TTAB - Trademark Trial and Appeal Board - *1 HOYLE KNITTING MILLS, INC. v. T.J. MANALO, INC. July 13, 1989

Trademark Trial and Appeal Board

Patent and Trademark Office (P.T.O.)





July 13, 1989

Hearing: March 16, 1989



 Opposition No. 75,941, to application Serial No. 613,609 filed August 7, 1986 and to application Serial No. 613,610 filed August 7, 1986.



Schweitzer & Cornman for Hoyle Knitting Mills, Inc.



Frost & Jacobs for T.J. Manalo, Inc.



Before Rice, Cissel & Seeherman






Opinion by Rice






 Applications were filed by T.J. Manalo, Inc. to register the mark "MIX CONCRETE" [FN1] and the mark "MIX CONCRETE" and design, [FN2] shown below (in reduced size),




for clothing goods, namely, sweaters, use since December 2, 1985 being asserted in both applications.



 Registration in each case [FN3] was opposed by Hoyle Knitting Mills, Inc. on the asserted ground that opposer believes itself to be an owner of, and to have not less than an equity interest in, the marks sought to be registered. Specifically, opposer asserts, in essence, that it is a supplier of domestic and imported sweaters; that in conjunction and association with applicant and its principals, opposer commenced sales and promotion of young men's sweaters under the marks at least as early as November, 1985; and that opposer has "substantially continuously" used the marks since that time in connection with its sales of imported young men's sweaters.



 Applicant, in its answer to the notice of opposition, denied the allegations contained therein. Both parties have briefed the case and were represented at oral hearing.



 The record consists of the pleadings, the files of applicant's involved applications, and testimony in behalf of each party, namely, the testimony and rebuttal testimony [FN4] of opposer's president, Mr. Arnold Breuer, in behalf of opposer, and the testimony of Mr. M.J. Dunkelman, president of applicant, and Mr. Stuart Rosenthal, an employee of applicant, in behalf of applicant.



 The evidence of record tells the story of a business relationship turned sour. The testimony of Mr. Breuer, on the one hand, often conflicts with the testimony of Mr. Dunkelman and Mr. Rosenthal, on the other, as to the details of the story. The basic story is recited below. For the most part, this recital of the story follows the testimony of Mr. Dunkelman and Mr. Rosenthal on points of conflict.



 Opposer is a corporation which began business 18 years ago as a sales agent marketing sweaters for one mill. Today opposer is (and for some years has been) a jobber manufacturer of sweaters; that is, opposer buys the raw materials for sweaters of its design, has the sweaters manufactured domestically, and then markets the sweaters, primarily to major retailers throughout the country. Opposer is owned by Mr. Arnold Breuer and his wife, and Mr. Breuer is both the president and the chief operating officer of opposer. Opposer's office and showroom are located in the Empire State Building in New York.



 Applicant is a corporation which was formed in November of 1983 and incorporated in December of 1983. Applicant is owned, at least in large part, by Hayward Knitting Mills ("Hayward"), a Hong Kong company. Hayward, in turn, is owned by two Hong Kong gentlemen, namely, a Mr. Tony Lo and his father. Applicant designs, and markets in the United States, sweaters which are manufactured by Hayward in Hong Kong. Applicant's office and warehouse are located in Cincinnati. Mr. M.J. Dunkelman is a principal of applicant who is also its president and was intimately involved in the setting up of applicant's business.



