-4).
II. Procedural Background
On November 4, 2010, Plaintiff filed a Complaint for Violation of the Lanham Act and Unfair Competition. (ECF No. 1). On November 17, 2010, the Honorable Stephen N. Limbaugh, Jr. entered a Consent Judgment and Permanent Injunction ("Consent Judgment"; ECF No. 12). In the Consent Judgment, the parties agreed that "[s]ince approximately 1923, plaintiff has continuously and extensively utilized 'Pioneer Orchards Company' as its tradename in order to identify its business of growing and selling of peaches and nectarines." (Consent Judgment, ¶6). In consideration of this, Defendants were enjoined from:
a. Directly, or indirectly, engaging in, owning, operating, managing, controlling, being employed by or having any interest in, or being connected in any manner with any person, firm corporation, company, entity or business which operates under the name "Pioneer Orchards Company," "Pioneer Orchards," "Pioneer," or any derivative thereof; and
b. The use of the name "Pioneer Orchards Company-Jackson;" and
c. The use of the Pioneer Orchards Company trademarks or any colorable variation or ...