Samson Lift Technologies LLC v. Jerr-Dan Corporation et al
MEMORANDUM AND ORDER granting in part and denying in part pltf's Motion for Partial Summary Judgment 72 . 1) GRANTED with respect to Jerr-Dans violation of the Territorial Promise claim;2) DENIED in all other regards.A separate scheduling order will issue.Signed by Honorable Sylvia H. Rambo on 08/11/11 (ma, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
SAMSON LIFT TECHNOLOGIES,
Civ. No. 09-1590
Before the court is Plaintiff’s motion for partial summary judgment on
liability on its breach of contract claim.1 (Doc. 72.) For the reasons that follow,
Plaintiff’s motion will be granted in part and denied in part.
On June 4, 2004, Plaintiff, Samson Lift Technologies, LLC (“Samson”)
acquired ownership of a patent that related to the “use, manufacture, marketing,
advertising, sale, distribution and provision of a fork lift apparatus adapted to be
Plaintiff has also brought a breach of the covenant of good faith and fair dealing claim
but has not moved for summary judgment on that claim, as such, it will proceed to trial.
In Forbes v. Twp. of Lower Merion, 313 F.3d 144, 148–49 (3d Cir. 2002), the Third
Circuit reaffirmed its supervisory rule first announced in Vadino v. A. Valey Engineers, 903 F.2d 253,
259 (3d Cir.1990) that “the district courts in this circuit [must] accompany grants of summary judgment
hereafter with an explanation sufficient to permit the parties and this court to understand the legal
premise for the court’s order.” Vadino, 903 F.2d at 259. Here, the court will identify those facts that are
subject to genuine dispute, and cite to the record in order to highlight the precise nature of any disputed
facts. The court will not cite to the record where the facts are undisputed; instead, the court will rely on
the statements of material fact and admissions submitted by the parties. The materiality of any
genuinely disputed facts will be analyzed in the discussion section below.
coupled to a truck or trailer.” (Pl.’s Statement of Material Facts (“SMF”) ¶¶ 1, 3.)
The parties and the court have generally referred to this piece of equipment as a sideloading vehicle retriever (“SLVR”) because it allows a tow truck to pull along side a
parked car — as opposed to in-front of, or behind — and, by lowering and extending
forks can extract a vehicle from a parked spot without any damage to the parked
vehicle. Although Samson acquired a U.S. Patent for this technology, it did not have
the capacity to manufacture the SLVR in the United States. Therefore, Samson
searched for a manufacturing company with appropriate resources and marketing
abilities to manufacture the SLVR.
By late 2003, Samson considered two companies, Jerr-Dan and Miller,
to be the front runners. For financial and marketing reasons, Samson chose to enter
into a licensing agreement with Jerr-Dan. During the process of negotiating the
terms of the licensing agreement, discussions also took place concerning entering
into a distributor agreement. However, the parties greatly contest whether
conversations merely took place, or actual promises were made to enter into a
distributor agreement. (Pl.’s SMF ¶ 16 (citing to a number of emails and other
correspondence that Samson argues constitute promises by Jerr-Dan representatives
to enter into a distributor agreement immediately after signing the license
agreement); Def.’s SMF ¶ 16 (citing the deposition of Jerr-Dan representative Jeff
Weller stating that “he could not recall agreeing to ‘do a distributor agreement
immediately upon signing the license agreement.’”).)
On June 16, 2004, the parties executed an initial license agreement. A
representative of Samson stated that the agreement was entered into based on JerrDan’s alleged promise that a distributor agreement be entered into promptly. (Pl.’s
SMF ¶ 17.) Defendants cite to the deposition of Jeff Weller, a representative of JerrDan, to rebut this claim. (Def.’s SMF ¶ 17.) Subsequent to the execution of the
initial license agreement being entered into, Defendant OshKosh Corp. (“OshKosh”)
acquired Jerr-Dan. Samson claims that after this acquisition, Jerr-Dan and OshKosh
demanded changes to the initial license agreement, including changes regarding
patent protection and disclosure. (Pl.’s SMF ¶ 18.) On July 22, 2004, the final
License Agreement was signed by all parties.3 (Pl.’s SMF ¶ 19.)
