Tilstra v. Bou-Matic, LLC

1 F. Supp. 3d 900, 2014 U.S. Dist. LEXIS 27220, 2014 WL 834531
CourtDistrict Court, W.D. Wisconsin
DecidedMarch 4, 2014
DocketNo. 12-cv-827-slc
StatusPublished
Cited by2 cases

This text of 1 F. Supp. 3d 900 (Tilstra v. Bou-Matic, LLC) is published on Counsel Stack Legal Research, covering District Court, W.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tilstra v. Bou-Matic, LLC, 1 F. Supp. 3d 900, 2014 U.S. Dist. LEXIS 27220, 2014 WL 834531 (W.D. Wis. 2014).

Opinion

OPINION AND ORDER

STEPHEN L. CROCKER, United States Magistrate Judge.

In this civil action for monetary relief, plaintiffs Sid Tilstra and his company, Tils-tra Dairy Equipment, Ltd. (collectively “Tilstra”) contend that in early 2010, defendant Bou-Matic, LLC breached Bou-Matic’s dealership agreement with Tilstra to sell dairy equipment when Bou-Matic threatened to reassign Tilstra’s territory and tortiously interfered with Tilstra’s sale of its dealership to a neighboring Bou-Matic dealer. Jurisdiction is present under 28 U.S.C. § 1332.1 Before the court is Bou-Matic’s motion for summary judgment in which it argues that the tortious interference of contract claim is barred by Wis. Stat. § 893.57, the statute of limitations for intentional torts, and that Tilstra has not adduced sufficient evidence to prevail on his breach of contract claim. Dkt. 18.

I conclude that Bou-Matic is entitled to summary judgment on Tilstra’s claim of tortious interference because it is barred by the statute of limitations for intentional torts and is not subject to statutory tolling. Bou-Matic is not entitled to summary [903]*903judgement on Tilstra’s breach of contract claim because a reasonable jury could find that Bou-Matic’s decision to eliminate Tils-tra’s dealership territory was a breach of the implied covenant of good faith and fair dealing, or alternatively, constituted an anticipatory or constructive breach.

For the purpose of deciding Bou-Matic’s motion, I find the following facts to be material and undisputed:

UNDISPUTED FACTS

I. The Parties and Their Dealership Agreement

Plaintiff Sid Tilstra is a citizen of Ontario, Canada. He is the owner and president of plaintiff Tilstra Dairy Equipment Ltd., a dairy equipment dealership headquartered in Ontario. Defendant Bou-Matic LLC is a citizen of Texas with headquarters in Madison, Wisconsin. Bou-Matic manufactures dairy equipment and parts. Bou-Matic sells its equipment and parts through territorial dealers, who also service Bou-Matic products.

Tilstra became a Bou-Matic dealer in 1981 and operated in that capacity for almost 20 years, until March 2, 2010. The parties executed their last written dealership agreement in July 2004. The agreement named Sid Tilstra as the “dealer” and Tilstra Dairy Equipment, Ltd., as the “dealer business name.” Although the agreement assigned to Tilstra an exclusive territory in which to sell and service Bou-Matic products, Bou-Matic reserved to itself the right to change Tilstra’s assigned territory:

Dealer shall purchase Bou-Matic products only on Dealer’s own account for resale to purchaser-users in Dealer’s assigned territory as described in the “Territory Addendum” to this agreement which is incorporated herein. Dealer shall solicit sales only in their assigned territory unless allowed by Bou-Matic in writing prior to any solicitation. Bou-Matic reserves the right to change, at its sole discretion, the assigned territory and amend the Territory Addendum.

Agreement, dkt. 1, exh. A, at ¶ 3.

With respect to termination, the agreement provided that:

Except as otherwise provided herein, Bou-Matic shall not terminate this Agreement or effect a substantial change in the competitive circumstances of this Agreement without good cause and only upon ninety (90) days’ advance written notice sent by certified mail. The term “good cause” means Dealer’s failure to comply substantially with essential and reasonable requirements imposed upon Dealer by Bou-Matic.

Id. at ¶ 14.

II. Tilstra’s Contiguous Competitor: Dortmans Brothers Barn Equipment, Inc.

Dortmans Brothers Barn Equipment, Inc. (Dortmans) is a corporation owned by John and Rita Dortmans and Ben Wil-lemse. Dortmans became a Bou-Matic dealer in the early 1980s. In 2009, Dort-mans and Tilstra had adjacent Bou-Matic territories in southwestern Ontario, Canada. The cow population in Tilstra’s territory was almost twice that of Dortmans’s territory. Between July 2007 and 2010, John Ghey was the district sales manager for Bou-Matic in the territories assigned to Tilstra and Dortmans. Ghey has known Willemse of Dortmans for 10 to 12 years. Prior to joining Bou-Matic, Ghey had worked for Bou-Matic’s competitor, DeLa-val. Dortmans also is a DeLaval dealer, and Ghey had provided technical assistance to Dortmans while he was at DeLa-val.

In late 2006 or early 2007, John Dort-mans approached Sid Tilstra about Dort-mans buying Tilstra’s Bou-Matic dealer[904]*904ship. Dortmans and Tilstra discussed and agreed on a formula under which Tilstra would be willing to sell to Dortmans. The formula would have resulted in a sale price between $2,000,000 and $2,500,000. However, after reviewing Tilstra’s financials under the formula with his accountant, John Dortmans told Sid Tilstra that the purchase was more expensive than he had anticipated and he could not afford it.

III. Bou-Matic’s Threats to Change Tilstra’s Territory

In August 2008, Ghey and Willemse exchanged emails and had discussions about Dortmans needing more territory. On September 9, 2009, Sid Tilstra sent an email to Ghey and several of his superiors at Bou-Matic, criticizing Ghey for allowing Dortmans to bid on a project in Tilstra’s territory and causing the loss of the prospective customer to DeLaval. Shortly after, Ghey began putting together information to build a case for changing Tilstra’s territory.

In February 2009, Ghey reviewed Tils-tra’s performance and determined that the company needed improvement in many areas. By the fall of 2009, Ghey was looking into why Bou-Matic was losing market share, losing projects and doing poorly in Tilstra’s territory. Willemse and Dort-mans provided Ghey with a list of farms that allegedly had issues with Tilstra.

On October 19, 2009, Ghey emailed a report to his regional sales manager, Mario Gladu, in which Ghey highlighted problems in Tilstra’s territory and explaining why changes were necessary. Ghey recommended that Bou-Matic reassign Tils-tra’s territory to other Bou-Matic dealers, including Dortmans. Ghey reported that Dortmans and “Advanced” (another Bou-Matic dealer in the area) were “actively pursuing leads in Tilstra’s territory,” and “[b]oth would love to have additional territory with our blessing.” It was Ghey’s opinion that Sid Tilstra was destroying the territory and that his “focus was about making money on the initial sale”:

[He] did not always do the follow-up with dairymen that he had sold equipment to. Part of the cost of installing product is ongoing to make sure it works right. There were situations where that wasn’t happening, and that was getting out into the community.

Ghey deposition, dkt. 17 at 117-18.

Ghey also felt that Tilstra’s “route man was good at what he did and there’s a certain element of service he did at his end, like maintenance, but some of the knowledge and service department capacity was not there to deal with customers’ issues.” Id. at 118.

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1 F. Supp. 3d 900, 2014 U.S. Dist. LEXIS 27220, 2014 WL 834531, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tilstra-v-bou-matic-llc-wiwd-2014.