Argo Marine Systems, Inc. v. Camar Corporation

755 F.2d 1006, 40 Fed. R. Serv. 2d 1223, 1985 U.S. App. LEXIS 29400
CourtCourt of Appeals for the Second Circuit
DecidedFebruary 19, 1985
Docket341, Docket 84-7563
StatusPublished
Cited by31 cases

This text of 755 F.2d 1006 (Argo Marine Systems, Inc. v. Camar Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Argo Marine Systems, Inc. v. Camar Corporation, 755 F.2d 1006, 40 Fed. R. Serv. 2d 1223, 1985 U.S. App. LEXIS 29400 (2d Cir. 1985).

Opinions

[1008]*1008CLARIE, District Judge:

In the trial court, the plaintiff-appellant, Argo Marine Systems, Inc. (hereinafter “Argo”), sought compensation from the defendant-appellee, Camar Corporation (hereinafter “Camar”), in the form of orally agreed upon commissions represented to be due to the plaintiff as the result of its being appointed as a sales agent for the defendant. Argo claims to have marketed or contributed to the procurement of sales of Camar’s inert gas system (hereinafter “IGS”), invented and manufactured by Ca-mar; or, in the alternative, that Camar agreed, orally, to compensate it for sales of IGS made by the defendant in territory purportedly assigned exclusively to Argo.1

On appeal, Argo contends: that the trial court erred in finding the plaintiff’s principal witness unworthy of belief; that the decision of the trial court to dismiss plaintiff’s complaint was based upon a misapprehension of controlling legal principles regarding the formation of contracts and the earning of commissions; that the factual findings of the trial court regarding the agreement between the parties, and the sales efforts expended by Argo were clearly erroneous; that the trial court erroneously dismissed plaintiff’s second, third and eighth causes of action at the close of plaintiff’s case; and, that the trial court’s award of discovery sanctions against the plaintiff, pursuant to Rule 37 of the Federal Rules of Civil Procedure, 102 F.R.D. 280, was improper.

Facts

At the times relevant to this appeal, Ca-mar Corporation of Worcester, Massachusetts was in the business of manufacturing inert gas systems (“IGS”). An IGS system cools and cleans the exhaust gases from a tanker vessel’s boiler before its distribution to the ship’s cargo tanks. This inert gas prevents an explosive atmosphere from forming in the empty tanks. As of June 1, 1981, the IGS became a legal requirement for all tankers over 70,000 DWT trading in United States waters. There were approximately 35 U.S. ships affected by this proviso and their identities were commonly known in the marine industry and to Ca-mar. Furthermore, of these, only 12-15 required retrofits, i.e., IGS.

In April 1970, E.R. Franklin became Ca-mar’s worldwide agent. Due to physical injuries which Franklin sustained in an accident, and his resulting hospitalization, Ca-mar cancelled the arrangement it had with him, in March, 1980. Camar, just prior thereto, had begun negotiations with Argo, seeking to retain the latter to sell its IGS product. Argo is a marine and industrial supply house which sold, among other things, pollution control equipment and specialty marine paraphernalia. Previously, said corporation had been approached by Franklin himself who, as worldwide agent for Camar, was exploring the possibility of an agreement between Argo and the E.R. Franklin Company to help distribute Camar’s IGS. On June 9, 1980, a document entitled “Distributor Agreement”, which had been prepared and drafted by Eric Nietsch, an employee of Argo, was submitted to Camar for its approval and execution. Camar amended the proposed agreement and returned it to Argo for its signature. Argo never signed the document.

As drafted, the Distributor Agreement purported to give Argo the exclusive right to market the products of Camar in the United States, Greece, the United Kingdom, Italy and Monaco. However, before it signed the document, Camar struck references to Greece, the United Kingdom, Italy and Monaco from that portion of the agreement which defined the territory encompassed therein. The proposed contract provided in clear cut terms that:

[1009]*1009The relationship between Camar and Argo is that of a Seller and Purchaser only. Argo, its Agents, Representatives and/or employees shall under no circumstances be deemed agents or representatives of Camar____(emphasis added)

After submitting to Camar the Distributor Agreement which it had originally drawn up, Argo apparently experienced a change of heart and thereafter was no longer desirous of a distributorship relationship whereby it would be obligated to pay the purchase price and marketing costs of Camar’s IGS. Instead, Argo wished to act as Camar’s agent or representative. Notwithstanding the Distributor Agreement which it drafted Argo claimed at trial, and maintains on this appeal, that it was agreed that Argo would be Camar’s exclusive sales agent in the United States and, as such, would be entitled to a ten per cent commission on all IGS sales made in that territory.

The trial court found that Camar had made it clear to Argo that pending the resolution of whether Argo would agree to become the purchaser and pay for IGS manufactured by Camar under the Distributor Agreement, the only basis for allowing any compensation to Argo would be in those instances where Argo sold a system in a transaction in which Camar was not called upon to participate. The court below held that at no time did Camar create a reasonable expectancy that Argo would be entitled to commissions on sales made by Camar, where Argo had not actually produced the order.

Discussion

I. The Trial Court’s Finding That Plaintiffs Principal Witness Was Unworthy Of Belief

To a very great extent, the trial in this case was dominated by a question of credibility. Plaintiff’s witnesses testified to the existence of a sales agency agreement with the defendant and to numerous acts on their part which purportedly resulted in several sales of the defendant’s IGS. On the other hand, the defendant’s witnesses represented that no such agency arrangement had been agreed to and that the plaintiff was not in fact a procuring cause of any of its IGS sales. The trial court found the testimony of the defendant’s witnesses more worthy of belief and that the plaintiff failed to sustain its burden of proof to establish its claim to compensation by a fair preponderance of the believable evidence. The trial judge’s finding was based on his conclusion that the trial was “permeated with perjury of the principal witness produced by the plaintiff, on the witness stand, including what was demonstrated to be the manufacture of critical written material____” The manufacture of written evidence concerned the desk calendar pads of Eric Nietsch, which were submitted to corroborate his testimony regarding sales meetings, telephone calls and the receipt of orders. When the defendant’s attorney originally sought discovery of Nietsch’s calendar pads, it was reported by the plaintiff that they could not be located. Suddenly, after the first day of the original trial of this matter, after the trial court expressed its skepticism of Nietsch’s testimony, the pads were discovered just a few feet from Nietsch’s desk at Argo. The appellant insists that the trial judge committed a “devastating and unequivocal error” in concluding that Nietsch fabricated this evidence.

Argo claims that the trial judge concluded that Nietsch had back-dated the calendar pads with information which the trial judge believed Nietsch could not have possibly possessed on the date in question, May 14, 1980.

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Bluebook (online)
755 F.2d 1006, 40 Fed. R. Serv. 2d 1223, 1985 U.S. App. LEXIS 29400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/argo-marine-systems-inc-v-camar-corporation-ca2-1985.