Samson claims that the License Agreement contains the following
specific promises by Jerr-Dan: exclusivity targets would be set at 350 SLVR’s for
the period from the agreement’s inception through June 30, 2006 and each twelve
month period thereafter (Pl.’s SMF ¶ 20)4; Jerr-Dan would “‘continuously and
diligently procure’ and maintain facilities and trained personnel adequate to make
reasonable commercial efforts (Pl.’s SMF ¶ 22(a), the “Resource Promise”); JerrDan would “do the foregoing in a manner ‘no less thorough, diligent, and
professional’ than Jerr-Dan would with its other products” (Pl.’s SMF ¶ 22(b), the
“Non-Discrimination Promise”); “Jerr-Dan promised to sell the Samson Product only
in United States” (Pl.’s SMF ¶ 24(a), the “Territorial Restriction” promise); and that
the License Agreement contained a patent protection clause whereby Jerr-Dan would
inform Samson if it applied for a patent for any “Improvements” to the SLVR during
Plaintiff has attached the License Agreement as Exhibit 3 to its motion and repeatedly
cites to this document as the License Agreement. Defendants do not refute that this document is the
License Agreement that all parties entered into. However, the court notes that the attached document is
dated June 16, 2004, not July 22, 2004. (See License Agreement, Ex. 3, Doc. 73-3.)
Jerr-Dan does not contest the exclusivity targets outlined in the Licensing Agreement,
however, Jerr-Dan does point out that the agreement contemplated for adjustments in the targets based
on “reasonable market conditions.” (Def.’s SMF ¶ 20.)
the applicability of the License Agreement. (Pl.’s SMF ¶ 24(b), the “Patent
On February 14, 2006, the parties entered into a Distributor Agreement.
(Doc. 73-11, Ex. 3, Distributor Agreement.) Under the Distributor Agreement, JerrDan was obligated to: train employees and representatives in the general use of the
SLVR5 and, Jerr-Dan was to provide, “upon [Samson’s] request and upon mutually
agreed upon terms, . . . reasonable assistance during major sales presentations to
governmental representatives.” (Pl.’s SMF ¶ 25; Def.’s SMF ¶ 26; Pl.’s SMF ¶ 26,
the “Support Promise.”)
Samson claims that the above alleged “promises” were incorporated into
the Agreements, and thus actionable under contract law. (Pl.’s SMF ¶¶ 27, 29.) JerrDan disputes that any such “promises” were incorporated into either the License
Agreement or Distributor Agreement and thus also disputes that they are actionable
under these contracts. The facts and evidence in record — inluding depositions,
declarations and affidavits from various employees of the respective companies —
diverge greatly with regard to what “promises” or “representations” were made
during the course of negotiating both the Licencing Agreement and Distributor
Agreement. (See Amend. Compl. ¶¶ 45, 46, 47, 48, 49, 57, 59, 61, 61, 63, 71; Decls.
Baish, Anderson, D’Angelo, Joel Amsley, Kuriakose, Wasserman, Anderson,
Gelbart; Deps. Joel Amsley, Karen Seylar Amsley, Weller, Blankenfeld, Kuiakose,
Hammond, Saffelle, Chiaramonte, Surace, D’Angelo, Carberry, Smith, Walter,
Aiken, Rutenberg, Lazarus, Anderson, Gelbart, Kimmitt, Badgley, Szews.)
Although the number of individuals to be trained was to be at Jerr-Dan’s “sole
discretion,” at least a total of three (3) employees of Samson were to be trained at no additional cost.
Although the parties generally agree that a Licensing Agreement and a
Distribution Agreement were entered into, they dispute the intent of the parties
regarding some of the language contained in the Agreements. The parties also
dispute at what point subsequent to the signing of the Licensing Agreement the
Distribution Agreement was to be entered into. Finally, perhaps the largest
contention between the parties pertain to whether or not Jerr-Dan made “reasonable
commercial efforts” to market the SLVR in a manner consistent with it other
products. The court will discuss each “promise” in turn.
Summary judgment is proper when “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c); accord Saldana v.
Kmart Corp., 260 F.3d 228, 231-32 (3d Cir. 2001). A factual dispute is “material” if
it might affect the outcome of the suit under the applicable law. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is “genuine” only if there is
a sufficient evidentiary basis that would allow a reasonable fact-finder to return a
verdict for the nonmoving party. Id. at 248. The court must resolve all doubts as to
the existence of a genuine issue of material fact in favor of the non-moving party.
Saldana, 260 F.3d at 232; see also Reeder v. Sybron Transition Corp., 142 F.R.D.
607, 609 (M.D. Pa. 1992).
The moving party bears the initial burden of demonstrating the absence
of a disputed issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 324
(1986). Upon such a showing, the burden then shifts to the non-moving party to
present “specific facts showing the existence of a genuine issue for trial.” Fed. R.
