1. Employer and Employee--sales commission agreement--ambiguity
The trial court did not err by denying plaintiff employee's motion for partial summary
judgment regarding certain commissions on sales to clients recruited by plaintiff based on an
employment agreement giving plaintiff five percent commission on “everything he brings in,”
because the language of the contract is ambiguous and thus susceptible to varied interpretations
on its face.
2. Employer and Employee--sales commission agreement--parol evidence--trade usage
and practice
The trial court did not err by denying plaintiff employee's motion in limine to exclude
defendant employer's evidence regarding trade usage and practice in the plastics molding
industry to show the intentions of the parties when they entered into their sales commission
agreement, because: (1) parol evidence was admissible to show and make certain the intention
behind the contract when the contract was ambiguous; and (2) the general custom in the business
or trade may be considered in arriving at the intention of the parties.
3. Employer and Employee--sales commission agreement--jury instruction--
employment at will
The trial court did not err by instructing the jury on the doctrine of employment at will in
a case involving the interpretation of the parties' sales commission agreement, because plaintiff's
counsel's repeated questioning regarding defendant employer's right to terminate plaintiff
employee's employment without first paying compensation may have confused the jury on the
issues of plaintiff's right to collect his sales commissions with plaintiff's right to retain
employment when the jury calculated plaintiff's damages.
LeCroy Ayers & Willcox, by M. Alan LeCroy, for plaintiff
appellant.
Lynch & Taylor, P.A., by Anthony Lynch, for defendant
appellee.
McCULLOUGH, Judge.
On or about 15 August 1997, plaintiff Doyle Dockery filed suit
against his former employer, defendant Quality Plastic CustomMolding, Inc., seeking compensation for alleged monies owed to him
by defendant as commissions on sales to clients recruited by
plaintiff. The undisputed facts are as follows: In 1991, plaintiff
agreed to work for defendant as a quality control manager and as a
salesman. Plaintiff memorialized with Wayne Buff, defendant's
representative, the following employment agreement:
Doyle Dockery 326.00 per week + 5% commission on
everything he brings in after first 17,000 in base pay is
passed. + .11 for each mile for car.
Agreement between Wayne & Doyle
lst Aug 1991
Because defendant business was new, plaintiff agreed to defer
payment of his sales commissions in order for the business to
invest in needed machinery. In December of 1995, plaintiff
requested that his commission be paid, which defendant then
calculated as amounting to approximately $10,000.00. Plaintiff
disputed this sum, contending that defendant had enjoyed sales in
excess of $7.7 million from companies allegedly recruited and
established by plaintiff. Plaintiff argued that, pursuant to the
employment agreement, he was entitled to five percent of the $7.7
million in sales. Defendant subsequently terminated plaintiff's
employment, and plaintiff filed the instant suit.
After filing suit, plaintiff made a motion for partial summary
judgment seeking entitlement as a matter of law to a portion of the
sales commissions allegedly owed him by defendant. Finding
material facts regarding plaintiff's compensation to be
outstanding, the trial court denied plaintiff summary judgment.
Before the jury trial, plaintiff filed a motion in limine,seeking to exclude evidence of trade usage and pra
ctice proffered
by defendant. Plaintiff argued that the above-stated employment
agreement between plaintiff and defendant was "defined by the terms
of said agreement[,]" and that "[e]vidence of 'common business
practices' within the plastics molding business [was] not relevant
to the issues of the terms of the contractual agreement[.]"
Finding the agreement between plaintiff and defendant to be
ambiguous, the trial court denied plaintiff's motion and allowed
evidence by defendant regarding trade practices in the plastics
molding business. The trial court further instructed the jury that
they could consider "all of the evidence put forth on the question
[of interpreting the contract] including the parties on the
practical construction of their agreement as evidenced by their
conduct." The jury subsequently found that plaintiff was only
entitled to recover $10,000.00 from defendant, and the trial court
entered judgment in favor of plaintiff for said sum. Plaintiff now
appeals from this judgment.
[1]Plaintiff argues that the trial court erred in denying
plaintiff's motion for partial summary judgment. Plaintiff
contends that he is entitled to judgment as a matter of law
regarding certain commissions on sales to clients recruited by
plaintiff, because the employment agreement between plaintiff and
defendant gives plaintiff five percent commission on "everything he
brings in." Plaintiff argues that, under the plain and unambiguous
terms of the contract, plaintiff is entitled to commissions on all
of the sales to clients recruited by plaintiff. Defendant argues
that the contract terms are uncertain, and that defendant did notintend for plaintiff to collect commission on all business
conducted with clients recruited generally by plaintiff, but rather
only upon those particular sales secured by plaintiff.
