234 Mich. App. 550 | Mich. Ct. App. | 1999
Lead Opinion
Defendant, Allied Chucker and Engineering Company, appeals as of right the judgment entered against it following a nine-day bench trial for the recovery of unpaid sales commissions owing to plaintiff, H. J. Tucker & Associates, Inc. In this case,
This cases arises from plaintiff’s claim that it was entitled to unpaid sales commissions from defendant. In 1957, Harold Joseph Tucker (Joe Tucker
Over the years, the parties’ relationship grew mutually financially beneficial, with plaintiff procuring
In February 1993, plaintiff sued defendant to recover the full amount of the commissions owed plaintiff since 1986. In its complaint, plaintiff alleged breach of contract, fraudulent misrepresentation, innocent misrepresentation, detrimental reliance, quantum meruit, unjust enrichment, and breach of fiduciary duty. Plaintiff later added an additional count for damages under the sales commission act, MCL 600.2961; MSA 27A.2961, which allows for an additional award of two times the amount of the commissions due, not to exceed $100,000, and for pay-
i
Defendant challenges the constitutionality of MCL 600.2961; MSA 27A.2961, the provision of the RJA under which plaintiff sought attorney fees, court costs, and treble damages for defendant’s failure to pay commissions.
The Title-Object Clause of the Michigan Constitution states that “[n]o law shall embrace more than one object, which shall be expressed in its title.” Const 1963, art 4, § 24. There are three ways to challenge a statute on the basis of the Title-Object Clause: (1) a multiple-object challenge, (2) a title-body challenge, and (3) a change of purpose challenge. Ray Twp, supra at 728, citing People v Kevorkian, 447
With respect to the multiple-object challenge, we are not persuaded by defendant’s argument that the RJA embraces more than one object in that the object of the RJA deals with procedural improvements but § 2961 involves substantive rights. “The ‘object’ of a law is its general purpose or aim.” Ray Twp, supra at 731. The body of the law, and not just its title, must be examined to determine whether the act embraces more than one object. Id. “The purpose of the single-object rule is to avoid bringing into one bill diverse subjects that have no necessary connection.” Mooahesh v Dep’t of Treasury, 195 Mich App 551, 564; 492 NW2d 246 (1992).
The title of the RJA states:
An act to revise and consolidate the statutes relating to the organization and jurisdiction of the courts of this state; the powers and duties of such courts, and of the judges and other officers thereof; the forms and attributes of civil claims and actions; the time within which civil actions and proceedings may be brought in said courts; pleading, evidence, practice and procedure in civil and criminal actions and proceedings in said courts; to provide remedies and penalties for the violation of certain provisions of this act; and to repeal all acts and parts of acts inconsistent with, or contravening any of the provisions of this act.
Although we agree with defendant that § 2961 involves substantive rights, we disagree that the object of the RJA involves procedure only. In reviewing the title of the RJA, we find that the general object or purpose of the RJA is the revision and consolidation
With regard to defendant’s title-body challenge, defendant argues that § 2961 exceeds the scope of the title because the rja’s object deals only with procedure and § 2961 creates substantive rights. Because this argument is based on a premise we rejected in considering defendant’s multiple-object challenge, we
“The title of an act must express the general purpose or object of the act.” Ray Twp, supra at 728. However, the title of an act need not be an index to all the provisions of the act. Id. The test is whether the title gives fair notice to the legislators and the public of the challenged provision. Id. at 728-729. “The notice aspect is violated where the subjects are so diverse in nature that they have no necessary connection.” Mooahesh, supra at 569.
