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GENICA, INC. v. HOLOPHANE DIV. OF MANVILLE CORP.

February 2, 1987

GENICA, INC.
v.
HOLOPHANE DIVISION OF MANVILLE CORPORATION



The opinion of the court was delivered by: KATZ

 Plaintiff, Genica, Inc. ("Genica") is a corporation organized and existing under the laws of Commonwealth of Pennsylvania with its principal place of business in Drexel Hill, Pennsylvania. Defendant, Holophane Division of Manville Corporation ("Holophane") is a corporation organized and existing under the laws of the State of Delaware with its principal place of business in Denver, Colorado. Jurisdiction is thus founded upon diversity of citizenship, and the amount in controversy, which exceeds Ten Thousand Dollars.

 The Court heard this cause of action in a two day non-jury trial. Plaintiff Genica put on two witnesses: Gerald N. Carozza, President of Genica, and Gerald Rose, a Certified Public Accountant from the firm of Seligman, Cupersmith & Co., who handled Genica's account. Defendant Holophane put on three witnesses: David Meredith, Holophane's Marketing Manager, Elsie Madsen, a financial and marketing analyst with Holophane and Aage Emanuelson, the President of Holophane-Mexico. Plaintiff introduced as well the deposition testimony of Raul Meza, Holophane-Mexico's former President, and Scot Anderson, the Proposal Coordinator and former Purchasing Manager for Morrison-Knudsen International in Columbia, South America. The court, after evaluating all of the testimony and examining the documentary evidence, finds as follows:

 Findings of Fact

 1. In 1962 Gerald N. Carozza joined Holophane as a sales engineer. He was employed in a variety of sales and managerial positions until January 1980. Carozzi's responsibility during much of this period was for Holophane's sales efforts in Central and South American and the Caribbean. In 1978 or early 1979, the Holophane division manager suggested that Carozza form a company to take over the territory of Central and South America and the Caribbean as the exclusive sales agent. Testimony of Gerald Carozza.

 2. On November 30, 1979, Genica and Holophane entered into a Manufacturer's Agent Agreement ("Agreement"). Plaintiff's Exhibit No. 1. According to the Agreement, Genica was to receive commissions on all lighting products sold by Holophane and shipped by Holophane into South and Central America and the Caribbean. Id. at PP 1, 4, 9. The contract was later expanded to include shipments from Holophane-Mexico, Holophane-Canada and Holophane-England. Testimony of Gerald N. Carozza; Testimony of David Meredith; Plaintiff's Exhibit No. 2; Defendant's Exhibit No. 7. Under the contract Genica was not entitled to commissions on sales made by third parties who were not Holophane. Testimony of David Meredith; Plaintiff's Exhibit No. 1.

 3. Under the Agreement terms, Genica was initially to receive a twelve percent (12%) commission on completed fixtures and other components manufactured by Holophane. Plaintiff's Exhibit No. 1 at para. 9(a). As of January 1, 1983 this commission rate was increased to thirteen and one-half percent (13.5%) for sales up to five hundred thousand dollars ($500,000). Genica received five percent (5%) commission on vendor items and certain non-compensable items. Plaintiff's Exhibit No. 1 at para. 9(a); Testimony of David Meredith. Plaintiff's Exhibit No. 3. On sales where Genica purchased the product, Genica was also entitled to a profit mark-up. Testimony of Gerald N. Carozza. The contract precluded Genica from carrying other product lines. Plaintiff's Exhibit No. 1 at para. 7.

 4. Prior to Genica's formation, Cinducoll, Ltd., a Colombian company, was a distributor of Holophane. To assure Genica's sole responsibility for distribution, Holophane terminated this relationship in 1979. Testimony of Gerald N. Carozza; Plaintiff's Exhibits No's. 13, 18; Defendant's Exhibit No. 8.

