Cent. Tower Exch. Corp. v. German Motor Parts GMBH

• Decision Date: 10 February 2021
• Docket Number: Case No. 1:19-cv-01144
• Citation: 518 F.Supp.3d 1233
• Court: U.S. District Court — Central District of Illinois
• Parties: CENTRAL TOWER EXCHANGE CORPORATION, an Illinois corporation, Plaintiff, v. GERMAN MOTOR PARTS GMBH, a German corporation, and German Motor Parts CZ s.r.o, a Czech corporation, Defendants.

518 F.Supp.3d 1233

CENTRAL TOWER EXCHANGE CORPORATION, an Illinois corporation, Plaintiff,

v.GERMAN MOTOR PARTS GMBH, a German corporation, and German Motor Parts CZ s.r.o, a Czech corporation, Defendants.

Case No. 1:19-cv-01144

United States District Court, C.D. Illinois, Peoria Division.

Signed February 10, 2021

Adam J. Glazer, Andrew Shilling Johnson, Schoenberg Finkel Newman & Rosenberg LLC, Chicago, IL, for Plaintiff.

John Henry Wickert, Lustig & Wickert P.C., Northbrook, IL, for Defendants.

ORDER & OPINION

JOE BILLY McDADE, United States Senior District Judge This matter is before the Court on the parties' cross-motions for summary judgment. (Docs. 25, 26). The motions have been fully briefed and the issues presented therein are ready for disposition. For the following reasons, the motions are each granted in part and denied in part.

BACKGROUND ¹

Plaintiff, Central Tower Exchange Corp., is an Illinois corporation "engaged in promoting sales and soliciting orders for mechanical products manufactured and supplied by the companies it represents." (Doc. 16 at 1). Defendants are German Motor Parts GmbH, a private corporation located in Germany, and German Motor Parts CZ, a wholly owned subsidiary of German Motor Parts GmbH located in the Czech Republic. (Doc. 16 at 1–2).

Around May 24, 2013, Plaintiff and Defendant German Motor Parts GmbH entered into a sales agreement "whereby German Motor Parts GmbH appointed [Plaintiff] as its sales representative to attract business for German Motor Parts GmbH on a designated customer basis ...." (Doc. 16 at 3; see also doc. 3). In December 2015, Defendant German Motor Parts CZ was added to the agreement. (Doc. 16 at 3).

The relevant contract provisions are contained in Paragraphs 4, 8, and 13. (See doc. 3, ¶¶ 4, 8, 13). Paragraph 4 reads:

The commissions are earned when the customer places orders with [German Motor Parts GmbH] and are due and payable on a monthly basis by the 25th of the succeeding month for all sales orders invoiced and paid in the prior period, regardless of when or where products or services are delivered.

Paragraph 8 states:

In the event [German Motor Parts GmbH] would elect to terminate [Plaintiff] at any or all customers, [German Motor Parts GmbH] must give thirty (30) day written notice and pay commissions on all jobs currently in production or jobs realized as a result of quotations generated during the period of representation for the life of the part or program, no matter where or when shipped. Post termination commissions shall be paid on all engineering changes for the life of the part/program. All outstanding unprocessed requests for quotations in [German Motor Parts GmbH's] possession at the end of the thirty (30) day period will be returned to [Plaintiff].

Lastly, Paragraph 13 states:

[German Motor Parts GmbH] agrees to pay reasonable attorney fees and costs in the event [Plaintiff] would have to retain legal counsel to enforce the Agreement.

As laid out in the contract, Plaintiff acted as Defendants' sales representative and solicited new business for Defendants. (Doc. 25 at 4–5). It appears Plaintiff was adequately compensated for its services at first, but Defendants began to fall behind on commission payments in early 2018. (Docs. 25 at 7, 26 at 2).

In July 2018, Plaintiff's Administrator emailed Defendants' General Manager (GM) about June commissions. (Doc. 28 at 22 (Ex. 1)). Included was a list of invoices due to Plaintiff in March and April 2018 and a reminder that those invoices were "way past due and need[ed] to be paid immediately." (Id. at 23–28). At that point, Defendants owed $25,610.58. (Id. at 22). Separately, the email noted the "Melrose Park Parts," a project for which the parties agreed Plaintiff would "hold off on billing ... for a couple of months." (Id. ). Plaintiff's Administrator stated it was "time to catch up on past shipments" and asked Defendants how they planned to accomplish this. (Id. ).

