Poggi v. Tool Research & Engineering Corp., 39457

• Citation: 451 P.2d 296,75 Wn.2d 356
• Decision Date: 20 February 1969
• Docket Number: No. 39457,39457
• Court: United States State Supreme Court of Washington
• Parties: Martin J. POGGI, Respondent and Cross-Appellant, v. TOOL RESEARCH AND ENGINEERING CORPORATION, a Delaware Corporation, and Stresskin Products Company, a Delaware Corporation, Appellants, Jane Doe Poggi, Respondent.

Page 356

75 Wn.2d 356

451 P.2d 296

Martin J. POGGI, Respondent and Cross-Appellant, v. TOOL RESEARCH AND ENGINEERING CORPORATION, a Delaware

Corporation, and Stresskin Products Company, a

Delaware Corporation, Appellants,

Jane Doe Poggi, Respondent.

No. 39457.

Supreme Court of Washington, Department 1.

Feb. 20, 1969.

Rehearing Denied May 15, 1969.

Shidler, McBroom & Gates, George W. McBroom, Seattle, for appellants.

Riddell, Williams, Voorhees, Ivie & Bullitt, Donald Voorhees, Seattle, for respondent.

HALE, Judge.

Martin J. Poggi, a professional mechanical engineer, had an exclusive contract to sell on commission the products of Tool Research and Engineering Corporation within the state of Washington. He says now that he arranged for the sale of several million dollars worth of gas deflector doors to the Boeing Airplane Company and that Tool Research has refused to pay him his earned commission. Tool Research says that his contract was terminated before the sales were made and that he has been paid in full all commissions actually earned. We think Mr. Poggi has a good claim.

In 1937, Mr. Poggi received a bachelor's degree in mechanical engineering from the California Institute of Technology. Ever since, he has in one way or another worked in connection with the aeronautical and aerospace industries. At the time of trial, he was a member of the Society of Automotive Engineers and for about 10 years had been a member of the Institute of Aerospace and Aeronautical Sciences. In May, 1958, he signed an agreement with the John J. Foster Manufacturing Company, a predecessor of Tool Research and Engineering Corporation, which provided for commissions at 5 per cent and made him that company's exclusive sales representative in the state of Washington. The contract said that it 'shall be considered as being effective for one hear * * * and shall at the end of that period automatically renew itself for a like priod.' Either party, however, could cancel the agreement on 30 days' written notice by registered mail.

Tool Research, among other products, was producing a welded, honeycombed material called Stresskin--a material consisting of a mental honeycomb separating two smooth-surfaced faceplates. Stresskin has great strength for its weight, withstands very high temperatures, and can be readily shaped. Because of these characteristics, Poggi saw several possible applications of it in the aeronautical and aerospace industries.

Mr. Poggi tried to get Boeing to use Stresskin as a reentry shield for DynoSoar and as a structural support, but the company instead gave him a small order for some to use in a test panel it was building--an order which netted Mr. Poggi only a few hundred dollars in commission. During the course of numerous consultations with Boeing engineers and technologists in 1961, however, when plaintiff first saw a mock-up of the new model 727 tri-jet transport then on display to selected suppliers, he concluded that Stresskin's unique qualities might make it applicable as an integral part of what is called the thrust reverser door. Each of the three jet engines on the new 727 would have two thrust reverser doors, thus providing a tremendous sales potential in the new Boeing 727 of six doors for each plane.

The thrust reverser assembly is a device mounted on the tailpipe of each jet engine. In flight, the door is closed, and the jet exhaust flows out the back. When the engines are put into reverse thrust to slow the plane on landing, the thrust reverser doors come out from the walls of the tailpipe and break the flow of the jet exhaust so that it flows out the side and hits the deflector doors forcing the thrust forward at about a 60-degree angle. The forward thrust thus produced by the action of the exhaust against the thrust reverser doors exerts a braking action on the airplane.

Boeing engineers had once told Poggi that the thrust reverser doors would have to be of brazed honeycomb core because the conventional design, known as skin and stringer, would be too heavy. As an engineer, Poggi knew that the jet exhaust produces, a high sound level and creates a very high frequency vibration that will shake the face sheets and cause them to flex until they break. He saw in Stresskin an additional advantage over the other types of brazed doors not only because of its strength and its ability to withstand higher temperatures but also in its greater capability to resist this sonic fatigue.

