Court Opinion

ID: 2666214
Source: CourtListenerOpinion
Date Created: 2014-04-04 08:43:12.964983+00
Date Added: 2024-06-11T12:39:57.459610
License: Public Domain

UNITED STATES DISTRICT COURT
                       FOR THE DISTRICT OF COLUMBIA

                                   )
AMERICA’S CHOICE, INC.,            )
                                   )
                  Plaintiff,       )
                                   )    Civil Action No. 07-428(EGS)
                  v.               )
                                   )
SANDRA BUSH BIENVENU,              )
                                   )
                  Defendant.       )
                                   )

                            MEMORANDUM OPINION

     Plaintiff America’s Choice, Inc. (“ACI” or “plaintiff”) is a

for profit corporation in the education consulting industry.

Plaintiff seeks a declaratory judgment that it does not owe

defendant Sandra Bush Bienvenu (“defendant” or “Bienvenu”) a

commission on a sales contract.        Bienvenu counterclaims for the

commission.    Defendant filed a motion for partial summary

judgment and plaintiff cross-moved for summary judgment.       Upon

careful consideration of the motions, responses and replies

thereto, the applicable law, the entire record herein, and for

the reasons stated below, the Court GRANTS IN PART AND DENIES IN

PART defendant’s motion for summary judgment, and DENIES

plaintiff’s motion for summary judgment.

I.        BACKGROUND

     A.        The Parties and the Education Consulting Industry

     ACI is a Delaware corporation headquartered in the District

of Columbia.    Defendant’s Statement of Uncontested Material Facts
(“Def.’s SOF”) ¶ 2.1   Its business involves providing curriculum

materials and professional development training to struggling

public schools nationwide.    Def.’s SOF ¶ 2.   ACI is a for-profit

subsidiary of the National Center on Education and the Economy, a

not-for-profit corporation.   Def.’s SOF ¶ 3.   ACI operates on a

fiscal year (“FY”) running from July 1 to June 30.       Def.’s SOF ¶

4.

     In late 2004, ACI hired Nicholas Solinger as its Vice-

President of Sales and Marketing.     Def.’s SOF ¶ 13.   Solinger

developed the Compensation Policy for the commissions at the

heart of this dispute.   Def.’s SOF ¶ 13.   Solinger hired several

Business Development Managers responsible for regions around the

country.   Def.’s SOF ¶¶ 13-14.   One of those Business Development

Managers was Bienvenu, who had responsibility for the Southeast

Region including Arkansas, Florida, Texas, Louisiana,

Mississippi, Alabama, and Oklahoma.    Def.’s SOF ¶ 24.    Bienvenu

in turn hired Cecil Harris, a salesman with connections to the

     1
       The parties each submitted statements of material facts
not in dispute with their moving briefs pursuant to Local Civil
Rule 7(h). In its response to defendant’s motion, plaintiff
filed objections to defendant’s statement of material facts not
in dispute. In her response, defendant did not file a separate
objection to plaintiff’s statement of facts and instead noted
that she was incorporating by reference her previous statement of
facts. Unless otherwise noted, citations to the respective
statements of material fact refer to facts that were not disputed
by either party.

                                  2
Arkansas education establishment.2    Def.’s SOF ¶ 25.

     B.      Contract With Arkansas Department of Education

     Through prior contacts at the Arkansas Department of

Education (“ADE”), Harris discovered that the state had certain

Title I federal education funds that he believed needed to be

committed by May 20, 2006 (i.e., in FY 2006) in order for

Arkansas to receive the federal funds.    Def.’s SOF ¶¶ 28-29.   The

prospect of a multi-million dollar contract led to marketing by

Harris, Bienvenu, and other ACI representatives in early 2006.