Summary judgment is only appropriate where "the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that any party is entitled to a
judgment as a matter of law." N.C. Gen. Stat. § 1A-1, Rule 56(c)
(1999); Dept. of Transportation v. Idol, 114 N.C. App. 98, 100, 440
S.E.2d 863, 864 (1994). "A contract which is plain and unambiguous
on its face will be interpreted as a matter of law by the court."
Dept. of Transportation, 114 N.C. App. at 100, 440 S.E.2d at 864.
If the agreement is ambiguous, however, interpretation of the
contract is a matter for the jury. Id. Ambiguity exists where the
contract's language is reasonably susceptible to either of the
interpretations asserted by the parties. Glover v. First Union
National Bank, 109 N.C. App. 451, 456, 428 S.E.2d 206, 209 (1993).
"The fact that a dispute has arisen as to the parties'
interpretation of the contract is some indication that the language
of the contract is, at best, ambiguous." St. Paul Fire & Marine
Ins. Co. v. Freeman-White Assoc., Inc., 322 N.C. 77, 83, 366 S.E.2d
480, 484 (1988).
We determine the language "everything he brings in" to be
susceptible of varied interpretations on its face, and that both
plaintiff's and defendant's interpretations of the contract
language are reasonable. Thus, we hold that the trial courtproperly denied partial summary judgment to plaintiff and overrule
this assignment of error.
[2]Plaintiff also argues that the trial court erred in
denying his motion in limine to exclude defendant's evidence
regarding trade usage and practice in the plastics molding
industry. The proffered evidence tended to show that commissions
paid in the trade are for each individual job and not on the total
amount paid by a particular client. Plaintiff contends that the
contract was plain and unambiguous, and that the custom of trade
usage and practice evidence impermissibly injected a new term into
the parties' contract. We disagree. As stated above, we agree
with the trial court that the contract was ambiguous on its face.
The primary purpose in interpreting a contract is to ascertain the
intention of the parties. International Paper Co. v. Corporex
Constructors, Inc., 96 N.C. App. 312, 317, 385 S.E.2d 553, 556
(1989). When a contract is ambiguous, parol evidence is admissible
to show and make certain the intention behind the contract. Id.
Moreover, "the general custom in the business or trade may be
considered in arriving at the intention of the parties." McAden v.
Craig, 222 N.C. 497, 500, 24 S.E.2d 1, 3 (1943). As such, the
trial court properly admitted trade usage and practice evidence
concerning the agreement between plaintiff and defendant. We also
determine the trial court properly instructed the jury that the
contract was ambiguous, and that they could consider trade usage
and practice in interpreting the agreement. This assignment of
error is overruled. [3]Finally, plaintiff argues that the trial court erred in
instructing the jury on the doctrine of employment at will.
Plaintiff contends that, since he presented no evidence suggesting
that he was illegally terminated from his employment, the
instruction confused the jury as to the pertinent issues. We
disagree. During cross-examination, plaintiff's counsel repeatedly
questioned Wayne Buff regarding defendant's right to terminate
plaintiff without paying the sales commissions allegedly owed to
plaintiff. Typical of those questions were the following:
So once -- once a manager has gotten a sales
representative to bring in over 7.7 million
dollars worth of business, they can simply
say, "There's the door." And as a result of
say [sic] that, just saying that, just
terminate them? . . .
* * * *
So what your [sic] stating is that if in the
manager's eyes this person has not been as
useful as they have been in the past, they
have the right to terminate them and not pay
them any more commissions?
When plaintiff later protested the inclusion of the employment at
will instruction, the trial judge agreed that he normally "wouldn't
have given [the instruction], but you-all just got off into that,
and that hasn't got anything to do with [the case]." The trial
judge added, "I'm just going to tell [the jury] it has nothing to
do with the case." The trial judge then instructed the jury as
follows:
And I would also instruct you that under our
law in North Carolina that when a contract is
not for a term served, that is a definite
term, it is considered an employee at will
situation, either party may terminate the
agreement at any time. That is either the
employer or the employee. And you are not toconcern yourself as to who may have terminated
this arrangement, because that is not
determinative of the amount of damages that
you would award in this case.
"It is the duty of the trial judge without any special requests to
instruct the jury on the law as it applies to the substantive
features of the case arising on the evidence." Millis Construction
Co. v. Fairfield Sapphire Valley, 86 N.C. App. 506, 509, 358 S.E.2d
566, 568 (1987). We determine that the above-stated instruction
clarified, rather than confused, the issues for the jury. With
plaintiff's counsel's repeated questioning regarding defendant's
right to terminate plaintiff's employment without first paying
compensation, the jury might have easily confused plaintiff's right
to collect his sales commissions with plaintiff's right to retain
employment when it calculated plaintiff's damages. The trial court
foresaw this possibility and correctly instructed the jury on the
law of employment at will, thereby avoiding potential confusion.
We therefore overrule plaintiff's final assignment of error and
affirm the judgment of the trial court.
No error.
Judges WALKER and THOMAS concur.
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