author: COHILL, District Judge.

text:
    Loretta E. STANA, Plaintiff, v. SCHOOL DISTRICT OF the CITY OF PITTSBURGH and Charles N. Allebrand, Defendants.
    Civ. A. No. 84-691.
    United States District Court, W.D. Pennsylvania.
    Dec. 4, 1984.

      Joseph S. Hornack, Pittsburgh, Pa., for plaintiff.
    Robert J. Stefanko, Pittsburgh, Pa., for defendant.
   MEMORANDUM OPINION

COHILL, District Judge.

Before us are cross motions for summary judgment filed by both the Plaintiff and Defendants.

The Plaintiff in this case is a resident of Allegheny County, Pennsylvania. The Defendant School District is a First Class A School District as defined in the Public School Code of 1949, 24 Pa.Stat.Ann. § 1-101 et seq. and is situated in Allegheny County, Pennsylvania. Defendant Allebrand is a resident of Allegheny County, Pennsylvania. At all times relevant to this action he has been Assistant Director of Personnel for the School District and has been in charge of the eligibility lists which are discussed in this action.

This case was filed by Plaintiff alleging violations of 42 U.S.C. § 1983. Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment is appropriate if there is “no genuine issue as to any material fact” and if a party is “entitled to judgment as a matter of law.”

The material facts in this ease are not in dispute: the Plaintiff, Loretta Stana, was certified in 1972 by the Pennsylvania Department of Education to teach chemistry and general science. Full-time teachers are selected from eligibility lists. Placement on the eligibility list is premised on four qualifying factors: the applicant must take the National Teacher Exam, the “core battery” test, must be evaluated by the Credentials Committee, and must be interviewed by a Committee of teachers. Specifically, the Public School Code, 24 Pa. Stat.Ann. § 21-2110 provides that

... no person shall be appointed, promoted, or transferred to any educational position in the public school system, in school districts of the first class, whose name does not appear among the three highest names upon the proper eligible list.

Plaintiff applied for a position as a public school teacher and was notified on June 30, 1981 that she would be placed on the chemistry and general science eligibility list beginning August 27, 1981. From August 27, 1981 until October 21, 1982, Plaintiff was one of the three highest names on the eligibility list and was not appointed. During this period, others were appointed, even though their names were not among the top three. On October 21, 1982, Plaintiff was informed by letter that her credentials had been reviewed as of October 13, 1982, and that she was no longer considered qualified. Plaintiff alleges that her failure to be appointed, and the removal of her name from the list, constitute deprivations of property without due process of law in violation of the 14th Amendment.

Two elements must be established to constitute a violation of 42 U.S.C. § 1983. First, the conduct complained of must be committed by a person acting under color of state law; second, the conduct must have deprived a person of rights, privileges or immunities secured by the Constitution or laws of the United States. Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1912, 68 L.Ed.2d 420 (1981).

We have been directed to no opinion of the Pennsylvania courts which has squarely considered and decided whether presence on an eligibility list is 1) an entitlement subject to protection, or 2) constitutes a protected access to employment.

Assuming a property interest exists, an issue we do not decide today, a deprivation may occur in one of two ways: 1) as a random, unauthorized act by a state employee, or 2) as the result of some established state procedure. We believe the acts alleged here to be an example of the former: taking the acts as true, Mr. Allebrand may have violated the provisions of the state statute by appointing someone from outside the three top positions on the eligibility list. Since the alleged violation did not result from the state system itself, we must next consider whether the methods of redress available within the state satisfy the requirements of the due process clause. See Logan v. Zimmerman Brush Co., 455 U.S. 422, 436, 102 S.Ct. 1148, 1158, 71 L.Ed.2d 265 (1982).

A plaintiff establishes a violation of § 1983 only if the remedies available within the state do not comport with the requirements of due process, since, under the rule of Parratt v. Taylor, supra, a deprivation of property does not rise to the level of a constitutional violation so long as the state provides a forum within which redress may be had.

Here, the Plaintiff has alleged an unauthorized failure of state agents to follow prescribed procedures. See Cohen v. City of Philadelphia, 736 F.2d 81, 84 (3d Cir.1984). We believe that Plaintiff clearly has redress in the state courts of Pennsylvania. E.g. McKelvey v. Colonial School Dist., 22 Pa.Commwlth. 207, 348 A.2d 445 (1975). Substantive mistakes or deprivations such as those alleged here do not create a federal claim so long as correction is available in the state’s courts. Cohen v. City of Philadelphia, 736 F.2d 81, 86 (3d Cir.1984).

In Cohen, the Court of Appeals for the Third Circuit emphasized, as has the Supreme Court, that its holding does not constitute an exhaustion requirement. Id. at 86-87. Rather, the deprivation itself simply does not exist unless there has been a denial of due process under state procedures. Here, there is no claim that Plaintiff did not have access to the state courts, that Mr. Allebrand was acting according to a state policy in denying Plaintiff a position as a teacher, or that the state eligibility system is itself constitutionally defective or insufficient. We believe the rule of Parratt v. Taylor and Cohen v. City of Philadelphia bars action in this court, and will, therefore, grant the Defendant’s motion for summary judgment without prejudice to Plaintiff, of course, to seek redress in the appropriate Pennsylvania forum.

ORDER

AND NOW, to-wit, this 4th day of December, 1984, having considered Plaintiff’s and Defendants’ cross motions for summary judgment, and having heard oral argument, it is hereby ORDERED, ADJUDGED and DECREED that Defendants’ Motion for Summary Judgment be and hereby is GRANTED without prejudice, and that Plaintiff’s Motion for Summary Judgment be and hereby is DENIED.


source: Caselaw Access Project

author: NORMA HOLLOWAY JOHNSON, District Judge.

license: Public Domain

text:
    COALITION TO PRESERVE the INTEGRITY OF AMERICAN TRADEMARKS, et al., Plaintiffs, v. The UNITED STATES of America, et al., Defendants, and 47th Street Photo K-Mart Corporation, Intervenor-Defendants.
    Civ. A. No. 84-0390.
    United States District Court, District of Columbia.
    Dec. 5, 1984.

      William Allen, Covington & Burling, Washington, D.C., for plaintiffs.
    David M. Cohen, Velta A. Melnbrencis, U.S. Dept, of Justice, Washington, D.C., for U.S.
    Robert W. Steele, Washington, D.C., for K-Mart Corp.
    Nathan Lewin, Jamie S. Gorelick, Washington, D.C., for 47th Street Photo.
   MEMORANDUM OPINION .

NORMA HOLLOWAY JOHNSON, District Judge.

Plaintiffs bring this action for declaratory and injunctive relief, in part in the nature of mandamus, alleging that certain regulations of the Customs Service, an agency of the Department of the Treasury, are inconsistent with the Tariff Act of 1930 and the Lanham Trademark Act of 1946. Asserting that these regulations deny them their entitlement to the full protection of their trademarks as mandated by these statutes, plaintiffs seek a declaration that the regulations are inconsistent with the statutes, an injunction prohibiting enforcement of these regulations, and an order directing that the statutes be enforced in accordance with their express terms.

BACKGROUND

Plaintiffs, American companies suing individually or by representation through their membership in the Coalition to Preserve the Integrity of American Trademarks (COPIAT), are manufacturers or distributors of such trademarked products as fragrances and cosmetics, watches, tires, fine crystal, cameras, photographic equipment, binoculars, and electronic goods. As owners of trademarks registered with the United States Patent and Trademark Office, plaintiffs have also filed copies of the certificates of registration with the Customs Service pursuant to section 42 of the Lanham Act. They claim to suffer damage from the importation and sale in this country of products known as diverted, gray-market, or parallel goods manufactured by their foreign subsidiaries or licensees and bearing their trademarks but imported without authorization. Seeking a mandatory order directing the Customs Service to exclude such goods from entry into this country, plaintiffs contend that the Tariff Act of 1930 and the Lanham Trademark Act of 1946 give them an unqualified right to demand such exclusion. Although plaintiffs license certain foreign subsidiaries to manufacture goods bearing their trademarks, they assert that unrelated third parties import these products without their consent.

Defendants are the United States of America, Donald T. Regan, Secretary of the Treasury, and William Von Raab, Commissioner of the United States Customs Service. Intervenor-defendant 47th Street Photo is a retailer of camera, video, and other electronic equipment in New York City. Intervenor-defendant K-Mart Corporation (K-Mart) is a mass merchandiser and retailer operating more than 2,000 discount department stores. Both 47th Street Photo and K-Mart are engaged in the sale of diverted goods to consumers in this country. Progress Trading Company, Inc., and The American Free Trade Association, which import and distribute diverted goods, as well as four American consumers, were granted leave to file briefs as amici curiae and support the position of K-Mart.