In August 2018, Defendants' GM and Plaintiff's President exchanged emails addressing the outstanding payments.² (Doc. 26-1, Ex. A). Defendants' GM appears to have suggested holding off on paying invoices for a particularly troubled project. (Id. ). Plaintiff's President replied Defendants' proposal was unacceptable and suggested a repayment plan Plaintiff could "live with" in order for Defendants to "get current on their commission" without having to resort to litigation. (Id. ). This plan included Defendants paying the commission on all invoices as stated in the parties' contract starting in September 2018 and paying an additional $5000 every month starting in October 2018 to pay down the arrearage. (Id. ). Plaintiff's President stated the "only alternative that [Plaintiff] see[s] to [Defendants] making these payments (starting in September) is to turn this matter over to [Plaintiff's] attorneys ...." (Id. ). Defendants' GM responded with his own proposal, which included sending new invoices by the end of September 2018 and starting payment of the additional $5000 per month in December of that year. (Id. ). In response, Plaintiff's President requested a list of invoices Defendants planned to pay and asked if Defendants planned to add $5000 to monthly payments starting in December and continue those payments until all of Defendants' debt was paid. (Id. ). Defendants' reply suggested they hold off on sending invoices until the end of September and confirmed its proposal for the additional payments. (Id. ). It appears Plaintiff did not respond further. Following this exchange, Plaintiff began accepting payments toward the arrearage.

Problems with timeliness continued, however. On October 11, 2018, Plaintiff's Administrator again emailed Defendants' GM demanding September payments that were well past due and objecting to some invoices being put on hold despite Defendants' email stating they would start paying all invoices starting in September. (Doc. 28, Ex. 2). On November 26, 2018, Plaintiff's Administrator again emailed Defendants' GM asking about commissions that were due the previous day. (Doc. 28, Ex. 3).

In March 2019, Defendants attempted to renegotiate the terms of the contract in order to "reduce the commissions [Plaintiff] could earn and to avoid other provisions of the Agreement, including Paragraph 8," but this attempt was rebuffed by Plaintiff. (Docs. 25 at 6, Ex. C; 27 at 3). On March 29, 2019, after these negotiations failed, Defendants sent a termination letter to Plaintiff, which was to take effect two days later on March 31, 2019 (docs. 25 at 6; 27 at 2), despite the fact the contract required thirty days' notice of termination (doc. 3, ¶ 8).

Plaintiff filed its Complaint in late April 2019, at which time Defendants owed $56,529.56 in outstanding commission payments. (Docs. 1, ¶ 42; 25 at 8; 27 at 2). Defendants continued to make payments throughout this litigation, eventually paying off the entire arrearage of $56,529.56. (Docs. 28 at 2, Ex. A; 30-1, Ex. A).

LEGAL STANDARD

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A genuine dispute of material fact exists ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ " Skiba v. Ill. Cent. R.R. Co. , 884 F.3d 708, 717 (7th Cir. 2018) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). "The nonmovant bears the burden of demonstrating that such genuine issue of material fact exists." Aregood v. Givaudan Flavors Corp. , 904 F.3d 475, 482 (7th Cir. 2018). "The parties must support their assertions that a fact is disputed or cannot be genuinely disputed by citing to admissible evidence in the record." Horton v. Pobjecky , 883 F.3d 941, 948 (7th Cir. 2018).

The record is viewed in the light most favorable to the nonmovant, and the Court must draw all reasonable inferences from the evidence in the nonmovant's favor. BRC Rubber & Plastics, Inc. v. Continental Carbon Co. , 900 F.3d 529, 536 (7th Cir. 2018). When presented with cross-motions for summary judgment, the Court must consider the motions separately, which necessarily means the nonmovant differs depending on the motion being considered. Schlaf v. Safeguard Prop., LLC , 899 F.3d 459, 465 (7th Cir. 2018) (quoting Hendricks-Robinson v. Excel Corp. , 154 F.3d 685, 692 (7th Cir. 1998) ). This, however, does not alter the standard for reviewing a motion for summary judgment or the parties' respective burdens.

DISCUSSION

The Complaint contains four claims. Count I alleges breach of contract; Count II alleges a violation of the Illinois Sales Representative Act (ISRA), 820 ILCS 120/1–3; Count III, pled in the alternative, alleges unjust enrichment; and Count IV requests declaratory relief affirming Plaintiff's contractual right to receive post-termination commissions and ordering Defendants to account for all commissions due to Plaintiff.³ (See doc. 1).

Plaintiff seeks summary judgment on four points. First, combining the elements of Counts I and II, it requests the Court (1) determine Defendants breached the parties' contract by failing to timely pay commissions and (2) award Plaintiff attorney's fees pursuant to both the contract and the ISRA. (Doc. 25 at 16). Second, drawing from Count II, it requests the Court find Defendants liable under the ISRA and award statutory exemplary damages in the amount of three times the unpaid commissions at the time the Complaint was filed. (Id. ). Third, drawing from Count I and pursuant to 815 ILCS 205/2, it requests the Court award pre-judgment interest on the unpaid commissions during the period in which Defendants paid down their arrearage. (Id. ). Finally, drawing from Count IV, it requests a declaration it is "entitled to post-termination sales commissions on any business solicited by Plaintiff" under the contract. (Id. ).

Defendants likewise seek...