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Bob's Red Mill Natural Foods, Inc. v. Excel Trade, LLC

United States District Court, Ninth Circuit

October 30, 2013

BOB'S RED MILL NATURAL FOODS, INC., Plaintiff/Counter Defendant,
EXCEL TRADE, LLC, Defendant/Counter Claimant.


PAUL PAPAK, Magistrate Judge.

Plaintiff Bob's Red Mill Natural Foods, Inc. ("BRIM"), filed this action against defendant Excel Trade, LLC ("Excel"), on December 4, 2012, seeking this court's declaration that BRM does not owe Excel a commission under the parties' written "Commission Agreement" on any order received by BRM from any of its customers subsequent to the date BRM unilaterally terminated that agreement. On January 31, 2013, Excel filed counterclaims against BRM seeking this court's declaration that, pursuant to the parties' Commission Agreement, BRM owes and will continue to owe Excel commissions on an ongoing basis in connection with orders received by BRM from any of its customers on whose accounts Excel performed services on BRM's behalf during the effective period of the agreement, for so long as such customers continue to place orders with BRM, and in addition alleging BRM's liability both for breach of the Commission Agreement prior to its termination and for anticipatory breach of the agreement from its termination date forward. This court has subject-matter jurisdiction over the parties' claims pursuant to 28 U.S.C. ยง 1332, based on the complete diversity of the parties and the amount in controversy.

Now before the court is BRM's motion (#16) for partial summary judgment, styled as a motion for summary judgment and for partial summary judgment, by and through which BRM seeks summary adjudication of its own declaratory relief claim and of Excel's declaratory relief and anticipatory breach claims. I have considered the motion, oral argument on behalf of the parties, and all of the pleadings and papers on file. For the reasons set forth below, the motion is granted in part and denied in part, as discussed below.


Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A party taking the position that a material fact either "cannot be or is genuinely disputed" must support that position either by citation to specific evidence of record "including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials, " by showing that the evidence of record does not establish either the presence or absence of such a dispute, or by showing that an opposing party is unable to produce sufficient admissible evidence to establish the presence or absence of such a dispute. Fed.R.Civ.P. 56(c). The substantive law governing a claim or defense determines whether a fact is material. See Moreland v. Las Vegas Metro. Police Dept, 159 F.3d 365, 369 (9th Cir. 1998).

Summary judgment is not proper if material factual issues exist for trial. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 318, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995), cert. denied, 116 S.Ct. 1261 (1996). In evaluating a motion for summary judgment, the district courts of the United States must draw all reasonable inferences in favor of the nonmoving party, and may neither make credibility determinations nor perform any weighing of the evidence. See, e.g., Lytle v. Household Mfg., Inc., 494 U.S. 545, 554-55 (1990); Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000).


I. The Parties

BRM is an Oregon Corporation with its principal place of business in Milwaukie, Oregon, and is engaged in the business of manufacturing and selling food products. Excel is a Washington limited liability company with its principal place of business in Seattle, Washington, and is engaged in the business of providing export management services.

II. History of the Parties' Dispute

In the fall of 2004, Robert Agnew, Vice President of sales for BRM, contacted Sally Cox, Excel's principal and at that time its sole employee, to discuss the possibility of BRM hiring Excel to develop and manage its export business, which at that time totaled approximately $180, 000 annually. In the course of their negotiations, Cox expressed concern over the possibility that Excel might develop business on BRIM's behalf and then later be "cut out" of any return on that business development, and Agnew indicated that he "understood and acknowledged that [Excel] should be compensated and protected accordingly."[2] The parties ultimately agreed that BRM would retain Excel to provide export management services.

Agnew requested that Cox prepare a broker agreement to memorialize the parties' understanding. Cox did so, and on November 18, 2004, Agnew signed the instrument prepared by Cox, without modification. That agreement (the parties'"Commission Agreement") provides in hull as follows:

We, Bob's Red Mill Natural Food Inc.[, ] agree to pay Excel Trade Limited a monthly retainer of $1000, or 5% of the total net sales for each calendar month on sales related to export accounts that are managed by Excel Trade Ltd, whichever is greater, for each month beginning Nov. 1, 2004, This agreement is effective beginning with the last half of October 2004 for the amount of $500, and for the full month of November and thereafter.
The above described retainer is effective for one year and shall be renegotiated after one year.
Excel Trade shall receive the commission of 5% on an ongoing basis for all orders related to the described accounts as long as they purchase Bob's Red Mill products even if the above described monthly retainer agreement is not renegotiated at the close of one year. Excel Trade shall provide export management services related to all export accounts for BRM with the exception of Japan which is not covered by this agreement.
Payment of commission shall be made to Excel Trade Limited on a monthly basis.

(Emphasis supplied.) The agreement is signed by Agnew for BRM, but bears no signature nor any space for a signature on behalf of Excel.

Over the course of the next approximately 8 years, Excel actively managed BRM's export business, growing BRM's overseas sales from approximately $180, 000 annually to approximately $4 million annually by 2012, and growing BRM's overseas markets from three countries to over sixty countries over that time period.

On October 31, 2012, BRIM sent Excel a letter stating that "as of November 30, 2012, there would] be a dissolution of the [Commission] [A]greement between [BRM] and Excel..." BRM's letter indicated that BRM would pay Excel "commissions on all orders received [by BRM] prior to December 1, 2012."

On November 1, 2012, counsel for Excel wrote to BRM indicating that Excel interpreted the parties' Commission Agreement of November 2004 as providing that Excel would continue to receive a 5% commission on sales made to accounts that had previously been managed by Excel on BRM's behalf, including after the termination of the agreement, on an ongoing basis, for so long as the BRM clients in question continued to purchase BRM products. The parties failed to resolve their dispute over ...

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