This matter is presently before the Court on the motion of intervenor-defendant 47th Photo to dismiss, plaintiffs’ motion for summary judgment, the cross motion of federal defendants for summary judgment, and the cross motion of intervenor-defendant K-Mart for summary judgment. For the reasons set forth below, the motion of 47th Street Photo to dismiss will be granted in part and denied in part; the motion of plaintiffs for summary judgment will be denied; and, the cross motions of federal defendants and K-Mart for summary judgment will be granted.

MOTION TO DISMISS

The Court first turns its attention to the threshold issue of jurisdiction and considers the motion of intervenor-defendant 47th Street Photo to dismiss for lack of subject matter jurisdiction. 47th Street Photo contends that the Court of International Trade has exclusive jurisdiction over plaintiffs’ claims under section 526 of the Tariff Act and that plaintiffs’ averments with respect to section 42 of the Lanham Act fail to state a claim upon which relief may be granted. In support of the motion to dismiss under the Tariff Act, 47th Street Photo relies on a virtually identical action recently decided in the United States Court of International Trade wherein that court rendered a decision on the very jurisdictional issue presented by this case. In Vivitar Corp. v. United States, et al., 585 F.Supp. 1415 (CIT 1984), the Court of International Trade held that it possesses exclusive jurisdiction over claims arising under section 526 of the Tariff Act. The court premised its jurisdiction on its exclusive jurisdiction under 28 U.S.C. § 1581(a) over international trade disputes and rejected the argument that jurisdiction properly lies in the District Courts because the action is based primarily on United States trademark laws. In addition, 47th Street Photo argues that for prudential reasons the Court of International Trade should exercise jurisdiction over this complex issue in order to avoid duplication of judicial and legal resources and possible conflicting decisions. In opposition to the motion to dismiss the claim under the Tariff Act, plaintiffs contend that this court has jurisdiction over all aspects of the case.

The Court rejects intervenor-defendant’s contentions and finds that jurisdiction is present in this case by virtue of the general federal question jurisdiction under 28 U.S.C. § 1331, the specific jurisdiction under 28 U.S.C. § 1338(a) of actions arising under statutes relating to trademarks, and the specific jurisdiction under 15 U.S.C. § 1121 of all actions arising under the Lanham Trademark Act. This case, contrary to the argument of 47th Street Photo, is not within the purview of any of the specific provisions of 28 U.S.C. § 1581 which would vest the United States Court of International Trade with exclusive jurisdiction. Therefore, the motion of 47th Street Photo to dismiss for lack of subject matter jurisdiction must be denied.

47th Street Photo also contends that the amended complaint fails to state a claim under section 42 of the Lanham Act, 15 U.S.C. § 1124, in that the goods in question bear a genuine trademark rather than one that copies or simulates a registered trademark. Section 42 of the Lanham Act provides that “no article of imported merchandise ... which shall copy or simulate a trademark registered in accordance with the provisions of this chapter ... shall be admitted to entry at any customhouse of the United States ____” Plaintiffs argue that despite the statute’s plain language, the Supreme Court’s decisions in A. Bourjois & Co. v. Katzel, 275 F. 539 (2d Cir.1921), reversed 260 U.S. 689, 43 S.Ct. 244, 67 L.Ed. 464 (1923), and A. Bourjois & Co. v. Aldridge, 292 F. 1013 (2d Cir.1922), 263 U.S. 675, 44 S.Ct. 4, 68 L.Ed. 501 (1923), construed section 27 as barring the parallel importation of genuine trademarked goods. However, the Court finds that Katzel and Aldridge are distinguishable from the instant case. In Katzel, the Supreme Court held that an American purchaser of domestic trademark rights was totally independent from the foreign manufacturer and became the complete master of the trademark in the United States for the reason that the public recognized the American purchaser as the sole source of goods in the United States. It was further held that the foreign manufacturer, who had sold its business and trademark in this country, could not subsequently import its. products to this country using the old trademark in competition with the American purchaser of the trademark. The Katzel holding was premised largely on the equities of the case and was intended to overcome the unfairness of permitting the foreign manufacturer, having sold its trademark rights to another, to thereafter arrange to have its goods marketed in the United States by someone other than the independent American purchaser.

Shortly thereafter, in Aldridge, with facts identical to those in Katzel, the Supreme Court ruled per curiam that the same plaintiff as in Katzel could prevent the importation by a third party of face powders made in France by the same company from which the plaintiff obtained its powder. Thus, the Aldridge decision, which was tied completely to the facts and analysis of Katzel, held only that infringing goods within the equitable reasoning of Katzel could be excluded. Under Katzel and Aldridge, a trademark on imported merchandise would be deemed to “copy or simulate” if the United States registrant who had purchased the rights was truly independent of the foreign entity applying the mark abroad and had developed its own goodwill in the American marketplace.

The Court finds, based on the foregoing, that absent the Katzel situation, section 42 of the Lanham Act clearly applies only to merchandise bearing counterfeit or spurious trademarks that “copy or simulate” genuine trademarks. Therefore, plaintiffs’ amended complaint fails to state a claim upon which relief may be granted under section 42. Accordingly, the claim under the Lanham Act must be dismissed.

MOTIONS FOR SUMMARY JUDGMENT

Having determined that there is subject matter jurisdiction over plaintiffs’ claims under the Tariff Act, the Court will now address the cross motions for summary judgment. Summary judgment is an extraordinary remedy and should be granted only if the pleadings, depositions, answers to interrogatories, admissions, and affidavits conclusively demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The Court finds that there are no genuine issues of material fact in dispute and this case is appropriate for summary disposition.

The primary issue for determination is whether the challenged Customs Service regulations are inconsistent with the Tariff Act and should be set aside. Section 526(a) of the Tariff Act of 1930, 19 U.S.C. § 1526, provides that in the absence of the written consent of a trademark owner, it is unlawful to import into the United States “merchandise of foreign manufacture” that bears a trademark “owned by a citizen of, or by a corporation or association created or organized within the United States” properly registered in the Patent and Trademark Office and a copy of the certificate of registration filed with the Secretary of the Treasury in the manner provided by section 42 of the Lanham Act. Merchandise imported in violation of section 526 is subject to seizure and forfeiture.

The challenged regulations, adopted in 1972 and codified in 19 C.F.R. § 133.-21(c)(l)-(3), were promulgated to implement 19 U.S.C. § 1526. Fed.Reg. 20677, et seq. The Customs Service regulations provide that restrictions relating to trademarked imports do not apply to imported articles when:

(1) both the foreign and the U.S. trademark are owned by the same person or business entity;
(2) the foreign and domestic trademark owners are parent and subsidiary-companies or are otherwise subject to common ownership or control; and
(3) the articles of foreign manufacture bear a recorded trademark applied under authorization of the U.S. owner.

I.

The provisions of 19 U.S.C. § 1526 were first enacted into law as part of section 526 of the Tariff Act of 1922 and were re-enacted without change as part of the Tariff Act of 1930. In 1936, the Customs Regulations of 1931 promulgated pursuant to the Act, were amended to read as follows:

Art. 518. Prohibition of importation— (a) Merchandise of foreign or domestic manufacture is prohibited importation when it bears a name or mark which copies or simulates a trade-mark or trade name entitled to the protection of the Trade-mark Act of 1905 or the Trademark Act of 1920, unless such merchandise is imported by or for the account of, or with the written consent of, the owner of the protected trade-mark or trade name.
(b) A name or mark (including a name or mark which is a genuine trade-mark or trade name in a foreign country) on an article of foreign manufacture identical with a trade-mark or trade name protected by the trade-mark laws of the United States, as well as a name or mark on an article of foreign or domestic manufacture counterfeiting such protected trademark or trade name, or so resembling such protected trade-mark or trade name as to be likely to cause confusion or mistake in the minds of the public or to deceive purchasers, shall be deemed for the purpose of these regulations to copy or simulate such protected trade-mark or trade name. However, merchandise manufactured or sold in a foreign country under a trade-mark or trade name, which trade-mark is registered under the trade-mark laws of the United States, shall not be deemed for the purpose of these regulations to copy or simulate such United States trademark or trade name if such foreign trade-mark or trade name and such United States trade-mark or trade name are owned by the same person, partnership, association, or corporation. (Emphasis supplied.)

See T.D. 48539, 70 Treas.Dec. 337.

