Alexander Assocs., Inc. v. FCMP, Inc.
| Decision Date | 27 March 2012 |
| Docket Number | Case No. 10-12355 |
| Parties | ALEXANDER ASSOCIATES, INC., Plaintiff, v. FCMP, INC., FCMP FRANCE, FCMP INDUSTRIES, FCMP DEVELOPPEMENT, and KFI KARTAL FCMP OTOMOTIV SAN. TIC. C.A.S., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Honorable David M. Lawson
Plaintiff Alexander Associates, Inc. filed the present action in state court to collect sales commissions allegedly due under a contract in which the plaintiff agreed to sell automotive products manufactured by defendant FCMP, Inc. After defendant FCMP, Inc. removed the case to federal court, it filed a motion for judgment on the pleadings. That motion calls into question two aspects of the parties' contract: the identity of the customers to whom the plaintiff had the exclusive right to sell the defendant's products; and whether the contract describes an exclusive agency agreement, or an exclusive sales agreement. The motion also attacks counts of the complaint seeking recovery on an implied contract theory and a declaratory judgment. The motion was argued in June of last year and remains under advisement. While the motion was pending, the plaintiff sought and obtained leave to amend the complaint to add additional defendants. The newly-added defendants, foreign companies that are related to FCMP, Inc., moved to dismiss arguing that they have nocontact with this forum and the Court does not have personal jurisdiction over them. The plaintiff has answered that motion and the defendants have replied. The Court has reviewed the pleadings and motion papers and finds that the papers adequately set forth the relevant facts and law and oral argument will not aid in the disposition of the motion to dismiss. Therefore, it is ORDERED that the motion be decided on the papers submitted. See E.D. Mich. LR 7.1(f)(2).
FCMP, Inc.'s motion for judgment on the pleadings will be denied because the agreement explicitly states that changes to the exclusive customer list need not be in writing; the provision of the agreement governing the parties' relationship is ambiguous; even though the existence of a contract precludes recovery under the theories of quantum meruit and unjust enrichment, the plaintiff is entitled to plead in the alternative at this stage of the lawsuit; and a declaratory judgment may be useful in determining the parties' obligations concerning future commissions.
The personal jurisdiction motion was brought by defendants FCMP France, FCMP Industries, FCMP Developpement, and KFI Kartal FCMP Otomotiv San. Tic. C.A.S. ("KFI"). That motion will be denied as to defendant FCMP France and granted as to the others. The plaintiff has not demonstrated sufficient contacts with Michigan by any of the newly-added defendants to allow the exercise of general personal jurisdiction. Nor has the plaintiff shown that FCMP Industries, FCMP Developpement, or KFI have had sufficient contacts with Michigan to support limited personal jurisdiction or that FCMP, Inc. is a subsidiary of those companies acting as their alter ego. However, the plaintiff has set out a prima facie case that FCMP France has purposefully availed itself of the privilege of doing business in Michigan and that exercising personal jurisdiction over it would be reasonable. Therefore, the motion to dismiss for want of personal jurisdiction will be granted in part and denied in part.
FCMP, Inc., along with the related companies FCMP France, FCMP Industries, FCMP Developpement, and KFI, manufactures and supplies a variety of automotive parts including valves, pistons, sleeves, end caps, end plugs, automatic braking system components, and air bag parts. According to the amended complaint, on July 14, 2004, the plaintiff entered into an agreement with defendant, FCMP, Inc. that granted the plaintiff "the exclusive right (to the exclusion of Principal and all claiming by or through Principal) to act as the exclusive sales representative of Principal." Defs.' Mot. to Dismiss Ex. B ¶ 1.1 (Agreement). In return for acting as a sales representative for FCMP, Inc., FCMP, Inc. agreed to pay the plaintiff a commission for sales made to a list of "Exclusive Customers." Ibid. The plaintiff contends that it successfully solicited orders for the defendant and is owed commissions under the agreement. The agreement states that it shall be enforced and construed under the laws of Michigan.
