United States District Court, N.D. California
ORDER DENYING DEFENDANT'S MOTION IN LIMINE AND
GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT RE: ECF
NOS. 45, 51
TIGAR, UNITED STATES DISTRICT JUDGE
the Court is Defendant Karcher North America, Inc.'s
("Karcher") Motion in Limine Regarding Choice of
Law, ECF No. 45, and Plaintiff 181 Sales, Inc.'s
("181 Sales") Motion for Summary Judgment, ECF No.
51. The Court will deny Defendant's Motion in Limine and
grant Plaintiff's Motion for Summary Judgment.
181 Sales is a Nevada corporation with its only place of
business in California. The owner and sole employee of 181
Sales, Kathleen Brown, is an independent sales representative
who has been a California resident at all times relevant to
the motions under consideration. Defendant Karcher is a
Delaware corporation with its principal place of business in
Colorado. Karcher is a manufacturer and distributor of
cleaning equipment, including pressure washers.
20, 2014, 181 Sales and Karcher entered into a Manufacturer
Representative Agreement (the "MRA") with an
effective date of June 1, 2014. As part of the MRA, Karcher
agreed that 181 Sales would be Karcher's "exclusive
sales agent to" two retailers, Menards and Fry's
Electronics ("Fry's"). Through two addendums to
the MRA, Karcher agreed to pay 181 Sales a 4% commission on
the net invoice amounts billed to Menards and Fry's.
Karcher further agreed that it would not "otherwise
distribute or sell the Products to [Menards or Fry's],
except as hereinafter provided."
included the following choice of law provision:
12.2 Governing Law - This Agreement shall be made and
construed in accordance with the laws of the State of
Delaware located in the United States of America.
12.3 Entire Agreement - This Agreement together with all
other documents incorporated by reference shall constitute
the entire Agreement between the Company and the
Representative with respect to all matters herein . . . .
This Agreement shall not be amended, altered or qualified
except by memorandum in writing signed by the Company and the
Representative and any amendment, alteration or qualification
hereof shall be null and void and shall not be binding upon
any party who has not given its consent as aforesaid.
to the MRA, Ms. Brown, on behalf of 181 Sales, attempted to
solicit sales of Karcher's products from Fry's by,
for instance, contacting and giving presentations to
representatives of Fry's located at several of its
California locations. Ms. Brown was not able to complete any
sales with Fry's. However, Ms. Brown was able to secure
sales of various Karcher products to Menards totaling $1,
508, 040 in September and October of 2014. These sales were
made to various Menards locations in Wisconsin, Illinois, and
the sales with Menards were secured, Karcher claims that its
representative called 181 Sales and "insisted the MRA be
modified and that 181 Sales accept the industry standard 1%
commission on [the] sale[s]." ECF No. 63 at 6. Karcher
asserts that the reduced 1% commission was "industry
standard" because the products sold to Menards were part
of a so-called "closeout sale" for which the profit
margins were substantially smaller than normal sales.
Id. at 5-6. Karcher further asserts that
"[a]lthough 181 Sales was not initially enthusiastic
about the reduced commission, eventually 181 Sales understood
and agreed that commissions on closeout sales were atypical
and could [ ] be negotiable." Id. at 6.
Sales disputes Karcher's assertions regarding the
agreement to reduce the commission to 1%, claiming that
"Karcher simply made that up." ECF No. 51 at 12.
"To the contrary, " 181 Sales claims that "Ms.
Brown objected each time Karcher mentioned the purported
reduction, as evidenced by multiple emails in which she
informed Karcher that the 4% rate in the MRA would apply to
the sales in question." Id.
5, 2015, 181 Sales filed a complaint against Karcher in
Contra Costa County Superior Court, asserting claims for
breach of contract and violation of California's
"Independent Sales Representative Statutes." ECF
No. 1-1. On July 9, 2016, Karcher removed this case to
federal court on the basis of diversity jurisdiction. ECF No.
March 18, 2016, Karcher filed a Motion in Limine Regarding
Choice of Law. ECF No. 45. On April 21, 2016, 181 Sales filed
a Motion for Summary Judgment. ECF No. 51. The Court now
considers both of these motions.
Court has jurisdiction pursuant to ...