Ketz & Associates, Inc. v. Creative Kids Far East, Inc.

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
KETZ & ASSOCIATES, INC., a
Minnesota corporation,
Plaintiff,
v.
CREATIVE KIDS FAR EAST, INC.,
a New York corporation; and BAP
INVESTORS, LLC, a New York limited
liability company,
Defendants.
Case No. 23‐CV‐3397 (PJS/EMB)
ORDER
D. Clay Taylor and Nicholas Clay Taylor, TAYLOR FRICTION, PLLC,
for plaintiff.
Solomon Rosengarten, for defendants.
Plaintiff Ketz & Associates, Inc. (“Ketz”) is an independent sales agency that
markets and sells toys on behalf of manufacturers and importers. Defendant BAP
Investors, LLC (“BAP”) is a manufacturer and importer of toys.1 BAP licenses certain
trademarks and other intellectual property from defendant Creative Kids Far East, Inc.
(“Creative Kids”), with which BAP shares ownership, offices, and employees. In this
1Although the caption of the amended complaint and the docket of this case
identifies this defendant as “BAP LLC,” the body of the amended complaint makes
clear that the correct name of this defendant is “BAP Investors, LLC.” See Am. Compl.
at 1 (“COMES NOW, the Plaintiff, Ketz & Associates, Inc. (‘Ketz’), for its claims against
Defendants, BAP Investors, LLC (‘BAP’) and Creative Kids Far East, Inc.”); id. ¶ 2
(identifying “Defendant, BAP Investors, LLC”).
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 1 of 12

action, Ketz brings breach‐of‐contract, quantum meruit, and statutory claims against
BAP and Creative Kids, alleging that they have failed to pay approximately $350,000 in
sales commissions owed to Ketz.
This matter is before the Court on Ketz’s motion for partial summary judgment
on its claims for breach of contract (Count III) and recovery of the statutory penalty
provided by Minn. Stat. § 181.145 for failure to pay commissions (Count V). 2 For the
reasons that follow, Ketz’s motion is granted. The Court also awards attorney’s fees to
Ketz under § 181.145.3
I. BACKGROUND
As noted, Ketz is an independent sales agency that specializes in marketing and
selling toys on behalf of manufacturers and importers. Ketz Decl. ¶ 2. Ketz sells toys to
a wide variety of retailers, including Target. Ketz Decl. ¶ 2. Ketz works on a
commission basis. Ketz Decl. ¶ 2.
2Defendants did not file a timely response to Ketz’s motion. After granting one
extension and partially granting a second, see ECF Nos. 84, 86, the Court denied
defendants’ (untimely) request for reconsideration and a further extension, ECF No. 90.
Ketz’s motion is therefore unopposed.
3In the alternative to judgment on its breach‐of‐contract claim, Ketz seeks
judgment on its claim for failure to pay commissions in violation of Minn. Stat.
§ 325E.37 (Count II). Because the Court grants Ketz’s motion as to its breach‐of‐contract
claim, the Court need not address Ketz’s claim under § 325E.37.
-2-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 2 of 12

BAP licenses trademarks and other intellectual property from Creative Kids, and
both entities import Creative Kids‐branded goods and distribute such goods in the
United States. Ketz Decl. ¶ 5. BAP and Creative Kids do business together under the
name BAT, LLC (“BAT”). BAT maintains bank accounts through which BAP and
Creative Kids receive funds from retailers and pay commissions to Ketz. Ketz Decl. ¶ 6.
In 2003, BAT’s predecessor, Steve Spangler, Inc., d/b/a BE AMAZING! (“BAM!”),
commissioned Ketz as an independent sales representative. Ketz Decl. ¶ 7. Ketz’s and
BAM!’s contract is memorialized in a written Sales Representative Agreement
(“Agreement”) dated July 30, 2003. Ketz Decl. ¶ 7; Taylor Decl. Ex. 1. Under the
Agreement, Ketz earns a ten percent commission on the wholesale prices of products
that it sells on BAM!’s behalf. Taylor Decl. Ex. 1 ¶ 7(A). The Agreement is for an
indefinite duration and can be terminated by either party upon 30 days’ written notice.
Ketz Decl. ¶ 7; Taylor Decl. Ex. 1 ¶ 8(A).
Ketz opened a Target account for BAM! in approximately 2005; by 2022, Ketz’s
annual sales of BAM!‐branded products to Target totaled over $5.2 million. Ketz Decl.
¶ 9. Due to the large volume of sales to Target, Ketz agreed to a reduced commission of
five percent on Target sales. Ketz Decl. ¶ 9.
In approximately 2018, Creative Kids acquired most of BAM!’s intellectual
property. Ketz Decl. ¶ 10. BAT (that is, Creative Kids and BAP acting together)
-3-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 3 of 12