Def.’s SOF ¶ 30.   On March 30, 2006, the ADE issued a Request for

Proposals (“RFP”) seeking bids to provide comprehensive school

reform in low-performing Arkansas public schools.    Def.’s SOF ¶

32; see also Def.’s Ex. L, RFP.    The RFP provided for a

“Professional Services Contract”3 between ADE and the successful

offeror.   Def.’s Ex. L, §1.01.   The RFP also significantly

provides that, under state law, the awarded contract was

     2
       Harris is a plaintiff with the same claims in the Middle
District of Louisiana. Summary judgment was denied in that case,
see Harris v. America’s Choice, Inc. No. 07-195-JVP-SCR, 2009 WL
411698 (M.D. La. Feb. 18, 2009), and the parties later settled.
See Harris v. America’s Choice, Inc., No. 07-195-JVP-SCR Docket
Nos. 77 and 78, Mot. to Dismiss and Order granting Mot. to
Dismiss. Consolidation of all cases in one venue was not
appropriate.
     3
        The “Professional/Consultant Services Contract” is the
form contract document that Arkansas requires for procurement of
state contracts with a value in excess of $25,000. Def.’s Ex. J,
Dep. of Dr. Bobbie Davis, ADE’s Assistant Commissioner for Fiscal
and Administrative Services (“Davis Dep.”) at 43:2-9.

                                  3
contingent upon review and approval by the Arkansas Department of

Finance and Administrative Office of State Procurement and the

Arkansas Legislative Council.   Def.’s Ex. L, §1.01.

     On April 12, 2006, ACI submitted its sixty-plus page

proposal for a comprehensive school improvement model for low-

performing public school districts in Arkansas, which outlined

its proposed programs at a projected cost of $6,095,000.    Def.’s

Ex. R, Proposal to State of Arkansas Department of Education

(“Proposal”).   The Proposal breaks down the costs of each program

for 46 schools in the state, specifies the programs for each

grade level, notes the materials for each program, provides for a

term to begin on May 30, 2006 and end on June 30, 2007 (over two

fiscal years), and is signed by Jason Dougal, ACI’s Vice-

President of Legal and Business Affairs.   See generally Proposal.

In other words, there are clear and detailed price, service, and

time terms.

     On April 17, 2006, ADE accepted ACI’s proposal and the ADE

Commissioner and Dougal signed a “Professional/Consultant

Services Contract,” (“hereinafter “April Contract”).   The April

Contract set forth terms from the Proposal including that ACI

would provide services for 46 Arkansas schools at a cost of

$6,095,000 from May 30, 2006 through June 30, 2007.    See Pl.’s

Ex. 17 at §§ 2,3,6.   The April Contract also contained the

following statement regarding payment: “The method(s) of

                                 4
rendering compensation will be delivered in accordance with a

schedule developed by the contractor and ADE.”   Pl.’s Ex. 17 at §

5.   Pursuant to state law, the contract still had to go through

the contingencies of review and approval by procurement

officials.   Davis Dep. at 20:1-21:15.   The contract was reviewed

and approved by: 1) internal ADE officials; 2) the State Director

of Finance; 3) the state legislature; and 4) again by the State

Director of Finance, who marked the contract as finally approved

on June 2, 2006.   Pl.’s Ex. G, Dep. of Estelle Mathis at 17:13-

18:25; see also Def.’s Ex. M at 5.4

      On July 20, 2006, ADE and ACI executed a document entitled

“America’s Choice, Inc. Agreement with State of Arkansas,

Department of Education,” (hereinafter “July Agreement”) which

refined certain provisions in the April Contract.   Def.’s SOF ¶

56; Pl.’s SOF ¶ 37.   Specifically, the July Agreement listed

which schools would receive the different programs, developed

more precise budgeting, and came up with a total contract amount

      4
       Before this final approval date, but after the Arkansas
legislature approved the $6 million in funds, Bienvenu testifies
that ACI had meetings with state-wide school superintendents to
inform them of the services ACI would be providing. Pl.’s Ex. H,
Bienvenu October 30, 2008 Dep. at 15:20-23. ACI calls these
“marketing” meetings, but does not contest that the subject of
discussion was the services it would provide under the contract.
Pl.’s Mem. in Opp’n to Def./Counter Pl.’s Mot. for Partial Summ.
J. and in Supp. of Pl./Counter Def.’s Cross Mot. for Summ. J.
(“Pl.’s Mot.”) at 28-29. Regardless of the nature or purpose of
these meetings, however, the Court concludes that they are
irrelevant to the determination of when a binding contract was
formed.

