Kenneth Henes Special Proj. v. Continental Biomass
| Decision Date | 10 February 2000 |
| Docket Number | No. 98-CV-72966-DT.,98-CV-72966-DT. |
| Parties | KENNETH HENES SPECIAL PROJECTS PROCUREMENT, Marketing and Consulting Corporation, Plaintiff, v. CONTINENTAL BIOMASS INDUSTRIES, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
Randall J. Gillary, Troy, MI, for plaintiff.
George W. Burnard, Troy, MI, for defendant.
This matter is before the Court on a number of post-trial motions, to-wit, (1) Defendant's Motion for New Trial and Amendment of Judgment; (2) Plaintiff's Motion for Amendment of Judgment; and (3) Plaintiff's Motion for Attorney Fees. Having reviewed and considered the parties' motion, briefs and supporting documents, and the Court's record of this action, the Court has determined that oral argument is not necessary, therefore, pursuant to Local Rule 7.1(e)(2), these motions will be decided on the briefs. This Opinion and Order sets forth the Court's ruling.
Plaintiff Kenneth Henes Special Projects, Procurement, Marketing and Consulting Corporation ("Henes") is a former sales representative of Defendant Continental Biomass Industries, Inc. ("CBI"). After CBI terminated its eight-year-long relationship with Henes in 1998, Henes brought suit to recover unpaid commissions due and owing as a result of sales of CBI equipment procured by Henes. In its Amended Complaint, Henes sought recovery of the unpaid commissions under two theories — common law breach of contract and violation of the Michigan Sales Representative Act, M.C.L. § 600.2961.
The case was tried to a jury and after a five-day trial, the jury returned a verdict finding that Plaintiff was owed commissions by Defendant on four sales. Specifically, the jury found that Plaintiff was owed commissions of $12,493 on a December 1996 sale of equipment to Draw Leasing; $35,000 on a June 1997 sale of equipment to Draw Leasing/Suburban Recycling; $50,200 on a May 1998 sale to Midwest Forestry; and $37,500 on a 1998 sale to Megacity. The jury further found that with respect to all but the 1996 sale to Draw Leasing, CBI intentionally failed to pay Henes the sales commissions.
Applying the Michigan Sales Representative Act's "double commissions" provision for intentional failure to pay commissions to the Suburban Recycling, Midwest Forestry and Megacity sales, the Court entered a $257,493.00 Judgment in favor of Plaintiff and against Defendant as follows:
Ct. 1: $12,493.00
Ct. 2: $70,000.00 (Suburban Recycling sale jury verdict of $35,000 × 2)
Ct. 3: $100,000.00 (applying the statutory double commissions cap to the Midwest Forestry sale)
Ct. 4: $75,000.00 (Megacity sale jury verdict of $37,500 × 2)
Following entry of the Judgment, Defendant CBI moved for a New Trial and Amendment of Judgment. Plaintiff Henes responded by filing its own Motion for Amendment of Judgment and a Motion for Attorney Fees. All of these Motions, in one way or another, present issues of applicability and interpretation of the Michigan Sales Representative Statute, M.C.L. § 600.2961.
M.C.L. § 600.2961 provides, in relevant part, as follows:
(1) As used in this section:
(a) "Commission" means compensation accruing to a sales representative for payment by a principal, the rate of which is expressed as a percentage of the amount of orders or sales or as a percentage of the dollar amount of profits.
(b) "Person" means an individual, corporation, partnership, association, governmental entity, or any other legal entity.
(c) "Prevailing party" means a party who wins on all the allegations of the complaint or on all of the responses to the complaint.
(d) "Principal" means a person that does either of the following:
(i) Manufactures, produces, imports, sells, or distributes a product in this state.
(ii) Contracts with a sales representative to solicit orders for or sell a product in this state.
(e) "Sales representative" means a person who contracts with or is employed by a principal for the solicitation of orders or sale of goods and is paid, in whole or in part, by a commission. Sales representative does not include a person who places an order or sale for a product on his or her own account for resale by that representative.
(2) The terms of the contract between the principal and sales representative shall determine when a commission becomes due.
(3) If the time when the commission becomes due cannot be determined by a contract between the principal and sales representative, the past practices between the parties shall control or, if there are no past practices, the custom and usage prevalent in this state for the business that is the subject of the relationship between the parties.