Civ. P. 56(e). The nonmoving party may not simply sit back and rest on the
allegations in its complaint; instead, it must “go beyond the pleadings and by [its]
own affidavits, or by the depositions, answers to interrogatories, and admissions on
file, designate specific facts showing that there is a genuine issue for trial.” Celotex
Corp., 477 U.S. at 324 (internal quotations omitted); see also Saldana, 260 F.3d at
232 (citations omitted). Summary judgment should be granted where a party “fails
to make a showing sufficient to establish the existence of an element essential to that
party’s case, and on which that party will bear the burden at trial.” Celotex, 477 U.S.
at 322-23. “‘Such affirmative evidence – regardless of whether it is direct or
circumstantial – must amount to more than a scintilla, but may amount to less (in the
evaluation of the court) than a preponderance.’” Saldana, 260 F.3d at 232 (quoting
Williams v. Borough of West Chester, 891 F.2d 458, 460-61 (3d Cir. 1989)).
Because subject matter jurisdiction in this case is based on diversity of
citizenship, the court looks to the substantive law of Pennsylvania to determine the
rights and obligations of the parties. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 77
(1938). The law of the Commonwealth is declared by “its Legislature in a statute or
by its highest court.” Id. The Pennsylvania Supreme Court is the best authority on
Pennsylvania law, but when the Supreme Court has not issued a clear
pronouncement in a particular area, the court “must consider relevant state
precedents, analogous decisions, considered dicta, scholarly works, and any other
reliable data” to determine what the law is. McKenna v. Ortho Pharm. Corp., 622
F.2d 657, 661, 663 (3d Cir. 1980); see also Comm’r v. Estate of Bosch, 387 U.S.
456, 465 (1967). Opinions from lower Pennsylvania courts are not controlling, but
they are entitled to significant weight when there is no indication that the
Pennsylvania Supreme Court would rule otherwise.
Individual Alleged Promises by Jerr-Dan
1. Non-Discrimination Promises
Section 8.2 of the Licensing Agreement state as follows:
[Jerr-Dan] warrants to make reasonable commercial efforts
to manufacture, advertise, sell and ship the [SLVR], and
shall continuously and diligently during the terms of this
Agreement procure and maintain facilities and trained
personnel sufficient and adequate to accomplish the
foregoing, all to the extent and in a manner no less
thorough, diligent, and professional than the same
accorded to [Jerr-Dan’s] other products. [Jerr-Dan] shall
manufacture or cause the manufacture of the [SLVR] in
accordance with the SAMSON Patent Rights, in
compliance with all applicable law, and with good
manufacturing procedure at least consistent with (if not
superior to) the manufacture of its other products.
(Pl.’s Ex 3, Doc. 73-3, Licensing Agreement, § 8.2) (emphasis added).
Samson claims that, as a matter of law, Jerr-Dan breached this provision
by: engaging in pricing discrimination by failing to include the price of the SLVR in
various price books and instead listing the price as “TBD (to be determined”);
delaying the relay of the listed price of the SLVR to Samson and subsequently
providing an incorrect price; failing to demonstrate the SLVR in a similar fashion to
other Jerr-Dan products; engaging in market discrimination by failing to target highprofile Northeast Regions as originally agreed to; and finally, engaging in
commission discrimination by providing minimal, if any, sales commission for the
marketing and sale of an SLVR. (Pl.’s Br. Supp. Mot. for Summary Judgment, pp.
Before rebutting these contentions, Defendants take note that all of
Plaintiff’s “non-discrimination” allegations involve Defendants’ contractually
obligated duty under Section 8.2 of the License Agreement to make “reasonable
commercial efforts” with the SLVR just as it would when manufacturing,
advertising, selling, or shipping Jerr-Dan’s other products. (See Doc. 73-3,
Licensing Agreement, § 8.2.) Although the court will address each of the “promises”
individually, the court first notes that “reasonable commercial efforts” is an
ambiguous term open to multiple interpretations. Therefore, it is a factual
determination best left for a jury to decide. See Huang v. BP Amoco Corp., 271 F.3d
560, 565 (3d Cir. 2001) (“Under Pennsylvania law, whether a party has made a
good-faith effort is a question of fact.”); In re Am. Home Mortg. Holdings, Inc., 637
F.3d 246, 259 (3d Cir. 2011) (Rendell, J., concurring) (“the determination of what is
‘commercially reasonable’ involves a fact-intensive inquiry, dependant of the totality
of the circumstances, and calls for an examination of the particular situation . . . .”);
1000 N. of N.Y. Co. v. Great Neck Med. Assocs., 775 N.Y.S.2d 884, 885 (N.Y. 2004)
(explaining that whether a party had used “reasonable commercial efforts” required a
factual determination and therefore was not appropriate to be resolved as a matter of
