Jeremy I Silberman

By Roger Renstrom

The New Jersey Supreme Court has decided in favour of Mitsubishi forklift franchisee Maintainco Inc and against equipment manufacturer and franchisor Mitsubishi Caterpillar Forklift America Inc (MCFA), ending a decade-long legal dispute.

"We have worked for over 20 years to build the Mitsubishi forklift business here in northern New Jersey," says James G Picarillo, Maintainco president. "We made the investment in money, in sweat equity and in dedication to Mitsubishi, so when they tried to destroy us, we decided that we could not let it happen. We are gratified by the court's ruling and believe justice has been done. We look forward to the success of our efforts to continue to build the Mitsubishi brand over the coming decades."

Last month, the Trenton-based court denied MCFA's request for a review of the appellate division's 30 July decision in favour of Maintainco (Forkliftaction.com News #422).

"The Supreme Court's ruling effectively ends this litigation with Maintainco the prevailing party," says Jeremy I Silberman, an attorney representing the plaintiff. "Maintainco keeps its Mitsubishi forklift dealership, keeps its exclusive sales territory and keeps the lower courts' award of a very substantial monetary judgment."

The dollar amount was not disclosed. "The financial arrangements with MCFA have been set, but it would not be appropriate to detail them", notes principal Maintainco trial attorney Theodore Margolis.

With its decision, the court upheld the protection of the New Jersey Franchise Practices Act for equipment dealers and other franchisees that a franchisor may have "constructively terminated".

The ruling upheld appellate and trial court decisions that Maintainco is entitled to continue as the exclusive Mitsubishi dealer in northern New Jersey and affirms the monetary damages award. Margolis, Silberman and Haekyoung Suh, all with the Bridgewater, New Jersey office of the Norris, McLaughlin & Marcus law firm, represented Maintainco.

MCFA attorneys Kevin McNulty and H John Shank II with the Newark, New Jersey office of the law firm Gibbons PC did not respond to a request for comment about the supreme court decision or how it might impact MCFA business practices.

Houston, Texas-based MCFA was formed in 1992 as a joint venture of the industrial manufacturing and trading units of Tokyo-based Mitsubishi Group and an industrial subsidiary of Caterpillar Inc of Peoria, Illinois. MCFA makes Mitsubishi and Caterpillar forklifts and distributes the equipment in North America using a "Two Brands, One Promise" marketing strategy.

Family-owned Maintainco has New Jersey locations in South Hackensack and South Plainfield and has been the Mitsubishi dealer in the 12-county region since 1982. In 1999, MCFA decided to terminate Maintainco as part of a plan to reorganise its distribution network into larger regional dealerships. When Maintainco refused to voluntarily give up its Mitsubishi dealership, MCFA engaged in a course of conduct designed to force Maintainco to drop the line, including appointing a second dealer in Maintainco's territory, say Maintainco attorneys. The second dealer was Mid-Atlantic Handling Systems LLC.

Maintainco sued, claiming that in 1985 Maintainco was granted the right to be the exclusive Mitsubishi dealer in the territory although the dealership agreement did not expressly use the term "exclusive". The suit argued that Maintainco qualified for the protection of the state franchise practices act and that MCFA's appointment of the second dealer in the territory breached the contract and illegally terminated Maintainco's franchise in violation of the statute.

By filing the lawsuit, Maintainco was able to retain its Mitsubishi business while the litigation was pending. However, through investigations and the litigation discovery process, Maintainco attorneys found that MCFA gave the new dealer better pricing than Maintainco, supplied the new dealer with Maintainco's customer lists and paid for letters sent to Maintainco's customers directing them to buy from the new dealer. In further discovery of MCFA internal emails, it was learned that the executive vice president wanted to "ditch" Maintainco.

A 20-day trial occurred in 2007. Judge William C Meehan found in favour of Maintainco and awarded a multi-million-dollar judgment for damages including attorneys' fee and litigation costs (Forkliftaction.com News #311).

The appellate division awarded Maintainco additional attorneys' fees for the costs of the appeal and deducted some of the costs awarded by the lower court.