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S.a. Maxwell Co. v. Desoto

OPINION FILED MARCH 28, 1979.

S.A. MAXWELL COMPANY, PLAINTIFF-APPELLEE,

v.

DESOTO, INC., DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. WILLIAM F. PATTERSON, Judge, presiding.

MR. JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT:

Plaintiff, S.A. Maxwell Company, Inc., a distributor of wall coverings manufactured by defendant DeSoto, Inc., brought this suit to recover for damages sustained because of defendant's failure to give reasonable notice to plaintiff of its termination as a distributor. A jury returned a verdict for plaintiff in the sum of $26,750; the trial court denied defendant's motion for judgment notwithstanding the verdict and entered judgment on the verdict. On appeal defendant contends that the trial court erred in denying its motions for a directed verdict and for judgment n.o.v.; that the court erred in instructing the jury; and that the court erred in the admission of plaintiff's damage evidence.

Plaintiff sold wall coverings made by defendant and other manufacturers to retail outlets such as wallpaper and paint stores. There was no written contract between the parties to this suit, but they had dealt with each other for many years.

Wall coverings are sold through sample books; each book represents a certain line. Plaintiff purchased sample books from defendant and then its salesmen called on retailers, promoted the line, and attempted to sell the books to the retailers. Customers examined the sample books at the retail outlets and selected the wall coverings they wished. Retailers placed orders with plaintiff and the wall coverings were shipped to the retailers from plaintiff's inventory. Sample books ordinarily had a life of two years.

In 1971 plaintiff was distributing six of defendant's wall covering lines. Two of those lines, Famous Flocks and P.D.Q., are the matters in dispute. In December 1971 defendant's regional sales manager, Charles Fink, told plaintiff's president, Lee Emmert, that defendant planned on distributing fabric-backed wall coverings directly to retailers. Defendant considered Famous Flocks such a wall covering. Emmert stated that Famous Flocks was not fabric-backed and that defendant should not terminate plaintiff's distribution of the line. Fink replied that he would consider plaintiff's objections, but made no promise to change defendant's plans.

In February 1972 defendant sent plaintiff its written projected purchase figures for 1972. A notation after the words Famous Flocks read "applicable only if distribution assigned to you." The notation was explained to plaintiff as meaning that defendant was considering distributing the line directly but that a decision had not been made. In June, Fink told Emmert a decision to distribute Famous Flocks had been made final. In a subsequent conversation with Fink's superior, Kenneth Rohl, Emmert was told defendant intended to maintain the status quo.

In August 1972 Fink told Emmert defendant was going to terminate all its lines with plaintiff as the books expired. Fink stated, however, that the matter was important enough to warrant plaintiff's taking it up with Fink's superiors. Emmert thereupon talked to defendant's comptroller who agreed that defendant should not distribute directly. At a meeting with defendant's comptroller, plant manager and divisional manager, Emmert explained the difficulties defendant would have distributing directly to retailers. After his explanation, Emmert was told by defendant's representatives that things would work out to plaintiff's satisfaction.

In September 1972 plaintiff was informed that all six lines would be terminated as the books expired. In a letter dated October 16, 1972, Fink confirmed a September discussion in which it was stated defendant would not offer the forthcoming P.D.Q. collection to plaintiff. Famous Flocks expired in October 1972, and P.D.Q. expired in January 1973.

In January 1973, at a national convention, Emmert sought to replace defendant's lines. He had difficulty doing so because, in order to satisfy its customers, plaintiff maintained high standards of quality. Plaintiff did not obtain replacement lines until the autumn of 1973 and the spring of 1974. Emmert testified that it was not unusual for plaintiff to first see replacement sample books as little as 30 days before the expiration date of the old books.

Defendant's initial argument is that the trial court erred in not directing a verdict in its favor or in not entering judgment notwithstanding the verdict. It maintains that the notice it gave plaintiff of the termination of the distributorship was reasonable as a matter of law. Plaintiff counters that the reasonableness of the notice was a question to be determined by the jury, and that its decision should not be disturbed.

This matter must be determined under the familiar principle that verdicts ought to be directed and judgments n.o.v. entered only in those cases in which all the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on the evidence could stand. (Pedrick v. Peoria & Eastern R.R. Co. (1967), 37 Ill.2d 494, 229 N.E.2d 504.) Defendant agrees that it had a duty to give timely notice to plaintiff of the termination of its distributorship, but maintains that the notice it gave was timely and reasonable. Both sides agree that a reasonable notice period is one which gives the distributor an opportunity to put its house in order. We believe that, from the evidence adduced, the jury could reasonably find that the notice given by defendant was not reasonable.

• 1 Discussions between the parties regarding termination of the distributorship began in December 1971, but the jury could have concluded that defendant did not give adequate, unequivocal notice until September 1972. The jury could have decided that as late as August 1972 defendant, through its comptroller, assured plaintiff that things would work out to plaintiff's satisfaction. Since the Famous Flocks line was to expire in October 1972 and P.D.Q. was to expire in January 1973, the jury could have concluded that notice of termination given in September 1972 was insufficient. We cannot say that such evidence, when viewed in a light most favorable to plaintiff, so overwhelmingly favors defendant that no contrary verdict based on the reasonableness of the notice could stand.

Defendant points out that plaintiff's president testified it was not unusual for him to first see replacement sample books only 30 days before the expiration date of the old books, and therefore it argues a 30-day notice of termination was sufficient. Termination of a distributorship, however, is a far more difficult position for a distributor than making a decision as to whether it should take on a new line. The jury could have determined that plaintiff was entitled to a longer period of time for notice of termination. Plaintiff also offered evidence of its efforts and difficulties in finding replacement lines. Plaintiff's president testified that it began the search for replacements at a national convention in January 1973. Plaintiff was unsuccessful in its efforts for several months because of its concern for distributing quality products and giving good service. We believe the trial court correctly denied defendant's motions for a directed verdict and for judgment notwithstanding the verdict.

Defendant next contends that the trial court committed reversible error in instructing the jury. It singled out one instruction given the jury over defendant's objection and two instructions ...


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