BRODERICK ASSOCIATES, INC. v. FANSTEEL, INC.

Filing 95

ORDER ON PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT - For the foregoing reasons, Plaintiff Broderick Associates, Inc.'s Motion for Partial Summary Judgment (Filing No. 61) is GRANTED in part and DENIED in part. Defendants Fansteel, Inc. and American Sintered Technologies are liable to Broderick for their breach of contract for the unpaid commissions that are due to Broderick under the Agreement as well as the attorney fees and costs available under the Illinois Sales Representative Act. The other claims asserted in Broderick's Complaint and the issue of the amount of damages remain pending for trial. (See Order). Signed by Judge Tanya Walton Pratt on 1/22/2016. (JLS)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
BRODERICK ASSOCIATES, INC., d/b/a
BRODERICK AND ASSOCIATES
Plaintiff,
v.
FANSTEEL, INC.
a/k/a FANSTEEL INTERCAST, and
AMERICAN SINTERED TECHNOLOGIES
a/k/a FANSTEEL AMERICAN SINTERED
TECHNOLOGIES,
Defendants.

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Case No. 1:14-cv-01133-TWP-DML

ORDER ON PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
This matter is before the Court on a Motion for Partial Summary Judgment filed pursuant
to Federal Rule of Civil Procedure 56 by Plaintiff Broderick Associates, Inc. (“Broderick”) (Filing
No. 61). After its contractual business relationship with Defendants Fansteel, Inc. (“Fansteel”)
and American Sintered Technologies (“AST”) (collectively, “the Defendants”) deteriorated and
terminated, Broderick initiated this lawsuit, asserting claims for breach of contract, unjust
enrichment, and state statutory violations. Broderick moves for partial summary judgment on its
breach of contract and Illinois Sales Representative Act claims. For the following reasons, the
Court GRANTS in part and DENIES in part Broderick’s Motion for Partial Summary
Judgment.
I.

BACKGROUND

Broderick is an Indiana corporation that provides business consulting and sales support
services to other companies. Fansteel is a company that manufactures metal castings in various
shapes and sizes for the gas turbine market, flow control market, and industrial original equipment

manufacturer market. AST is a Fansteel company that manufactures powder metal component
parts for the automotive, hardware, and lawn and garden markets.

AST operates out of

Pennsylvania.
On April 1, 2006, Broderick and the Defendants entered into a “Manufacturer’s Sales
Representative Agreement,” whereby Broderick agreed to provide certain sales services to the
Defendants in exchange for commission payments from the Defendants (“the Agreement”). The
Agreement called for Broderick to develop the market for the Defendants’ products within a
specified territory in the United States—Indiana, Kentucky, Ohio, Michigan, and Tennessee.
Broderick was to establish new customer accounts and service existing accounts. The Agreement
established a term for the contractual relationship, ending on December 31, 2007. It also permitted
the parties to extend the length of the term by executing a written extension agreement “within 30
days prior to the end of the current Term up to 30 days past the current expiration date.” (Filing
No. 63-2 at 5.) Through a series of contract extensions, the parties agreed to extend the term of
the Agreement to December 31, 2013 (Filing No. 1-3 at 9).
After the parties entered the Agreement in 2006, Broderick began providing sales
representative services to the Defendants as called for in the Agreement. In return, the Defendants
paid commissions to Broderick in accordance with the payment terms of the Agreement. The
Agreement called for the commission payments to be “mailed by the 11th of each month for
invoiced payments received by the end of the prior month.” (Filing No. 63-2 at 7.) At some point
during the parties’ contractual relationship, the Defendants began experiencing financial hardship,
and they fell behind on their commission payment obligations to Broderick at least in 2012 and
2013. During one period of time, the Defendants were six to eight months behind on their
payments (Filing No. 63-5 at 3). At various times throughout 2013, the Defendants were three

