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Stein v. Malden Mills

DECEMBER 8, 1972.




APPEAL from the Circuit Court of Cook County; the Hon. NATHAN M. COHEN, Judge, presiding.


Plaintiff brought this action for an accounting seeking to recover damages for an alleged breach of an oral contract. Trial was had before the court sitting without a jury and two judgments totaling $78,158.09 were entered in favor of plaintiff. Defendant appeals to this court contending: (1) that the trial court erred in finding that plaintiff had an enforceable contract with defendant; (2) that the trial court erred in awarding commissions to plaintiff for the period after the termination of his employment; (3) that evidence was improperly excluded; and (4) that the trial court's finding indicates its misconception of the case.

Plaintiff was a salesman with 40 years of experience in the upholstery industry. Malden Mills and American Velour Mills, which merged with Malden, (for purposes of this opinion both firms will be considered as one — Malden) wanted to enter the upholstery fabric market. Since the remainder of the facts are in dispute, it is necessary to present the theory of each side separately.

Plaintiff's evidence indicates that during the June 1967 furniture "market" he met Harry Goldstein, owner and president of American Velour; Milton Glasser, who Goldstein said represented Aaron Fuerstein, the president of Malden Mills; and Seymour Ett, an upholstery fabric salesman. At that meeting the proposed merger of American Velour and Malden Mills was discussed as was Malden's desire to enter the upholstery fabric industry. Plaintiff testified that the terms of employment were "I was to get five percent commission on all goods sold. Five percent commission on reorders of anything sold. Five percent commission as long as those customers would reorder those goods." Goldstein explained the terms to Glasser who knew nothing about the upholstery fabric business. Glasser agreed, they shook hands, and departed. No one indicated how long the employment relationship was to run or what effect, if any, termination would have on commissions.

Plaintiff's knowledge of the industry was used by Malden to develop its fabric line. Plaintiff proceeded to visit various potential customers, selling them small orders of fabric to be used on furniture at various shows. Based upon the response at the shows, he would then receive reorders for the goods. This way he obtained many new customers for Malden, but the efforts were all at his own expense, his only compensation being his commissions. Through plaintiff's efforts, this facet of Malden's business grew to over $2,000,000 in annual sales, while plaintiff's commissions grew from about $700 per month in July, 1967 to $3,000 per month in May, 1968.

At the June, 1968 furniture show plaintiff again had a conversation with Ett, Glasser, Fuerstein and Joseph Gosule, product manager of Malden's upholstery division. Fuerstein was very pleased with plaintiff's efforts. Shortly after that meeting, however, Gosule telephoned plaintiff and said his employment was terminated as of July 1, 1968 and he would receive commissions on everything on the books at that time.

Plaintiff testified that goods would typically be reordered by a customer for about three years, and as of the date of trial, December, 1969, customers were still buying the same style number he had originally sold them. The parties agreed at trial, however, that three years from June, 1967 would be a reasonable cut-off date for determining plaintiff's damages.

The evidence presented by defendant painted a somewhat different picture. Milton Glasser had over 30 years of experience in various phases of the textile industry and, at the time of the agreement between plaintiff and defendant, was an executive of Malden Mills in charge of product development. He was given the assignment to "develop lines" and to "do whatever was necessary" to "get into new fields." Glasser testified that this included the authority to employ. Malden was contemplating entering the velour upholstery fabric industry but knew very little about it. In April or May of 1967, Goldstein introduced Glasser to plaintiff. They discussed the new market and Glasser asked plaintiff what compensation would be acceptable. Plaintiff said the customary commission was five percent. Glasser testified that he understood trade practice to require payment "on all sales that a man makes plus whatever comes in while he is in your employ" on reorders. On cross-examination, however, it was demonstrated that at the time Glasser's knowledge of the upholstery fabric industry was practically nil and he was not familiar with the custom in that industry regarding payment of commissions to a salesman after he leaves the company's employ. Glasser also stated that plaintiff started selling for Malden in April or May of 1967, made sales every month, and received an advance in early June, 1967. None of that testimony corresponds to the commission statements introduced by both plaintiff and defendant. Those statements indicated that the first commissions accrued to plaintiff in July, 1967, and the first advance made to plaintiff came on October 4, 1967. Plaintiff's employment was terminated in late June, 1968 because, according to Glasser, defendant felt that proper market coverage was not being obtained.

Defendant called plaintiff as an adverse witness and he testified that he was to receive commissions for reorders as long as the customer kept purchasing the style numbers he had sold. These commissions would continue as long as reorders were made but in no event past his death.

Before entering his findings, the trial judge made the following comments on the various witnesses:

"Mr. Glasser has been devious in his testimony * * *. As I observed his demeanor and I listened to him I said the witness is evasive, devious; he was certainly that, at least. Apparently Mr. Fuerstein is cut of the same cloth. *fn1

The court is of the opinion that Mr. Stein, Mr. Ett, [plaintiff's witness], testified truthfully and forthrightly.

Mr. Glasser testified deviously, evasively and in a character and manner and tone and demeanor which left his testimony wholly unconvincing to this court.

Mr. Gosule testified in a more sincere manner and tone. His demeanor was such that the court felt that Mr. Gosule was telling partial truths. However, he was certainly an uninformed witness and he appeared to be merely an instrumentality ...

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