The Problem

Our client, a West Michigan business, hired the plaintiff as its sales manager and orally agreed to pay him commissions on sales to customers he “went out and got” for the company. After his hiring, numerous customers called into the company to do business with them, and plaintiff, as the sales manager, assisted those customers. The company began mistakenly paying the plaintiff commissions on those sales and, after his termination, the plaintiff sued our client, arguing that he was entitled to continuing, post-termination commissions on all sales to the customers for which he was the “procuring cause.” The plaintiff also asserted that Michigan’s Sales Representative Commission Act applied such that he was entitled to treble damages and the recovery of his legal fees. During the case, the plaintiff filed numerous affidavits, swearing under oath that he was the “exclusive” reason the customers were doing business with our client and otherwise stating that he was the reason for all of the post-termination sales to those customers.

Our Approach

Because the commission agreement was oral, the case presented a classic “he said, she said” situation. The plaintiff claimed that the intent of the oral commission agreement was to continue to pay him commissions, even after his termination, for sales to any customer he negotiated with during the course of his employment and thereby “procured.” Our client, however, stated that the intent was to only pay commissions while plaintiff was employed and only for customers the plaintiff actually went out and got on his own. Because none of the customers came to the business because of the plaintiff’s efforts, our position was that plaintiff was owed no more commissions. Given this fundamental dispute over the intent of the agreement, credibility was key, and at trial we focused on the numerous false affidavits the plaintiff had filed throughout the case to show the jury that the plaintiff was not the reason the customers were doing business with our client and establish that plaintiff’s version of this agreement was false.

The Result

The case was tried to a jury in the Kent County Business Court over a two-week period. The plaintiff asked the jury to award him $1.2 million in sales commissions and asked the jury to conclude that the Commission Act applied because the agreement involved the sale of goods, as opposed to services.  We, however, asked the jury to find that there was no breach of contract and that the Commission Act did not apply because the case predominately involved the sale of services. The jury returned a verdict finding no breach of contract by our client and awarding the plaintiff no money.  The jury also agreed that the contract involved the sale of services such that the Act did not apply. As a result of the verdict, our client was also able to seek recovery of its legal fees from the plaintiff.

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