Free Proposed Findings of Fact - District Court of Arizona - Arizona

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LANG & BAKER, PLC
8767 VIA DE COMMERCIO, SUITE 102 SCOTTSDALE, ARIZONA 85258 TELEPHONE (480) 947-1911

KENT A. LANG, #010041 WILLIAM G. KLAIN, #015851 Attorneys for Defendants/Counterclaimant

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA QC CONSTRUCTION PRODUCTS, LLC, a Delaware limited liability company, Plaintiff, ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) NO. CV03-1997 PHX ROS

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v.
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COHILL'S BUILDING SPECIALTIES, INC., and MICHAEL COHILL, Defendants. ________________________________________ COHILL'S BUILDING SPECIALTIES, INC., an Arizona corporation, Counterclaimant, v. QC CONSTRUCTION PRODUCTS, LLC, a Delaware limited liability company, Counterdefendant. ________________________________________

DEFENDANTS'/COUNTERCLAIMANT'S REVISED PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW

Pursuant to this Court's Fourth Revised Scheduling Order, Defendant Timothy Michael Cohill and Defendant/Counterclaimant Cohill's Building Specialties, Inc. submit the following revised proposed Findings of Fact and Conclusions of Law: FINDINGS OF FACT 1. On or about October 27, 1998, Defendant/Counterclaimant Cohill's Building Specialties,

Inc. ("Cohills") and Plaintiff/Counterdefendant QC Construction Products, LLC ("QC") entered into a Letter of Agreement (the "Agreement"). Case 2:03-cv-01997-ROS Document 131 Filed 05/24/2006 Page 1 of 8

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2.

In part, the Agreement expressly provided that QC "shall provide exclusive support and

material sales to Cohills toward developing the market for Bayferrox synthetic iron oxides, BAYFERROX by [QC] and the [QC] concrete coloring line of products throughout the territory of the state of Arizona." 3. The term of the Agreement commenced November 1, 1998 and was to continue for a

period of ten years thereafter. 4. On November 2, 1998, QC sold products in Arizona to Border Products Corp.

("Border") without Cohills' consent. 5. 6. At all times relevant, Border was been a competitor of Cohills. As Cohills possessed the exclusive right to sell QC products in the state of Arizona

during the term of the Agreement, absent either the consent of Cohills or a breach of the Agreement by QC, any and all persons in Arizona desiring to purchase QC products necessarily would have been required to purchase such products from Cohills. 7. During 2000, QC sold products to the following third parties in Arizona without Cohills'

consent, generating the following sales revenues: Meadow Valley Contractors Progressive Concrete (Bomanite) White Cap Cemrock Landscapes 8. $52,863.75 $158.50 $31.50 $7,770.16

During 2001, QC sold products to the following third parties in Arizona without Cohills'

consent, generating the following sales revenues: Cemrock Landscapes Larson Company Orco Progressive Concrete (Bomanite) $907.06 $977.40 $687.46 $2,645.96

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United Metro Materials 9.

$11,800.001

During 2002, QC sold products to the following third parties in Arizona without Cohills'

consent, generating the following sales revenues: Carter Waters Corp. Cemrock landscape Concrete Construction Supply $40.80 Creative Concrete HCS Cutler Larson Progressive Concrete (Bomanite) Twenty One Tech 10. $561.07 $126.80 $6.88 $9,488.84 $1,188.50 $64.95 $260.36

Between November 2, 1998 and December 28, 2001, QC sold products in Arizona to

Border without Cohills' consent at the aggregate price of $112,673.00. 11. During 1999, QC sold product in Arizona to Progressive Concrete without Cohills'

consent at the aggregate price of $586.00. 12. During 1999, QC sold product in Arizona to Twenty-One Tech without Cohills' consent

at the aggregate price of $65.25. 13. During 2000, QC sold product in Arizona to the Larson Group without Cohills' consent

at the aggregate price of $1,000.20. 14. Between January 1, 2002 through December 31, 2002, QC sold products in Arizona

to Border without Cohills' consent at the aggregate price of $49,769.00. 15. . . . Border has, on various occasions, purchased product from Cohills.

