Lakeshore Machinery, Inc. v. Thermwood Corp.

117 F.R.D. 429, 1987 U.S. Dist. LEXIS 10133
CourtDistrict Court, E.D. Wisconsin
DecidedOctober 28, 1987
DocketNo. 85-C-528
StatusPublished

This text of 117 F.R.D. 429 (Lakeshore Machinery, Inc. v. Thermwood Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lakeshore Machinery, Inc. v. Thermwood Corp., 117 F.R.D. 429, 1987 U.S. Dist. LEXIS 10133 (E.D. Wis. 1987).

Opinion

DECISION AND ORDER

CURRAN, District Judge.

By Order dated June 2, 1987, this court granted summary judgment to the defendant Thermwood Corporation on the plaintiff's first two causes of action stating claims under the Wisconsin Fair Dealership Law, Wis.Stats. § 135.01 et seq. Presently before the court are the defendant’s motions for leave to amend its answer to state the affirmative defense of accord and satisfaction and for summary judgment on the third cause of action. In its third claim, Lakeshore Machinery, Inc. alleges that on September 21, 1983, it sold a Thermwood machining system to Brookfield Plastics for $69,772.50. It further alleges that Thermwood had agreed to pay Lakeshore a twenty per cent commission on the sale price, which amounted to $13,954.50. “Thermwood Corporation unilaterally reduced the commissions that Lakeshore Machinery, Inc. had earned to an amount of $3,489.00 ... [and] remains indebted to Lakeshore Machinery, Inc. in the amount of $10,465.50 for commissions that are unpaid.” (Complaint at paragraphs 14 and 18) In its answer, Thermwood did not assert the affirmative defense of accord and satisfaction but rather, at paragraph 16, denied the plaintiff’s averments and alleged “that on October 19, 1984, Therm-wood sent Lakeshore a check for $3,489.00 under cover of a letter of even date, copies of which are attached hereto collectively as Exhibit 2 and made a part hereof.” The referenced and incorporated letter to Lakeshore Machinery from Thermwood provided as follows:

Dear Mr. Johnson:

I have carefully reviewed the facts and circumstances with regards to the commission due Lakeshore Machinery with regards to the Cartesian machining system sold Brookfield Plastics.
(1) The dealership agreement between yourself and Thermwood specifically states that a designation certificate is required in order for the dealer to receive commissions. We have no record of such a designation certificate being signed.
(2) Our salesman indicates that your Company was attempting to sell a competitor’s machine (Powermatic) to the customer. This action is directly in opposition with the dealer agreement.
(3) When discounts are given to customers, both the dealer and Thermwood have to share in these discounts.
Based on these facts, I believe that no commission is due to Lakeshore Machinery; however, after discussing the situation with Mr. Gary Hall, Vice President of Marketing, we have agreed that we will honor the previous verbal committment by our salesman and, therefore, we are enclosing a check for $3,489.00 in total satisfaction of this transaction.
[431]*431If you have any questions, please feel - free to give me a call.
Very truly yours,
John M. Reeves
Vice President, Finance

Federal Rule of Civil Procedure 8(c) is explicit in denominating accord and satisfaction as an affirmative defense which must be set forth as such. It is the plaintiffs position that the defendant has waived its opportunity to assert accord and satisfaction by this failure. Because of the manner in which the accord and satisfaction issue was presented in the answer, however, I am persuaded that there is no danger of unfair surprise or prejudice if the defendant is permitted to amend its answer in order to assert the affirmative defense of accord and satisfaction. Counsel for the defendant has further submitted an affidavit indicating that last June she had a telephone conversation with the attorney for the plaintiff informing him that she intended to file a motion for summary judgment on the issue of accord and satisfaction. According to the affidavit, counsel for the plaintiff stated that he had already fully researched that issue and felt that the case law would favor his position. There have been no opposing papers filed on the motion. The interests of justice would thus not be offended by permitting the defendant leave to amend, and it will be granted. See Federal Rule of Civil Procedure 15(a) & (b).

The court, however, is not convinced that summary judgment is appropriate on the accord and satisfaction affirmative defense. In seeking summary judgment it is the burden of the moving party to satisfy the court that no genuine issue of material fact exists which would preclude granting judgment as a matter of law. Cedillo v. International Association of Bridge, etc, 603 F.2d 7, 9-10 (7th Cir.1979). All inferences drawn from the record before the court must be resolved in favor of the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-61, 90 S.Ct. 1598, 1609-10, 26 L.Ed.2d 142 (1970). The court is not permitted to weigh evidence and must give the nonmoving party the most favorable view of the record if there is doubt as to the sufficiency of factual showings. Exxon Corp. v. Federal Trade Commission, 663 F.2d 120-26 (D.C.Cir.1980). The standards for ruling on a summary judgment motion are identical to those which govern a trial judge in the determination as to whether to direct a verdict. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The burden of establishing all of the elements of an affirmative defense rests squarely upon the defendant. Capitol Indemnity Corporation v. St. Paul Fire & Marine Insurance Company, 357 F.Supp. 399, 410 (1972). The burden is thus upon the party asserting accord and satisfaction to establish every necessary element of the defense. See 6 A. Corbin, Corbin on Contracts § 1280 (1962) & Kaufman, Supp. (1984) and cases cited therein.

In support of its motion, Thermwood has proffered the “Authorized Dealer Agreement” which, at paragraph 5, provides that “in the event the efforts exerted by dealer ... results (sic) in the sale of Thermwood products ... to one or more of dealer’s customers, Thermwood shall pay to dealer a commission. The amount of the commission shall be fifteen per cent (15%) of the amount of sales of Thermwood products....” Paragraph 6 of the agreement conditions payment of commission upon a dealer transaction designation certificate being signed by the dealer and by a Therm-wood regional vice president or district manager. It further provides that the dealer. transaction designation certificate be in full force and effect at th.e time of the sale. Thermwood has also supported its motion with the October 19, 1984 letter quoted above and a photocopy of a Therm-wood check made out to Lakeshore Machinery in the amount of $3,489.00, which check was endorsed by Lakeshore Machinery, Inc. and negotiated on October 25, 1984.

Wisconsin recognizes that “accord and satisfaction promotes fairness by protecting the bona fide expectations of a debtor who tenders payment on condition that it will be accepted as payment in full ... [432]

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Related

Adickes v. S. H. Kress & Co.
398 U.S. 144 (Supreme Court, 1970)
Anderson v. Liberty Lobby, Inc.
477 U.S. 242 (Supreme Court, 1986)
Exxon Corporation v. Federal Trade Commission
663 F.2d 120 (D.C. Circuit, 1980)
Clark v. Aetna Finance Corp.
340 N.W.2d 747 (Court of Appeals of Wisconsin, 1983)
Flambeau Products Corp. v. Honeywell Information Systems, Inc.
341 N.W.2d 655 (Wisconsin Supreme Court, 1984)

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Bluebook (online)
117 F.R.D. 429, 1987 U.S. Dist. LEXIS 10133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lakeshore-machinery-inc-v-thermwood-corp-wied-1987.