Dynamic Metal Industries, Inc. v. Larsen Manufacturing, LLC.

2023 IL App (1st) 230894-U

• Court: Appellate Court of Illinois
• Decided: December 22, 2023
• Docket: 1-23-0894
• Status: Unpublished

Opinion

2023 IL App (1st) 230894-U No. 1-23-0894 Order filed December 22, 2023 Fifth Division

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT __________________________________________________________________________ DYNAMIC METAL INDUSTRIES, INC., ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County ) v. ) No. 20 CH 7040 ) LARSEN MANUFACTURING, LLC, ) Honorable ) Alison C. Conlon, Defendant-Appellee. ) Judge presiding.

JUSTICE NAVARRO delivered the judgment of the court. Justices Mikva and Lyle concurred in the judgment.

ORDER

¶1 Held: We affirm the circuit court’s grant of summary judgment to Larsen Manufacturing, LLC, on claims against it for breach of contract and a violation of the Illinois Sales Representative Act (820 ILCS 120/0.01 et seq. (West 2020)).

¶2 Pursuant to a contract, Dynamic Metal Industries, Inc. (Dynamic), was an independent

sales representative for Larsen Manufacturing, LLC (Larsen). Dynamic earned commissions based

on manufacturing parts sold on Larsen’s behalf to third parties. After Larsen terminated the

agreement, Dynamic sued Larsen for breach of contract and a violation of the Illinois Sales No. 1-23-0894

Representative Act (820 ILCS 120/0.01 et seq. (West 2020)), claiming that Larsen had failed to

pay commissions that Dynamic earned under the agreement. On Larsen’s motion, the circuit court

granted summary judgment in its favor on both counts. Dynamic now appeals the judgment of the

circuit court, contending that the court misinterpreted the parties’ agreement and there was a

genuine issue of material fact as to whether Larsen had breached the agreement. For the reasons

that follow, we affirm the circuit court’s grant of summary judgment in favor of Larsen.

¶3 I. BACKGROUND

¶4 A. The Relationship Between Larsen and Dynamic

¶5 Larsen manufactures custom-metal parts to companies across multiple industries, including

in the automotive space. Those companies, in turn, incorporate Larsen-manufactured parts into

products they sell to other companies. In order to find third-party customers, Larsen utilizes

independent sales representatives throughout the United States and world, and pays them

commissions based on the sale of Larsen’s products. Dynamic is such an independent sales

representative and works with metal component manufacturers primarily in the Midwest. Dynamic

had an existing relationship with Omron Automotive Electronics, Inc. (Omron), a St. Charles,

Illinois-based electronic components manufacturer for automobile makers such as Ford and BMW.

¶6 In January 2011, Larsen contracted with Dynamic to be one of its independent sales

representatives on a non-exclusive basis covering the territory of Northern Illinois and Wisconsin.

Larsen agreed to pay Dynamic a 5% commission on products sold to companies it facilitated.

However, Larsen retained the right to split commissions between multiple independent sales

representatives. According to Paragraph 7, titled “Domestic Split Commissions,” of the agreement:

“Split commissions occur when the design is achieved in one Sales Representatives

territory (Design Area), the Procurement function is performed in another

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Representatives territory (Procurement Area) and the actual manufacturing is

performed in another Representatives territory (Fulfillment Area) or any

combination therein. In such cases, the commission split will compensate the

Design Area Representative at 50%, the Procurement Area Representative at 25%

and the Fulfillment Area Representative at 25% of the total commission payout.”

The agreement defined “Design Area,” “Procurement Area,” and “Fulfillment Area” as well as

provided examples of design, procurement and fulfillment activities. According to Paragraph 6 of

the agreement, the “Design Area” was the “area/territory where the design effort occurs.” The

“Procurement Area” was “the area/territory where the purchasing organization placing the

purchase order resides.” Finally, the “Fulfillment Area” was the “area/territory where the

production material is shipped.”

¶7 According to a deposition from Jim Miles, Larsen’s strategic accounts manager, the split-

commissions provision was included in Larsen’s sales representative agreements in response to

the evolution of the manufacturing sales channel, wherein the design, procurement and fulfillment

began to occur in different locations. Miles explained that the split-commissions provision

guaranteed that the sales representative who brought Larsen the initial business would continue to

receive credit in the form of commissions for the design work. However, Miles asserted that the

provision allowed Larsen to ensure that procurement and fulfillment work were not neglected in

the event the sales representative who brought Larsen the business “wasn’t able to or willing to or

interested in fulfilling the requirements of the procurement area or the fulfillment area because it

fell outside his geographic territory.”

