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American Delta Technologies, Inc. v. RK Electronic Information Concepts

Decided: September 29, 1994.

AMERICAN DELTA TECHNOLOGIES, INC., A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT,
v.
RK ELECTRONIC INFORMATION CONCEPTS, A TEXAS CORPORATION, DEFENDANT-RESPONDENT.



On appeal from Superior Court, Law Division, Bergen County.

Before Judges Petrella, Brochin and Cuff.

Per Curiam

PER CURIAM

American Delta Technologies, Inc. (American) appeals from the dismissal of its complaint seeking certain commission fees from RK Electronic Information Concepts (RK Electronic).*fn1 The court below granted RK Electronic's motion to dismiss the complaint for failure to state a claim upon which relief could be granted. See R. 4:6-2. Counsel fees and costs were awarded in favor of RK Electronic against American.*fn2

RK Electronic is a Texas corporation with its principal place of business in Dallas, Texas. It is in the business of providing claims management services to health care providers. RK Electronic markets its services by entering into Independent Sales Organization (ISO) agreements with independent contractors who, in turn, market the services to health care providers.

Under an ISO agreement between RK Electronic and American dated October 22, 1990, American agreed to act as an independent contractor to obtain sales of RK Electronic's services to health care providers. The agreement emphasized that American was to act as an independent contractor. It further provided that "all parties hereto submit to jurisdiction and venue in the state and federal courts of Dallas County, Texas for all purposes hereunder." Paragraph ten of the ISO agreement specifies that when

either party brings an action to enforce the agreement, the prevailing party is entitled to reasonable attorney's fees and costs.

On December 20, 1991, RK Electronic entered into a claims management agreement with Staten Island University Hospital (Hospital) under which it would process, service, track, collect and administer the Hospital's claims, using RK Electronic's claims management staff and medical claims software program. The agreement with the Hospital stated that American was the "authorized ISO obtaining this Agreement on behalf of RK Electronic." It was signed by a representative of the Hospital and the president of RK Electronic, and witnessed by an account consultant for American. A December 30, 1991 addendum specified additional terms and conditions to incorporate a New York State claims payment program. In March 1992, the ISO agreement between the parties was terminated. A dispute arose as to entitlement to commissions, and American filed a complaint in this State against RK Electronic seeking relief pursuant to the Sales Representatives' Rights Act, N.J.S.A. 2A:61A-1 et seq. (the Act).

The parties had agreed to litigate their disputes in Texas under Texas law. Here, the motion Judge dismissed the complaint specifically because he held the Act inapplicable to the relationship between American and RK Electronic. The Judge specifically stated that he was not suggesting in his dismissal whether or not American was entitled to commissions, but only deciding whether the services performed by American under the ISO agreement fell within the intendment of the Act. The Judge concluded they did not and we agree. We likewise do not address the merits of the underlying commission dispute.

As noted, RK Electronic provides claims management services directly to area hospitals and other health care providers. Here, American functioned as a broker or finder to bring together RK Electronic and the ultimate user of the product.

The Act became effective September 7, 1991 by L. 1990, c. 93, ยงยง 1 to 7, as N.J.S.A. 2A:61A-1 et seq. It ...


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