Aidamark, Inc. v. Roll Forming Corp., 092214 FED6, 14-1068

Docket Nº:14-1068
Opinion Judge:RICE, District Judge.
Party Name:AIDAMARK, INC., Plaintiff-Appellant, v. ROLL FORMING CORPORATION, Defendants-Appellees.
Judge Panel:BEFORE: COOK and GRIFFIN, Circuit Judges; RICE, District Judge.
Case Date:September 22, 2014
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

AIDAMARK, INC., Plaintiff-Appellant,

v.

ROLL FORMING CORPORATION, Defendants-Appellees.

No. 14-1068

United States Court of Appeals, Sixth Circuit

September 22, 2014

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN

BEFORE: COOK and GRIFFIN, Circuit Judges; RICE, District Judge. [*]

RICE, District Judge.

Plaintiff-Appellant Aidamark, Inc. ("Aidamark"), appeals the district court's decision granting summary judgment in favor of Defendant-Appellee Roll Forming Corporation, Inc. ("RFC"). Believing that it was owed unpaid sales commissions after RFC terminated a long-standing agreement between the parties, Aidamark filed suit alleging breach of contract, a violation of the Michigan Sales Representative Act ("MSRA"), Mich. Comp. Laws § 600.2961, and claims for accounting and declaratory judgment. Because the district court correctly determined that the undisputed evidence showed that Aidamark received all the sales commissions to which it was entitled under the parties' agreement, we AFFIRM the judgment of the district court.

I. FACTUAL BACKGROUND

Aidamark is a closely-held Michigan corporation with its principal place of business in Rockford, Michigan. Its sole shareholder is Rick Engvall ("Engvall"). RFC is a Kentucky corporation that manufactures roll-formed steel parts, and its principal place of business is Shelbyville, Kentucky.

Aidamark and RFC entered into an agreement (the "Agreement") on May 27, 2003, under which Aidamark was to function as the "exclusive sales representative" of RFC for the sale of its products in Michigan and several Indiana counties. Under the Agreement, Aidamark was entitled to "a commission of 5% on net billed sales of all roll[-]formed products" that Aidamark sold in its sales territory and were "shipped by" RFC. Sales commissions were "considered as earned on the date of payment by the customer for the products" that Aidamark sold. Although Aidamark functioned as RFC's sales representative, the Agreement carefully defined the scope of the representation by placing restrictions on Aidamark's activity. For example, Aidamark could collect orders and submit them for approval to RFC, but could not "commit, obligate, or bind Roll Forming Corporation in any manner whatsoever, contractually, or otherwise, " under the Agreement. Any price quote had to be obtained from RFC and "formally presented on Roll Forming Corporation standard quotation form for delivery by [Aidamark] [to] the customer." The Agreement could be "terminated in its entirety at any time" by either party with ninety days' advance written notice.

On June 16, 2008, Engvall, on behalf of Aidamark, and Geoff Repp ("Repp"), on behalf of RFC as its Sales Manager, signed an addendum to the Agreement that identified the specific accounts assigned to Aidamark. Among the accounts listed were Steelcase, an office furniture manufacturer, and Interkal, a manufacturer of telescoping spectator bleachers. Aidamark's claims of unpaid sales commissions arose from transactions between RFC and those two companies.

In 1998, RFC began manufacturing roll-formed metal products for Steelcase's "Answer" line of office furniture and cubicle panel systems. Aidamark was not involved in the sales of the original "Answer" line of products, but it functioned as RFC's representative to Steelcase on sales of other products. Steelcase began a redesign of its "Answer" line, which ultimately became known as the "Answer JT" line.