¶8 The term of the agreement between Larsen and Dynamic was one year, but it would

automatically renew for an additional year unless either party timely terminated it. According to

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Paragraph 9b of the agreement, in the event of a termination, Dynamic would continue to be paid

commissions for established part numbers for up to 10 years and new part numbers for up to 10

years, the latter so long as Dynamic received purchase orders for those parts within one year of the

effective date of termination. As part of the agreement, Larsen designated Dynamic as the sales

representative associated with Omron. Sometime in the mid-2010s, Omron opened up a

manufacturing facility in Mexico to complement the facility already operational in St. Charles,

Illinois.

¶9 In December 2018, Larsen provided Dynamic a notice of termination of the agreement to

become effective the following month. According to a declaration submitted by David Larsen, the

president of Larsen, in connection with the instant case, part of the reason Larsen terminated the

agreement was because Dynamic, who was based in Illinois, was not adequately providing

procurement and fulfillment work for Omron as “[Omron’s] Mexico facility place[d] the vast

majority [of] Larsen’s orders from [Omron].” Following the notice of termination, Dynamic

provided Larsen with a list of 46 established parts numbers, which were almost all for Omron, and

35 new part numbers, the majority of which were for Omron (hereinafter occasionally referred to

as the “eligible parts”), that Dynamic believed it was entitled to post-termination commissions on

based upon the parties’ agreement. 1 According to David Larsen’s declaration, the company agreed

to pay Dynamic post-termination commissions on these parts, though it informed Dynamic of its

intent to hire a sales representative to handle procurement and fulfillment activities for Omron in

Mexico. Because Larsen did not have an independent sales representative designated to the Omron

account when Larsen terminated the agreement with Dynamic, design, procurement and

1 Although the parties agree that Dynamic provided Larsen with a list of 46 established parts numbers, our count of the list shows it was actually 45 established part numbers.

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fulfillment work between Larsen and Omron were handled completely internally, according to the

deposition of Miles, Larsen’s strategic accounts manager.

¶ 10 In late 2019, Nidec Mobility America Corporation (Nidec) acquired Omron (hereinafter,

Omron/Nidec). By November 2020, Larsen still handled design, procurement and fulfillment work

with Omron internally, as it had not yet retained a new independent sales representative designated

to Omron/Nidec. However, that month, Larsen entered into a sales representative agreement with

Wilson Sanchez doing business as V&N Technology Sales (V&N), a Mexico-based manufacturing

sales representative. V&N’s statement of work with Larsen, which adopted and incorporated by

reference the terms and conditions of a sales representative agreement between the two parties,

stated that V&N’s responsibilities in Mexico included performing procurement and fulfillment

work for Omron/Nidec. According to the declaration submitted by David Larsen in connection

with the litigation, Larsen retained V&N so it could have a sales representative available in

Mexico, who could visit, communicate and work with Omron/Nidec’s employees there.

¶ 11 As a result of Larsen’s agreement with V&N, Larsen informed Dynamic that V&N would

handle procurement and fulfillment activities concerning Omron/Nidec. Citing the split-

commissions provision in the parties’ agreement, Larsen asserted that Dynamic’s commission

would be reduced by 50% effective immediately. According to a declaration submitted by Wilson

Sanchez, V&N’s sales manager, in connection with the litigation, V&N became the primary

contact between Larsen and Omron/Nidec in Mexico. In the declaration, Sanchez detailed the

procurement and fulfillment activities he had undertaken with regard to Omron/Nidec.

¶ 12 B. The Litigation Between Larsen and Dynamic

¶ 13 In December 2020, Dynamic filed a three-count complaint for a declaratory judgment

against Larsen, seeking a declaration that the parties’ sales representative agreement did not allow

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Larsen to split commissions following the termination of the agreement and that it was owed a 5%

commission on all eligible parts. Dynamic later amended its complaint and added counts for breach

of contract and a violation of the Sales Representative Act (820 ILCS 120/0.01 et seq. (West

2020)). During the proceedings, Dynamic voluntarily dismissed its declaratory judgment counts.

