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Mele v. TSE Systems

May 27, 2010


The opinion of the court was delivered by: Juan R. Sánchez, J.


Defendant TSE Systems, Inc. (TSE) asks this Court for summary judgment against Plaintiff Samuel M. Mele. Mele's sole remaining claim in this action is for breach of contract. TSE argues if this Court interprets the contract's plain language and applies the parol evidence rule, Mele is precluded from recovery. This Court agrees the language of the contract bars Mele's claim for relief and will grant TSE's motion for summary judgment.


Mele is an independent salesman and the sole proprietor of Stanton Sales, a business that contracts with manufacturers and distributors to sell medical and scientific supplies to universities and research laboratories. Mele brings claims against two defendants, TSE and TSE Systems, GmbH (TSE, GmbH).*fn1 TSE, GmbH is a German company which develops and manufactures animal testing equipment. TSE is a fully owned subsidiary of TSE, GmbH and distributes TSE, GmbH's products in North America.

On August 1, 2005, Mele, on behalf of Stanton Sales, signed a TSE Systems, Inc. Manufacturers' Representative Agreement (the Agreement) which appointed Stanton Sales as a "non-exclusive sales commission representative for Products in the Northeast and Southeast territory."*fn2 Agreement at 1. As a non-exclusive sales commission representative, Mele agreed to "perform primarily as a sales and market development specialist, to promote sales growth of TSE products in the Territory and to be the primary, but not exclusive, interface with the customers for purposes of developing, securing, and servicing the sale of Product at accounts in the Territory."*fn3

Agreement at 4. The Agreement obligated TSE to instruct Mele regarding the features and technology of TSE, GmbH products, and to provide product information and price lists free of charge, provide the names of prospective accounts within the Territory, and technical support. Id.

TSE agreed to pay Stanton Sales a 10% commission of the net invoice value for all sales to accounts with a billing address within Stanton Sales's territory, provided Stanton Sales was "the primary or sole party responsible for achieving the sales."*fn4 Agreement at 2. The Agreement states Mele may be eligible for sales he made outside his territory and that those sales would be evaluated on a case-by-case basis.*fn5 The Agreement further states Mele would receive his commission following TSE's receipt of the customer's payment, and Mele would not receive a commission for orders placed after Mele's contract with TSE was terminated.

When TSE began its relationship with Stanton Sales, it also offered Mele a 5% commission for sales pending at the time of the Agreement, as an incentive for Mele to begin to develop client relationships. TSE credited Mele with a 5% commission on pending sales if Stanton Sales "contributed bona fide efforts to close the sale." Agreement at 3. This introductory commissions policy expired on March 31, 2006. Id. After this initial period, the Agreement states TSE would only pay commissions to a sales person who acted as the sole or primary agent on a sale.

The parties dispute Mele's successfulness as a representative of TSE products. TSE's President, Jim Marinik, testified that Mele, through Stanton Sales, was not a successful sales representative. Marinik contends Mele only created one new client relationship for TSE and that, instead of developing new clients, Mele would wait until TSE developed a client relationship and then try to add additional sales to those clients to earn his commissions. TSE further states it had trouble communicating with Mele, Mele did not take initiative as a salesperson or follow up on clients' requests, and Mele never became adequately knowledgeable about TSE's products. In August 2007, TSE hired Robert Tice as a Vice President of Sales and Market Development. Tice was charged with working with Mele to improve Stanton Sales's performance. Tice and Mele had a number of conflicts; most notably, Mele refused to follow the commissions reporting system TSE implemented.

The initial term of the Agreement was August 1, 2005, to March 31, 2006. The Agreement provided for 12-month contract extensions at the discretion of TSE.*fn6 TSE extended this Agreement twice. The Agreement stated TSE would give Mele 60 days notice, before the end of each fiscal year, of its intention to either extend or terminate the Agreement. With regard to renewing the Agreement for the term beginning April 1, 2008, TSE says its Board voted not to renew Stanton Sales's contract because of the hostile, unproductive relationship which developed between Mele and TSE. On January 28, 2008, TSE informed Mele that his Agreement would not be renewed and would formally terminate on March 31, 2008. This letter stated, Mele would "be paid commissions for any business you have been assigned and worked [on] and for which TSE has received a Purchase Order prior to the effective termination date of March 31, 2008, and for which TSE receives payment, per TSE's commission policy." Letter from Robert Tice and James Marinik to Sam Mele, Stanton Sales, January 24, 2008, Ex. 14 to Pl.'s Opp. to Summ. J.

Mele filed the instant lawsuit on January 13, 2009, bringing claims against TSE, GmbH for civil conspiracy, piercing the corporate veil, and intentional interference with business relations, and claims against TSE for breach of contract, intentional interference with business relations, fraud, civil conspiracy, piercing the corporate veil, and breach of the implied covenant of good faith and fair dealing. On March 23, 2009, TSE filed a motion to dismiss. On May 12, 2009, this Court granted TSE's motion to dismiss Counts II, IV, VI, and VII of the complaint.*fn7 On May 14, 2009, the Court amended its May 12, 2004 Order to include dismissal of Count V of Mele's complaint, as this Count was inadvertently omitted in the original order. On May 14, 2009, TSE, GmbH filed a motion to dismiss. On June 15, 2009, this Court dismissed Counts VI and VII for civil conspiracy and piercing the corporate veil against TSE, GmbH . Following disposition of these motions, Mele maintained claims against TSE for breach of contract and against TSE, GmbH for intentional interference with business relations. After the close of discovery, TSE and TSE, GmbH filed motions for summary judgment.*fn8


Summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). On a motion for summary judgment, a court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party's favor. Doe v. County of Centre, 242 F.3d 437, 446 (3d Cir. 2001). "Facts must be viewed in the light most favorable to the nonmoving party only if there is a 'genuine' dispute as to those facts." Ricci v. DeStefano, 120 S.Ct. 2658, 2677 (2009) ; see id. ( "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.") (citations omitted).

The moving party "bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed. R. Civ. P. 56(c)). The nonmoving party must then "go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, ...

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