May 30, 2023
Elite Lighting Faces Lawsuit for $280,000+ in Unpaid Commissions
Pittsburgh lighting agent, Repco II, claims manufacturer is withholding payments and sales data
A business agreement between a value-focused lighting brand and a Western Pennsylvania lighting agent has taken an unfortunate turn. Repco II, Inc., a Pittsburgh based lighting agent, has filed a lawsuit against Elite Lighting, a California-based corporation. Legal representatives from Clark Hill PLC are handling the case for Repco II, which revolves around an alleged breach of contract and significant outstanding payments.
Central to this legal dispute is a Sales Representative Contract and an Addendum, drawn up on November 20, 2014, and April 15, 2022, respectively. According to the allegations made by Repco II, they had an agreement to promote Elite's lighting products in Western Pennsylvania and West Virginia and receive commissions in return, but the situation soured when Elite reportedly failed to meet its obligations.
The 2022 contract addendum changed the standard commission levels for stock orders from a standard 5-10% to a 1.5% base commission with performance kickers that could build stock order commissions up to 5%. That commission shift may be a major aspect of the dispute.
Elite Lighting is best known for importing and selling a range of general lighting products. The company's portfolio includes contractor-grade downlights, cans, flat panels, and wall packs, among other items. Despite sharing the same ownership with Edison Price Lighting, the two companies operate independently. In Western Pennsylvania, separate representation for the two brands is maintained. Repco II handles Elite Lighting, while Architectural Lighting Sales is responsible for representing Edison Price Lighting.
Distributors deal direct for stock orders
According to the agent contract between the two companies, stock orders are processed by territory distributors directly by the company. This seemingly causes Repco II to be beholden to the sales data reported by Elite to accurately compensate the agent for those territory sales.
The addendum signed by Repco II in 2022, outlines an agreement for Elite stock orders from Scott Electric, Cardello, Hite, Mayer, Rexel, Gexpro, Yesco and others to be handled directly from the factory, whle awarding Repco II a base commission of 1.5%. Higher stock commission percentages would be earned as specification and project revenues climb from $1 million to $4 million. Project orders were to be handled by Repco II at commissions of 5% or more.
The filed complaint describes Repco II diligently promoting Elite's products and successfully boosting sales. However, despite these efforts, Repco II claims that Elite did not hold up its end of the bargain, neglecting to pay owed commissions or provide the necessary data to calculate them.
Repco II also alleges that it sought to resolve the issue of non-payment of commissions in good faith, requesting relevant sales, invoicing, and supply information from Elite. However, Elite allegedly did not provide the requested information.
Show me the calculations
Based on the invoicing information that Repco II currently has access to, they claim that Elite owes at least $200,000 in commissions. But, with consideration of sales information which Elite allegedly has not disclosed, Repco II claims the total amount owed could exceed $280,000. Repco II’s lawsuit asserts that Elite refused to supply the needed information or pay the outstanding amounts. As a result, Repco II has now taken the matter to court.
The initial lawsuit filing doesn’t detail exactly how Repco II arrived at the $200,000 and $280,000 figures. If the agent earns an average commission of 5%, the $280,000 claim represents $5.6 million in revenue. If average agent commission is 3% that $280,000 claim translates to $9.3 million in Elite sales. Both sales numbers seem like rather large numbers that would likely represent more than one year of Elite Lighting sales in Western Pennsylvania and West Virginia markets.
Moving forward
The lawsuit details three separate claims: breach of contract, promissory estoppel (proposed as an alternative), and unjust enrichment (also proposed as an alternative). Repco II is demanding a trial by jury and asking the court to order Elite to pay all available damages, which total more than $280,000, as well as pre and post-judgment interest, attorney’s fees, costs connected with the action, and any other relief the court finds appropriate.
The case was originally filed in the Court of Common Pleas in Allegheny County, Pennsylvania, and was transferred on Friday to the U.S. District Court for the District of Western Pennsylvania. The venue shift was likely due to the defendant’s place of business being outside of Pennsylvania.
Elite Lighting has been served with the lawsuit summons and while they filed paperwork relating to the change in court venue, Elite hasn't yet filed an answer to Repco II's complaint.