As previously stated, the title of the rja is not merely limited to procedure, but also refers to substantive rights. The rja’s title encompasses the general organization and powers of the courts within the state. Only this general object of the rja, and not all the details and incidents of a particular statute, need be indicated in the title. Id. at 566. After reviewing the scope of the title and the rights created by the provisions of § 2961, we conclude that the title of the RJA gives fair notice of the provisions of § 2961. As stated in Kingsley, supra at 508, “[t]he rja is a multivolume compilation of statutes enacted at various times on a number of subjects.” The title of the rja specifically refers to “the powers and duties of [the] courts” and “the forms and attributes of civil claims and actions.” “Section 600.2961 merely authorizes the courts to grant treble damages for intentional failure to pay commissions.” Kingsley, supra at 508. Thus, the rights created by § 2961 are within the scope of the title of the rja, and the subjects are not so diverse in nature that they “have no necessary connection.” Mooahesh, supra at 569.
n
Defendant argues that the trial court erred in awarding plaintiff attorney fees under MCL 600.2961; MSA 27A.2961. MCL 600.2961(6); MSA 27A.2961(6) provides that “ [i]f a sales representative brings a cause of action pursuant to this section, the court shall award to the prevailing party reasonable attorney fees and court costs.” “Prevailing party” is defined in subsection 2961(l)(c) as “a party who wins on all the allegations of the complaint or on all of the responses to the complaint.” Because plaintiff pleaded alternative theories of liability and did not prevail on all of them, defendant argues that plaintiff was not a prevailing party under this definition. We disagree.
In Van Zanten v H Vander Laan Co, Inc, 200 Mich App 139, 141; 503 NW2d 713 (1993), the plaintiff pleaded three different damage theories. Because each theory sought to recover for the same injury and recovery under any theory would have allowed recovery of the full measure of her damages, our Court held that it was necessary for the plaintiff to “prevail only on one theory in order to be considered a pre
m
Defendant also asserts that the trial court improperly awarded prejudgment interest to plaintiff pursuant to MCL 600.6013; MSA 27A.6013. Specifically, defendant asserts that prejudgment interest on the 1994 commissions should have been awarded from the date those commissions became due and owing to plaintiff in 1994 and not from when the complaint was filed in 1993. We disagree.
MCL 600.6013; MSA 27A.6013 entitles a prevailing party in a civil action to prejudgment interest from the date of filing the complaint to the entry of the judgment. The purpose of prejudgment interest is to “compensate the prevailing party for expenses incurred in bringing actions for money damages and for any delay in receiving such damages.” Phinney v Perlmutter, 222 Mich App 513, 541; 564 NW2d 532 (1997). “[T]he prejudgment interest statute is remedial in nature and is to be construed liberally in favor of the plaintiff.” Id.
This Court recently held that, except for future damages resulting from a personal bodily injury, a plaintiff is entitled to prejudgment interest on the entire money judgment, including future damages, from the date of the filing of the complaint. Paulitch
IV
Defendant next argues that the trial court erred in determining that plaintiff’s entire breach of contract action was not barred by the statute of limitations and that plaintiff was entitled to recover its unpaid commissions for up to six years before the filing of its complaint. We disagree. In this case, plaintiff’s breach of contract claim is subject to the six-year period of limitation set forth in MCL 600.5807(8); MSA 27A.5807(8). A claim of breach of contract accrues when the promisor fails to perform under the contract. Cordova Chemical Co v Dep’t of Natural Resources, 212 Mich App 144, 153; 536 NW2d 860 (1995).
Although defendant asserts that plaintiff’s claim accrued in 1986, more than six years before plaintiff filed its complaint, and thus the entire breach of contract action was time-barred, we conclude that claims for payments due under the contract between the parties are analogous to claims for payments under an installment contract, MCL 600.5836; MSA 27A.5836, claims for alimony payments, MCL 600.5837; MSA 27A.5837, or claims for monthly pension payments, Harris v City of Allen Park, 193 Mich App 103, 107;
v
Defendant argues that the trial court erred in finding that plaintiff did not agree to modification of the representation agreement and that plaintiff had not waived its contract rights. We disagree. This Court reviews findings of fact for clear error. MCR 2.613(C); Arco Industries Corp v American Motorists Ins Co, 448 Mich 395, 410; 531 NW2d 168 (1995).
The evidence supports the trial court’s finding that plaintiff did not agree to the reductions in its commissions. In the trial court’s verdict, it stated that it believed Joe Tucker’s testimony that he did not agree to the modification of the agreement. This Court gives special deference to the trial court’s findings when they are based on its assessment of the witnesses’ credibility. Id. Further, in addition to Tucker’s testi
Plaintiff also did not waive its contract rights. This Court has defined “waiver” as follows:
“To constitute a waiver, there must be an existing right, benefit, or advantage, knowledge, actual or constructive, of the existence of such right, benefit, or advantage, and an actual intention to relinquish it, or such conduct as warrants an inference of relinquishment. . . .