law). Therefore, not only is the issue of whether Jerr-Dan made the alleged promises
a factual determination, it is also well-established that whether Jerr-Dan used
“reasonable commercial efforts” to fulfill these promises is an issue for a jury to
In short, the court concludes that the question of whether Jerr-Dan
fulfilled its contractually obligations is best left to a jury and thus summary judgment
will be denied on this ground. Nevertheless, the court will briefly discuss each
a. Pricing Discrimination
Samson claims that Jerr-Dan engaged in pricing discrimination because
it failed to list the specific price of the SLVR in the 2006 and 2007 price books and
instead indicated the price was “TBD (to be determined).” In addition, the SLVR
was not listed at all in the 2008 price books. However, although Jerr-Dan conceded
this general point, it claims that the SLVR was merely a proto-type for most of 2006
and that once a pre-production model was available, Jerr-Dan supplied pricing
through inventory sheets, email, upon request or on Jerr-Dan’s website. (See Def.’s
Br. in Opp. to the Mot. for Summ. J., at 12.) In addition, Samson alleges, and JerrDan agrees that there was a mistake in the pricing information that was given to
Samson in January 2007, an error that was not corrected until October 2007. It is
therefore apparent that whether or not pricing discrimination occurred will require an
inquiry into whether Jerr-Dan made “commercially reasonable efforts” to provide
pricing for the SLVR, a factual determination to be decided by a jury. Summary
judgment on this ground will be denied.
b. Demonstration Discrimination
In addition, Samson claims that Jerr-Dan engaged in demonstration
discrimination because it only demonstrated the SLVR to a maximum of twenty-five
potential customers, while it demonstrated another product, the MPL-40, to up to one
thousand potential customers. Jerr-Dan claims the products are not comparable
given the well-established popularity of the MPL-40 and the relatively new
technology which was the SLVR.
Again, it is for a jury to determine the factual issue of whether these
products are similar enough in nature to constitute being comparable as one of JerrDan’s “other products” (see Licensing Agreement, § 8.2, “[Jerr-Dan] must
manufacture . . . the [SLVR] . . . with good manufacturing procedures at least
consistent with (if not superior to) the manufacture of its other products”), and
whether Jerr-Dan acted with “reasonable commercial efforts” given the relatively
new design of the SLVR. Summary judgment on this ground will be denied.
c. Marketing Discrimination
Samson claims Jerr-Dan participated in marketing discrimination
because the sales manager for Jerr-Dan was unfamiliar with the marketing scheme
Samson and Jerr-Dan agreed upon, and that Jerr-Dan advanced the marketing of
other similar products, but failed to do so for the SLVR. Both parties cite to various
depositions or declarations for support, each of which is open to interpretation and
credibility determinations. (See Marketing Plan, Pl.’s Ex. 10; Dep. Amsley,
Hammond, Seylar; Dec. Anderson.) Therefore, a jury must make the factual
determination regarding what the relevant individuals involved in marketing did or
did not do to advance the marketing of the SLVR as compared to other similar
products marketed by Jerr-Dan and whether the effort that was made was
“commercially reasonable.” Summary judgment on this ground will be denied.
d. Commission Discrimination
Next, Samson claims Jerr-Dan paid its employees commission on the
sale of other products, but not on the SLVR, thereby creating no incentive or a
disincentive to market and sell the SLVR.
There is conflicting evidence who, if anyone, received commission on
sales of the SLVR. (See Pl.’s Ex. 26, Hammond Dep. at 72 (no commission received
on sale of one SLVR); Def.’s Ex. R, Aiken Dep. at 40:1 (commission would be
received for the sale of an SLVR); Pl.’s Br. Supp. Mot. for Summ. J., at 16 (stating
that Paul Saffelle would receive commission for “demonstrations” but not
necessarily sales, of the SLVR.) The parties also disagree about whether any
commission that may have been received was proportionate to other Jerr-Dan
Here again, issues of material fact remain regarding the payment or nonpayment of commission, and whether the amount that Jerr-Dan provided to its
marketing team was “commercially reasonable.” Summary judgment on this ground
will be denied.
Samson also claims that Jerr-Dan violated Section 8.2 of the License
Agreement by failing to “continuously and diligently . . . procure and maintain
facilities and trained personnel sufficient and adequate” to “make reasonable
commercial efforts to manufacture, advertise, sell and ship” the SLVR consistent
with Jerr-Dan’s other products. (See Licensing Agreement, § 8.2.)
Samson’s main contention in this regard is that Jerr-Dan did not at all
times have anyone exclusively dedicated to demonstrating and marketing the SLVR.