This provision that a trademark on foreign-manufactured merchandise would not be deemed to copy or simulate a United States trademark if the foreign and domestic trademarks were owned by the same person, partnership, association, or corporation remained in effect from 1936 until 1972 when the regulations were amended. ’

The currently challenged regulations, embodied in 19 C.F.R. § 133.21(c)(l)-(3), resulted from a rulemaking proposed on December 19, 1970. Although all appropriate steps for agency rulemaking were followed, including the solicitation of public comment, plaintiffs herein did not participate in the proceeding. On October 3, 1972, the Customs Service published a Final Notice (37 Fed.Reg. 20677) adopting these regulations implementing section 526. The revisions were intended to clarify the regulations and to incorporate Customs Service policies and procedures not included in previous regulations.

The 1972 revisions were in response to the decision in the consolidated “perfume” cases, United States v. Guerlain, 155 F.Supp. 77 (S.D.N.Y.1957), vacated and remanded, 358 U.S. 915, 79 S.Ct. 285, 3 L.Ed.2d 236 (1958), action dismissed, 172 F.Supp. 107 (S.D.N.Y.1959). The theory of the case rested on an antitrust doctrine. The trial court gave judgment for the Government and held that section 526 did not protect a United States company that was part of an international enterprise against importation of the enterprise’s goods. On appeal to the United States Supreme Court, the Government asked that the judgment be vacated and the case remanded to the District Court so that the Government could move to dismiss its own case in order that legislation restricting section 526 could be promptly submitted. That was the genesis of a 1959 bill which was introduced to repeal section 526. The Congress did not enact that bill. Thereafter, the challenged regulations were promulgated permitting the unrestricted importation of trademarked products manufactured abroad where both the foreign and American trademark rights are owned by the same company or companies under common ownership.

Since 1951, the Customs Service has issued several letters describing its policy on foreign-manufactured goods bearing trademarks owned by Americans under section 526. The policy of the Customs Service has been consistent that if the United States trademark owner and the owner of the foreign rights to the same mark are one and the same person, articles produced and sold abroad by the foreign owner may be imported by anyone since the trademark owner has itself either introduced or authorized the introduction of the articles into commerce and thereafter may not unreasonably restrict the use of the product. See Customs Service Letters dated March 27,1951, July 2,1962, March 19,1963, June 27, 1962, and December 11, 1968. If the foreign producer has been authorized by the American owner to produce and sell goods abroad bearing the recorded trademark or trade name, merchandise so produced is deemed admissible by the Customs Service. See Customs Service Letter dated November 25, 1968.

II.

Plaintiffs contend that the challenged regulations effectively nullify the protection for unauthorized trademark imports that Congress intended United States trademark owners to have. Plaintiffs claim that the statute, clear on its face, is controlling and, contrary to the position of defendants, there is no need to look to the legislative history to determine the intent of Congress. Plaintiffs also allege harm in that the regulations, as interpreted by the Customs Service, permit goods manufactured abroad bearing an authentic U.S. trademark to be imported and sold in the United States by third parties without authorization from the owner of the trademark. These diverted goods, plaintiffs aver, not only are frequently of a different quality, but also are marketed outside the authorized distribution channels responsible for promoting, supporting, and servicing the brand in the United States. Moreover, plaintiffs argue, diverted goods, often sold by discount houses throughout this country, result in revenue loss due to lost sales of products manufactured in this country. Because of the interpretation of these regulations, plaintiffs aver they have suffered a loss of prestige associated with the selection of distributors, diffusion of promotional efforts, impairment of good will, and the threat of an untimely end to the fashionable aura of the brand name.

It is further claimed that the regulations have resulted in agency inaction and in unlawful limitations on the enforcement of the statute. Plaintiffs insist that the continued introduction of diverted goods will destroy the very essence of the trademark and the property values it represents by permitting third parties who do not contribute to the advertising efforts and good will identified with the mark to obtain a “free ride” by reaping unfair benefits to themselves. Plaintiffs seek to block middlemen from buying the diverted merchandise cheaply in Europe, importing it into this country, and then underselling the authorized dealers by as much as thirty percent.

In arguing for summary judgment in their favor, defendants contend that the challenged regulations are a correct application of the trademark statutes and that the legislative history demonstrates that it was not the intention of Congress to prohibit importation of diverted goods. Defendants, consistent with their interpretation of the statute, argue that once a trademark owner has authorized the foreign manufacturer to apply the trademark to goods, the trademark owner himself has introduced the articles into commerce and cannot thereafter unreasonably restrict the use of the product. The position of the intervenor-defendants is that the statute has been properly interpreted by the Customs Service and, further, the importing of diverted goods provides consumers with a legitimate alternative.

III.

The issue for decision, then, is whether the regulations promulgated by the Customs Service are invalid because they are inconsistent with the statute. As the Supreme Court reiterated in Federal Election Commission v. Democratic Senatorial Campaign, 454 U.S. 27, 39, 102 S.Ct. 38, 46, 70 L.Ed.2d 23 (1981) (citing Zenith Radio Corporation v. United States, 437 U.S. 443, 450, 98 S.Ct. 2441, 2445, 57 L.Ed.2d 337 (1978), and Train v. Natural Resources Defense Council, 421 U.S. 60, 75, 95 S.Ct. 1470, 1479, 43 L.Ed.2d 731 (1975)), (1) the task for a court is not to interpret a statute as it thinks best, but rather the narrower inquiry into whether the agency’s construction is “sufficiently reasonable” to be accepted by the reviewing court; and (2) in order to satisfy this standard, it is not necessary for a court to find that the agency’s construction is the only reasonable one or even the reading the court would have reached if the question had initially arisen in a judicial proceeding. The pivotal question is whether the construction by the- Customs Service, as embodied in the challenged regulations, is sufficiently reasonable. This Court finds that the challenged regulations reflect the Customs Service’s long-standing and consistent interpretation of section 526, which interpretation is fully consistent with the intent of Congress in enacting the legislation. This is amply demonstrated by the legislative history of the statute as well as judicial interpretation.

Previous court decisions have construed the statutory language of the Tariff Act to prohibit only the entry of merchandise which copies or simulates registered trademarks and not as a bar to genuine articles. See Apollinaris Company v. Scherer, 27 F. 18 (C.C.S.D.N.Y.1886); Fred Gretsch Mfg. Co. v. Schoening, 238 F. 780 (2d Cir. 1916). These decisions were followed by Katzel, supra, and Aldridge, supra, where plaintiffs who held trademark rights conveyed from foreign companies sought to exclude from entry genuine products manufactured in the foreign country and bearing the trademarks. As noted above, the Supreme Court held in Katzel that a foreign manufacturer, having sold his business and trademark to a purchaser in this country, could not subsequently come to this country and use his old trademark in competition with that purchaser.

Neither Aldridge nor Katzel involved the situation in which one and the same party, owning trademark rights in the United States and abroad, authorized the application of the trademark on foreign-made goods and then sought to enjoin importation of those goods which bore the genuine trademark. This latter situation was involved in United States v. Guerlain, Inc., supra at pages 849-850, which formed the basis of the Customs Service regulations which plaintiffs now challenge.

In addition to judicial decisions construing the statutory language as not barring genuine articles, a pattern of legislative acquiescence has indicated acceptance by the Congress of the Customs Service’s interpretation of section 526 by failing to amend that section when legislation closely related to the provision was enacted. In 1978, in connection with the Customs Procedural Reform and Simplification Act of 1978, Pub.L. 94-410, 92 Stat. 903, the House Ways and Means Committee specifically recognized that section 526 “has been consistently interpreted by the United States Customs Service for the past 20 years as excluding from protection foreign-produced merchandise bearing a genuine trademark created, owned, and registered by a citizen of the United States if the foreign producer has been authorized by the American trademark owner to produce and sell abroad goods bearing the recorded trademark.” H.Rep. No. 621, 95th Cong., 1st Sess. 27 (1977). Yet, Congress took no action for the purpose of protecting owners of the United States trademarks from importations bearing their own trademarks in such circumstances.

When an agency’s interpretation and application of a particular statute are known to Congress, and Congress either amends the statute without affecting the administrative practice or refuses to act at all, the administrative interpretation of the law is presumed to be correct and consistent with Congressional intent. Haig v. Agee, 453 U.S. 280, 297-98, 101 S.Ct. 2766, 2776-77, 69 L.Ed.2d 640 (1981). The construction of a statute by those charged with its execution should be followed unless there are compelling indications that it is wrong, especially when Congress has refused to alter the administrative construction. Red Lion Broadcasting Co. v. Federal Communications Commission, 395 U.S. 367, 381, 89 S.Ct. 1794, 1802, 23 L.Ed.2d 371 (1969). In the instant case, Congress is well aware of the Custom Service’s policy of permitting importation of diverted goods since at least 1944. It was clearly so informed when it enacted the Lanham Act in 1946 and again when it considered amendments to the Customs laws in 1954. And in 1978, in connection with the Customs Reform and Simplification Act, Congress specifically noted the practice and yet chose not to change it while amending other parts of section 526. Under the circumstances, Congress must be deemed to have approved the interpretation of and practice under section 526. See Bob Jones University v. United States, 461 U.S. 574, 103 S.Ct. 2017, 76 L.Ed.2d 157 (1983); Merrill, Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 102 S.Ct. 1825, 72 L.Ed.2d 182 (1982); Zenith Radio Corporation v. United States, 437 U.S. 443, 450-9, 98 S.Ct. 2441, 2445-50, 57 L.Ed.2d 337 (1978).

