Campaniello Imports, Ltd. v. Saporiti Italia S.p.A.
| Decision Date | 26 June 1997 |
| Docket Number | No. 1221,D,1221 |
| Citation | 117 F.3d 655 |
| Parties | CAMPANIELLO IMPORTS, LTD.; Campaniello Imports of Florida Inc., Plaintiffs-Appellants, v. SAPORITI ITALIA S.p.A.; Sergio Saporiti; Raffaele Saporiti; Gidatex S.R.L.; Dario Filippini, Defendants-Appellees. ocket 96-9113. |
| Court | U.S. Court of Appeals — Second Circuit |
Nathan Lewin, Miller, Cassidy, Larroca & Lewin, Washington, DC (Timothy J. Preso, Miller, Cassidy, Larroca & Lewin, Washington, DC, of counsel, and on the brief), for Plaintiffs-Appellants.
Thomas G. Bailey, Jr., Whitman, Breed, Abbot & Morgan, New York City (Patricia Anne Kuhn, John C. Canoni, Whitman, Breed, Abbott & Morgan, New York City, of counsel, and on the brief), for Defendants-Appellees.
Before: OAKES and KEARSE, Circuit Judges, and POLLACK, District Judge. *
On May 22, 1974 appellee Saporiti Italia S.p.A. ("Saporiti Italia"), an Italian furniture manufacturer, entered into a contract with Thomas Campaniello of New York, granting him an exclusive distributorship in the United States, Canada, Mexico and Puerto Rico for Saporiti Italia furniture. On May 29, 1974, Campaniello organized Campaniello Imports, Ltd., to facilitate the execution of the agreement and to secure a lease for a showroom. Campaniello Imports opened its first sales facility in New York City and commenced importing Saporiti Italia's products for resale to interior designers and architects. Subsequently, Saporiti Italia granted Campaniello additional exclusive territories in the Caribbean and South America. The exclusive distributorship was later extended when Campaniello opened a Florida showroom and Campaniello organized under his ownership Campaniello Imports of Florida Inc. (together with Campaniello Imports, Ltd., the appellants "Campaniello companies") to provide service to the new sales territories. The Campaniello companies later opened additional showrooms in Florida, Texas and California.
During the next several years, appellants purchased substantial amounts of Saporiti Italia's products and resold them to interior designers and architects through their showrooms.
During the period of that distributorship until 1993, Saporiti Italia was owned and controlled by two brothers--appellee Sergio Saporiti ("Sergio") owned 60% of the company and Georgio Saporiti owned 40%. On or about September 23, 1993, Georgio Saporiti withdrew as an officer and employee of Saporiti Italia, and on January 11, 1994, he sold his 40% interest in the company to appellee Raffaele Saporiti ("Raffaele"), Sergio Saporiti's son. Sergio and Raffaele are Italian citizens and reside in Italy. After September 23, 1993, they jointly controlled and managed the business, that is, until April, 1994.
Business conditions for Saporiti Italia deteriorated in the 1990s. Sales of the Saporiti Italia products declined; important Saporiti Italia clients in Italy and abroad went bankrupt. On January 11, 1994, Saporiti Italia went into liquidation.
In March, 1994, the Campaniello companies filed an action in the District Court for the Southern District of New York against Saporiti Italia and its principals, Sergio and Raffaele, alleging breach of contract and fraud ("1994 Litigation"). The appellants charged that the appellees had violated the terms of their agreements by selling directly to purchasers in appellants' territory models of Saporiti Italia products; that appellees had made direct sales of Saporiti Italia products to customers whose orders were taken at appellees' factory in Milano, Italy without acknowledging the sales to appellants, thereby depriving appellants of commissions of more than one and a half million dollars; that stipulated commissions payable to Campaniello on sales in Mexico and Venezuela had not been paid; that fabrics delivered to Saporiti Italia on orders had not been utilized or returned; and that merchandise sold to appellants were not, as required to be sold, at prices equal to or lower than prices charged to local distributors in Italy. Appellants demanded a monetary judgment, an accounting and punitive damages.
On April 20, 1994, Saporiti Italia applied to the Tribunal of Busto Arsizio ("Tribunal") for protection under the Italian law known as "Concordato Preventivo," which contains provisions that permit restructuring of debts in a fashion similar to Chapter 11 of the United States bankruptcy laws. On April 22, 1994, the Tribunal admitted Saporiti Italia to the procedure of Concordato Preventivo. On May 8, 1994 the judge assigned to the Concordato Preventivo authorized Saporiti Italia to lease their company for ten months to Gidatex S.R.L. ("Gidatex"), a local furniture manufacturer, which was owned and controlled by Dario Filippini, an Italian citizen, with an option to purchase Saporiti Italia's business if Gidatex could keep Saporiti Italia afloat during the ten month period.
