Alessi Equip., Inc. v. Am. Piledriving Equip., Inc.

• Decision Date: 06 January 2022
• Docket Number: 18 Civ. 3976 (JCM)
• Parties: ALESSI EQUIPMENT, INC., Plaintiff, v. AMERICAN PILEDRIVING EQUIPMENT, INC., Defendant. American Piledriving Equipment, Inc., Counterclaim-Plaintiff, v. Alessi Equipment, Inc., Counterclaim-Defendant.
• Court: U.S. District Court — Southern District of New York

578 F.Supp.3d 467

ALESSI EQUIPMENT, INC., Plaintiff,

v.AMERICAN PILEDRIVING EQUIPMENT, INC., Defendant.

American Piledriving Equipment, Inc., Counterclaim-Plaintiff,

v.Alessi Equipment, Inc., Counterclaim-Defendant.

18 Civ. 3976 (JCM)

United States District Court, S.D. New York.

Signed January 6, 2022

Kristopher M. Dennis, The Law Office of Kristopher M. Dennis, New York, NY, Keith Allen LaVallee, LaVallee Law Offices, PLLC, Farmingdale, NY, for Plaintiff.

Brian David Waller, Peckar & Abramson, New York, NY, for Defendant/Counterclaim-Plaintiff.

Keith Allen LaVallee, LaVallee Law Offices, PLLC, Farmingdale, NY, for Counterclaim-Defendant.

OPINION AND ORDER

JUDITH C. McCARTHY, United States Magistrate Judge Plaintiff Alessi Equipment, Inc. ("Alessi") commenced this action against Defendant American Piledriving Equipment, Inc. ("APE") on May 5, 2018. (Docket No. 5). Alessi filed an amended complaint (the "Amended Complaint") on July 24, 2018. (Docket No. 18). On March 19, 2019, APE filed an answer and asserted counterclaims against Alessi (the "Counterclaims").¹ (Docket No. 36). Before this Court are (1) APE's motion for summary judgment dismissing the Amended Complaint; (2) APE's motion for summary judgment granting relief under the Counterclaims, (Docket No. 92); (3) Alessi's cross-motion for summary judgment dismissing the Counterclaims; and (4) Alessi's cross-motion for summary judgment granting it relief under the Amended Complaint,² (Docket No. 100). On December 22, 2021, the Court held oral argument regarding ten specific questions concerning various issues that were not sufficiently addressed by the parties’ papers. (See Docket Nos. 112, 113). For the reasons set forth below, the Court (1) grants in part and denies in part APE's motions for summary judgment; and (2) grants in part and denies in part Alessi's cross-motions for summary judgment.

I. BACKGROUND

This case involves a manufacturer-distributor relationship between APE and Alessi for excavator mounted construction equipment. The following facts are taken from the parties’ statements and counterstatements of material fact submitted pursuant to Local Rule 56.1 of the United States District Courts for the Southern and Eastern Districts of New York and the exhibits³ submitted by the parties in support of their contentions.⁴ Any disputes of material fact are noted.

APE is a Washington corporation that manufactures, sells and leases deep foundation construction equipment, including vibratory hammers and piledrivers. (Docket Nos. 95-1 ¶ 1; 108 ¶ 1). It was founded in 1992 by Mr. White and Pat Hughes ("Mr. Hughes"). (Docket Nos. 95-1 ¶ 2; 108 ¶ 2). Mr. White served as APE's president from its inception until June 15, 2012, when he resigned.⁵ (Docket Nos. 95-1 ¶ 3; 108 ¶ 3; see also Docket Nos. 93-9 at 37:6-15, 236:6-16;⁶ 93-11). Alessi is a privately owned New York corporation that sells and services excavator mounted construction equipment. (Docket Nos. 95-1 ¶ 4; 108 ¶ 4; 102 ¶ 1; 105 ¶ 1). It is owned by Gerald Alessi ("Mr. Alessi"), who started it in 1992. (Docket Nos. 93-1 at 36:4-17; 95-1 ¶ 5; 108 ¶ 5).

In or about the early to mid-1990s, Alessi approached APE regarding the possibility of APE manufacturing excavator mounted vibratory hammers for Alessi to sell. (See Docket No. 93-18 at 6 ¶ 2; see also Docket Nos. 93-1 at 48:9-50:8; 95-1 ¶ 6; 108 ¶ 6). MGF, the company that had previously manufactured Alessi's vibratory hammers, had gone bankrupt, and Alessi needed a new manufacturer so it could continue selling products to existing clients. (Docket No. 93-1 at 48:9-50:8). According to Alessi, Alessi sent APE an MGF vibratory hammer so that APE could "reverse engineer" such "a unit that would fit on an excavator" for Alessi's use.⁷ (Docket Nos. 93-1 at 49:7-50:8; 93-18 at 7 ¶¶ 6-7; see also Docket Nos. 102 ¶ 6; 105 ¶ 6). Thereafter, APE developed a line of excavator mounted vibratory hammers including the 15E, 20E, 50E, 100E and 150E. (Docket Nos. 93-1 at 60:20-61:2; 93-9 at 43:6-24; 93-18 at 7 ¶¶ 6-9; 95-1 ¶ 6; 108 ¶ 6). Mr. White submitted an affidavit asserting that Alessi "educated APE on" its development of these products in that APE "depended on Alessi to tell [it] what size and weight of machine would best fit the varying size of excavators on the market," and Alessi recommended "suspended weights" and "hydraulic flow rates" for each model.⁸ (Docket No. 93-18 at 7 ¶ 9).

