In the Matter of a Mail Dispute ) September 12, 1997 Between ) ) BHC MARKETING, INC. ) ) and ) ) G A MARKETING, INC. ) d/b/a BHC MARKETING, INC. ) P. S. Docket No. MD 97-273 APPEARANCE FOR BHC Ronald L. Haskvitz, Esq. MARKETING, INC. (MR. COBB): Lommen, Nelson, Cole & Stageberg 1800 IDS Center 80 South Eighth Street Minneapolis, MN 55402-2100 APPEARANCE FOR G A Tony L. Visage, Esq. MARKETING, INC. (MR. HOWARD): Bracewell & Patterson South Tower Pennzoil Place 711 Louisiana Street, Suite 2900 Houston, TX 77002-2781
This mail dispute has been docketed pursuant to Postal Operations Manual (POM7, August 1, 1996) Section 616.21, which requires the Chief Field Counsel to forward certain unresolved mail disputes to the Judicial Officer for resolution. The mail in dispute, which is addressed to BHC MARKETING, INC., 7470 Market Place Drive, Eden Prairie, Minnesota, 55344-3634, is being held by the Eden Prairie Postmaster.
Both disputants have submitted sworn statements, and other documents in support of their claims, as required by 39 C.F.R. §965.5. Mr. Cobb also submitted a response to Mr. Howard's filing, as permitted by 39 C.F.R. §965.6. The following findings of fact are based on all the materials submitted by both parties, including that forwarded by the Postal Service Law Department, Chicago Office.
1. BHC Marketing, Inc. is a Minnesota corporation, formed by disputants Cobb and Howard in February 1988. Its principal business is the sale of insurance. Its registered office has been at 7470 Market Place Drive, Eden Prairie, Minnesota, since November 1991, and it also has a place of business at 25120 Grogans Park Drive, The Woodlands, Texas 77380.
2. On November 16, 1996, Mr. Cobb and Mr. Howard, the only two shareholders of BHC Marketing, Inc., entered into a "Reorganization Agreement." The essence of the agreement was to create two subsidiary corporations, ECA Marketing, Inc. (ECA), to be owned and operated by Cobb in Minneapolis, and G A Marketing, Inc. (GAM), to be owned and operated by Howard in Texas. BHC Marketing, Inc. was to retain some of its assets, however, and the corporation was a signatory party to the agreement, along with Cobb and Howard.
3. Mr. Cobb and Mr. Howard each owned 675 shares of BHC Marketing, Inc. To create the two subsidiaries, each transferred 600 of their shares back to BHC Marketing, Inc., in exchange for stock in the new corporations. The agreement specified in detail how the assets of BHC Marketing, Inc. were to be divided. One of the terms is stated, on page 5, as follows:
(h) The Name - "BHC Marketing". On the Closing Date, all right, title and interest in the name "BHC Marketing" and all variations thereof shall be transferred to GAM; provided, however, that for a period of 180 days after the Closing Date, ECA may use the name "BHC Marketing" for the limited purpose of identifying itself as a successor to certain of BHC's assets and business. Within 30 days after the request of GAM, BHC shall change its name to a name to be mutually agreed upon by Howard and Cobb, and BHC shall be responsible for all costs and expenses associated therewith. BHC shall have the right to use "BHC Marketing" as an assumed name.
4. On July 2, 1997, Mr. Visage, attorney for GAM, wrote to the Eden Prairie Postmaster, asking that all mail addressed to BHC Marketing, Inc. be forwarded to 25120 Grogans Park Drive, The Woodlands, Texas 77380. On July 11, 1997, Mr. Haskvitz, attorney for BHC Marketing, Inc., wrote to the Eden Prairie Postmaster, stating that this mail should continue to be delivered to 7470 Market Place Drive, thus precipitating this mail dispute.
5. The November 16, 1996 Reorganization Agreement was signed by Mr. Cobb and Mr. Howard, as individuals, and by Mr. Howard for BHC Marketing, Inc., as "President." In connection with the reorganization, the parties also signed a "Shareholder Control Agreement," on December 12, 1996. This document is also signed by both men as individuals, and by Mr. Howard, as President of BHC Marketing, Inc. The text of the Shareholder Control Agreement lists Mr. Howard as President and Secretary , and Mr. Cobb as Vice-President and Treasurer, of BHC Marketing, Inc. Mr. Cobb's sworn statement also identifies himself as Vice-President and Treasurer.
Contentions of the Parties
Mr. Cobb argues that the Reorganization Agreement, in the paragraph quoted above, only gave GAM the right to use the name "BHC Marketing," not BHC Marketing, Inc., and therefore gave GAM no right to receive mail addressed to BHC Marketing, Inc. at the Eden Prairie address. The fact that the agreement recognized that BHC Marketing, Inc. was going to continue to exist and carry on certain corporate functions, he says, implies that the corporation would continue to receive mail addressed to it, at its long-time address. He also argues that it should be assumed that anyone who sent mail intended for GAM would address it to the Texas address, no matter what corporate name was on it.
Mr. Howard argues that the Reorganization Agreement gave him (GAM) the sole right to use the name BHC Marketing and, therefore, any mail addressed to that name, whether or not it includes the "Inc.," should be forwarded to the Texas address. He also asserts, based on information from customers and a former ECA employee (an affidavit from this employee is in the file), that some mail intended for GAM was received at the Eden Prairie address, and was not forwarded.
The general purpose of Postal Service rules regarding delivery of mail is to ensure that mail reaches the destination intended by the sender. In this case it is likely that some of the mail in dispute is intended for BHC Marketing, Inc. at the Eden Prairie address, and some is intended for GAM, d/b/a BHC Marketing in Texas. It is not possible to determine whether a large majority of the disputed mail is intended for one party or the other.(1) Therefore, the rule that dictates the outcome of this dispute is found in Section 614.1 of the Postal Operations Manual, which states that in the event of a dispute over mail addressed to a corporation, the mail "must be delivered according to the order of the organization's president or equivalent official."
It appears clear that Mr. Howard is the president of BHC Marketing, Inc. Therefore, he is entitled to direct delivery of the disputed mail. This decision deals only with delivery of the disputed mail. It does not determine ownership of the contents, nor does it determine any other underlying dispute between the parties. If Mr. Howard (GAM) receives any mail that is intended for Mr. Cobb, it is his responsibility to forward that mail promptly.
The attached delivery order should be issued.
Bruce R. Houston Chief Administrative Law Judge