retained Ketz to continue servicing the Target account. Ketz Decl. ¶ 11. For several
years, BAT paid commissions at the rates specified in the Agreement—that is, five
percent on Target sales and ten percent on all other sales. Ketz Decl. ¶ 11. Eventually,
however, BAT fell into arrears on commission payments. Ketz Decl. ¶ 6(2).4
In September 2021, BAT sales manager Collette Trejo asked Ketz to consider
reducing its commission rate for certain categories of the Target business. Taylor Decl.
Ex. 5. Ketz did not respond to Trejo’s request. Taylor Decl. Ex. 5. A few months later,
in February 2022, Trejo followed up by asking Brad Ketz, owner of Ketz, if he would
agree to restructure the Target commission rate, lowering it for some categories and
raising it for others. Ketz Decl. ¶¶ 1, 10(2); Taylor Decl. Ex. 5. Brad Ketz declined,
responding that, “before we talk about commission rates, we need to talk about
commission payment,” and noting that BAT had not paid commissions to Ketz since the
previous October. Taylor Decl. Ex. 5. During a phone call the following week, Brad
Ketz informed Trejo that Ketz would not agree to revised commission rates while BAT
owed Ketz so much money. Ketz Decl. ¶ 13. Following this conversation, BAT
continued to make (sporadic) commission payments to Ketz on the Target account at
the rate of five percent. Ketz Decl. ¶ 23; Maslennikov Dep. 70–71, 87–89, 93, 99.
4The paragraphs in the Ketz declaration are numbered 1 through 11, after which
they re‐start at 6. To distinguish the duplicate numbers, the Court will cite the second
set with a (2).
-4-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 4 of 12

Ketz continued to struggle to get BAT to make commission payments. By the
summer of 2023, BAT had not made any payments to Ketz for 2023 sales and still owed
money for 2022. Ketz Decl. ¶ 25. On August 21, 2023, Ketz emailed BAT and pointed
out that BAT owed Ketz more than $200,000. Ketz Decl. ¶ 25; Taylor Decl. Ex. 12. BAT
initially responded by sending a reconciliation for unpaid 2022 and 2023 commissions
that was slightly lower than Ketz’s estimate, but that used the five‐percent commission
rate. Ketz Decl. ¶ 26; Taylor Decl. Ex. 13. Less than an hour later, however, BAT
followed up, asking Ketz to disregard the previous email because the commission rates
had changed. Ketz Decl. ¶ 27; Taylor Decl. Ex. 12. Ketz promptly responded, denying
that the rates had changed. Ketz Decl. ¶ 27–29; Taylor Decl. Ex. 12.
About a week later, BAT terminated Ketz as to the Target account. Ketz Decl.
¶ 31; Taylor Decl. Ex. 15. Ketz responded that terminating Ketz from Target was
“shocking” given the amount of commissions it was owed and stated that, if BAT did
not reinstate Ketz to the Target account and make “real progress” on overdue
commissions, Ketz would consider its relationship with BAT to be terminated effective
immediately. Ketz Decl. ¶ 31; Taylor Decl. Ex. 15. Ketz added that, if Ketz was
terminated, “please let this email serve as Ketz & Associates’ immediate demand for the
payment of all outstanding commissions and for payment of all commissions that come
due on our pipeline of Target and non‐Target business.” Taylor Decl. Ex. 15. After
-5-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 5 of 12

about a week with no response, Ketz emailed BAT that “we will assume that Ketz &
Associates has been terminated as of my last email.” Taylor Decl. Ex. 15. 	BAT paid no
further commissions to Ketz—not even amounts that BAT admitted were due. Ketz
Decl. ¶ 32. This lawsuit followed.
II. ANALYSIS
A. Standard of Review
Summary judgment is warranted “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 dispute over a fact is “material” only if its resolution
might affect the outcome of the suit under the governing substantive law. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). And a dispute over a fact is “genuine” only
if “the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Id. “The evidence of the non‐movant is to be believed, and all justifiable
inferences are to be drawn in his favor.” Id. at 255.
B. Breach of Contract
Ketz first seeks summary judgment in its favor on its breach‐of‐contract claim for
unpaid commissions. “Under Minnesota law, a breach‐of‐contract claim has four
elements: ‘(1) formation of a contract; (2) performance by plaintiff of any conditions
precedent; (3) a material breach of the contract by defendant; and (4) damages.’” Nelson
-6-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 6 of 12

