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Wallace Sales & Consulting, LLC v. Tuopu North America, Ltd.

United States District Court, E.D. Michigan, Southern Division

November 17, 2016

Wallace Sales & Consulting, LLC, Plaintiff/Counter Defendant,
Tuopu North America, Limited, Defendant/Counter Claimant.




         I. Introduction

         On March 2, 2015, Wallace Sales & Consulting, LLC (“Plaintiff”) filed a Complaint and Demand for Trial by Jury against Tuopu North America, Limited (“Defendant”), alleging breach of contract and seeking a declaratory judgment. See Dkt. No. 1. On August 7, 2015, Defendant asserted a counterclaim against Plaintiff for Unjust Enrichment/Quantum Meruit. Dkt. No. 21, pp. 3-4 (Pg. ID No. 506- 07). Plaintiff amended its complaint on August 28, 2015. Dkt. No. 28.

         Presently before the Court is Defendant's Motion for Summary Judgment, filed on September 30, 2016. Dkt. No. 94. Upon review of the briefing, the Court concludes that oral argument will not aid in the resolution of the instant motion. Accordingly, the Court will resolve Defendant's present motion on the briefs. See E.D. Mich. LR 7.1(f)(2).

         For the reasons discussed herein, the Court will DENY Defendant's Motion for Summary Judgment [94].

         II. Background

         Plaintiff is a Michigan sales representative firm in the automotive industry, whose sole member is James Wallace (“Wallace”). Dkt. No. 105, p. 6 (Pg. ID No. 2733). Defendant is an Ontario, Canada corporation and a subsidiary of a Chinese manufacturing conglomerate, and functions as the North American supplier of automotive suspension parts. Id.

         In October 2005, Wallace emailed with James Robbescheuten at Topew International Incorporated. Id. at 8. In response to Robbescheuten's request, Wallace attached a résumé that stated he had an Associate's Degree in Engineering Technology from Henry Ford Community College and a Bachelor's of Science degree in Mechanical Engineering from Lawrence Technological University. Id.; Dkt. No. 105-2, p. 4 (Pg. ID No. 2764).

         Defendant, Tuopu North America, was incorporated on January 24, 2006. Dkt. No. 105-4. Defendant first retained Plaintiff as its sales representative pursuant to a written agreement in February 2007. Dkt. No. 105-6. The 2007 agreement appointed Plaintiff to be Defendant's “sales agent for the sale and servicing of Products to the Customers” and to “assist in representing [Defendant] to other customers.” Id. at 2 (Pg. ID No. 2279).

         In December 2011, after several years of working together, Plaintiff and Defendant agreed to execute a new written Manufacturer's Representative Agreement (hereinafter “the Agreement”), under which Plaintiff served as an independent manufacturer's representative. Dkt. No. 105-9. The Agreement became effective on January 1, 2012. Id. at 2 (Pg. ID No. 2802). According to the Agreement, any disputes related to the Agreement shall be governed solely by Ontario, Canada law. Id. at 8.

         The Agreement included detailed provisions governing the sales commissions that Defendant would be required to pay to Plaintiff in the event of termination, which varied based upon whether Plaintiff's termination was “without cause” or “for cause.” Id. at 6-7. If Defendant terminated Plaintiff “without cause, ” it was required to continue paying sales commissions to Plaintiff on all sales for which an order or quotation was received prior to December 31, 2014. Id. at 7. However, if Defendant terminated Plaintiff “for cause, ” it was only required to pay Plaintiff commissions on parts shipped during the one-month period following the effective termination date. Id.

         The parties' allegations diverge as to the quality of Plaintiff's work for Defendant. Plaintiff asserts that by 2014, the orders it procured were resulting in sales of around $40 million per year. Dkt. No. 105, p. 6 (Pg. ID No. 2733). Conversely, Defendant alleges that the parties' working relationship was problematic, due to Plaintiff's failure to work well with Defendant's staff. Dkt. No. 94, pp. 16-17 (Pg. ID No. 2232-33).

         On July 11, 2014, Defendant sent Plaintiff notice of termination, effective immediately. Dkt. No. 105-12. The termination notice stated that the “termination is due to financial reasons and is without cause.” Id. Additionally, the letter provided that Defendant would pay Plaintiff sales commissions through December 31, 2014. Id.

         On March 2, 2015, Plaintiff filed this suit, alleging breach of contract to pay sales commissions and seeking a declaratory judgment. Dkt. No. 1. In April 2015, shortly after the present case was filed, Defendant sent Plaintiff a letter rescinding the termination without cause and replacing it with a termination for cause. Dkt. No. 105-14. Defendant then filed a ...

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