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Innovative Sales and MacHine Services, LLC v. Maier Usa, LLC

United States District Court, D. Connecticut

March 31, 2016

INNOVATIVE SALES AND MACHINE SERVICES, LLC, Plaintiff,
v.
MAIER USA, LLC, Defendant.

MEMORANDUM OF DECISION

DONNA F. MARTINEZ, Magistrate Judge.

Plaintiff, Innovative Sales and Machine Services, LLC ("ISMS"), brought this breach of contract action against defendant, Maier USA, LLC ("Maier"). After a two-day bench trial on December 16 and 17, 2015, I make the following findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.[1]

I. Findings of Fact

A. Parties & Background

This case involves a dispute between a manufacturer of Swiss-style screw machines and one of its distributors. The individuals involved came to know one another through many years in the industry working for different manufacturers and distributors. Two of them entered into an oral agreement on behalf of the parties. For nearly two years, they carried on without incident, but the relationship eventually fell apart, leading to the instant lawsuit.

Plaintiff ISMS, a distributor of Swiss-style screw machines, is a limited liability company in which John Schuld is the only member. (Tr. 12/17/15 AM, pp. 4, 7.)

Defendant Maier USA is a limited liability company owned by Michael Maier, who lives in Germany and also owns Maier Germany. (Tr. 12/17/15 PM, pp. 71-72, 80.) Maier USA was founded in 2008 to import and distribute Maier Germany products in the United States. (Tr. 12/17/15, pp. 71-72.) Before 2008, Maier imported and distributed its machines through Methods Machine Tools ("Methods"), the "largest importer of machine tools privately owned" in the United States. (Tr. 12/16/15 AM, p. 18.) James Kucharski was the product manager of the Maier line at Methods. (Tr. 12/16/15 AM, p. 19.) He later became the national sales manager at defendant Maier.[2] (Tr. 12/16/15 AM, pp. 17-19; Tr. 12/17/15 PM, p. 72.)

Schuld and Kucharski met in or around 1999. (Tr. 12/16/15 AM, p. 20; Tr. 12/17/15 AM, p. 6.) At the time, Schuld worked for Rudel Machinery Company ("Rudel"), which distributed screw machines manufactured by another company called Tornos, where Kucharski was the regional sales manager. (Tr. 12/16/15 AM, p. 20; Tr. 12/17/15 AM, p. 6.) Schuld and Kucharski became friends and socialized. (Tr. 12/16/15 AM, p. 22; Tr. 12/17/15 AM, p. 6.)

In 2001, Schuld left Rudel to work for his father's company rebuilding, manufacturing, and selling screw machine tooling and replacement parts. (Tr. 12/17/15 AM, pp. 6-7.) Schuld remained in contact with Kucharski. (Tr. 12/17/15 AM, pp. 7-8.) After four years at his father's company, Schuld left to start ISMS. (Tr. 12/17/15 AM, pp. 4, 7.) Schuld hired two independent contractors, Jeff Judd and Barry Ertel. (Tr. 12/17/15 AM, pp. 9, 10, 22, 58, 68-9, 71, 98.)

After forming ISMS, Schuld contacted Kucharski, who at the time was working as the regional sales manager of Tornos, to ask if Kucharski was satisfied with Tornos's New England distributor, Rudel. (Tr. 12/17/15 AM, p. 8.) He was not. (Tr. 12/17/15 AM, p. 8.) In or around 2005, Rudel "fell apart, " and Kucharski asked ISMS to become the regional distributor of Tornos products. (Tr. 12/16/15 AM, pp. 22-23; Tr. 12/17/15 AM, pp. 8-9.)

By 2008, Kucharski was working for defendant Maier as its national sales manager. (Tr. 12/16/15 AM, pp. 17-19; Tr. 12/17/15 PM, p. 72.) ISMS still was distributing Tornos products. (Tr. 12/16/15 AM, pp. 24-27; Tr. 12/17/15 AM, pp. 11, 13.) Kucharski approached Schuld to discuss ISMS becoming a distributor of Maier products. (Tr. 12/16/15 AM, pp. 24-27; Tr. 12/17/15 AM, pp. 11, 13.)

B. The Agreement

In or around April 2008, Schuld and Kucharski, on behalf of the parties, entered into an oral distribution agreement. The material terms included (i) services; (ii) territory; (iii) exclusivity; (iv) commission; and (v) duration and termination.

1. Services

Under the contract, ISMS was to serve as Maier's distributor. ISMS would market, promote, and sell Maier machines and ancillary equipment. (Tr. 12/16/15 AM, pp. 25-26, 73, 106-07; 12/17/15 AM, pp. 12, 26-27, 90.) ISMS was to pay its own marketing ...


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