United States District Court, D. Massachusetts
MEMORANDUM AND ORDER DENYING MOTION TO
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE
2, 2017, Plaintiff Controlled Kinematics, Inc. filed suit
against Defendant Novanta Corp. seeking recovery of unpaid
sales commissions for services rendered. [ECF No. 1]
(“Compl.”). Plaintiff asserts several claims,
including breach of contract and a violation of Mass. Gen.
Laws Chapter 93A. Presently pending before the Court is
Defendant's Motion to Dismiss Plaintiff's Chapter 93A
claim. [ECF No. 9]. For the reasons set forth below, the
Court DENIES Defendant's motion.
FACTS ALLEGED IN THE COMPLAINT
an independent sales representative for manufacturers of
precision motion control solutions, is based in California.
Compl. ¶¶ 1, 11. Defendant, a manufacturer of
photonics and motion control components, is a Michigan
corporation with its principal place of business in
Massachusetts. Id. ¶ 1.
2000, MicroE Systems, Inc. (“MicroE”), a
Massachusetts-based company that designs and manufactures
precision motion control components, hired Plaintiff to serve
as its independent sales agent in California. Id.
¶¶ 14-15. In 2002, Plaintiff and MicroE entered
into a written sales contract, under which Plaintiff would be
paid a 10 percent commission on sales. Id. ¶
16. Later, Defendant acquired MicroE. Id. ¶
Following the acquisition, Defendant continued to employ
Plaintiff as an independent sales representative for
Defendant's line of MicroE products pursuant to the 2002
sales contract. Id. ¶ 18. During the 12-year
period from June 2002 until December 2014, Defendant
repeatedly reduced the commission rate it paid Plaintiff for
its services with regard to MicroE products, but without
executing another written agreement with Plaintiff.
Id. ¶ 23. The parties entered into negotiations
in 2014 and executed a new written sales agreement in
December 2014. Id. ¶¶ 25-26.
2001, Applimotion, Inc., a California-based company that
manufactures precision motors and motion control technology,
also hired Plaintiff to serve as its independent sales
representative in California. Id. ¶ 20.
Although Plaintiff and Applimotion did not enter into a
written sales contract, Applimotion paid Plaintiff
commissions on a monthly basis pursuant to an agreed-upon
commission rate of 10 percent. Id. ¶ 34.
Defendant acquired Applimotion in February 2015. Id.
After the acquisition, Defendant continued to use Plaintiff
as a sales agent for Applimotion products, and continued to
pay the 10 percent commission as previously agreed by
Applimotion and Plaintiff. Id. ¶ 35.
summer of 2015, Defendant rebranded MicroE and Applimotion
products under the “Celera Motion Group” name,
and informed Plaintiff that it wished to renegotiate the
December 2014 agreement and lower the commission rate it paid
Plaintiff on products formerly sold under the MicroE and
Applimotion brands. Id. ¶ 36. In February 2016,
the parties began to discuss Defendant's proposed
commission rates, which Plaintiff believed were too low.
Id. ¶¶ 39-40.
March 2016, Celera Motion's Global Sales Director, Hitesh
Shah, based in Bedford, Massachusetts [ECF No. 11 at 4],
stated in an email to Plaintiff that Defendant would not pay
Plaintiff its commissions for the first quarter of 2016
unless Plaintiff signed a new sales representation agreement
with reduced commission rates. Compl. ¶ 41. After
back-and-forth communications in May 2016 between Plaintiff
in California and Shah in Massachusetts [ECF No. 11 at 4-5],
Defendant paid the first quarter of 2016 commissions for
Plaintiff's sales of MicroE products, but withheld the
first quarter of 2016 commissions for sales of Applimotion
products. Compl. ¶ 50.
17, 2016, Shah wrote in a letter to Plaintiff that no sales
agreement existed between Defendant and Plaintiff with
respect to Applimotion products. Id. ¶ 51. Shah
added that when “an acceptable sales agreement”
between the parties was reached, Defendant would pay
Plaintiff the commissions for the first quarter of 2016
retroactively, based on the newly-negotiated agreement.
Id. ¶ 52. Shah also asserted that Plaintiff was
not performing a number of administrative requirements
pursuant to the parties' December 2014 agreement
concerning MicroE products. Id. ¶ 53.
3, 2016, Defendant sent Plaintiff two notices of termination,
one for MicroE products and another for Applimotion products,
each of which stated that Defendant was terminating Plaintiff
as an independent sales representative “without
cause” effective October 1, 2016. Id.
¶¶ 57-58. Both notices were signed by the President
and General Manager of Celera Motion, Leane Sinicki,
id. ¶ 57, who was based in Bedford,
Massachusetts [ECF No. 11 at 5]. The MicroE termination
notice indicated that the December 2014 Sales Agreement
pertained to only MicroE products. [ECF No. 1 ¶ 59]. The
termination notice for Applimotion products stated that no
written sales contract ever existed regarding Applimotion
products and that Defendant would send Plaintiff
“undisputed sales commissions” on Applimotion
products “consistent with the parties' past course
of dealings” until the termination date, but not
thereafter. Id. ¶¶ 60-62; [ECF No. 11 at
allegedly did not pay Plaintiff commissions on sales of
MicroE products prior to the October 1, 2016 termination date
or on sales that Defendant accepted during the 12 months
following the termination date, in violation of the December
2014 Agreement. Compl. ¶¶ 65-66. Additionally,
Defendant did not pay Plaintiff commissions on sales of
Applimotion products prior to the October 1, 2016 termination
date or on sales Defendant accepted during the 12 months
following the termination date. Id. ¶ 67.
January 2017, Plaintiff contacted Defendant regarding its
unpaid commissions for MicroE and Applimotion products.
Id. ¶ 69. In response, on February 1, 2017,
Shah asserted in an email that Defendant did not owe
Plaintiff any commissions for sales of MicroE products
pursuant to the December 2014 Agreement because Plaintiff had
not given Defendant any Purchase Orders for the products for
“likely years, ” and because Plaintiff did not
“devote resources required by the Agreement to
develop new business.” Id. ¶¶ 71,
73. Additionally, Shah stated that Defendant did not owe
Plaintiff any commissions for sales of Applimotion products
because there was no written agreement concerning the sale of
those products. Id. ¶ 77.
February 10, 2017, Sinicki emailed Plaintiff and reiterated
Shah's positions regarding the unpaid commissions.
Id. ¶¶ 82-85. On February 16, 2017,
Sinicki sent another email in which she repeated the
assertion that Plaintiff was not entitled to any commissions.
Id. ¶ 87.
2, 2017, Plaintiff brought this diversity action alleging
Defendant's violation of the California Independent
Wholesale Sales Representative Contractual Relations Act of
1990, Cal. Civil Code § 1738 (Count I); violation of
Mass. Gen. Laws c. 104 §§ 7-9 (Count II); breach of
contract (Count III); unjust enrichment (Count IV); and
violation of Chapter 93A (Count V). [ECF No. 1]. Plaintiff
asserts that Defendant engaged in “an ongoing practice
to withhold commissions, ” and that this practice
“was developed by senior Novanta ...