United States District Court, N.D. Illinois, Eastern Division
October 6, 2004.
ALAN C. CONRAD and ELECTRONIC PRODUCTION AND MONITORING, INC., Plaintiffs,
VACUUM INSTRUMENT CORPORATION, Defendant.
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs, Alan C. Conrad and Electronic Production and
Monitoring, Inc., filed suit against Defendant, Vacuum Instrument
Corporation. Plaintiffs allege that Defendant failed to honor a
contract requiring Defendant to pay commissions on products sold
within Conrad's geographical sales area. Presently before the
Court is Defendant's Motion for Summary Judgment and Plaintiffs'
Cross-Motion for Summary Judgment. Plaintiffs have also filed a
Motion for Leave to Amend the Complaint, which seeks to make a
technical change to the Complaint and add a claim for an
Summary judgment is appropriate when no genuine issue of
material fact exists and the moving party is entitled to judgment
as a matter of law. Fed.R.Civ.P. 56(c); Cincinnati Ins. Co. v.
Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150 (7th Cir.
1994). "One of the principal purposes of the summary judgment
rule is to isolate and dispose of factually unsupported claims or
defenses. . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). Thus, although the moving party on a motion for summary judgment is
responsible for demonstrating to the court why there is no
genuine issue of material fact, the non-moving party must go
beyond the face of the pleadings, affidavits, depositions,
answers to interrogatories, and admissions on file to
demonstrate, through specific evidence, that a genuine issue of
material fact exists and to show that a rational jury could
return a verdict in the non-moving party's favor. Celotex,
477 U.S. at 322-27; Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
254-56 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986); Waldridge v. American
Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994).
Disputed facts are material when they might affect the outcome
of the suit. First Ind. Bank v. Baker, 957 F.2d 506, 507-08
(7th Cir. 1992). When reviewing a motion for summary judgment, a
court must view all inferences to be drawn from the facts in the
light most favorable to the opposing party. Anderson,
477 U.S. at 247-48; Popovits v. Circuit City Stores, Inc., 185 F.3d 726,
731 (7th Cir. 1999). However, a metaphysical doubt will not
suffice. Matsushita, 475 U.S. at 586. If the evidence is merely
colorable or is not significantly probative or is no more than a
scintilla, summary judgment may be granted. Anderson,
477 U.S. at 249-250.
The undisputed facts, for the purposes of this motion, taken
from the parties' Local Rule 56.1(a) & (b) statements of material
facts (referred to herein as "Pl.'s 56.1" and "Def's 56.1") and
exhibits, are as follows.
Defendant makes and sells industrial leak-detection systems
that other manufacturers use to test for leaks in the
manufacturers' finished products. Def.'s 56.1 ¶ 4. Independent
sales representatives, such as Conrad, sell Defendant's systems to
industrial customers throughout the country. Def.'s 56.1 ¶ 5.
Pursuant to a Sales Representative Agreement, Defendant gave
Plaintiffs a designated geographical area to sell the
leak-detection systems. Def.'s 56.1 ¶¶ 8-9. The agreement
provided that Conrad would be credited with all sales emanating
from his territory and that Conrad would receive commissions for
sales based on a number of factors. Pl.'s 56.1 ¶ 3; Def.'s 56.1
¶¶ 12-14. Conrad was eligible to receive commissions for systems,
spare parts, and customer add-ons that Defendant bought from a
third-party. Def.'s 56.1 ¶ 13. The agreement also provided that
it could be terminated by either party with thirty-days' written
notice. Def.'s 56.1 ¶ 11.
In Count I, Conrad seeks to recover commissions for sales of
leak-detection systems sold by Defendant in Conrad's territory.
In the 1990s, Defendant made a number of sales to companies in
Conrad's territory; and Conrad did not receive full or any
commissions on these sales. Def.'s 56.1 ¶¶ 24, 25, 29-32, 36-39.
Although Conrad was aware of the sales and considered the failure
to pay commissions a breach of the Sales Representative
Agreement, Conrad continued working for Defendant and did not
terminate the sales agreement. Def.'s 56.1 ¶¶ 23, 25-27, 33-35,
In Count II, Conrad seeks to recover "shared commissions,"
which represent partial commissions Conrad agreed to accept, on
certain leak-detection systems sold by Defendant. Def.'s 56.1 ¶
40. In Count III, Conrad seeks commission for spare parts sold by
Defendant in Conrad's sales territory. Def.'s 56.1 ¶ 46.
On November 15, 2001, the Sales Representative Agreement
terminated. Def.'s 56.1 ¶ 21. ANALYSIS
Summary Judgment Motions
Both Defendant and Plaintiffs move for summary judgment.
Defendant contends that Conrad waived his right to commissions
when he continued to perform under the Sales Representative
Agreement. Specifically, although Conrad was aware that Defendant
made sales in his territory and that he would not receive credit
or full commissions on those sales, Conrad still continued to
perform under the agreement. Defendant also argues that
Plaintiffs' evidence relating to the breach of contract is
speculative. Finally, Defendant seeks summary judgment on Count
IV, Plaintiffs' claim for treble damages under the Illinois Sales
Representative Act, because Plaintiffs have no evidence that
Defendant acted in bad faith.
