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Perfac, Inc. v. Centoco Manufacturing Corporation

United States District Court, D. Minnesota

March 26, 2014

PERFAC, INC., d/b/a Performance Sales and Marketing Group, Plaintiff,
CENTOCO MANUFACTURING CORPORATION, a Canadian Corporation, Defendant.

Steven C. Moore and Galen E. Watje, WATJE & MOORE, LTD., for plaintiff.

Joel T. Wiegert and Erin D. Doran, MEAGHER & GEER, PLLP, for defendant.


PATRICK J. SCHILTZ, District Judge.

Defendant Centoco Manufacturing Corporation ("Centoco") manufactures toilet seats. Centoco appointed plaintiff Perfac, Inc. ("Perfac") to act as a non-exclusive sales representative. Under the parties' agreement, Perfac earned commissions when it sold Centoco products to retailers. Perfac alleges that it sold Centoco toilet seats to Menard, Inc. ("Menards") in 2010, but that Centoco refused to pay the commissions owed to Perfac on that sale. Perfac brought this lawsuit against Centoco to recover those commissions.

This matter is before the Court on Centoco's motion for summary judgment. Centoco argues that Perfac is not owed commissions because Perfac was not authorized in writing to sell the line of toilet seats that Menards bought and because Perfac had nothing to do with that sale. The Court agrees with the latter argument, and thus grants Centoco's motion for summary judgment.


Taking the record in the light most favorable to Perfac, a jury could find the following:

Generally speaking, Centoco sells the toilet seats that it manufactures in three ways. First, Centoco maintains its own brand - Peter Anthony Designs ("Peter Anthony") - and it attempts to sell Peter Anthony seats to retailers. Second, Centoco manufactures toilet seats for other companies, who market those seats under their own brands to retailers. Third, Centoco manufactures toilet seats directly for retailers, who sell the seats in their stores under their own brands. Thus, a particular retailer may sell several brands of toilet seats - some under its own brand, some under the Peter Anthony brand, and some under the brands of other companies - and all of the toilet seats might be manufactured by Centoco.

In 2006, Centoco and Perfac entered into a Retail Sales Agency Agreement ("the Agreement").[1] See Wiegert Aff. Ex. D ("Agreement") [ECF No. 32-1 at 19-25]. Under the Agreement, Perfac was appointed "for the solicitation of Customer orders for the Products that have been approved in writing by [Centoco]...." Id. § 2.0. Centoco agreed to pay commissions "of three (3%) percent of the Net Sales Amount of Products sold by [Perfac]...." Id. § 10.0. "Products" are defined as "any and all original or replacement toilet seats or other similar or like goods offered by [Centoco] for sale." Id. § 1.0. The Agreement includes a choiceof-law clause, under which Ontario law governs "any controversy arising under or in relation to this Agreement...." Id. § 15.0.

Menards was among the retailers to which Perfac was authorized to sell "Products." See Second Hazlett Aff. ¶ 2 [ECF No. 38]. Perfac attempted to sell the Peter Anthony brand toilet seats to Menards, but Perfac was unsuccessful in doing so. Id. In January 2009, a representative of Menards explained to Centoco and Perfac that Menards preferred to carry brands that were more familiar to consumers than the Peter Anthony brand. The Menards representative cited as an example the Eljer brand of toilet seats marketed by American Standard Brands ("American Standard"). Id. ¶ 4.

Immediately after this conversation with the Menards representative, Kevin Parent (Centoco's Global Sales and Marketing Manager) and Kirk Hazlett (Perfac's owner and president) formulated a plan under which Centoco would manufacture toilet seats under the Eljer brand and sell those seats to Menards. Id. Perfac contends that Parent promised Hazlett at that time that, if Centoco was successful in selling Eljer toilet seats to Menards, Centoco would pay Perfac a commission on those sales. See Hazlett Dep. 29-30 [ECF No. 37-3]. This plan, says Perfac, is memorialized in a series of April 2009 emails between Centoco, Perfac, and Menards:

• On April 7, 2009, Centoco's Account Manager Matt Hennin received an email from Menards in which Menards gave Centoco the contact information for a representative of American Standard. Later that day, Hennin told Parent that "Eljer wants to do this they are waiting on us." Parent Dep. Ex. 4 at 1.
• On April 9, 2009, Hennin emailed Menards with "the special Eljer brand quote." Parent Dep. Ex. 5 at 1. Hazlett was copied on that email. Id.
• Over the following week, Parent, Hennin, and Menards' representative Chuck Surges emailed back and forth about various quotes for various toilet seats, information about discounts, and comparisons to other products. See Parent Dep. Exs. 6-8. The email header for all of these messages is "RE: Centoco Quote for Eljer label." Id. Again, Hazlett was copied on each of these messages.
• On April 13, 2009, Parent asked Hazlett to "follow up" with Surges. Parent Dep. Ex. 9 at 1. Parent also stated that he believed "we are well positioned to become a significant supplier to Menards with the Eljer private label program." Id.
• Finally, on April 14, 2009, Hazlett emailed Parent that "per your request, I have been in contact with both Matt Hennin and Chuck Sturgis [sic], of Menards; I will make sure to get Matt abreast of any developments." Parent Dep. Ex. 10 at 1. Parent responded, "Thank you ...

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