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Contract Associates Office Interiors, Inc. v. Ruiter

November 7, 2008




Previously pending on this court's law and motion calendar for October 29, 2008, were the following discovery motions: (1) Plaintiff Contract Associates' Motion against Defendant Workplace Solutions, Inc. (hereafter "Workspace") regarding Plaintiff's Request for Production, served August 15, 2008 [Docket No. 89]; (2) Plaintiff Contract Associates' Motion against Defendant Teknion LCC ("Teknion") regarding Plaintiff's Request for Production, served August 15, 2008 [83]; (3) Plaintiff and Cross-Defendant Contract Associates' Motion against Defendant/Cross-Complainant Letitia Ruiter regarding (a) Plaintiffs Interrogatories, served May 24, 2007, (b) Plaintiffs' Requests for Production, served August 15, 2008, (c) Plaintiff s Request for Production, served August 27, 2007, and (d) Plaintiffs' Requests for Admissions, served August 15, 2008 [86]; and (4) Defendant/Cross-Complainant Ruiter's Motion against Plaintiff/Cross-Defendant Contract Associates to compel production of witnesses for deposition [80].

Appearing at the hearing on behalf of the parties were Kathleen Finnerty and Angela Diesch on behalf of Contract Associates; Mark Divelbiss on behalf of Workspace Solutions, Inc.; Shaye Harrington on behalf of Teknion, LLC; and Christopher Wohl on behalf of Ms. Letitia Ruiter. For the following reasons, the court grants in part, and denies in part, the parties' discovery motions, and denies all requests for sanctions.


Plaintiff Contract Associates is in the business of designing and installing interior office spaces and selling office furniture in the commercial market. Amended Complaint ("Am. Compl."), at ¶ 7. Since 1990, Contract Associates has been an authorized dealer for Teknion office furniture; in 2006, Teknion was plaintiff's primary supplier, and Teknion products accounted for 80% of Contract Associates's total purchases. Id. at ¶ 8. A significant majority of these purchases were for Contract Associates' projects with E*Trade, a client of Contract Associates since 2004. Id. at ¶ 9.

Contract Associates employs both project managers (paid on a salary plus commission basis, primarily for in-house accounts), and commissioned sales associates (paid commissions based on a percentage of net profits, primarily from sales on their own accounts). Id. at ¶ 10.

In July 2003, Contract Associates hired Ms. Ruiter as a project manager, on a salary-plus-commission basis, to serve both plaintiff's in-house accounts and to seek her own business accounts. Ms. Ruiter's responsibilities included "furthering Contract Associates' relationship with its client E*Trade by determining and supplying its office furniture needs and working with office furniture vendors such as Teknion to procure that furniture." Id. at ¶ 11.

On May 1, 2006, at Ms. Ruiter's request, Contract Associates entered into a Commission Sales Compensation Contract ("Contract") with Ms. Ruiter, which provided that she would be paid on a commission-only. "Also pursuant to that Contract, Ruiter promised that any products she sold or any services she performed on behalf of or in representation of Contract Associates would be invoiced by Contract Associates. In exchange, Ruiter received 40% of the net profit from each product and service. Thereafter Ruiter worked exclusively on projects for Contract Associates' client, E*Trade." Id. at ¶ 12.

"On September 1, 2006, Ruiter tendered a written notice of resignation to Contract Associates effective on that date." Id. at ¶ 16. Ms. Ruiter informed Contract Associates that she would "finish out" three E*Trade projects for which plaintiff had purchase orders: Roseville, California, Alpharetta, Georgia, and Sandy, Utah. Id. At the hearing, the parties agreed that Ms. Ruiter completed her work for Contract Associates on these projects, and plaintiff does not state any claims or seek any damages based thereon.

On September 5, 2006, Contract Associates discovered that Ms. Ruiter had begun working for plaintiff's competitor, Workspace Solutions, Inc. Id. at ¶ 17.

Contract Associates thereafter discovered that, between May 2006 and September 2006, Ms. Ruiter worked on several E*Trade projects which she had not disclosed to plaintiff but instead taken to Workspace. Plaintiff alleges that Ms. Ruiter deleted and/or attempted to delete Contract Associates' computer files on these "secret projects" and transferred this information to Workspace. Although the complaint lists several projects that allegedly come within this category, see, e.g, Am. Compl., at ¶¶ 5, 40, the parties agreed in their discovery stipulations and at oral argument that plaintiff has stated claims based on the following five "undisclosed projects," and that any discovery thereon is appropriate: (1) Sandy, Utah, (2) Alpharetta, Georgia, (3) Charlotte, North Carolina, (4) Dulles, Virginia, and (5) Jersey City, New Jersey.

Plaintiff filed this action on February 20, 2007. On April 27, 2007, Ms. Ruiter filed a cross-claim against Contract Associates alleging unpaid wages, improperly withheld commissions, breach of contract, and unfair business practices. Dckt. No. 12. Teknion was added as a defendant by the amended complaint lodged April 30, 2008, and effectively filed by order of the court on June 12, 2008,*fn1 at which time the court re-opened discovery until September 25, 2008. Dckt. Nos. 32, 56. Discovery had previously closed on April 30, 2008. Dckt. No. 13.*fn2

On August 6, 2008, the district judge granted Ms. Ruiter's motion for summary judgment on Contract Associates' request for tort damages based on its claim that Ms. Ruiter breached the implied covenant of good faith and fair dealing. Dckt. No. 76. The motion was denied as to all remaining legal and damages claims, upon which this case proceeds. Id.

On September 26, 2008, this court approved the parties' stipulation extending the discovery deadline in this case to November 24, 2008, in order to resolve the present motions. Dckt. No. 79. Trial remains ...

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