NO T RE CO MM EN DE D FO R FU LL -T EXTPU BL IC A TI ON Fi le N ame: 09a0135n .06 Fi led : F ebr uar

y 17, 2009 No . 07- 2293 UNITED STA

TES COURT OF A PPE A LS FO R TH E SI XTH C IR CU IT
JO HN HA RDY, Pl ain ti ff-A ppel lan t,
v. RE YNOL DS & RE YNOL DS COM PA NY, Defendant -A ppel lee

. ) ) ) ) ) ) ) ) ) ON APP EAL F RO M THE UN ITED ST AT ES DIST RICT COURT F O R THE EASTER N DI STRIC T OF MI CH IGAN

Before: MARTI N, BAT CHELDER, an d DAUGHT REY, C ircuit Judges.

PER C UR IA M. In t his di v ersi ty contractac ti on, p lai nti ff Jo hn H ardy

ch all eng es the ruling of th e district co urt grant ing sum ma ry ju dgme nt to his forme r emp loyer, R eynolds & Rey nol ds Compan y . Beca use the s ale s commis si on ag re ement be tw een t he par ti es g iv es Reynolds & Reynolds the discretion to modif y it, and beca use Hardy w as no t respon sible for procur ing the cont est ed s ale throug h his ind iv idu al efforts as re q uired by the ag re ement, we co n c lu d e t h a tt h e d is t ri c tco u rtp ro p e rl y re s o lve d t h e is s u e b e fo re it

. In a d d it i o n , we hol d that the choi ce- of-l aw q uest ion ra is ed by the pla int iff for the firs t t ime on appe al has been w aiv ed. W e the re fore affirm the j udg ment of the dis tr ic t c our t.No. 07- 2293

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- 2 - FACTUA L A ND PROCEDUR A L BACKGROUND
On D ecember

3, 2004, pla int iff John H ardy w as hired as an a cc ount ex ecut iv e for the d efendant, R ey nol ds & R ey nol ds Compan y , a company t h a t se ll s s oftw are and infor mati on te chnol og y

se rv ic es to re tai l automobi le deal ers. R ey nol ds & R ey nol ds has it s hea dquarte rs in D ayton, Oh io, bu t Hardy w as assigned to the Gen eral Motors acco untin Det ro it and w or ked in Mi chi g an. Pr ior to beg inn ing hi s e mploy ment, Hardy si g ned a “S ale s Rep re sent ati v e and Ass oci ate A g re ement,” w hic h prov ide d that Ohi o l aw w oul d g ov er n the a gre e m e n t a n d c hoi ce of v enue an d j ur is dicti on w oul d be in the O hio co urts. The ag re ement als o prov ide d that th e “ [e]mpl oy ee s hal l be ent it led to compens ati on ac cordin g to t he formul a, met hod or sy ste m desc ri bed i n the then -c ur ren t co m p e n sat ion pl an inc lud ing the prov is ion s of suc h plan appli cabl e upon transfer or ter minat ion as su ch pla n maych ang e from t ime to t ime. ” ( Des cr ipt ion s of sal es re present ati v e c ompensat ion pl ans w ere made a v ail abl e on the c ompany ’s i ntranet si te.)
Pr ior to Hardy ’s hirin g, Rey nol ds & R ey nol ds had bee n w or ki ng on a proposa l to prov ide an I nteg ra ted Deal er Manag ement Sy ste m (I DM S) for General M otors d eal ers. As a result of

these ef forts, Reynolds & Reynolds received a forma l Req uestfor Propo sal in Janua ry 2005, not lon g after

H ardy w as hired. Rey nol ds & R ey nol ds manag ement c re ated a tea m of

emp loyees to respo nd to the GM request for a propo sal. Hardy w as no t a part of this team , nor wa s h e include d in the conferen ce calls and mee tings inv olved in prepar ing the proposa l. H ardy ’s role in the proces s w as si mply to ser v e as a “ poi nt pe rs on”No. 07- 2293

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- 3 - to s ubmitq uest ion s t o Gen eral Mo tors. H e co nti nued t o s er v e i n thi s c apaci ty

after the prop osal wa s subm itted to Gen eral Motors, bu t he did not pa rticipate in the con tract neg oti ati ons w it h Gen eral Mo tors t o fina lize the transacti on. Hardy w as, how ev er , l is ted as a “key perso n” on th e con tract. T he p erson al sales plan thatHardy develope d in Novembe r 2005 for the 2 006 f iscal y ear did n ot includ e the IDMS dea l w ith Gen eral Motors. The ID MS co ntractw it h Gen eral Mo tors was annou nced to R ey nol ds & R ey nol ds employ ees on D ecember 16, 2005, and had a v alu e of $260 mi ll ion ov er se v en y ears. After the c ontractw as final iz ed, o n J anu ar y 9, 2006, Hardy

recei v ed a letter aw ardin g hi m a $43, 000 c ash and s toc k b onus for hi s p arti ci pati on in the I DM S transac ti on. The le tter

st ated:
Si nce deal s t his l arg e are unant ic ipa ted w hen es tabl is hin g y our annual com pen sation pl an, no credit wi ll be provi ded through your stand ard compens ati on prog ra m. H ow ev er , t he foll ow ing cas h and s toc k a re i ntended to reward y ou for y our ou tstan ding ef forts. Had Hardy be en grante d a com mission on the IDMS deal acco rding to his v ariable compens ati on pl an, h e w oul d hav e recei v ed $2, 283,750

