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Alexander Assoc., Inc. v. Parkway Products, LLC

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

February 15, 2018

ALEXANDER ASSOC., INC., Plaintiff,
v.
PARKWAY PRODUCTS, LLC, Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S AMENDED COMPLAINT (ECF #15)

          MATTHEW F. LEITMAN, UNITED STATES DISTRICT JUDGE

         In this action, Plaintiff Alexander Associates Inc. alleges that Defendant Parkway Products LLC has failed to pay commissions due and owing under the parties' sales representative agreement (the “Agreement”). (See Am. Compl., ECF #14.) Parkway has now moved to dismiss Alexander Associates' Amended Complaint. (See Mot. to Dismiss, ECF #15.) For the reasons explained below, the motion is DENIED.

         I

         A

         On or about June 2, 2010, Parkway and Alexander Associates entered into the Agreement. (See Am. Compl. at ¶6, ECF #14 at Pg. ID 159; Agreement, ECF #14-2.) The Agreement called for Alexander Associates “to sell and promote the sales of products of PARKWAY.” (Agreement at §1, ECF #14-2 at Pg. ID 170.) In exchange, Parkway agreed to pay sales commissions to Alexander Associates at a rate of 5% of the net invoice price on all shipments of products to the customers identified in the Agreement. (See Am. Compl. at ¶7, ECF #14 at Pg. ID 159; Agreement at §4, ECF #14-2 at Pg. ID 171.)

         Section 10 of the Agreement governs the commissions to be paid to Alexander Associates upon termination. That section provides that Alexander Associates is entitled to commissions on all “orders” calling for shipment that are dated prior to termination and shipped within 36 months of the termination Dated:

Rights upon Termination: Upon termination of this agreement for any reasons, REPRESENTATIVE shall be entitled to commissions, as defined in section 4 and pursuant to section 5 of this agreement, on all orders calling for shipment to REPRESENTATIVE customers, or customer's designated “ship to” location, that are dated prior to the effective date of termination and shipped to said customers within thirty-six (36) months of the date of termination commencing with the start of full production. Any RFQ/quotation meeting the compensation criteria set forth in section 4 of this agreement initiated by REPRESENTATIVE that results in an order within twelve (12) months following termination date would be subject to the general post termination commission.

(Agreement at §10, ECF #14-2 at Pg. ID 174.)

         The Agreement further defines the term “order” as follows:

Order” shall mean any commitment to purchase PARKWAY's products which calls for shipment to REPRESENTATIVE's customers or which is subject to commission in accordance with this Section 5.

(See Id. at §5(e), Pg. ID 171.)

         On or about September 6, 2016, Parkway gave Alexander Associates written notice that it (Parkway) was terminating the Agreement. (See Am. Compl. at ¶16, ECF #14 at Pg. ID 162.) The termination became effective 30 days later. (See Agreement at §9(a), ECF #14-2 at Pg. ID 174.)

         Thereafter, a dispute arose between the parties concerning whether Parkway was fulfilling its obligations to pay post-termination commissions. Alexander Associates contends that Parkway is not paying all of the due and owing post-termination commissions; Parkway insists that it is making all of the required commission payments.

         Much of this dispute appears to center around the scope of the term “order” as used in the Agreement. The scope of that term is important because, as noted above, Alexander Associates is only entitled to commissions on post-termination sales by Parkway if those sales were made based upon an “order” dated prior to termination of the Agreement. The parties characterize the disputed issue this way: does “order” include “blanket purchase orders, ”[1] or is “order” confined to “firm releases”[2]? (As described below, the Court does not believe that Alexander Associates' right to commissions on post-termination turns on labels like ...


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