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June 30, 1981


The opinion of the court was delivered by: BRODERICK


Perry Silver brought this action to recover commissions allegedly owed to him by Gene K. Kolber Advertising, Inc. under a contract of employment. Kolber Advertising has counterclaimed under the same contract. The plaintiff claims the sum of $ 16,263.73 and the defendant counterclaims for $ 9,560.35. The court has jurisdiction under 28 U.S.C. § 1332 in that the plaintiff is a citizen of New York, the defendant is a Pennsylvania corporation with its principal place of business in Pennsylvania, and the amount in controversy is more than $ 10,000. Because the parties entered into the contract in Pennsylvania and envisioned performance here, Pennsylvania law governs the case. Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941); In re Danz, 444 Pa. 411, 283 A.2d 282 (1971). The case was heard without a jury on April 1 and 2, 1981. This memorandum constitutes the court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).


 The business relationship between the parties to this action dates back to 1972. Perry Silver, the plaintiff, was then general sales manager of WIBG radio in Philadelphia. The defendant, Gene K. Kolber Advertising, Inc., was one of the advertising agencies to which plaintiff sold radio air time. Kolber Advertising is wholly owned by Gene K. Kolber, who is also the agency's founder and president.

 Perry Silver first began working for Kolber Advertising in August, 1975. At that time WIBG radio was sold and the plaintiff anticipated that the new owners, in keeping with industry practice, would replace the station's management upon takeover. According to the plaintiff, Gene Kolber suggested that he leave WIBG and become an account executive at the Kolber agency. But Gene Kolber testified that he dissuaded the plaintiff from leaving the station and joining the agency because there would be only "lean pickings" for him in advertising due to his lack of experience in that business. In either case, the result was that Perry Silver became an outside commissioned salesman for the Kolber agency while retaining his position with WIBG. He was to receive 50% of any net profit earned by the agency on accounts that he brought to it.

 By February, 1977 Perry Silver had become dissatisfied with the new owners of WIBG. He called Gene Kolber in the hope of becoming a full-time salaried employee of the Kolber agency but Gene Kolber rejected this proposal. Further discussions led to an agreement whereby Perry Silver would continue to work for the agency on the same terms as before but full-time and with provision of office facilities and a car. He was also assigned to work on certain in-house accounts as to which he would be compensated on the same terms as for his account referrals. Finally, it was agreed that Perry Silver would be given an accounting of commissions owed to him and would draw a weekly income against the sum due. Plaintiff then resigned from his position at WIBG.

 The two men met on April 15, 1977 to determine how much money Kolber Advertising owed Perry Silver as of March 4, 1977. The document memorializing that occasion, which Gene Kolber wrote out during the meeting, calculates the total due as of that date to be $ 8,263.81. According to Gene Kolber this sum represented only a "ball park feel" of the amount of money involved in that he was "winging it right off the top of (his) head" when writing down the individual figures that comprise the sum. His purpose in doing this, he claims, was to demonstrate by "leaning over backwards" in the plaintiff's favor that the $ 1,000 per week draw requested by him was too high. The parties then agreed to a draw of $ 400 per week, which Perry Silver received until he left the agency in July, 1977 and bought a radio station of his own. The manner of and reasons for his departure from the agency are disputed but these matters are not relevant to the case.

 The document in Gene Kolber's handwriting was typed out by an agency secretary on April 16, 1977. In addition to a list of accounts as to which the agency owed Perry Silver money and the amount for each account, the document states:

August & September ATCO DRAGWAY is still due Perry.
Kolber Advertising has out in bills -- not yet paid Commission on:

  $ 2,866.77 PIER 37 2,792.00 ATCO $ 5,658.77


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