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Bosinger v. Belden CDT

March 18, 2008



Presently before the Court is defendant Belden CDT, Inc.'s motion for summary judgment. For the following reasons, the motion is granted.


Factual Background

This case arises out of plaintiff Kenneth Bosinger's termination as a sales representative for defendant, Belden CDT. Prior to his termination, plaintiff was an independent contractor who received commissions on products sold to customers whose accounts he had obtained. In this case, plaintiff seeks post-termination commissions on his accounts.

The following facts are undisputed. Plaintiff, doing business as K-Tronics,*fn1 began representing defendant's predecessor company, Dearborn Wire and Cable Co., in 1986. Plaintiff acted as an independent contractor, pursuing sales of cable and wire products for use in the broadcasting, computer, entertainment, security, instrumentation, and networking industries. Plaintiff sought new accounts and serviced existing accounts, spending approximately forty hours per week "regularly servic[ing] the accounts, hand[ling] any type of complaints, negotiat[ing] contracts . . . [and] keeping in constant contact with the customers . . . ." (Id. ¶ 45.)

Plaintiff signed a five-page contract to begin his representation of the company. The contract included a provision that either party could terminate the contract upon thirty days' notice. The contract also provided that plaintiff would only receive commissions on his former accounts for thirty days after termination.*fn2 (Defendant's Statement of Facts "SOF", Ex 3, at 4.) Plaintiff asked for an indemnification provision, which he wrote by hand at the bottom of the 1987 contract. (Id. at 5.)

In 2002 and 2004, Plaintiff signed new representation contracts with the company. The 2002 contract was signed to recognize Dearborn's successor, Dearborn CDT, and the 2004 contract recognized the company, after another merger, as Belden CDT (defendant). (Opp. at 2.) The 2002 agreement contained termination provisions identical to those in the 1986 agreement. (SOF, Ex. 4 at 4.) The three-page agreement signed November 1, 2004, which was in effect at the time of plaintiff's termination, contained a substantively identical provision: Following termination, Representative shall only receive commissions on orders secured by him (it) from customers in the territory up to the termination date that are accepted by the company, shipped within 30 days of termination date and ultimately paid for. (Id. Ex. 5 at 3.) Provisions such as these are "very common" in the industry. (Plaintiff's Response to SOF ("RSOF") ¶ 10.)

Between the signing of the 1986 agreement and the 2004 agreement, plaintiff filed lawsuits challenging termination provisions contained in his representation contracts with other companies.*fn3

Prior to signing the 2004 agreement, plaintiff attempted to negotiate his commission rate, which was 4% in the proposed contract provided by defendant, but which plaintiff wished to increase to 5%, the rate he had previously received. (Id. ¶ 34.) Defendant's representative, Sandy Houston, told plaintiff they could revisit his commission percentage in a few months if he signed the contract at that time. Plaintiff signed the 2004 agreement on November 1, 2004, after receiving it in the mail. In May of 2005, defendant gave plaintiff thirty days' notice of its intent to terminate the agreement.

Procedural Background

Plaintiff filed suit on May 29, 2007 in the Superior Court of California for San Diego County. Plaintiff alleges claims for (1) a declaratory judgment as to the rights of the parties; (2) breach of contract; (3) violations of California's Unfair Competition Law; (4) breach of the implied covenant of good faith and fair dealing; (5) constructive fraud; and (6) unjust enrichment. Plaintiff seeks a declaration the commission-termination provision of the 2004 representation agreement is unconscionable and thus he is entitled to a continuing income stream from his former contracts. Plaintiff claims approximately $900,000 in damages based on his pre-termination commission stream.

Defendant removed the case to federal court on June 18, 2007, based on the diversity of the parties. On January 10, 2008, defendant filed a motion for summary judgment. (Doc. No. 13.) Plaintiff filed an opposition to the motion nunc pro tunc to February 19, 2008. (Doc. No. 16.) Defendant filed a reply on February 25, 2008. (Doc. No. 17.) The Court heard oral argument on the motion on March 3, 2008. Alan Geraci appeared on behalf of plaintiff and Douglas Northup appeared on behalf of defendant.


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