Doynow Sales Associates, Inc. v. Rocheux International of New Jersey, Inc.

647 F. Supp. 2d 296, 2009 U.S. Dist. LEXIS 75074, 2009 WL 2589330
CourtDistrict Court, S.D. New York
DecidedAugust 24, 2009
Docket08 Civ. 8043 (AJP)
StatusPublished
Cited by2 cases

This text of 647 F. Supp. 2d 296 (Doynow Sales Associates, Inc. v. Rocheux International of New Jersey, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Doynow Sales Associates, Inc. v. Rocheux International of New Jersey, Inc., 647 F. Supp. 2d 296, 2009 U.S. Dist. LEXIS 75074, 2009 WL 2589330 (S.D.N.Y. 2009).

Opinion

OPINION AND ORDER

ANDREW J. PECK, United States Magistrate Judge:

Plaintiff Doynow Sales Associates, Inc. (“DSA”) brings this action alleging that Rocheux International of New Jersey, Inc., a wholesale commercial distributor of swimming pool liners and other plastic products, breached its contract with DSA when it reduced DSA’s sales commissions in part or entirety on at least two accounts with large pool distributors. {See generally Dkt. No. 18: Am. Compl.)

Presently before the Court is DSA’s summary judgment motion (Dkt. No. 32: DSA Notice of Motion; see also Dkt. No. 34: Lucas Aff.; Dkt. No. 35: Steven Doynow Aff.; Dkt. No. 36: Larry Doynow Aff.; Dkt. No. 37: DSA Rule 56.1 Stmt.; Dkt. No. 42: DSA Br.), and Rocheux’s summary judgment motion (Dkt. No. 38: Rocheux Notice of Motion; see also Dkt. No. 39: Stephanoff Aff.; Dkt. No. 40: Schwartz Aff.; Dkt. No. 41: Rocheux Br.; Dkt. No. 43: Rocheux Rule 56.1 Stmt.). The parties have consented to decision of this case by a Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Dkt. No. 9.)

*299 For the reasons set forth below, DSA’s and Rocheux’s summary judgment motions both are DENIED.

FACTS

Rocheux distributes and sells industrial plasties, including “vinyl for swimming pool liners” manufactured by “Nan Ya Plastics Corp. of Ta[i]wan.” (Dkt. No. 37: DSA Rule 56.1 Stmt. ¶9; Dkt. No. 35: Steven Doynow Aff. ¶ 9; Dkt. No. 43: Rocheux Rule 56.1 Stmt. ¶ 1.) DSA, which employs Steven Doynow as a sales representative, entered into a “Sales Representative Agreement” with Rocheux in May 1992 to sell Rocheux “products in a specified territory” as a “non-exclusive sales representative” “in exchange for commissions on sales.” (DSA Rule 56.1 Stmt. ¶¶ 7, 17; Steven Doynow Aff. ¶¶ 7, 17; Rocheux 56.1 Stmt. ¶¶ 2-3; see Dkt. No. 40: Schwartz Aff. Ex. A: 5/5/1992 Sales Representative Agreement.) “The focus of DSA’s sales to Rocheux customers has been the sale of vinyl to swimming pool manufacturers and distributors.” (DSA Rule 56.1 Stmt. ¶ 31; Steven Doynow Aff. ¶ 22.)

The Sales Representative Agreement

The Sales Representative Agreement (the “Agreement”) was drafted by Rocheux based on a Rocheux form agreement. (Dkt. No. 37: DSA Rule 56.1 Stmt. ¶¶ 15 -16, 136-41.) The Agreement “appoints [DSA] as an authorized nonexclusive [sales] agent for the Rocheux Products specified in Schedule A ... [to] market and promote the sale of, to solicit orders for, and to service orders for the Products, in the geographic area specified in Schedule B....” (Dkt. No. 40: Schwartz Aff. Ex. A: Agreement ¶ 1.) 1 DSA’s geographic area includes the entire “[c]ontinental U.S.” (Schwartz Aff. Ex. A: Agreement at p. 11, Schedule B.) Schedule A to the Agreement establishes the following compensation structure:

[DSA]’s total compensation under this Agreement shall consist of the following percentages of the Rocheux sales price paid to and reviewed by Rocheux for Products shipped based on orders, released and options exercised and accepted by Rocheux during the term of this Agreement through the efforts of [DSA],
Sales commission shall be 3-5% except in cases, which in order to entertain large volume accounts, it may be necessary upon mutual agreement to reduce [DSA’s] commission.

