Newsletter #422 (View other news stories)
Panel affirms Maintainco case against MCFA
Trenton, NJ, United States
Wednesday, 5 Aug 2009
An appellate court in New Jersey has affirmed Maintainco’s trial court verdict against Mitsubishi Caterpillar Forklift America Inc (MCFA), holding that a franchisor such as MCFA cannot constructively terminate a dealer.
"We are, of course, delighted with the decision of the court, and we look forward to continuing to work hard to continue to make Maintainco a successful and respected dealership," says James G Picarillo, president of Maintainco. In New Jersey, the dealership is based in South Hackensack and operates another location in South Plainfield.
A three-judge panel of the Superior Court of New Jersey Appellate Division in Trenton heard oral arguments on 23 March and disclosed a decision on 30 July. Judge Joseph F Lisa delivered the opinion for a unanimous court. The other panel members were Judges Susan L Reisner and Paulette Sapp-Peterson.
The Maintainco legal team has filed motions to apply for the defendant’s payment of Maintainco’s cost of appeal. Theodore Margolis, who represents Maintainco, is a senior trial attorney in the Bridgewater, New Jersey office of the law firm Norris McLaughlin & Marcus PA.
The MCFA legal team may file either a motion for reconsideration or a petition for certification to the Supreme Court of New Jersey. Kevin McNulty and H John Shank II represented MCFA in the oral arguments. Each is a director of business and commercial litigation with the Newark, New Jersey office of the law firm Gibbons PC. Requests to MCFA counsel for comment were not answered.
In May 2008, Maintainco filed for reimbursement of more than USD4 million in legal fees and costs shortly after a trial judge found MCFA liable for breach of contract and violation of the New Jersey Franchise Practices Act (Forkliftaction.com News #311). The recent appellate opinion reduced the amount by USD477, 611, "representing expert fees", but interest on the judgment that the trial court awarded Maintainco exceeds the expert fee amounts.
Maintainco sued MCFA in September 2000 to stop the termination by MCFA of Maintainco’s franchise. MCFA established another Mitsubishi distributor, Mid-Atlantic Handling Systems LLC, in Maintainco’s exclusive territory. Maintainco began selling Mitsubishi forklifts in 1982 and, starting in 1985, was granted an exclusive Mitsubishi sales territory covering 12 counties in northern New Jersey. Maintainco added Toyota Material Handling USA products in nine overlapping counties in 1992.
According to court filings, MCFA decided in June 1999 to terminate Maintainco as a dealer. Mid-Atlantic began operations in July 2000 and, in 2003, filed for bankruptcy protection and was liquidated.
Joint venture MCFA of Houston, Texas uses a "two-brands, one-promise" strategy in marketing lines of Mitsubishi and Caterpillar forklifts. The success of the Maintainco litigation affirms the rights of a franchisee and may influence the ongoing MCFA effort to have certain dealerships represent both brands.
To stay the judgment by the trial court, MCFA had to file a letter of credit for the full amount of the judgment of more than USD5 million plus interest. Maintainco holds the letter of credit.
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