¶ 14 Larsen filed a motion to dismiss Dynamic’s amended complaint pursuant to section 2-619

of the Code of Civil Procedure (735 ILCS 5/2-619 (West 2020)), contending that Dynamic failed

to state a claim for breach of contract or a statutory violation because Larsen had the contractual

right to reduce Dynamic’s commission after it retained V&N to perform procurement and

fulfillment work for Omron/Nidec. In resolving Larsen’s motion, the circuit court determined that,

as a matter of law, the agreement allowed Larsen to retain V&N and split commissions between

Dynamic and V&N following the termination of Larsen and Dynamic’s agreement. The court,

however, found there was a question of fact as to whether V&N was “actually performing

Procurement and Fulfillment work regarding the parts at issue.” Consequently, the court denied

Larsen’s motion to dismiss.

¶ 15 Dynamic subsequently filed the operative second amended complaint. It alleged that the

split-commissions provision of the agreement did not apply following the termination of the

agreement. Dynamic therefore asserted that it was the only sales representative entitled to receive

commissions on sales of eligible parts from Larsen to Omron/Nidec. As a result, in Count I,

Dynamic alleged a breach of contract and claimed that Larsen owed it $23,854.62 in

commissions—an amount, though, that would continue to increase as Larsen sold more eligible

parts to Omron/Nidec. In Count II, Dynamic alleged a violation of the Sales Representative Act

(820 ILCS 120/0.01 et seq. (West 2020)), asserting that Larsen had failed to pay its sales

commissions following the termination of the agreement within the time period mandated by the

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law. Dynamic posited that, pursuant to the statute, it was entitled to exemplary damages in the

amount of three times the commissions owed as well as attorney fees and costs.

¶ 16 Thereafter, Larsen filed a motion for summary judgment, contending that the plain

language of the agreement allowed it to split commissions between V&N and Dynamic.

Additionally, Larsen asserted that the agreement allowed for split commissions when procurement

and fulfillment functions were performed in a different sales representative’s territory from the

territory that the design was achieved in, irrespective of the quality of the procurement or

fulfillment performance. As such, Larsen argued that, because it retained V&N as its new sales

representative in Mexico to perform procurement and fulfillment functions, it was entitled to split

the commissions on eligible parts between V&N and Dynamic, the latter who had been the sales

representative where the design effort occurred for the eligible parts. To this end, Larsen claimed

there were no genuine issues of material fact as to whether it breached the agreement, and it was

entitled to summary judgment on Count I. Larsen further posited that, because there were no

genuine issues of material fact as to whether it breached the agreement, there were no genuine

issues of material fact as to whether it violated the Sales Representative Act (id.), which was

parasitic to a breach of contract claim. Therefore, Larsen asserted it was entitled to summary

judgment on Count II. In response, Dynamic contended that the split-commissions provision of

the agreement did not apply following the termination of the agreement, and even if it did, V&N

did not perform procurement or fulfillment services to Omron/Nidec to trigger a split of the

commissions.

¶ 17 Following briefing and oral argument on Larsen’s motion, the circuit court determined that,

as a matter of law, the agreement allowed Larsen to split commissions between Dynamic and V&N

following the termination of the agreement. Additionally, the court concluded that, as a matter of

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law, the agreement allowed Larsen to split commissions between Dynamic and V&N for

procurement and fulfillment work performed for Omron/Nidec in Mexico. Lastly, the court found

there was no genuine issue of material fact as to whether V&N performed procurement and

fulfillment activities to entitle it to a split of the commissions. As a result, the court determined

that the undisputed record evidence established that Larsen did not breach the agreement.

Consequently, the court granted Larsen summary judgment on Count I and on Count II because it

was wholly reliant on Count I.

¶ 18 Dynamic timely appealed. In its notice of appeal, Dynamic sought review of the circuit

court’s denial of Larsen’s motion to dismiss and grant of Larsen’s motion for summary judgment.

¶ 19 II. ANALYSIS

¶ 20 A. Motion to Dismiss

¶ 21 Initially, the parties dispute whether we can review the circuit court’s denial of Larsen’s

motion to dismiss, as they disagree about whether the court’s denial constituted a step in the

procedural progression leading to summary judgment. See CitiMortgage, Inc. v. Bukowski, 2015

IL App (1st) 140780, ¶ 13. Despite this dispute, Dynamic wants us to review the court’s finding

when denying Larsen’s motion to dismiss that the agreement allowed Larsen to split commissions

post-termination. Larsen agrees that this finding is reviewable, albeit through the court’s grant of

summary judgment in its favor when the court reiterated that, “as a matter of law, the [agreement]

permit[ted] post-termination commission-splitting.” In other words, any alleged error in the denial

of Larsen’s motion to dismiss merged into the summary judgment, the final judgment in the case.