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weeks behind on their payment obligations. At the end of 2013 they were behind on their payments
of commissions owed to Broderick. (Filing No. 63-1 at 10–12.)
Effective December 31, 2013, the Agreement was terminated by virtue of the expiration of
the last contract extension and the parties had not executed another written contract extension.
Under the provisions of the Agreement, if the Agreement was terminated without cause, Broderick
would be “entitled to earned commissions for 180 days starting from date of termination,” and for
automotive accounts, “commissions will be paid to [Broderick] for 540 days from the date of
termination.” (Filing No. 63-2 at 5.) However, if Broderick committed “any act of embezzlement,
theft, fraud, or dishonesty against the [Defendants] or commit[ted] any material breach of this
Agreement,” the Defendants could terminate the Agreement “with cause.” Id. “Upon said
termination, [Broderick] will forfeit all unpaid commissions without recourse.” Id.
During the early months of 2014, Broderick pointed out to the Defendants that it was owed
payment for outstanding commissions. During this same time, Broderick and the Defendants had
discussions regarding whether the Agreement would be extended. More than once, the Defendants
informed Broderick that they were looking at their business plans and hoped to have an answer for
Broderick soon.
In a letter dated April 2, 2014, the Defendants acknowledged that the “current status” of
the Agreement was “Contract not renewed as of December 2013.” (Filing No. 63-6 at 7.) On
April 30, 2014, John Graham (“Mr. Graham”), the Defendants’ new chief operating officer, sent
an email to Broderick asserting that the Defendants “terminated its contract with Broderick
Associates on December 31st, 2013.” (Filing No. 63-12 at 2.) In this email, Mr. Graham claimed
that the Agreement was terminated “with cause.” He then went on to assert that “[i]t’s Fansteel’s
position that Broderick failed to honor multiple sections of the contract including Section 1

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Engagement, Section 4 Relationship, and Section 5 Performance.” Id. There was no explanation
as to how these sections of the Agreement were not honored by Broderick. The Defendants did
not submit payment to Broderick for the outstanding commissions.
On July 7, 2014, Broderick initiated this lawsuit by filing its Complaint against the
Defendants, asserting claims for breach of contract, breach of implied contract, unjust enrichment,
violation of the Illinois Sales Representative Act, and violation of the Indiana Wholesale Sales
Representative Act based on the unpaid, due and owing commissions. After the Defendants filed
their Answer and the parties conducted discovery, Broderick filed its Motion for Partial Summary
Judgment on its breach of contract and Illinois Sales Representative Act claims.
II.

SUMMARY JUDGMENT STANDARD

Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate if “the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.” Hemsworth v. Quotesmith.com, Inc., 476 F.3d
487, 489–90 (7th Cir. 2007). In ruling on a motion for summary judgment, the court reviews “the
record in the light most favorable to the non-moving party and draw[s] all reasonable inferences
in that party’s favor.” Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) (citation omitted).
“However, inferences that are supported by only speculation or conjecture will not defeat a
summary judgment motion.” Dorsey v. Morgan Stanley, 507 F.3d 624, 627 (7th Cir. 2007)
(citation and quotation marks omitted). Additionally, “[a] party who bears the burden of proof on
a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific
factual allegations, that there is a genuine issue of material fact that requires trial.” Hemsworth,
476 F.3d at 490 (citation omitted). “The opposing party cannot meet this burden with conclusory

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statements or speculation but only with appropriate citations to relevant admissible evidence.”
Sink v. Knox County Hosp., 900 F. Supp. 1065, 1072 (S.D. Ind. 1995) (citations omitted).
“In much the same way that a court is not required to scour the record in search of evidence
to defeat a motion for summary judgment, nor is it permitted to conduct a paper trial on the merits
of [the] claim.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001) (citations and quotation
marks omitted). “[N]either the mere existence of some alleged factual dispute between the parties
nor the existence of some metaphysical doubt as to the material facts is sufficient to defeat a motion
for summary judgment.” Chiaramonte v. Fashion Bed Grp., Inc., 129 F.3d 391, 395 (7th Cir.
1997) (citations and quotation marks omitted).
III. DISCUSSION
Broderick moves for partial summary judgment on its breach of contract and Illinois Sales
Representative Act claims, asserting that the Defendants’ failure to pay the unpaid, due and owing
commissions was a breach of the parties’ Agreement, and their failure to pay the commissions
within thirteen days of when the commissions were due after termination of the Agreement is a
violation of the Illinois Sales Representative Act, 820 Ill. Comp. Stat. 120.
In cases based on diversity jurisdiction, the court applies federal procedural law and state
substantive law. Hanover Ins. Co. v. Northern Bldg. Co., 751 F.3d 788, 792 (7th Cir. 2014). Rules
of contract interpretation are substantive, so the Agreement will be interpreted according to state
law. Id. In this case, the parties agreed that the laws of the State of Illinois would govern the
Agreement and any disputes regarding the Agreement without application of its choice of law rules
(Filing No. 63-2 at 8). “Contract cases such as this one are often prime candidates for summary
judgment because contract interpretation is a question of law.” Hanover, 751 F.3d at 791.