Cohills did consent to one specific sale by QC to San Javier Ready Mix (United Metro Materials). For further explanation as to Cohills' damages resulting from this sale, see footnote no.4. Case 2:03-cv-01997-ROS 3 Document 131 Filed 05/24/2006 Page 3 of 8

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16.

With respect to QC's 1998 sales in Arizona to entities other than Cohills, had such sales

been conducted through Cohills, Cohills would have incurred the following costs and expenses, and generated the following profits: Purchaser Border 17. Costs/Expenses2 $4,499.46 Profits3 $1,009.05

With respect to QC's 1999 sales in Arizona to entities other than Cohills, had such sales

been conducted through Cohills, Cohills would have incurred the following costs and expenses, and generated the following profits: Purchaser Border Progressive Concrete Twenty-One Tech 18. Costs/Expenses $32,189.61 $615.13 $88.24 Profits $6,351.07 $154.87 $24.76

With respect to QC's 2000 sales in Arizona to entities other than Cohills, had such sales

been conducted through Cohills, Cohills would have incurred the following costs and expenses, and generated the following profits: Purchaser Border Meadow Valley Contractors Progressive Concrete (Bomanite) White Cap Cemrock Landscapes Larson Group . . . "Costs/Expenses" as used herein represents Cohills' cost of goods sold together with Cohills' variable expenses on lost sales.
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Costs/Expenses $23,452.19 $63,084.30 $189.51 $35.99 $7,463.31 $1,101.86

Profits $9,166.70 $15,160.70 $45.55 $29.01 $3,609.12 $325.87

"Profits" as used herein represents Cohills' net lost profits. 4 Document 131 Filed 05/24/2006 Page 4 of 8

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19.

With respect to QC's 2001 sales in Arizona to entities other than Cohills, had such sales

been conducted through Cohills, Cohills would have incurred the following costs and expenses, and generated the following profits: Purchaser Border Cemrock Landscapes Larson Company Orco Progressive Concrete (Bomanite) United Metro Materials 20. N/A Costs/Expenses $41,315.39 $901.47 $874.18 $768.54 $2,460.70 Profits $18,806.88 $422.91 $500.97 $560.46 $1,274.43 $1,320.004

With respect to QC's 2002 sales in Arizona to entities other than Cohills, had such sales

been conducted through Cohills, Cohills would have incurred the following costs and expenses, and generated the following profits: Purchaser Border Carter Waters Corp. Cemrock Landscape Concrete Construction Supply $44.75 Creative Concrete HCS Cutler Larson Progressive Concrete (Bomanite) $823.06 $141.06 $3.18 $8,652.67 Costs/Expenses $55,504.48 $75.05 $300.84 $23.25 $245.44 $73.44 $1.28 $4,847.71 Profits $25,543.57 $30.11 $120.71

On one specific occasion, Cohills did permit QC to sell product directly to San Javier Ready Mix (United Metro Materials) in exchange for QC's agreement to pay Cohills $.11 for each pound of product sold to San Javier Ready Mix (United Metro Materials). QC never made such payment to Cohills despite selling 12,000 lbs. of material directly to San Javier Ready Mix (United Metro Materials). Case 2:03-cv-01997-ROS 5 Document 131 Filed 05/24/2006 Page 5 of 8

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Twenty One Tech 21.

$1,366.33

$552.31

Between November 1, 1998 and February 25, 2003, Cohills authorized QC to sell

directly to third parties in Arizona in only two instances: (1) Cohills agreed to allow QC to sell directly to San Javier Ready Mix (United Metro Materials) in satisfaction of a single order for product provided that Cohills received a 14 cent per pound commission on product sold, which commission was agreed to by QC; and (2) Cohills agreed to allow QC to sell product to Border for use in the first phase of a project at the University of Arizona. 22. Aside from QC's sale to San Javier Ready Mix in satisfaction of a single order for

product and QC's sale of product to Border for use in the first phase of a project at the University of Arizona, Cohills had no knowledge of QC's sales of product to third parties in Arizona and never consented thereto. 23. QC has never paid to Cohills the commission agreed to by QC in relation to the

sale of product by QC to San Javier Ready Mix (United Metro Materials) in satisfaction of a single order for product, which unpaid commission amounts to $1,320.00. 24. On February 25, 2003, Cohills commenced purchasing product from Bayer Corp., and

treated the Agreement as terminated as of such time. CONCLUSIONS OF LAW 1. Border. 2. QC repeatedly breached the Agreement between November 4, 1998 and February 25, QC breached the Agreement on November 4, 1998, by selling product in Arizona to

