944 F.2d 1131 (3rd Cir. 1991), 90-5765, Cassidy Podell Lynch, Inc. v. SnyderGeneral Corp.

Docket Nº:90-5765, 90-5770.
Citation:944 F.2d 1131
Party Name:CASSIDY PODELL LYNCH, INC. v. SNYDERGENERAL CORPORATION Snydergeneral Corporation (
Case Date:September 18, 1991
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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Page 1131

944 F.2d 1131 (3rd Cir. 1991)

CASSIDY PODELL LYNCH, INC.

v.

SNYDERGENERAL CORPORATION

Snydergeneral Corporation ("SnyderGeneral"), Appellant.

CASSIDY PODELL LYNCH, INC.

v.

SNYDERGENERAL CORPORATION.

Cassidy Podell Lynch, Inc., Appellant.

Nos. 90-5765, 90-5770.

United States Court of Appeals, Third Circuit

September 18, 1991

        Argued April 3, 1991.

        Rehearing Denied Oct. 25, 1991.

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        John L. McGoldrick (argued), Richard M. Eittreim, Lisa M. Goldman, Penelope M. Taylor, McCarter & English, Newark, N.J., for SnyderGeneral Corp.

        Robert W. Forman (argued), Greenberger & Forman, New York City, for Cassidy Podell Lynch, Inc.

        Before MANSMANN and HUTCHINSON, Circuit Judges, and O'NEILL, District Judge [*].

       OPINION

        HUTCHINSON, Circuit Judge.

       I.

        SnyderGeneral Corporation (Snyder), a manufacturer of industrial air conditioning systems, appeals a judgment for $1,060,000.00 plus attorney's fees entered by the United States District Court for the District of New Jersey in favor of Cassidy Podell Lynch (Cassidy), formerly the distributor of Snyder's products in northern New Jersey and Rockland County, New York. The district court entered the judgment for Cassidy after granting Snyder a $356,200.00 remittitur against a jury verdict of $1,416,200.00 for Cassidy on its claim that Snyder terminated the distributorship in violation of the New Jersey Franchise Practices Act, (the New Jersey Franchise Act), N.J.Stat.Ann. §§ 56:10-1 to 10-29 (West 1989 & Supp.1991). Relying on a provision in its distributorship contract with Cassidy (the Distributorship Agreement) stating termination was permitted on thirty-days' notice, Snyder terminated the Distributorship Agreement without cause effective December 2, 1984.

        In its cross-appeal, Cassidy sought entry of judgment for $70,000.00 or a new trial limited to damages on Cassidy's additional claim that Snyder breached a contract for the sale of goods to Cassidy. Cassidy's contract claim was separately submitted to the jury on special interrogatories. Cassidy based the contract claim on Snyder's refusal to supply Cassidy with all the air conditioning equipment needed to fulfill a contract Cassidy had made with New Jersey Bell Telephone Company (the New Jersey Bell contract). The jury found that Snyder had wrongfully refused to ship the remaining products Cassidy needed to perform its contract with New Jersey Bell but awarded no separate damages for this claim. Cassidy also cross-appeals a judgment for Snyder for $89,804.00 in damages on Snyder's counterclaim. The $89,804.00 is the balance of the price Cassidy owed Snyder for equipment Snyder had sold and delivered to Cassidy in connection with the New Jersey Bell contract. This judgment was entered on a directed verdict for Snyder on its counterclaim against Cassidy. 1

        We hold that the evidence was insufficient for a rational jury to find that the exclusive Distributorship Agreement between Snyder and Cassidy created a "community of interest" as the statute requires. Alternately, we also hold that the parties had not "contemplated" a "fixed business location" in New Jersey as the New Jersey Franchise Act also requires. We will therefore reverse the judgment for Cassidy on its New Jersey Franchise Act claim and remand to the district court with instructions to vacate the $1,060,000.00 judgment

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for damages on that claim and the $72,770.00 it also awarded Cassidy for attorney's fees as a successful plaintiff under the New Jersey Franchise Act and instead enter judgment in favor of Snyder on its motion for judgment n.o.v. on Cassidy's franchise claim. We will affirm the district court's order directing a verdict for Snyder on its counterclaim for the unpaid price of the goods it sold and delivered to Cassidy. We will remand Cassidy's contract claim to the district court for a new trial limited to damages.

       II.

        Cassidy initiated this action on October 16, 1985. Its complaint asserted breach of contract, antitrust violations and wrongful termination under the New Jersey Franchise Act. Snyder answered and included in its answer a counterclaim alleging that Cassidy had failed to pay for goods purchased and delivered. After Cassidy's antitrust claims were voluntarily dismissed and Snyder's motion for summary judgment denied, the case proceeded to trial.