  *2 Between the formation of applicant in November 1983 and its incorporation in December 1983, Mr. Dunkelman was in Hong Kong developing the styling and the samples for a line of sweaters to be sold by applicant. While he was in Hong Kong, Mr. Dunkelman called Mr. Breuer, whom he had known for some years, and asked if Mr. Breuer would be interested in selling applicant's sweaters (in addition to selling opposer's sweaters) in the United States. Mr. Breuer indicated that he might be interested, and it was agreed that when Mr. Dunkelman returned to the United States, he would visit Mr. Breuer's office in New York and show him applicant's sweater samples. In late December of 1983, Mr. Dunkelman did that. Mr. Breuer liked the samples, and said that he would like to keep them in his office to show to some of his regular customers. During the first week of 1984, Mr. Breuer called Mr. Dunkelman and indicated that he was interested in selling applicant's sweaters, but that he wanted to meet applicant's principals in Hong Kong, and see their manufacturing facilities. In February or March, Mr. Breuer and Mr. Dunkelman made the trip to Hong Kong, and Mr. Breuer agreed to market applicant's sweaters in the United States. The agreement, which was unwritten, was that Mr. Breuer was to be paid a commission for the sweaters that he (or anyone under his organizational control) sold for applicant, and that he would pay his own expenses. In addition, because applicant had procured warehouse space and an office in Cincinnati, but did not have a sales office in New York, it was agreed that applicant's sweater samples would be shown in New York, by Mr. Dunkelman or Mr. Breuer or anyone else who needed to show them, at opposer's office; that is, that applicant would use opposer's office for the purpose of showing applicant's sweater samples to customers in New York. Mr. Dunkelman testified that he offered Mr. Breuer a 4% commission; that Mr. Breuer asked for 5% since applicant had decided to use his office, for which he had to pay the rent and other expenses; and that Mr. Dunkelman agreed to (and did) pay Mr. Breuer a commission of 5% on sweaters that Mr. Breuer sold for applicant at full price, and 3% for sweaters sold at a marked-down price. The testimony of Mr. Rosenthal, an employee of applicant (and whose role in this story is explained in more detail hereafter), is consistent with the testimony of Mr. Dunkelman on this point. Mr. Breuer's initial testimony concerning the terms of the agreement was that in the beginning he was to be paid a commission of only 3% on all sales, so that applicant's sweaters could be marketed at a low price and achieve quick market penetration; that later when applicant's line of sweaters got off the ground, he was to be given a higher commission or a cost-plus arrangement; and that applicant was also, in the future, to contribute something towards opposer's office expenses. He further testified that the only part of the future plan which ever came to fruition was that applicant did start to contribute to the office expenses after about two years. During his rebuttal deposition, however, Mr. Breuer testified that the agreement was that he would get a 5% commission, and he denied that there was ever any discussion about his getting 4%, plus an additional 1% to help cover office expenses.



  *3 The record indicates that Mr. Dunkelman did the styling for applicant's line of sweaters, and had samples made up by Hayward in Hong Kong, for use by himself, Mr. Breuer, and, at times, others in selling the sweaters. Purchase orders for the sweaters were written on applicant's purchase order forms (bearing applicant's name), or were written on the customer's own purchase order forms and then transcribed to applicant's forms. Once orders for the sweaters had been obtained, Mr. Dunkelman had the sweaters manufactured by Hayward and shipped to applicant's warehouse in Cincinnati, from which they were sent on to the customers. Before they left Hong Kong, the sweaters were marked with applicant's name, trademarks (which at that time were "T.J. MANALO", "CATTIVO", and "RUVIDO"), and RN number (assigned to applicant by the U.S. Department of Commerce, and by which applicant would be held responsible for any problems with the goods). Then the goods were "prepacked," and the packaging for the goods was also marked with applicant's indicia. After the goods reached Cincinnati, applicant's shipping label was applied to each box and the boxes were shipped on to applicant's customers. At about the same time that an order was shipped from Cincinnati, applicant would prepare an invoice (bearing its name) for the goods. One copy of the invoice was sent to the customer, and one copy was sent to applicant's factor, Manufacturers Hanover Financial, which was responsible for collecting applicant's accounts receivable.