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“In Illinois, the main objective in contract interpretation is to give effect to the intent of the
parties.” Id. at 792 (citing C.A.M. Affiliates, Inc. v. First Am. Title Ins. Co., 715 N.E.2d 778, 782
(Ill. App. Ct. 1999)). “If a contract is clear and unambiguous, the court must determine the intent
of the parties solely from the plain language of the contract.” Id. (quoting C.A.M. Affiliates, 715
N.E.2d at 782). “[T]he mere fact that the parties disagree as to the meaning of a term does not
make that term ambiguous.” William Blair & Co., LLC v. FI Liquidation Corp., 830 N.E.2d 760,
770 (Ill. App. Ct. 2005). “A contract term is ambiguous if it can reasonably be interpreted in more
than one way due to the indefiniteness of the language or due to it having a double or multiple
meaning.” Id. at 769. “A contract is not ambiguous, however, if a court can ascertain its meaning
from the general contract language.” Id. at 770. “In the absence of ambiguity, a court must
construe a contract according to its own language, not according to the parties’ subjective
constructions.” Id.
“When a contract is clear and unambiguous, a court will not add terms in order to reach a
result more equitable to one of the parties.” Mid-West Energy Consultants, Inc. v. Covenant Home,
Inc., 815 N.E.2d 911, 916 (Ill. App. Ct. 2004) (citation omitted). “There is a strong presumption
against provisions that easily could have been included in the contract but were not. A court will
not add another term about which an agreement is silent.” Klemp v. Hergott Group, 641 N.E.2d
957, 962 (Ill. App. Ct. 1994) (citations omitted). “Contractual provisions providing for termination
of an agreement are generally enforceable according to their terms.” S & F Corp. v. American
Express Co., 377 N.E.2d 73, 77 (Ill. App. Ct. 1978).
A.

Breach of Contract Claim
Broderick asserts that there is no dispute that the Defendants entered into the Agreement

with Broderick, the Defendants failed to make timely commission payments under the Agreement,

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and Broderick suffered damage as a result of the Defendants’ failure to make timely commission
payments. Because of these undisputed facts, Broderick explains that it is entitled to summary
judgment on its breach of contract claim.
In response to Broderick’s breach of contract argument, the Defendants explain that they
did not breach the Agreement because they did not have to pay the outstanding commissions to
Broderick after they terminated the Agreement “with cause” after reviewing whether they would
extend the Agreement with Broderick into 2014. Because they determined that the Agreement
was terminated “with cause,” the Defendants explain, Broderick forfeited all unpaid commissions
due under the Agreement.
Under Illinois law, to establish a breach of contract claim, a plaintiff must show: “(1) an
offer and acceptance, (2) consideration, (3) definite and certain contractual terms, (4) the plaintiff’s
performance of his contractual obligations, (5) the defendant’s breach of the contract, and (6)
damages resulting from the breach.” Green v. Trinity Int’l Univ., 801 N.E.2d 1208, 1213 (Ill. App.
Ct. 2003).
Upon review of the designated evidence and the parties’ briefs, it appears that there is no
dispute that the parties entered into the Agreement and extended the initial Agreement term to
December 31, 2013. Therefore, the Court focuses its review on the contractual provisions and the
claimed breach.
Pursuant to the Agreement, Broderick established new customer accounts and serviced
existing accounts for the Defendants. In return for these sales services, the Defendants paid
commissions to Broderick. The Agreement called for the commission payments to be “mailed by
the 11th of each month for invoiced payments received by the end of the prior month.” (Filing No.
63-2 at 7.) The initial term of the Agreement expired on December 31, 2007. However, the

