Webster and Associates, Inc. v. Eagleburgmann KE, Inc.

Filing 59

MEMORANDUM OPINION & ORDER; 1)Plaintiff's 51 MOTION to Amend/Correct is DENIED; 2)Judgment in the amount of $93,227.22 is entered in favor of Def. Signed by Judge William O. Bertelsman on 4/3/2014.(LST)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
COVINGTON DIVISION
WEBSTER & ASSOCIATES, INC.,
Plaintiff,
v.
EAGLEBURGMANN KE, INC.,
Defendant.

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Action No.: 12-206-WOB-JGW
(Judge William O. Bertelsman)
MEMORANDUM OPINION AND ORDER

This matter is before the Court on the parties’ briefs
concerning damages (Doc. 46, Def. Brief; Doc. 52, Pl. Brief) and
on Plaintiff’s Motion to Modify the Court’s November 27, 2013
Order (Doc. 51, Motion to Modify).
Having reviewed the parties’ briefs, the Court concludes
that

oral

matter.

argument

is

unnecessary

to

the

resolution

of

the

The Court therefore issues the following Memorandum

Opinion and Order.
ABBREVIATED FACTS
A. Background Information
The focus of this litigation is a contract that was entered
into on November 1, 2009 (the “Contract”) between the parties,
Plaintiff

Webster

EagleBurgmann

KE,

&
Inc.

Associates

(“Webster”)

(“Defendant”).

(See

and

Doc.

Defendant

32,

Webster

Dep., p.p. 42, 99-100, Exs. F and C; Green Dec., ¶3 and Ex. 1.)

Under

the

Contract,

Webster

was

granted

the

exclusive

obligation and right to solicit for the sale of equipment on
behalf

of

Southeast.
his

Burgmann

to

a

defined

market

territory

(Webster Dep., Ex. C., Appx. II.)

services,

Webster

received

Appendix I to the Contract.

commissions

in

the

In exchange for
as

determined

by

(Id., Ex. C at Appx. I.)

The Contract states that in the event of termination of the
Contract by Burgmann, Webster “will receive commission for any
orders accepted by the PRINCIPAL, for the remaining period of
the contract.”

(Id. at Section 10.)

The relevant duration and

Contract termination provisions under Section 11 of the Contract
state:
Section 11. DURATION OF AGREEMENT
This
Agreement
shall
be
a
three
(3)
year
“evergreen” contract, meaning the Agreement shall
automatically be extended by one (1) year at the
end of each contract year, unless either party
shall have given written notice of its intention
not to renew the Agreement at least sixty (60)
days prior to the expiration of the then current
year of the agreement.
Should the PRINCIPAL serve notice of intention to
terminate the agreement, REPRESENTATIVE may be
required to service ACCOUNTS in the Territory for
the remaining two years of this agreement, at the
PRINCIPAL’s option.
PRINCIPAL’s decision to
relieve the REPRESENTATIVE of this responsibility
does not affect payment of commissions for any
shipments that occur during the remaining two
years of the agreement.
Upon a breach of any of the terms and conditions
of this Agreement, or any act of misfeasance by

2

either party, or should either party become
involved in insolvency proceedings, receivership
or bankruptcy, this Agreement may be terminated
immediately at the option of the other party by
written notice.
(Id. at Section 11.)
The contractual relationship operated smoothly until Spring
2011, when Webster was unavailable to Burgmann and neglected his
duties

under

the

Contract.

(See

Doc.

30

at

p.

6;

Richard

Webster Affidavit at ¶ 14; Webster Depo. at 65-66, 70.)

After

multiple attempts to reach Webster without response, Burgmann
mailed Webster a termination letter on September 14, 2011.

(See

Webster Depo. at Ex. D.)
B. The Court’s November 27, 2013 Order
This action was commenced on October 9, 2012.
1.)

(See Doc.

On November 27, 2013, the Court granted partial summary

judgment for Defendant on its contract counterclaim, but denied
summary judgment as to Webster’s contract claim.
Order, 12.)

(Doc. 44,

Because the Contract extended until November 1,

2013 due to the evergreen provision, the Court ruled Webster is
entitled to receive commissions under the Contract up to and
including November 1, 2013.

(Id.)

The Court also ruled that

Burgmann is entitled to establish its damages due to Webster’s
breach.

(Id. at 11.)

