JANUARY 25, 1995
Today we consider Defendants' Motion for Summary Judgment on their Counterclaim and Plaintiffs' Amended Complaint.
The litigation arises out of events occurring between 1991 and 1994. In early 1991, Iversen Baking Company entered into a Services Agreement with Weston.
According to the terms of the contract, the parties agreed that Iversen would "lease" its President, David Collins, to Weston for two years to act as the president of Stroehmann Bakeries, Inc., a Weston subsidiary. Under the terms of the Services Agreement, Iversen was to supply Collins as an independent contractor on an exclusive basis to Stroehmann; in exchange for Collins's services, Weston was to pay Iversen a flat fee every month.
At the same time the parties entered into the Services Agreement, they also signed a Stock Agreement. This contract required Weston to purchase a certain amount of Iversen stock, which it did. The contract also provided that upon a certain event, Iversen would be obligated to repurchase the stock from Weston at the original sales price.
In 1992, Weston and Collins signed a Long Term Compensation Agreement (LTC Agreement) which, in consideration for Collins's continued employment and services to Stroehmann, provided for additional compensation based on Stroehmann's income over a five year period. The LTC Agreement contains an arbitration clause as well as a clause captioned "Termination." Much of the current litigation concerns those two clauses.
Summary Judgment Standard
In considering a motion for summary judgment, a court must consider whether the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show there is no genuine issue of material fact, and whether the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The court must determine whether the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
In making this determination, all of the facts must be viewed in the light most favorable to the non-moving party and all reasonable inferences must be drawn in favor of the non-moving party. Id. at 256. Once the moving party has met the initial burden of demonstrating the absence of a genuine issue of material fact, the non-moving party must establish the existence of each element of its case. J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1531 (3d Cir. 1990), cert. denied, 499 U.S. 921, 113 L. Ed. 2d 246, 111 S. Ct. 1313 (1991) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)).
Plaintiffs have admitted liability under Defendants' counterclaim. Accordingly, summary judgment will be granted on the claim. Plaintiffs, however, argue that any amounts it owes should be set-off against amounts due to it from Defendants. This question will be reserved for trial or for more complete briefing by the parties.
2. LTC Agreement's Arbitration Clause
Defendants' first, and overarching, argument is that any claims based on the LTC Agreement are barred because of the arbitration clause within the contract. The arbitration clause states:
The exclusive forum for any dispute, controversy, or claim arising out of or relating to any provision of this Agreement, including termination of the Agreement, shall be by arbitration . . . .