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Agreement allowed the parties to extend the length of the term by executing a written extension
agreement “within 30 days prior to the end of the current Term up to 30 days past the current
expiration date.” (Filing No. 63-2 at 5.) “Failure to offer to extend the agreement by Fansteel will
be treated as a termination and the provisions of section 9 of this agreement will apply.” Id.
Section 9 governs termination of the Agreement and states, in part:
a.
This Agreement (other than provisions, which by their terms, survive this
Agreement), may be terminated by either party with or without cause at any time
by giving a written 30-day notice to the other party. In addition, Fansteel may
terminate this Agreement forthwith and without prior notice if [Broderick] or any
of its salesmen, employees or agents commits any act of embezzlement, theft, fraud,
or dishonesty against the [Defendants] or commits any material breach of this
Agreement hereinafter referred to as cause. Upon said termination, [Broderick] will
forfeit all unpaid commissions without recourse.
(Filing No. 63-2 at 5.) Section 9 also provides that if the Agreement was terminated without cause,
then Broderick would be “entitled to earned commissions for 180 days starting from date of
termination,” and for automotive accounts, “commissions will be paid to [Broderick] for 540 days
from the date of termination.” Id.
Finally, Section 9 states:
c.
It shall be the responsibility of the appropriate Fansteel Sales Manager to
monitor [Broderick’s] adherence to this Agreement. Should the sales manager
deem [Broderick] is non-performing; a formal review would be scheduled.
[Broderick] is responsible to provide Fansteel with a corrective action plan and will
be given no more than 90 days to execute said plan prior to any termination notice.
Id.
Under the terms of the Agreement, the Defendants were obligated to mail commission
payments to Broderick by the eleventh of each month for payments the Defendants received during
the previous month.

According to Carrie Saline (“Ms. Saline”), Defendant AST’s general

manager, there were times the Defendants were “very behind on commission payments.” (Filing
No. 63-5 at 3.) She estimated that the Defendants failed to timely pay commissions over a period
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of six to eight months. Id. According to Ms. Saline, the Defendants’ failure to timely pay
commissions was a material breach of the Agreement (Filing No. 63-5 at 3–4). Indeed, under
Illinois law, “[o]nce performance of an obligation under a contract is due, failure to perform the
obligation amounts to a breach.” Fireman’s Fund Mortg. Corp. v. Zollicoffer, 719 F. Supp. 650,
656 (N.D. Ill. 1989) (citing State Dept. of Agr. v. Ackerman, 341 N.E.2d 48, 51 (Ill. App. Ct. 1975)
(“[t]he breach of a duty to pay is an instantaneous occurrence that coincides with the moment at
which the duty arises . . . .”)). Further, Mr. Graham, the Defendants’ chief operating officer,
testified that the Defendants got behind on their commission payment obligations to Broderick at
least in 2012 and 2013. At various times throughout 2013, the Defendants were three weeks behind
on their payment obligations. They were behind on their payments to Broderick at the end of 2013
when the Agreement was not renewed. Commissions were due to Broderick when the Agreement
terminated on December 31, 2013 (Filing No. 63-1 at 10–12).
Pursuant to the terms of the Agreement and according to the deposition testimony of Mr.
Graham as the Defendants’ 30(b)(6) representative, on December 31, 2013 the Agreement
terminated based on non-renewal, not “for cause.” (Filing No. 63-1 at 14–16.) The Defendants
wanted to provide an “official,” “final” notice of the termination, which they did on April 30, 2014
(Filing No. 63-1 at 15). On April 30, 2014, the Defendants determined that the Agreement was
terminated “with cause.” Prior to April 30, 2014, the Defendants had never taken the position that
the December 31, 2013 termination was “with cause.” (Filing No. 63-1 at 16–17.) Based on the
Defendants’ April 30, 2014 position that the termination was “with cause,” the Defendants assert
that they are not in breach of the Agreement because Broderick forfeits all unpaid commissions
after a “with cause” termination.