* * *
“A waiver may be shown by proof of express language of agreement or inferably established by such declaration, act, and conduct of the party against whom it is claimed as are inconsistent with a purpose to exact strict performance.” [Fitzgerald v Hubert Herman, Inc, 23 Mich App 716, 718-719; 179 NW2d 252 (1970) (citation omitted).]
Further, with respect to defendant’s assertion that the statements made during the trial by Donald Tucker, plaintiff’s legal counsel and one of its directors, constituted admissions that plaintiff did not object to the reductions in its commissions before 1990, we conclude that defendant is taking the statements out of context. During the trial, defense counsel questioned Donald Tucker about plaintiff’s prior litigation, filed in 1989, regarding a commission dispute with Demmer Corporation. When asked by defense counsel whether “this was the first time” that plaintiff had a commission dispute with a principal, Donald Tucker responded that it was the first time that he had represented plaintiff “in a litigation” with regard to a commission dispute. Defense counsel then questioned: “Is it the first time [plaintiff] had a problem with commissions?” Donald Tucker responded: “I believe so, yes.” On the basis of this colloquy, the trial court inferred that Donald Tucker meant that the prior commission dispute with Demmer Corporation was the first commission problem that plaintiff had litigated. The statements did not corroborate defendant’s position that plaintiff did not dispute its commissions with defendant before 1990. The trial court’s
VI
Next, defendant asserts that the trial court erred in its application of Wild v Wild, 266 Mich 570; 254 NW 208 (1934), to the present case. We disagree. In Wild, at 572, the Supreme Court held that testimony regarding the admissions of deceased individuals should be regarded with caution and is of little value without corroboration. Defendant asserts that the trial court did not heed this caution in accepting Joe Tucker’s testimony regarding the terms of the agreement he made with Julien VanMaele in 1957.
However, contrary to defendant’s assertion,
Further, the terms of an oral agreement may be demonstrated by the course of dealing and performance between contracting parties. State Bank of Standish v Curry, 442 Mich 76, 86; 500 NW2d 104 (1993). Defendant’s own documents verified Joe Tucker’s testimony regarding the manner in which his commissions were calculated and the accounts for which he received commissions. Defendant’s documents revealed that before defendant reduced plaintiff’s commissions in 1986, the commission payments to plaintiff were consistent with the terms of the agreement as related in testimony by Joe Tucker.
In accord with Wild, supra, the trial court in the present case was mindful of the cautions to be exercised when one of the parties to an agreement is deceased. Because there was ample evidence presented by disinterested witnesses and by the course of conduct between plaintiff and defendant regarding the payment of commissions, all of which corroborated Joe Tucker’s version of the agreement with Julien VanMaele, we conclude that the trial court did not err in its application of Wild and in accepting Joe Tucker’s version of the terms of the sales representation agreement.
vn
Defendant also argues that the trial court erred in relying on Reed v Kurdziel, 352 Mich 287; 89 NW2d 479 (1958), without making a finding that plaintiff
vm
Defendant asserts that the trial court clearly erred in finding that plaintiff was entitled to posttermination commissions for all sales it procured for defendant. We disagree. The court’s finding was consistent with plaintiff’s pleadings, the evidence presented, and the law in Michigan. Contrary to defendant’s assertion, plaintiff’s amended complaint alleged that plaintiff was obligated under its agreement with defendant “to procure new customers and orders” for defendant. Even assuming, as argued by defendant, that plaintiff’s statements and pleadings are inconsistent with regard to its obligations to procure customers, the fact still remains that defendant paid plaintiff commissions for years on sales plaintiff procured from Rockwell Corporation and Clark Equipment, which payments to plaintiff belies defendant’s claim that plaintiff was not entitled to a commission on these
Further, although Melvin Schalhamer, defendant’s president from 1986 to 1990 and a subsequent chairman of defendant’s board of directors, may have testified that defendant’s sales representatives were not entitled to posttermination commissions, the court found Joe Tucker to be the more credible witness. This Court should defer to the trial court’s assessment of credibility in this regard. Reed, supra at 295. In addition, the testimony of Bill Munday, another sales representative for defendant, supported Joe Tucker’s testimony that plaintiff was entitled to receive commissions for as long as the parts continued to be run and that the agreement between defendant and plaintiff did not address whether commissions would continue to be paid following the termination of plaintiff’s representation of defendant. Moreover, the trial court’s determination that plaintiff is entitled to commissions on orders procured by plaintiff “for the life of the part,” i.e., posttermination commissions, is consistent with Michigan law. Id. at 294-295; Del-Met, supra.
