Kend v. Chroma-Glo, Inc.

• Decision Date: 20 April 1973
• Docket Number: No. 72-1389.,72-1389.
• Citation: 478 F.2d 198
• Parties: David KEND, Appellee, v. CHROMA-GLO, INC., Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

478 F.2d 198 (1973)

David KEND, Appellee, v. CHROMA-GLO, INC., Appellant.

No. 72-1389.

United States Court of Appeals, Eighth Circuit.

Submitted February 12, 1973.

Decided April 20, 1973.

Raymond L. Erickson, Duluth, Minn., for appellant.

Robert E. Goldman, New York City, for appellee.

Before GIBSON and ROSS, Circuit Judges, and BENSON,^* District Judge.

BENSON, District Judge.

A judgment for the plaintiff (appellee) for the sum of $51,597.27 was entered on a jury verdict in a diversity action brought in the United States District Court for the District of Minnesota. This is an appeal from the judgment and from the order of the court denying defendant's (appellant's) motion for judgment notwithstanding the verdict, or in the alternative, for a new trial.

In June, 1966, Appellee David Kend (Kend), experienced in the name plate industry, contacted Appellant, Chroma-Glo, Inc. (Chroma-Glo), and expressed an interest in the company and its operations. Kend was particularly interested in Chroma-Glo's production of a mylar sign which closely resembled metal signs, but which fabricated very much like paper and didn't require expensive tooling or heavy equipment.

At an August 31, 1966, meeting with the Board of Directors of Chroma-Glo, Kend learned that Cole National Corporation (Cole) was interested in a type of Mylar numeral or letter sign bonded to a rigid aluminum backing. The purpose of the aluminum backing was to prevent the sign from curling. Chroma-Glo could not produce such a product with its existing equipment. Its capital picture was such that it was not in a position to secure additional equipment without financial assistance. Kend suggested that perhaps Cole could be sold a sign with a paper or cardboard backing which would satisfy Cole's requirements and could be produced with Chroma-Glo's equipment. It was agreed that Kend would represent Chroma-Glo on a commission arrangement in efforts to sell to Cole.

On September 7, 1966, Kend wrote Chroma-Glo :

". . . confirming our verbal arrangement, I am going to pursue the `Cole National\' project to a conclusion. I will cover all bases both in New York and Cleveland towards concluding a contract with them. As I progress I will be in touch with you to make sure our figures and proposals are sound. You have advised me that Chroma-Glo, Inc. will protect me with your standard commission arrangement in the event that I am successful in selling this account. This commission will be paid for any sales made to this company, whether or not we conclude a long term arrangement."

The president of Chroma-Glo responded on September 23, 1966:

". . . I\'m anxious to hear from you on our potential business from Cole National Corp. and you have our assurance that you would receive for your efforts the commissions and per cent of over charge over price list as we had discussed it."

On November 8, 1966, Kend made a presentation to Cole of Chroma-Glo gold and black cardboard mounted letters. Cole was impressed with the cardboard backing feature, and asked for an immediate quotation on black and white similarly mounted letters. Additional presentations with price quotations were made. It appeared an order would be forthcoming and on December 19, 1966, Kend brought a Cole representative to inspect Chroma-Glo's production facilities and wrote Chroma-Glo :

"Confirming my arrangement with you, you will cover me with a commission on this program which represent the difference between your quoted price to me of .035 cents each and the selling price to Cole of .039 cents each. On the tooling I will be covered on the difference between the quoted price to me of $400 and the quoted price to Cole of $630. On all future items which we quote to Cole, I will be protected by you with a commission percentage in the same amount (10%) which we had established on this initial program."

Following the plant inspection, Cole began placing orders with Chroma-Glo for black and white cardboard backed numerals and some eighteen months after the initial black and white order, placed orders for black and gold cardboard backed numerals. Altogether, Cole placed orders totalling $728,364.80.

At about the time Cole began placing its orders, Kend, with Chroma-Glo's knowledge, became associated with Dura Process Company, a competitor of Chroma-Glo. He continued to negotiate with Cole regarding the full marketing program of Chroma-Glo letters, numerals and signs of various color combinations. With reference to the Cole business, Chroma-Glo wrote Kend on February 8, 1967:

"If they wish, they can select any color combination such as olive drab, red, etc., for sale to certain customers such as Bell Telephone Company who uses approximately an olive drab. This would cause no difficulty whatever on our part, provided the quantities were fairly substantial. A color change creates no need whatever in the equipment required to make these parts."

In March of 1967, during which time Kend testified he remained in contact with Cole on behalf of Chroma-Glo, samples of the mylar numerals were sent to Cole, accompanied by a letter dated March 27, from Mr. Erickson, which stated in part :

"David Kend will see you at your convenience to discuss the price quotations on all of these parts and he will cover with you at the same time the various points and possible changes you may require."

Mr. Kend testified that he subsequently quoted prices to Cole, including prices on gold and black, in April of 1967. It appears that Mr. Kend corresponded with Cole in May of 1967, as to the progress of field testing of Chroma-Glo samples sent in February.

However, it was not until March of 1968, that Cole indicated to Chroma-Glo that it was interested in placing an order for the black and gold numerals. Chroma-Glo did not communicate this information to Kend, and in June, 1968, Cole made substantial purchases of the black and gold numerals. When Kend learned of this purchase, a dispute arose as to whether Kend was entitled to a 10% commission on the black and gold sale.

Chroma-Glo has stated the issues presented for review to be:

"1. Did the trial court err in refusing to instruct the jury that where words or other manifestations of intention bear more than one meaning an interpretation is preferred which operates more strongly against the party using them, as had been requested by the appellant, Chroma-Glo, Inc.?

2. Did the trial court err in refusing to instruct the jury as to the legal meaning of "procuring cause," as had been requested by the appellant?

3. Did the facts sufficiently support the jury\'s finding that the appellee, David Kend, was the procuring cause of the sales of the Black and Gold series to Cole National Company?"

Appellee stated a cause of action in his complaint on a theory of exclusive and continuing agency which would entitle him to a commission on all future Chroma-Glo sales to Cole, and demanded judgment accordingly.

In the trial of the case, and as argued to the jury, the parties, in effect, narrowed the issue to whether...