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In light of all these facts, Broderick sued the Defendants for breach of contract for the
unpaid, due and owing commissions. Broderick’s argument is simple—the Defendants cannot
unilaterally reinstate a terminated contract that ended without cause based on non-renewal just to
terminate the contract again but with cause. They cannot resurrect the terminated Agreement to
re-terminate it “with cause” to avoid the obligation to pay commissions.
The Defendants’ response to Broderick’s argument also is simple. They are not trying to
resurrect the Agreement. They assert that the Agreement does not require a determination of “with
cause” or “without cause” at the time of the termination. The Defendants point out that Section 8
of the Agreement does not state whether non-renewal automatically is treated as “with cause” or
“without cause.” The Agreement does not limit the time within which a party must determine if
the termination is “with cause.” From December 2013 through April 2014, the Defendants
considered whether the termination should be “with cause,” and on April 30, 2014, they
determined that the termination four months earlier was “with cause.”
The Defendants also briefly assert that terminating the Agreement with cause based on a
material breach did not require any notice at all to Broderick. However, this is not what the
Agreement states. It allows either party to terminate the Agreement with or without cause at any
time by giving a written thirty-day notice to the other party. But in the event of a material breach
by Broderick, the Defendants could terminate the Agreement without prior notice, meaning the
Defendants would not have to provide the written thirty-day notice to Broderick. However, the
Defendants still would need to inform Broderick that they were contemporaneously terminating
the Agreement based on a material breach so that Broderick would know of the termination.
Broderick replies to the Defendants’ argument by explaining that the Agreement does not
provide an “infinite limbo period” whereby a termination “without cause” can be converted into a

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termination “with cause”. If it was the parties’ intent to allow the Defendants to deem the
Agreement terminated “with cause” four months after the “original” termination, the Agreement
should have said so, and the Court should reject the Defendants’ request to add this language into
the Agreement.

Broderick asserts that an after-the-fact “with cause” termination cannot

retroactively excuse the Defendants’ prior breaches of failing to timely pay commissions. Nothing
in the Agreement provides a retroactive excuse for past breaches. Broderick explains that the
Defendants’ position ignores the plain meaning of the contract language and requires the addition
of terms that simply are not there.
The Agreement does not require a determination of “with cause” or “without cause” at the
time of the termination, does not limit the time within which a party must determine if the
termination is “with cause,” and does not state whether non-renewal automatically is treated as
“with cause” or “without cause.” Similarly, on the other hand, the Agreement does not provide a
“limbo period” whereby a termination “without cause” can be converted into a “with cause”
termination, and it does not allow a party to deem the Agreement terminated “with cause” months
after the Agreement already has been terminated. “A court will not add another term about which
an agreement is silent.” Klemp, 641 N.E.2d at 962. In fact, no other terms are necessary.
The simple failure to extend a contract or just allowing a contract to expire according to its
terms is not a termination “with cause” or “for cause.” If there is “cause” for terminating a contract,
that reason or “cause” should be expressed. If no “cause” is communicated, then logic and reason
demand that the termination is “without cause.” The Agreement does not need to explicitly explain
how a termination “without cause” occurs. If no “cause” is given, then it is “without cause.” In
this case, the parties allowed the Agreement to expire on December 31, 2013 by not extending the

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term. By this non-renewal, the Agreement was terminated. The Defendants gave no “cause” for
the non-renewal termination. Thus, the termination was “without cause.”
As a result, Broderick is entitled to the commission payments due under the Agreement.
Broderick did not forfeit these commissions.