. Hardy fil ed a compl ain t i n the Eas ter n Dis tr ic t of Mic hig an in March 2006, all eg ing breach of contractand b re a ch o f the Mi chi g an Sal es Rep re sent ati v es’ C ommis si on Ac t, M I CH . C O MP . L AW S A NN . § 600.296 1, w it h j ur is dic ti on bas ed on div ersi ty g ro unds. R ey nol ds & R ey nol ds mov ed for summar y j udg men t, a nd th at mot ion w as lat er g ra nted based on Mi c h ig a n la w.No. 07- 2293

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- 4 - DI SC US SION
St and ard o f Rev iew
W e rev iew

a g ra nt of s ummary

judg ment bya dis tr ic t c our t de n ovo . See Cim inillo
v. Str eicher , 434 F. 3d 461, 464 (6 th Ci r. 2006)

. Summary j udg ment i s p ro per

w here “ the plea dings, the discovery and disclosure ma terials on f ile, and any aff idavits show thatthere is no g enui ne is sue as to any mater ial fact and that the mov ant i s e nti tl ed to j udg ment as a ma tter of

law .” F ED . R. C IV . P. 5 6( c)

. In ev alu ating a m o tion for summar y j udg ment, a cour t “ must re v iew

al l the e v ide nce, facts , and inferences in the li g ht mos t fav orabl e to the non mo v ing party .” Van Gorder v. Grand Trunk W

este rn R.R., Inc. , 509 F.3d 265 , 268 ( 6th Cir. 2007). T o de feata mo tion for sum ma ry judgme n t , t h e n o n mo v ing party must demonst ra te t he e xist e n ce o f a g enui ne i ss ue of mater ial fact. See id. T he e v iden ce present ed by the nonmov ing par ty must be more than a mere s ci nti ll a; i t mus t be suffici ent to al low a reason abl e finder

of fact to find i n tha t par ty ’s fav or . See Ander

son v. Lib er

ty Lob by, In c. , 477 U.S. 242 , 252 (1986 ).
Ch oice o f Law
In a div ersi ty

ca se, federal co urts appl y the confli ct of l aw

r ule s o f the forum s tate. See Kl axon Co. v. Ste ntor

Elec. Mfg. Co. , 3 1 3 U .S

. 4 8 7 , 496 ( 1940)

. Det er minat ion s o f sta te l aw by federal di str ic t c our

ts are to be rev iew ed de nov o by co urts of appeal s. See Salve Regina College v. Russe ll , 499 U .S. 225, 231 ( 1991)

. Beca use thi s law sui t w as filedNo. 07- 2293

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- 5 - in federal co urt i n M ic hig an, w e look first to Mi chi g an s tate law

. Mi chi g an’ s c hoi ce of law ru les “ re qui re a c our

t t o bal ance the e x pect ati ons of the par ti es to a cont ra ct w it h the intere sts of

the sta tes involv ed to det e rm in e w hich sta te's law to ap ply.” Equitable Li fe Ass ur ance Soc'

y o f t he Un ited St

ates v. Poe , 143 F .3d 1 013, 1016 ( 6th C ir .1998)

. The Supreme C our

t of M ic hig an has foll ow ed th e approach of the R est atement (S econd ) of Con flic t of

Law s, §§ 187-18 8 i n s tr ik ing thi s b ala nce. See Mi ll ’ s P ri de, Inc. v. C onti

nental Ins . C o. , 300 F .3d 701, 704- 06 (6 th Ci r. 2002)

. Acc ordin g to the Res tatement , t he l aw of the s tate sel ect ed by

the par ti es g enerall y

co ntrols, u n le ss there i s n o s ubst anti al conne cti on betw een the cont ra ct and the sta te or the par ti es’ ch oic e of la w

w oul d v iol ate a fundamental pol icy

of the s tate law

w hic h w oul d h a v e g ov er ned i n the abs ence of the par ti es’ ch oic e. See Kipin Ind us., Inc. v. Va n Deilen In t’ l, Inc. , 182 F.3d 49 0, 49 3 (6th Cir. 199 9).
Here, the p arti es ag re ed i n the Sal es Rep re sent ati v e and Ass oci ate A g re ement t hat “[ t]he laws o f the St ate o f Ohio shal l g ov er n al l q uest ion s rela ti v e to the i nter pretati on and cons tr uct ion of thi s A g re ement. ” M ic hig an s tate cour ts g enerall y

fav or enforc ing co n tr a ct u a l p ro visio n s re gar d in g th e ch o ice of la w, whic h in th is c a se w o u ld se e m to w e igh in fav or of appl y ing Ohi o l aw . See Turcheck v. Am erifun d Fin., In c. , 725 N .W .2d 6 84, 6 88 (M ic h. C t. App. 2006)

