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Boston Light Source, Inc. v. Axis Lighting, Inc.

United States District Court, D. Massachusetts

November 13, 2017



          DONALD L. CABELL, U.S.M.J.

         Boston Light Source (“BLS”), a representative of commercial lighting products, has brought a seven-count action against Axis Lighting (“Axis”), a manufacturer of commercial lighting products, to recover unpaid commissions BLS contends it earned through marketing, promoting and selling Axis's products. Axis moves to dismiss five of the seven counts for failure to state a claim. For the reasons discussed below, I recommend that the motion to dismiss be granted in part and denied in part.

         I. BACKGROUND

         A. Relevant Facts

         Accepting the facts in the complaint as true, BLS is a sales representative for manufacturers of commercial lighting products, including Axis, whose products are sold across the United States. (Compl. ¶¶ 4-5). On April 5, 2007, BLS and Axis entered into a Sales Representative Agreement (the “Agreement”) pursuant to which BLS agreed to represent, promote, and market Axis products in the “Boston [a]rea, including eastern Massachusetts, Worcester County, and the state of Rhode Island.” (Id. at ¶ 6). In exchange, Axis agreed to pay BLS a certain commission on the sale of any Axis products. (Id. at ¶¶ 6-7). Both parties reserved the right to terminate the Agreement with 30-days prior notice but BLS would be entitled in such a case to receive commissions owed “for a period of three months for any order or contract that has been registered with [Axis] within 30 days or there is sufficient evidence to prove that the agent has worked on the order or contract.” (Dkt. No. 1-3).

         After consummating the Agreement, BLS actively marketed and promoted Axis's products to help achieve brand recognition in the designated territory. BLS also increased sales of Axis products and introduced BLS customers to Axis management to further expand Axis's market share. (Compl. ¶¶ 8-10). Then, in early 2016, Axis instituted a “sales incentive program” under which it agreed to pay BLS an additional “incentive bonus” if BLS achieved certain sales benchmarks in a calendar year. (Id. at ¶ 11).

         By the summer of 2016, BLS “had many orders pending, was on the brink of making a number of substantial sales, had made significant headway into finalizing the largest specification for an order of Axis products it had ever created, ” and “was well on its way to earning a bonus” under the sales incentive program. (Id. at ¶ 12). On September 6, 2016, however, Axis notified BLS that it was terminating the Agreement. Axis stated that the termination was due to a “territorial reorganization” but BLS contends that Axis terminated the Agreement so that it could avoid having to pay BLS commissions and incentive bonuses that were due and/or that were likely to be due at the end of the calendar year. (Id. at ¶ 13-14).

         B. The Plaintiff's Claims and the Motion to Dismiss

         The complaint advances seven counts. Count I alleges a breach of contract; Count II alleges a breach of the implied covenant of good faith and fair dealing; Count III alleges a violation of M.G.L. c. 104, §§ 7-9, which imposes on certain entities a statutory obligation to pay timely commissions and penalties for failing to do so; Count IV alleges a violation of M.G.L. c. 93A; Count V alleges unjust enrichment; Count VI alleges a claim for quantum meruit; and Count VII asserts a claim for an accounting. Axis moves to dismiss Counts II and IV-VII for failure to state a claim. (Dkt. No. 6). BLS opposes the motion. (Dkt. No. 14).


         Under the Federal Rues of Civil Procedure, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). To survive a motion to dismiss, the plaintiff must provide “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The“[f]actual allegations must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (internal citations omitted). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully, ” and is met where “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. At 556).

         When deciding a motion to dismiss under Rule 12(b)(6), the court must “accept as true all well-pleaded facts set forth in the complaint and draw all reasonable inferences therefrom in the pleader's favor.” Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) (quoting Artuso v. Vertex Pharm, Inc., 637 F.3d 1, 5 (1st Cir. 2011)). However, the Court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Simply put, the Court should assume that well-pleaded facts are genuine and then determine whether such facts state a plausible claim for relief. Iqbal, 556 U.S. at 679.

         III. ANALYSIS

         A. Count II States a Valid Claim for Breach of the Implied Covenant ...

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