(Schwartz Aff. Ex. A: Agreement at p. 12, Schedule A(3), emphasis added.)

The Agreement also contains a “merger clause” and provides a specific procedure to modify the Agreement:

This Agreement supersedes any previous Agreement or negotiations between the parties, either expressed or implied, and constitutes the entire Agreement between the parties. It shall not be amended or modified except by a subsequent written agreement signed by the party to be bound thereby. Modifications to Schedules A and B shall be accomplished by both parties signing and dating the schedule modified as desired and appending the modified schedule to the contract.... The failure or delay of either party to exercise any right hereunder shall not be deemed to be a waiver of such right, and the delay or failure to terminate this Agreement for noncompliance or breach shall not be deemed a waiver of the right to do so for that or any ... other such default, of the *300 persistence in such default of a continuing nature.

(Schwartz Aff. Ex. A: Agreement ¶ 11.)

The Agreement commenced on May 1, 1992, and “was automatically renewed for successive five-year terms beginning on May 1, 1997, May 1, 2002 and May 1, 2007,” and “remains in force and is not scheduled to expire until May 1, 2012.” (DSA Rule 56.1 Stmt. ¶¶25, 26, 29, 54; Dkt. No. 35: Steven Doynow Aff. ¶¶ 18-20, 41; see Schwartz Aff. Ex. A: Agreement ¶ 5.) Either party can prevent the Agreement’s automatic renewal by providing the other party “a written notice of non-renewal at least six months before the Agreement’s expiration.” (DSA Rule 56.1 Stmt. ¶ 25; Schwartz Aff. Ex. A: Agreement ¶ 5.) 2

The Agreement contains a non-compete clause binding DSA for the term of the agreement and twelve months after termination (ie., through May 1, 2013). (DSA Rule 56.1 Stmt. ¶ 30; see Schwartz Aff. Ex. A: Agreement ¶ 8.) Rocheux, however, claims the non-compete “applies only to competition with Nan Ya products, not to Rocheux.” (Dkt. No. 48: Rocheux Opp. Rule 56.1 Stmt. ¶ 8.) DSA maintains that it “remains bound by the Agreement’s non-compete clause ... until May 1, 2013,” even though “Rocheux has eliminated or virtually eliminated 100% of DSA’s compensation by unilaterally converting DSA’s accounts into ‘house accounts.’ ” (DSA Rule 56.1 Stmt. ¶ 30.)

“Any dispute arising under th[e] Agreement not resolved by agreement of the parties shall be ... governed and construed by the laws of New Jersey and the USA, excluding New Jersey choice of law rules.” (Schwartz Aff. Ex. A: Agreement ¶ 12; see DSA Rule 56.1 Stmt. ¶ 24.)

The Parties’ Construction of the Agreement’s Commissions Provision

DSA maintains that the “Agreement does not contain any clause permitting Rocheux to convert DSA’s accounts into house accounts or to otherwise cease paying DSA commissions, and expressly requires Rocheux to pay [DSA] commissions on ‘all orders ’ accepted by Rocheux prior to the Agreement’s termination date.” (Dkt. No. 37: DSA Rule 56.1 Stmt. ¶ 20; see Dkt. No. 40: Schwartz Aff. Ex. A: Agreement ¶¶ 4D, 6D.) DSA claims that “[u]pon bringing in the account, the [sales] ‘representative] [is] deemed to be the sales rep. on the account as long as the orders continued from that customer,’ ” and “having generated the account ... would thereafter receive the commissions from sales to that account.” (DSA Rule 56.1 Stmt. ¶¶ 34, 35, 40-47.) Only when the Agreement ends would Rocheux “have no obligation to pay DSA any commissions” on “orders from customers generated through DSA’s efforts.” (DSA Rule 56.1 Stmt.

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647 F. Supp. 2d 296, 2009 U.S. Dist. LEXIS 75074, 2009 WL 2589330, Counsel Stack Legal Research, https://law.counselstack.com/opinion/doynow-sales-associates-inc-v-rocheux-international-of-new-jersey-inc-nysd-2009.