Moreover, the policy of the Customs Service of excluding from protection foreign-produced merchandise bearing a genuine trademark has been long-standing and consistent. When an agency charged with administering a statute has long adhered to a particular interpretation of its terms, that agency interpretation is entitled to “considerable weight”. United States v. National Association of Securities Dealers, 422 U.S. 694, 719, 95 S.Ct. 2427, 2442, 45 L.Ed.2d 486 (1975); Accord, Federal Election Commission v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 102 S.Ct. 38, 70 L.Ed.2d 23 (1981); Federal Trade Commission v. Mandel Brothers, Inc., 359 U.S. 385, 79 S.Ct. 818, 3 L.Ed.2d 893 (1959). It is clear from the existing regulations, that the Customs Service, as the agency charged with the administration of the laws pertaining to entry of imports, has chosen to protect the owners of registered and recorded trademarks against imports of goods bearing the genuine trademark only in those instances in which the owners have not authorized the application of the trademarks abroad either directly or through other parties under their control. To the contrary, in those instances in which owners have authorized the application of the trademarks abroad, the Customs Service has not accorded protection. The Customs Service interpretation of the statute, as demonstrated through its policies, is long-standing and consistent.

The intervenor-defendant 47th Street Photo presents an additional argument to preclude summary judgment contending that there are genuine issues of material fact in dispute. This argument has been considered but is deemed to be without merit. The Court finds that although there are tangential issues in dispute, they are not genuine issues of material fact touching on the issues to be decided in this case.

The construction of section 526 of the Tariff Act by the Customs Service, as embodied in the challenged regulations, is sufficiently reasonable. This construction is supported by the legislative history, judicial decisions, legislative acquiescence, and the long-standing consistent policy of the Customs Service. The regulations clearly implement the limited purpose for which section 526 was enacted and are consistent with and effectuate the intent of Congress to permit entry of trademarked goods not involving the Katzel situation.

For the foregoing reasons and it appearing to the Court that the pleadings, depositions, answers to interrogatories, admissions, and affidavits conclusively demonstrate that there is no genuine issue as to any material fact and that the defendants are entitled to judgment as a matter of law, the plaintiffs’ motion for summary judgment must be denied, and the cross motions of the federal defendants and intervenordefendant K-Mart must be granted. An Order consistent with this Memorandum Opinion will be entered this date.

ORDER

Upon consideration of the motion of intervenor-defendant 47th Street Photo to dismiss, plaintiffs’ motion for summary judgment, the cross motion of federal defendants for summary judgment, the cross motion of intervenor-defendant K-Mart Corporation for summary judgment, the memoranda submitted in support of and in opposition to the motions, the entire record herein, the argument of counsel, and consistent with the Memorandum Opinion of even date, it is this 5th day of December, 1984,

ORDERED

1. That the motion of the intervenor-defendant 47th Street Photo to dismiss for lack of subject matter jurisdiction be, and hereby is, denied;

2. That the motion of the intervenor-defendant 47th Street Photo to dismiss for failure to state a claim under section 42 of the Lanham Act be, and hereby is, granted;

3. That plaintiffs’ claims under section 42 of the Lanham Act be, and they hereby are, dismissed for failure to state a claim upon which relief may be granted;

4. That the motion of the plaintiffs for summary judgment be, and hereby is, denied;

5. That the motion of the federal defendants for summary judgment be, and hereby is, granted;

6. That the motion of the intervenor-defendant K-Mart Corporation for summary judgment be, and hereby is, granted;

7. That judgment be, and hereby is, entered for defendants on the merits of plaintiffs’ claim under section 526 of the Tariff Act.


author: MOYE, Chief Judge.

text:
    COLDWELL BANKER COMMERCIAL GROUP, INC., a Delaware Corporation v. Marvin P. NODVIN.
    No. C83-1212A.
    United States District Court, N.D. Georgia, Atlanta Division.
    Dec. 5, 1984.

      James D. Meadows & Jerry B. Black-stock, Powell & Goldstein, Atlanta, Ga., for plaintiff.
    Jerome J. Froelich, Jr., Robert B. Remar, Remar, Arnold & Zimring, Atlanta, Ga., for defendant.
   ORDER OF COURT

MOYE, Chief Judge.

The above-styled action was submitted to the jury on special interrogatories under Fed.R.Civ.P. 49(a). This action is now before the Court on the entry of a final judgment. After a review of the special interrogatories, the parties’ briefs, and the relevant case law, this Court concludes that the plaintiff is entitled to a judgment in the amount of $40,000.00.

I. FACTUAL BACKGROUND

In October 1982, Ray Uttenhove, an agent for the plaintiff real estate brokerage firm Coldwell Banker Commercial Group, Inc. (plaintiff), asked the defendant Marvin P. Nodvin (defendant), if he was interested in selling 25 acres of real estate he owned near Interstate Highway 85. At this time, the plaintiff was acting as an agent for Silver Dollar City, Inc. (SDC), which was interested in buying this property. On December 23, 1982, the defendant entered into a contract with Harry Hargrave, a director for SDC, for the sale of the property for $790,000.00. The plaintiff was made a party to this contract so that it could enforce its right to a commission. This contract contained the following provision:

In negotiating this agreement, Broker has rendered a valuable service for which reason Broker is made a party to this agreement ____ Seller agrees to pay Broker the full commission at closing. Commission to be paid in this transaction shall be Forty Thousand and No/100 ($40,000.00) Dollars, which seller agrees to pay to Broker in accordance with the provisions hereof, only if this contract is closed.

On April 21, 1983, the defendant appeared at the scheduled closing but refused to complete the transaction. He claims that the plaintiff did not tender the proper documents and that the plaintiff defrauded him in various ways. On May 13,1983, the defendant sold his property to SDC, the same purchaser, for $950,000.00.

The plaintiff has filed this lawsuit in two counts: breach of contract and quantum meruit. The defendant argues that he has no obligation to pay the plaintiff its commission under the contract because the contract never closed and that the plaintiff is not entitled to recover under quantum meruit for various legal reasons. The defendant has also counterclaimed against the plaintiff for fraud and misrepresentation. Before reaching these issues, the Court will review the jury’s answers to the special interrogatories.

II. THE INTERROGATORIES

The jury found that the original $790,-000.00 contract closed when the defendant sold his property to SDC on May 13, 1983, for $950,000.00. Interr. No. 1(1). The jury also found, however, that the plaintiff failed to tender to the defendant all the documents specified in the $790,000.00 contract on the scheduled closing date. Interr. No. 11(1). In addition, the jury found that the plaintiff was not damaged by the defendant’s closing of the contract on May 13, 1983. Interr. No. 1(9).

The jury concluded that the plaintiff was the procuring cause of the sale of the property, Interr. No. 1(2), and that the plaintiff rendered valuable services to the defendant. Interr. No. 1(3). The jury found that the reasonable value of those services was $40,000. Interr. No. 11(19). The jury also found that the plaintiff was not acting as the agent for the defendant, Interr. No. III(l), but as the agent for the purchaser, SDC. Interr. No. 11(7). The fact that the plaintiff was acting as an agent for the buyer was, according to the jury, disclosed to the defendant. Interr. No. 11(15).

The jury also found that the defendant caused the plaintiff unnecessary trouble and expense in collecting its commission, Interr. No. 1(6), and that the defendant was stubbornly litigious. Interr. No. 1(4). The jury reached seemingly contradictory answers on the issue of the defendant’s alleged bad faith. In Interr. No. 1(5), the jury found that the defendant acted in bad faith in refusing to pay its commission, and in Interr. No. 1(7), the jury found that the defendant acted in bad faith by “conspiring to deprive or defraud [the plaintiff] out of its brokerage commission.” In Interr. No. 1(8), however, the jury concluded that the defendant did not “act in bad faith by attempting to deprive or defraud [the plaintiff] out of its brokerage fees.” The jury found that the reasonable value of the plaintiff’s expenses of litigation was $42,-000.00. The jury also found that the plaintiff was not entitled to exemplary damages. Interr. No. 1(11).

The jury answered all of the questions relating to the defendant’s counterclaim adversely to the defendant. It is clear, therefore, that the defendant is not entitled to any damages on its counterclaim.