April 25, 1961, Mr. Poggi wrote Foster Company, predecessor to defendant Tool Research and Engineering Corporation, asking to be brought up to date on the possible application of Stresskin in speed brakes and explaining that there was a possibility that the product could be sold to Boeing for use in the 727. As time went on, Mr. Poggi kept making his recommendation for use of Stresskin in the manufacture of thrust reverser doors and constantly relayed to his company information and advice as to its ever-growing potential use. By September, 1961, he told his company, Foster, that Boeing would be a possible market for $6,000 doors--with an additional market for spares, estimated by Poggi to run between 25 and 50 per cent of the production requirement.

Poggi participated in a continuous round of discussions with Boeing's engineering and material departments in an effort to discover means and methods of reducing weight, for, as he expressed it, 'weight at that time was very important. The airplane was overweight in the aft end and weight was the number one criteria at that stage of the game.' During this interim, while plaintiff was trying to sell Boeing on the concept of Stresskin thrust reverser doors, he exchanged mountains of technical, engineering and cost information with the Boeing staff and with his own company. Despite skepticism from Boeing engineers and metalurgists who doubted whether a curved surface could be brazed properly to meet the airplane company's requirements, Poggi convinced Boeing that, by employing a new high nickel matrix brazing alloy, defendant's Stresskin thrust reverser doors would be eminently satisfactory.

By January 9, 1962, defendant company had brazed its first door and would soon produce two more hoping to get one of them shipped to Boeing. After one of the doors had been delivered, the Boeing engineers made changes in its design, and Poggi had to make a referral of new drawings of the proposed doors along with technological explanations to defendant company.

To shorten this narrative of events, we draw upon the court's findings of fact, which, we observe, were in every respect abundantly supported by the evidence. The learned trial court was convinced from the evidence that plaintiff's efforts were indispensable to the subsequent sales of the doors to Boeing and that without his participation there would have been no sale.

After nearly 4 years of negotiations, conferences, studies and persuasion, Boeing, about May 21, 1965, decided to incorporate Stresskin thrust reverser doors into all production model 727 airplanes as rapidly as defendant could produce them. The record shows that Poggi did a fine job for his company. During the interval of December, 1964, and January, 1965, Boeing paid defendant company $142,500 as a one-half reimbursement for research and development costs, and in part for the purchase price of thrust reverser doors already delivered. On these transactions, there was no doubt that Poggi had earned his commission and they are not in controversy now.

About December 1, 1964, Boeing placed with defendant a firm order for 500 Stresskin thrust reverser doors for later delivery; the same order was later increased to 610 doors by means of a later Boeing purchase order. Poggi performed what the parties referred to as post-contract services with respect to this order up to August 2, 1965. July 27, 1965, Boeing issued to defendant a new order--on what is described as a letter of intent to purchase--for 960 more Stresskin thrust reverser doors. This letter of intent was followed on November 17, 1965, by a purchase order, and the court found that the letter of intent of July 27, 1965, amounted to a firm order for the purchase by Boeing of the 960 doors. Again, with respect to this latter order, plaintiff performed all post-contract services up to but not after August 2, 1965.

It is these two orders, the first for 610 doors and the second for 960, which are in issue here. Tool Research and Engineering contends that Mr. Poggi did not earn a commission on these orders; that his services with the defendant company had been terminated before the orders had been secured and placed; and that he did not and could not have performed the post-contract services contemplated by his representative agreement with respect to either order.

An understanding of the relative rights and responsibilities between plaintiff and defendant concerning the sales and commissions arising from the two Boeing orders requires specific reference to what the parties call the representative agreement. Signed by the parties and effective as of May 15, 1958, this agreement appointed Mr. Poggi as exclusive sales representative for the John J. Foster Manufacturing Company--predecessor to defendant Tool Research and Engineering Corporation--in the sales territory of Washington state. Tool Research later succeeded to all of Foster Manufacturing Company's rights, duties and privileges in this contract. In the sales representative agreement, defendant promised to pay Poggi so far as pertinent here, a 5 per cent 'commission on all remittances received for all formal orders from customers located within the sales territory assigned herein.'

The agreement also provided that commissions on 'remittances received from customers up to the end of each month will be made on or before the 15th day of the following month' and stated that Mr. Poggi, the sales representative, would pay all of his own expenses in...