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MACHINE TOOL TECHNOLOGY 21, INC. v. UNITED GRINDING TECH.

March 20, 2003

MACHINE TOOL TECHNOLOGY 21, INC., PLAINTIFF,
v.
UNITED GRINDING TECHNOLOGIES, INC., DEFENDANT.



The opinion of the court was delivered by: Charles Ronald Norgle, Sr., Judge United States District Court

OPINION AND ORDER

Before the court is Plaintiff's motion for partial summary judgment and Defendant's motion for summary judgment, brought pursuant to Federal Rule of Civil Procedure 56. For the following reasons, Plaintiff's motion is denied and Defendant's motion is granted.

I. BACKGROUND*fn1

The parties present the court with a simple issue of contract interpretation, in regard to the amount of commission to be paid under the parties' contract.

Plaintiff, Machine Tool Technology 21, Inc., an Illinois corporation with its principal place of business in Cook County, Illinois, ("MTT"), filed suit against Defendant, United Grinding Technologies, Inc., a Delaware corporation with its principal place of business in Ohio, ("UGT"), seeking to recover commissions allegedly due under the parties' contract. This suit was initially filed in Illinois state court, but was properly removed by UGT on October 25, 2001. See Notice of Removal). MTT's complaint contained two counts: Count I alleged breach of contract and Count II alleged violation of the Illinois Sales Representative Act, 820 Ill. Comp. Stat. § 120/0.01 et seq.

The events precipitating this litigation are excerpted as follows. On June 7, 1999, MTT and UGT entered into a contract, styled "Sales Representative Agreement." UGT is in the business of designing, manufacturing, and selling grinding machines. Under the contract, MTT acted as a sales representative and solicited sales for UGT within the territories defined in the contract, including areas of Iowa and Illinois. (See Affidavit of Chris Stine, Ex. A: Contract, Exhibit B [hereinafter Contract]). The contract also reserved to UGT the right to directly solicit and accept sales within MTT's defined territory. (See Contract, section 4). Whether sales were solicited by MTT or directly by UGT, MTT would receive a commission on such sales. (See Contract, sections 4 and 6). Specifically, section 6 of the parties' contract, styled "Commissions," explained how commissions were to be determined. (See Contract, section 6).

On September 26, 2000, UGT terminated the parties' contract effective October 26, 2000. The parties' contract provided for commissions after the termination of the contract. In the event of termination, MTT would receive commissions for sales including, products shipped by UGT prior to the effective date of termination, and products shipped by UGT against orders received and accepted by UGT prior to the effective date of termination. (See Contract, section 7.1). The commissions on such post-termination commissions would be calculated as provided in section 6 of the contract. (See Contact, section 7.2).

Prior to the termination of the parties' contract, UGT directly solicited, received and accepted two orders, without any involvement by MTT. The first order was from Wahl Clipper Corporation ("Wahl") and the second order was from Gleason Pfauter Hurth Cutting Tools ("Gleason"), both in MTT's sales territory. The list price for the Wahl order was in the amount of $782,651 and the list price for the Gleason order was in the amount of $654,550. Both orders were discounted; the Wahl order was discounted by $70,328 and the Gleason order was discounted by $67,061. As finally negotiated by UGT, after the discounts, the Wahl order was in the amount of $712,323 and the Gleason order was in the amount of $587,489.

After termination of the parties' contract, MTT disputed the commission on the sale of these two orders. MTT contends that it is entitled to a commission of $43,370 on the Wahl order and $39,611 on the Gleason order. MTT contends that it is entitled to a full commission from the list price, without having to contribute toward the discount, based on language in section 4 of the contract and the parties' previous course of dealing.*fn2 In contrast, UGT contends that MTT is entitled to a commission of $19,927 on the Wahl order and $17,272 on the Gleason order.*fn3 UGT contends that MTT must contribute toward the discounts given to the Wahl and Gleason orders, and that such contribution toward the discounts is then taken from the commission earned, based on language in section 6 of the contract, which is explicitly referred to in section 4 of the contract.

On August 27, 2002, both MTT and UGT filed motions for summary judgment, (see Mots. for Summ. J.), which the court now addresses.

II. DISCUSSION

A. Standards for Summary Judgment

A grant of summary judgment is permissible when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The nonmoving part cannot rest on the pleadings alone, but must identify specific facts, see Cornfield v. Consolidated High School District No. 230, 991 F.2d 1316, 1320 (7th Cir. 1993), that raise more than a mere scintilla of evidence to show a genuine triable issue of material fact. See Murphy v. ITT Technical Services, Inc., 176 F.3d 934, 936 (7th Cir. 1999). The Seventh Circuit has indicated that cases involving contract interpretation are "particularly suited to disposition by summary judgment." United States v. 4500 Audek Model No. 5601 AM/FM Clock Radios, 220 F.3d 539, 542 (7th Cir. 2000).

The court views the record and all reasonable inferences drawn therefrom in the light most favorable to the non-moving party. Fed.R.Civ.P. 56(c); see also Perdomo v. Browner, 67 F.3d 140, 144 (7th Cir. 1995). "In the light most favorable" simply means that summary judgment is not appropriate if the court must make "a choice of inferences." See United States v. Diebold, Inc., 369 U.S. 654, 655 (1962); see also Wolf v. Buss (America) Inc., 77 F.3d 914, 922 (7th Cir. 1996). The choice between reasonable inferences from facts is a jury function. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial. Waldridge v. American Hoechst Corp., 24 ...


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