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ULLMAN-BRIGGS v. SALTON

January 18, 1991

ULLMAN-BRIGGS, INC., PLAINTIFF,
v.
SALTON, INC., DEFENDANT.



The opinion of the court was delivered by: Sprizzo, District Judge:

OPINION AND ORDER

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 Fed.R.Civ.P. 52.

FACTS

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.") at 18-19.

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 181.

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 26-30, 179-181.

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, ...


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