See Ovnik v. Podolskey, 2017 IL App (1st) 162987, ¶ 19 (declining to review the denial of a section

2-619 motion to dismiss where “any error in the denial of the motion merge[d] into the final

judgment, which in this case was the summary judgment *** and it is from that final judgment

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that an appeal is taken”). That is to say, regardless of whether the court’s denial of Larsen’s motion

to dismiss constituted a step in the procedural progression leading to summary judgment or the

alleged error in the court’s denial merged into the summary judgment (see id.), the parties agree

that we can review the court’s grant of summary judgment to Larsen, through which it found, as a

matter of law, that the agreement allowed Larsen to split commissions post-termination.

¶ 22 B. Summary Judgment

¶ 23 We now turn to Dynamic’s contention that the circuit court erred in granting Larsen’s

motion for summary judgment. Dynamic argues that the court misinterpreted the parties’

agreement, erred by determining there was no genuine issue of material fact as to whether Larsen

properly split commissions between it and V&N, and therefore, erred in finding there was no

genuine issue of material fact as to whether Larsen breached the agreement.

¶ 24 Summary judgment is proper where the pleadings, depositions, affidavits, and admissions

on file demonstrate that there is no genuine issue of material fact and the moving party is entitled

to judgment as a matter of law. Carney v. Union Pacific R.R. Co., 2016 IL 118984, ¶ 25. “A

genuine issue of material fact precluding summary judgment exists where the material facts are

disputed or, if the material facts are undisputed, reasonable persons might draw different inferences

from the undisputed facts.” Mashal v. City of Chicago, 2012 IL 112341, ¶ 49. When determining

whether a genuine issue of material fact exists, we construe “the evidence in the light most

favorable to the nonmoving party and strictly against the moving party.” Johnson v. Armstrong,

2022 IL 127942, ¶ 31. The disposition of litigation on “[s]ummary judgment is a drastic measure,”

and such a motion “should only be granted if the movant’s right to judgment is clear and free from

doubt.” Seymour v. Collins, 2015 IL 118432, ¶ 42. We review the circuit court’s grant of summary

judgment de novo. Id.

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¶ 25 1. Does the Agreement Allow Post-Termination Split Commissions?

¶ 26 Dynamic first posits that the circuit court erred in finding that its agreement with Larsen

allows for split commissions following the termination of the agreement. Dynamic argues that the

plain language of the agreement shows that the parties did not intend for the split-commissions

provision to apply after the termination of the agreement. Rather, according to Dynamic, the split-

commissions provision was intended only to apply when it was a sales representative for Larsen.

Conversely, Larsen asserts that the plain language of the agreement allows for split commissions

following termination, which is demonstrated by viewing the agreement as a whole.

¶ 27 Resolution of this issue turns on the interpretation and construction of the parties’ contract,

which is a question of law that we also review de novo. In re Marriage of Dynako, 2021 IL 126835,

¶ 15. Because this issue is a question of law, it is properly resolved through summary judgment.

Wolff v. Bethany North Suburban Group, 2021 IL App (1st) 191858, ¶ 36. Our primary objective

when construing a contract is to give effect to the intent of the parties. Gallagher v. Lenart, 226

Ill. 2d 208, 232 (2007). The best indication of that intent is the plain and ordinary language of the

agreement. Id. at 233. Because a contract’s language is dependent on context, the parties’ intent

cannot be gleaned from examining “any clause or provision standing by itself.” Id. Rather, we

must view the agreement as a whole and examine “each part in light of the others.” Id.

¶ 28 As noted, the agreement between Dynamic and Larsen provided that Dynamic would be

entitled to a 5% commission on “[a]ll accounts presented” by it “for services performed and

products sold by [it]” to third-party customers. However, Paragraph 7 of the agreement provided

that Larsen could split commissions between multiple independent sales representatives.

According to that provision:

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“Split commissions occur when the design is achieved in one Sales Representatives

territory (Design Area), the Procurement function is performed in another

Representatives territory (Procurement Area) and the actual manufacturing is

performed in another Representatives territory (Fulfillment Area) or any

combination therein. In such cases, the commission split will compensate the

Design Area Representative at 50%, the Procurement Area Representative at 25%

and the Fulfillment Area Representative at 25% of the total commission payout.”

