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SANTO MUSUMECI v. REBORN PRODS. CO.

June 10, 1975

Santo MUSUMECI
v.
REBORN PRODUCTS CO., INC., et al.



The opinion of the court was delivered by: NEWCOMER

 NEWCOMER, District Judge.

 Plaintiff brought this case against Defendants Novimex, Ltd., Reborn Products, Inc., Milton Ford, and Allan Ford, alleging that Novimex breached a contract it had with plaintiff, and that Defendants Reborn, Milton Ford, and Allan Ford conspired to and did induce this breach between Novimex and plaintiff.

 At the close of plaintiff's evidence, we granted the motions of the several defendants for directed verdicts. We subsequently realized that in a case tried before the court without a jury, the proper procedural device for disposition of a case at the close of plaintiff's evidence is not a directed verdict, but simply the entry of judgment. F.R.Civ.P. 41(b). This procedural matter does not, however, change the result in this case, for our decision was and remains that plaintiff did not produce evidence from which we could conclude in favor of plaintiff on its charges against the respective defendants.

 Plaintiff's testimony, plus the statement of facts to which the parties stipulated, showed the following picture.

 On March 15, 1970, plaintiff, operating Sunrise Importing Company, entered into a contract with Defendant Novimex, Ltd., a Swiss exporter, by which plaintiff acquired the exclusive American sales rights for a pour spout which Novimex exported. This contract between plaintiff and Novimex obligated plaintiff to order an initial shipment of 25,200 spouts, and to order an additional 100,000 spouts before September 30, 1975, and that if plaintiff failed to do so, Novimex would have the right to export to other companies in the United States. The contract also provided that "quantities to be ordered, prices and payment terms (would be) subject to separate arrangement." The contract also provided that the agreement was to be construed according to Swiss law.

 Pursuant to this contract, plaintiff ordered and received 25,200 spouts in March 1970.

 In April, 1970, plaintiff and defendant Reborn Products, Inc. ("Reborn"), through its President Allan Ford, entered into negotiations for the sale of the spout by plaintiff to Reborn.

 On the insistence of the Fords, however, the document also provided that the document's validity was contingent upon the execution of an agreement between plaintiff's company and Reborn designating Reborn as the exclusive distributor of the spout plaintiff's company was importing.

 Although Reborn and plaintiff discussed entering into a contract designating Reborn as distributor of the spout in the United States, Reborn declined to enter into such contract in view of substantial advertising and marketing expenses which would be incurred, unless plaintiff secured long-term exclusive importing rights from Novimex.

 Pending plaintiff's obtaining such long-term rights Reborn agreed to buy from plaintiff quantities of the spout for resale in this country and did purchase, on separate occasions, 25,200, 14,000, and 56,700 units respectively in May and June of 1970 on terms agreeable to the parties.

 In the purchase of these spouts, Reborn paid its own promotional, advertising, and sale costs. The relationship between plaintiff and Reborn on this purchase was one of buyer/seller, rather than principal/agent or supplier/distributor.

 On May 27, 1970, Allan Ford and Milton Ford executed a document attached as Exhibit "B" to plaintiff's complaint against Reborn and the Fords. This document provided that neither Reborn nor the Fords would make any attempt to compete with plaintiff's importing company ("Sunrise") with respect to the spout. The document also provided, however, that the validity of the agreement contained therein ...


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