After several years of negotiation, development, and meetings between Steelcase, Aidamark, and RFC's engineers, Steelcase decided to award the supplier contract to RFC for the roll-formed parts in the "Answer JT" line in July of 2010. The parties memorialized the award in several agreements. They signed a "Master Purchasing Agreement" on July 1, 2010, which set forth "some of the terms and conditions" that applied when Steelcase purchased RFC's products while acknowledging that other agreements would provide the pricing terms and other specifics for particular orders. The "Schedule of Product, " which took effect on December 8, 2010, was such an agreement. It provided for a "fixed term" of five years, and its provisions referenced a schedule that set forth the "initial prices" for RPC's products and lead times before delivery. Under Section 5.9, RFC was described as "the sole supplier of all products listed in Schedule A, unless you are unable to reasonably meet [Steelcase's] quality and delivery requirements for the Products in Schedule A." The "Schedule of Product" also incorporated by reference the provisions of the "Master Purchasing Agreement."1

Aidamark also serviced RFC's account with Interkal, a manufacturer of spectator bleachers. In 2000, Interkal and RFC entered into an agreement that designated RFC as the sole supplier of certain parts. Although the agreement specified an initial five-year term, the agreement stated that it would be "extended indefinitely, " but could be canceled by either RFC or Interkal with six months' advance written notice.

In early 2010, RFC and Aidamark began to discuss plans to engage Interkal in a new long-term agreement. Although a draft was submitted to Interkal, the parties were unsuccessful in getting Interkal to sign it, causing them to suspect that Interkal was shopping around for a new supplier. The suspicion was confirmed in May of 2011, when Interkal terminated its relationship with RFC. Engvall reminded Repp that Interkal was required to provide six months' notice before terminating the agreement, and Interkal agreed to honor the provision and continue to order from RFC for six more months.

Two weeks later, on June 2, 2011, RFC sent a letter to Aidamark stating that it was terminating the Agreement, thereby ending Aidamark's role as a sales agent for its products. RFC provided Aidamark with a sales commission statement on August 31, 2011, stating that Aidamark would be paid $26, 529.90 for payments on invoices that it had received. The statement also listed $49, 227.38 in commissions that RFC considered not earned under the Agreement, as it had not received payment from its clients for those invoices before the effective termination date of the Agreement. On September 29, 2011, RFC paid Aidamark $26, 529.90 in commissions for payments that RFC had received as of August 31, 2011.

II. PROCEDURAL BACKGROUND & SUMMARY JUDGMENT DECISION

Aidamark filed suit against RFC on February 29, 2012, in the 17th Circuit Court for Kent County, Michigan. In its complaint, Aidamark alleged that it had not been paid "three categories of commissions" by RFC. First, Aidamark alleged that RFC owed it for the $49, 227.38 of invoiced sales described in the August 31, 2011, commission statement. Second, Aidamark alleged that it was owed approximately $50, 000 in sales commissions for purchases made by Interkal. Third, Aidamark alleged that it had not been paid any commissions that it was owed under RFC's agreement with Steelcase to supply parts for the "Answer JT" product. According to Aidamark, it had "procured" the sales to Interkal that had been ordered but not shipped by August 31, 2011. Aidamark also alleged that it had "procured" RFC's sales to Steelcase for the "Answer JT" product, as it had "procured an agreement between RFC and Steelcase with estimated sales . . . of $5 million to $7 million per year." Aidamark alleged a claim for breach of contract and a violation of the MSRA, Mich. Comp. Laws § 600.2961, as well as claims for accounting and declaratory judgment, and sought relief in the form of actual damages, penalty damages, and statutorily authorized attorneys' fees.

On March 27, 2012, RFC removed the case to the United States District Court for the Western District of Michigan on the basis of diversity jurisdiction.

RFC filed for summary judgment on January 11, 2013, which the district court granted on December 27, 2013. In its decision, the district court found the language of the Agreement between Aidamark and RFC to be unambiguous, and read its terms to define Aidamark's commissions as "earned" only upon RFC's receipt of payment from a customer. The court also held that RFC had demonstrated that the undisputed facts showed that RFC had paid commissions on all orders for which it received payment prior to the August 31, 2011, termination date of the Agreement.2

The district court also held that because the Agreement did not contain a provision that addressed post-termination commissions, the procuring cause doctrine applied as a matter of law to its terms. Citing Michigan law, the court noted that the procuring cause doctrine allows an agent who was "the procuring cause of the sale" to recover a sales commission, even if he or she did not personally conclude or complete the sale. However, according to the district court, the undisputed facts showed that Aidamark had not been the procuring cause of any of the sales in question. Although Aidamark had assisted RFC in procuring the "Answer JT" account and agreement, the district court reasoned that the Agreement only allowed commissions on the actual sale of goods, not future sales from a procured account or customer. The district court...

To continue reading

FREE SIGN UP