Stonemen Group v. Metalforming Techs.

• Decision Date: 22 March 2005
• Docket Number: No. CIV. 02-40291.,CIV. 02-40291.
• Citation: 362 F.Supp.2d 896
• Parties: STONEMEN GROUP, INC., Plaintiff, v. METALFORMING TECHNOLOGIES, INC., Defendant.
• Court: U.S. District Court — Eastern District of Michigan

362 F.Supp.2d 896

STONEMEN GROUP, INC., Plaintiff, v. METALFORMING TECHNOLOGIES, INC., Defendant.

No. CIV. 02-40291.

United States District Court, E.D. Michigan, Southern Division.

March 22, 2005.

Timothy E. Galligan, Timothy E. Galligan Assoc., Bloomfield Hills, for Stonemen Group, Incorporated, Plaintiff.

Philip Cwagenberg, Ishbia & Gagleard, Birmingham, for Metalforming Technologies, Incorporated, Defendant.

ORDER DENYING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DENYING DEFENDANT'S MOTION IN LIMINE

GADOLA, District Judge.

Before the Court is Defendant's motion for partial summary judgment and Defendant's motion in limine. Defendant filed both motions on January 30, 2004. For the following reasons, the Court will deny both motions.

I. BACKGROUND

This action involves the issue of whether Defendant owes sales commissions to Plaintiff. The amended complaint contains two counts: (1) breach of contract and (2) violation of the Michigan's Sale Representative Commissions Act under Michigan Compiled Laws § 600.2961. These counts involve sales of products to three customers: Magna, Summo Steel, and Continental Teves. The parties previously appeared before the Court for a final pretrial conference. At that conference, the parties noted that a legal issue remained to be adjudicated, even though no summary judgment motions had been filed by either party. In order to simplify the trial and to facilitate a possible settlement of the case, the Court allowed the filing of a motion after the dispositive motion deadline. The parties articulated the legal issue as follows:

The applicability, if any, of the Michigan Sales Representative Commission Representative Act [sic, should read: "Michigan Sales Representative Commissions Act"], MCL 600.2961, given [that]: some, or all, of the sales were for products produced and delivered outside of the state of Michigan. [The Court then wrote in:] This issue will be resolved by a motion for summary judgment or dismissal to be filed by 1/30/04. Response by 2/6/04.

Final Pretrial Order at ¶ 6, filed Jan. 22, 2004 (emphasis added). Essentially, the parties contemplated disposing of the issue of whether the Michigan Sales Representative Commissions Act applies to sales made outside of Michigan. Defendant, however, filed a motion for summary judgment on a broader issue than the issue articulated in the final pretrial order; Plaintiff only responded to the narrower issue. A hearing was held regarding this motion on June 22, 2004. At the hearing, the Court allowed Plaintiff to file a supplemental response addressing the broader issue and also allowed Defendant to file a supplemental reply.

Contemporaneous with Defendant's motion for partial summary judgment, Defendant also filed a motion in limine seeking the preclusion of any argument, testimony or evidence of Plaintiff's future damages on the ground that such damages are speculative. Plaintiff filed a response to Defendant's motion in limine. The Court determines that an additional hearing is not necessary to facilitate the adjudication of this matter. Local R. E.D. Mich. 7.1(e).

II. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

A. Standard of Review

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Summary judgment is appropriate if the moving party demonstrates that there is no genuine issue of material fact regarding the existence of an essential element of the nonmoving party's case on which the nonmoving party would bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Martin v. Ohio Turnpike Comm'n, 968 F.2d 606, 608 (6th Cir.1992).

In considering a motion for summary judgment, the Court must view the facts and draw all reasonable inferences in a light most favorable to the nonmoving party. 60 Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987). The Court is not required or permitted, however, to judge the evidence or make findings of fact. Id. at 1435-36. The moving party has the burden of showing conclusively that no genuine issue of material fact exists. Id. at 1435.

