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Strategic Learning, Inc. v. Wentz

November 29, 2006


The opinion of the court was delivered by: Judge Conner


Presently before the court are: (1) the motion for summary judgment (Doc. 15), filed by defendants Thomas Wentz and Corporate Performance Systems (collectively "defendants"), and (2) the motion for partial summary judgment (Doc. 22), filed by plaintiff Strategic Learning, Inc. ("Strategic"). For the reasons that follow, summary judgment will be granted in part and denied in part.

I. Statement of Facts

A. The Parties

Strategic is a business consulting organization that specializes in developing strategic initiatives and training employees to implement those initiatives. (Doc. 14 ¶¶ 1-2.) As a component of its business, Strategic entered into a contract to become an "authorized representative" of Wilson Learning Corporation ("Wilson"), a company that develops business consulting programs and markets them through such representatives. (Doc. 16 ¶¶ 3, 4; Doc. 29 ¶¶ 3, 4; see also Doc. 17, Ex. 12.)

Defendant Corporate Performance Systems ("CPS") is also a business consulting organization and an authorized representative of Wilson. (Doc. 16 ¶ 1; Doc. 29 ¶ 1; Doc. 32, Ex. J at 1.) Defendant Thomas Wentz ("Wentz") is CPS's president and sole shareholder. (Doc. 16 ¶ 1; Doc. 29 ¶ 1.)

B. The Initial Contract Between the Parties

In 2001, Strategic entered into discussions with York International Corporation ("York") about the possibility of conducting a sales training program for the company. (Doc. 13, Ex. 3 at 1.) York agreed to permit Strategic to conduct a pilot sales training program in August 2001. (Doc. 13, Ex. 5 at 4.) The pilot program was to involve a Wilson product called "Counselor Salesperson." (Doc. 16 ¶¶ 4, 6; Doc. 29 ¶¶ 4, 6.) To facilitate the program, Strategic enlisted Wentz.*fn1 (Doc. 16 ¶ 6; Doc. 29 ¶ 6.) Pursuant to an oral contract, Strategic agreed to provide York with written materials from Wilson, and Wentz agreed to facilitate the program for $2,500 per day.*fn2 (Doc. 16 ¶ 6; Doc. 29 ¶ 6.) Wentz facilitated the pilot program on August 21-23, 2001, and Strategic paid Wentz the agreed-upon fee. (Doc. 16 ¶ 6; Doc. 29 ¶ 6.) Thereafter, Wentz continued to facilitate programs at York,*fn3 and Strategic continued to pay Wentz.*fn4 (Doc. 16 ¶ 9; Doc. 17, Ex. 3; Doc. 29 ¶ 9.)

C. The Dispute Between the Parties

1. Wentz's "Independent" Consulting Work

In November 2002, Wentz facilitated a sales training program for York without Strategic's involvement. (Doc. 13, Ex. 7.) For this program, Wentz billed York directly, at a rate of $5,000 per day. (See Doc. 13, Ex. 7.) Wentz maintained that this program did not involve Wilson products and that, as a result, he was free to conduct it without Strategic's involvement. (Doc. 17, Ex. 5 at 5; Doc. 31 ¶ 31; Doc. 32, Ex. J ¶ 32.) Wentz also requested that he be permitted to continue to provide such independent consulting services to York and offered to pay Strategic a "finder fee" for such work. (Doc. 32, Ex. J at 36.) Strategic countered that, pursuant to the parties' oral agreement, Wentz was neither authorized to bill York directly nor to work with York independently. (Doc. 17, Ex. 10 at 4.) As a result, Strategic maintained that it was entitled to reimbursement from Wentz for the November 2002 session. (Doc. 17, Ex. 5 at 1.)

2. Wentz's Request for Additional Compensation

According to Wentz, York became dissatisfied with the program's price and inquired whether Wentz would be able to conduct the program for a lower price if Strategic were not involved. (Doc. 17, Ex. 4 at 5.) Believing York to be a "protected customer" of Strategic,*fn5 Wentz responded that he could not. (Doc. 17, Ex. 4 at 5.) Wentz, however, told Strategic about this conversation and suggested that Strategic lower its prices to meet York's needs. (Doc. 17, Ex. 4 at 5.) Strategic responded by explaining that its prices reflected the provision of customized materials, including "some original Tom Wentz intellectual capital," to York. (Doc. 17, Ex. 4 at 2.)