rx
Defendant argues that the trial court abused its discretion in qualifying Ronald Markowski as an expert in accounting and in admitting his testimony regarding the amount of unpaid commissions owed to plaintiff. We disagree. Contrary to defendant’s assertion, plaintiff moved to have Markowski qualified as an
Defendant also asserts that the information on which Markowski based his opinion was of little probative value and was also inaccurate and unreliable because the information on which Markowski relied consisted of summary sheets prepared by plaintiffs attorney. After reviewing the record, we conclude that the information on which Markowski relied was sufficiently reliable to form the basis for his expert opinion and also assisted the trier of fact. Amorello v Monsanto Corp, 186 Mich App 324, 332; 463 NW2d 487 (1990). We note that although defendant is correct in stating that Markowski was provided with summary sheets prepared by plaintiffs attorney, Markowski testified that he verified the accuracy of the information provided to him by plaintiffs counsel on the sales summaries by checking that information against the original sales invoices and sales analyses provided by defendant. Further, Markowski testified that on the basis of this verification, he was confident that the parts summary provided to him by plaintiffs counsel accurately reflected the information provided by defendant. In addition, defendant’s criticisms of Markowski’s knowledge about the information goes
x
Defendant argues that the trial court erred in denying its motions for summary disposition with regard to plaintiffs claims of fraud (count n), misrepresentation (count m), and detrimental reliance (count iv). We disagree. Defendant asserts on appeal that the trial court should have granted its motions for summary disposition pursuant to MCR 2.116(C)(10) (no genuine issue regarding any material fact), but defendant did not move for summary disposition pursuant to MCR 2.116(C)(10) with respect to plaintiff’s claims of fraud, misrepresentation, and detrimental reliance. Defendant’s motions for summary disposition stated that summary disposition was appropriate based on MCR 2.116(C)(8) (failure to state a claim), and not MCR 2.116(C)(10), with respect to the fraud, misrepresentation, and detrimental reliance claims.
A motion under MCR 2.116(C)(8) for failure to state a claim tests the legal sufficiency of a claim and is tested on the pleadings alone. Singerman v Municipal Service Bureau, Inc, 455 Mich 135, 139; 565 NW2d 383 (1997). All factual allegations must be taken as pleaded, as well as any reasonable inferences that may be drawn therefrom. Id. To assert an
In its pleadings, plaintiff alleged that defendant represented to plaintiff that the unilateral reduction in plaintiff’s commission for the Rockwell differential case work would be only temporary until the job was “up and running.” Plaintiff further alleged that defendant knew that the representations were false when they were made, or that they were made as positive assertions without any knowledge of their truth, that the misrepresentations induced plaintiff to not take action against defendant, and that plaintiff suffered damages as a result. On the basis of our review of the pleadings alone, Singerman, supra, we find that plaintiff sufficiently alleged fraud, misrepresentation, and detrimental reliance,
Defendant contends that the trial court erred in denying its motion for summary disposition of plaintiffs claim for quantum meruit. We disagree. A motion for summary disposition brought pursuant to MCR 2.116(C)(10) tests the factual support for a claim. Singerman, supra. In ruling on the motion, the court must consider the pleadings, affidavits, depositions, and other documentary evidence. Id.