                                 5
– still $6,095,000, though there was discussion of reducing that

total to $5,848,000.   Pl.’s SOF ¶¶ 37-38.      The July Agreement

also included an integration clause, which states that the July

Agreement “supercedes” any prior agreements.       Pl.’s SOF ¶ 39.

The July Agreement, however, was not processed through the state

contract ratification process.     Def.’s Ex. I, Dep. of Dr. Diana

Julian, ADE’s Assistant Commissioner at 45:13-46:15.       ACI began

providing services to ADE in July 2006, with ACI invoicing ADE

for the first time on July 20, 2006 for half the total, or

$3,047,500.   Pl.’s SOF ¶¶ 40-41.       ADE paid this invoice on August

10, 2006.    Pl.’s SOF ¶ 42.

     C.       ACI’s Compensation Policy

     On May 9, 2005, ACI and Bienvenu entered into an employment

agreement.    Def.’s SOF ¶ 18.   The agreement provided that

Bienvenu would work from her home in Florida, and would be

responsible for developing sales in the Southeastern Region noted

above.    Def.’s SOF ¶¶ 18-19.   Bienvenu’s annual salary was

$150,000 a year, but significant commissions were possible if she

reached her sales quota.    Def.’s SOF ¶ 19.      Her sales quota for

FY 2006 was $2.5 million.      Def.’s SOF ¶ 23.   Attached to her

Employment Agreement was a commission grid specifying potential

payouts, but this grid did not include any explanation of quota

accrual rules.   Def.’s SOF ¶ 19.       Both parties agree that ACI

could modify the Compensation Plan, even during the fiscal year,

                                    6
with approval from ACI’s Board of Directors.     Def.’s SOF ¶ 20;

Pl.’s SOF ¶¶ 5-6.     Indeed, Bienvenue was given a new FY 2006

compensation plan in the fall of 2005.     Def.’s SOF ¶ 23; Pl.’s

SOF ¶ 9.

II.        ANALYSIS

      A.    Standard of Review

      Pursuant to Federal Rule of Civil Procedure 56, summary

judgment should be granted if the moving party has shown that

there are no genuine issues of material fact and that the moving

party is entitled to judgment as a matter of law.      See Fed. R.

Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986);

Waterhouse v. District of Columbia, 298 F.3d 989, 991 (D.C. Cir.

2002).     In determining whether a genuine issue of material fact

exists, the court must view all facts in the light most favorable

to the non-moving party.     See Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 587 (1986).     Likewise, in

ruling on cross-motions for summary judgment, the court shall

grant summary judgment only if one of the moving parties is

entitled to judgment as a matter of law upon material facts that

are not genuinely disputed.      See Rhoads v. McFerran, 517 F.2d 66,

67 (2d Cir. 1975).

      There are two straightforward legal issues ripe for

adjudication.    The first is whether there was an enforceable

contract between ACI and ADE as of June 2, 2006.     The second is

                                    7
whether under ACI’s Compensation Policy, Bienvenu earned her

commission in connection with the contract between ACI and ADE in

FY 2006 or 2007.

     B.   The Contract Between ADE and ACI.

          1. Choice of Law

     The parties agree that Arkansas law governs the issue of

whether and when there was a contract between ADE and ACI.   There

is also a venue provision in the contract identifying Arkansas

law as governing any disputes.   District of Columbia courts give

effect to contractual choice of law provisions “as long as there

is some reasonable relationship with the state specified.”

Elemary v. Philipp Holzmann A.G., 533 F. Supp. 2d 144, 155 n.3

(D.D.C. 2008)(quotation omitted).

