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Ipeg, Inc v. Hamilton Avtec

September 13, 2011

IPEG, INC.,
PLAINTIFF,
v.
HAMILTON AVTEC, INC.,
DEFENDANT.



The opinion of the court was delivered by: Judge Nora Barry Fischer

MEMORANDUM OPINION

Pending before the Court is Plaintiff/Counterclaim-Defendant IPEG‟s Motion to Dismiss Counterclaim Count II for Intentional Interference with Contractual Relationships, (Docket No. [18]), raised by Defendant/Counterclaim-Plaintiff Hamilton Avtec, Inc. ("Hamilton") in its Answer, Affirmative Defenses and Counterclaim. (Docket No. 14). The Court has considered IPEG‟s brief in support of its motion to dismiss, (Docket No. 19), Hamilton‟s brief in opposition, (Docket No. 24), and IPEG‟s reply. (Docket No. 25). The motion has been fully briefed and is ripe for disposition. For the following reasons, the motion [18] will be GRANTED.

I.Factual Background

IPEG, d/b/a Conair ("IPEG") brings this action for breach of contract and declaratory judgment. (Docket No. 13 at ¶ 1). IPEG is a Delaware corporation with its principal place of business in Pennsylvania. (Id. at ¶ 3). IPEG claims that Hamilton is a Canadian corporation with its principal place of business in Ontario, Canada. (Id. at ¶ 4). Hamilton denies that it is a Canadian corporation, but admits that its principal place of business is in Ontario. (Docket No. 14 at ¶ 4). Hamilton states that it is organized under the laws of Ontario. (Id. at ¶ 76).

IPEG claims that this Court has subject matter jurisdiction over the parties because they are of diverse citizenship and the amount in controversy exceeds $75,000. (Docket No. 13 at ¶ 5). IPEG also states that this Court has personal jurisdiction over Hamilton pursuant to Pennsylvania‟s long-arm statute, 42 Pa.C.S.A. § 5301, et seq., due to Hamilton‟s business transactions in Pennsylvania. (Id. at ¶ 6).

IPEG is a privately-owned manufacturing and industrial service company that provides high-end equipment, parts, and turnkey services in the plastics manufacturing industry. (Id. at ¶ 8). At various times, IPEG has had a relationship with Hamilton for the commissioned sale of IPEG equipment and parts pursuant to a territorial representative agreement or through Hamilton‟s purchase and independent distribution of IPEG‟s equipment and parts. (Id. at ¶ 11). This "off-and-on" relationship began in the late 1960s. (Docket No. 14 at ¶ 11).

a.The Alleged Representative Agreements

On September 15, 2007 (the "First Representative Agreement") and March 10, 2010 (the "Second Representative Agreement"), IPEG and Hamilton entered into two separate agreements (the "Representative Agreements"), wherein Hamilton was designated as IPEG‟s exclusive sales representative in the Canada (the "Territory") subject to certain exceptions. (Docket No. 13 at ¶ 12-13). According to IPEG, these agreements provide the method by which commissions would be calculated and paid to Hamilton for sales made within the Territory. (Docket No. 13 at ¶ 15). Hamilton was entitled to 25% of sales made outside the Territory, but for which the ultimate destination was within the territory. (Id. at ¶ 16).

The Representative Agreements included a termination provision. This provision provided that, in the event that either party wished to terminate the agreement, that party would inform the other of its reasons and the parties would engage in a 90-day good faith effort to resolve the issue. (Id. at ¶ 18). However, the Representative Agreements provided that they could be terminated with or without cause on 30 days written notice. (Id. at ¶ 19). The Second Representative Agreement also gave IPEG the right to terminate the Agreement upon breach of any agreement by Hamilton. (Id. at ¶ 20). The Second Representative Agreement "will be governed by the laws of the Commonwealth of Pennsylvania." (Id. at ¶ 21).

b.The Alleged Distribution Agreements

The parties also allegedly entered into several distribution agreements (the "Distribution Agreements"). (Id. at ¶ 22). These agreements were dated August 16, 2008 (the "First Distribution Agreement") and February 11, 2010 (the "Second Distribution Agreement"). Both agreements expressly stated that the Representative Agreements would govern the relationship between IPEG and Hamilton, save as expressly provided in the Distribution Agreements. (Id. at ¶ 25).

The Distribution Agreements also granted Hamilton the right to purchase equipment and spare parts from IPEG to resell "for its own account" to customers within the Territory. (Id. at ¶ 26). Such sales were to be FOB IPEG, reduced in price, and payable net 60 days from invoice for equipment and net 30 days from invoice for spare parts. (Id. at ¶ 27).

c.The Disputes

In December 2010, IPEG sought to terminate the agreements due to Hamilton‟s failure to achieve sufficient market penetration or to meet its obligations under the Second Representative Agreement. (Id. at ¶ 29). IPEG claims that Hamilton failed to provide a sufficient sales staff to serve the Territory. (Id. at ¶ 30). IPEG also claims that Hamilton was distributing competing products and that, due to this conflict, Hamilton was not meeting its obligations under the Agreements. (Id. at ¶ 34).

In a letter dated January 28, 2011, IPEG proposed that Hamilton be terminated as sales representative, but that it continue as a distributor. (Id. at ¶ 36). Hamilton rejected this proposal in February 2011, but requested a continuing dialogue. (Id. at ¶ 37). IPEG then noted that the 90-day resolution ...


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