Invictus Aerospace Grp., LLC v. Point Blank Enters., Inc.

• Decision Date: 30 April 2020
• Docket Number: Civil Action No. ELH-19-2983
• Parties: INVICTUS AEROSPACE GROUP, LLC, Plaintiff, v. POINT BLANK ENTERPRISES, INC., Defendant.
• Court: U.S. District Court — District of Maryland

INVICTUS AEROSPACE GROUP, LLC, Plaintiff, v. POINT BLANK ENTERPRISES, INC., Defendant.

Civil Action No. ELH-19-2983

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

April 30, 2020

MEMORANDUM OPINION

In this contract dispute, plaintiff Invictus Aerospace Group, LLC ("Invictus") filed suit against defendant Point Blank Enterprises, Inc. ("PBE"), claiming that PBE failed to pay commissions due in accordance with the terms of the parties' agreement. See ECF 1 (the "Complaint"). In particular, the Complaint alleges claims for breach of contract (Count I); unjust enrichment (Count II); quantum meruit (Count III); promissory estoppel/detrimental reliance (Count IV); and intentional misrepresentation-fraud (Count V). Id. ¶¶ 52-88.¹ Several exhibits are appended to the suit. See ECF 1-2 to ECF 1-4.

Two motions are pending. PBE has moved to transfer venue to the U.S. District Court for the Southern District of Florida, pursuant to 28 U.S.C. § 1404. ECF 16. The motion is supported by a memorandum of law (ECF 16-1) (collectively, the "Motion to Transfer") and two exhibits. ECF 16-2; ECF 16-3. Invictus opposes the Motion to Transfer (ECF 23), and has submitted four exhibits. ECF 23-2 to ECF 23-5. PBE has replied. ECF 24.

PBE has also moved to dismiss Count V. ECF 20. It is supported by a memorandum of law. ECF 20-1 (collectively, the "Motion to Dismiss"). Invictus "is not opposing Defendant PBE's Motion to Dismiss Count V of the Complaint." ECF 23-1 at 14 n.6. Accordingly, I shall grant the Motion to Dismiss.

No hearing is necessary to resolve the Motion to Transfer. See Local Rule 105.6. For the reasons that follow, I shall deny the Motion to Transfer.

I. Factual Background²

According to plaintiff, in 2015 PBE "acquired certain assets of The Protective Group" ("TPG"), a company that manufactures ballistic armor. ECF 1, ¶ 8. Invictus's Vice-President, Nathaniel ("Nate") Hoffman, had previously worked for TPG. Id. ¶ 9.³ Because of Hoffman's experience with TPG and his "expertise in ballistic armor sales in the Middle East, Africa, Asia, South America, and Europe[,]" PBE "solicited" Hoffman in September 2016, "on behalf of Invictus," to "manage business development on behalf of PBE in Huntsville, Alabama." Id. ¶ 10. The parties subsequently engaged in contract negotiations concerning Invictus's "territory, the scope of [its] business development duties, and compensation." Id. ¶ 11. On or about December 21, 2016, Invictus, through Nate Hoffman, executed a "Professional Services Agreement" (the "Contract"). ECF 1, ¶ 14; ECF 1-2. Lex Watson, the Vice President and General Manager of PBE, signed the Contract on behalf of PBE on January 6, 2017. ECF 1-2 at 5. The Contract had a term of thirty-six months. ECF 1, ¶ 16; ECF 1-2 at 1.⁴

Under the Contract, PBE was to pay Invictus a monthly retainer of $4,000. ECF 1, ¶ 12. According to plaintiff, PBE acknowledged that this amount "was low and below industry standards[.]" Id. However, PBE also "promised Invictus that it would establish a commission schedule for Invictus, and that said commission schedule would be commensurate with the commission schedules received by comparable consulting firms." Id. ¶ 13.

The Contract identifies Invictus as the "Contractor." ECF 1-2 at 1. As to "Scope of Work," the Contract provides that "CONTRACTOR shall focus its sales and marketing efforts on the U.S. federal government market ... and selected subcontractors and commercial companies as mutually agreed...." Id., § 2.1. And, it contains the following provisions in Paragraph 3, concerning compensation, ECF 1-2 at 2-3:

3. Retainer Fee and Commission.

3.1 Retainer Fee. PBE agrees to pay CONTRACTOR a monthly retainer fee of Four Thousand Dollars ($4000.00) due and payable in advance on the 1st day of each month during the term of this Agreement (the "Retainer Fee").

3.2 Commission. In addition to the Retainer Fee, PBE shall pay CONTRACTOR commission on sales secured by CONTRACTOR and awarded to PBE (the "Commission"), as follows:

PBE Sales

Commission payable to CONTRACTOR

Up to $10.0 million

1.0%

$10.0 million and up

2.0%

Contractor's commission rate is based on cumulative sales during the term of this [A]greement. When the total amount of PBE sales secured by CONTRACTOR equals or exceeds $10 million annually, Contractor's commission on such incremental sales will be paid at the 2% rate.