 Orders for applicant's goods were obtained in a number of ways. Mr. Breuer would present applicant's samples to opposer's regular customers at the same time that he was showing them opposer's goods, either at the New York office or at the customer's office. Mr. Dunkelman, too, would show the samples to his customers, sometimes at the New York office and sometimes at the customer's place of business. In addition, Mr. Dunkelman and Mr. Breuer went to approximately four out-of-town trade shows a year for the purpose of showing applicant's and opposer's goods at a shared exhibit booth, and applicant and opposer split the expenses for these shows.



 In 1985, after a slowdown in applicant's sweater sales, Mr. Dunkelman decided to develop a new line of sweaters directed to the young men's market. The new line was to be sold under a separate mark through a new young men's division of applicant. In November of 1985, Mr. Stuart Rosenthal was hired for the purpose of selling the goods of, and running, the young men's division. He was paid by applicant on a commission basis, at the rate of 5% on sweaters that he sold at regular price, and 3% on sweaters sold at less than the regular price. In this regard, applicant agreed to pay him, as a draw against his commissions, on a monthly basis at a predetermined amount totalling $75,000 a year. Applicant also paid Mr. Rosenthal's travel expenses for sales trips. Shortly before Mr. Rosenthal was hired, opposer and applicant had begun to share a larger suite of offices in the Empire State Building, and applicant had begun to pay a portion (a little less than a third) of the rent. The door to the new offices bore the names of both companies, and Mr. Rosenthal was given office space there. At Mr. Breuer's request, Mr. Rosenthal agreed to try to sell some of opposer's sweaters, on a 3% commission basis, to Mr. Rosenthal's customers for applicant's sweaters. Mr. Rosenthal testified that he sold some of opposer's sweaters but was never paid his commission on the sales. Mr. Breuer testified that Mr. Rosenthal never sold any of opposer's sweaters.



  *4 Mr. Rosenthal insisted, as one condition for accepting the job with applicant, that he be allowed to be involved with Mr. Dunkelman in the styling of the sweater lines for the young men's division, in order to ensure that the sweaters would be styles that he could sell successfully. In November of 1985, immediately after Mr. Rosenthal was hired, he and Mr. Dunkelman made a trip to Tokyo and then on to Hong Kong to put together the styling for the young men's sweater line. While they were in Tokyo, they came up with the mark "MADE FOR THE STREET NEW CONCRETE" and design. When they got to Hong Kong, they drew up the graphics for the new mark, and gave their sweater designs and the new label graphics to Hayward so that Hayward could manufacture sweater samples labeled with the new marks.  When they returned to the United States, Mr. Dunkelman called applicant's attorneys and asked them to begin the registration process for the new mark. Shortly thereafter, the word "MIX" was added to the mark, at the suggestion of applicant's counsel, to overcome a potential conflict with another mark.



 The first sample sweaters bearing the new mark were shipped to Mr. Rosenthal in January 1986. He immediately began to show the line and to take orders, which were filled beginning in May. As with applicant's other sweaters, the new sweaters were ordered on applicant's purchase order forms; made in Hong Kong by Hayward according to applicant's specifications; marked with applicant's indicia, including applicant's RN number; shipped to Cincinnati; from there, sent on, under applicant's shipping label, to applicant's customers; and invoiced on applicant's invoice forms.



 During his first year with applicant, Mr. Rosenthal sold more than a million dollars worth of applicant's young men's sweaters bearing the new marks, and Mr. Dunkelman also sold some of the sweaters. Although Mr. Breuer testified that young men's sweaters of the new division were sold out of "our" office, which was certainly true since applicant was sharing opposer's offices and Mr. Rosenthal was making sales out of the office, Mr. Breuer never testified that he himself sold any of these sweaters; Mr. Rosenthal's and Mr. Dunkelman's testimony was to the effect that Mr. Breuer never sold any of the sweaters of the young men's division. Throughout that year, applicant continued to share opposer's new, larger office space in the Empire State Building and to pay a portion of the rent. Mr. Breuer/opposer continued to pay the other basic office expenses, and applicant and opposer continued to share trade show space and trade show expenses. When Mr. Breuer and Mr. Rosenthal went to lunch together, they took turns paying for the lunches.