     The Court concludes that a reasonable relationship exists

and will therefore apply Arkansas law.   Arkansas law, following

general contract principles, provides that the essential elements

of a contract are: 1) competent parties; 2) subject matter; 3)

legal consideration; 4) mutual agreement; and 5) mutual

obligations.   See Foundation Telecommc’ns., Inc. v. Moe Studio,

Inc., 16 S.W.3d 531, 538 (Ark. 2000); Hunt v. McIlroy Bank &

Trust, 616 S.W.2d 759, 761 (Ark. Ct. App. 1981).

          2. ADE-ACI Contract

     The parties agree that there was a contract between ADE and

ACI to perform education consulting services; the only dispute is

                                 8
when this contract became effective.5    On April 17, 2006 ACI and

ADE signed the April Contract.    Bienvenu argues that, despite

being further refined by the July Agreement, the April Contract

was complete and became enforceable on June 2, 2006 when the

Director of Finance gave his final stamp of approval.    ACI’s

argument, however, is that the April Contract was a mere “form”

document that was only a starting point in the “contracting

process” and lacked specificity regarding the scope and details

of the programs to be implemented.     For the following reasons,

the Court finds that a binding contract existed as of June 2,

2006.

        First, with regards to ACI’s form contract argument, the

Court finds that the April Contract includes extensive detail

about ACI’s obligations, the costs to ADE, and the time-length of

the agreement.    The subject matter of the contract is also

specified; it is a consulting contract, the nature of which

includes ACI’s delivery of its comprehensive school improvement

model to Arkansas public schools through development, training,

and on-site technical assistance.

        The Court is also persuaded that the April Contract contains

clear and mutual obligations and agreements: i.e., ACI must

        5
       Neither party disputes that Dougal and the ADE
Commissioner were competent parties to sign the contract. See
Def.’s Mem. Supp. of Mot. for Partial Summ. J. (“Def.’s Mot.”) at
13; Pl.’s Mot. at 24.

                                   9
provide education consulting services and ADE must pay ACI for

those services.   Under Arkansas law, mutual promises are adequate

consideration to uphold a contract.   See Youree v. Eshaghoff, 256
S.W.3d 551, 555 (Ark. Ct. App. 2007); see also Tyson Foods, Inc.

v. Archer, 147 S.W.3d 681, 684 (Ark. 2004) (“[M]utuality of

contract means that an obligation must rest on each party to do

or permit to be done something in consideration of the act or

promise of the other.”); Showmethemoney Check Cashers, Inc. v.

Williams, 27 S.W.3d 361, 366 (Ark. 2000).   The Court finds that

the April Contract contemplated such mutual promises and mutual

obligations and is unpersuaded that ACI was “swimming in a sea of

uncertainty” until the July Agreement was signed.    See Pl.’s Mot.

at 25.

     ACI also argues that because the April Contract left the

method of rendering compensation to a future determination, see

Pl.’s Ex. 17 at § 5 (“The method(s) of rendering compensation

will be delivered in accordance with a schedule developed by the

contractor and ADE.”), the contract was not valid.   Along similar

lines, ACI argues that the greater specificity in the July

Agreement (i.e., which of the schools would receive the services

and how payments would be scheduled) demonstrates that the April

Contract was not enforceable.   The Court finds that the

refinements in the July Agreement did not change the overall

objectives and scope of the April Contract and do not make the

                                10
April Contract void.    Parties may refine terms in a contract to

supplement prior agreements, but that does not mean the prior

agreement was never valid.     See Foundation Telecommc’ns, 341 Ark.

at 242 (affirming trial court’s decision that a contract was

formed where the price terms were later revised because

“agreements may be supplemented by subsequent acts, agreements,

or declarations”).6

      Finally, the Court is persuaded that the April Contract is

the only contract that went through the procurement process

required under Arkansas law.    Arkansas State contract procurement

protocol requires that a Professional Services Contract such as

the April Contract progress through a multi-step approval

process.   Ark. Code Ann. §§ 19-11-1006-1007.   These steps were

each completed in turn and the Director of Finance gave final

approval to the April Contract on June 2, 2006.    Def.’s Ex. M at

5.   In contrast, the July Agreement was not submitted for this

approval process and did not contain the necessary components or

approvals to be a contract under Arkansas law.

