HARBOR LAUNDRY SALES, INC. v. MAYFLOWER TEXTILE SERVICES CO. et al
Filing
41
OPINION. Signed by Judge Noel L. Hillman on 3/28/2012. (TH, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
HARBOR LAUNDRY SALES, INC.,
Civil Action No.
09-6259 (NLH)
Plaintiff,
v.
OPINION
MAYFLOWERS TEXTILE SERVICE
CO., et al.,
Defendants.
APPEARANCES:
Steven Maniloff, Esquire
Patrick T. Ryan, Esquire
Montgomery, McCracken, Walker & Rhoads, LLP
Liberty View
457 Haddonfield Road, Sixth Floor
Cherry Hill, NJ 08002
On behalf of plaintiff
Stuart Alan Schwager, Esquire
Lerch, Early & Brewer, Chtd.
3 Bethesda Metro Center, Suite 460
Bethesda, MD 20814
On behalf of defendants
HILLMAN, District Judge
In this breach of contract case, presently before the Court
is defendants’ motion for summary judgment on plaintiff’s claims
against them.
For the reasons expressed below, defendants’
motion will be denied.
I.
BACKGROUND
Plaintiff, Harbor Laundry Sales, Inc. (hereinafter,
"Harbor"), filed a Complaint against defendants Mayflower
Healthcare Textile Services LLC and Mayflower Textile Services
Co. (hereinafter, "Mayflower"), asserting claims for breach of
contract, declaratory judgment, and an accounting, because of
Mayflower's alleged failure to pay sales commissions to Harbor
pursuant to an agreement between the parties whereby Harbor would
solicit and procure for Mayflower customers in need of commercial
laundry services.
Mayflower subsequently filed a counterclaim
against Harbor for restitution for allegedly over-paid
commissions.
The main dispute is whether, under the memorandum agreement
between Harbor and Mayflower, Harbor “procured” for Mayflower
five hospital customers so that Harbor is due over $1.5 million
in commissions.
Mayflower argues that Harbor did not procure any
of those customers, and has moved for summary judgment on
Harbor’s three claims against it.
Harbor has opposed the
motion.1
II.
DISCUSSION
A.
Jurisdiction
This Court has jurisdiction over this matter pursuant to 28
U.S.C. § 1332 because there is complete diversity of citizenship
between the parties and the amount in controversy exceeds
$75,000.
1
Neither party has moved for summary judgment on Mayflower’s
counterclaim.
2
B.
Summary Judgment Standard
Summary judgment is appropriate where the Court is satisfied
that the materials in the record, including depositions,
documents, electronically stored information, affidavits or
declarations, stipulations, admissions, or interrogatory answers,
demonstrate 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.
Celotex Corp. v. Catrett, 477 U.S. 317, 330
(1986); Fed. R. Civ. P. 56(a).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor.
248 (1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
A fact is “material” if, under the governing
substantive law, a dispute about the fact might affect the
outcome of the suit.
Id.
In considering a motion for summary
judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party's evidence “is to be believed and
all justifiable inferences are to be drawn in his favor.”
Marino
v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir.
2004)(quoting Anderson, 477 U.S. at 255).
Initially, the moving party has the burden of demonstrating
the absence of a genuine issue of material fact.
v. Catrett, 477 U.S. 317, 323 (1986).
3
Celotex Corp.
Once the moving party has
met this burden, the nonmoving party must identify, by affidavits
or otherwise, specific facts showing that there is a genuine
issue for trial.
Id.
Thus, to withstand a properly supported
motion for summary judgment, the nonmoving party must identify
specific facts and affirmative evidence that contradict those
offered by the moving party.
Anderson, 477 U.S. at 256-57.
A
party opposing summary judgment must do more than just rest upon
mere allegations, general denials, or vague statements.
Saldana
v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).
C.
Analysis
Mayflower raises three arguments in its motion for why it is
entitled to summary judgment:
(1) Harbor lost its standing as Mayflower’s exclusive sale
and marketing agent in the Philadelphia area because it failed to
“secure reasonable opportunities from prospective customers for
MTS to provide laundry services at an annual rate of at least 10
million pounds on or before June 30, 2005,” as required by the
parties’ contract, and the determination of this issue is a
matter of law for the Court to decide;
(2) no reasonable jury could find that Harbor “procured”--as
required by the contract and defined by the Court as a matter of
law--the five hospital contracts2 for which Harbor claims it is
2
The five hospital contracts in dispute are Virtua Health
System, Children’s Hospital of Pennsylvania, Temple Health
System, Jefferson Health System, and Underwood Memorial Hospital.
4
entitled to commissions; and
(3) Mayflower has not admitted it owes Harbor $241,323 by
virtue of it making a clerical error.
In opposition to Mayflower’s motion, Harbor argues that
disputed material facts abound as to all issues and claims, and,
therefore, summary judgment must be denied.
The Court agrees with Harbor.
Addressing Mayflower’s first
and second arguments, Mayflower contends that Harbor lost its
exclusivity as Mayflower’s sole sale and marketing representative
in the Philadelphia area because the only contract Mayflower
entered into as a result of Harbor’s efforts prior to June 30,
2005--a contract with University of Pennsylvania Health System-resulted in only 4.6 million pounds of laundry as of June 30,
2005, and only a total of 8.7 million pounds of laundry by
December 31, 2005.