In response, Jerr-Dan claims they do not routinely assign individuals to a single
product. Thus, a factual question remains as to whether the personnel provided by
Jerr-Dan at the relevant times constituted “reasonable commercial efforts” to
“procure and maintain facilities and trained personnel sufficient and adequate” to
market the SLVR. Summary judgment on this ground will be denied.
Samson argues that Jerr-Dan breached the territorial promise contained
in the License Agreement which prohibited Jerr-Dan from marketing and selling the
SLVR outside the United States. Jerr-Dan concedes it sold the SLVR in the United
Kingdom and, therefore, it was a technical breach of the Licensing Agreement but
further argues that because royalties were paid, the harm is de minimus.
Because this is a motion for partial summary judgment as to liability
alone, and Jerr-Dan has conceded it breached the licensing agreement in this regard,
summary judgment will be granted to Samson on this claim. Any discussion of
damages shall be reserved for a later date. Summary judgment as to liability will be
Patent Notice Promise
Section 5.1 of the Licensing Agreement states, in relevant part:
[Jerr-Dan] shall not be normally permitted to file for patent
protection for an Improvement, provided that in the event
that [Jerr-Dan] does file for patent protection for an
Improvement, it will promptly notify SAMSON, and [JerrDan] shall promptly assign the ownership of such patent
application to SAMSON within thirty (30) days of such
(Pl.’s Ex. 3, Licensing Agreement, § 5.1.)
On December 1, 2005, and July 5, 2007, Jerr-Dan filed patent
applications that Samson argues violate Section 5.1 because they relate to
“Improvements” on the SLVR. (Pl.’s Br. Supp. Mot. for Summ. J. at 18.) Jerr-Dan
counters that the licensing agreement differentiates “Improvements” from
“improvements” — the critical distinction here being the capitalization of “i.” JerrDan argues that Section 5.1 only requires they provide notice for “Improvements”
but that patent applications here only involve “improvements,” and thus, no notice
need be given.6 (Def.’s Br. in Opp. to the Mot. for Summ. J. at 27.)
Samson rebuts that it is Jerr-Dan’s burden to prove it was not required
to give Samson notice of the patent protection application because Samson has no
way of proving the application was for an “improvement” and not an
“Improvement.” (Pl.’s Reply Br. at 25.) The court agrees that Jerr-Dan has the
burden of showing they were not required to provide notice under the contract, and
therefore, whether the changes Jerr-Dan wishes to have patented were
“Improvements” or “improvements” is a factual question for a jury to determine.
Therefore, summary judgment will be denied on this ground.
Section 1.5 of the Licensing Agreement defines Improvements as “any modifications,
improvements and/or developments to a product or method or product described or claimed in the
SAMSON Patent Rights by either party. (Pl.’s Ex. 3, Licensing Agreement, § 1.5) (emphasis added).
The court thus fails to see how an “improvement” would not also be an “Improvement” seeing as it is
incorporated in the definition thereof, just as a “modification” would also be an “Improvement” but not
necessarily an “improvement.” The parties, however, do not address this argument and the court will
therefore assume that if Jerr-Dan can prove their patent was for an “improvement” they were not
required to provide Samson with notice. (See Pl.’s Reply, at 26, “Because of the notice provisions of the
License Agreement, to avoid a breach, Jerr-Dan had to determine at the time of a patent filing whether
the filing was a “little I” or “Capital I” improvement, and if it was the latter, it had to give Samson
notice.”) (emphasis in original.)
For the aforementioned reasons, Samson’s motion for partial summary
judgment as to liability will be denied with regard to the allegations that Jerr-Dan
breached the following promises allegedly contained in the License Agreement: the
Non-Discrimination Promises, the Resource Promise, and the Patent Notice Promise.
The court finds that there are genuine issues of material fact relating to these
allegations that must be resolved by a jury.
The court will grant Samson’s motion for partial summary judgment as
to liability on Samson’s Territorial Promise claim in light of Jerr-Dan’s concession
that it technically violated the terms of the contract when it sold SLVR’s in the
No determination as to damages on any of the claims will be made at
An appropriate order to follow.
s/Sylvia H. Rambo
United States District Judge
Dated: August 11, 2011.
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
SAMSON LIFT TECHNOLOGIES,
Civ. No. 09-1590
For the reasons stated in the accompanying memorandum of law, it is
HEREBY ORDERED that, Plaintiff’s motion for partial summary judgment on
liability (Doc. 72) is:
1) GRANTED with respect to Jerr-Dan’s violation of the Territorial
2) DENIED in all other regards.
A separate scheduling order will issue.
s/Sylvia H. Rambo
United States District Judge
Dated: August 11, 2011.