Finally, under Paragraph 9b, upon termination of the parties’ agreement, Dynamic would:

“be paid commissions for established part numbers brought to [Larsen] by

[Dynamic] for the life of the program or up to 10 years from the date of agreement

termination, whichever comes first *** [and] be entitled to the commissions earned

on new part numbers which were being worked on during the time prior to

termination [for the life of the program or up to 10 years from the date of agreement

termination, whichever comes first].”

¶ 29 Viewing the agreement as a whole, it permitted Larsen to split Dynamic’s commissions on

eligible parts following termination. Once Larsen terminated the agreement with Dynamic, the

plain language dictated that Dynamic continue to be paid commissions, though at no explicit rate,

for up to 10 years on eligible parts, those being parts already in existence and parts in development.

The agreement could have provided for post-termination commissions at a specific percentage, but

it did not. This omission is telling. See Klemp v. Hergott Group, Inc., 267 Ill. App. 3d 574, 581

(1994) (“There is a strong presumption against provisions that easily could have been included in

the contract but were not” and “[a] court will not add another term about which an agreement is

silent.”). And it is because Paragraph 9b must be read in conjunction with the rest of the agreement,

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in particular Paragraph 5a, which sets forth the maximum commission percentage Dynamic could

be entitled to of 5% for “services performed and products sold,” Paragraph 6, which provides the

definitions of “Design Area,” “Procurement Area,” “Fulfillment Area,” and Paragraph 7, which

allows for split commissions. See Gallagher, 226 Ill. 2d at 233.

¶ 30 Based on the definitions of “Design Area,” “Procurement Area,” “Fulfillment Area,” as

well as the examples of design, procurement and fulfillment activities in Paragraph 6, once parts

have been designed by Larsen for Omron/Nidec, the design area for that specific part became

immutable. And thus, Dynamic became entitled to 2.5% commissions for up to 10 years following

the termination of the agreement on eligible parts that had already been designed. However, once

Larsen terminated the agreement with Dynamic and Dynamic no longer was a sales representative

for Larsen, Dynamic necessarily could no longer perform procurement or fulfillment activities,

which, based on the examples in Paragraph 6, required a sales representative to be communicating

with Omron/Nidec on Larsen’s behalf about orders, shipping and quality assurance. This meant

that the rate of Dynamic’s post-termination commissions on eligible parts became dependent on

the area where Omron/Nidec placed the purchase orders, the area where the parts were shipped for

actual manufacturing and whether Larsen had a sales representative assigned to the procurement

and fulfillment territory. And thus, for eligible parts after termination, Dynamic’s commission

could be anywhere from 2.5% to 5%, depending on the above circumstances.

¶ 31 Applying the split-commissions provision following termination is the only way to

harmonize the entire agreement between Larsen and Dynamic and give effect to each provision

therein. See Clanton v. Oakbrook Healthcare Center, Ltd., 2023 IL 129067, ¶ 34 (observing that

the goal in interpreting a contract is to “harmonize[] and give[] effect to all provisions of the

contract and *** not render any language superfluous”). Moreover, such a reading produces the

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most logical result. See Foxfield Realty, Inc. v. Kubala, 287 Ill. App. 3d 519, 524 (1997) (stating

that courts “will construe a contract reasonably to avoid absurd results”). Under this interpretation

of the agreement, Dynamic retains a 2.5% commission, a finder’s fee for all practical purposes,

for up to 10 years following the agreement’s termination—a commission that rewards its past

efforts but that requires no future efforts. That is Dynamic’s reward for establishing the

relationship and leading the design efforts on Larsen’s behalf for Omron/Nidec. But the

establishment of the relationship does not entitle Dynamic to the other 2.5% for doing nothing

when the procurement and fulfillment functions for Larsen’s customers occur in another sales

representative’s territory, all of which require efforts by the sales representative. It would be

illogical for a sales representative to agree to perform procurement and fulfillment activities for

free, which is why the sales representative is entitled to a portion of the commissions if the

procurement and fulfillment activities occur in its territory. See id. As such, the parties intended

for the split-commissions provision to apply following the termination of the agreement.