 In November or December of 1986, applicant rented an office of its own in the Empire State Building in New York, moved its samples to the new office, and severed its relationship with Mr. Breuer. It appears that the reason for the split was that Mr. Breuer was spending more and more of his time selling opposer's goods, and less and less selling applicant's goods, because he felt that he could make more money by concentrating his efforts on opposer's products. Although the split itself was apparently amicable, a dispute arose later over the accounting of monies, and Mr. Breuer filed this opposition in the name of opposer, asserting, for the first time, a joint ownership interest in the "MIX CONCRETE" marks.



  *5 Mr. Breuer admittedly had nothing to do with the formation of applicant; nor was he an officer or shareholder of applicant; nor did he or opposer ever contribute any capital to applicant, or bear any financial risk if applicant's business were not successful; nor was either he or opposer ever promised any stock or equity interest in applicant; nor did either he or opposer have any right of management or control over the manufacture of applicant's sweaters or the filling of orders therefor, or do any advertising of applicant's product line.



 Black's Law Dictionary (Fifth Edition 1979) defines the term "joint venture" as follows:

   A legal entity in the nature of a partnership engaged in the joint prosecution of a particular transaction for mutual profit. [citation omitted] An association of persons jointly undertaking some commercial enterprise. It requires a community of interest in the performance of the subject matter, a right to direct and govern the policy in connection therewith, and duty, which may be altered by agreement, to share both in profit and losses. [emphasis added; citation omitted]



 Similarly, the portion of 48 Corpus Juris Secundum entitled "Joint Adventure" has been quoted as indicating that as a general rule, a joint adventure (a term which is said therein to be synonymous with the term "joint venture") requires "a community of interest in the performance of a common purpose, a joint proprietary interest in the subject matter, a mutual right to control, a right to share in the profits, and a duty to share in any losses which may be sustained." See: In re Hercofina, 207 USPQ 777, 779 (TTAB 1980).



 In the same vein, opposer, in its main brief on the case, quotes, from Williston on Contracts §§ 318, 318A (3rd Ed.), the following definition of a joint venture:

   A joint venture is an association of individuals or companies who agree to engage in a common enterprise for their mutual profit. Its essential elements are: (a) a joint proprietary interest in, and a right to mutual control over, the common enterprise; (b) a contribution by the respective ventures of capital, materials, services or knowledge; and (c) the right to share the anticipated profits.

Applicant, in turn, quotes another sentence from § 318A of the same source, at page 557, namely, "As a legal concept, a joint venture is not a status created or imposed by law but is a relationship voluntarily assumed and arising wholly ex contractu."



 The Board itself has indicated that in a trademark context, a joint venture is an undertaking, meeting the general requirements of the definitions set forth above, in which "separate legal entities combine to perform a specific function or to market the fruit of their combined labors under a mark created by them jointly to identify the venture." See: In re Hercofina, supra, at page 781.



 In the present case, opposer claims that opposer and applicant were joint venturers with respect to the manufacture and sale of young men's sweaters under the marks "MIX CONCRETE" and "MIX CONCRETE" and design, and thus that opposer and applicant are joint owners of these marks. We are not persuaded by the record before us that there was, in fact, a joint venture.