The agreement names only the plaintiff and FCMP, Inc. as parties. However, by its terms it is binding not only on those two parties, but also "their respective successors, assigns, transferees, asset purchasers and joint ventures." Agreement ¶ 13.1. The agreement continues that if FCMP, Inc. sold its assets or any of its "commissionable" business, the agreement "shall be binding upon the successor, assignee, transferree, asset purchaser, or joint venture to the same extent as it would be binding on [FCMP, Inc.] if no sale or transfer had taken place." Ibid. The plaintiff alleges that FCMP, Inc. and FCMP France directed it to represent all the related companies. The plaintiff also alleges that FCMP, Inc. was acting as an agent for all the other defendants in directing the plaintiff's activities.
The agreement required the plaintiff to "use its best efforts to solicit orders from the Exclusive Customers to develop profitable business for [FCMP, Inc.] and to promote the goodwill, name and interest of [FCMP, Inc.] and its products to the Exclusive Customers." Agreement ¶ 4.1. The plaintiff's duties under the agreement were to (1) make quotations, demonstrations, and presentations as reasonably necessary to sell the products, (2) promptly resolve inquiries and problems raised by customers, (3) maintain familiarity with the current and prospective requirements of customers on the list of Exclusive Customers, (4) solicit business only from customers listed as Exclusive Customers, and (5) forward all requests for quotes, proposals, orders, or offers to the defendant.
FCMP, Inc. agreed to pay the plaintiff a commission of five percent for products or parts that were sold, unless otherwise agreed upon. The agreement required FCMP, Inc. to pay commissions "for the life of the product or part," as long as the product or part remained substantially the same. Agreement ¶ 7.1. In the event of termination, the agreement entitled the plaintiff to receive commissions for the life of the part or product if the "request for quotation or an inquiry was received prior to the effective termination date." Agreement ¶ 9.
One of the main disputes in this case is whether the plaintiff must have been the procuring cause of the sale before it would be entitled to a commission. The plaintiff argues that it earned a commission under the agreement, regardless of who made the sale. However, FCMP, Inc. contends that commissions are only earned if the plaintiff procured the sale, and the agreement allowed FCMP, Inc. to sell its own products without obliging it to pay the plaintiff a commission. However, the agreement states that FCMP must provide the plaintiff copies of all communications relating to the plaintiff's customers or prior customers within 30 days of receiving such communication.
The agreement included a list of Exclusive Customers attached to the agreement as Exhibit A. The agreement stated that the plaintiff had "the exclusive right to solicit orders for the Products from those customers listed in Exhibit 'A'." Agreement ¶ 3.1. The list was subject to modification, but not necessarily by means of a formal modification. The agreement states that "with the exception of mutually agreed upon changes to Exhibit A, [the agreement] may be amended only by an instrument in writing signed by both parties . . . . " Agreement ¶ 14. The list was amended formally in writing three times over the course of the agreement; first on December 6, 2005, then on February 8, 2006, and finally on May 2, 2006. The plaintiff contends that the list of Exclusive Customers was amended at other times during the agreement, although it was not amended in a writing signed by both parties. The defendant, on the other hand, argues that the plaintiff is only entitled to commissions for sales to customers on the list of Exclusive Customers that was written and signed by both parties.
The duration of the agreement was one year from the date of its signing, with a provision that it would automatically renew each year upon the same terms and conditions. However, either party could terminate the agreement with thirty days written notice to the other party. FCMP, Inc. terminated the agreement effective February 15, 2010 with a letter to the plaintiff dated February 12, 2010. FCMP, Inc. alleges that the plaintiff failed to use its best efforts in performing its duties.
The plaintiff contends, however, that it did everything it was called upon to do throughout the entire relationship. The plaintiff alleges that the defendants have not paid all the pre- and post-termination commissions required by the agreement Additionally, the plaintiff argues that the termination was an attempt by the defendants to avoid the payment of commissions that were likely to materialize. However, the plaintiff does not offer any specificity concerning the amount of thecommissions owed, the dates on which the sales were completed, or to whom the sales occurred. The plaintiff also alleges that the termination violated the agreement because the defendant did not give thirty days written notice.
On May 10, 2010, the plaintiff filed the present action in the Oakland County, Michigan circuit court. The original complaint presented claims for (1) breach of contract, (2) quantum meruit or unjust enrichment, and (3) declaratory judgment. The plaintiff requested actual damages, exemplary damages,...
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