      For these reasons, the Court finds that the April Contract

became enforceable on June 2, 2006.    Plaintiff’s commission,

therefore, depends on the compensation policy in place during

      6
        ACI   further asserts that the July Agreement contains an
integration   clause, which states that it supercedes any prior
agreements.    While true, this does not negate the fact of a prior
enforceable   contract; it only means that the July Agreement now
controls as   between ADE and ACI.

                                  11
ACI’s FY 2006.

     B.   ACI’s FY 2006 Compensation Policy

           1. Choice of Law

     In diversity cases, the District of Columbia’s choice of law

principles call for a two-step analysis: 1) first, whether there

is any conflict among the potentially applicable legal standards;

and 2) if there is a conflict, the court must determine which

jurisdiction has a “more substantial interest” in the governing

issues.   See YWCA v. Allstate Ins. Co., 275 F.3d 1145, 1150 (D.C.

Cir. 2002).   Bienvenu argues that Florida law applies to

determining the terms of ACI’s FY 2006 compensation policy

because that is where she worked and signed the contract.    ACI

persuasively responds, however, that District of Columbia law

applies because Bienvenu has shown no conflict between District

of Columbia law and Florida law.     Under either jurisdiction’s law

on employment contracts, the compensation policy controls whether

Bienvenu is entitled to a sales commission.     Compare Parkway

Motor Co. v. Charles, 39 F.2d 292 (D.C. Cir. 1930) (whether

employee is entitled to commission for sales is dependent upon

terms of employment contract) with Comerford v. Sunshine Network,

710 So. 2d 197, 198 (Fla. Dist. Ct. App. 1998) (terms of

employment agreement control whether employee is entitled to

sales commission).   Given the lack of conflict, the Court will

apply the District of Columbia’s laws; however, the analysis

                                12
would be the same under Florida law, where the Court would

similarly look to the terms of the Compensation Policy.7

           2. FY 2006 Compensation Policy

     Because the Court finds that there was an enforceable

contract as of June 2, 2006, the resolution of the parties’

dispute depends on the terms of ACI’s FY 2006 Compensation

Policy.   The parties’ interpretations of those terms are at

complete odds with each other.   Bienvenu argues: 1) that her

Employment Agreement did not contain an express provision as to

the accrual of commission credit; and 2) that ACI Vice-President

Solinger, the person who created the Compensation Policy, told

her that commission credit would be earned when a contract was

signed, and she would receive payment once ACI was paid by the

client.   Def.’s Mot. at 4-5, 21.     She argues that this practice -

commission upon signing of a contract - is consistent with

industry custom and practice and further asserts that in the fall

of 2005, ACI’s CEO, Judy Codding (“Codding”), told her “[d]on’t

worry; we’ll take of you” in response to her concerns about the

     7
       ACI concedes that Bienvenu’s counter-claim for attorney’s
fees, which follows directly from her claim of unpaid sales
commissions, should be analyzed under Florida law. The two
issues are related: if Bienvenu is entitled to her sales
commissions (the equivalent of unpaid wages in Florida), then she
will be entitled to attorney’s fees. See Fla. Stat. § 448.08
(2009). Because the Court finds that there are material issues
of fact regarding whether Bienvenu is entitled to her sales
commission, the Court need not address the attorney’s fee issue
at this time.

                                 13
Compensation Policy.   Def.’s Mot. at 5; see also Def.’s Ex. G.

Bienvenu June 25, 2008 Dep. at 221:15-19; Pl.’s Ex. B, Solinger

Dep. (“Solinger Dep.”) at 32:1-16.   Bienvenu also contends that,

despite being aware that ACI could alter her quota and commission

structure for FY 2006, at no point in time between when she was

hired in May 2005 and the summer of 2006 was she informed that

ACI intended to impose a quota credit that depended on factors

other than the execution of a binding contract.   Def.’s Mot. at

6.