Pursuant to MCR 2.111(A)(2), plaintiff was entitled to bring alternative counts of breach of contract and implied contract. However, a contract cannot be implied in law while an express contract covering the same subject matter is in force between the parties. Neal v Neal, 219 Mich App 490, 495; 557 NW2d 133 (1996); Cascade Electric Co v Rice, 70 Mich App 420, 426; 245 NW2d 774 (1976). In the present case, the trial court could have found that an express contract was originally formed between the parties but that subsequently the contract was no longer in force. Under such circumstances, plaintiff could have recovered for breach of contract for the period when the contract was in force and could have recovered on an implied contract basis for the period when there was no contract in force. Alternatively, the court could have found that the express verbal agreement between the parties covered certain subjects concerning plaintiffs commissions but did not cover other subjects. Id. at 426-427. Finally, the trial court in the present case could have found that there was no contract between the parties, especially because one of
xn
Finally, defendant argues that the trial court erred in determining that plaintiff did not breach its fiduciary duties to defendant. We disagree. Under principles of agency, an agent owes his principal a duty of good faith, loyalty, and fair dealing. Burton v Burton, 332 Mich 326, 337; 51 NW2d 297 (1952). An agent’s dual representation of competitors is not necessarily a breach of the duty of loyalty and fair dealing where the agent believes that he is privileged to undertake such representation and has disclosed his representation of competitors to the principals involved. Sweeney & Moore, Inc v Chapman, 295 Mich 360, 363; 294 NW 711 (1940); see, also, Del-Met, supra at 1283-1285.
In the present case, the trial court’s finding that plaintiff did not breach its duty of loyalty to defendant was supported by the evidence. In addition to Joe Tucker’s testimony, other witnesses testified that Joe Tucker fully disclosed to defendant that he represented other companies. The evidence also showed that defendant did not object to Tucker’s representation of other companies as long as it did not take
We affirm.
For the purposes of this opinion, Joe Tucker is synonymous with plaintiff corporation.
Schomer eventually became the president of defendant corporation in 1990.
Although we express no opinion regarding their constitutionality, we note that, like § 2961, other statutes contained within the kja provide for the award of treble damages and specific sanctions for violations of their provisions. See, e.g., MCL 600.2919; MSA 27A.2919 (treble damages for anyone who cuts down trees, and so forth, without landowner’s permission); MCL 600.2911; MSA 27A.2911 (exemplary and punitive damages possible in libel actions).
Defendant’s reliance on Sam v Balardo, 411 Mich 405, 423-424; 308 NW2d 142 (1981), and Connelly v Paul Ruddy’s Equip Repair & Service Co, 388 Mich 146, 151; 200 NW2d 70 (1972), is misplaced. Although the Court in Sam and Connelly stated that the rja is an act that affects procedural rights but does not establish substantive rights, neither case applied that reasoning to the Title-Object Clause of the Michigan Constitution.
The Sixth Circuit Court of Appeals more recently affirmed its holding that § 2961 does not violate the Title-Object Clause of the Michigan Constitution in Terry Barr Sales Agency, Inc v All-Lock Co, Inc, 96 F3d 174, 182 (CA 6, 1996).
Defendant also asserts that the trial court erred in giving any weight to Joe Tucker’s testimony regarding his agreement with VanMaele because that testimony was contradicted by Melvin Schalhamer, who became president and then chairman of defendant’s board after VanMaele’s death. However, as pointed out by plaintiff, if the trial court should have disregarded Tucker’s testimony because of his interest in the outcome of the case, then it should have also disregarded Schalhamer’s testimony (and other employees of defendant) for the same reason.
Taylor is also referred to in the record as Mary Leeann and Marilee.
Defendant moved for summary disposition pursuant to MCR 2.116(C)(10) with regard to counts I (breach of contract), v (quantum meruit), vi (unjust enrichment), and vn (breach of fiduciary duty).
Even assuming, as defendant argues, that the trial court erred in not granting summary disposition with respect to the detrimental reliance claim (count IV) because detrimental reliance merely constitutes an element of a misrepresentation claim, as opposed to a separate ground for
Concurrence Opinion
(concurring). I concur with the majority’s opinion with regard to all issues in this case. However, I write separately to further discuss the statute of limitations issue in section iv of the majority opinion and to express reservations regarding the outcome of this issue, although I ultimately join in the affirmance in this case.
