Turner Associates, Inc. v. Small Parts, Inc., Civil No. 98-40233.

• Decision Date: 30 July 1999
• Docket Number: Civil No. 98-40233.
• Citation: 59 F.Supp.2d 674
• Parties: TURNER ASSOCIATES, INC., Plaintiff, v. SMALL PARTS, INC., Defendant.
• Court: U.S. District Court — Eastern District of Michigan

Page 674

59 F.Supp.2d 674

TURNER ASSOCIATES, INC., Plaintiff, v. SMALL PARTS, INC., Defendant.

Civil No. 98-40233.

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

July 30, 1999.

Stephen K. Valentine, Jr., Valentine Assoc., West Bloomfield, MI, for plaintiff.

David E. Wright, Bradley C. Morris, Johnson, Smith, Indianapolis, IN, Francis R. Ortiz, Dickinson, Wright, Detroit, MI, for defendant.

MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S MOTION TO STRIKE PORTIONS OF THE AFFIDAVIT OF RONALD TURNER; DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; AND DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

GADOLA, District Judge.

Presently before the Court are three motions. The first is a motion for summary judgment filed on April 15, 1999 by defendant Small Parts, Inc. (hereinafter "Small Parts"). The above-captioned diversity case involves claims for breach of contract, quantum meruit, and declaratory relief. On May 26, 1999, plaintiff Turner Associates, Inc. (hereinafter "Turner") filed its responsive brief to defendant's motion, as well as its own motion for partial summary judgment. Defendant submitted a reply brief and response to plaintiff's motion for partial summary judgment on June 4, 1999. On the same day, defendant filed a motion to strike portions of the affidavit of Ronald Turner. Oral argument on the defendant's motion for summary judgment, plaintiff's motion for partial summary judgment, and defendant's motion to strike the affidavit of Ronald Turner was heard on July 28, 1999.

For the reasons set forth below, the Court will deny defendant's motion to strike portions of Ronald Turner's affidavit, deny defendant's motion for summary judgment, and deny plaintiff's motion for partial summary judgment.

I. Factual Background

Defendant Small Parts is an Indiana corporation which manufactures parts used mainly in automobiles. Defendant sells its products to manufacturers through its internal sales force and also through sales representatives. See Aff. of Michael Jordan, ¶¶ 2-3, attached as Exh. 1 to defendant's brief in support of motion for summary judgment.

According to defendant, it had a contract with plaintiff Turner Associates which allegedly established plaintiff's right to 12 months of post-termination commissions. The parties are in dispute as to whether any such contract in fact existed. Defendant maintains that the purported contract was entered into between defendant and plaintiff and memorialized in a November 23, 1977 memorandum from defendant to plaintiff, formerly known as Schuster-Allen Associates, Inc. See Exh. C attached to Aff. of Michael Jordan. In 1986, Ronald Turner purchased 100% of the shares of Schuster-Allen, and thereafter changed the firm name to Turner Associates, Inc.

Plaintiff, on the other hand, contends that at the time Mr. Turner purchased Schuster-Allen, he understood its relationship with defendant to be "essentially a handshake deal" and that plaintiff would be paid a commission on all business that it was involved in developing. According to plaintiff, other correspondence sent from other sales representatives to Michael Jordan of defendant-company indicate that there was no agreement reached between the parties regarding post-termination commissions in 1977. See Exhs. 2A and 2B to plaintiff's brief in response.

Defendant explains the genesis of the alleged November 1977 agreement as follows: Michael Jordan, formerly defendant's vice-president of marketing, is currently the president of the company. In his capacity as vice-president, Jordan called defendant-company's first national sales meeting on October 5-7, 1977. See Aff. of Michael Jordan, ¶ 4. According to defendant, the purpose of the meeting was for all the sales representatives to meet and discuss various issues relating to their relationship with defendant. Frank Schuster, president of Schuster-Allen, plaintiffs predecessor company, attended the meeting on behalf of Schuster-Allen. Following the meeting, Schuster sent a letter dated October 10, 1977 to Jordan, confirming Schuster's attendance and thanking Jordan for a helpful meeting. See Exh. B to Aff. of Michael Jordan. As plaintiff points out, in the October 10, 1977 letter, Schuster did not acknowledge any agreement between the parties. See id.

