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DCS Marketing v. Homer Laughlin China Co.

November 10, 2009

DCS MARKETING, PLAINTIFF,
v.
THE HOMER LAUGHLIN CHINA COMPANY ET AL., DEFENDANTS.



The opinion of the court was delivered by: David O. Carter United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT

Before the Court is Defendant The Homer Laughlin China Company's ("HLC" or "Defendant") Motion for Partial Summary Judgment ("Motion"). After considering the moving, opposing and replying papers, as well as the parties' oral argument, and for the reasons that follow, the Court hereby GRANTS IN PART AND DENIES IN PART Defendant's Motion.

I. BACKGROUND

Defendant HLC is a manufacturer of dinnerware with its principal place of business in Newell, West Virginia. HLC manufactures dinnerware for sale to individuals and also has a separate business line for sales to restaurants, hotels, and other institutions. This case involves the sales of dinnerware to restaurants, hotels, and other institutions. On February 14, 2006, Plaintiff, DCS Marketing ("Plaintiff" or "DCS") entered into a written contract with Defendant. Def.'s Resp. to Statement of Genuine Issues of Disputed Fact in Opp. to Mot. ("U.F.") ¶ 32. DCS is a manufacturer's sales representative for a wide range of products including curtains for institutional walk-in freezers, convection ovens, juicers, knifes, and grills. Id. ¶ 16. DCS is owned by Dennis Solomon. Id. ¶ 17. DCS had a working relationship with Dennis Dominic, the principal of VNI, LLC. Id. ¶ 18. Dominic entered into a verbal agreement with Solomon to represent HLC under the DCS name. Id. ¶ 31.

Through the contract, DCS agreed to sell HLC's chinaware and represent DCS as a sales representative in the Nevada and Southern California regions. The written contract set forth the particular commissions that DCS would receive for different types of orders. For instance, DCS was to receive a 10% commission on Ameriwhite products and an 8% commission on Fiesta products. Id. ¶ 32. The contract also set forth that "[c]ommission rates for special contract patterns and/or split commission orders are handled on an individual basis." Id. DCS was to receive commission for orders received beginning February 20, 2006. Id.

HLC's national sales are managed by Richard Blatchford, the General Sales Manager. Id. ¶ 9. DCS was supervised by HLC's Regional Sales Manager for the Western United States, Pamela Perkins. Id. ¶ 13. In Southern California, HLC also employs a District Sales Manager, Sandy Coye ("Coye"). Id. ¶ 14.

HLC terminated the contract by letter on May 14, 2008, termination effective on June 2, 2008, but the termination is not at issue in this action. DCS makes four allegations of wrongful commissions withholdings by HLC pursuant to its contract: "(1) it did not receive a commission on a sale to the Westin Bonaventure Hotel in Los Angeles; (2) deductions were taken from its commissions and paid to Sandy Coye; (3) it did not receive a commission for sales to the Cheesecake Factory; and (4) it did not receive the full amount of commissions owed for sales made to customers that were handled through Wasserstrom, a dealer." Id. ¶ 67. DCS has alleged three causes of action for breach of contract, violation of the Independent Wholesale Sales Representatives Act, and accounting. HLC's Motion for Partial Summary Judgment only seeks summary judgment as to the second cause of action, violation of the Independent Wholesales Sales Representatives Act.

II. LEGAL STANDARD

Summary judgment is proper if "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c).

The Court must view the facts and draw inferences in the manner most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993 (1962); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1161 (9th Cir. 1992). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact for trial, but it need not disprove the other party's case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548 (1986). When the non-moving party bears the burden of proving the claim or defense, the moving party can meet its burden by pointing out that the non-moving party has failed to present any genuine issue of material fact. Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990).

Once the moving party meets its burden, "an opposing party may not rely merely on allegations on denials or its own pleading; rather, its response must--by affidavits or as otherwise provided in this rule--set out specific facts showing a genuine issue for trial. If the opposing party does not so respond, summary judgment should, if appropriate, be entered against that party. FED. R. CIV. P. 56(e)(2); see also Anderson, 477 U.S. at 248-49. Furthermore, a party cannot create a genuine issue of material fact simply by making assertions in its legal papers. There must be specific, admissible evidence identifying the basis for the dispute. S.A. Empresa de Viacao Aerea Rio Grandense v. Walter Kidde & Co., Inc., 690 F.2d 1235, 1238 (9th Cir. 1980). The Supreme Court has held that "[t]he mere existence of a scintilla of evidence... will be insufficient; there must be evidence on which the jury could reasonably find for [the opposing party]." Anderson, 477 U.S. at 252.

III. DISCUSSION

A. Applicability of the Independent Wholesale Sales Representatives Contractual Relations Act

Defendant argues that summary judgment should be granted on the second cause of action because the Independent Wholesale Sales Representatives Contractual Relations Act ("the Act") does not apply to the parties' contract. Specifically, Defendant argues that Plaintiff is not a "wholesale sales representative" as defined by the Act. Cal. Civ. Code ยง 1738.12(e). The Act defines "wholesale sales representative" as "any person who contracts with a manufacturer, jobber, or distributor for the purpose of soliciting wholesale orders, is compensated, in whole or part, by commission, but shall not include one who places orders or purchases exclusively ...


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