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Webster & Associates, Inc. v. Eagleburgmann KE, Inc.,

United States District Court, Sixth Circuit

November 27, 2013




This matter is before the Court on Defendant, EagleBurgmann KE, Inc.'s ("Burgmann"), Motion for Summary Judgment, filed on August 30, 2013, on the singular cause of action in Plaintiff, Webster & Associates, Inc.'s ("Webster"), Complaint (the "Webster Contract Claim") and Burgmann's breach of contract counterclaim against Webster (the "Burgmann Contract Claim"). Upon reviewing the Motion, the memoranda filed in support of and opposition to the Motion, the evidence in the record and the arguments of counsel, and for the following reasons, the Court finds that there is no genuine issue of material fact, and Burgmann is entitled to partial summary judgment on the Burgmann Contract Claim but the Motion is denied as to the Webster Contract Claim.

I. Procedure

Webster filed its initial Complaint and lawsuit against Burgmann on October 9, 2012. See Doc. 1. Webster amended the Complaint on October 25, 2012 (the "Amended Complaint"). Doc. 8. In the Amended Complaint, Webster asserted one cause of action against Burgmann the Webster Contract Claim. Id. Webster sought an unknown amount of damages that it believed to exceed $100, 000.00. Id. at ¶ 13. Burgmann responded to the Amended Complaint with an Answer denying that it had breached the Contract, and asserted a counterclaim (the "Counterclaim"). Doc. 13. In the Counterclaim, Burgmann set forth, among other things, the Burgmann Contract Claim. Id. The parties exchanged written discovery and Burgmann deposed Webster's corporate representative, Mr. Richard A. Webster ("Mr. Webster"), on July 23, 2013. See Doc. 27. Discovery closed (see Doc. 23) and Burgmann sought summary judgment in its favor on the Webster Contract Claim and partial summary judgment on the Burgmann Contract Claim. The parties argued Burgmann's Motion for Summary Judgment on November 15, 2013, before the Court. Doc. 40.

II. Relevant Background and Facts

Burgmann's United States headquarters is located in Hebron, Kentucky. Doc. 31 (Affidavit of Michael Green; "Green Dec."), ¶ 2. Burgmann, among other things, manufactures fabric expansion joints and rubber expansion joints (collectively, the "Equipment") for power plants, petroleum based chemical producers, refineries, auxiliary equipment manufacturers, engineering and construction firms, food companies, pulp and paper businesses, and cement makers (the "Market"). Id. Burgmann also repairs and replaces the Equipment (the "Services"). Id.

Webster is a "one-man operation" from Atlanta, incorporated in Georgia, and conducted by Mr. Webster. See Doc. 32 (Deposition of Mr. Webster; "Webster Dep."), pp. 15-18. Mr. Webster is Webster's sole owner and employee. Id.

Webster was founded in 1984 and has been representing various product manufacturers as an independent contractor/sales representative in the Market since then. Webster Dep., pp. 19-20. Mr. Michael Green, Burgmann's General Manager, and Mr. Webster met in Atlanta in 2006 to discuss a potential relationship between Burgmann and Webster. Id., p. 41. Those discussions culminated in an agreement between the parties executed in 2007, which was later replaced by a Sales Representative's Agreement entered into on November 1, 2009 (the "Contract"). See id., pp. 42, 99-100, Exs. F and C; see also Green Dec., ¶ 3 and Ex. 1.

A. The Contract

Under the Contract, Webster was granted the exclusive obligation and right to solicit for the sale of Equipment to the Market in Alabama, Georgia, and Tennessee, for all Southern Company locations, for Advatech/URS in Baton Rouge and New Orleans, and all TVA locations except Plant Marshall (collectively, the "Territory"). Webster Dep., Ex. C, Appx. II.

Webster was to provide a variety of services to Burgmann in accordance with the Contract. Among other things, Webster agreed:

• To solicit and secure orders for the Equipment and maintain contracts on behalf of Burgmann with potential customers in the Territory (Contract, Section 4. A);
• To use its best efforts to obtain orders or contracts in accordance with Burgmann's practices (4. H);
• To cooperate in furnishing information for market surveys, forecasts and competitive activity in the Territory when requested by Burgmann (8 C);
• To furnish promptly information requested by Burgmann (10. A); and
• To canvass diligently and use its best efforts to sell the Equipment and Services in the Territory (10.A).

In exchange for its services, Webster received commissions as determined by Appendix I to the Contract. Id., Ex. C at Appx. I.

The Contract, at Section 10. I), also states that Webster may receive commissions in accordance with the Contract for any orders accepted by Burgmann for the remaining period of the Contract, in the event that Burgmann ever terminates the Contract.

B. Webster's Breaches of the Contract and Burgmann's Attempts to Locate Webster

All ran well between the parties until the Spring of 2011. Commencing in April 2011, Webster "went dark" on Burgmann, Burgmann's customers, and potential customers. See Webster Dep., pp. 70-71; see also Green Dec., ¶ 5. Among other things, Webster failed to contact Burgmann from April 2011 through October 2011. Id. When deposed, Mr. Webster could not recall the date of Webster's last contact with Burgmann. Id., p. 60. And Webster failed to contact Burgmann, all while knowing precisely how to contact Burgmann by phone, e-mail, or physically at Burgmann's business address in Hebron, Kentucky. Id., p. 56.

Webster made the unilateral decision to take the entire month of July 2011 "off" and failed to inform Burgmann or any customers of its time off from work. Webster Dep., pp. 60-62. In June, July, and August 2011, Webster failed to check or respond to e-mail communications; yet, e-mailing was a common form of contact between the parties. See id. at p. 62; Green Dec., ¶ 6. Specifically, on June 15, 2011, Webster received an e-mail from Mr. Green, requesting Webster's plan and assistance with "growing the business in the market ...

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