Defendant argues that Conrad waived his right to commissions
claimed in Counts I, II, and III when he continued to perform
under the Sales Representative Agreement despite being aware that
Defendant made sales in Conrad's territory which would not result
in full commissions for Conrad. Waiver, whether express or
implied, is the "voluntary relinquishment of a known and existing
right." Havoco of Am., Ltd. v. Sumitomo Corp., 971 F.2d 1332,
1337 (7th Cir. 1992) (citation omitted) (Havoco). Conduct
indicating that strict compliance with a contractual provision
will not be required may constitute waiver. Havoco,
971 F.2d at 1338. However, Defendant has the burden of proof to demonstrate
that Conrad intended to waive his rights under the Sales
Representative Agreement, which is a question of fact. Havoco of
Am., Ltd. v. Hilco, Inc., 731 F.2d 1282, 1293 (7th Cir. 1984).
With respect to Count I, Defendant argues that Conrad has
waived his rights to commissions for sales of leak-detection
systems made by Defendant in Conrad's sales territory. It is undisputed that Conrad was aware of these sales. It is
further undisputed that Conrad continued to work for Defendant
despite considering the failure to pay commissions a breach of
the agreement. However, Plaintiffs argue that Conrad objected to
not receiving the commissions. Therefore, a genuine issue of
material fact exists as to whether Conrad had the requisite
intent needed to waive his rights to the commissions claimed in
With respect to Counts II and III, Defendant has the burden of
proof to demonstrate Conrad intended to waive these commissions.
A genuine issue of material fact exists as to whether Conrad had
the requisite intent needed to waive his rights to the
commissions claimed in Counts II and III.
Defendant also argues that Plaintiffs' evidence relating to the
breach of contract claims in Counts I, II, and III is
speculative. To succeed on a claim for breach of contract,
Plaintiffs must demonstrate that Defendant actually breached the
contract. E.g., Burrell v. City of Mattoon, 378 F.3d 642, 651
(7th Cir. 2004). Thus, Plaintiffs must show that Defendant
actually made some sales for which Conrad did not receive
commissions for under the Sales Representative Agreement.
With regard to Count I, Defendant contends that Plaintiffs have
no evidence of certain sales made to a particular purchaser of
Defendant's leak-detection systems. However, genuine issues of
material fact exist as to whether sales of other leak-detection
systems occurred. Accordingly, summary judgment is not granted to
Defendant with respect to Count I.
With respect to Count II, a genuine issue of material fact
exists as to whether sales of leak-detection systems upon which
Conrad is seeking "shared commission" occurred. Similarly, as to Count III, a genuine issue of fact exists as to whether
sales of spare parts occurred. Therefore, Defendant is denied
summary judgment on Counts II and III.
Defendant seeks summary judgment on Count IV, Plaintiffs' claim
for treble damages under the Illinois Sales Representative Act,
as well. To prove a claim for treble damages, Plaintiffs must
demonstrate the failure to pay commissions is vexatious or
willful and wanton. Stebell v. L'amour Hosiery, Inc., No. 98 C
50157, 2002 WL 1359422, at *1 (N.D. Ill. June 20, 2002).
Defendant argues that Conrad's testimony demonstrates that
Defendant did not act with the requisite intent. Although
Defendant raised this argument in its motion for summary
judgment, Defendant has not pointed to any specific evidence,
including affidavits, depositions, answers to interrogatories, or
admissions, demonstrating that the failure to pay commissions was
not vexatious or willful and wanton. Accordingly, summary
judgment on Count IV is denied.
Plaintiffs have also moved for summary judgment. However,
Plaintiffs have failed to present any affidavits, depositions,
answers to interrogatories, and admissions to demonstrate that
they are entitled to summary judgment. Accordingly, Plaintiffs'
motion for summary judgment is also denied.
Motion for Leave to Amend the Complaint
Plaintiffs also seek leave to amend their Complaint by: (1)
adding a claim for an accounting and (2) making a technical
change to the Complaint.
Federal Rule of Civil Procedure 15(a) provides that once a
defendant has filed a responsive pleading, a plaintiff may amend
his "pleading only by leave of court or by written consent of the
[defendant]; and leave shall be freely given when justice so
requires." However, leave to file an amended complaint may be
denied if: (1) there is undue delay, bad faith, or a dilatory motive in filing an amended complaint; or (2) the
opposing party would suffer undue prejudice if the amendment is
permitted. E.g., Park v. City of Chicago, 297 F.3d 606, 612
(7th Cir. 2002). Substantive amendments shortly before trial are
prejudicial to litigants and the "public's interest in speedy
resolution of legal disputes." Perrian v. O'Grady,
958 F.2d 192, 193, 195 (7th Cir. 1992).
Plaintiffs seek to add a claim for an accounting so that Conrad
may determine if he is due other commissions, which are not
stated in the Complaint. However, as Conrad testified in his
deposition, Plaintiffs have known that Conrad may have been due
other commission since May 2003. Since that time, Plaintiffs have
taken no steps to file an amended complaint. Accordingly, there
has been undue delay in filing an amended complaint.
Moreover, the amendment would cause undue prejudice to
Defendant. An accounting would require an auditor to review
Defendant's records and possibly the records of Defendant's
customers. Because the motion for leave to amend the Complaint
was filed four months before the November 8, 2004 trial date, the
accounting could force the trial date to be moved. Plaintiffs,
though, had opportunities, through the use of discovery, to
examine Defendant's records and the records of Defendant's
Based on the above, Plaintiffs' Motion for Leave to Amend the
Complaint is denied with respect to the additional claim for an
accounting. However, Defendant does not object to the technical
amendment; and, therefore, that motion is granted. CONCLUSION
For the foregoing reasons, Defendant's Motion for Summary
Judgment is denied. Plaintiffs' Motion for Summary Judgment is
denied. Plaintiffs' Motion for Leave to Amend the Complaint is
granted in part and denied in part. Leave is granted to make the
technical amendment to the Complaint.
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