  *6 In this regard, Mr. Breuer claimed in his testimony, inter alia, that after he agreed to try to market applicant's sweaters in the United States, he developed applicant's system of using prepacks; that through a friend of his, and based on his own and opposer's reputation in the trade, he set up applicant's financing by the factor, Manufacturers Hanover (although admittedly neither he nor opposer signed any documents relating to the financing); that he was involved in styling applicant's sweaters; that he "merchandised" the sweaters; that he allowed applicant to use his New York office; that for the first two years, he paid the office expenses, including telephones, secretarial services, office supplies, messenger service, postage, Federal Express charges, etc.; that applicant began to contribute to these office expenses during the third year; that he was involved in the decision to establish the new division to sell young men's sweaters; that he hired Mr. Rosenthal, with Mr. Dunkelman's approval (Mr. Breuer admitted that Mr. Rosenthal was paid by applicant); that the decision to adopt the marks here involved for use on the sweaters of the new division was made by himself, Mr. Dunkelman, and Mr. Rosenthal after Mr. Dunkelman and Mr. Rosenthal returned from their November 1985 trip overseas; etc. In short, Mr. Breuer claims to have played a larger role in applicant's business than that attributed to him by the testimony of Mr. Dunkelman and Mr. Rosenthal.



 Mr. Breuer's testimony on these points, as well as some other points not discussed in detail herein, is contradicted by the testimony of Mr. Dunkelman and Mr. Rosenthal. [FN5] Moreover, Mr. Breuer's testimony is marked by internal inconsistencies, [FN6] as well as by leading questions. In short, his testimony is much less persuasive in nature than the testimony of Mr. Dunkelman and Mr. Rosenthal.



 Moreover, applicant's testimony was supported by exhibits in the nature of, inter alia, shipping labels, purchase order forms, and invoices, all bearing applicant's name and applicant's other indicia (but not any reference to Mr. Breuer or opposer), the initial sketch done by Mr. Dunkelman and Mr. Rosenthal of the graphics for the "MADE FOR THE STREET NEW CONCRETE" and design mark, and a sketch done by them of the design for one of the first sweaters sold by the new division. The only exhibits offered by opposer during its main testimony period were two labels and one hang tag bearing (only) the "CONCRETE" and "MIX CONCRETE" etc. design marks.



 During the rebuttal testimony of Mr. Breuer, opposer offered into evidence 13 additional exhibits showing payment by opposer or by Mr. Breuer of certain expenses incurred in late 1985 and 1986. These consisted of expenses in connection with a trade show, held in Charlotte, North Carolina in March 1986, which Mr. Breuer and Mr. Rosenthal attended together, namely, the charge (made on Mr. Breuer's credit card) for a rental car which the two used, two restaurant bills charged on Mr. Breuer's credit card, the cost (paid by opposer) of the exhibit booth (the invoice for this was addressed to "Concrete," the name by which the new division was known), and the charge (paid by opposer) for display materials which they used at the show (this invoice was addressed to "Concrete/Hoyle Knitting Mills" and, under the words "Ordered By," bears the names "Stu Rosenthal/Arnold Breuer"); [FN7] a salesman's guide and health insurance, both paid by opposer for Mr. Rosenthal; a charge paid by opposer, invoiced from a printing company to "Concrete Inc.", which Mr. Breuer said was for business cards for Mr. Rosenthal; Mr. Rosenthal's hotel bill (charged on Mr. Breuer's credit card) and both Mr. Rosenthal's and Mr. Breuer's airfare (also charged on Mr. Breuer's credit card), for another trade show (known as the "MAGIC" show) held in California in September of 1986, at which the products of both parties were shown; certain Federal Express and messenger service charges incurred by Mr. Rosenthal and paid by opposer; and six charges to Mr. Rosenthal's credit card (one apparently for framing a picture for his office and five apparently for restaurant bills), for which Mr. Rosenthal asked Mr. Breuer to reimburse him (the reimbursement check was drawn on opposer's account).



