Masarjian v. Mark Lighting Fixtures Co., Inc.

• Decision Date: 11 October 1984
• Docket Number: Civ. No. B-81-438 (PCD)
• Citation: 595 F. Supp. 869
• Parties: Albert MASARJIAN, et al. v. MARK LIGHTING FIXTURES CO., INC.
• Court: U.S. District Court — District of Connecticut

595 F. Supp. 869

Albert MASARJIAN, et al. v. MARK LIGHTING FIXTURES CO., INC.

Civ. No. B-81-438 (PCD)

United States District Court, D. Connecticut.

October 11, 1984.

Eric N. Wellman, Jones, Damia, Wellman, Kaufman & Borofsky, Danbury, Conn., for plaintiffs.

Clifford J. Grandjean, Rosenberg, Barnett, Sattin & Kardon, Hartford, Conn., for defendant.

RULING ON MOTION FOR SUMMARY JUDGMENT

DORSEY, District Judge.

In this action, plaintiffs seek commissions allegedly due under a sales representative contract. Defendant has moved for summary judgment, Rule 56(b), Fed.R. Civ.P.

Background

The uncontroverted facts follow. On or about January 10, 1978, plaintiffs, Albert Masarjian and Fred Merrill, doing business as Meridian Enterprises (Meridian), entered into a sales representative agreement with defendant, Mark Lighting Fixtures Co., Inc. (Mark). Meridian was to solicit orders for commercial lighting fixtures manufactured by defendant. The agreement authorized plaintiffs' efforts in western Massachusetts and all of Connecticut. The agreement contained specifics of the process by which commissions were to become due and be paid, a non-competition clause and a promise by defendant to provide samples and advertising. The agreement was of indefinite duration, but was terminable by either party upon thirty days' written notice to the other.

On April 30, 1979, Mark gave plaintiffs written notice of termination of the agreement, effective June 1, 1979. Prior to the notice plaintiffs had initiated efforts to sell Mark products, through Grand Light & Supply Co., to J.A. Valenti, Inc., an electrical contractor that expected to receive a contract to install light fixtures at Union Carbide headquarters in Danbury, Connecticut. No order for such equipment had been obtained by plaintiffs nor placed with defendant on or before June 1, 1979.

Plaintiffs claim a commission on an order placed with Mark by Valenti after June 1, 1979. Plaintiffs contend that defendant acted in bad faith in terminating the agreement in order to deny plaintiffs a commission on the Valenti order. In addition, plaintiffs claim to have been the procuring cause of the Valenti order and thus entitled to a commission as provided by the agreement as if the order was placed prior to the termination of the agreement.

Defendant argues that the termination of the agreement was in accordance with its terms and no commission is owed as no order was placed before the termination. Defendant moved for summary judgment on this basis.

Discussion

Summary judgment may be appropriate in a contract case. Harrison Western Corp. v. Gulf Oil Co., 662 F.2d 690, 691-92 (10th Cir.1981). Where the issue is covered in the contract, and no genuine issue of material fact remains to be decided, the motion may be determined as a matter of law. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 444 (2d Cir.1980); Heyman v. Commerce & Industry Ins. Co., 524 F.2d 1317, 1319 (2d Cir. 1975).

Connecticut courts look to the law of place of the execution of the contract, but if the operative effect or performance is other than where the contract was executed, the court will look to the law of the state of the operative effect or performance. Grand Sheet Metal Prod. Co. v. Aetna Cas. & Sur. Co., 500 F.Supp. 904 (D.Conn.1980); see Whitfield v. Empire Mut. Ins. Co., 167 Conn. 499, 505-06, 356 A.2d 139 (1975). It is unclear where the contract was executed. Since the contract was to be performed and had its operative effect substantially in Connecticut, Connecticut law would apply.