Mayflower argues that these numbers make it
clear that Harbor did not fulfill its contractual obligation to
“secure reasonable opportunities from prospective customers for
MTS to provide laundry services at an annual rate of at least 10
million pounds on or before June 30, 2005.”
This failure, Mayflower argues, leads into the analysis of
Mayflower’s second point--that Harbor did not procure five
additional hospital contracts.
Because after June 30, 2005,
Harbor was no longer Mayflower’s exclusive sale and marketing
representative, Mayflower argues that it was because of the
5
efforts of Mayflower, or others on Mayflower’s behalf, that the
five hospital contracts were obtained.
Mayflower contends that
no reasonable jury would find that Harbor’s actions “procured”
those contracts.
Harbor presents a different interpretation of its
exclusivity arrangement and its efforts in securing the five
additional hospital contracts.
Harbor presents evidence that as
of June 30, 2005, it had numerous meetings with representatives
of prospective customers that would require the processing of
more than 10 million pounds of laundry per year.
Harbor points
out that four of those customers actually entered into contracts
with Mayflower, and although those contracts were formed after
June 30, 2005, it was because of Harbor’s efforts prior to June
30, 2005 that (1) satisfied its obligation to “secure reasonable
opportunities from prospective customers,”3 and (2) entitled it
3
Harbor points out that even if it lost its exclusivity as
Mayflower’s sole sale and marketing representative in the
Philadelphia area, the contract provides that Harbor is still
entitled to commissions for the customers it procured for
Mayflower. Thus, Harbor agues that Mayflower seeking summary
judgment on that issue is improper, since that issue is
irrelevant to its claims regarding entitlement to commissions-i.e., Harbor does not have to prove it retained its exclusivity
in order to prevail on its claims. Moreover, Harbor argues that
Mayflower’s stance on the exclusivity clause is actually a
defense to payment, and it is Mayflower’s burden to prove that
Harbor did not live up to that agreement. Mayflower responds
that the issue is properly brought for summary disposition
because it is directly relevant to Harbor’s claims since it
affects the analysis of the parties’ actions in securing the five
additional hospital contracts. Because Mayflower’s summary
judgment motion will be denied, the Court will not address at
6
to commissions on “procuring” those customer contracts.
Harbor
also presents evidence with regard to its efforts to procure the
fifth contract at issue in this case.
Regardless of how the exclusivity provision is interpreted
or how the word “procured” is defined,4 what actions the parties
took that ultimately led to Mayflower entering into laundering
contracts with five hospitals cannot be resolved on summary
judgment.
Harbor presents its efforts to meet with the five
hospitals and market Mayflower’s laundry services, and provides
evidence to support its position.
Mayflower also presents its
efforts to secure those same contracts, and provides evidence to
support its position.
Even though Mayflower asks that this Court
credit its proof over Harbor’s, only a jury can decide which
party’s efforts created the “causal connection” between its
activity and the signing of the contract so that that party can
be considered the “procuring cause” of that sale.
See De
Benedictis v. Gerechoff, 339 A.2d 225, 228 (N.J. Super. Ct. App.
this time whose burden it is to prove whether Harbor fulfilled
the conditions of the exclusivity provision in the parties’
contract.
4
Both parties point out that either New Jersey or
Pennsylvania law applies to Harbor’s claims, but that under
either state’s law, the results are the same. Because neither
party has definitively argued for a particular state’s law to
apply, and both contend that under either New Jersey or
Pennsylvania law, their interpretation of the contract is
supportable, the Court will refrain from conducting a choice of
law analysis at this time.
7
Div. 1975) (explaining that “for a broker to earn a commission
from a Seller or buyer he must establish that he was the
‘efficient producing cause’ in bringing about the sale--at least
in the sense of causing the seller to negotiate with a customer,
produced by the broker, who is ready, able and willing to
perform, and where the transaction is later consummated without a
substantial break in the ensuing negotiations”); Amerofina, Inc.
v. U. S. Industries, Inc., 335 A.2d 448, 453 (Pa. Super. 1975)
(“There must be . . . a causal connection between the activities
of the finder and the resultant acquisition or merger.
It is
generally said that the middleman must be the efficient procuring
cause of the transaction.”).
Finally, with regard to Mayflower’s argument that it is
entitled to summary judgment on Harbor’s claim that Mayflower has
admitted to owing Harbor $241,323, material disputed facts exist
on that issue as well.
In December 2008, Mayflower sent Harbor
an email containing a list of commissions paid to Harbor.
Included in that list were three checks totaling $241,323, but
Harbor never received those checks.
Harbor contends that after
sending Mayflower three emails to report that it had not received
those commission checks, Mayflower promised to send overdue
commission payments, although Harbor claims Mayflower never did.
During discovery in this case, it was determined that the
three checks listed as commission payments to Harbor were
8
actually made out to different payees.
Mayflower contends that
this was simply a clerical error, Harbor is not entitled to those
checks, and, therefore, it cannot be held to have admitted to
owing Harbor that amount.
Harbor argues that Mayflower’s
counterclaim includes that amount in its request for restitution,
which is inconsistent with its contention that Harbor is not owed
that commission.
This dispute is for the jury to resolve.
III. CONCLUSION
For the foregoing reasons, defendants’ motion for summary
judgment on plaintiff’s claims against them will be denied.
appropriate Order will be entered.
Date: March 28, 2012
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
At Camden, New Jersey
9
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