Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Bae Systems Information and Electronics Systems Integration, Inc. v. Spacekey Components

February 1, 2012

BAE SYSTEMS INFORMATION AND ELECTRONICS SYSTEMS INTEGRATION, INC.
v.
SPACEKEY COMPONENTS, INC.



The opinion of the court was delivered by: Landya McCafferty United States Magistrate Judge

ORDER

BAE Systems Information and Electronics Systems Integration Inc. ("BAE") has sued its former sales consultant and customer, SpaceKey Components, Inc. ("SpaceKey"), in six counts. Among other things, BAE seeks declaratory judgments concerning its rights to terminate or reject seven purchase orders submitted by SpaceKey (Count I) and its right to terminate the agreement under which SpaceKey performed consulting services for it (Count II). SpaceKey, in turn, asserts four counterclaims, including claims that BAE breached the consulting agreement by: (1) refusing to accept five purchase orders it submitted to BAE (Count One); and (2) failing to pay commissions on several dozen sales to qualified buyers it identified for BAE (Count Two). Before the court is BAE's motion for summary judgment on Counts I and II of its amended complaint and Counts One and Two of SpaceKey's counterclaim. SpaceKey objects. For the reasons that follow, BAE's motion for summary judgment is granted in part and denied in part.

Summary Judgment Standard

Summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). "The object of summary judgment is to 'pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required.'" Davila v. Corporacion de P.R. para la Diffusion Publica, 498 F.3d 9, 12 (1st Cir. 2007) (quoting Acosta v. Ames Dep't Stores, Inc., 386 F.3d 5, 7 (1st Cir. 2004)). "[T]he court's task is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009) (citations and internal quotation marks omitted).

"Once the moving party avers an absence of evidence to support the non-moving party's case, the non-moving party must offer 'definite, competent evidence to rebut the motion,'" Meuser v. Fed. Express Corp., 564 F.3d 507, 515 (1st Cir. 2009) (citing Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991)), and "cannot rest on 'conclusory allegations, improbable inferences, [or] unsupported speculation,'" Meuser, 564 F.3d at 515 (quoting Welch v. Ciampa, 542 F.3d 927, 935 (1st Cir. 2008)). When ruling on a party's motion for summary judgment, a trial court "constru[es] the record in the light most favorable to the non-movant and resolv[es] all reasonable inferences in [that] party's favor." Meuser, 564 F.3d at 515 (citing Rochester Ford Sales, Inc. v. Ford Motor Co., 287 F.3d 32, 38 (1st Cir. 2002)).

Background

Unless otherwise indicated, the following facts are undisputed.

In 2004, BAE and SpaceKey entered into an agreement (hereinafter "Consultant Agreement" or "Agreement") under which SpaceKey promised to "advise and assist BAE SYSTEMS in identifying suitable, financially qualified buyers for BAE SYSTEMS' Products ('Products') and in effecting the sale of such Products to such buyers in the States of Connecticut and Maryland and in the Commonwealth of Virginia ('Territory')."

Pl.'s Mot. Summ. J., Rea Decl., Ex. B (doc. no. 57-4), at 1. The Consultant Agreement further provides that "[t]he Products, Prices and Terms and Conditions governing such sales shall be as set forth in Exhibit A, which BAE SYSTEMS may revise from time to time." Id. In return for SpaceKey's services, BAE "agree[d] to pay [SpaceKey], upon completion of each sale by BAE SYSTEMS of Products to a Qualified Buyer in the Territory a fee equal to five per cent (5%) of the Net Sales Price of said Products . . . ." Id. at 2.

The Consultant Agreement also includes the following relevant provisions:

2. TERM OF AGREEMENT

A. The term of this Agreement shall commence as of July 8, 2004 and shall remain in effect through January 31, 2007, or until such earlier termination of the consultant services as hereinafter provided. In no event shall BAE SYSTEMS be liable to [SpaceKey] hereunder for any services performed by [SpaceKey] prior to the term of this Agreement or after its expiration or termination.

B. If the Agreement has not been terminated prior to its expiration, it shall be renewed for an additional term commencing February 1, 2007, and annually thereafter, unless either Party gives the other notice of its intention not to renew the Agreement, no later than ninety (90) days prior to commencement of the renewal term. . . . .

12. TERMINATION

A. Either Party may terminate this Agreement without cause by sixty (60) days' written notice to the other Party. In the event of termination with or without cause, BAE SYSTEMS' obligations will be limited to fees earned by [SpaceKey] to the effective date of termination. . . .

B. This Agreement shall terminate immediately and all payments due shall be forfeited if, in rendering services hereunder, improper payments are made, unlawful conduct is engaged in, or any part of the fee or expenses payable under this Agreement is used for an illegal purpose.

Pl.'s Mot. Summ. J., Rea Decl., Ex. B (doc. no. 57-4), at 1, 5-6.

Appendix A to the Consultant Agreement is a document with a listed revision date of November 2006, and which is captioned "Terms of Sale -- Commercial/Domestic" (hereinafter "2006 TOS"). Paragraph 6 of the 2006 TOS, titled "Payment," provides, in pertinent part:

Unless otherwise specified in writing by BAE SYSTEMS, terms of payment for Buyer are the earlier of net thirty (30) days from the date of invoice or upon delivery. . . . Payments are unconditional and shall be made as specified in the Order, without recourse, set off, or discount. If Buyer shall fail to make any payment in accordance with the terms and conditions hereof, BAE SYSTEMS, in addition to its other rights and remedies, may, at its option, defer shipments or deliveries hereunder, or under any other contract with Buyer. BAE SYSTEMS reserves the right to require payment before delivery if credit information on Buyer is lacking or unfavorable.

Pl.'s Mot. Summ. J., Rea Decl., Ex. A (doc. no. 57-3), at 3. Paragraph 7 of the 2006 TOS, titled "Buyer's Default: Termination," provides, in pertinent part:

Without prejudice to any other rights or remedies available to BAE SYSTEMS, BAE SYSTEMS shall have the right and option to immediately terminate this Order upon written notice to Buyer in the event of the occurrence of one or more of the following: (i) If Buyer Breaches any of the terms and conditions of this Order, including but not limited to the failure to perform any obligation hereunder or make any payment due hereunder.

Id.

In May of 2008, BAE adopted a revision of its terms of sale (hereinafter "2008 TOS"). It is not clear whether the 2008 TOS replaced the 2006 TOS, or a subsequent revision.*fn1 Paragraph 6 of the 2008 TOS, titled "Terms of Payment," provides that "[p]ayment terms are net thirty (30) days from the date of the invoice . . . ." Def.'s Obj., Spear Decl., Ex. A (doc. no. 59-4), at 2. Paragraph 6 of the 2008 TOS, however, does not include any of the language that follows the ellipsis in the portion of Paragraph 6 from the 2006 TOS that is quoted above. That is, the 2008 TOS does not include either a provision allowing BAE to defer shipments to SpaceKey or a provision allowing BAE to require advance payment from SpaceKey. On the other hand, the "Buyer's Default: Termination" section of the 2008 TOS, i.e., Paragraph 7, is identical to Paragraph 7 in the 2006 TOS.

While the Consultant Agreement was in effect, SpaceKey submitted purchase orders to BAE listing itself as the qualified buyer. It then resold the products it purchased from BAE, earning both a five-percent commission from BAE and whatever mark-up it was able to incorporate into the prices it charged the end users of the products it purchased from BAE.

On June 30, 2006, the Virginia State Corporation Commission automatically terminated SpaceKey's corporate existence because SpaceKey failed to file its annual report and remit the annual registration fee required by Virginia law. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.