  *7 As indicated above, in footnote 4, these materials support opposer's case-in-chief and thus constitute improper rebuttal. Although applicant did not object to the exhibits and accompanying testimony on this ground, and they have therefore not been excluded from the record, their probative value is severely compromised since applicant was deprived of its right to rebut or explain them. It is quite possible that applicant might have been able to explain or rebut all of the exhibits and accompanying testimony if they had been introduced, as they should have been, during opposer's main testimony period. [FN8]



 Further, it is clear from Mr. Breuer's testimony that his understanding of the legal significance of the term "joint venture" was hazy, at best. For example, at page 31 of his rebuttal testimony, he testified that Mr. Rosenthal "was supposed to come in as a joint venturer to sell both Hoyle and T.J. Manalo products, but he never, never made an attempt, nor did he ever sell a Hoyle product." Similarly, at page 49 of the same deposition, he stated, with respect to the styling of sweaters,

   Any successful company, it's a total input. Again, I use the word joint venture by everybody, salespeople, manufacturing people, by the buyers, by people going overseas to Italy or to Spain or Montreal or to Atlanta, Georgia, or to a boutique on Madison Avenue where more styles are picked up here on Madison Avenue.



 Finally, as noted by applicant in its brief, another problem with opposer's case is that opposer is Hoyle Knitting Mills, Inc., but a good part of the record presented by opposer relates to the activities of Mr. Breuer. That is, the activities on which opposer bases its claim of joint ownership rights in the involved marks are in significant part the individual activities of Mr. Breuer, acting in his own behalf as a commissioned salesman of applicant, not the activities of opposer.



 Opposer, as plaintiff herein, had the burden of proving, by a preponderance of the evidence, that opposer and applicant formed a joint venture for the purpose of manufacturing young men's sweaters under the marks sought to be registered. For the reasons specified above, we are of the opinion that opposer's record in this case falls far short of proving the elements of a joint venture, particularly with respect to the elements of right to control and duty to share in any losses which might be sustained. [FN9]



 Decision: The opposition is dismissed with prejudice.



J. E. Rice



R. F. Cissel



E. J. Seeherman



Members, Trademark Trial and Appeal Board



FN1. Serial No. 613,610, filed August 7, 1986.



FN2. Serial No. 613,609, filed August 7, 1986.   The application includes a disclaimer of the words "Made," "New," and "Guys" apart from the mark as shown. In its brief on the case, applicant appears to assert, at page 1, that its mark sought to be registered in its application Serial No. 613,609 is "CONCRETE" and design, not "MIX CONCRETE" and design. The application statement also describes the mark as "CONCRETE" and design. Some of the specimens submitted with applicant's application Serial No. 613,610 for the mark "MIX CONCRETE" in typed form are labels bearing the same design as that shown above except that the word "MIX" is not included therein (i.e., they are labels showing the mark "CONCRETE" and design, and thus are not even appropriate specimens for the application to register "MIX CONCRETE" in typed form). However, in Serial No. 613,609 the drawing and all of the specimen labels show the mark "MIX CONCRETE" and design exactly as pictured above.



FN3. The two applications were opposed together in a single notice of opposition.



FN4. Much, if not all, of Mr. Breuer's rebuttal testimony (with accompanying exhibits) consists of material (primarily, testimony and exhibits concerning certain expenses paid by opposer or its president, Mr. Breuer, assertedly in furtherance of the "joint venture") which supports opposer's case-in-chief and hence constitutes improper rebuttal. See, for example: General Electric Co. v. Graham Magnetic Inc., 197 USPQ 690 (TTAB 1977). However, applicant has not objected to the testimony and exhibits as improper rebuttal, but rather has treated them as part of the record. Accordingly, the testimony and exhibits have been considered in our determination of this case, but their probative value is weakened by the fact that they were offered during rebuttal rather than during opposer's main testimony period, and that applicant was thus deprived of its right to rebut or explain the evidence.



FN5. Mr. Dunkelman and Mr. Rosenthal did not dispute Mr. Breuer's payment of the New York office expenses, but testified that Mr. Breuer was given a 5%, instead of a 4%, sales commission to help with the office expenses. On many other points, however, the testimony of Mr. Dunkelman and Mr. Rosenthal flatly contradicts the testimony of Mr. Breuer. Although we cannot, within the space limitations of this opinion, discuss in detail the testimony of each party on each disputed point, we give here three examples of Mr. Dunkelman's and/or Mr. Rosenthal's refutations of Mr. Breuer's testimony.