In sum, the jury found that the plaintiff rendered valuable services to the defendant in the sum of $40,000.00 and that the plaintiff was the procuring cause of the sale of the defendant’s land to SDC. In addition, the jury found that the plaintiff was entitled to its litigation expenses in the amount of $42,000.00. The issues before this Court are whether these findings are supported by the evidence and are appropriate under applicable Georgia law.

III. DISCUSSION

As a preliminary matter, under Georgia law the plaintiff is required to make an election between inconsistent remedies prior to the entering of the judgment. UIV Corporation v. Oswald, 139 Ga.App. 697, 229 S.E.2d 512 (1976). Because there cannot be recovery under both an express contract and quantum meruit, e.g., Classic Restorations v. Bean, 155 Ga.App. 694, 699, 272 S.E.2d 557 (1980), the plaintiff is required to make an election of remedies prior to the entering of the judgment. Steinemann v. Vaughn & Co., 169 Ga.App. 573, 313 S.E.2d 701 (1984). In its brief, the plaintiff has stated that if it is required to elect remedies, it would elect to recover under Count II of its complaint which sounds in quantum meruit.

The defendant has developed three arguments to support its position that the plaintiff is not entitled to any recovery in this case. First, the defendant claims that the plaintiff is not entitled to recovery under the doctrine of quantum meruit because there was an express contract between the parties.

Secondly, the defendant argues that a prerequisite to recovery in this case is the existence of an agency between the parties and the jury explicitly found that no such agency relationship existed. Finally, the defendant contends that the plaintiff cannot recover because it was actually acting as an agent for the purchaser not for the defendant. This Court will analyze each of these arguments separately.

A. Recovery Under Quantum Meruit When There Is An Express Contract

It is undisputed that the parties entered into an express contract that detailed the parties’ obligations before a commission would have to be paid. The defendant claims that there can be no recovery in quantum meruit when the parties have entered into an express contract. Although there are Georgia cases which support this proposition, e.g., Bean, supra, there are also numerous Georgia cases which have allowed plaintiffs to assert both breach of contract and quantum meruit in the same lawsuit. E.g., Steinemann, supra; Starling, Inc., et al. v. Housing Authority of Atlanta, 170 Ga.App. 858, 318 S.E.2d 728 (1984); Stowers v. Hall, 159 Ga.App. 501, 283 S.E.2d 714 (1981); Sharp-Boylston Company, et al. v. Lundeen, 145 Ga.App. 672, 244 S.E.2d 622 (1978). The Lundeen case is extremely similar to the present action. In Lundeen, the plaintiff broker sued the defendant buyer for a real estate commission under both an express oral contract and the doctrine of quantum meruit. The Court stated the following:

After reviewing the evidence, it appears to this Court that the only clear provision in the oral agency contract between the [buyer] and the [broker], was that [the buyer] would compensate [the broker], if through his efforts, [the buyer] leased or purchased a building. Under these circumstances, we are unable to find any error in the trial court’s direction of a verdict for the [buyer] on Count 1, breach of an oral contract.
It was, however, error to direct a verdict in [the buyer’s] favor on Count 2, recovery in quantum meruit ____ Even though the [buyer’s] ultimate purchase ... of the property was not due to the [broker’s] efforts, the evidence shows that it was [the broker] who procured the initial information on the building, ____ Under these circumstances, the jury should have been allowed to decide whether [the broker] was entitled to any recovery in quantum meruit.

Lundeen at 673-74, 244 S.E.2d 622.

Thus, the Lundeen court specifically held that the plaintiff real estate broker could sue the buyer under an express oral contract and under the theory of quantum meruit.

After an exhaustive review of the Georgia cases on this subject, this Court concludes that it is permissible to assert the inconsistent theories of breach of contract and quantum meruit in the same action as long as an election is made prior to the entering of the judgment. See Steinemann, supra, 169 Ga.App. at 579, 313 S.E.2d 701. The plaintiff has elected to recover under quantum meruit. Accordingly, the defendant’s argument that the plaintiff is barred from any such recovery because of the existence of an express contract is without merit.

B. The Absence of An Agency Relationship

The defendant argues that the plaintiff cannot recover under the theory of quantum meruit because the jury found that it was not acting as the agent for the defendant. There are two Georgia statutes which arguably support the plaintiff’s recovery under quantum meruit. O.C.G.A. § 10-6-32 provides the following:

The fact that property is placed in the hands of a broker to sell shall not prevent the owner from selling, unless otherwise agreed. The broker’s commissions are earned when, during the agency, he finds a purchaser who is ready, able, and willing to buy and who actually offers to buy on the terms stipulated by the owner.

In Interr. No. 11(14), however, the jury found that the plaintiff did not “as Marvin Nodvin’s agent, find a purchaser ready, able and willing to buy who actually offered to buy on the terms stipulated by Mr. Nodvin.” Therefore, the jury found that the plaintiff was not entitled to its commission under O.C.G.A. § 10-6-32. The other statutory section upon which the plaintiff relies is O.C.G.A. § 9-2-7 which states the following:

Ordinarily, when one renders service or transfers property which is valuable to another, which the latter accepts, a promise is implied to pay the reasonable value thereof. However, this presumption does not usually arise in cases between very near relatives.

The issue before this Court is whether this section requires in the context of a broker suing for services performed, the existence of an agency relationship.

The defendant makes the bold allegation that “[i]n every case where a broker has recovered on a theory of quantum meruit, it' was, in fact, acting as agent for the defendant.” Defendant’s Reply Brief at 6. The defendant has failed, however, to produce a Georgia case which has explicitly held that an agency relationship is a prerequisite to recovery under quantum meruit. Furthermore, unlike O.C.G.A. § 10-6-32, there is no language in O.C.G.A. § 9-2-7 which indicates that an agency relationship is a prerequisite for recovery. Rather, all that is required is the rendering of a valuable service to another and the acceptance by that person of that service. The standard which Georgia courts have seemed to adopt is that there can be no recovery for services “rendered voluntarily and with no expectation ... that they will be compensated.” E.g., Brightwell v. Oglethorpe Tel. Co., 47 Ga.App. 521, 526, 171 S.E. 162 (1933). But, this standard is quite different from the standard of agency which the defendant urges this Court to adopt. The defendant has failed to convince this Court that the existence of an agency relationship is a prerequisite to recovery under O.C.G.A. § 9-2-7.

in the present case, the jury found that the plaintiff rendered valuable services to the defendant which he accepted. This Court finds, as a factual matter, that these services were not rendered voluntarily but were rendered upon the expectation that they would be paid for. This finding is supported by the fact that the parties entered into an express contract which was supported by consideration on both sides. Therefore, this Court finds that the plaintiff has satisfied all of the requirements of O.C.G.A. § 9-2-7.

C. Plaintiffs Status As The Agent of The Buyer

The defendant contends that the plaintiff is not entitled to any recovery because it was acting as the agent for the buyer, SDC, and was therefore not attempting to secure the best price for the defendant. This situation can be analogized to the situation where there is a dual agency. In such a case, Georgia law is clear:

Contracts of dual agency are not void per se, but are void only when the fact that the agent represented both parties was unknown. The burden of making out a defense to a prima facie liability rests upon the defendant; and where dual agency is relied on, it is necessary for the defendant to allege and prove not only the incompatible relationship, but also that it was unknown.

Williamson v. Martin-Ozburn Realty Co., 19 Ga.App. 425, 428, 91 S.E. 510 (1916) (emphasis added); see also, Erwin v. Wender, 78 Ga.App. 94, 98, 50 S.E.2d 244 (1948).

In the present case, the jury specifically found that the plaintiff did not conceal from the defendant that it was acting as an agent for SDC. Interr. No. 11(15). This finding is supported by the evidence. Therefore, the defendant’s argument that the plaintiff is not entitled to recover under quantum meruit because it was acting as SDC’s agent is without merit.

In sum, the jury found that the plaintiff rendered valuable services to the defendant which he accepted in the sum of $40,000.00. This finding is amply supported by the record and is allowable under Georgia law. Accordingly, the plaintiff is entitled to recover $40,000.00 from the defendant under the theory of quantum meruit.

IV. EXPENSES OF LITIGATION

Under Georgia law, attorney's fees and expenses of litigation are not allowed in contract actions unless the defendant “has acted in bad faith in making the contract, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense.” O.C.G.A. § 13-6-11. The jury only has to make one of these findings to award attorney’s fees in contract actions. Marler v. River Creek Associates, 138 Ga.App. 471, 226 S.E.2d 311 (1976). The jury found that the defendant in the present case was stubbornly litigious and did cause the plaintiff unnecessary trouble and expense. Interr. Nos. 1(4) and 1(6). The jury reached contradictory findings as to the defendant’s bad faith. Interrogatory Nos. I(5), I(7), I(8) II(3), and II(17). The issues before the Court are whether the facts support a finding of stubborn litigiousness and unnecessary trouble and expense and, whether the jury actually found that the defendant acted in bad faith.

