New York State Appellate Court Modifies Trial Court Decision in Anti-Competitive Lawsuit Involving Nation's Two Largest Appliance Parts Distributors

Appellate Court Also Fast-Tracks Servall's Appeal

Mar 22, 2011, 13:12 ET from 1st Source Servall

BUFFALO, N.Y., March 22, 2011 /PRNewswire/ -- The New York State Appellate Division, Fourth Department, recently granted 1st Source Servall two key victories in its defense of a lawsuit brought by its chief competitor – Marcone APW, LLC.  By an Order dated March 10, 2011, the Appellate Court first granted a significant reversal of a February 8, 2011 decision by New York Supreme Court Justice John Michalek and then expedited the balance of Servall's appeal of the trial court's preliminary injunction against the company.  As a result, Servall is now free to sell its products to customers in the appliances industry despite Marcone's efforts to stop it from doing so.

"The Appellate Division's order represented a significant victory for 1st Source Servall and we look forward to having the rest of the trial court's decision reversed when the appeal is heard in May," said B. Kevin Burke, Jr., a partner at Jaeckle Fleischmann & Mugel, LLP in Buffalo, New York representing 1st Source Servall.  "This latest decision gives Servall immediate relief from Marcone's unfounded attacks and will allow Servall to continue growing its business in the Northeast, and specifically, in the Buffalo area.  We also appreciate the Appellate Division's decision to consider the surviving portion of the trial court's order on an expedited basis and see that as an important step toward the eventual dismissal of the frivolous claims in this lawsuit," Burke went on to explain.

According to Burke, the lawsuit was commenced by Marcone to stifle competition in the Northeast and prevent 1st Source Servall from serving those customers impacted by Marcone's recent poor service and price gouging following Marcone's take-over of Buffalo-based business AP Wagner.  "Marcone's sloppy take-over annoyed many customers, causing them to seek other supply sources, such as Servall," said Burke.  "Marcone is now seeking to re-claim its lost customers through litigation rather than by earning their business back in the market."

Burke also responded to an accusation made by Dave Cook, a senior officer at Marcone, regarding Servall's supposed "dishonesty."  "It is dumbfounding that anyone at Marcone would venture an opinion about whether its competitors are acting ethically, since it was this time last year that Marcone pled guilty before a federal judge in Florida to a charge that it knowingly bought and sold more than 100,000 kilos of a banned substance" known as HCFC-22 "and that Marcone remains on probation as a result of its admission of criminal activity."

Burke continued to explain how "customers that formerly did business with AP Wagner are saying that they left due to Marcone's increased pricing on appliance parts - in some instances as much as 200%, the lack of the availability of many parts from Marcone and Marcone's lack of professional customer service," Burke said.  "Instead of addressing a flawed business model and problematic operations, Marcone chose to start a lawsuit so that it can point to its groundless claims as an explanation for why it is losing major market share in the appliance parts industry."

"None of the information that a rogue former employee of Marcone sent to a few of his former colleagues now employed by Servall was 'confidential' or 'trade secret' under New York law," Burke went on to add.  "It's clear that Marcone wants a monopoly in the appliance parts industry in the Northeast and is trying to scare customers away from 1st Source Servall.  We are confident that 1st Source Servall's customers are seeing right through this charade," Burke said.  On this topic, Burke took issue with what he called "Marcone's ongoing smear campaign" against Mark Creighton, who is a former AP Wagner employee that Servall hired in April 2010.  "Mr. Creighton did nothing more than delete or destroy some Marcone computer files that he retained after Marcone forced him out of his job in the early spring of 2010.  The fact that Marcone has continued with its quest to destroy this man's reputation only reveals that Marcone will stop at nothing to maintain its stranglehold on the Northeast market."

Founded in 1929, 1st Source Servall ( is a third-generation family-owned and operated distributor of appliance parts. With branch offices and call centers located throughout the Midwest, Southwest, Southeast and Northeast, 1st Source Servall is the country's second-largest distributor of appliance parts.

Earl Wells/ Ben Roberts

SOURCE 1st Source Servall