   First, Mr. Dunkelman testified, with respect to applicant's use of prepacks, that during the six years prior to the formation of applicant, he was the president of two different clothing companies which marketed clothing; that he used prepacks in both instances; and that the only discussion with Mr. Breuer and his customers relating to prepacks was "what the prepack should be, the size of them, the color assortment, breakdown." Mr. Rosenthal testified, in the same vein, that the use of prepacks is standard in the industry, and that two clothing companies he worked for before he came to applicant also used prepacks.

   Second, with respect to the factor, Mr. Dunkelman testified that applicant wanted to retain a bank to collect applicant's accounts receivable for a fee (i.e., to act as a factor); that because applicant's Hong Kong principals wanted to use a bank that had ties to a Hong Kong bank, they suggested two or three Hong Kong banks that were divisions of New York banks; that after negotiations with those banks, Manufacturers Hanover was selected because it offered the best fee rate; that applicant did not borrow any money from Manufacturers Hanover, because Hayward Knitting Mills (owner of applicant in large part) had plenty of money; and that while Mr. Breuer may have made a phone call to someone who called someone else, that had nothing to do with applicant's factor relationship with Manufacturers Hanover, which relationship was developed in Hong Kong.

   Third, Mr. Dunkelman testified that he hired Mr. Rosenthal; Mr. Rosenthal's testimony was to the same effect.



FN6. Again, space limitations do not allow us to describe all of the inconsistencies in detail, but we will mention a few examples. First, there was the change in Mr. Breuer's testimony as to his sales commission rate, as described above in our recitation of the basic facts.

   Second, he testified, at page 15 of his main testimony deposition, that he considered the three trademarks under which applicant's sweaters were first sold, namely, "T.J. MANALO", "CATTIVO", and "RUVIDO", to be jointly owned by himself and applicant because "I was promoting a ... new line from the outset, from scratch so to speak, with the idea that when it did well we would also share in the additional profits over and above the three percent commission." Similarly, at page 19, he testified that he thought that what he was (initially) entering into with applicant "was a joint venture in the fact that I would get the commissions and I would help style the line and use my offices and my telephones and my knowledge and my contact (sic) which made it a joint venture. I would think it's a joint venture." At page 14 of the deposition, however, when questioned about the agreement reached when he went to Hong Kong (in February or March of 1984) to meet applicant's principals there, he stated, "There was an agreement between Mr. Lo, and his father and Mr. Dunkelman and myself that I would sell their sweaters in the United States." When asked, on the same page, whether this was the extent of the agreement when he left Hong Kong, he replied that that was basically the agreement. In his rebuttal testimony, when asked on cross-examination, at page 53, if he ever had any discussions with Mr. Dunkelman regarding Mr. Breuer's becoming a partner or joint venturer in the T.J. Manalo operation, he replied "No, nothing to do with T.J. Manalo, strictly sales. That was our agreement; that's all I wanted, that's all he wanted."; and at page 55, when asked whether, at any time during his relationship with T.J. Manalo, there was discussion between the parties regarding the joining of resources to form either a partnership or a joint venture, he responded, "No, only with Concrete not with T.J. Manalo Concrete was supposed to be the joint venture."

   Third, at page 21 of his main testimony deposition, Mr. Breuer testified that applicant did not have an office of its own in this country, and just used opposer's office [the evidence offered by applicant, including exhibits as well as testimony, clearly establishes that applicant had an office in Cincinnati]; at pages 53 and 54 of his rebuttal deposition, he indicated that the filling of orders for applicant's sweaters was "all done out of Cincinnati."