Under Georgia law, in the absence of bad faith, there can be no recovery of attorney’s fees if there exists a bona fide controversy between the parties. Beaudry Ford, Inc. v. Bonds, 139 Ga.App. 230, 228 S.E.2d 208 (1976); Georgia-Carolina Brick & Tile Co. v. Brown, 153 Ga.App. 747, 266 S.E.2d 531 (1980); Thompson Enterprises, Inc. v. Coskrey, 168 Ga.App. 181, 308 S.E.2d 399 (1983). The evidence in this case overwhelmingly establishes that there existed a bona fide controversy between the parties. The jury found that the purchaser, SDC, did not tender to the defendant all of the documents specified in the original contract between the parties. In-terr. No. 11(1). In fact, the defendant presented an expert witness who testified that the documents tendered to the defendant on the scheduled closing date were unenforceable under Georgia law. See Testimony of Mr. Killorin. The plaintiff did not present any evidence to rebutt this testimony. Because the sales contract between the defendant and SDC was unenforceable, the defendant did not have an obligation under the contract to pay the plaintiff its commission. Busbin v. Suburban Realty, Inc., 236. Ga. 783, 225 S.E.2d 316 (1976). In fact, the jury specifically found that the plaintiff was not entitled to any damages on its breach of contract claim. Interr. No. 1(9). Thus, the jury found against the plaintiff on one of its two major claims.

The defendant’s argument in this case was that he was not obligated to pay the plaintiff its commission because the plaintiff never produced proper closing documents and because the plaintiff defrauded the defendant. Although the jury found for the plaintiff on the latter claim, there was evidence to support the defendant’s position. More importantly, however, Georgia courts have repeatedly held that the “mere refusal to pay a disputed claim is not the equivalent of stubborn litigiousness or causing unnecessary trouble and expense.” Franchise Enterprise, Inc. v. Ridgeway, 157 Ga.App. 458, 460, 278 S.E.2d 33 (1981).

After a review of all of the evidence in this case, this Court concludes that no reasonable jury could have found that there was no bona fide controversy between the parties. The defendant has consistently argued in this case that the plaintiff was not entitled to any recovery under quantum meruit because the plaintiff was rendering valuable services for the buyer, SDC, not for the defendant. The evidence clearly shows that the first contract presented to the defendant by the plaintiff for the sale of his land was for the sum of $175,000.00. The defendant eventually sold his land to SDC for $950,000.00. As will be discussed in the next section of this order, this Court believes that the jury found that the defendant, in good faith, believed he did not owe the plaintiff any money for simply introducing him to the buyer. The mere fact that the defendant was mistaken in this belief does not entitle the plaintiff to attorney’s fees under Georgia law. Because there is no evidence in the record to support the jury’s findings that the defendant was stubbornly litigious or caused the plaintiff unnecessary trouble and expense, this Court vacates their findings on these issues.

The jury made seemingly contradictory findings on the issue of the defendant’s alleged bad faith. In Interr. Nos. 1(5) and 1(7), the jury found that the defendant acted in bad faith in refusing to pay the plaintiff its commission. And, in Interr. No. 11(3), the jury found that the defendant did not have a valid reason for failing to close the $790,000.00 contract. These answers, however, are inconsistent with various other answers given by the jury. For example, in Interr. No. 1(8), the jury found that the defendant did not act in bad faith by attempting to defraud the defendant out of its commission. And, in Interr. No. 11(17), the jury answered no to the following question:

Did Mr. Nodvin refuse to close the contract in bad faith and solely to avoid paying the commission?

Furthermore, the jury found that the parties intended that a commission be paid only in the event that the $790,000.00 closed. Interr. Nos. 11(4) and (5), and that the $790,000.00 contract did not close on the terms and conditions as set forth in that contract. Interr. No. 11(2).

This Court believes that it is impossible to reconcile the answers to Interr. Nos. 7 and 8. It is possible, however, to reconcile the other answers given by the jury. Based on the jury’s answers to Interr. Nos. 11(3) and 11(17), this Court believes that the jury found that the defendant, in fact, did not have a valid reason for failing to close the contract but that the defendant subjectively felt that he had a valid reason for not closing the contract. Similarly, the jury must have decided that, in light of the services rendered to the defendant by the plaintiff, the defendant was mistaken in thinking that he did not have to pay the plaintiff for its services simply because the buyer did not tender to the defendant all of the documents required by the $790,000.00 sales contract. This mistaken assumption by the defendant, however, without more, does not entitle the plaintiff to attorney’s fees in this case.

This Court has carefully reviewed all of the Interrogatories given to the jury and all of the evidence in the record. This Court finds that the jury must have decided that the defendant made a honest mistake in deciding that he was not obligated to pay the plaintiff for its services and that this finding is supported by the evidence. Accordingly, there was no bad faith on the part of the defendant and the plaintiff is not entitled to its litigation expenses.

V. THE DEFENDANT’S COUNTERCLAIM

The jury found against the defendant on every issue raised by his counterclaim. These findings are supported by the evidence and therefore judgment will be entered against the defendant on his counterclaim.

In sum, the Clerk of the Court is DIRECTED to enter a judgment for the plaintiff in the amount of $40,000.00. The plaintiff is not entitled to any expenses of litigation. The Clerk is further DIRECTED to enter judgment against the defendant on his counterclaim. This order resolves all of the issues in this case.

SPECIAL INTERROGATORIES TO THE JURY

I.

1. Did the $790,000 Contract close when Defendant transferred his property to Purchaser on May 13 , 1983, for $950,000? Coldwell Banker has the burden of proof.

YES ^_

NO_

2. If your answer to number one is no, did Plaintiff effect the sale of the Nodvin Property or was Plaintiff the procuring cause which culminated in the sale of the Nodvin Property? Coldwell Banker has the burden of proof.

YES ^_

NO_

3. If your answer to number one is no, did Plaintiff render valuable services to Defendant which he accepted?

Coldwell Banker has the burden of proof.

YES _

NO

4. If your answer to either number one, two or three is yes, do you find that Marvin Nodvin was stubbornly litigious in refusing to pay Coldwell Banker its commission? Coldwell Banker has the burden of proof.

YES ^_

NO_

5. If your answer to either number one, two or three is <d) . ’ . yes, did Marvin Nodvin act m bad faith m entering into the (2) $790,000 Contract or in refusing to pay Coldwell Banker its commission? Coldwell Banker has the burden or proof.

YES

(£ 0m A ‘f Cif*

NO

& 'r'**

6. If your answer to either number one, two or three is yes, did Marvin Nodvin cause Coldwell Banker unnecessary trouble and expense to collect its commission? Coldwell Banker has the burden of proof.

YES

NO

7. If your answer to either number one, two or three is yes, did Marvin Nodvin act in bad faith by conspiring to deprive or defraud Coldwell Banker out of its brokerage commission? Coldwell Banker has the burden of proof.

YES ^

NO_

8. If your answer to either number one, two or three is yes, did Defendant act in bad faith by attempting to deprive or defraud Coldwell Banker out of its brokerage fees? Coldwell Banker has the burden of proof.

YES_

NO ^

9. If your answer to either number one, two or three is yes, what damages, if any, did Coldwell Banker sustain? Coldwell Banker has the burden of proof.

$ /\ c _

10. If your answer to either number four, five or six is yes, what is the reasonable value of Coldwell Banker's expenses of litigation, including attorney's fees? Coldwell Banker has the burden of proof.

$ 00c_

11. Are the circumstances of this case such that exemplary or punitive damages should be awarded to Coldwell Banker? Coldwell Banker has the burden of proof.

YES_

NO v'_

12. If your answer to number eleven is yes, what amount of exemplary damages should be awarded to Coldwell Banker? Coldwell Banker has the burden of proof.

$ A' £ n g._ .

II.

1. Did the purchaser (Silver Dollar City, SDC Recreation or Harry Hargrave) tender to Mr. Nodvin at the april 21, 1983 scheduled closing all the documents specified in the $790,000 contract and in the manner and form specified in the contract? Coldwell Banker has the burden of proof.

YES _

NO

2. Did the $790,000 Contract close on the terms and conditions as set forth in the contract? Coldwell Banker has the burden of proof.

