Cavcon, Inc. v. Endress+ Hauser, Inc.

557 F. Supp. 2d 706, 2008 U.S. Dist. LEXIS 37952, 2008 WL 2004251
CourtDistrict Court, S.D. West Virginia
DecidedMay 8, 2008
DocketCivil Action 2:07-0044
StatusPublished
Cited by13 cases

This text of 557 F. Supp. 2d 706 (Cavcon, Inc. v. Endress+ Hauser, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. West Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cavcon, Inc. v. Endress+ Hauser, Inc., 557 F. Supp. 2d 706, 2008 U.S. Dist. LEXIS 37952, 2008 WL 2004251 (S.D.W. Va. 2008).

Opinion

MEMORANDUM OPINION AND ORDER

JOHN T. COPENHAVER, JR., District Judge.

Pending in this eleven-count action for breach of contract, tortious interference and related claims are the joint motion of all the defendants for summary judgment and the motion of the plaintiff for summary judgment with respect to Count I only, each filed on December 19, 2007. 1

I.

A. The Agreement between Cavcon and Endress

On February 11, 1991, plaintiff Cavcon Inc. (“Cavcon”), a West Virginia corporation, entered into a sales representative agreement (“agreement”) with defendant Endress + Hauser, Inc. (“Endress”), an Indiana corporation, to be its exclusive, independent sales representative in distributing Endress’ industrial instrumentation products in a territory that included a portion of West Virginia that appears to cover all but the northern panhandle of the state (“West Virginia territory”). (Compl. ¶¶ 1-2, 7; Answer ¶¶2, 7; Agreement ¶ 1(a), attached as Ex. 1 to Defs.’ Reply to Resp. to M.S.J.; Lucey Deck ¶ 6, attached as Ex. 8 to Defs.’ M.S.J.; Planitzer Depo. at 33, attached as Ex. 1 to Defs.’ M.S.J.). The agreement authorized Cavcon to sell products made by Endress. (Agreement ¶ 14, attached as Ex. 1 to Defs.’ Reply to Resp. to M.S.J.). Endress paid Cavcon a commission upon all net sales of Endress’ specified products within Cavcon’s territory. (Id. ¶ 5).

The agreement contained the following relevant paragraph:

13. Term of Agreement

(a) This agreement shall continue in force until terminated by either party, with or without cause, by the giving of thirty (30) days prior written notice of the intention to terminate this agreement.
(b) In the event of termination of this agreement in accordance with 13(a), Company [Endress] agrees to credit commission to Representative [Cavcon] for orders resulting from Representative’s quotations, according to the following schedule:
For orders transmitted by Representative or customers in Representative’s territory and accepted by Company within thirty (30) days after the effective termination date, the full commission shall be credited.
For orders similarly transmitted by Representative or customers in Representative’s territory and accepted *710 by Company between 31 and 60 days after the effective termination date,^ of the commission shall be credited.
No commission shall be paid on orders to be shipped more than one (1) year after termination.
For these provisions to apply, copies of all outstanding quotations up to the date of termination shall be deposited with Company at that time. Company’s acceptance of such orders shall not be unreasonably withheld.

(Id. ¶ 13).

B. Cancellation of the Agreement

On October 30, 2006, Endress provided notice of its intent to terminate the agreement, effective November 1, 2006. (10— 30-06 Cancellation Addendum, attached as Ex. 1 to Pl.’s M.S.J.). The cover letter and accompanying addendum to the contract cancelling the agreement (“cancellation addendum”) cited paragraph 13 of the original agreement after providing as follows:

Afer much consideration, Endress + Hauser has elected to terminate CAV-CON, Inc. as our representative in the territory defined:
[numerical descriptions omitted]
We appreciate your efforts on our behalf and wish you and your company success in the future. Your effective termination date is November 1, 2006. [boldfaced]
We will continue to honor orders resulting from your quotations and credit payment of sales commissions outlined in section 13 B of our representative agreement below.

* * *

(Id.). Following the boldface articulation of paragraph 13(b), the addendum contained signature blocks for Todd Lucey (“Lu-cey”), as general manager of Endress, and Jack Vaughan (“Vaughan”), as president of Cavcon; however, neither of their signatures were affixed to the document. (Id.). Vaughan did not sign and return the cancellation addendum to Endress at the advice of his lawyer. (Vaughan Depo. at 88, 180-181, attached as Ex. 4 to Defs.’ M.S.J.). It is undisputed, however, that Vaughan received the cancellation addendum via Federal Express on behalf of the plaintiff on October 31, 2006. (Id. at 87).

Frank Buchy (“Buchy”), as manager of the relevant West Virginia territory for Endress, testified that Endress decided to replace Cavcon because Vaughan did not provide any written plan to grow its West Virginia territory despite Endress’ requests to provide one. (Buchy Depo. at 69, attached as Ex. 12 to Defs.’ M.S.J.).

C. Post-termination Conduct Mandated by Agreement

On November 15, 2006, an e-mail was sent to potential Endress customers by Buchy announcing Endress’ appointment of Pennsylvania corporation, L.H. Boleky Co. (“Boleky”), as industrial municipal representative for the West Virginia territory formerly occupied by Cavcon. (11-15-06 Buchy e-mail, attached as Ex. 11-F to Defs.’ M.S.J.). In the e-mail, the effective date of the appointment was listed as December 1, 2006. (Id.).

Boleky did not begin as the sales representative in the West Virginia territory, formerly occupied by Cavcon, until after December 1, 2006. (Lucey Decl. ¶ 7, attached as Ex. 8 to Defs.’ M.S.J.). Cavcon “continued to place orders with [Endress] during the month of November 2006 and beyond that time.” (Vaughan Depo. 47-48, attached as Ex. 4 to Defs.’ M.S.J.). *711 Vaughan acknowledged that Cavcon received 100% commissions for all orders placed following his receipt of the termination notice. (Id.).

The obligation to pay these post-termination commissions was conditioned upon Cavcon meeting the requirement of the agreement that “copies of all outstanding quotations up to the date of termination shall be deposited with Company at that time.” (Agreement ¶ 13(b), attached as Ex. 1 to Defs.’ Reply to Resp. to M.S.J.). Although Cavcon never sent Endress the outstanding quotations, (Vaughan Depo. 177-179, attached as Ex. 4 to Defs.’ M.S.J.), Endress nevertheless paid Cavcon full commissions for all orders placed. (Lucey Decl. ¶ 7, attached as Ex. 8 to Defs.’ M.S.J.).

D. Boleky’s Background

On January 1, 1996, John Planitzer (“Planitzer”) purchased Boleky and has served as president and sole owner of Bo-leky during the relevant time period. (Compl. ¶¶ 5-6; Answer ¶¶ 5-6; Planitzer Depo. at 9, attached as Ex. 1 to Defs.’ M.S.J.).

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557 F. Supp. 2d 706, 2008 U.S. Dist. LEXIS 37952, 2008 WL 2004251, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cavcon-inc-v-endress-hauser-inc-wvsd-2008.