Willesen v. Ernest Communications, Inc.
323 Ga. App. 457
| Ga. Ct. App. | 2013Background
- 2W filed suit against ECI seeking commissions due under the March 1, 2004 ECI Authorized Sales Agent Agreement.
- The agreement required monthly commission statements and payments within 30 days after the statement, with commissions earned when invoices were issued and accounts delinquent over 30 days could be withheld.
- The contract contains a Limitation of Liability exculpatory clause limiting ECI's liability for profits or certain damages and shielding obligations to end users by reference to tariffs and forms.
- A dispute in late 2007 over commissions for two corporate accounts led to ECI terminating the agreement on February 26, 2008; 2W sued to recover those commissions.
- At trial in March 2012, ECI moved for a directed verdict arguing damages were not proven and the exculpatory clause barred recovery; the trial court granted the directed verdict.
- On appeal, the Georgia Court of Appeals reversed, holding the exculpatory clause did not bar 2W's claims and that 2W presented sufficient evidence of earned commissions and damages; the case was remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the exculpatory clause bar unpaid commissions? | 2W argues the clause does not clearly waive its right to earned commissions. | ECI contends the clause prohibits payment of commissions as part of potential damages. | Exculpatory clause does not bar unpaid commissions. |
| Was the damages proof sufficient to support a damages award? | Evidence of billed amounts and earned commissions suffices; burden shifts to ECI to show reductions. | Damages were not proven because payments or receipt by end users were not shown. | Damages evidence was sufficient; directed verdict improper. |
| Should the contract be read to preclude commissions after termination? | The contract expressly provides continued commissions for accounts brought to ECI during the term. | Exculpatory language could preclude post-termination payments. | Contract provides continued commissions post-termination; exculpatory clause not read to defeat that. |
Key Cases Cited
- Imaging Systems Intl. v. Magnetic Resonance Plus, 227 Ga. App. 641 (Ga. App. 1997) (mutuality and scope of exculpatory clause control interpretation)
- Hardnett v. Ogundele, 291 Ga. App. 241 (Ga. App. 2008) (interpretation of contracts and avoiding nullification of mutual obligations)
- McLendon v. Priest, 259 Ga. 59 (Ga. 1989) (prefer contract constructions that uphold the agreement)
- Choate Constr. Co. v. Ideal Elec. Contractors, 246 Ga. App. 626 (Ga. App. 2000) (conditions precedent limited; clear terms required for implied conditions)
- Holmes v. Clear Channel Outdoor, 284 Ga. App. 474 (Ga. App. 2007) (exculpatory clause construed against drafter; context in contract-wide reading)