   Fourth, at page 39 of his main testimony deposition, Mr. Breuer testified that shipments to fill orders for applicant's sweaters were made from two places, New York and Cincinnati; his rebuttal testimony, as indicated in connection with the third example, was that the filling of orders was all done out of Cincinnati.

   Fifth, while Mr. Breuer repeatedly referred to his payment of office expenses as one of the reasons why he thought there was a joint venture, and denied that he was given an extra percent on his sales commission to help cover the office expenses, he testified at page 20 of his main testimony deposition that applicant eventually was to reimburse opposer for the use of opposer's office, telephone, secretarial services, and so forth.



FN7. Mr. Breuer did not deny Mr. Rosenthal's testimony (which was similar to the testimony of Mr. Dunkelman) that opposer and applicant shared an exhibit booth and expenses at some trade shows where both parties exhibited their products. However, he stated that opposer's products, which were men's sweaters, were not exhibited at the March 1986 trade show in Charlotte; that no menswear was shown at that show, because the show was only for young men's wear; that only the Concrete division products, i.e., young men's sweaters, were shown there; and that he went to the show only because Mr. Dunkelman could not go due to a personal problem and asked Mr. Breuer to go in his place. During cross-examination, Mr. Breuer continued to maintain that the show was only for young men's wear, not for menswear, even though the invoices for the exhibit booth and display materials referred to the show as a "Menswear/Boyswear Show" and a "Menswear/Boyswear/Sporting Goods ... Show," respectively.



FN8. We note that some of the exhibits involved trade show expenses, and even Mr. Breuer testified that the parties shared trade show expenses. Others were for office expenses. As indicated in footnote 5, Mr. Dunkelman and Mr. Rosenthal did not dispute Mr. Breuer's payment of office expenses (actually these particular payments were made by opposer), and Mr. Breuer himself testified that applicant was to eventually reimburse opposer for these expenses (see footnote 6). As for the payment by opposer or Mr. Breuer of certain other expenses for Mr. Rosenthal, Mr. Breuer confirmed Mr. Rosenthal's testimony that when Mr. Rosenthal was hired to sell the young men's sweaters of the Concrete division, Mr. Rosenthal agreed to try to sell some of opposer's products, on a commission basis, also. Although there is a dispute in the testimony as to whether Mr. Rosenthal ever actually sold any of opposer's products, with Mr. Rosenthal saying he did and Mr. Breuer saying he didn't, this arrangement could account for the payment by opposer of these other expenses for Mr. Rosenthal. We note that there is no evidence that Mr. Breuer or opposer ever paid any of Mr. Rosenthal's travel expenses for sales trips (as opposed to trade show trips); and that the amounts paid by applicant for the development of its sweater lines and for Mr. Rosenthal's salary far exceeded the amounts paid by opposer and Mr. Breuer for office expenses, trade show expenses, and certain of Mr. Rosenthal's expenses. Further, Mr. Breuer testified at page 29 of his rebuttal deposition, that another salesman, Mr. Ben Howell, was hired, about a year before Mr. Rosenthal, to sell (and that he did sell) the sweaters of both applicant and opposer; that his salary was paid by Mr. Breuer (we assume he meant opposer); and that Mr. Howell was let go when Mr. Rosenthal was hired. Despite the fact that Mr. Breuer (or opposer) allegedly paid Mr. Howell's salary, and that Mr. Howell sold the products of both parties, Mr. Breuer asserted that it was only the Concrete division, which was not even formed until about the time that Mr. Howell was let go, that he claimed to be a joint venture (see footnote 6). We cannot see that the activities of Mr. Breuer and opposer after the formation of the new division differed significantly from their activities before the formation of the new division, except to the extent that their participation was, if anything, lessened since applicant paid Mr. Rosenthal's salary.



FN9. We would be of this opinion even if we construed the activities of Mr. Breuer as the activities of opposer, i.e., as if they were performed by him in his capacity as president of opposer rather than in an individual capacity.


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