A fact is "material" for purposes of summary judgment if proof of that fact would have the effect of establishing or refuting an essential element of the cause of action or a defense advanced by the parties. Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984). A dispute over a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Accordingly, when a reasonable jury could not find that the nonmoving party is entitled to a verdict, there is no genuine issue for trial and summary judgment is appropriate. Id.; Feliciano v. City of Cleveland, 988 F.2d 649, 654 (6th Cir.1993).

Once the moving party carries the initial burden of demonstrating that there are no genuine issues of material fact in dispute, the burden shifts to the nonmoving party to present specific facts to prove that there is a genuine issue for trial. To create a genuine issue of material fact, the nonmoving party must present more than just some evidence of a disputed issue. As the United States Supreme Court has stated, "there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the [nonmoving party's] evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted); see Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548; Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Consequently, the nonmoving party must do more than raise some doubt as to the existence of a fact; the nonmoving party must produce evidence that would be sufficient to require submission of the issue to the jury. Lucas v. Leaseway Multi Transp. Serv., Inc., 738 F.Supp. 214, 217 (E.D.Mich.1990) (Gadola, J.), aff'd, 929 F.2d 701 (6th Cir.1991). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252, 106 S.Ct. 2505; see Cox v. Ky. Dep't of Transp., 53 F.3d 146, 150 (6th Cir.1995).

B. Analysis

The Court will first address the issue anticipated by the final pretrial order of whether the Michigan Sales Representative Commissions Act ("the Act") applies to sales made outside of Michigan. The Act provides that principals shall pay sales representatives for commissions in accordance with the contract, past practices, or business custom within 45 days after the commission is due. Mich. Comp. Laws 600.2961(2)-(5). The Act also provides for penalties if the commissions are not paid by within 45 days of the due date. Id.

The Act defines "principal" as a person that (i) "[m]anufactures, produces, imports, sells or distributes a product in this state" or (ii) "[c]ontracts with a sales representative to solicit orders for or sell a product in this state." Mich. Comp. Laws 600.2961(1)(d) (emphasis added). The statute also provides that if the contract or past practices do not provide for a due date for the commission, the due date shall be determined by "the custom and usage prevalent in this state." Mich. Comp. Laws 600.2961(3). Defendant argues that this language means that the Act only applies to sales made "in this state." It is undisputed that the products at issue were sold outside of Michigan, to customers in Iowa, North Carolina, and Canada.

The Michigan Courts have not addressed whether the Act applies to out-of-state sales in a published opinion. In an unpublished decision, however, the Michigan Court of Appeals did address this issue. Cherry v. Am. Technical Servs., No. 213888, 217620, 2000 WL 33403005 (Mich.Ct.App. Nov. 3, 2000). In reversing the lower court, the Michigan Court of Appeals determined that the Act applied to commissions earned on sales outside of Michigan. Id. at *3; Pl.Ex. 5. The Michigan Court of Appeals reasoned:

The statute requires that "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." MCL 600.2961(4). We believe that by virtue of the fact that the statute references all commissions, the statute requires that all commissions, no matter where earned, be paid to a sales representative by a principal. MCL 600.2961(1)(d) defines a "principal" as a person or entity that: (1) "manufactures, produces, imports, sells, or distributes a product in [Michigan]," or, (2) "contracts with a sales representative to solicit orders for or sell a product in [Michigan]." The trial court misread this language to mean that the statute was only applicable to commissions earned in Michigan. The correct reading of the definition of "principal" is to only identify those persons who are subject to the statute's provisions. After a person is determined to be a principal within the meaning of the statute, then all commissions earned by a sales representative may be recovered under the statute. Therefore, we remand this case to the trial court.

Id. at *4 (emphasis added). The Court finds this reasoning persuasive. The definition of principal identifies the persons who are subject to the Act; the language does not restrict the particular sales involving the principal. The plain language of the statute specifically provides for the...