Where Can I Buy Certain Dri
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where can i buy certain dri
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Under the terms of the contract, Best Group was authorized to solicit orders within its territory for certain Dri-Steem products on the basis of terms and prices furnished by Dri-Steem. Under the original contract, Best Group's territory included the Upper Peninsula of Michigan and the State of Wisconsin except for certain counties in the west and southeast parts of the State. Upon Dri-Steem's acceptance the order, the contract provided that Best Group would be paid in one of two ways. If Best Group bought and resold the products, its compensation was the difference between its cost and selling price. If Dri-Steem invoiced the customer, Best Group's compensation was the difference between the selling price to the customer and the cost stated in the Dri-Steem price sheets or what was negotiated, less freight charges, taxes, commission splits and other agreed upon deductions.
Between 1985 and 1988, Best Group successfully introduced the Dri-Steem brand to engineers and contractors in the Wisconsin territory and increased its sales each year. In 1988, Best Group's territory was expanded to include the counties in southeast Wisconsin comprising the "Milwaukee Territory." By 1992, virtually all of the Dri-Steem products promoted by Best Group were purchased and owned by Best Group prior to resale. Neither at that time, however, nor at any time since, has Best Group actually taken possession of the Dri-Steem humidifiers it sold or maintained any inventory. Under the terms of the agreement, Best Group would submit orders to Dri-Steem on a buy and resell basis only. Dri-Steem could accept the orders, in whole or in part, or reject them. Best Group had no authority to assume or create any obligation on Dri-Steem's behalf. If the order was accepted, Dri-Steem would custom build the humidifier and ship it directly to the customer's building where it would be installed. Although Best Group bore the risk of nonpayment by the customer on units it sold, the risk was in fact quite low. The products were usually sold to reputable contractors on commercial buildings on which liens could be obtained. And since it could purchase on credit from Dri-Steem, Best Group had time to collect from its customer, although often the payment from the customer was substantially slower than the payment Best Group was required to make to Dri-Steem.
In construing this "vague and unhelpful" definition, Frieburg Farm Equipment, Inc. v. Van Dale, Inc., 978 F.2d 395, 398 (7th Cir.1992), the Wisconsin Supreme Court has declined to create a "bright line" rule that would provide clear guidance to businesses who risk running afoul of the WFDL and to the courts that must apply it. Instead, the Court has adopted a totality of the circumstances test that looks to two "guideposts" which are assessed by considering ten or more "facets" of the relationship. In adopting such a test, the Wisconsin Supreme Court has deliberately chosen the flexibility that a multi-faceted determination made on a case-by-case basis allows over the predictability and certainty that a more specific test would provide. Id. at 606, 407 N.W.2d 873. Such flexibility permits a court to do what it perceives as just, or equitable in the individual case before it. However, it also creates uncertainty and thereby leads to frequent litigation and the costs associated with it, as has occurred under the WFDL.
Notwithstanding the Wisconsin Supreme Court's rejection of "a bright line" or fixed percentage test, Best Group argues that the fact that approximately seventy percent of its gross profits is derived from its promotion and sale of Dri-Steem products is determinative of the issue of whether it is a dealership. In support of this argument, it points to the Seventh Circuit's language in Frieburg Farm Equipment, Inc. v. Van Dale, Inc., 978 F.2d 395, 399 (7th Cir.1992), wherein the court attempted to further distill the principles underlying the Wisconsin cases addressing the concept of "a community of interest." In so doing, the Frieburg court stated:
Frieburg, however, did not purport to change the test for a dealership under the WFDL. In stating that a community of interest may be found to exist when one of the two circumstances is shown, it was not saying that the presence of either circumstance requires a finding that such a relationship exists. Instead, a more reasonable reading of its language is that, in the absence of either circumstance, no dealership can be found. Thus, as Dri-Steem points out, the court has frequently held that no community of interest exists in cases where the plaintiff was able to show even greater economic dependence on the alleged grantor than Best has shown here. See Kania v. Airborne Freight Corp., 99 Wis.2d 746, 300 N.W.2d 63 (1981) (80-85%); *1079 Van Groll v. Land O'Lakes, Inc., 310 F.3d 566 (7th Cir.2002) (100% of sales); and Rakowski Distributing, Inc. v. Marigold Foods, 193 F.3d 504 (7th Cir.1999) (100% of profits); Kornacki v. Norton Performance Plastics, 956 F.2d 129 (7th Cir.1992) (75-80%).
Indeed, if there is any clear rule that can been gleaned from the Seventh Circuit's pronouncements on the WFDL, it is that no dealership will be found in the absence of a tangible financial investment by the alleged dealer that is specific to the dealership that is claimed to exist, or what some courts have referred to as "sunk costs." Frieburg, 978 F.2d at 399. Thus, in Sales & Marketing Assocs., Inc. v. Huffy Corp., 57 F.3d 602, 607 (7th Cir.1995), the court observed that "WFDL case law demonstrates that only a certain type of relationship is protected under it, and these cases all involve tangible financial investment." And in Moodie v. School Book Fairs, Inc., 889 F.2d 739, 744 (7th Cir.1989), the court noted in commenting on the statutory requirement of a community of interest, "[g]iven the rationale for the WFDL, ... the meaning of this requirement is apparent: it is where courts are to examine the relationship for indicia of a sufficient firm-specific investment." See also Moore v. Tandy Corporation, 819 F.2d 820, 822 (7th Cir.1987) ("To be a `dealer,' you must have made a financial investment in the dealership.")
IT IS FURTHER ORDERED that the parties appear telephonically by counsel at 9:30 A.M. on April 17, 2003. Prior to the scheduled conference counsel shall provide the clerk with the telephone number where they can be reached. The court will initiate the call.
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