In or about 1996, the parties commenced a business relationship whereby APE sold equipment to Alessi, and in turn, Alessi sold or leased that equipment to third parties. (Docket Nos. 95-1 ¶ 7; 108 ¶ 7). The record is inconsistent as to the nature of this arrangement and its level of formality. (Compare Docket Nos. 95-1 ¶ 7; 105 ¶ 7, with Docket Nos. 102 ¶ 7; 108 ¶ 7). Dan Collins ("Mr. Collins") testified that Alessi "was the only one selling the[ ] [Robovib]⁹ in the beginning," but no exclusive distributorship agreement existed in oral or written form. (Docket No. 105 ¶ 7; see also Docket No. 93-8 at 101:9-14). Therefore, APE disputes the existence of any such agreement in the mid-1990s. (Docket No. 105 ¶ 7). On the other hand, based on both Mr. White and Mr. Alessi's assertions, Alessi claims that around that time, APE formally "agreed" to use Alessi as its "exclusive distributor in the Northeast,"¹⁰ such that Alessi would sell all excavator mounted equipment and replacement parts even if a customer "contacted APE directly" (the "1996 Agreement"). (Docket No. 108 ¶ 7; see also Docket Nos. 93-9 at 43:1-47:13; 93-18 at 9 ¶ 17). There is no evidence on record of any such agreement in writing.¹¹ Mr. Alessi testified that the agreement was a "handshake agreement" or "understanding" with APE "based on the fact that [Alessi] knew how to mount" excavator mounted "vibros" and understood hydraulic machine systems," and APE "did not want to get involved with" these processes. (Docket No. 93-1 at 55:22-57:19). He recalled that under the agreement's terms, "50 percent due on order [sic], balance due at time of shipping for a unit [sic]. Parts would be 30 days [sic]. And basically, [Alessi] w[as] handling the excavator-mounted vibros for [APE]." (Id. at 56:24-57:4).

In or around 2003 or 2004, APE began manufacturing a new excavator mounted vibratory hammer called the Robovib.¹² (Docket Nos. 95-1 ¶ 8; 108 ¶ 8). The Robovib differed from APE's previous models because it was "side-mounted," and thus, required "less labor." (Docket No. 93-1 at 66:10-16). Whereas Mr. Collins, the Chief Financial Officer of APE at the time,¹³ testified that Alessi's role related to the Robovib was limited to reporting customer complaints, (see Docket No. 93-8 at 22:23-23:12, 142:18-143:1; see also Docket No. 105 ¶¶ 5, 8), Alessi claims that it was "instrumental in the development and success of the Robovibe unit," (Docket Nos. 102 ¶ 8; 108 ¶ 8). Indeed, both Mr. Alessi and Mr. White testified that Mr. Alessi initially suggested that APE begin developing a side mounted unit due to shifting customer demand and provided guidance on the Robovib's design once a prototype was built. (Docket Nos. 93-1 at 66:10-16; 93-9 at 230:16-23, 232:1-233:3; 93-18 at 6-8 ¶¶ 1-12; 102 ¶ 8; 105 ¶ 8). Mr. Alessi also appeared in a promotional video for the Robovib that was posted on APE's website until May 2018, when this lawsuit began. (Docket Nos. 93-9 at 232:1-233:3; 93-18 at 8 ¶ 12; 102 ¶ 8; 105 ¶ 8).

On September 1, 2004, Mr. White wrote a memorandum to Mr. Alessi "grant[ing] to A[lessi]" (1) "the exclusive right to sell Robovib in the Northeast USA;" and (2) the "non-exclusive right to sell anywhere else in the USA" (the "2004 Memorandum"). (Docket No. 93-10 at 2). It further "instructed" APE salespeople "to direct all sales to A[lessi] to provide A[lessi] the first chance to offer the machine," and "let A[lessi] do the set up and what ever else it takes to service the customer, regardless if [sic] the area of sale is in California, Texas, or any place else in the USA." (Id. ). Upon any sale by Alessi, the 2004 Memorandum required a two percent commission to APE, which would be "credited to the territory in which the equipment was sold." (Id. ). APE was to "handle the commission internally." (Id. ). The price of "the first" Robovib sold to Alessi would be $86,250.00 – a twenty-five percent discount – but "[t]he price w[ould] go down once [APE] g[o]t into production," with a six-month warranty "subject to the terms [in] [APE's] regular written warranty." (Id. at 1). The 2004 Memorandum further stated:

It is expected that A[lessi] will maintain a high level of customer satisfaction and retain a good reputation of the J&M logo.... [APE] wish[es] to channel the sales through A[lessi] and in return, avoid the service and set up. In addition, [APE] seek[s] a single source to collect [its] invoices.

...

APE ... branch managers are depending on A[lessi] to provide a high level of service to its customers in order to maintain the already excellent reputation of the APE/J&M product.... It is the duty of each APE ... branch to provide assistance to A[lessi] ...

The spirit of this agreement is to allow A[lessi], an expert in the mounting of excavator attachments, the ability to sell Robovib while at the same time providing APE ... a single source to manufacture and sell to.

(Id. at 2-3).

The 2004 Memorandum also contained an integration clause stating: "This agreement, until written in more detail and jointly signed will act as our only agreement." (Id. at 2). With regard to "chang[ing]" or "void[ing]" the 2004 Memorandum, it provided that "[a]ny branch manager" of APE or "officers" of Alessi could "order a ‘sit down,’ " and "[v]oiding the agreement would require two-thirds of the APE ... branch managers voting negatively." (Id. at 3). "Sit down requests" would "go to Dan Collins or John White." (Id. at 4). However, "Ray and Gerry ha[d] full authority to end the agreement at anytime." (Id. at 3). The 2004 Memorandum's subject line read: "Robovib...