(4) All commissions that are due at the time of termination of a contract between a sales representative and principal shall be paid within 45 days after the date of termination. Commissions that become due after the termination date shall be paid within 45 days after the date on which the commission became due.
(5) A principal who fails to comply with this section is liable to the sales representative for both of the following:
(a) Actual damages caused by the failure to pay the commissions when due.
(b) If the principal is found to have intentionally failed to pay the commission when due, an amount equal to 2 times the amount of commissions due but not paid as required by this section or $100,000.00, whichever is less.
(6) If a sales representative brings a cause of action pursuant to this section, the court shall award to the prevailing party reasonable attorney fees and court costs.
In its Motion for New Trial and Amendment of Judgment, Defendant CBI asserts three arguments. First, Defendant contends that the Michigan Sales Representative Act, M.C.L. § 600.2961 does not apply at all to any of the commissions involved in this matter because none of the sales giving rise to the commissions sought by Plaintiff occurred within the State of Michigan.
Second, assuming that the statute applies to these commissions, Defendant contends that the Court erred in refusing to give the instruction it had proffered on "intentional failure to pay" commissions. Defendant's last argument is that the $100,000 cap on double commissions provided in § 600.2961(5)(b) is a cap on doubling commissions in the aggregate, and not a per commission cap. Therefore, the Court's $257,493 Judgment reflecting double commissions on the Suburban Recycling and Megacity sales and the application of the $100,000 capped double damages on the Midwest Forestry sale is erroneous. CBI contends that the Judgment should reflect the jury verdict amount on each of the sales (i.e., $12,493 + $35,000 + $50,200 + $37,500) plus a single capped Section 2961(5)(b) intentional-failure-to-pay penalty of $100,000 for a total award of $235,193.00.
Plaintiff agrees that the Judgment entered in this case is erroneous but counters in its own Motion for Amendment of Judgment that the Judgment should be for more than the $257,493 reflected therein. Plaintiff contends that under subsection (5) of § 600.2961 it is entitled to recover on each of the three intentional-failure-to-pay commissions the jury verdict amount plus as to each of these three commissions either a doubled amount or $100,000, whichever is less. Thus, Plaintiff argues that the damages awarded in the Judgment should be as follows:
Transaction # 1 (Draw Leasing) —
commissions $ 12,493
Transaction # 2 (Suburban Recycling)
— commissions $ 35,000
§ 2961(5)(b) double commissions
penalty $ 70,000
Transaction # 3 (Midwest Forestry)
— commissions $ 50,200
§ 2961(5)(b) penalty (capped) $100,000
Transaction # 4 (Megacity) — commissions $ 37,500
§ 2961(5)(b) double commissions
penalty $ 75,000
____________
Total Damages: $380,193
Plaintiff also contends that the Judgment should be further amended to include provisions for pre-complaint interest, pre-judgment interest and post-judgment interest. Additionally, in Henes' separately filed Motion for Attorney Fees, Plaintiff seeks an award of attorneys fees pursuant to § 600.2961(6) in the amount of $71,760.00.
CBI does not dispute Plaintiff's entitlement to pre- and post-judgment interest (although it does dispute Plaintiff's calculation of these sums) but does contest any awarding of "pre-complaint" interest. Defendant further argues that Plaintiff is not entitled to an award of attorneys fees under section 2961(6) because it contends that since Plaintiff did not prevail "on all the allegations of the complaint," it does not meet the statutory definition of a "prevailing party," and hence, does not qualify for an award of fees and costs.
Defendant brings the instant Motion for Amendment of Judgment and for New Trial pursuant to Fed.R.Civ.Pro. 59.1
Motions to amend a judgment pursuant to Rule 59(e) "are entrusted to the Court's sound discretion." Nagle Industries, Inc. v. Ford Motor Company, 175 F.R.D. 251, 254 (E.D.Mich.1997), aff'd 194 F.3d 1339 (Fed. Cir.1999); Keweenaw Bay Indian Community v. United States, 940 F.Supp. 1139, 1140 (W.D.Mich.1996) (citing Huff v. Metropolitan Life Ins. Co., 675 F.2d 119, 122 (6th Cir.1982)), rev'd on other grounds, 136 F.3d 469 (6th Cir.1998). Rule 59 motions are generally granted for only three reasons:
(1) because of an intervening change in the controlling...
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