As a preliminary matter, I feel that a more complete exposition of the facts regarding the contract in this case and the breaches of the contract is necessary to fully understand the statute of limitations issue. The trial court determined, and this Court affirms, that Joe Tucker orally contracted in 1957 with Julien VanMaele of defendant corporation to seek customers for defendant in return for a five percent commission on all sales Tucker procured for defendant.
With these facts established, I next address the pivotal question: When did plaintiff’s claim accrue? Because, as the majority correctly points out, a breach of contract claim accrues when the promisor
Installment contract claims accrue as each installment falls due, MCL 600.5836; MSA 27A.5836, so that the statutory period of limitation runs separately with respect to each installment as it becomes due. Sparta State Bank v Covell, 197 Mich App 584, 587; 495 NW2d 817 (1992). Unfortunately, § 5836 does not provide a definition of “installment contract.” 3A Corbin, Contracts, § 687, p 245, however, offers a broad definition of “installment contract”:
An installment contract is one in which the agreed performance of at least one of the parties is to be rendered, not as a whole at one time and place, but piecemeal at different times or different places.
See Jackson v American Can Co, Inc, 485 F Supp 370, 374 (WD Mich, 1980). The Legislature also determined that alimony payments accrue as each payment falls due, as with an installment contract, MCL 600.5837; MSA 27A.5837. In addition, this Court has
Thus, current law does appear to point in the majority’s direction, although it requires several leaps of logic, because there is little analysis in these cases to explain the conclusions that different types of contracts are akin to installment contracts. Indeed, I believe that the contract at issue here can be considered analogous to a pension, because in each case
While accepting the above analysis, I remain troubled by the results in this case. In my judgment, the doctrine of continuing breaches may be extended too far in this case, potentially undermining the policy
Limitations periods created by statute are grounded in a number of worthy policy considerations. They encourage the prompt recovery of damages; they penalize plaintiffs who have not been industrious in pursuing their claims; they “afford security against stale demands when the circumstances would be unfavorable to a just examination and decision”; they relieve defendants of the prolonged fear of litigation; they prevent fraudulent claims from being asserted; and they “ ‘remedy ... the general inconvenience resulting from delay in the assertion of a legal right which it is practicable to assert.’ ” [Lothian v Detroit, 414 Mich 160, 166-167; 324 NW2d 9 (1982) (citations omitted).]
With these policies in mind, it appears that the critical points in the instant sequence of events were at the time of each affirmative decision by defendant to reduce or eliminate plaintiffs commissions on individual accounts, in 1986, 1988, 1989, and 1990. The actions of defendant could reasonably be viewed as a single breaching of the contract at the time of these affirmative decisions. Thereafter, defendant paid plaintiff what plaintiff was owed in full under the altered contract. At the moment the commissions were initially reduced, plaintiff was clearly put on notice that the status quo was being changed and that its rights under the contract were being altered. It seems to me that these are the points at which plaintiff knew that it could file a contract action against defendant, yet it waited beyond the statutory limitation period to do so.
Under the installment contract analogy, plaintiff is allowed, even perhaps required, to sit on its right to sue, even though it was already fully apprised that
Although I am troubled by the results in this case, which allow plaintiff to take no legal action indefinitely yet still maintain its right to sue on the contract, I recognize that the law appears to weigh in favor of the majority’s position in this case. In the absence of any alternative case law based on the policy of the statute of limitations, or otherwise finding that a commission contract of the sort involved in this case is not akin to an installment contract, I reluctantly concur with the majority’s position on this issue. Thus, I join the majority’s opinion on all issues, including the statute of limitations issue, finding that the commission contract here is analogous to an installment contract and therefore that the limitation period runs from the due date of each monthly payment.
Tucker testified that there were two exceptions to the commission agreement: (1) a large contract for Motor Wheel involving multiple small parts for which Tucker agreed to accept a 2-1/2 percent commission (the Motor Wheel hub job), with five percent to be paid on all other Motor Wheel work; (2) Tucker would receive a ten percent commission for jobs for which the customer supplied the necessary equipment without charge to defendant, because defendant would not have to purchase the equipment.
See section vni of the majority opinion.
Although defendant stated that this reduction was temporary, plaintiffs commission on this job was never increased.