Example: If CONTRACTOR secures two contracts for PBE totaling $9,700,000, commission due to CONTRACTOR is 1% of $9,700,000 or $97,000. If CONTRACTOR later secures an additional $1 million contract for PBE, commission due to CONTRACTOR on the new contract would be calculated as 1% on $300,000 plus 2% on $700,000, or $17,000 ($3,000+$14,000).

3.2.1 PBE shall pay all commissions to CONTRACTOR within thirty (30) days after PBE receives payment from its customer.

3.2.2 Upon mutual agreement of the Parties, CONTRACTOR's commission rate may be revised during negotiations with a specific customer, allowing for flexibility in negotiating final pricing.

3.2.3 So long as a PBE sale or sale from a contract arises from the work of CONTRACTOR under this Agreement up to twelve (12) months after termination, PBE will be obligated to pay CONTRACTOR the Commission set forth herein, even if this Agreement is terminated prior to the consummation of such sale or contract or payment by PBE's customer.

3.3 Any and all Retainer Fees and Commission payments made by PBE to CONTRACTOR pursuant to this Agreement shall be made by wire transfer pursuant to instructions provided by CONTRACTOR.

3.4 The Parties may mutually agree to modify and/or expand the Scope of Work, and in such event, the Parties will also negotiate appropriate modifications to CONTRACTOR's Retainer Fee and Commission.

Of relevance here, Paragraph 9 of the Contract contains a forum selection clause, id. at 4:

9. Governing Law/Jurisdiction. [PBE standard forum of law is Florida] This Agreement is made and entered into in the State of Maryland and shall be governed and construed in accordance with the laws of Maryland, without regard to its conflict of laws principles. The Parties also agree that any dispute between the parties shall be resolved in the courts of Maryland, and each party consents to the exercise of personal jurisdiction by the courts of Maryland and expressly waives any argument of forum nonconveniens. The Parties waive a trial by jury.

And, Paragraph 11 of the Contract provides that modifications to the Contract must be made in writing, id.:

11. Modification; Assignment. This Agreement shall not be amended or assigned except by mutual written agreement of the parties.

Pursuant to the Contract, Invictus was "to perform Huntsville sales development as an authorized representative of Defendant PBE to to [sic] assist PBE in obtaining contracts for PBE products and services." ECF 1, ¶ 14. And, as indicated, Invictus was to "focus its sales and marketing efforts on the U.S. federal government market, U.S. federal government prime contractors, and selected subcontractors and commercial companies as mutually agreed by theParties." ECF 1-2 at 1, § 2.1; see ECF 1, ¶ 15. And, according to Invictus, Nate Hoffman "was specifically instructed to focus his sale[s] effort on US Army Aviation aircraft." ECF 1, ¶ 15.⁵

In reliance on the terms of the Contract, Nate Hoffman relocated from Denver, Colorado, to Huntsville, Alabama. Id. ¶ 18. According to Invictus, at a meeting that followed execution of the Contract, Invictus was tasked with managing PBE's "Huntsville programs regarding the following: UH-60 Blackhawk Helicopter, the CH-47 Chinook Helicopter, and Non-Standard Rotary Wing Helicopters." Id. ¶ 19. And, in March 2017, Invictus was instructed "to begin international sales on behalf of Defendant PBE." Id. ¶ 20.

Invictus alleges that the scope of work assigned by PBE "increased dramatically" during 2017. Id. ¶ 21.⁶ According to Invictus, PBE expanded the scope of Invictus's work to include "international sales of all its product lines, attending conference(s), research and development, and proposal development and management." Id. For example, Invictus submitted proposals on behalf of PBE to the Department of Homeland Security. Id. Yet, despite this increased workload, beginning in June 2017, PBE allegedly failed to pay Invictus "in accordance with the terms of the Contract." Id. ¶ 22. Invictus claims it was not paid for its June services until June 29, 2017, i.e., almost a month past the contractual due date. Id. ¶ 23.

According to Invictus, for the remainder of 2017 and during 2018, PBE continued to increase the scope of work. Id. ¶ 25. Among other things, Invictus was required to "pursue international body armor sales" in a variety of countries, to travel to foreign destinations, and to organize and attend social events. Id. And, Invictus was instructed to train PBE's employees "on international sales practices, procedures and policies." Id. ¶ 26.

Invictus asserts that in October 2017, it secured sales contracts for the CH-47 UAE in the amount of $6,885,617.26. Id. ¶ 27. However, in December 2017, PBE "unilaterally made the determination that Invictus was to receive a commission of one-half (1/2) percent instead of the full one (1) percent as mandated by the Contract." Id. ¶ 28. And, Invictus alleges that PBE paid no commissions in all of 2017. Id. ¶ 29. Rather, Invictus was paid a commission of one-half percent in January 2018, with the promise of payment of the remaining one-half percent in 2018. Id. ¶ 30.

According to plaintiff, the Contract was modified on January 1, 2018. Id. ¶ 31. Specifically, plaintiff claims that the monthly retainer payable to Invictus increased from $4,000 to $6,000. Id.⁷ Invictus also asserts that the 2018 Modification did not alter the commission structure of the original Contract. Id. ¶ 32.

Invictus alleges that "PBE continued its pattern of late payments" to Invictus, "all while continuing to promise to pay Plaintiff Invictus in accordance...