Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

FRISHBERG v. ESPRIT DE CORP.

December 10, 1991

BERNARD H. FRISHBERG AND DEE BEE SALES CORP., PLAINTIFFS,
v.
ESPRIT DE CORP., INC., DEFENDANT.



The opinion of the court was delivered by: Robert L. Carter, District Judge.

  OPINION

Plaintiffs in this employment discrimination case make claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 623, and the New York Human Rights Law, N.Y.Exec.Law § 296(1)(a) (McKinney 1982), as well as claims for breach of contract and tortious interference with business relations. Plaintiff Bernard H. Frishberg ("Frishberg") is president and sole shareholder of plaintiff Dee Bee Sales Corporation ("Dee Bee Sales"), which employed Frishberg and several other people as sales representatives marketing merchandise for defendant Esprit de Corp. ("Esprit"). Jurisdiction is based both on the presence of a federal question and diversity of citizenship of the parties.*fn1 Defendant Esprit has moved for summary judgment on all of plaintiffs' claims.

I.

The undisputed facts relevant to the present motion are as follows. In 1978, Frishberg met with Leon C. Rosenberg ("Rosenberg"), national sales manager for Esprit, to discuss selling Esprit merchandise. Their eventual agreement that Frishberg would sell women's wear for Esprit as a commissioned salesperson was memorialized in a letter from Rosenberg to Frishberg, dated October 9, 1978. Esprit claims that this letter embodied the entirety of the agreement between the parties, while Frishberg maintains that his agreement with Rosenberg, and therefore with Esprit, was partly written and partly oral.

The letter agreement stated the terms of Frishberg's engagement as follows: his sales territory included all of New Jersey, Long Island, upstate New York, and the New York metropolitan region, less certain accounts; his remuneration would be a commission of eight percent (8%) of net shippings; he was to sell only Esprit merchandise; and he was to hire two salespeople to work for him in selling Esprit products.

Initially, Frishberg was paid directly by Esprit, as were the two salespeople he hired to work with him. During this period Esprit deducted payroll taxes from the commissions it paid to Frishberg. However, in 1981 Frishberg formed Dee Bee Sales, a New York corporation of which he was sole shareholder and through which he sold Esprit goods. From that date forward, Frishberg and the salespeople he hired were paid by Dee Bee Sales, which deducted payroll taxes on their behalf, and Esprit paid commissions on the merchandise sold by all these people directly to Dee Bee Sales.

Frishberg d/b/a Dee Bee Sales employed several salespeople and assistants from 1981 to 1989, including two that covered the upstate New York sales territory for Dee Bee Sales. Esprit provided these salespeople with drawing accounts, but only on the condition that Frishberg d/b/a Dee Bee Sales guarantee them. On at least one occasion, Frishberg had to pay Esprit $5,000 to cover the overdrafts of a Dee Bee Sales salesperson.

Frishberg d/b/a Dee Bee Sales kept two offices, one in the basement of Frishberg's house in East Meadow, New York, and the other a condominium showroom in Atlantic City, New Jersey. Frishberg purchased and maintained these two offices at his own expense. Frishberg d/b/a Dee Bee Sales also paid a fee to Esprit for the use of an Esprit showroom in New York City.

Frishberg d/b/a Dee Bee Sales paid many of its own business expenses, including rental space for displaying merchandise, automobile expenses, hotel rooms, telephone bills, and other travel costs. Esprit, however, paid all expenses when Frishberg and the salespeople employed by Dee Bee Sales attended quarterly Esprit sales meetings. Frishberg and the employees of Dee Bee Sales received no traditional employee benefits from Esprit. Dee Bee Sales paid for Frishberg's pension plan, medical expenses, disability insurance, life insurance, and vacations.*fn2 Frishberg also worked largely on his own, without daily supervision by Esprit. Frishberg set his own schedules and appointments with clients. He did, however, report at least weekly to Esprit officials regarding the sales Dee Bee Sales had produced in his territory.

Esprit sold its products through two sales forces, salaried sales representatives and commissioned sales representatives. When Frishberg first began to sell for Esprit, most of Esprit's sales force consisted of commissioned sales representatives, the status both he and the other employees of Dee Bee Sales assumed. Esprit's sales strategy at this time was to focus on specialty stores around the country in an effort to establish the company's name and image. As Esprit's reputation and size grew in the 1980's, Esprit changed its sales approach, concentrating more on major accounts such as large department stores. During this period Esprit took several steps to centralize the sales force, including establishing regional sales offices staffed with salaried sales representatives for each of four regions. These salaried sales representatives serviced many of the company's larger accounts.*fn3

Beginning in 1983, Esprit reduced the commission rate applicable to commissioned sales representatives several times. That year the rate was reduced from 8% to 6%, in 1984 it was reduced to 5%, and then in 1988 it was further reduced to 4%. These commission reductions all affected Frishberg and Dee Bee Sales. In 1988, Esprit also moved the United States Navy account, a large account that had been very profitable for Frishberg, from Dee Bee Sales to the Esprit regional office in New York. Throughout this period Frishberg and Dee Bee Sales continued their relationship with Esprit.

In 1989, Esprit management continued the change in its sales approach. It pulled "in-house," i.e. into the closest regional sales office, most of the remaining major store accounts that were still being sold to by commissioned sales representatives. In accordance with this plan, Richard Baker ("Baker"), president of Esprit's women's wear division, called Frishberg on October 27, 1989, to inform him that the Stern's account, to which Frishberg had been selling and which constituted a large part of his business, was being reassigned to the regional office in New York.

A letter to Frishberg dated October 31, 1989, explained the restructuring and confirmed the removal of the Stern's account. The letter did not terminate Frishberg, but expressed Esprit's wish "to help you refocus your attention on the many other accounts and potential customers in your area. . . ." Baker sent another letter to Frishberg on December 4, 1989, once again confirming the restructuring and the removal of Stern's from his charge. In a letter dated December 6, 1989, Frishberg requested that airline tickets for the upcoming national sales meeting in Phoenix be forwarded to him, in accordance with past practice. No tickets were sent, and Frishberg did not attend the sales meeting. Various negotiations and this lawsuit followed.

II.

Esprit has moved for summary judgment on all of plaintiffs' claims. To prevail on such a motion, the moving party must establish that "there is no genuine issue as to any material fact and that [it] is entitled to judgment as a matter of law." Rule 56(c), F.R.Civ.P. The court is not to "determine the truth of the matter but to determine whether there is a genuine [factual] issue" which must be reserved for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986). All evidence submitted must be viewed in a light most favorable to the party opposing the motion, Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986), and the court must resolve all doubts, ambiguities and inferences in the non-movant's favor. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962).

The summary judgment hurdle is not insurmountable, however. The Supreme Court has noted that "[i]f the evidence [submitted by the party opposing summary judgment] is merely colorable . . . or is not significantly probative . . . summary judgment may be granted." Liberty Lobby, supra, 477 U.S. at 249-50, 106 S.Ct. at 2510-11. The Court has explained that "[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and we think it should be interpreted in a way that allows it to accomplish its purpose." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). Thus, once the movant has pointed out to the court the absence of a fact issue, the "opponent must do more than simply show that there is some metaphysical doubt as to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.