     ACI, by contrast, argues that the signing of a contract is

insufficient to entitle Bienvenu to commission credit because its

FY 2006 Compensation Policy required that a contract be “booked”

and invoiced in the same fiscal year in order for the sales

person to receive commission credit.   Pl.’s Mot. at 4-5; Solinger

Dep. at 72:6-18.   The rationale behind this policy, ACI asserts,

is that in the education consulting industry, schools have often

signed contracts for services subject to future expenditures, but

then either did not receive funds or did not want to expend funds

a later time.   Thus, before awarding commission credit, ACI wants

“contractual certainty” that it will receive payment for its

service, evidenced by such factors as a payment schedule and/or

invoices   – events that did not occur until July 2006 (i.e., FY

2007).   ACI notes that this “contractual certainty” policy was

presented to and approved by its Board of Directors in September

                                14
2005.    Pl.’s Mot. at 5.   ACI asserts that, following the adoption

of this policy, Codding held a training attended by all sales

personnel where they were given an “abbreviated version” of the

presentation regarding the compensation policy.      Pl.’s Mot. at 5.

In ACI’s view, Bienvenu was thus entitled to commission credit in

FY 2007, but because she had a higher sales quota to reach in

that fiscal year, she is not entitled to any commission.

        The key testimony on this point is that of Solinger because

he created the FY 2006 Compensation Policy.      Solinger, in his

deposition, testified that the general policy was to pay

commissions in the fiscal year in which the contract was signed

and the services were performed.       But, crucially, he also

testified that there were “exceptions” to this policy.      For

instance, he testified that if a service was provided over two

fiscal years, the sales person would be entitled to a sales

commission in the first fiscal year.      In Solinger’s words (cited

by both parties):

             I worked hard to find a way to represent this
             notion of the school district being at risk
             financially to America’s Choice and America’s
             Choice having certainty that a contract would
             produce the revenue described. And so I looked
             at, you know, if there’s a contractual
             commitment, an invoice, a commitment to a payment
             schedule, payments received, things like that to
             try to address this notion of school districts
             being able to wantonly cancel contracts and not
             pay under them. But at the same point, a desire
             to compensate sales people at the time based on
             the contract date and trying to find something
             which captured the notion.

                                  15
Jt. Exh. B, Solinger Dep. at 73:6-19.   ACI, of course, highlights

the words “invoice” and “payments received,” while Bienvenu

focuses on “a desire to compensate people at the time based on

the contract date.”   Resolution of this issue is further

complicated by the fact that the commission policy was not

written down, and apparently was still developing over FY 2006.

Moreover, Solinger also testified that he had not fully

considered the situation in which contract funds were

appropriated in one fiscal year, but services were not provided

until the following fiscal year    – the exact situation here.

     Viewing these facts in the light most favorable to the non-

moving parties, there are genuine issues of material fact in

regard to: 1) the exact terms of the FY 2006 Compensation Policy

and whether they were ever modified; 2) what Solinger or other

ACI managers told Bienvenu the policy was, and when she was told;

3) if there was a general policy to apply commission credit after

services were invoiced, what the exceptions to that Policy were,

who decided whether the exceptions would apply, and whether the

ADE-ACI contract (with funding appropriated in one fiscal year

for services in the next fiscal year) falls into an exception;

and 4) what ACI meant by “contractual certainty.”8   Accordingly,

     8
       The court presiding over the related case in Louisiana,
involving Cecil Harris (Bienvenu’s sales person in regard to the
ADE-ACI contract), similarly denied summary judgment, finding
that there were disputed issues of fact regarding the terms and
implications of the compensation policy. See Harris v. America’s

                                  16
both parties’ motions for summary judgment on this issue are

DENIED.

III.      CONCLUSION

       Accordingly, for the reasons stated, the Court GRANTS IN

PART AND DENIES IN PART defendant’s motion for summary judgment,

and DENIES plaintiff’s motion for summary judgment.   An

appropriate Order accompanies this Memorandum Opinion.

       SO ORDERED.

Signed:    Emmet G. Sullivan
           United States District Judge
           March 26, 2010

Choice, Inc. No. 07-195-JVP-SCR, 2009 WL 411698 (M.D. La. Feb.
18, 2009).

                                 17