550 F.3d 605 (7th Cir. 2008), 07-2694, AA Sales & Associates, Inc. v. Coni-Seal, Inc.

Docket Nº:07-2694.
Citation:550 F.3d 605
Party Name:AA SALES & ASSOCIATES, INCORPORATED, Plaintiff-Appellant, v. CONI-SEAL, INCORPORATED, Defendant-Appellee.
Case Date:December 09, 2008
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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550 F.3d 605 (7th Cir. 2008)



CONI-SEAL, INCORPORATED, Defendant-Appellee.

No. 07-2694.

United States Court of Appeals, Seventh Circuit.

December 9, 2008

Argued Sept. 16, 2008.

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[Copyrighted Material Omitted]

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Peter V. Baugher, Jason M. Rosenthal (argued), Schopf & Weiss, Chicago, IL, for Plaintiff-Appellant.

Robert E. Shapiro (argued), Barack, Ferrazzano, Kirschbaum & Nagelberg, Chicago, IL, for Defendant-Appellee.

Before CUDAHY, FLAUM and ROVNER, Circuit Judges.

CUDAHY, Circuit Judge.

AA Sales alleges that Coni-Seal breached the parties' contract, as well as the Illinois Sales Representative Act, 802 Ill. Comp. Stat. 120/1, et seq. , by failing to pay it the commissions it was due. It alleges that it labored for nearly a decade to convince the retailer AutoZone to do business with Coni-Seal, and that Coni-Seal wrongfully denied it commissions after it finally started making sales to AutoZone. It also claims that Coni-Seal failed to pay it the post-termination commissions it is due based on Coni-Seal's sales to AA Sales' former accounts.

The district court granted Coni-Seal's motion for summary judgment, finding, inter alia, that there was no evidence that AA Sales actually effectuated Coni-Seal's sales to AutoZone. We affirm that portion of the judgment dismissing AA Sales' claim for post-termination commissions based on Coni-Seal's sales to accounts AA Sales gave up in 1995, but reverse the dismissal of AA Sales' claim for commissions based on Coni-Seal's AutoZone sales.


Coni-Seal is a family-owned automobile parts manufacturer. Originally, it made brake parts. More recently, it expanded its product line to include, among other things, chassis parts-parts related to an automobile's suspension system. AA Sales is a manufacturers' sales representative; Gerald Saltzman is its owner and sole employee. Saltzman began working with Coni-Seal in the 1980's. According to Saltzman, in the early days of the parties' relationship Coni-Seal offered few products and had no large national accounts. Saltzman helped Coni-Seal secure its first large, national clients and Coni-Seal rewarded him by naming him its “ special national accounts representative" in 1987.

The parties memorialized their 1987 agreement in a one-page contract that lies at the center of the present dispute. The 1987 written contract entitled AA Sales to a six percent commission “ on all products sold to the approved accounts," and provided for post-termination commission payments “ on all accounts that had been previously called on and sold by AA Sales." “ Approved accounts," in turn, were defined as accounts that Coni-Seal had given AA Sales written authorization to solicit. The contract did not prohibit oral modifications, and the parties subsequently modified the contract orally in two important respects: first, they began negotiating commissions on an account-by-account basis; and second, they dispensed with the written approval requirement, and Coni-

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Seal began giving Saltzman oral approval to solicit particular clients.

In 1994, Coni-Seal gave Saltzman oral approval to solicit sales from AutoZone, a large retailer of auto parts and accessories. In exchange, Saltzman was promised a three percent commission on all AutoZone sales. Relying on Coni-Seal's representation that AutoZone was AA Sales' account, Saltzman made approximately fifty sales trips at his own expense to AutoZone's headquarters in Memphis, Tennessee.

In 2001, Coni-Seal announced that it was expanding its product line to include chassis parts. Although the parties disagree about the details of this announcement, Saltzman concedes that he was initially told that Coni-Seal had no inventory or catalogs for its new product line and that Coni-Seal's sales representatives were “ advised" not to attempt to sell chassis parts until they were notified that the line was ready. Saltzman further concedes that he was never expressly told products from the chassis line were available for sale. However, Saltzman claims that he was authorized under the original agreement to sell all of the products contained in Coni-Seal's products catalog and that Coni-Seal later sent him client programs that included products from its chassis line.

Prior to Coni-Seal's announcement of its new chassis line, the parties' relationship had begun to sour. In 1995, Coni-Seal reassigned several accounts to its regional sales staff.1 In exchange for yielding responsibility for these accounts, Saltzman agreed to accept a two percent “ override" commission based on Coni-Seal's Illinois sales, as well as a flat fee of $1,700 per month.

The deterioration of the parties' relationship came to a head in 2003 when Coni-Seal authorized a second sales representative to make sales calls on AutoZone. When Saltzman learned of this, he confronted Coni-Seal's president Frank Pagano. He alleges that Pagano told him that Saltzman would share responsibility for the AutoZone account and assured him that he would still be entitled to the three percent commission he was originally promised. Later in 2003, Saltzman alleges that Coni-Seal asked him to split his AutoZone commissions with its other sales representative and that he refused.

In 2004, Coni-Seal began...

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