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CHARLES LESLIE v. PENNCO (12/02/83)

filed: December 2, 1983.

CHARLES LESLIE, D/B/A L & W COMPANY, APPELLANT,
v.
PENNCO, INC.



No. 56 Pittsburgh, 1982, Appeal from the Judgment entered of January 15, 1982, In the Court of Common Pleas of Erie County, Civil Division, No. 7136-A-1980.

COUNSEL

Will J. Schaaf, Erie, for appellant.

Norman H. Stark, Erie, for appellee.

Cercone, President Judge, and Spaeth and Hester, JJ. Spaeth, J., filed a dissenting opinion.

Author: Cercone

[ 323 Pa. Super. Page 25]

Plaintiff, Charles Leslie, d/b/a L & W Company, appeals the lower court's denial of his motions n.o.v. and for a new trial which followed a jury verdict in favor of defendant Pennco, Inc., appellee herein. Appellant contends that the weight of the evidence elicited at trial does not support appellee's contention that based on language appearing in a purchase order, it was empowered with an option to terminate the entire contract between the parties on a quarterly basis. We agree with appellant and reverse the judgment entered by the lower court, and grant appellant a new trial.

The general rule for a grant of a new trial on the basis that it is against the weight of the evidence allows the granting of a new trial only when the jury's verdict is contrary to the evidence as to shock one's sense of justice and a new trial is necessary to rectify this situation. Burrell v. Philadelphia Electric Co., 438 Pa. 286, 265 A.2d 516 (1970); Brown v. McLean Trucking Co., 434 Pa. 427, 256 A.2d 606 (1969); Jones v. Williams, 358 Pa. 559, 58 A.2d 57 (1948). Unlike appellate review of a refusal to enter a judgment n.o.v., where the evidence and all reasonable inferences therefrom are viewed in the light most favorable to the verdict winner, the appellate court, in reviewing the refusal to grant a new trial, ordinarily considers all of the evidence. Abbott v. Steel City Piping Co., 437 Pa. 412, 263 A.2d 881 (1970).

The decision of the lower court, either granting or refusing a new trial, is considered to be within the sound discretion of the trial judge and will be reversed on appeal only if the appellate court determines that the trial court palpably abused its discretion. Ditz v. Marshall, 259 Pa. Superior Ct. 31, 393 A.2d 701 (1978). We find that the instant case justifies a reversal under the above test.

[ 323 Pa. Super. Page 26]

In 1978, Charles Leslie, appellant, was approached by Jack Wheeler who was a manufacturer's representative for Iroquois Tool Company. Wheeler told Leslie that his company had been offered a contract by Pennco to manufacture seventy-five hundred humidifiers, to be completed in a year's time. (Pennco had been licensed to manufacture and distribute the humidifier.) Wheeler asked Leslie if he was interested in manufacturing them. Leslie expressed his interest and subsequently went with Wheeler and a Mr. Haas, of Iroquois, to discuss the idea with Thomas Fadale, president of Pennco. Apparently no written agreement was drawn up, but a purchase order was sent from Pennco to L & W, the company which Leslie formed for the express purpose of manufacturing these 7500 humidifiers. The purchase order set a price of $32.00 per humidifier to be paid after each delivery; this figure provided L & W with an $11.00 profit on each humidifier. Leslie borrowed fifty thousand dollars from the bank which is what Iroquois demanded for tooling and consulting service, and for rights to the contract.

The purchase order set forth the agreement for Pennco's order of 7500 humidifiers as a "blanket order for 5-15-78 through 4-15-79." It specified certain dates for production and set the rate for delivery. Nine hundred units were to be completed by the end of the first quarter. After that, 750 units were to be delivered each month. After 3,946 humidifiers were delivered to Pennco, it refused to accept further delivery. This refusal left approximately 3,530 of the ordered humidifiers unmanufactured.

At the bottom of the purchase order were the words: "PLEASE NOTE THE ABOVE RELEASE SCHEDULE TO BE REVIEWED QUARTERLY."

The evidence is unconstradicted that the parties never arrived at a mutual understanding that this phrase meant that Pennco could terminate its agreement as part of its quarterly review and thereby reject the remainder of the humidifiers. Nevertheless, Thomas Fadale of Pennco testified

[ 323 Pa. Super. Page 27]

    at trial that, in his mind, the phrase included just such an option.

If sales were good -- and we anticipated that they would be; we had -- we were going to do an awful lot to make them by that way -- we could increase production; but if sales were bad, as they turned out, then we could decrease production and possibly stop it.

Fadale also testified that the custom in the industry supported his interpretation.

On cross examination, this exchange occurred:

Q. [by Mr. Schaaf, attorney for plaintiff-appellant]: My question is this: Did you and Mr. Haas at any time discuss the idea that you could terminate this ...


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