A federal appeals court has reinstated a $187,000 breach-of-contract claim against DaimlerChrysler in a suit involving a marketing and employee-recognition program designed for Pittsburgh-area dealerships.
The 6th U.S. Circuit Court of Appeals in Cincinnati ruled that Charles Verrett can pursue his claim for the unpaid portion of work that he did on a business employee recognition program.
Verrett and an associate designed the program that matched dealerships with area companies. At monthly luncheons, participating companies honored their employees of the month, and the winners received use of a Chrysler-badged vehicle from the dealerships for 30 days.
'My client secured the dealerships and companies,' said Verrett's lawyer, Kelly Kruse of Bloomfield Hills, Mich. She said the former Chrysler Corp. continued the program 'after my client was out of the loop.'
The dealerships were not sued.
According to the suit, Verrett and his associate negotiated with Chrysler representatives in 1995 to sell and implement the program. Verrett claims that the Chrysler representatives verbally agreed to implement the program at six dealerships for $250,000 plus salary and expenses and that Chrysler would 'own the program' for one year.
Chrysler paid an initial $80,500 invoice but failed later to pay the balance allegedly due, the suit asserted. Chrysler claimed that its purchase order obligated it to pay only the $80,500 while Verrett relied on a 'progress payment' designation in the purchase order.
Jay Cooney, DaimlerChrysler's litigation communications manager, said, 'Our contention all along is that we contracted with Verrett in a purchase order for a specific amount of money for a specific amount of time.'
It was a test, Cooney said, and ended after six months. 'We decided not to move forward, and we paid him whatever we owed him. We don't understand why he wants more.'
A judge in U.S. District Court in Detroit sided with DaimlerChrysler and dismissed the case without trial.
The appeals court modified that decision in a unanimous opinion by Judge James Ryan, ruling that Verrett can pursue his contract claim. It found sufficient evidence for a jury to decide whether or not there was an enforceable contract and, if so, what its terms were.
However, the three-judge panel rejected Verrett's claim that Chrysler illegally retained his idea for the program. The idea was not protected by trademark, copyright, patent law or a confidentiality agreement, it said, and Chrysler refused to sign the confidentiality agreement Verrett sought early in the negotiations.
Verrett's lawyer, Kruse, said the next step is for the case to be scheduled for trial, possibly within the next few months.