Lockewill, Inc. v. United States Shoe Corp.

547 F.2d 1024 (8th Cir. 1976)

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Nature of the Case

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Facts

Lockewill (P) is a Missouri corporation which was organized in the spring of 1965 by Grant Williams. Williams made an oral contract with Pappagallo in March 1965. After that contract was made, the rights and liabilities incident to it passed informally to the P, which Williams controls. If Williams would, at his own expense, open and equip a Shop for Pappagallo in the St. Louis area, and if he would maintain it and operate it satisfactorily, and if he would purchase shoes in reasonable volume from year to year, he would be given an exclusive right to market Pappagallo products in that area. In the course of the conversation, Williams placed an initial order for several thousand pairs of shoes. The agreement was not reduced to writing. Pappagallo’s representative, although a lawyer, assured Williams that no writing was necessary and that their handclasp was sufficient to bind the deal. The agreement was silent as to its duration, and nothing was said about the right of either side to terminate the arrangement either with or without notice or with or without cause. Williams returned to St. Louis, formed his corporation, invested about $100,000.00 in the venture and opened for business in May 1965. P bought and paid for large quantities of Pappagallo merchandise. Eventually, Pappagallo was acquired by United States Show (D). D was under pressure to sell the shoes in large department stores. Existing franchises complained contending that it would infringe upon their exclusive franchises and also, would destroy the very marketing concept which had made the Pappagallo brand famous and dealings in merchandise bearing that brand profitable. Eventually, D gave in and allowed department stores in St. Louis to carry the shoes. P noticed D of a violation of their rights under the agreement and that P would commence action to vindicate and preserve its alleged rights. P's protests were ignored, and the department stores began to sell goods in direct competition with P. P sued D. The jury found in favor of P and assessed P's damages in the sum of $150,000.00. D filed a motion for judgment notwithstanding the verdict, or, in the alternative, for a new trial. That motion was denied, and this appeal followed.