YES_

NO ^

3. Did Marvin Nodvin have a valid reason for not closing the $790,000 Contract? Marvin Nodvin has the burden of proof.

YES_

NO_^_

4. Did the parties to the $790,000 Contract intend that Mr. Nodvin would be obligated to pay Coldwell Banker Commercial Group, Inc. a real estate commission even if the $790,000 Contract did not actually close? Coldwell Banker has the burden of proof.

YES

NO

5 Did the parties to the $790,000 Contract intend that Mr. Nodvin would be obligated to pay Coldwell Banker Commercial Group, Inc. a real estate commission only in the event that the $790,000 Contract closed? Marvin Nodvin has the burden of proof.

YES _

NO

6. Was Coldwell Banker Commercial Group, Inc. acting as Marvin Nodvin's agent in the sale of his property? Coldwell Banker has the burden of proof.

YES_

NO__

7. Was Coldwell Banker Commercial Group, Inc. acting as the agent for the purchaser (Silver Dollar City, SDC Recreation or Harry Hargrave) in the purchase of Mr. Nodvin's property? Marvin Nodvin has the burden of proof.

YES ^_

NO_

8. If your answer to question seven is yes, did Coldwell Banker Commercial Group, Inc. disclose in writing to Marvin Nodvin that it was representing the purchaser? Coldwell Banker has the burden of proof.

YES_

NO ^_

9. Was Coldwell Banker Commercial Group, Inc. acting as agent for both Marvin Nodvin and the purchaser (Silver Dollar City, SDC Recreation or Harry Hargrave) in the sale of the Nodvin property? Marvin Nodvin has the burden of proof.

YES_

NO _

10. If your answer to question nine is yes, did Coldwell Banker Commercial Group, Inc. disclose in writing to Marvin Nodvin that it was representing both him and the purchaser? Coldwell Banker has the burden of proof.

11. Was Coldwell Banker Commercial Group, Inc. acting as Marvin Nodvin's agent in the sale of his property pursuant to the $950,000 land exchange agreement? Coldwell Banker has the burden of proof.

YES_

NO

12. Were services rendered by Coldwell Banker Commercial Group, Inc. to the purchaser (Silver Dollar City, SDC Recreation or Harry Hargrave)? Marvin Nodvin has the burden of proof.

YES

NO

, 13 Group, proof. Were services rendered by Coldwell Banker Commercial Inc. to Marvin Nodvin? Coldwell Banker has the burden of

YES ^_

NO

14. Did Coldwell Banker Commercial Group, Inc., as Marvin Nodvin's agent, find a purchaser ready, able and willing to buy who actually offered to buy on the terms stipulated by Mr. Nodvin? Coldwell Banker has the burden of proof.

YES_

NO ^_

15. Did Coldwell Banker Commercial Group, Inc., acting through either Ray Uttenhove or Nelson Brown, misrepresent to Marvin Nodvin or conceal from him whom they were representing in regard to the sale of the Nodvin property. Marvin Nodvin has the burden of proof.

YES_

NO _

16. Did Coldwell Banker Commercial Group, Inc., acting through either Ray Uttenhove or Nelson Brown, misrepresent to Mr. Nodvin or conceal from him whom the true value of his property? Marvin Nodvin has the burden of proof.

YES_

no _

17. Did Mr. Nodvin refuse to close the contract in bad faith and solely to avoid paying the commission? Coldwell Banker has the burden of proof.

YES_

NO

18. Did Coldwell Banker Commercial Group, Inc. render valuable services to Mr. Nodvin. Coldwell Banker has the burden of proof.

YES_

NO

19. What was the reasonable value, if any, of Coldwell Banker Commercial Group, Inc.'s services to Mr. Nodvin? Coldwell Banker has the burden of proof.

$ ¿hC ^ O o c'_

20. What amount of expenses of litigation, if any, do you award Coldwell Banker Commercial Group, Inc.

$ COO —O—j--

21. What amount of. compensatory damages, if any, do you find that Marvin Nodvin sustained? Marvin Nodvin has the burden of proof.

$ A'i'r/e_

22. If you find that Marvin Nodvin is entitled to expenses of litigation, what amount, if any, do you award him as expenses of litigation? Marvin Nodvin has the burden of proof.

$ ^ •P (■? ¿_

23. What amount of exemplary or punitive damages, if any, do you award Marvin Nodvin? Marvin Nodvin has the burden of proof.

$ _

hi.

1. Was Coldwell Banker acting as the agent of Marvin Nodvin? If your answer to number one is no, do not answer questions 2-11. Coldwell Banker has the burden of proof.

YES____

NO_¡¡£_

2. If your answer to number one is yes, did Coldwell Banker, or any of its agents or employees, fail to disclose to Marvin Nodvin the proposed purchase of the Parak tract at a time when they had a duty to disclose? Marvin Nodvin has the burden of proof.

3. If your answer to number one is yes, did Coldwell Banker, or any of its agents or employees fail to disclose to Marvin Nodvin that it was acting on behalf of an undisclosed principal for the purchase of the Parak tract? Marvin Nodvin has the burden of proof.

4. If your answer to number one is yes, did Coldwell Banker, or any of its agents or.employees fail to disclose to Marvin Nodvin that it had previously represented Harry Hargrave with respect to the Route 41 properties? Marvin Nodvin has the burden of proof.

5. If your answer to number one is yes, did Coldwell Banker, or any of its agents or employees fail to disclose to Marvin Nodvin that Harry Hargrave was acting as a trustee on behalf of SDC Recreation? Marvin Nodvin has the burden of proof.

6. If your answer to number one is yes, did Coldwell Banker, or any of its agents or employees fail to disclose to Marvin Nodvin that there was no trust in existence of which Harry Hargrave was trustee? Marvin Nodvin has the burden of proof.

7. If your answer to number one is yes, did Coldwell Banker, or any of its agents or employees wrongfully conspire to cause Marvin Nodvin to sell his property below fair market .value? Marvin Nodvin has the burden of proof.

8. If your answer to number one is yes, did Coldwell Banker, or any of its agents or employees, fail to disclose any dual agency or conflicts of interests that might have existed? Marvin Nodvin has the burden of proof.

9. If your answer to number one is yes, and your answer to either numbers 2, 3, 4, 5, 6, 7, or 8 is yes, has Marvin Nodvin been damaged and, if so, what amount of money, if any, should be awarded? Marvin Nodvin has burden of proof.

10. If your answer to number one is yes and your answer to either numbers 2, 3, 4, 5, 6, 7, or 8 is yes, is Coldwell Banker liable to pay Marvin Nodvin's expenses of litigation, including attorney's fees? Marvin Nodvin has the burden of proof. If so, what amount?

11. If your answer to any of questions 2-8 is yes, what amount of exemplary or punitive damages, if any, do you award Marvin Nodvin? Marvin Nodvin has the burden of proof.

$ _

IV.

1. Was Coldwell Banker properly licensed as a real estate broker when it was involved with the sale of the Nodvin property? Coldwell Banker has the burden of proof.

YES

NO

2. Did Coldwell Banker, or any of its agents or employees. lf) (?) ^■"engage in a scheme to confuse Marvin Nodvin and to violate the Georgia Real Estate Commission rules and regulations? Marvin Nodvin has the burden of proof.

3. Did Coldwell Banker, or any of its agents or employees, engage in deceptive trade practices? Marvin Nodvin has the burden of proof.

YES_

NO_^_

4. Did Coldwell Banker, or any of its agents or employees, wrongfully use the United States Mails? Marvin Nodvin has the burden of proof.

YES_

NO_^_

5. Did Coldwell Banker, or any of its agents or employees, wrongfully use the wire, radio or television? Marvin Nodvin has the burden of proof.

YES _

NO__

6. Has Coldwell Banker, or any of its agents or employees, engaged in racketeering activities? Marvin Nodvin has the burden of proof.

YES

NO

7. Has Coldwell Banker, or any of its agents or employees, engaged in false advertising? Marvin Nodvin has the burden of proof.

YES_

NO_^_,

8. If your answer to either number 2, 3, 4, 5, 6, or 7 is yes, has Marvin Nodvin been damaged, and if so, what amount of money, if any, should he be awarded? Marvin Nodvin has the burden of proof.

V.

1. Did any of Coldwell Banker's agents or employees make a misrepresentation of a material existing fact to Marvin Nodvin or fail to disclose a material fact that should have been disclosed to Marvin Nodvin? Marvin Nodvin has the burden of proof.

YES_

NO ^

2. If the answer to question one is yes, did such employee or agent know the falsity of the misrepresentation at the time it was made, or should such employee have known that the misrepresentation was false? Marvin Nodvin has the burden of proof.

3. If the answer to question one is yes, did such employee or agent intend to induce Marvin Nodvin to rely upon the misrepresentation or the omission of the material fact or facts? Marvin Nodvin has the burden of proof.