        Snyder moved for a directed verdict at the close of Cassidy's case. Snyder renewed its motion for a directed verdict on Cassidy's franchise claim and Cassidy's New Jersey Bell contract claim at the close of all the evidence. Snyder also moved for a directed verdict on its own counterclaim against Cassidy for breach of contract. Cassidy likewise moved for a directed verdict on its claim under the New Jersey Franchise Act. The district court reserved decision on the motions addressed to the New Jersey Franchise Act but entered judgment against Cassidy on Snyder's counterclaim in the amount of $89,804.00 for Cassidy's failure to pay for goods sold and delivered.

        The district court submitted special interrogatories to the jury both on Cassidy's New Jersey Franchise Act and its New Jersey Bell contract claims. In answer to the special interrogatories, the jury returned a verdict in favor of Cassidy on its New Jersey Franchise Act claim for $1,416,200.00. The jury also found that Snyder had wrongfully refused to ship the goods remaining on Cassidy's New Jersey Bell contract but did not award Cassidy any separate damages for this refusal.

        After the jury returned its verdict in favor of Cassidy on the New Jersey Franchise Act claim, Cassidy moved for an award of attorney's fees, for prejudgment interest and to amend the judgment by adding $70,000.00 in compensatory damages on its claim for breach of contract or alternately for a new trial on this claim. Snyder filed post-trial motions for judgment n.o.v. or a new trial on the New Jersey Franchise Act claim and in the alternative sought a remittitur. On August 2, 1990, the court awarded Cassidy $72,770.00 in attorney's fees pursuant to the New Jersey Franchise Act, but denied Cassidy's motion for pre-judgment interest and its motion to add $70,000.00 in damages to the judgment or for a new trial on damages on Cassidy's contract claim. The court denied Snyder's motion for judgment n.o.v. or a new trial but granted it a remittitur from $1,416,200.00 to $1,060,000.00.

        Snyder filed a Notice of Appeal on September 4, 1990, and Cassidy filed its notice of cross-appeal two days later. Snyder appeals those parts of the district court's orders denying its motions for judgment n.o.v. or a new trial on Cassidy's franchise claim, the award of attorney's fees on Cassidy's franchise claim, the sufficiency of the remittitur and the entry of judgment for Cassidy in the amount of $1,132,770.00. Cassidy appeals from the amount allowed for attorney's fees, the directed verdict for $89,804.00 on Snyder's counterclaim, the denial of its motion for prejudgment interest and the denial of its motion to add $70,000.00 to the judgment or grant it a new trial on its claim that Snyder breached its contract to supply the equipment needed for Cassidy's New Jersey Bell contract. A Consent Order Staying Execution on Judgments Pending Appeal was entered by the district court on September 13, 1990. On October 16, 1990 the parties stipulated that Snyder would assume the role of appellant and Cassidy the role of appellee.

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       III.

        Snyder, a manufacturer of air conditioning systems for industrial use, purchased the Climate Control Division of the Singer Company in 1982. Cassidy had been the exclusive manufacturer's sales representative in Northern New Jersey and Rockland County, New York for the Singer Company's air conditioning and heating products. Cassidy continued to act for Snyder in the same capacity. The service vehicles and uniforms of Cassidy's employees bore the Snyder logo, but Cassidy managed its own sales force, made its own decisions about hiring and firing and solicited new customers on its own. Most of Cassidy's income was derived from the sales and servicing of Snyder's products, and Snyder policies prohibited Cassidy from carrying directly competing products. Cassidy could, and did, sell other lines of products which were not directly competitive with Snyder's products.

        Cassidy had no office or place of business in New Jersey. It ran its distributorship from a New York City location. 2 Cassidy used the New York address on correspondence relating to its New Jersey business, and all its orders were processed through the New York City office. Cassidy's New Jersey salesmen operated out of their own New Jersey residences. The record does show that Cassidy used a Clifton, New Jersey repair facility to repair Snyder products, but there were no secretaries or office personnel at that location and Cassidy processed no orders there.

        In April, 1984, Snyder and Cassidy executed a Distributorship Agreement renewing Cassidy's exclusive distributorship in parts of New Jersey and New York for a term of one year but subject to earlier termination at Snyder's option on thirty days' notice. The termination provision read:

The term of this Agreement ... shall automatically expire on March 31, 1985. This Agreement may be earlier terminated by either party upon thirty (30) days' written notice to the other. [Snyder] shall have the right to appoint a new representative during this (30) days' notice period.

        Distributorship Agreement, p 2. Under the Distributorship Agreement, Cassidy's New Jersey corporation acted as Snyder's exclusive representative in northern New...

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