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AVTEX FIBERS INC. v. VAN DRESSER CORP.

February 13, 1987

AVTEX FIBERS INC.
v.
VAN DRESSER CORPORATION



The opinion of the court was delivered by: LUDWIG

 Ludwig, J.

 Findings of fact and conclusions of law are made pursuant to Fed.R.Civ.P. 52(a), this action having been heard without a jury. Jurisdiction exists by diversity of citizenship, 28 U.S.C. ยง 1332. Plaintiff is a Pennsylvania corporation and defendant, a Michigan corporation.

 This action is for goods sold and delivered in the sum of $120,405.28. Defendant Van Dresser Corporation admits the amount claimed but counterclaimed for rebates in excess of that amount. *fn1" The hearing, therefore, proceeded on the counterclaim. The parties submitted a proposed joint order containing undisputed facts. Those facts, which I find, are as follows:

 
Plaintiff is Avtex Fibers Inc. ("Avtex"), a manufacturer of textiles, fabrics, and yarns. Defendant Van Dresser Corporation ("Van Dresser"), is a manufacturer of automotive interior trim parts sold directly to automobile manufacturers. Avtex manufactured an acetate fiber known as vinyon which was a principal ingredient in a product developed by Van Dresser known as FIBRMAT. Avtex commenced selling vinyon to Van Dresser for use in its FIBRMAT product in 1975.
 
In early 1982, Edward Bihun ("Bihun"), Executive Vice President of Van Dresser, took over responsibility for the FIBRMAT process within Van Dresser's research and development department. Thereafter, Michael F. Spann, Jr. ("Spann"), the Northern Regional Sales Manager for Avtex met with Bihun to discuss the future use of vinyon in FIBRMAT and Avtex's ability to supply Van Dresser with vinyon in the future.
 
On March 15, 1982, a meeting was conducted between Avtex and Van Dresser. At the meeting Van Dresser projected its need for vinyon into the future.
 
On June 28, 1982 Avtex met with Bihun to present its pricing proposal. At this meeting, Avtex made the proposal which was confirmed in the July 1, 1982 letter from Spann to Bihun. After this letter was received, Bihun continued to ask Spann to improve on the price of vinyon.
 
For the 1983-84 model year Avtex's list price for vinyon remained unchanged from the previous year, and Avtex continued to sell Van Dresser vinyon at $1.52 per pound. During the 1983-84 model year Van Dresser purchased 1,784,026 pounds of vinyon from Avtex.
 
During the 1984-85 model year, Avtex continued to charge Van Dresser its list price of $1.52 per pound for vinyon. Van Dresser purchased 1,485,000 pounds of vinyon from Avtex from August 1984 through March 1985, 1,645,507 pounds through April 15, 1985 and a total of 1,964,509 pounds through May, 1985.
 
Throughout the business relationship between Avtex and Van Dresser, Van Dresser expressed constant dissatisfaction with the price of vinyon and repeatedly discussed with Avtex alternatives to the use of Avtex's vinyon in its FibrMat product. Even after Avtex proposed the model year 1982-1983 pricing structure Van Dresser continued to express dissatisfaction with the price of vinyon and continued to request a lower price for vinyon from Avtex.
 
Beginning with the 1982-83 model year, Van Dresser's employee, Cheryl Kline ("Kline"), issued annual blanket purchase orders to Avtex. Kline forwarded blanket purchase orders to Avtex at the beginning of each model year (August 1) and would normally type in all information contained on the blanket purchase order from the previous model year, unless advised of any changes, either by Van Dresser or Avtex. The blanket purchase order was filed in the vendor purchasing file maintained for Avtex by Van Dresser. Changes or additions to the blanket purchase order would be issued on Van Dresser's form Supplement To Purchase Order.
 
Specific quantities of vinyon were ordered by Van Dresser on a weekly basis over the telephone. Kline would telephone Barry Lenox, Avtex's Senior Account Executive ("Lenox"), to place an order and would then send him a production release which would confirm the telephone conversation of the quantity purchased. Each production release referred to the corresponding blanket purchase order number, and contained a cumulative total of quantity received to date within each model year.
 
Following the telephone order, Lenox would confirm the order by sending Van Dresser a written order acknowledgment of the materials purchased along with the price. These order acknowledgments would then be filed by Cheryl Kline in Avtex's purchase file. Following the delivery of a shipment, Avtex would send Van Dresser an invoice indicating how much product had been shipped. Price per pound and total price were included on these invoices.
 
Throughout the entire business relationship between Avtex and Van Dresser, Van Dresser monitored its volume of purchases from Avtex. At the end of each model year, the final production release issued by Cheryl Kline would reflect the ...

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