v. Am. Fam. Mut. Ins. Co., 899 F.3d 475, 480 (8th Cir. 2018) (quoting Gen. Mills Operations,
LLC v. Five Star Custom Foods, Ltd., 703 F.3d 1104, 1107 (8th Cir. 2013)).5
Undisputed evidence in the record establishes all four of these elements. To
begin, defendants admit that Ketz served as BAP’s sales representative. Taylor Decl.
Tab E at 9. Moreover, Ketz offers uncontradicted evidence that it provided services to,
and was paid by, BAT—the name under which Creative Kids and BAP did business
together. This is sufficient to establish an implied‐in‐fact contract with BAT—that is,
with both Creative Kids and BAP.
As to Ketz’s performance, Ketz offers three spreadsheets, produced by BAT, that
document Ketz’s sales to Target and other stores—sales for which Ketz never received
compensation. Ketz Decl. ¶¶ 32, 34. Given that BAT itself produced these
spreadsheets, there can be no dispute that Ketz fulfilled its duties as sales representative
and earned commissions on the sales documented on the spreadsheets. Finally, Ketz
5The Agreement includes a Colorado choice‐of‐law provision. Taylor Decl. Ex. 1
§ 12. Defendants argue, however, that their relationship with Ketz was not governed by
the Agreement and therefore the choice‐of‐law clause does not apply. Taylor Decl.
Tab E at 9. Because applying Colorado law would not change the result, the Court may
apply Minnesota law without deciding whether the Agreement applies or engaging in a
choice‐of‐law analysis. See Phillips v. Marist Soc. of Wash. Province, 80 F.3d 274, 276 (8th
Cir. 1996); see also Univ. of Denver v. Doe, 547 P.3d 1129, 1139 (Colo. 2024) (to prevail on
breach‐of‐contract claim, a plaintiff must establish “(1) the existence of a contract, (2) the
plaintiff’s performance of the contract or justification for nonperformance, (3) the
defendant’s failure to perform the contract, and (4) the plaintiff’s damages as a result of
the defendant’s failure to perform the contract.”).
-7-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 7 of 12

offers uncontradicted evidence that it did not receive nearly $350,000 in commissions
owed on those sales. Ketz Decl. ¶ 35.
The only issue that is possibly in dispute in this case is the commission rate on
certain sales to Target. But the record is entirely devoid of evidence to support BAT’s
contention that the commission rates changed in 2022. By contrast, Ketz offers evidence
that it rejected the proposed change, Ketz Decl. ¶¶ 13, 29, Taylor Decl. Ex. 12, and that
BAT had consistently calculated and paid its commissions at five percent, Ketz Decl.
¶ 23, Maslennikov Dep. 70–71, 87–89, 93, 99. Defendants’ Fed. R. Civ. P. 30(b)(6)
designee could not identify any evidence that Ketz agreed to change its commission
rates. Maslennikov Dep. 100–01, 102–04, 110. Notably, this witness is Creative Kids’s
controller, yet he did not hear about the purported change to the Target commission
rates until August 2023, a year and a half after the change had supposedly taken effect
and immediately before BAT terminated Ketz from the Target account. Maslennikov
Dep. 98–99, 101.
As to the amount of unpaid commissions, the Court notes a slight discrepancy
between Ketz’s calculation and the Court’s. Relying on BAT’s spreadsheets (which Ketz
offers as Exhibits 17, 18, and 19), Ketz asserts that it is owed $349,003.49 in unpaid
commissions. Ketz Decl. ¶ 35. But based on Exhibit 19, the Court calculated a slightly
lower figure than appears in the Ketz declaration—$6,055.27 rather than $6,552.74—for
-8-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 8 of 12

unpaid commissions for small‐store sales. See Ketz Decl. ¶ 35. The Court arrived at the
lower figure by applying the ten percent commission rate to $60,552.74, which
represents the sales figures documented in Exhibit 19 less the $91,941.36 in sales
attributable to Target (and which matches the figure used by Ketz, see ECF No. 77
at 18).6 The Court therefore grants Ketz’s motion for summary judgment on its breach‐
of‐contract claim (Count III of its amended complaint) for $348,506.02 in unpaid
commissions.
C. Minn. Stat. § 181.145
Ketz also moves for summary judgment on Count V, its claim for a penalty
under Minn. Stat. § 181.145. Subdivision 3 of that statute provides as follows:
If the employer fails to pay the salesperson commissions
earned through the last day of employment on demand
within the applicable period as provided under
subdivision 2, the employer shall be liable to the salesperson,
in addition to earned commissions, for a penalty for each
day, not exceeding 15 days, which the employer is late in
making full payment or satisfactory settlement to the
6The Court also notes that there is a discrepancy in Exhibit 17 between the 2022
Target sales figure on the initial summary page and the figure at the bottom of the
itemized list of 2022 Target sales elsewhere in the exhibit. The higher figure, which is
based on the itemized list, appears to be more reliable, and also appears to be the
number that Ketz actually used in its calculations, notwithstanding the numbers in its
brief for total Target sales (in which the math is incorrect in multiple places, see ECF
No. 77 at 17–18, 23). The Court agrees that the higher 2022 sales figure from Exhibit 17
is more likely than not correct and has relied on it in its calculations. The resulting
figure of $453,673.90 in commissions on Target sales matches the number claimed in
Ketz’s papers. See Ketz Decl. ¶ 35; ECF No. 77 at 18.
-9-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 9 of 12