 5. Cinducoll had purchased refractor glass and components through Genica until June of 1982. Plaintiff's Exhibit No. 8. Thereafter Cinducoll did not purchase from Genica nor was Genica advised of any sales from Holophane or its subsidiaries to Cinducoll. Testimony of Gerald N. Carozza. Holophane-USA did not sell any merchandise to Cinducoll after 1982. Testimony of David Meredith; Testimony of Elsie Madsen. Holophane-Mexico made $34,806 of sales to Cinducoll, but commissions have been paid to Genica on those sales. Testimony of David Meredith; Plaintiff's Exhibit No. 8; Defendant's Exhibit No. 7.

 5.a. Cinducoll was not a licensee or agent of Holophane. Holophane's headquarters in Denver handles licensing for Holophane USA and Holophane Mexico, and there is no record of any license to Cinducoll. Testimony of David Meredith. Neither Holophane-USA or Holophane-Mexico have entered into any license agreements with Cinducoll. Plaintiff's Exhibit No. 18. Testimony of David Meredith; Testimony of Aage Emanuelsen.

 6. Genica's claim for unpaid commissions focused on a sale of lighting products by Cinducoll to Morrison-Knudsen International for a coal mine in Baranquilla, Colombia. There was no evidence in the record, however, either of Cinducoll being a licensee or agent of Holophane when it made the sale, see supra, nor of Holophane making any unreported sales to Cinducoll in connection with the Columbian coal project. Holophane referred all Morrison-Knudsen inquiries to Genica during the term of Genica's agreement. Defendant's Exhibits No's. 29, 30. Holophane advised Morrison-Knudsen that Cinducoll did not represent Holophane and that the materials Cinducoll was offering were not suitable for the project. Defendant's Exhibit No's. 8, 9, 10.

 7. The evidence establishes that Cinducoll counterfeited Holophane's products and misappropriated its tradename. Genica introduced a January 17, 1984 telex from Carlos Alvarez of Holophane-Mexico to Morrison-Knudsen that described Cinducoll as its licensee and recommended the use of certain lighting equipment. The evidence establishes that Holophane's Mexican subsidiary did not send this telex. Both Carlos Alvarez and Raul Meza denied sending this telex. Evidence suggested that the telex was not sent from Holophane-Mexico's telex machine. Testimony of Aage Emanuelsen. The 1985 letter from Raul Meza confirming that the January 17 telex had been sent and referring to Cinducoll as a licensee and to a Cinducoll brochure containing "Holophane" products lacks credibility. Plaintiff's Exhibits No's. 5, 7, and 10, 11. The Cinducoll brochure is undated and may relate to the time prior to 1982 when all parties agree Cinducoll was a Holophane purchaser. Testimony of Gerald N. Carozza; Testimony of David Meredith. The 1985 letter from Raul Meza itself was written while Mr. Meza was suspended from Holophane-Mexico pending investigation that ultimately resulted in his termination. Id. The earlier "draft" version of this letter initially sent to Genica did not include the license language that was included in the second version of this letter that Genica submitted. Testimony of Gerald N. Carozza; Plaintiff's Exhibit No. 7; Defendant's Exhibit No. 35.

 8. According to the deposition of Mr. Scot Anderson, Morrison-Knudsen purchased certain lighting fixtures from Cinducoll. Deposition of Scot Anderson at 3, 8. His testimony did not establish that Holophane manufactured or sold the lighting fixtures or supplied Holophane components. Id. at 10. The Agreement did not cover sales by Cinducoll, and Genica thus was not entitled to a commission on the sale.

 9. According to Mr. Anderson's deposition, Morrison-Knudsen returned the fixtures purchased as defective and cancelled all other purchase orders. Deposition of Scot Anderson at 6, 10-11. Genica was not entitled to commissions for returned merchandise under the Agreement, only to credits against replacement merchandise shipments. Testimony of David Meredith; Plaintiff's Exhibit No. 1 at para. 9(c). Since there was no evidence that Morrison-Knudsen purchased replacement fixtures from Holophane or ...


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