Because the Defendants have not paid the

commissions, they have breached the Agreement. Summary judgment is granted to Broderick on
its claim for breach of contract. The Court leaves for trial the determination of the amount of
damages sustained by Broderick as a result of the Defendants’ breach.
Although it is not necessary to the Court’s analysis and determination, the Court briefly
addresses the Defendants’ lengthy explanation for why they deemed the termination to be “with
cause.” In their discovery responses, the Defendants asserted that at some unspecified point in
2013, Broderick failed to visit customers, maintain current business, service current accounts,
solicit new business, and identify themselves as representatives of Fansteel (Filing No. 78-5 at 7).
The Defendants also asserted that, consistently from 2006 (when the Agreement began) forward,
Broderick failed to develop annual performance goals, develop and implement a sales and
marketing plan, provide timely communications about customer relations, and provide sales
forecasts and product/marketing information (Filing No. 78-5 at 7–8). The Defendants’ executives
and managers—John Graham, Stephen Mullendore, Jim Vito, Carrie Saline, and Tom Weaver—
had knowledge of these things (Filing No. 78-5 at 8). It is for these reasons that the Defendants
assert Broderick materially breached the Agreement leading to the Defendants’ decision to
allegedly terminate the Agreement “with cause” on April 30, 2014.
Four months after the Agreement had terminated based on non-renewal, Mr. Graham sent
an email to Broderick on April 30, 2014. In the email, Mr. Graham asserted that the Defendants
“terminated its contract with Broderick Associates on December 31st, 2013,” and the termination

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was “with cause” because “Broderick failed to honor multiple sections of the contract including
Section 1 Engagement, Section 4 Relationship, and Section 5 Performance.” (Filing No. 63-12 at
2.) However, Section 9c of the Agreement provided protection to Broderick in the event that the
Defendants believed Broderick was not performing under the Agreement. This provision provides
that:
c.
It shall be the responsibility of the appropriate Fansteel Sales Manager to
monitor [Broderick’s] adherence to this Agreement. Should the sales manager
deem [Broderick] is non-performing; a formal review would be scheduled.
[Broderick] is responsible to provide Fansteel with a corrective action plan and will
be given no more than 90 days to execute said plan prior to any termination notice.
(Filing No. 63-2 at 5.) In the event that Broderick was not performing according to the provisions
of the Agreement, the Defendants were to schedule a formal review, and Broderick was to provide
a corrective action plan and execute on that plan. Broderick would be given no more than ninety
days to execute the corrective plan before termination notice was given.
The designated evidence indicates that the Defendants never scheduled a formal review of
Broderick and never requested a corrective action plan from Broderick (Filing No. 89-3 at 2–3;
Filing No. 78-6 at 3–5; Filing No. 89-4 at 2; Filing No. 89-1 at 2). Thus, the Defendants failed to
comply with these contractual provisions regarding perceived non-performance by Broderick. The
Defendants assert that consistently from 2006, when the Agreement began, until termination in
2013, Broderick failed to develop annual performance goals, develop and implement a sales and
marketing plan, provide timely communications about customer relations, and provide sales
forecasts and product/marketing information. Despite these alleged breaches by Broderick, the
Defendants continued to extend their contract with Broderick for seven years without any requests
for a formal review or a corrective action plan. The Defendants additionally claim that at some
unspecified point in 2013, Broderick failed to visit customers, maintain current business, service

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current accounts, solicit new business, and identify themselves as representatives of Fansteel. Yet
the Defendants never scheduled a formal review and never requested a corrective action plan as
called for by the Agreement. The Defendants cannot point the finger at Broderick, asserting its
non-performance, while not following the provisions of the Agreement governing any nonperformance by Broderick.
B.

Violation of the Illinois Sales Representative Act
Broderick also moves for summary judgment on its Illinois Sales Representative Act (“the

