Di Gennaro v. Rubbermaid, Inc.
| Decision Date | 12 August 2002 |
| Docket Number | No. 99-1989-CIV.,99-1989-CIV. |
| Citation | 214 F.Supp.2d 1354 |
| Parties | Margitta DI GENNARO and Core Products Europe, Inc., A Florida corporation, Plaintiffs, v. RUBBERMAID, INC., An Ohio corporation, Defendant. |
| Court | U.S. District Court — Southern District of Florida |
David Finger, Frank H. Alvarez, Levine & Finger, Miami, FL, for plaintiffs.
Robert B. Galt, III, Gregg J. Brietbart, Jonathan B. Morton, Kirkpatrick & Lockhart, Miami, FL, for defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Pursuant to the requirements of Fed. R.Civ.P. 52, the following facts and conclusions of law are made. In this case, Margitta Di Gennaro and Core Products Europe, Inc. ("Di Gennaros"), have sued Rubbermaid, Inc. ("Rubbermaid"), alleging that Rubbermaid is liable for damages in the amount of $1,691,298.08 because Rubbermaid failed to reimburse them for time and expenses incurred in selling products which Rubbermaid later decided not to manufacture. During a nine-day, bench trial, which began on June 4, 2002, this Court heard the evidence, considered the law and the arguments before it, and now finds that Rubbermaid is liable to the Di Gennaros in the amount of $299,578.61. The Court grants judgment in the Di Gennaro's favor for the reasons set forth in the following Findings of Fact and Conclusions of Law.
1. Margitta Di Gennaro, a citizen of the State of Florida, was at all relevant times the president and sole shareholder of Core Products Europe, Inc. ("Core Products"), a Florida corporation with its principle place of business in Florida. Core Products was primarily involved in the sales of home health care products in Europe and the Middle East. See Mrs. Di Gennaro Test. at 45, PTS at ¶ 5. Mario Di Gennaro, Margitta's husband, assisted in the business of Core Products, but at times was involved in developing a Wisconsin corporation called Tamarac, which was also in the home health care industry.
2. George Higgs, was the owner of Carex Corporation, a distributor of health care products with its principle place of business in New Jersey. See Higgs Test.1; PX6.
3. Rubbermaid Inc., was at all relevant times an Ohio corporation with its principle place of business in Ohio. See PTS ¶ 5.
4. In June 1994, the Di Gennaros entered into an oral agreement with George Higgs, the President of Carex Corp. See Mr. Di Gennaro Test. at 119-20. The Di Gennaros agreed that Core Products Europe (then known as Core Products GMBH2), a corporation owned by Mrs. Di Gennaro, would be the exclusive European sales representative for Carex. See Mr. Di Gennaro Test. at 199-20; PX6. According to the agreement, the Plaintiffs were to market and sell Carex health care products in Europe and the Middle East and in consideration would receive commissions equal to 10% of their sales. See Mr. Di Gennaro Test. at 119-20; Higgs Test. Under the agreement, the Di Gennaros would be responsible for all the expenses they incurred in the sales and marketing of the products. See Higgs Test.
5. In July of 1994, Carex was purchased by Rubbermaid, and was absorbed into Rubbermaid Home Health Care Products ("RHCP"). See Mrs. Di Gennaro Test. at 53. George Higgs stayed as the President of Carex/Rubbermaid Home Health Care Division until 1995. Id.
6. In August 1994, the Di Gennaros relocated to the United States and Core Products GMBH became inoperative. Mrs. Di Gennaro incorporated a new company, Core Products Europe, Inc., in Marathon Florida.
7. In September 1994, Wayne Schmitt became the general manager of the Rubbermaid Home Health Care division and Darren Horst was installed as Mr. Schmidt's vice-president of sales and marketing. See Horst Test.; Schmidt. Test.
8. In November 1994, the Di Gennaros essentially reaffirmed their previous Carex agreement with Wayne Schmidt on behalf of Rubbermaid. See Mr. Di Gennaro Test.; Schmitt Test.; Ramos Test.
9. Wayne Schmitt attended some trade shows with George Higgs and the Di Gennaros. At these shows, Schmitt represented to the Di Gennaros and to customers that Rubbermaid was going to revolutionize the market of health care products. See Mrs. Di Gennaro Test. at 56. At trade shows, Rubbermaid displayed prototypes of the newly developed products and a poster featuring pictures of the prototypes with the caption "You Spoke We Listened ... and created the most innovative line of patient aids in history." See PX11 (emphasis added); PX1; PX12; PX13.
