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GREEN BAY PACKAGING, INC. v. HOGANSON & ASSO.

August 7, 1973

GREEN BAY PACKAGING, INC., A CORPORATION, PLAINTIFF,
v.
HOGANSON & ASSOCIATES, INC., A CORPORATION, AND ALLAN HOGANSON, DEFENDANTS, STRUCTO DIVISION OF KING-SEELEY THERMOS CO., A CORPORATION AND NEWELL MFG. CO., A CORPORATION, ADDITIONAL DEFENDANTS ON COUNTERCLAIM.



The opinion of the court was delivered by: Bauer, District Judge.

MEMORANDUM OPINION AND ORDER

This cause comes on the plaintiff's motion to strike or dismiss the defendants' six count counterclaim.

This is an action for declaratory judgment pursuant to 28 U.S.C. § 2201. Jurisdiction of this Court is based on diversity of citizenship. It is alleged by the plaintiff that the matter in controversy exceeds $10,000 exclusive of interest and costs.

The plaintiff, Green Bay Packaging, Inc. ("Green Bay"), is a corporation organized and existing under the laws of the State of Wisconsin, with its principal place of business at Green Bay, Wisconsin. It is engaged in the manufacture and sale of paperboard corrugated containers.

The defendant Hoganson and Associates, Inc. is a corporation organized and existing under the laws of the State of Illinois, with its principal place of business at Freeport, Illinois. It is engaged in the business of selling on commission and acting as a manufacturer's representative. Defendant Allan Hoganson is a resident of Freeport, Illinois and is the principal owner and control person of Hoganson & Associates, Inc.

The plaintiff in the complaint alleges, inter alia, the following facts:

  1.  On or about January 1961, plaintiff entered
      into an oral arrangement with the defendant
      Allan Hoganson, who was doing business as
      Hoganson & Associates, an unincorporated
      entity. The defendant indicated that he would
      procure sales of plaintiff's product to the
      Structo Manufacturing Company ("Structo") in
      Freeport, Illinois, in return for which he
      would receive a five percent (5%) brokerage
      commission. This arrangement was never
      formalized. An attempt was made in 1961 to
      reduce said arrangement to writing, but no
      meeting of the minds was achieved, and,
      consequently, the arrangement remained oral.
      Defendant Hoganson & Associates, Inc. became
      incorporated in the State of Illinois and
      succeeded to the Business of Hoganson &
      Associates. During the period from 1961 to
      1970, defendant played an increasingly less
      active role in obtaining orders from Structo,
      as a reflection of which all of the parties
      twice arranged to reduce the percentage
      commission to be paid defendants on sales to
      Structo. Finally, in 1970, Structo requested
      of plaintiff that it be allowed to deal
      directly with the plaintiff. The existing
      arrangement provided that whenever an order
      was accepted from Structo, a commission was
      paid to Hoganson & Associates, Inc. The
      continued efforts to enter into a contract
      failed, for the parties were unable to agree
      upon the key terms which were necessary for
      any proper agreement.
  2.  On or about March, 1963, plaintiff entered
      into an oral arrangement with defendant Allan
      Hoganson, doing business as Hoganson &
      Associates, an unincorporated entity, whereby
      the defendant indicated that he would procure
      sales of plaintiff's products to Newell
      Manufacturing Company ("Newell") in Freeport,
      Illinois, in return for which he would
      receive a five percent brokerage commission.
      Due to the previous failure of the parties to
      agree upon a contract concerning Structo, the
      parties did not attempt to reduce this
      arrangement as to sales to Newell to writing.
      Again over the years,

      defendants also assumed an increasingly less
      active role in obtaining orders from Newell,
      as a reflection of which all of the parties
      twice arranged to reduce the percentage of
      commission to be paid to defendant on sales
      to Newell. In 1970, Newell also requested
      that it be allowed to deal directly with the
      plaintiff.
  3.  The two above described arrangements between
      plaintiff and defendants were terminated by
      specific agreement of the parties on April
      28, 1970, effective May 1, 1970. Letters to
      this effect were sent by plaintiff to Structo
      and Newell on May 5, 1970, advising them
      that, henceforth, they could deal directly
      with plaintiff. Pursuant to its termination
      agreement with defendants, plaintiff agreed
      to pay defendants' commission not only on
      those orders accepted prior to termination,
      but also any orders accepted from either
      Structo or Newell for the remainder of the
      calendar year. Purchase orders were received
      by plaintiff directly from Structo and Newell
      during this period, and defendants were
      offered, and accepted, payment of a
      commission on all orders accepted by
      plaintiff through December 31, 1970.
  4.  A dispute exists between the parties with
      respect to the foregoing matter. It is the
      position of the plaintiff that the above
      described arrangements between plaintiff and
      defendants have been absolutely terminated,
      with defendants having no further rights,
      privileges, claims, obligations or
      responsibilities thereunder. The plaintiff
      has the following reason for its position:
      a. that any claimed contract or agreement was
      void ab initio for vagueness and uncertainty,
      and consequently would be unenforceable;
      b. that having accepted the benefits of
      plaintiff's payment of commissions in the
      face of an inability to come to agreement,
      defendants are estopped to claim on
      agreement;
      c. that any purported agreement is
      unenforceable for failure to comply with the
      Statute of Frauds, Chapter 59, Section 1 of
      the Illinois Revised Statutes;
      d. regardless of the terms of the purported
      arrangement, defendants accepted payment of
      commissions from May 1, 1970 through December
      31, 1970, in termination of said arrangement
      which was adequate consideration for the
      agreed terms of an accord and satisfaction,
  ...

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