Thereafter, Wentz became concerned that Strategic had been charging York a premium for materials that Wentz had "customized" at his own expense.*fn6

(Doc. 16 ¶ 10; Doc. 17, Ex. 5 at 4-5.) Wentz also felt that he had been acting both as a sales associate and as a facilitator and should be compensated accordingly. (Doc. 17, Ex. 5 at 4-5.) Therefore, Wentz submitted a proposal to Strategic in which he requested $35,290 in additional compensation for work he had previously completed.*fn7 (Doc. 17, Ex. 5 at 4-5.) Strategic responded with an offer of $15,000, which Wentz swiftly rejected. (Doc. 17, Ex. 5.)

3. The Parties' Double Billing of York

In February and March of 2003, Wentz provided five days of facilitation services to York. (Doc. 16 ¶ 15; Doc. 29 ¶ 15.) York paid Strategic $5,000 per day for these facilitation services; however, Strategic did not pay Wentz, intending to "offset the payment due" for the independent consulting session Wentz had previously conducted for York. (Doc. 16 ¶¶ 16-17; Doc. 17, Ex. 11 at 36; Doc. 29 ¶¶ 16-17.) Wentz responded by billing York directly for the completed work. (Doc. 16 ¶ 18; Doc. 17, Ex. 7.) This double billing created some discontentment at York, so York again proposed that Wentz facilitate all future programs without Strategic's involvement. (Doc. 13, Ex. 9.) York also informed the parties that it would contact Wilson directly if necessary to resolve the dispute.*fn8 (Doc. 13, Exs. 9, 10 at 2.) Finally, York suggested a compromise position - all future billing was to be separated, with Strategic billing for materials and Wentz billing for facilitation. (Doc. 17, Ex. 8 at 1.) However, Strategic refused to permit direct billing by Wentz. (Doc. 17, Ex. 8 at 3, 6; Ex. 10 at 4.) As a result, York contacted Wilson to request the written materials directly from them, and Wilson complied. (Doc. 17, Ex. 9.)

4. Wentz's Attempts to Collect

Wentz repeatedly asked Wilson for "help" in collecting the money that he alleged Strategic owed him. (Doc. 14 ¶ 42; Doc. 31 ¶ 42.) On November 6, 2003, Wentz asked Wilson to deduct his fee from commission fees that Wilson owed Strategic. (Doc. 13, Ex. 14 at 1.) Eight days later, Wentz asked Wilson to put a "credit hold" on any requests for supplies made by Strategic. (Doc. 13, Ex. 13; Doc. 14 ¶ 41; Doc. 31 ¶ 41.) Wentz also asked Wilson not to give Strategic any sales awards in light of their "unethical practices." (Doc. 13, Ex. 15; Doc. 14 ¶ 43; Doc. 31 ¶ 43.)

Several months later, Wilson notified Wentz that he had violated his representative agreement with Wilson in several respects, including attempting to sell a Wilson product to a "protected customer" of another Wilson representative. (Doc. 14, Ex. A; 31 ¶¶ 46-48.) Wentz denied these allegations. (Doc. 14, Ex. B; Doc. 31 ¶¶ 46-48.) Wilson advised Wentz to terminate "any discussions with the York account about [Wilson] other than as permitted by the Protected Account Representative." (Doc. 14, Ex. D.) Wilson also advised Wentz that York employees would not be permitted to attend any "open or public Counselor Salesperson seminars" that he chose to conduct. (Doc. 14, Ex. D.)

D. Aftermath

In March 2004, Strategic conducted a pilot presentation of a new version of Counselor Salesperson at York using a facilitator other than Wentz. (Doc. 16 ¶ 23; Doc. 29 ¶ 23; Doc. 31 ¶ 58.) Thereafter, York and Strategic discussed organization-wide implementation of this new version. (Doc. 16 ¶ 24; Doc. 29 ¶ 24.) However, such organization-wide implementation has not occurred. (Doc. 14 ¶ 58.) In addition, York has advised that it would prefer to use Wentz to facilitate future programs. (Doc. 17, Ex. 10 at 7.) However, such future programs have been put "on hold" because of the unrest between Strategic and Wentz. (Doc. 13, Ex. 8 at 1.)

Both Strategic and Wentz remain authorized representatives of Wilson. (Doc. 16 ¶ 22; Doc. 29 ¶ 22.) Wentz continues to conduct "open" Counselor Salesperson seminars, which are not targeted specifically to York. (Doc. 31 ¶ 57.) Strategic has been fully paid for all ...

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