3

LEGAL CONCLUSIONS
A. Plaintiff’s Motion to Modify is Denied.
Plaintiff’s Motion to Modify the Court’s November 27, 2013
Order is not well-taken and is denied.
The

Court’s

Order

interpreted

the

Contract

termination

provision to mean that the Contract ran from November 1, 2009
until November 1, 2012.
the

first

contract

extended

by

Burgmann

failed

expiration

of

irrelevant,
terminate

one

the

because

the

year

year
to

When the Contract reached the end of
on

to

November

November

provide

1,

current

the

Contract

2010,

2013.

sixty-days’

then

contract

1,

year

of

due

The

notice

provides

immediately”

the

to

Contract
fact

prior

that

to

the

the

agreement

was

that

Burgmann

Webster’s

“may

breach.

(See Doc. 44, Order, page 12.)
The Court found that because the Contract was terminated
due to Plaintiff’s breach on September 14, 2011, the Contract
did not yet renew “at the end of the contract year” (on November
1, 2011).
to

Rather, because Defendant terminated the Contract due

Plaintiff’s

though

the

commissions

breach,

obligation
remained.

the
to

Contract
pay

Thus,

the

immediately
remaining

Burgmann

terminated,

two

owes

years

payment

of
on

commissions through November 1, 2013, not November 1, 2014.
Plaintiff’s suggestion that Defendant’s drafting the Order
is a basis for it to be modified is not well-taken.

4

The record

is clear that Plaintiff was given the opportunity to review the
Order before Defendant submitted the draft Order to the Court.
(Doc. 47, Hearing Transcript, page 25.)

There is no evidence

that Defendant failed to show the proposed order to Plaintiff or
that Plaintiff raised any objections prior to submission of the
Order to the Court.
B. Defendant is Entitled to Judgment Against Plaintiff in
the Amount of $93,227.22.
The Court adopts Defendant’s calculation of damages, which
amounts

are

reasonable

and

not

challenged

by

Plaintiff.

Defendant incurred $336,628.00 in damages to replace Plaintiff.
Plaintiff

is

owed

$243,400.78

in

commissions,

which

is

not

disputed but for his argument that the Contract period should be
extended.

Therefore,

judgment

will

be

entered

in

favor

of

Defendant for $93,227.22.
“In
contract

seeking
damages,

to

state

the

the

courts

exact
may

use

formula

different

depending on the type of contract involved.”
§18.1 (2014 ed.)

for

KY. L.

measuring
techniques
OF

DAMAGES,

“In failure to provide some personal service,

the damages are usually measured as the cost of obtaining the
service less the amount the breaching party would have been
paid.”

Id. (citing Haas v. Gahlinger, 248 S.W.2d 349, 352 (Ky.

1952); Hogg v. Edley, 236 Ky. 142, 32 S.W.2d 744, 746 (1930)).
Lost profits are recoverable in most cases if they were in the

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contemplation of the parties and reasonably certain to occur.
KY. L.

OF

DAMAGES,

§18.1

(2014

ed.)

(citing

Pauline’s

Chicken

Villa, Inc. v. KFC Corp., 701 S.W.2d 399, 401, 55 A.L.R.4th 499
(Ky. 1985)).
Defendant hired Mr. Viau to replace Plaintiff to mitigate
its

damages,

incurring

total

of

$336,628.00

in

commissions, benefits and transportation expenses.
rejects

Plaintiff’s

argument

that

Defendant’s

salary,
The Court

damages

are

unreasonable because Mr. Viau is a salaried employee entitled to
benefits and expense reimbursement.

Mr. Viau works in the same

market and territory and performs the same job functions as did
Webster.

In addition, Mr. Viau is paid fairly comparably to

what Plaintiff was paid in commissions.

Under the Contract,

Webster would have received commissions of $243,400.78, whereas
Mr.

Viau’s

total

earnings

plus

benefits

and

transportation

expenses equal $336,628.00.
Defendant’s expenses would not have been incurred but for
Webster’s breach of the Contract.

Moreover, Defendants are not

seeking lost profits, to which they are arguably entitled under
the

law.

Accordingly,

Defendant

is

entitled

against Webster in the amount of $93,227.22.

6

to

a

judgment

IT IS THEREFORE ORDERED that
the

Court’s

Order

is

DENIED;

Plaintiff’s Motion to Modify

and

judgment

$93,227.22 is entered in favor of Defendant.

This 3rd day of April, 2014.

7

in

the

amount

of