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EASTCOAST EQUIP. CO. v. HARNISCHFEGER CORP.

January 19, 1973

Eastcoast Equipment Co.
v.
Harnischfeger Corp.


Green, District Judge.


The opinion of the court was delivered by: GREEN

GREEN, District Judge.

 Presently before the court is plaintiff's motion to enjoin defendant from terminating plaintiff as the Northern New Jersey dealer of defendant Harnischfeger Corporation. We have extended to the parties an opportunity to introduce all evidence relevant to injunctive relief, and accordingly now after full hearing, make the following:

 Findings of Fact

 1. Plaintiff is a New Jersey corporation having its principal place of business at U.S. Route 22, Mountainside, New Jersey.

 2. Plaintiff is engaged in the business of selling, servicing, and renting new and used heavy construction equipment, engines and parts. Plaintiff, at various times, has been a dealer for products manufactured by Harnischfeger Corporation, the defendant herein, as well as Allis-Chalmers, Baldwin-Lima-Hamilton, LaCrosse Manufacturing Company, Jaeger Machinery Company, Poclain and others.

 3. Defendant is a Wisconsin corporation with its principal place of business at West Milwaukee, Wisconsin.

 4. Defendant transacts business in this district at Suburban Station Building, Philadelphia, Pennsylvania.

 5. Defendant is a manufacturer of, inter alia, heavy construction equipment including cable power cranes and shovels and hydraulic cranes and excavators ("P & H" Products).

 6. In April of 1963, defendant appointed plaintiff as its dealer for "P & H" Equipment in Northern New Jersey counties and by subsequent agreement the territory of said dealership was extended to two counties in New York state, namely, Rockland and Orange. The most recent dealer agreement entered into between the parties is dated February 6, 1967, and includes the following provision entitled "Duration of Agreement":

 
"This agreement shall be in force for a term of one year from the date of execution and, unless terminated as hereinafter provided, shall automatically renew itself for successive one-year periods. This agreement may be terminated by either party at any time by giving thirty (30) days' notice in writing to the other by registered mail of its intention to terminate, provided that if this agreement is terminated by either party because of failure or neglect to perform or because of any other breach of this contract by such party, then upon notice of termination for such cause such termination shall be effective immediately upon the receipt of such notice by registered mail."

 7. Under date of September 4, 1969, defendant sent plaintiff a notice of intention to terminate plaintiff's dealer agreement effective October 31, 1969.

 8. Upon receipt of the termination notice, certain meetings took place between representatives of plaintiff and defendant and when the dispute between the parties was not resolved, plaintiff filed this suit on October 24, 1969, invoking the jurisdiction of this court under 15 U.S.C. §§ 1 and 2 and 28 U.S.C. § 1332.

 9. On October 27, 1969, defendant rescinded its notice of termination and plaintiff accepted the rescission on or about October 31, 1969, and the parties continued to transact business, without interruption, pursuant to the aforesaid agreement of February 6, 1967.

 10. In December 1971, defendant mailed to plaintiff for execution a proposed new dealer agreement providing terms essentially the same as those of the agreement of February 6, 1967, but containing a different paragraph 15 relating to the Duration of the Agreement. Paragraph 15 in the proposed new agreement deleted the first sentence which appeared in the old agreement and which read as follows:

 
"This agreement shall be in force for a term of one year from the date of execution and, unless terminated as hereinafter provided, shall automatically renew itself for successive one-year periods."

 Said proposed agreement did contain in paragraph 15 a provision for termination which read as follows:

 
"This agreement may be terminated by either party at any time with or without cause, by giving thirty (30) days' notice in writing to the other by registered mail of its intention to terminate, provided that if this agreement is terminated by either party because of a breach of this contract by the other party, then such termination shall be effective immediately upon the receipt of such notice by registered mail."

 In April of 1972, plaintiff executed and returned the proposed new dealer agreement to defendant, adding thereto the following provision:

 
"Subject to agreement referred to in C.A. No. 69-2507."

 Defendant never executed said proposed agreement and it never became a binding contract.

 11. In January of 1968, defendant was seeking to establish a dealer in the metropolitan New York City area and at the suggestion of its president, Henry Harnischfeger, one Robert T. Grant ("Grant") was asked to form a corporation to act as the dealer in New York. Grant agreed.

 12. One of the terms of the agreement between Grant and defendant was that Grant's financial investment in the new corporation to be formed and known as "Grandor" would be limited to $5,000 in cash. Defendant agreed to aid in the establishment of the Grandor dealership either through the devices of loans or guaranteed financing.

 13. Grant was then and continues to be the owner of Johnson and Dealaman, Inc., a New Jersey corporation, which was and is a competitor of plaintiff in the sales, rental and servicing of heavy construction equipment in the Northern New Jersey area.

 14. Grant demanded of defendant a commitment, that if Johnson and Dealaman had their dealership for Lorain Cranes and Equipment cancelled, defendant would make Johnson and Dealaman its dealer for P & H Products in Northern New Jersey, the territory of plaintiff.

 15. Lorain did cancel Johnson and Dealaman, and on request of Grant, defendant attempted to cancel plaintiff and substitute Johnson and Dealaman as its Northern New Jersey dealer in October 1969. Said attempt to terminate plaintiff was rescinded prior to the effective date of termination. The aforesaid conduct did not constitute an antitrust violation by defendant.

 16. Defendant cancelled plaintiff effective June 30, 1972, for business reasons other than those referred to in finding of fact #15 and said termination does ...


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