Act”) claim, asserting that the Defendants’ failure to pay the commissions within thirteen days of
when the commissions were due after termination of the Agreement is a violation of the Act, 820
Ill. Comp. Stat. 120. As a result, Broderick claims that it is entitled to exemplary damages and its
attorney fees and costs.
The Act declares:
Sec. 2. All commissions due at the time of termination of a contract between a
sales representative and principal shall be paid within 13 days of termination, and
commissions that become due after termination shall be paid within 13 days of the
date on which such commissions become due. Any provision in any contract
between a sales representative and principal purporting to waive any of the
provisions of this Act shall be void.
820 Ill. Comp. Stat. 120/2. The Act sets out a recovery for sales representatives who have been
denied commission payments in violation of the Act.
Sec. 3. A principal who fails to comply with the provisions of Section 2 concerning
timely payment or with any contractual provision concerning timely payment of
commissions due upon the termination of the contract with the sales representative,
shall be liable in a civil action for exemplary damages in an amount which does not
exceed 3 times the amount of the commissions owed to the sales representative.
Additionally, such principal shall pay the sales representative’s reasonable
attorney’s fees and court costs.
820 Ill. Comp. Stat. 120/3.

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The Defendants first assert that Broderick is not entitled to recovery under the Act because
the Agreement was terminated “with cause,” and thereby, Broderick forfeited all commissions.
Because Broderick forfeited all commissions, the Defendants have not violated the Act by not
paying commissions. For the reasons explained above, the Court rejects this argument of the
Defendants. The Defendants owed commissions to Broderick when the Agreement was
terminated.

Additional commissions became due and owing after the termination of the

Agreement. The Defendants have failed to pay these commissions to Broderick. Therefore, the
Defendants violated the Act.
The Defendants next assert that Broderick is not entitled to exemplary damages under the
Act because they did not act in bad faith, and their failure to pay the commissions was not “willful
and wanton conduct or [a] vexatious refusal to pay.” Zavell & Assocs. v. CCA Indus., 628 N.E.2d
1050, 1052 (Ill. App. Ct. 1993). Relying on Installco Inc. v. Whiting Corp., 784 N.E.2d 312, 320
(Ill. App. Ct. 2002), the Defendants explain that, “[n]o automatic award of exemplary damages is
granted for every violation of the Act.” Further, “[s]uch damages should not be awarded absent a
finding of culpability that exceeds bad faith. . . . [T]he plaintiff would be entitled to exemplary
damages only if it could demonstrate that the defendant’s behavior in withholding the commissions
beyond the statutory period was outrageous and the moral equivalent of criminal conduct.” Id.
The designated evidence shows that the Defendants knew commissions were due at the
time the Agreement was terminated. However, the evidence does not support a finding at the
summary judgment stage that the Defendants’ failure to pay the commissions was in bad faith or
“the moral equivalent of criminal conduct.” Thus, the Court denies summary judgment for
Broderick on its claim for exemplary damages under the Act.

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The Act also states that a “principal shall pay the sales representative’s reasonable
attorney’s fees and court costs.” 820 Ill. Comp. Stat. 120/3. The Defendants’ argument regarding
attorney fees and costs goes to the amount of such an award. Because the Court is leaving for trial
the determination of the amount of damages sustained by Broderick as a result of the Defendants’
breach, it is also appropriate for the Court to leave for trial the determination of the amount of
attorney fees and costs under the Act. The Court grants summary judgment to Broderick, holding
that the Defendants have violated the Act and that they are liable to Broderick for its attorney fees
and costs.
IV. CONCLUSION
For the foregoing reasons, Plaintiff Broderick Associates, Inc.’s Motion for Partial
Summary Judgment (Filing No. 61) is GRANTED in part and DENIED in part. Defendants
Fansteel, Inc. and American Sintered Technologies are liable to Broderick for their breach of
contract for the unpaid commissions that are due to Broderick under the Agreement as well as the
attorney fees and costs available under the Illinois Sales Representative Act. The other claims
asserted in Broderick’s Complaint and the issue of the amount of damages remain pending for
trial.
SO ORDERED.
Date: 1/22/2016

DISTRIBUTION:
Julia E. Dimick
ALERDING CASTOR HEWITT LLP
[e-mail]
Michael J. Alerding
ALERDING CASTOR HEWITT LLP
[e-mail]
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Gregory Forrest Hahn
BOSE MCKINNEY & EVANS, LLP
[e-mail]
Kevin Michael Quinn
BOSE MCKINNEY & EVANS, LLP
[e-mail]
Vilda Samuel Laurin, III
BOSE MCKINNEY & EVANS, LLP
[e-mail]

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