salesperson for the commissions earned through the last day
of employment. The daily penalty shall be in an amount
equal to 1/15 of the salesperson’s commissions earned
through the last day of employment which are still unpaid at
the time that the penalty will be assessed.
Ketz, as a Minnesota “commission salesperson” within the meaning of the statute, is
clearly entitled to its protections. See id. subd. 2 (requiring prompt payment of
commissions to any “commission salesperson [employed] in this state” who resigns or
is terminated); McClure v. Davis Eng’g, L.L.C., 716 N.W.2d 354, 357 (Minn. Ct. App. 2006)
(“person” in § 181.145 is not limited to natural persons).
Ketz is also entitled to recover a penalty. Upon termination, Ketz made a clear
demand for payment, following which BAT had three days to make full payment. 7
Minn. Stat. § 181.145, subd. 2. Fifteen days after full payment was due, BAT became
liable for the maximum penalty allowed under the statute, which is 100 percent of the
commissions that were past due on the date of Ketz’s termination. Id. subd. 3.
Subtracting the $60,082.92 in commissions attributable to 2024 Target sales, see Taylor
Decl. Ex. 17, ECF No. 77 at 18, yields a penalty of $288,423.10. Ketz’s motion for
summary judgment on its claim to recover a penalty under § 181.145 is therefore
granted as to that amount.
7The time to make payment is extended to six days if a salesperson resigns
without giving five days’ written notice. Minn. Stat. § 181.145, subd. 2(c). Even if BAT
contended that this longer period applied, the years‐long delay in payment means that
BAT is liable for the same penalty.
-10-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 10 of 12

Finally, Ketz seeks an award of attorney’s fees and costs under both Minn.
Stat. § 181.145 and Minn. Stat. § 325E.37. Ketz is clearly entitled to recover reasonable
attorney’s fees pursuant to § 181.145, subd. 4(b), and Ketz may move under Fed. R. Civ.
P. 54(d) to recover those fees after this case is fully resolved and judgment is entered.
Section 325E.37 does not give this Court authority to award fees, however, as that
provision authorizes only arbitrators to award fees. See id. subd. 5(b); R.L. Mlazgar
Assocs., Inc. v. Focal Point, LLC, No. 22‐CV‐0942 (NEB/TNL), 2022 WL 3685388, at *3 n.1
(D. Minn. Aug. 25, 2022) (“Mlazgar argues the MTSRA permits attorney’s fees, but
‘reasonable attorneys’ fees and costs’ are awardable only through arbitration.” Minn.
Stat. § 325E.37, subdiv. 5(b).”).
ORDER
Based on the foregoing, and on all of the files, records, and proceedings herein,
IT IS HEREBY ORDERED THAT:
1. 	Plaintiff’s motion for partial summary judgment [ECF No. 80] is
GRANTED as to Counts III and V of plaintiff’s amended complaint.
a. 	Plaintiff is entitled to recover $348,506.02 in unpaid commissions
from defendants on Count III of the amended complaint.
Defendants are jointly and severally liable for this amount.
-11-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 11 of 12

b. 	Plaintiff is entitled to recover $288,423.10 as a penalty from
defendants on Count V of the amended complaint. Defendants are
jointly and severally liable for this amount.
c. 	Plaintiff is entitled to recover “reasonable attorney’s fees” from
defendants pursuant to Minn. Stat. § 181.145, subd. 4(b). The
amount of those fees will be determined upon motion following the
entry of final judgment at the close of this case.
2. 	Plaintiff’s motion for partial summary judgment is DENIED AS MOOT as
to Count II of its amended complaint and DENIED as to plaintiff’s claim
for attorney’s fees pursuant to Minn. Stat. § 325E.37, subd. 5.
Dated: December 17, 2025 	/s/ Patrick J. Schiltz
Patrick J. Schiltz, Chief Judge
United States District Court
-12-
CASE 0:23-cv-03397-PJS-EMB Doc. 91 Filed 12/17/25 Page 12 of 12