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BACHMAN CO. v. MCGONIGLE

June 1, 1994

THE BACHMAN COMPANY
v.
KEVIN McGONIGLE



The opinion of the court was delivered by: FRANKLIN S. VAN ANTWERPEN

 VAN ANTWERPEN, J.

 This civil action arose out of the failed franchisor - franchisee relationship between plaintiff Bachman Company ("Bachman") and defendant Kevin McGonigle ("McGonigle"). Beginning on January 3, 1994, and ending January 13, 1994, we held a jury trial in this matter. On January 14, 1994, we entered an order in which we molded the jury verdict into a verdict in favor of McGonigle and against Bachman in the amount of $ 282,870. Before us now is defendant McGonigle's Motion for Contempt and for Orders in Furtherance of Judgment.

 I. Background

 While the underlying issues in this case are not pertinent to our disposition of defendant's motion, we briefly review aspects of the lawsuit, the trial, and certain post-trial events which have led to the present quandary.

 McGonigle owned and operated a Bachman wholesale franchise ("wholesalership"). A dispute arose over McGonigle's efforts to properly market Bachman products. The dispute led to Bachman's termination of the wholesalership agreement and, ultimately, to the instant litigation.

 At trial, plaintiff Bachman argued that defendant McGonigle breached the wholesaler contract by, among other things, not using his "best efforts" to sell Bachman products. McGonigle responded by asserting that, not only did he use his "best efforts" to sell Bachman products, but that plaintiff Bachman acted in a commercially unreasonable manner when it terminated the wholesaler contract and took over and operated McGonigle's business.

 After the close of the evidence, the jury was instructed to determine whether McGonigle had breached the wholesaler agreement, and if so, whether Bachman incurred damages or lost profits as a result of such a breach. Secondly, the jury was instructed to determine whether Bachman acted in a commercially reasonable manner in terminating the wholesalership, and if it did not, to determine what damages McGonigle incurred as a result of such conduct on the part of the Bachman Company. In addition, the jury was given a special interrogatory which read as follows: "Indicate the net proceeds you find the defendant Kevin McGonigle would have received after deduction of sales costs and debts and liens from the fair market sale price of his business." (Plaintiff's Exhibit E, Special Verdict Questions). The issue concerning net business value stems from McGonigle's contractual rights following termination of the wholesalership agreement by Bachman for breach of contract.

 
Termination under Sections 10.1 or 10.2 above shall require Bachman, within the limits of its ability to do so, to operate the business for the account of Wholesaler, deducting its reasonable expenses in connection with the operation thereof, and to sell Wholesaler's Wholesale Distribution Rights to a qualified purchaser at the best price which can reasonably be obtained after proper notice and advertisement. Said sale shall be for the account of Wholesaler, and the proceeds of such sale, after deducting there from any monies owed by Wholesaler to Bachman, the amount of any outstanding liens, and the reasonable costs incurred in effecting the sale, shall be turned over to Wholesaler in exchange for a release of all rights and interest hereunder.

 (emphasis added). As of the date of trial, Bachman had not sold the McGonigle's wholesalership. Accordingly, the parties stipulated that, in its deliberations, the jury should determine the amount that McGonigle would be entitled to for the value of the wholesalership in accordance with the provisions of the Wholesaler Agreement that govern the sale of the wholesalership after a termination of the Wholesaler Agreement (the "Stipulation"). *fn1" At trial, the parties presented testimony as to the value of the wholesalership.

 In our charge to the jury, we instructed the jury about the Stipulation and stated that the jury should determine the net proceeds due McGonigle under the terms of the Wholesaler Agreement. We mirrored the contract language regarding the calculation of net proceeds:

 
That would be the fair market value on the open market, less a ten percent transfer fee required by the contract, and also less any sales costs, debts and liens.

 (Plaintiff's Exhibit D, Jury Charge, at 17). In our Special Verdict Questions, we again mirrored the contract language to direct the jury to determine the fair market value of the wholesalership, less sales ...


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