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Gas Products Corporation v. BTU Marketing, LLC

United States District Court, D. Colorado

September 21, 2017

GAS PRODUCTS CORPORATION, Plaintiff/Counter Defendant,
v.
BTU MARKETING, LLC, and MONTIGO DEL RAY CORPORATION, Defendants/Counter Plaintiffs.

          ORDER

          MICHAEL E. HEGARTY, UNITED STATES MAGISTRATE JUDGE.

         Defendants, BTU Marketing LLC and Montigo Del Ray Corporation, seek summary judgment on all three of Plaintiff, Gas Products Corporation's ("GPC") remaining claims. GPC's claims arise out of Defendants' alleged scheme to obtain the contact information of GPC's customers and sell products directly to them. The Court finds that disputed issues of fact remain on each of GPC's causes of action.

         Additionally, Montigo seeks summary judgment on its counterclaim for breach of contract, which arises out of GPC's failure to pay for goods Montigo delivered to GPC. Because GPC does not dispute Montigo's evidence supporting the counterclaim, the Court enters judgment in favor of Montigo on this claim.

         Accordingly, the Court grants in part and denies in part Defendants' Motion for Summary Judgment.

         BACKGROUND

         I. Factual Background

         The evidence submitted by the parties reveals the following facts viewed in the light most favorable to GPC, who is the non-moving party in this matter.

         1. Defendant Montigo Del Ray Corporation ("Montigo") is a fireplace manufacturer started by DanBinzer in approximately 1984. Dep. of DanBinzer, June 29, 2017, 10:20-11:5, ECF No. 42-1.

         2. Montigo produces off-the-shelf and custom-designed fireplaces. Id. at 33:14-34:7. The custom-designed products are called "C-View fireplaces." Mot. for Summ. J. 3; Dep. of Ray Scott, March 17, 2017 ("Scott dep."), 40:17-:18, ECF No. 42-2.

         3. Montigo uses manufacturer's representatives to sell its fireplaces. Mot. for Summ. J. 3; Scott dep. 37:1-40:18.

         4. The duties of manufacturer's representatives include finding purchasers of Montigo's products and ordering the fireplaces for customers in a given geographic region. Mot. for Summ. J. 3; Scott dep. 37:9-:16.

         5. Montigo paid its manufacturer's representatives a five percent commission on all sales within a given representative's region. Mot. for Summ. J. 3; Scott dep. 180:17-: 19.

         6. After Ray Scott formed Plaintiff GPC in the 1980s, GPC became a manufacturer's representative for many companies selling a variety of gas-related products. Mot. for Summ. J. 3-4; Scott dep. 8:6-9:25.

         7. GPC generally employed between one and two individuals other than Mr. Scott. Scott dep. 237:25-41:12, ECF No. 45-2.

         8. One of these individuals, T.J. Hines, worked for GPC as an independent contractor. Id. at 239:9-:19. Mr. Hines assisted with GPCs general sales. Id. at 19:16-20:7.

         9. In 1999 or 2000 GPC became Montigo's manufacturer's representative for Colorado, Wyoming, Montana, and Utah. Mot. for Summ. J. 4; Scott dep. 34:1-36:5.

         10. For non-custom fireplaces, Montigo would generally ship the product to the customer and then collect payment from GPC. Scott dep. 53:12-15, ECF No. 42-2.

         11. As such, GPC had a credit line with Montigo that changed throughout the parties' business relationship. Id. at54:13-:21.

         12. When GPC ordered a C-View fireplace for a customer, it filled out a Montigo form with the customer's shipping and contact information. Scott dep. 40:10-42:9; ECF No. 45-2. At the time of the order, GPC paid Montigo a deposit. Scott dep. 53:23-54:10. Montigo collected the remainder of the balance before shipping the custom fireplace. Id.

         13. GPC asserts the parties agreed that if GPC submitted a C-View order form, Montigo would not sell directly to that customer. Id. at 169:18-:24.

         14. According to GPC, in approximately 2001, it began warehousing Montigo's products. Scott dep. 45:6-46:1, ECF No. 45-2. This allowed GPC to deliver the product directly to distributors, retailers, and home builders. Id. Additionally, it permitted GPC to install the product for customers located near its warehouse. Id. at 46:6-: 17.

         15. When GPC began warehousing Montigo's fireplaces, it agreed that it would no longer sell any other manufacturer's products. Scott dep. 18:21-:25.

         16. GPC maintained a list of all the customers to which it sold products. Scott dep. 140:9-: 19. The list included the customer's name, ID, telephone number, and type of product purchased. Id. at 141:2-42:10.

         17. The list included customers that purchased products from GPC both before and after GPC began doing business with Montigo. Id. at 31:22-32:5.

         18. In approximately 2009, GPC began to struggle financially. Mot. for Summ. J. 5; Scott dep. 56:21-:25, ECF No. 42-2. As a result, GPC maintained past due balances with Montigo, which reached up to $110, 000.00. Mot. for Summ. J. 5; Scott dep. 57:l-:8.

         19. According to GPC, it agreed to pay an extra ten percent on every order it had with Montigo to reduce its past due balance. Scott dep. 67:22-:25.

         20. In June 2012, Montigo formally terminated GPC as its manufacturer's representative. Mot. for Summ. J. 5; Scott dep. 180:3-7; ECF No. 42-9. However, GPC continued selling Montigo's products as a general distributor and customer. Scott dep. 171:1-: 12; ECF No. 42-9.

         21. Defendant BTU Marketing, LLC ("BTU"), which is owned by Dave Fredericks, replaced GPC as Montigo's manufacturer's representative. ECF No. 42-9; Scott dep. 181:1-:25; Dep. of Dave Fredericks, June 27, 2017 ("Fredericks dep."), 22:18-: 19, ECF No. 42-3.

         22. On September 20, 2012, Mr. Scott sent an email to Scott Baron, a Montigo employee, to voice his concern about BTU selling C-View fireplaces in the Colorado market. ECF No. 42-11.

         23. Also in September 2012, Mr. Fredericks met with Mr. Scott to discuss the relationship between GPC and BTU. Fredericks dep. 113:7-:25; Scott dep. 209:3-:18. According to GPC, Mr. Fredericks told Mr. Scott that BTU would not "go after [GPC's] customers, period." Scott dep. 209:17-: 18.

         24. GPC claims it subsequently began noticing it was losing customers. Scott dep. 211:5-:7.

         25. According to GPC, Mr. Scott contacted Mr. Fredericks in 2015 regarding GPC's decline in sales. Scott dep. 211:5-:20. Mr. Fredericks told Mr. Scott that Montigo was giving GPC's customer information to BTU and telling BTU to "go get them." Id. at 216:14-:19.

         26. GPC stopped purchasing products from Montigo in May 2015. ECF No. 42-20, at 79. After making a payment to Montigo on May 18, 2015, GPC had a remaining accounts payable balance of $9, 583.39. Id.

         27. On March 17, 2016, Montigo sent GPC a letter attempting to collect GPC's outstanding balance. ECF No. 15.

         II. ...


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