United States District Court, N.D. Indiana, Fort Wayne Division
OPINION AND ORDER
THERESA L. SPRINGMANN CHIEF JUDGE UNITED STATES DISTRICT
matter comes before the Court on Plaintiff R3 Composites
Corporation's Motion for Summary Judgment [ECF No. 37],
filed on August 24, 2018. The Defendant, G&S Sales Corp.,
filed a response [ECF No. 45] on September 28, 2018. On
October 12, 2018, the Plaintiff filed a reply [ECF No. 50] in
further support of its Motion for Summary Judgment. The
Defendant also filed a Motion for Hearing [ECF No. 49]
regarding the Plaintiff's Motion for Summary Judgment.
parties' dispute centers around whether R3 breached an
agreement to pay commissions to G&S for business that
G&S procured on behalf of R3.
Start of the Business Relationship Between R3 and
2001, Roy Carver founded R3 to custom mold fiberglass parts.
Around 2010, R3 purchased property in Grabill, Indiana, which
included several hydraulic presses located on the property.
Carver bought the property with the intent to use the
hydraulic presses to manufacture grain storage bins. Shortly
thereafter, Carver reached out to Steven Stefani, an
equipment broker, to either sell the hydraulic presses
located on the property or to find potential customers for R3
in need of molding work. Stefani and Carver had conversations
discussing the potential to have Stefani act as a sales
representative for R3 working on commission. Around the same
time, Stefani was in communication with a former colleague,
Mark Glidden, about joining him to find potential customers
for R3's molding business. Glidden agreed to help Stefani
procure business for R3.
and Stefani first discussed the possibility of incorporating
a new company called G&S Sales Corporation. Glidden and
Stefani also discussed that any commission payments G&S
earned would be split in half between Glidden and Stefani.
Glidden ultimately expressed a desire to form his own company
that would act as a subcontractor assisting G&S on its
work for R3. Subsequently, Stefani's wife, Patricia
Stefani, incorporated G&S Sales Corporation as the sole
incorporator and as a 50% owner. Steven Stefani owned the
remaining 50% of G&S.
January 31, 2011, Glidden sent an email to Carver with a
proposed written sales representative agreement between R3
and G&S. The language pertaining to the proposed sales
commission arrangement stated that R3 would pay G&S a
commission fee of 5% for any business G&S brought to R3.
The parties did not enter into this proposed agreement.
February 10, 2011, R3 and G&S entered into a
Non-Disclosure Agreement (“NDA” or
“Agreement”). Glidden signed the Agreement on
behalf of G&S as “Managing Partner.” The
language pertaining to commissions states:
12. General Business Agreements.
12.1 New Jobs. G&S will assist R3 in starting up new jobs
sourced by G&S through the pre-production approval
process until such approval is given by the client/customer.
12.2 Commission. If G&S obtains jobs for R3, the
parties will attempt to develop an agreement whereby G&S
is paid a commission with a guideline being a 5% commission
with the precise commission rate to be negotiated on a
job-by-job basis. A commission will also be paid for any
and all extensions, renewals, subsequent phases or additional
terms of any such job obtained by G&S for R3, the amount
of which to be determined on a job-by-job basis. Any
commissions to be paid to G&S in this Section 12.2 are
predicated upon G&S fulfilling all of its obligations
under this Agreement, including without limitation, those
provisions of Sections 12.3 immediate [sic] following.
12.3 Existing Jobs. During the term of this Agreement and
thereafter, G&S agrees not to interfere with any existing
R3 jobs by attempting to transfer such work to other molders
and this provision shall remain in place throughout the
existence of any existing production contract and all
extensions, renewals, subsequent phases or additional terms
13. Termination. Either party may, at any time, terminate
this Agreement effective upon written notice to the other
party. Notwithstanding such termination, the obligations of
each party as set forth in Section[ ] . . . 12 of this
Agreement shall survive termination of this Agreement.
(See Def.'s Mem. in Opp. to Mot. for Summ. J.,
NDA, Ex. 9, §§ 12-13, ECF No. 47-11 (emphasis
Aquatic Bath Business
the Agreement was signed, Stefani raised the possibility of
securing Aquatic Bath as a customer for R3's molding
business. On June 8, 2011, Aquatic and R3 signed a purchase
and sales agreement that required R3 to manufacture and sell
certain Aquatic products.
R3's Aquatic business was not as profitable as
anticipated, G&S agreed to temporarily forgo sales
commissions. In February 2012, G&S proposed limiting the
Aquatic commission payments to 10% of R3's profit from
the Aquatic business until monthly sales reached $600, 000,
at which point the commission would be set to 5% of sales. R3
did not accept the offer.
several months of back-and-forth, Stefani in June 2012 stated
that he was interested in the “long term” and was
willing to “figure something out” on the Aquatic
business until the Aquatic business became more profitable
for R3. A March 22, 2013, email chain between the parties
appears to reference an agreement between the parties that
G&S would be paid a commission of 3% on the Aquatic
business when the monthly sales to Aquatic reached $600, 000.
(Def.'s Mem. in Opp. to Mot. for Summ. J., Ex. 18, ECF
R3 Hires Glidden as Plant Manager
point during the R3 and Aquatic negotiations, Carver
contacted Glidden to offer him a position as a plant manager
at ¶ 3's Grabill location. R3 ultimately hired
Glidden on June 1, 2011. Although Stefani expressed conflict
of interest concerns with Glidden accepting the position
while still working for G&S to procure business for R3,
he eventually acquiesced to allow Glidden to take the role as
a plant manager for R3.
Reductions to ...