The opinion of the court was delivered by: Sprizzo, District Judge:
Plaintiff, Ullman-Briggs, Inc. ("Ullman-Briggs"), brings this
action against the defendant, Salton, Inc. ("Salton"), alleging
breach of contract. The Court held a bench trial on liability
on July 17, 18, and 21, 1989, and received post-trial briefs
and heard closing statements on November 15, 1989, at which
time the Court announced its findings on liability.
Specifically, the Court found Salton liable for breach of
contract and ordered a trial on damages. The damages trial was
held on May 31, 1990. The Court then accepted post-trial
briefs, proposed findings of fact, and heard closing statements
on the damages issue. This Opinion and Order constitutes the
Court's findings of fact and conclusions of law pursuant to
At the times relevant to this action, Ullman-Briggs was a
manufacturer's representation company that was formed in
January of 1985. See Transcript of Liability Trial ("7/89 Tr.")
at 65. The two principals of the company were Dick Ullman and
Charles Briggs. See 7/89 Tr. at 65. Ullman-Briggs was paid
commissions on sales of products from manufacturers that it
represented.*fn1 See 7/89 Tr. at 66. It solicited orders from
any merchants to whom its clients were willing to sell their
products. These typically included department stores, specialty
stores, distributors, and discounters. See 7/89 Tr. at 68.
Ullman-Briggs also had a special relationship with J.C. Penney,
whose account was personally managed by Charles Briggs. See
7/89 Tr. at 66, 69-71; Transcript of Damages Trial ("5/90 Tr.")
Salton, Inc. ("Salton") was a company that was engaged in the
manufacture and distribution of small electrical appliances.
See 7/89 Tr. at 15. Alvin Finesman was the president of Salton
from 1983 to 1985 when the company was bought by Sevko,
Inc. ("Sevko") whose president and CEO was David Sabin.
See 7/89 Tr. at 14, 62, 305. Finesman had attempted to buy the
company. However, he was unsuccessful in doing so and, after
Sevko took over the company, he was fired. See 7/89 Tr. at 62,
305. Finesman did not recall when Sevko bought the company or
when he was fired, but he stated that it was after August 5,
1985. See 7/89 Tr. at 39-40.
Salton sold small electrical kitchen appliances such as hot
trays, coffee makers, yogurt makers, and battery-operated
shower radios known as "Wet Tunes." See 7/89 Tr. at 19. "Wet
Tunes" had a tremendous amount of potential in 1985 and ended
up being one of the most successful items sold in the
housewares business in the last five years. See 7/89 Tr. at
Prior to 1985, Salton had been represented by Dick Ullman,
who at that time was a principal of the Cue Group, a
representation firm headed by Ullman and Sam Carson.
See 7/89 Tr. at 28-30. This relationship stemmed from the fact
that Ullman and Finesman were personal friends and former
business associates. See 7/89 Tr. at 23, 46. In fact, it was
Dick Ullman who had introduced Salton to Andrew Mark, the
inventor of "Wet Tunes," which paved the way for the licensing
agreement that Salton now has with Mr. Mark. See 7/89 Tr. at
In January of 1985, after Ullman left the Cue Group and
joined Briggs to form Ullman-Briggs, Ullman-Briggs represented
Salton. See 7/89 Tr. at 3, 65-67. The parties' relationship was
governed by an oral contract for eight months. See 7/89 Tr. at
32. During the time that Ullman-Briggs represented Salton, it
was the most successful sales representative organization that
Salton had. See 7/89 Tr. at 30-31.
On August 5, 1985 Salton and Ullman-Briggs entered into a
written contract which provided that Ullman-Briggs would act as
Salton's exclusive representative for New York, Philadelphia,
Delaware, and Northern New Jersey for the next two years.
See 7/89 Tr. at 32-34, 186; Plaintiff's Exhibit ("PX") 1. This
contract was entered into by Alvin Finesman, who at that time
was still the president of Salton. See 7/89 Tr. at 32-34; PX 1.
However, on September 25, 1985, after Sevko had bought the
company and fired Finesman, Salton terminated its contract with
Ullman-Briggs effective October 31, 1985, and hired Sam Carson,
Inc. ("Sam Carson") as their representative. See 7/89 Tr. at
82-84, 271-273; PX 2.
On September 27, 1985, Mr. Briggs and Mr. Ullman met with Mr.
Sabin and Mr. Elliot, principals of Sevko, to discuss the
relationship between Ullman-Briggs and Salton.*fn2
See 7/89 Tr. at 38, 86. Although Ullman-Briggs' future
relationship with Salton was discussed at this meeting,
subsequent correspondence between the two companies indicates
that there was some disagreement as to what the extent of such
a future representation of Salton products by Ullman-Briggs
would be. See 7/89 Tr. at 86-97; PX 3, 4, 5.
An attempt was made to clarify this confusion at a meeting on
November 5, 1985 between Ullman, Briggs and Sabin at the
National Housewares Show in Chicago, Illinois. See 7/89 Tr. at
100-102. Following this meeting, Sabin offered Ullman-Briggs a
two-year contract as Salton's exclusive agent to J.C. Penney.
See PX 6. The testimony of Mr. Briggs, which the Court finds
credible, establishes that an agreement to act as an exclusive
representative to only one store was less attractive to
Ullman-Briggs than what was offered at the "hurricane meeting,"
and was certainly less attractive than the agreement to act as
an exclusive distributor set forth in the original contract
signed by Alvin Finesman. See 7/89 Tr. at 103. Nevertheless,
Ullman-Briggs attempted to serve as Salton's representatives to
J.C. Penney, but was prevented from adequately doing so by
actions of Salton's employees. See 7/89 Tr. at 107-08.
Interestingly, during all of the time that these negotiations
were taking place, neither Ullman nor Briggs asserted any
rights under the two-year agreement signed by Finesman.*fn3
See 7/89 Tr. at 103-05, 190-94. They testified that they
avoided mentioning that contract because they feared that if
they did so Salton would refuse to deal with them and would not
have paid commissions already owed to them. See id. at 103-05,
190-94. Also, they hoped that if the negotiations were
successful, Ullman-Briggs could have avoided losses from the
termination of the written agreement and therefore litigation
would have been unnecessary. See id. at 103-05, 190-94. The
Court accepts this explanation as credible.
The evidence introduced at the trial on damages established
that Ullman-Briggs represented Salton for ten months and during
that time earned $246,262.00 in commissions from the sale of
Salton products. See 7/89 Tr. at 81; PX 23. In contrast to this
amount, the evidence demonstrated that Sam Carson, Inc., the
representative corporation that replaced Ullman-Briggs, ...