News story

Maintainco survives MCFA mega-dealer ploy

Thursday, 24 May 2007 ( #311 ) - SOUTH HACKENSACK, NJ, United States
Forklift distributor Maintainco Inc filed on May 23 for reimbursement of more than USD4 million in legal fees and costs stemming from successful litigation it filed against Mitsubishi Caterpillar Forklift America Inc (MCFA). In a decision disclosed on May 2, Judge William C Meehan found MCFA liable for breach of contract and violation of the New Jersey Franchise Practices Act. The case was heard in New Jersey Superior Court's chancery division for Bergen County. Post-decision requests for MCFA legal comment about the case went unanswered. Meehan awarded damages of USD734,000 to Maintainco, has scheduled a July 10 hearing on the fees and costs and is then expected to sign the final judgment. Once filed and docketed, the case begins a 45-day period during which an appeal may be filed. Maintainco sued MCFA in September 2000 to ward off establishment of another Mitsubishi distributor - Mid-Atlantic Handling Systems LLC - in Maintainco's territory. Maintainco president James Picarillo said: "The litigation has been a long drawn out matter that is not yet fully concluded." Maintainco attorney Theodore Margolis expected MCFA would appeal against Judge Meehan's decision. However, he said: "If they appeal, they will find themselves going back into court. This time, it will not take seven years [to get a decision]. It will take seven minutes." Margolis is a senior trial attorney in the Bridgewater, New Jersey, office of the law firm Norris McLaughlin & Marcus PA. Maintainco started selling Mitsubishi forklifts in 1982 and, from 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 and distributes for Big Joe Manufacturing Company in an open region. Maintainco is based in South Hackensack and has another site in South Plainfield, 40 miles (64km) away. According to court filings, MCFA decided in June 1999 to terminate Maintainco as a dealer. "The truth is, in an email six months before the termination letter of January 5, 2000," Margolis said. Mid-Atlantic began operations in Middlesex, New Jersey, in July 2000. It sought bankruptcy protection three years later. Maintainco amended its suit in March 2001 to include Mid-Atlantic as a defendant. MCFA attorneys wanted the case heard in the US Bankruptcy Court in New Jersey, but, in November 2003, bankruptcy Judge Donald Steckroth remanded the litigation to the state court. Operant Material Solutions of NY/NJ LLC, in Middlesex, purchased some Mid-Atlantic assets in December 2003. Margolis said: "To destroy Maintainco, MCFA wanted to put in a second dealer that was selling [forklifts at] less than dealer cost. "The law says that if you want to get rid of a dealer, you come in and buy him out. They did not want to pay." MCFA, of Houston, Texas, USA, uses "Two Brands. One Promise" in marketing Mitsubishi and Caterpillar forklifts. The industry is familiar with the phrase "Two Brands. One Channel" to explain MCFA efforts to create mega-dealerships. "They want to get rid of 25 dealers," Margolis said.
Your Focus