¶ 32 Nevertheless, Dynamic highlights that the split-commissions provision of the agreement

uses present tense while the post-termination provision of the agreement uses future tense. See

Empress Casino Joliet Corp. v. W.E. O’Neil Construction Co., 2016 IL App (1st) 151166, ¶ 94

(using the tense of verbs in interpreting a contract). Dynamic therefore posits that the split-

commissions provision created a temporal boundary to apply only when the agreement was in

effect compared to the post-termination provision. We do not impart the same significance to the

tenses of the words in the respective provisions because to do so would result in the agreement’s

disharmony, as such a construction would ignore the potential ongoing procurement and

fulfillment work necessary for eligible parts. See Clanton, 2023 IL 129067, ¶ 34.

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¶ 33 Dynamic further highlights that Paragraph 7—the split-commissions provision—is titled

“Domestic Split Commissions.” Citing to Black’s Law Dictionary, Dynamic asserts the word

“domestic” is defined as “[o]f, relating to, or involving one’s own country.” Black’s Law

Dictionary (11th ed. 2019). And thus, according to Dynamic, Paragraph 7 could only apply when

the design area effort, the procurement area effort and the fulfillment area effort occurred

“domestically” in relationship to the territory at issue. To this end, because Larsen retained V&N

to provide procurement and fulfillment functions in Mexico, and not the United States, i.e.,

domestically to where the design area effort, the split-commissions provision did not apply to the

sales of eligible parts. Regardless of the title of the split-commissions provision containing the

word “Domestic,” there is no indication from the actual, binding contractual provisions that the

split-commissions provision was meant to apply only when the design area, the procurement area

and the fulfillment area efforts occurred “domestically” in relationship to the territory at issue.

Therefore, the plain language of the parties’ agreement allowed Larsen to split Dynamic’s

commissions following the termination of the agreement. Consequently, the circuit court properly

interpreted the relationship between the split-commissions provision and the post-termination

provision of the agreement.

¶ 34 2. Did Larsen Properly Exercise the Split-Commissions Provision?

¶ 35 Dynamic next argues that, even if Larsen had the contractual authority to split commissions

following the termination of the agreement, the circuit court erred when it determined that Larsen

properly exercised the split-commissions provision of the agreement to divide commissions

between it and V&N. Dynamic posits that the court misinterpreted the split-commissions provision

by not determining that, for the provision to be properly invoked, it and V&N had to be assigned

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to different sales territories contemporaneously. As to this argument, we again must interpret the

parties’ agreement, where our prior discussion of contract interpretation principles applies.

¶ 36 Paragraph 7 of the agreement is unambiguous that a split-commissions scenario occurs

when the design is achieved in one sales representative’s territory, the procurement is performed

in another sales representative’s territory and the fulfillment function is performed in another sales

representative’s territory, or any combination therein. As the definitions in Paragraph 6 illustrate,

the procurement area means where the purchase orders originated and the fulfillment area means

where the parts are shipped for actual manufacturing. Based on these definitions, once Larsen

terminated Dynamic and hired V&N to be its sales representative in Mexico beginning in

November 2020, any time a purchase order for eligible parts originated in Mexico and any time

eligible parts were shipped to Mexico for actual manufacturing, V&N became entitled to 2.5%

commissions on those eligible parts.

¶ 37 Critically, the split-commissions scenario only began in November 2020 despite

Dynamic’s agreement with Larsen having terminated in January 2019. That is because, during this

nearly two-year period, Larsen did not have a sales representative in Mexico and handled the

Omron/Nidec account internally, meaning Larsen could not exercise the split-commissions

provision and Dynamic maintained its full 5% commission. But once V&N became Larsen’s sales

representative in Mexico, from where Omron/Nidec purchased eligible parts and where eligible

parts were shipped for actual manufacturing, Larsen had the authority to exercise the split-

commissions provision of the agreement. Although Dynamic argues that, in order for the split-

commissions provision to be properly invoked, it and V&N had to be assigned to different sales

territories contemporaneously, such a reading of the agreement is contrary to its plain language.

Nothing in the parties’ agreement requires the sales representatives to contemporaneously assigned

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to different sales territories, and we cannot imply such language. See Klemp, 267 Ill. App. 3d at

581. As such, the circuit court properly interpreted when the split-commissions provision applies.

¶ 38 Nevertheless, Dynamic highlights various evidence in the record and argues that there was

a genuine issue of material fact as to whether V&N performed procurement and fulfillment

activities related to the eligible parts. Given this, Dynamic argues there was a genuine issue of

material fact as to whether Larsen breached the parties’ agreement, which should have precluded

summary judgment. In order to prove a breach of contract, the plaintiff must prove that: (1) there

was an enforceable contract, (2) it substantially performed its obligations, (3) the defendant

breached its obligations and (4) it suffered damages due to the defendant’s breach. Ivey v.

