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Mendicino v. Lotus Orient Corp.

October 19, 2010


The opinion of the court was delivered by: Dalzell, J.


Plaintiffs Jeffrey Mendicino and his company, Jeffrey Mendicino, Inc. ("JM Inc."), formerly an independent contractor sales representative for defendant Lotus Orient Corp. ("Lotus"), have filed this breach of oral contract action against Lotus, its President, Jing Wu, and its Vice-President, Linda Hillario, for failing to pay them at least $100,000 in commissions. Plaintiffs sue Lotus for (1) breach of contract (Count I), (2) a violation of Pennsylvania's Commissioned Sales Representative Act (Count II), (3) unjust enrichment (Count III), and (4) an accounting (Count VI). Plaintiffs sue defendant Hillario for intentional interference with contractual relations (Count IV), and defendant Wu for detrimental reliance (Count V).

Defendants move (1) to dismiss defendants Hillario and Wu from this action pursuant to Fed. R. Civ. P. 12(b)(2), (2) for a more definite statement with regard to the jurisdictional minimum pursuant to Rule 12(e), and (3) for a more definite statement regarding the existence of a contract between plaintiffs and defendant Lotus. In the alternative, defendants move to dismiss the complaint under Fed. R. Civ. P. 12(b)(6), move under Rule 12(b)(1) to dismiss either Jeffrey Mendicino or JM Inc. from this action, and move under Rule 12(b)(6) to dismiss Count VI. For the reasons set forth below, we will grant defendants' motion in part and deny it in part.

I. Factual Background

Defendant Lotus is a manufacturer, importer and wholesaler of bridal gowns and formal wear which it sells to retailers (the "Lotus Gown Lines"). Compl. at ¶ 8. Plaintiff Mendicino, through his company, JM Inc., has been an independent contractor sales representative for Lotus, selling the Lotus Gown Lines to retailers "on and off" since 1992. Id. at ¶¶ 8-10.

In 1997, Lotus terminated Hillario. Id. at ¶ 15. Six months after Lotus dismissed her, Lotus hired a new Sales Manager, Shawn Chen. Id. at ¶ 18. One year after Chen began working for Lotus, Mendicino began representing a couture wedding gown product line, Eve of Milady, which plaintiffs contend did not compete with Lotus. Id. at ¶ 19. According to plaintiffs, it is common for independent contractor sales representatives to represent more than one line at a time. Id. at ¶ 14. In January of 2001, Chen terminated JM Inc.'s contract with Lotus. Id. at ¶ 20.

Three months later, Lotus terminated Chen's employment and offered Mendicino his sales representative position back.

Id. at ¶ 21. Mendicino declined, but in December of 2003, Lotus reached out to him again, offering him his territory back. Id. at ¶¶ 22-23. Mendicino agreed to return on the condition that he could continue to represent other non-competing product lines. Id. at ¶ 24. Lotus agreed and sent Mendicino a Sales Representative Agreement, which Mendicino marked up but never signed. Id. at ¶¶ 25-28.

In February of 2004, Mendicino began working for Lotus again -- allegedly pursuant to an oral contract -- never having executed any written contract. Id. at ¶ 29. Mendicino avers that he and Lotus agreed "as outlined in the Proposed, but unexecuted, Sales Representative Agreement" (that is, orally) that Mendicino would have the exclusive right to sell the Lotus Gown Lines in Pennsylvania, Maryland, Delaware, New Jersey, New York, and Washington D.C., and that Lotus would pay Mendicino eight percent of the net sales amount for all gowns sold and then shipped to that territory. Id. at ¶ 30. Lotus agreed to pay Mendicino by the fifteenth of the second month following shipment. Id. Mendicino also avers that he, Lotus, and Lotus President Wu "further agreed, as stated in the unexecuted Proposed Sales Representative Agreement, and per Defendant Lotus Orient's general corporate policy, that either party could terminate the agreement by giving the other sixty (60) days written notice, and that, in the event of termination, Plaintiffs would be paid on all orders made prior thereto, even if shipment was made thereafter." Id. at ¶ 31.

After Lotus terminated Hillario in 1997, Hillario went to work for Victoria Bridal, a competitor of Lotus. Id. at ¶ 34. While Hillario was working for Victoria Bridal, Hillario approached Mendicino and asked him to leave Lotus and work exclusively for Victoria Bridal. Id. at ¶ 35. Mendicino declined Hillario's offer, which, Mendicino now contends, caused bad blood between them. Id. at ¶ 36.

Between 2004 and 2008, Mendicino's sales for Lotus increased and his territory expanded. Id. at ¶¶ 37-39. In January of 2007, Lotus began paying JM Inc. an additional $700 per month beyond the amount of Mendicino's commissions, as a consulting fee. Id. at ¶ 40.

In December of 2007, Lotus rehired Hillario as a Vice-President. Id. at ¶ 42. Within the first week of her rehire, Hillario contacted all of Lotus's sales representatives except Mendicino. Id. at ¶ 44. After waiting a week, Mendicino contacted Hillario "to welcome her back" at which time Hillario was "extremely cold and abrupt." Id. at ¶ 45. Mendicino avers that a number of current and former employees of Lotus told him that Hillario was "making it clear to everyone that she was trying to get Plaintiff's sales representative arrangement with Defendant Lotus Orient terminated." Id. at ¶ 47.

In February of 2009, plaintiffs contend that Hillario stopped paying JM Inc. the $700 monthly consulting fee. Id. at ¶

58. Mendicino, nervous that his job was in jeopardy, asked Wu whether Lotus intended to terminate him. Id. at ¶ 61. In June of 2009, Wu allegedly reassured Mendicino that Lotus did not intend to terminate its agreement with JM Inc. Id. But on June 16, 2009, Mendicino received a letter from Hillario "releasing" him "from Defendant Lotus" because "sales had fallen far below expectations." Id. at ¶ 62. Hillario also informed Mendicino that he would be paid commissions only for those products shipped through August 31, 2009 on orders received by June 30, 2009. Id.

On June 21, 2009, Mendicino sent Wu and Hillario an email asking that Lotus abide by the terms to which Mendicino and Wu had (allegedly) orally agreed, including that he be (1) given sixty days' notice of termination, per the company policy, (2) paid commissions on all orders received as of August 31, 2009, (3) compensated for the orders received from a show in July of 2009 for customers within his territory, (4) given an order report that would allow him to confirm what commissions were still due and owing, and (5) paid back for all accounts that had paid beyond 180 days from the date due. He also sought payment for past owed commissions of $15,000 still due him for adjustments made to sales between 2004 and 2007. Id. at ¶ 63. Lotus, Wu, and Hillario did not respond to Mendicino's email. Id. at ¶ 64.

On July 2, 2009, Lotus replaced Mendicino with a new sales representative (who happened to be Mendicino's estranged brother), and gave him Mendicino's accounts. Id. at ¶ 65. On December 15, 2009, Mendicino received a check from Lotus in the amount of $3,109.08 for "08/2009 final commissions [sic]." Id. at ¶ 66. Mendicino avers that he did not cash the check ...

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