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MORSE v. SWANK

October 10, 1978

Marvin W. MORSE, Plaintiff,
v.
SWANK, INC., Pierre dCardin, S.A.R.L. de Gestion Pierre Cardin, Max J. Bellest, and Coordinating Office, Inc., Defendants



The opinion of the court was delivered by: TENNEY

MEMORANDUM

This is an action brought by Marvin W. Morse that charges violations of the antitrust laws, breach of contract, tortious interference with a contract, fraud, and negligence. In the instant motion, defendants Max J. Bellest and Coordinating Office, Inc. ("Bellest defendants") and Pierre Cardin and S.A.R.L. de Gestion Pierre Cardin ("Cardin defendants") ask for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Rules"). Defendant Bellest individually moves for a stay of deposition. For the reasons set forth below, summary judgment is granted in favor of the Bellest defendants on the fourth and fifth causes of action only; it is denied as to all other defendants on all causes of action and denied as to the Bellest defendants on the other causes of action against them. Bellest's motion to stay his deposition is also denied.

 The Parties

 Plaintiff Morse is a New York citizen who negotiated with the Cardin defendants to obtain a license for the sale of Pierre Cardin lighters. Defendant Pierre Cardin is a French citizen and is a world-famous designer of men's and women's clothing, jewelry, and related product lines. Defendant S.A.R.L. de Gestion Pierre Cardin ("SARL"), also a French citizen, is the designer in corporate form. Defendant Max Bellest is a New York citizen. He is employed by and is the sole shareholder of Bellest Corporation, a New York entity that, as an independent contractor, represents SARL in the United States and Canada by supervising licensing agreements between Cardin and the Canadian and American licensees. Defendant Coordinating Office, Inc. ("CO"), incorporated at Bellest's suggestion, is likewise a New York corporation that coordinates promotions, advertising, and merchandising by American licensees of Pierre Cardin trademarked products. Defendant Swank, Inc. is incorporated in Delaware and has its executive offices in New York. Swank manufactures, distributes, and sells jewelry and related items under the Pierre Cardin trademark. It has exclusive distribution rights in the United States on some items of men's and women's jewelry and leather accessories.

 Background

 Late in 1975, plaintiff Morse began selling Pierre Cardin lighters in duty-free shops in the United States through an unexplained arrangement with Cardin. Based on his success in selling the lighters in this market, Morse decided to expand to reach the American market generally. In August 1977 he contacted CO to begin negotiating for such a Pierre Cardin license. CO referred Morse to the Cardin office in Paris. During the next several months, Morse and Herve Duquesnoy of SARL negotiated over terms of the prospective license; however, in a letter dated March 24, 1977, Duquesnoy informed Morse that the negotiations were at an end because the license had been promised to defendant Swank. Letter from Herve Duquesnoy to Mr. Worse (sic), appended as Exhibit I of Affidavit of Howard Breindel, sworn to February 16, 1978 ("Breindel Affidavit").

 In his letter terminating negotiations with Morse, Duquesnoy referred to a long-standing relationship between Cardin and Swank that began at least as early as October 13, 1967 when those two parties entered a licensing agreement for the manufacture and sale of men's jewelry and related product lines. The term jewelry was understood to include lighters. The agreement gave Swank exclusive rights to market the specified items except, as is relevant here, "to jewelry manufactured of precious metals or containing precious stones, retailing at a price in excess of $ 75.00 per item." Cardin-Swank Agreement, dated October 13, 1967, P 1, appended to Cardin Defendants' Motion for Summary Judgment ("1967 Agreement"). *fn1" However, while Swank began exploring the marketing of Cardin lighters in 1975, See Affidavit of John A. Tulin, sworn to April 1978, Exhibits A, B (letters from prospective suppliers of Cardin lighters providing requested prices) ("Tulin Affidavit"), not until March 8, 1977 did Marshall Tulin, vice-president of Swank, write Pierre Cardin to tell him of Swank's decision to consider the sale of lighters as provided for in the 1967 Agreement. Two weeks later, SARL, through Duquesnoy, terminated further negotiations with Morse.

 The Complaint

 The amended complaint *fn2" alleges five causes of action. The first is founded on an antitrust theory wherein Morse sues all five defendants under Section 1 of the Sherman Act, 15 U.S.C. § 1 (as amended). He alleges a combination and conspiracy in unreasonable restraint of trade to bar him from marketing Pierre Cardin lighters and thereby competing with Swank, claiming that Cardin's breached agreement, refusal to deal, and consummation of "the Swank Contract" were all acts in pursuit of the combination and conspiracy to restrain trade. Morse claims injury to himself, restrained competition in the distribution and sale of Pierre Cardin lighters and in the use of the Pierre Cardin trademark, and reduced consumer choice.

 Morse's second cause of action appears to be aimed at Pierre Cardin alone. *fn3" He alleges that on or about March 10, 1977 Morse and Cardin entered an agreement for the distribution of Pierre Cardin lighters and that Cardin breached that agreement shortly thereafter. This cause of action relates to the third, which alleges that Swank, Bellest, and CO tortiously interfered with the Morse-Cardin agreement.

 The fourth and fifth causes of action are pleaded alternatively to each other and only if the Swank contract is found to have been executed prior to the purported agreement with Morse. On one theory, Morse charges that Pierre Cardin and the Bellest defendants defrauded him by making materially false statements as to Cardin's trademark rights. Alternatively, Morse alleges injury by the same defendants through negligent misrepresentations.

 Jurisdiction over the antitrust cause of action is founded on Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26 (as amended). Jurisdiction over the second through the fifth causes of action is founded in diversity, 28 U.S.C. § 1332, and in the doctrine of pendent jurisdiction. *fn4"

 The Cardin and the Bellest defendants have filed separate motions for summary judgment, but they join in most contentions. Their version of the facts centers on an alleged "mistake" by Herve Duquesnoy, a young Frenchman in the SARL organization: according to the defendants, Duquesnoy negotiated with Morse over the license to sell Pierre Cardin lighters without realizing that Cardin had previously licensed Swank to sell such lighters, and when Duquesnoy became aware of the other agreement, he so informed Morse and referred him to Swank for any further discussions.

 This innocent explanation is buttressed by several legal arguments, particularly that the record establishes that the plaintiff is not the real party in interest; that the defendants never restrained trade nor conspired to, but that Cardin acted within his trademark rights in refusing to grant another lighter license; that the Morse-Cardin negotiations never ripened into an agreement and, accordingly, no agreement was breached; that no defendant induced a breach of any ...


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