On May 18, 1994, Filippini made a telephone call from Italy to Campaniello in New York stating that he was the new owner and sole administrator of the Saporiti Italia business, that he wished to enter into a distributor relationship with the Campaniello companies, and that if those companies wished to consider a new relationship for the distribution of Saporiti Italia furniture and would withdraw their lawsuit in the District Court in New York he would offer them a favorable contract for the Saporiti Italia line. Campaniello responded by expressing interest in a new contract and an amicable resolution of the New York lawsuit. Filippini asked Campaniello to meet him in Italy for further discussions.
Accepting this invitation, Campaniello and his lawyers met with Filippini and his counsel in Busto Arsizio, in the province of Varese, Italy, on June 13, 1994. The Italian attorneys explained to Campaniello that the bankruptcy estate would seek to settle creditors' claims at 40% of their value and that Filippini had offered to the supervising court that Gidatex would finance and take over Saporiti Italia for ten months, after which Gidatex could exercise an option to buy the business for approximately $6 million. Campaniello and his attorneys were told that if Gidatex failed to exercise the option, Saporiti Italia's liquidation would go forward. The Italian lawyers explained that the size of appellants' claims left insufficient funds available to pay 40% of the amounts owed to other creditors. Consequently, under Italian law, Saporiti Italia would have to be liquidated.
They explained that if the Campaniello companies withdrew their claims against the Saporiti Italia estate and entered into a separate agreement with Gidatex, any debt of Saporiti Italia to those companies could be excluded from the Concordato Preventivo and a reorganization with the other creditors could be accomplished within the 40% composition. At this same meeting, Filippini stated that if such an agreement could be reached, he, as sole administrator of the business, would cooperate with Campaniello to resolve past problems. Filippini further stated that, because his offer to the Italian court was for a ten-month period, he could commit to a distributorship agreement with the Campaniello companies only up to March 31, 1995, but that he planned to extend the agreement. 1
The parties met again the next morning and afternoon, this time joined by other persons including Sergio and Raffaele. Filippini restated that he would function as sole administrator of Saporiti Italia and would provide sufficient funds to allow Saporiti Italia to resume business during its reorganization. He stated that he was willing to enter into a financial settlement with the Campaniello companies, and that within a month of the consummation of such a settlement he would undertake to clear up the various complaints that had been made in the past.
As a result of these extensive meetings, on June 14, 1994, Gidatex and the Campaniello companies entered into a nine-month exclusive distributorship ("Gidatex Agreement"), which replaced the previous distributorship contract between the Campaniello companies and Saporiti Italia. As part of the agreement, Campaniello agreed to withdraw the 1994 Litigation against Saporiti Italia and Sergio and Raffaele. Gidatex engaged the Campaniello companies as the exclusive distributor of Saporiti Italia furniture in the United States and other Western Hemisphere countries through March 31, 1995. The agreement stipulated that the contract would automatically extend an additional five years if Gidatex exercised its option to purchase Saporiti Italia and imposed minimum purchase requirements on the Campaniello companies. The Campaniello companies also accepted an Italian choice-of-law provision.
Three weeks later, on July 7, 1994, appellants entered into a separate agreement with Saporiti Italia, Raffaele and Sergio, under which the latter would write off approximately Lit. 250 million (about $160,000) in receivables due Saporiti Italia from the Campaniello companies and the former would withdraw their 1994 Litigation and waive all claims against the Saporiti parties ("Settlement Agreement"). This agreement was approved by the Tribunal. In addition, upon further negotiation, the Campaniello companies agreed to amend the Gidatex Agreement.
The amendments to the Gidatex Agreement concerned four distinct provisions. The first amendment extended the exclusive sales territory to include Nicaragua and El Salvador. The second amendment provided that, for purposes of determining Campaniello's obligatory minimum purchases, the parties would include orders by appellants regardless of whether Gidatex fulfilled them. More importantly, the third amendment included an arbitration-in-Italy clause that stated "[a]ny controversy between the two parties regarding the above agreement will be resolved by arbitration." The fourth amendment granted the Campaniello companies an additional discount...
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