10. Rubbermaid executives believed that the new products would be produced and that it was reasonable for the Di Gennaros to believe that the products were going to be manufactured. See Horst Test.; Schmidt Test.; Maguire Test.; Rubbermaid July 14, 1995 Letter to Customers, PX14 ("we are in an excellent position to service your orders on all new products.") Rubbermaid had made a "commitment" to the Di Gennaros to produce and ship the new products. See Horst Test.; Schmidt Test.
11. The Di Gennaros were encouraged by Rubbermaid to "Sell our new products and programs hard ..." See PX44.
12. The Di Gennaros were supplied with a list of prospective shipping dates for the new products. See Maguire Test.; PX24. This list was periodically updated, indicating delays in the release dates of the new products. Id.
13. Rubbermaid did have an existing line of home health care products in stock that was available for sale. See Schmidt Test.; Maguire Test. However, there was a minimal demand for the existing line of products in Europe and the Middle East because these products were available elsewhere for lower prices. See Mr. Di Gennaro Test.; Mrs. Di Gennaro Test. Nonetheless, the Di Gennaros sold approximately $720,000 worth of existing products by using the new products to excite buyers. These existing products were shipped and the Di Gennaros received a 10% commission, totaling $72,000.
14. In June of 1996, RHCP was eliminated as a separate division and was placed under Rubbermaid's Commercial Products Division. Joseph Ramos was the head of Rubbermaid's Commercial Products Division. Patrick Brandt was titled vice-president and general manager of RHCP and was placed in charge of the day-to-day operations.
15. In September 1996, the Di Gennaros received a letter indicating that Rubbermaid's first priority was See PX17.
16. In March 1997, Rubbermaid, having decided it no longer wanted to operate under a verbal agreement, faxed the Di Gennaros a written sales representative agreement. See PX16. There was some dispute over the terms of the written contract and it was never signed. See Mr. Di Gennaro Test.; Schmidt Test.; Ramos Test.; PX9.
17. In May 1997, the Di Gennaros were given 90 days notice that Rubbermaid was terminating their relationship. See PX18.
18. Rubbermaid was aware that the Di Gennaros had been taking orders for the new products and that the Di Gennaros had "invested hundreds of thousands of dollars" in the marketing and selling of these products. See Schmidt Test.; Brandt Test. Nonetheless, Rubbermaid decided not to manufacture the new products due to unspecified production problems. See Horst Test.; Schmidt Test.; Ramos Test.
19. The Di Gennaros had approximately $590,000 in total business expenses from 1994 to August 1997. See PX8. These business expenses include costs for all of the businesses that the Di Gennaros represented. See Mrs. Di Gennaro Test. Approximately $30,000 of Core Products Europe's expenses was for American Orthomed, a corporation established by Mario Di Gennaro and operating for approximately three months during the subject period. This $30,000 is not chargeable to Rubbermaid.
20. The Di Gennaros claim that they spent approximately 70-90% of their time marketing and selling Rubbermaid. See Mr. Di Gennaro Test. at 167; Pl.'s Proposed Finding of Facts at ¶ 28.
21. The Di Gennaros claim that 85% of the $560,000 in expenses should be attributed to Rubbermaid due to the fact that they worked 85% of the time for Rubbermaid. Therefore, the Di Gennaros are claiming that Rubbermaid is responsible for $476,775.08 of Core Products Europe's expenses for the said period.
22. The Di Gennaros had commitments for 4.5 million to 5 million in sales of new products to European customers. See PX4; PX10. Assuming these commitments would have been honored, these sales would have resulted in $450,000 to $500,000 in commissions for the Di Gennaros. Additionally, Core Products Europe had received approximately $1,834,000 in purchase orders for new and old products. See DX51. Of those sales, Rubbermaid shipped approximately $720,000 worth of goods and the Di Gennaros did receive approximately $72,000 in commissions. Approximately $1,110,000 worth of purchase orders were not fulfilled.
23. The Di Gennaros, through testimony of their expert Hughlett Henderson, President of HCI Corporation, presented evidence of the estimated value of their services. See Henderson Test. Mr. Henderson estimated that had they been salaried employees, Mrs. Di Gennaro would have made $144,375 per year and Mr. Di Gennaro would have made $187,500 per year working for Rubbermaid 85% of their time. Id. Additionally, Mr. Henderson estimated that the Di Gennaros would have earned $109,219 per year in benefits. Id. The Di Gennaros claim $1,286,523 (estimated salary and benefits) minus commissions already received $72,000, for a total of $1,214,523. The total damages the Di Gennaros claim are $1,214,523 (adjusted salary and benefits) plus $476,775.08 (85% of total expenses) equaling $1,691,298.08.
24. Mr. Schmidt testified that if Rubbermaid had hired Mrs. Di Gennaro as a salaried employee working full time in Europe, it would have paid her a base salary of approximately $45-60,000. Additionally, Mr. Ramos stated that...
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