After the meeting, defendant maintains that Jordan memorialized the terms of the alleged agreement in a letter-memorandum dated November 23, 1977. See Exh. C attached to Aff. of Michael Jordan. The memorandum states, in pertinent part, as follows:

We also agreed upon the payment of earned commissions in the case of termination by the Company or by death for a period of one month for each year of service to a max of 12 months. Payments would be made to the estate of the Rep Organization as the particular case might dictate.

Id. The document is addressed to "All Sales Representative Organizations." Michael Jordan alleges that "this letter was sent to Schuster-Allen and other sales representatives." Aff. of Michael Jordan ¶ 9. However, plaintiff denies that Schuster-Allen ever received the November 23, 1977 letter-memorandum. Furthermore, plaintiff's custodian of records, Ronald Turner, cannot find the memorandum in the files of Schuster-Allen.

As mentioned above, Ronald Turner purchased the common stock of Schuster-Allen in 1986. Defendant maintains that the change in ownership did not alter the terms of the purported termination agreement between defendant Small Parts and plaintiff Turner Associates, formerly known as Schuster-Allen. (See Aff. of Michael Jordan, ¶ 10; Depo. of Ronald Turner, p. 115). According to Jordan, neither defendant nor Schuster-Allen modified or amended the purported termination agreement. See Aff. of Michael Jordan, ¶ 11.

In 1997, defendant allegedly terminated its relationship with plaintiff Turner Associates, effective October 1, 1997. See Aff. of Michael Jordan, ¶ 12. Plaintiff, however, disputes the October 1, 1997 termination date. Instead, according to plaintiff, the parties' relationship continued until January 22, 1998. Therefore, plaintiff alleges that the correct termination date is January 22, 1998.

Defendant admits that at the time of termination "Mr. Jordan, and others at Small Parts, had forgotten about the existence of the Termination Agreement." Defendant's brief, p. 4 (citing Aff. of Michael Jordan, ¶ 13). As a result, defendant further admits that "in negotiations concerning plaintiff's termination and the payment of post-termination commissions, defendant incorrectly took the position that plaintiff had no contract with defendant." Id. (emphasis added). Shortly after Mr. Jordan rediscovered the termination agreement in defendant-company's files, defendant's counsel notified plaintiff's counsel of the terms of the agreement and tendered the remaining commission allegedly owed to plaintiff. See Aff. of Michael Jordan, ¶ 15 and Exh. D attached thereto. Defendant proffered a check in the amount of $179,247.45, made payable to plaintiff Turner Associates. The check, however, was rejected by plaintiff.

On May 28, 1998, plaintiff filed its complaint in Oakland County Circuit Court, State of Michigan, alleging breach of an oral and/or implied contract based on defendant's failure to pay plaintiff post-termination commissions for sales made after termination. Specifically, plaintiff alleges that the parties agreed that plaintiff would be "entitled to commissions on all business in which it was involved for the life of those parts or programs." Complaint ¶ 12. Plaintiff also claims entitlement, in the alternative, to post-termination commissions under a quantum meruit or unjust enrichment theory. Complaint ¶¶ 16-21.

On June 30, 1998, the above-entitled case was removed from state court pursuant to 28 U.S.C. § 1441. Federal jurisdiction was premised on diversity of citizenship pursuant to 28 U.S.C. § 1332, plaintiff being a Michigan corporation and defendant being an Indiana corporation. Plaintiff did not contest removal.

II. Legal Standard

Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may be granted "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." "A fact is `material' and precludes grant of summary judgment if proof of that fact would have [the] effect of establishing or refuting one of the essential elements of the cause of action or defense asserted by the parties, and would necessarily affect [the] application of appropriate principle[s] of law to the rights and obligations of the parties." Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984) (citation omitted). In evaluating a motion for summary judgment, the Court must view the evidence in a light most favorable to the nonmovant, as well as draw all reasonable inferences in the nonmovant's favor. See U.S. v. Diebold, 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Bender v. Southland Corp., 749 F.2d 1205, 1210-11 (6th Cir.1984).

The movant bears the burden of demonstrating the absence of all genuine issues of material fact. Gregg v. Allen-Bradley Co., 801 F.2d 859, 861 (6th Cir.1986). This burden "may be discharged by showing ... that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party discharges that burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine triable issue. Fed.R.Civ.Proc. 56(e); Gregg, 801 F.2d at 861.

To create a genuine issue of material fact, however, the nonmovant must do more than present some evidence on a disputed issue. As the United States Supreme Court stated in Anderson v. Liberty Lobby, Inc., "[t]here is no issue for trial unless there is...