Transunion Rental Screening Solutions, Inc., 2022 IL 127903, ¶ 28. If there is a genuine issue of

material fact as to whether the defendant breached an agreement with the plaintiff, summary

judgment is improper. See Finch v. Illinois Community College Board, 315 Ill. App. 3d 831, 837

(2000).

¶ 39 Dynamic’s argument presupposes that the agreement between it and Larsen requires a

certain quantity or quality of procurement and fulfillment activities performed by V&N for V&N

to be entitled to split commissions. But the plain language of the agreement does not require a

certain level of procurement and fulfillment activities. Rather, the agreement only requires

procurement (i.e., where the purchase orders originated) and fulfillment (i.e., where the parts are

shipped for actual manufacturing) to be performed in another sales representative’s territory. In

other words, it is irrelevant the quantity or quality of procurement and fulfillment activities

performed by V&N because the plain language of the agreement does not require a sales

representative to do any specific procurement and fulfillment work to obtain split commissions.

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¶ 40 Given the split-commissions provision’s unambiguous language and the fact that the record

evidence plainly demonstrates that, since November 2020, V&N has been Larsen’s sales

representative in Mexico assigned to the Omron/Nidec account, Larsen was allowed to split the

commissions between V&N and Dynamic for any eligible parts ordered in Mexico by

Omron/Nidec or shipped to Mexico for actual manufacturing by Omron/Nidec. Therefore, there is

no genuine issue of material fact as to whether Larsen breached its agreement with Dynamic and

Larsen has not breached that agreement as a matter of law. Although the circuit court did not grant

Larsen summary judgment based on this reason—but rather found no genuine issue of material

fact that V&N was performing procurement and fulfillment activities on eligible parts—we may

affirm the court’s grant of summary judgment on any basis supported by the record. See Miller v.

Lawrence, 2016 IL App (1st) 142051, ¶ 22. But we note that Larsen raised this argument both

below to the circuit court and on appeal. Consequently, the circuit court properly granted summary

judgment to Larsen on Count I of Dynamic’s second amended complaint.

¶ 41 We next turn to Count II of Dynamic’s second amended complaint, in which it claimed

that Larsen violated the Sales Representative Act (820 ILCS 120/0.01 et seq. (West 2020)). The

statute provides that “[a]ll commissions due at the time of termination of a contract between a sales

representative and principal shall be paid within 13 days of termination, and commissions that

become due after termination shall be paid within 13 days of the date on which such commissions

become due.” Id. § 120/2. The statute further states that “[a]ny provision in any contract between

a sales representative and principal purporting to waive any of the provisions of this Act shall be

void.” Id. The statute defines the term “sales representative” and “principal” (see id. § 120/1(3),

(4)), but neither party disputes that Dynamic constituted a sales representative and Larsen

constituted a principal for purposes of the statute. Under the statute, if a principal fails to timely

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pay commissions to a sales representative following the termination of the parties’ agreement, the

principal “shall be liable in a civil action for exemplary damages in an amount which does not

exceed 3 times the amount of the commissions owed to the sales representative” as well as be

required to pay the sales representative’s reasonable attorney fees and court costs. Id. § 120/3.

Claims under the Sales Representative Act are “parasitic” to breach of contract claims. AA Sales

& Associates, Inc. v. Coni-Seal, Inc., 550 F.3d 605, 609 (7th Cir. 2008).

¶ 42 In the instant case, we have found that the circuit court properly concluded there was no

genuine issue of material fact as to whether Larsen breached the agreement with Dynamic and that

Larsen did not breach the agreement as a matter of law. Because claims under the Sales

Representative Act are “parasitic” to breach of contract claims (id.), it follows that there was no

genuine issue of material fact as to whether Larsen violated the Sales Representative Act and that

Larsen did not violate the act as a matter of law. Consequently, the circuit court properly granted

summary judgment to Larsen on Count II of Dynamic’s second amended complaint.

¶ 43 III. CONCLUSION

¶ 44 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.

¶ 45 Affirmed.

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