2003 by selling product in Arizona to Border, Progressive Concrete, Twenty-One Tech, Meadow Valley Contractors, White Cap, Cemrock Landscape, Larson Group, Larson Company, Orco, Carter Waters Corp., Concrete Construction Supply, Creative Concrete and HCS Cutler. 3. QC's repeated breaches of the Agreement between November 4, 1998 and February 25,

2003 directly caused damages to Cohills. . . .

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4.

It is reasonably probable that, but for QC's breach of the Agreement, Cohills would have

earned profits between from November 4, 1998 and February 25, 2003 by selling product in Arizona to Border, Progressive Concrete, Twenty-One Tech, Meadow Valley Contractors, White Cap, Cemrock Landscape, Larson Group, Larson Company, Orco, Carter Waters Corp., Concrete Construction Supply, Creative Concrete and HCS Cutler. 5. The loss of profits from sales that, but for QC's breach of the Agreement, are reasonably

probable to have been made by Cohills between from November 4, 1998 and February 25, 2003 by selling product in Arizona to Border, Progressive Concrete, Twenty-One Tech, Meadow Valley Contractors, White Cap, Cemrock Landscape, Larson Group, Larson Company, Orco, Carter Waters Corp., Concrete Construction Supply, Creative Concrete and HCS Cutler is a direct and natural consequence of QC's breaches of the Agreement 6. The lost profits suffered by Cohills as a direct and natural consequence of QC's breaches

of the Agreement has been established and proven by Cohills with reasonable certainty 7. Cohills has furnished the Court with a reasonable method of computing the net lost

profits it suffered as a direct and natural consequence of QC's breaches of the Agreement. 8. 12-341.01. 9. Pursuant to A.R.S. § 44-1201(A), Cohills is entitled to pre-judgment interest on its lost Cohills is the successful party of this action within the meaning of A.R.S. §§ 12-341 and

profits and post-judgment interest on all sums awarded to it, each calculated at the rate of 10% per annum until paid in full. 10. Defendant Timothy Michael Cohill is entitled to entry of judgment in his favor and

against QC on each of the Second, Third, Fourth, and Fifth Claims for Relief set forth in QC's Complaint. 11. Defendant/Counterclaimant Cohills is entitled to entry of judgment in its favor and

against QC on each of the First, Second, Third, Fourth, and Fifth Claims for Relief set forth in QC's Complaint. 12. Cohills is entitled to entry of judgment in its favor and against QC on the First Claim for 7 Document 131

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Relief set forth in Cohills' Answer and Counterclaim in the principal amount of $135,102.83, together with interest thereon calculated at the rate of 10% per annum from May 3, 2006 until paid in full. DATED this 24th day of May, 2006. LANG & BAKER, PLC By /s/ Kent A. Lang William G. Klain 6902 East First Street, Suite 100 Scottsdale, Arizona 85251 (480)947-1911 Attorneys for Defendants/Counterclaimant

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Original of the foregoing filed this 24th day of May, 2006, with: United States District Court For the District of Arizona Copy of the foregoing mailed this 24th day of May, 2006, to: Honorable Roslyn O. Silver United States District Court For the District of Arizona 401 West Washington Phoenix, Arizona 85003 Russell K. Ryan, Esquire Motschiedler Michaelides & Wishon LLP 1690 West Shaw Avenue; Suite 200 Fresno, California 93711 Attorneys for Plaintiff/Counterdefendant By: /s/ Alicia Smith

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