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Sky Systems of Plymouth, NH, LLC v. Sentech Architectural Systems

August 27, 2012

SKY SYSTEMS OF PLYMOUTH, NH, LLC
v.
SENTECH ARCHITECTURAL SYSTEMS, LLC



The opinion of the court was delivered by: Paul Barbadoro United States District Judge

MEMORANDUM AND ORDER

Beginning in 2007, Sky Systems of Plymouth, NH, LLC ("Sky") served as an independent sales representative for the Texas-based Sentech Architectural Systems, LLC ("Sentech"), and was responsible for a sales territory encompassing various Northeastern states. In January 2012, Sentech terminated its arrangement with Sky. Claiming that it has not received all of the commissions to which it is entitled, Sky now brings suit against Sentech. In addition to contract damages, Sky seeks treble damages and attorneys' fees based on Sentech's alleged violations of the Texas Sales Representative Act and its New Hampshire cognate. Sky moves for summary judgment, and, for the reasons below, I deny its motion.

I. BACKGROUND

Sky is a limited liability company based in New Hampshire. The company has no employees, and its president and sole member is Ernest Coupe. Sentech is a limited liability company whose principal place of business is Austin, Texas. Sentech designs structural glass systems, which have been incorporated into buildings such as the Freedom Tower in downtown Manhattan and the Newark International Airport.

In 2007, pursuant to an oral agreement, Sentech engaged Sky as an independent sales representative. Sky solicited orders for Sentech products and was compensated by Sentech through the payment of commissions. On August 16, 2010, Sky and Sentech formalized their arrangement by entering into a written Sales Representation Agreement ("Agreement"). Doc. No. 1-1. By the terms of the Agreement, Sky was granted the exclusive right to sell Sentech's products in a defined territory encompassing New England and northern New York State.

Clauses 5 and 6 of the Agreement address commissions and commission payments, specifying that commissions shall be computed on the gross amount of the invoice (including change orders) rendered by the Company and paid for by the Purchaser. In no event shall the commission be computed on an amount in excess of the amount received by the Company . . . . The Representative's commission shall be reduced a pro rata amount[] when final settlement is made with a Purchaser on other than a full payment basis . . . .

Id. ¶ 5. As to timing, the Agreement specifies that commission payments "shall be made only after the Products are paid for by the Purchaser," id. ¶ 5, and "[a]ll payments of commissions shall be made within thirty days of receipt of payment by the Company," id. ¶ 6.

Termination is addressed by clauses 2 and 15. Under the former, either party may terminate the Agreement "at any time without cause . . . upon 15 days' advance written notice to the other party[.]" Id. ¶ 2. Clause 15, whose meaning is disputed by the parties, is titled "Rights Upon Termination of This Agreement," and reads, in its entirety:

Upon termination of this Agreement, the Company shall pay the Representative commissions for orders and contracts accepted by the Company prior to the effective date of such termination, regardless of when shipments are made or invoices tendered. Upon termination of this Agreement, all trade names, patents, designs, drawings, engineering or other data, photographs, samples, literature, and sales data of every kinds [sic], shall remain the property of the Company, and the Representative shall return all such property in its possession with reasonable promptness along with copies of any confidential information which it may have other than the regular exchange of business correspondence.

Id. ¶ 15 (emphasis added).

On January 10, 2012, Sentech notified Sky that it would be terminating the Agreement. After receiving the notice, Sky demanded that Sentech make full payment of all outstanding commissions within fifteen days. Pointing to the most recent "Commission Statement" that had been supplied by Sentech, which listed nine projects for which commissions remained payable, Sky requested $73,968.60. That amount represents the sum total of the figures listed for each project under the "Remaining Commission Payable" heading of the Commission Statement.*fn1

Sentech rejected Sky's demand. Instead, it continued to pay Sky commissions on a rolling basis as it received payment from its customers. Where projects listed on the Commission Statement were cancelled or where purchasers where unable to make payment, the commissions paid to Sky were withheld or reduced accordingly. Sky asserts that as of May 30, 2012, ongoing commission payments had reduced the outstanding balance owed from $73,968.60 to $65,031.29.

Invoking this court's diversity jurisdiction, Sky brought suit on February 1, alleging that Sentech's failure to pay the full $73,968.60 by January 25 constituted a breach of the Agreement. Sky's complaint (Doc. No. 43) contains nine counts, including a contract claim; two quasi-contract claims for unjust enrichment and quantum meruit; an unfair trade practice claim under New Hampshire law; and five claims arising out of the statutes governing sales representatives and commissions in Texas, New Hampshire, Massachusetts, New York, and Connecticut. Sky now ...


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