4. If the answer to question one is yes, did Marvin Nodvin rely to his detriment upon the misrepresentation or the omission of the material fact or facts? Marvin Nodvin has the burden of proof.

5. If the answer to question one is yes, did Marvin Nodvin suffer any damage as the proximate result of the misrepresentation or omission of the material fact or facts? Marvin Nodvin has the burden of proof.

6. If the answers to all of Questions 1-5 are yes, what amount of compensatory damages should be awarded to Marvin Nodvin as a result of Coldwell Bankers misrepresentations or omissions of material fact or facts.

7. If you find that Coldwell Banker made misrepresentations or omissions of material fact or facts, what amount of exemplary or punitive damages, if any, do you award Marvin Nodvin? Marvin Nodvin has the burden of proof.

      . This clause was substituted by the parties for a clause in the original preprinted form contract which specifically gave the plaintiff its commission if the contract did not close due to the seller's actions.

      . The Court will only mention those answers that are relevant to the judgment.

      . The jury also found that, during the agency, the plaintiff did not find a ready, willing, and able purchaser who offered to buy on the terms stipulated by the defendant. Interr. No. 11(14).

      . The plaintiff argues that it is entitled to recover its commission under a "procuring cause” theory. This Court is not convinced that there is such a theory under Georgia law independent of quantum meruit or O.C.G.A. § 10-6-32.

      . The analytical framework of this order is not indicative of which side has the burden of proof on any particular issue. Because the jury clearly found for the plaintiff, however, it is useful to analyze their answers in relation to the defendant’s legal arguments.

      . The defendant also makes various arguments in support of its position that the plaintiff is not entitled to attorney’s fees in this case. Those arguments will be discussed in section 3 of this order.

      . The defendant does not appear to be arguing that O.C.G.A. § 10-6-32 is the exclusive remedy for a real estate broker suing under quantum meruit. In any event, Georgia courts have allowed recovery under O.C.G.A. § 9-2-7 to brokers suing under quantum meruit. E.g., Lundeen, supra, 145 Ga.App. at 674, 244 S.E.2d 622.

      . The jury specifically found that the plaintiff rendered valuable services to the defendant which he accepted in the amount of $40,000. Thus, except for the agency issues, the plaintiff has clearly met the requirements for recovery under the theory of quantum meruit.

      . Fed.R.Civ.P. 49(a) gives this Court the authority to resolve any factual questions relevant to the judgment which were not submitted to the jury.

      . Of course, this Court must also determine if a finding of bad faith was supported by the evidence. The legal standard which this Court must apply when reviewing the jury’s findings of stubborn litigiousness and unnecessary trouble and expense is whether any jury could have reasonably made those findings. See Bigelow-Sanford, Inc. v. Gunny Corp., 649 F.2d 1060, 1066 (5th Cir.1981).

      . It appears that the absence of a bona fide controversy is a prerequisite to the recovery of attorney’s fees under both the stubbornly litigious standard and the unnecessary trouble and expense standard. See generally Franchise Enterprises, Inc. v. Ridgeway, 157 Ga.App. 458, 278 S.E.2d 33 (1981).

      . The plaintiff produced no evidence that demonstrated that the buyer ever tendered the appropriate documents to the defendant in accordance with the $790,000.00 contract.

      . It is important to note that the jury was not asked whether or not a bona fide controversy was present in this case. It is therefore unclear whether the jury’s findings on stubborn litigiousness and unnecessary trouble and expense are findings sufficient, in and of themselves, to warrant the imposition of attorney’s fees in this case. In any event, this Court finds that there is no evidence in the record to support these findings.

      . In Interrogatory No. 7, the jury found that the defendant acted in bad faith by conspiring to defraud the plaintiff out of its commission.

      . This answer is seemingly inconsistent with Interrogatory No. 1.

      . This conclusion is consistent with the answer to Interr. No. 8 but inconsistent with the answer to Interr. No. 7. As noted earlier, these two Interrogatories are impossible to reconcile. In addition, the jury also must have concluded that the fact that there was an improper tender at the closing did not justify the plaintiff's refusal to go through with the sales transaction. In light of the contractural language in this case, that finding is contrary to Georgia law. See, Busbin, supra.

      . This Court finds that the jury’s answers to the questions concerning bad faith are susceptible only to the interpretation heretofore described.

      . Attached as Exhibit "A” is a copy of the jury's answers to the Special Interrogatories,


author: WEXLER, District Judge.

text:
    UNITED STATES of America, v. Robert FALVO, Defendant.
    No. CR 84-00078.
    United States District Court, E.D. New York.
    Dec. 5, 1984.
    Raymond J. Dearie, U.S. Atty. by Anthony J. Siano, Asst. U.S. Atty., Brooklyn, N.Y., for plaintiff.
    Anthony Lombardino, Kew Gardens, N.Y., for defendant.
   MEMORANDUM AND ORDER

WEXLER, District Judge.

Defendant has moved to dismiss under the Speedy Trial Act, 18 U.S.C. §§ 3161 et seq.

On April 14, 1982 defendant was indicted in the U.S. District Court for the Southern District of Florida on two counts of tax evasion. On April 27, 1982 a superseding indictment was returned, adding counts against defendant relating to an alleged scheme to defraud certain pharmaceutical manufacturers. On May 7, 1982 defendant was arraigned. On January 12, 1983 the court ordered the two tax counts severed. On April 12, 1983 defendant was convicted on the two non-tax counts. On April 21, 1983 defendant moved to transfer the two tax counts to New York. On June 10, 1983 the U.S. District Court for the Southern District of Florida ordered that the two tax counts be transferred to this Court. On November 29, 1983, the Clerk of the U.S. District Court for the Southern District of Florida noted on the docket sheet that copies of the two tax counts had been transmitted to this Court. On February 8, 1984 the tax counts were marked received and docketed in this Court. On September 10, 1984 defendant first appeared before this Court.

Under 18 U.S.C. § 3161(c)(1), trial shall commence “within seventy days from the filing date (and making public) of the information or indictment, or from the date the defendant has appeared before a judicial officer of the court in which such charge is pending, whichever date last occurs.”

The government argues that the seventy day time period of § 3161(c)(1) did not commence until September 10, 1984, the date on which defendant first appeared before this Court. We reject this argument. The' time period commenced May 7, 1982, the date on which defendant (having previously been indicted) appeared before a judicial officer of the U.S. District Court for the Southern District of Florida, the court in which the indictment was then pending. We see no reason why the transfer of a case from one district to another should entitle the government to have the time period start running anew from zero. Further, § 3161(h)(1)(G), by specifically excluding from the seventy day period “delay resulting from any proceeding relating to the transfer of a case”, necessarily implies that the transfer of a ease will not entitle the government to have the seventy day time period start running anew from zero. No authority cited by the government is relevant to the government’s contention that, where a defendant has appeared before a judicial officer in one district on charges pending in that district and the case is then transferred to another district, the seventy day time period will start running anew from zero.

We need not discuss the extent (if any) to which time elapsing between May 7, 1982 (the date the seventy day period commenced) and June 10, 1983 (the date of the transfer order) is excludable. The government argues that the time between June 10, 1983 (the date of the transfer order) and February 8, 1984 (the date the case was docketed in this Court) is excludable under § 3161(h)(1)(G) as “delay resulting from any proceeding relating to the transfer of a case.” We reject this argument. We hold that § 3161(h)(1)(G) excludes only reasonable delay. In the instant case, the eight month period elapsing between the date of the transfer order and the date the case was docketed in this Court clearly exceeds by far more than seventy days the amount of time which should reasonably have been spent in effecting the transfer. Consequently, we hold that the delay which took place between June 10, 1983 and February 8, 1984 in and of itself violated § 3161(c)(1). We therefore need not discuss the extent (if any) to which delay occurring prior to June 10, 1983 or subsequent to February 8, 1984 is excludable. Consequently, defendant’s motion to dismiss should be granted pursuant to § 3162(a)(2). Further, upon considering all relevant factors, we hold that the dismissal should be with prejudice.

This case is dismissed with prejudice.

SO ORDERED.

      . On July 12, 1982 the Clerk of the Southern District of Florida docketed a document marked "Waiver of Speedy Trial”, signed by defendant and his then attorney, and stating that defendant "hereby waives his rights to a Speedy Trial from the time of the Indictment as provided in the Speedy Trial Act.” While a judge has authority to grant a defendant a continuance ex-cludable from the seventy day period if the judge finds that the ends of justice served by taking such action outweigh the best interest of the public and the defendant in a speedy trial, § 3161(h)(8)(A), defendant’s unilateral act in signing the vague "waiver” in the instant case cannot preclude defendant from now moving to dismiss on the basis of delays occurring long after the "waiver” was signed.