Plaintiffs' major contention is that defendant cannot arbitrarily cut off their entitlement to commissions by invoking the termination clause. No claim is made that defendant did not follow the procedure described in the contract for terminating the agreement. Nonetheless plaintiffs claim that defendant may not cut off plaintiffs' entitlement to a commission arising from an order placed after the termination date but in the seminal stage on that date as a result of plaintiffs' solicitation. Put another way, plaintiffs claim defendant may not terminate the agreement for the purpose of defeating plaintiffs' right to bring an incipient order to fruition and thereby earn a commission. Plaintiffs argue that their efforts to obtain an order from Valenti were unfairly thwarted by the termination and they should have been permitted to bring their sales efforts to a conclusion, thereby earning a commission. Plaintiffs' position is not supported by any language in the contract and is dependent on an implied condition of good faith before the right to terminate may be exercised.

Defendant relies on the assertedly unambiguous language of the agreement which provides for commissions on orders placed before the effective termination date. The agreement provides:

5. This agreement shall be of an indefinite term and may be terminated by either party thereto upon thirty (30) days written notice to the other ....

Motion for Summary Judgment, Exhibit G. Thus, the contract was terminable at will by either party with no requirement of cause nor good faith being set forth. There is no indication nor claim that the contract did not embody all of the terms of the parties' agreement. Where the parties have expressed their intent, the court cannot rewrite the agreement because one party is unhappy with the contract terms in a particular fact situation. See Collins v. Sears, Roebuck & Co., 164 Conn. 369, 321 A.2d 444 (1973). No Connecticut case appears to have imposed a condition of good faith upon a termination-at-will clause. In a similar case, this court has construed a termination clause under the law of Michigan where the courts of that state also had not ruled on the claim that a condition of good faith should be implied, Biever Motor Car Co. v. Chrysler Corp., 108 F.Supp. 948 (D.Conn.), aff'd, 199 F.2d 758 (2d Cir.1952), cert. denied, 345 U.S. 942, 73 S.Ct. 834, 97 L.Ed. 1368 (1953); see also, Rubinger v. IT&T Corp., 193 F.Supp. 711 (S.D.N.Y. 1961), aff'd, 310 F.2d 552 (2d Cir.1962), and held that the exercise of a right to terminate at will is not conditioned upon a showing of good cause or good faith. In Biever the clause at issue allowed termination after the occurrence of specified events or upon the occurrence of "certain other conditions" with ten-days written notice. A good faith requirement would more likely be implied in Biever where the contract listed occurrences and "certain other conditions" that could arguably constitute specifications of a good faith termination. Yet a good faith requirement was held not to be implied.¹

In Parks v. Baldwin Piano & Organ Co., 262 F.Supp. 515 (D.Conn.), aff'd, 386 F.2d 828 (2d Cir.1967), the law of Ohio was also held not to require good faith in termination. See Green Bay Auto Distrib. v. Willys-Overland Motors, 102 F.Supp. 151 (N.D.Ohio 1951) (defendant's "right to terminate it was subject to no conditions as to good or bad faith, motive, intent or results" (quoting Martin v. Ford Motor Co., 93 F.Supp. 920, 921 (E.D.Mich.1950)). In Parks the relationship in question was held to be properly terminated simply by giving proper notice, thereby relieving defendant of all further liability. Parks, 262 F.Supp. at 519. In affirming, our Circuit Court of Appeals held that the contract's "unambiguous terms also left Parks vulnerable to the summary termination of his dealership by Baldwin and it is beyond the province of this court to imply limitation or conditions on the exercise of a power to terminate, so unmistakably expressed." Parks, 386 F.2d at 829. In support of its refusal to imply a good faith limitation, the court cited Bushwick, which held:

With a power of termination at will here so unmistakably expressed, we certainly cannot assert that a limitation of good faith was anything the parties had in mind. Such a limitation can be read into the agreement only as an overriding requirement of public policy. This seems an extreme step for judges to take.

Bushwick, 116 F.2d at 677.

As there is no ambiguity to be construed, and no language suggesting other than a right of termination at will, under the rule that contracts shall be enforced according to their terms, a view adhered to...