. How ev er , t he pla int iff sued un der a s peci fic M ic hig an s tatut e, an d nei ther par ty rais ed th e c hoi ce of law prov is ion at the d is tr ic t cour t lev el. As a re sul t, the district court judge relied on Michig an law withouto bjectio n. B oth p arties relied prima rily on M ic hig an l aw

i n the ir br iefs suppo rt ing or

oppos ing su mmary

j udg ment; nei ther

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In s o a rg u i n g , t h e d e fe n d a n tre l i e s o n a n u n p u b l i s h e d S i xt h C i r c u i td e c i s i o n, 1 Golum b ia v. The P

ru denti al Ins . C o. , N o. 96 -1 521, 1997 W L 34572 8 ( 6th C ir . J une 20, 1997)

. Gol umbia inv olv ed an ins urance cont ra ct w hic h ex press ly sta ted that New Y or k l aw w as to gov ern the policy . Becau se the plaintif f ’s attorne y

“repre sent ed to the district cou rt that Mi chi g an l aw

co ntrols ,” the pa n e l tr e ated the i ss ue as w aiv ed, a nd di d notal low the pla int iff to rais e the ch oic e of la w prov isi o n o n appeal. See id. at *2. In reach ing this conclu sion, th e pa nel relied o n tw o case s f rom th e S e ve n t h Circuit, on ly one of w hich squarelyadd ressed the issue of acquiescen ce to th e ap plication o f st ate la w

a t the district cour t l ev el. The f irs t c ase, Muslin v. Frelinghuysen L ivestock Man age rs, Inc. , 777 F .2d 1230 ( 7th C ir . 198 5) , add re ss es an attempt t o rais e the i ss ue of cho ic e of st ate l aw “ at a la t e p o in tin

. . . li t ig a t io n ” aft e r t h e p a rt ie s h a d “a c qu ie s c e d ” t o t h e ch o ic e o f Ne w Yo rkla w. Id. at 1231 n. 1. The other , W hir lpo ol Fi n. C or p. v . Se vaux , 96 F.3d 216 , 22 1 (7 t h Cir. 199 6), add resses cho ice of law in the intern ation al cont ext and the requireme nt of Fed. R. Ci v. P. 4 4 .1 to g iv e adeq uate noti ce before rais ing an i ss ue of forei g n l aw , w hic h i s n ot d ir e c t ly a p p li c a b le t o t h e is s u e in t h is c a s e . A lt h o u gh t h e re is li t t le ca s e la w f ro m o u r o wn ci rc uit direct ly address ing thi s i ss ue, a nd Golumbia se em s t o rely p artlyo n an inapp licable cas e f ro m anot her

ci rc uit , i ts approach appears reason abl e and is i n ac cord w it h the ge n e ra l c o n t ra c tp ri n c ip le t h a tt h e p a rt ie s ca n co n s e n tt o t h e ch o ic e o f la w.

- 6 - ra is ed or ci ted Ohi o law

. Ac cordin g ly , t he defendant arg ues that the c hoi ce of law i ss ue w as w aiv ed by

the pla int iff in t he di str ic t c our t, and bec ause itw as not a ss e rt e d at the district court level, the issue is w aived on ap pea l. 1
As a g eneral r ule , w e decli ne to consi der arg uments that w ere not prev iou sl y rais ed in the d is tr ic t c our

t. See , e.g. , City Mgm t. Corp. v. U.S. Che m . Co., Inc. , 43 F. 3d 244, 255 (6 th C ir . 199 4) . How ev er , there are recog niz ed ex cept ion s t o thi s g eneral ru le, per mitt ing rev iew of argumen ts notpre vio usly raised if they are pure question s of law , or “w here injustice m ight othe rw ise result.” Id. I n g ra nti ng thi s e x cept ion , w e hav e t e n d ed to v iew
more fav orabl y

arg uments thathav e been ra is ed in subst ance, althoug h notex pli ci tl y . See id. (addressin g an issue on ap pea l that was “ actu ally raised . . . [but ] notpressed at trial”);No. 07- 2293

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- 7 - United F ood & Com m er

ci al W or ker s U nio n, Lo cal

1099 v. Sw

. Oh io Reg ’ l Tr ansit Au th. , 163 F .3d 3 41, 3 60 n. 9 ( 6th C ir . 199 8) ( “Thoug h the ir arg uments co u ld h a ve been p r e s e n t e d m o r e c l e a r l y t o t h e d i s t r i c tc ourt, w e n e v e rt h e l e s s b e l i e v e t h e p a rt i e s ’ b r i e fs place d be fore the district court the v alidity of the policy und er the o v erbrea dth doctrine .”).
In t he present cas e, w e hav e no ind ic ati on from the record tha t t he par ti es ra is ed, or att empted t o rais e, t h e c h o ice of l aw prov is ion i n the Sal es Rep re sent ati v e and Ass oci ate A g re ement at the dis tr ic t cour t lev el. Al thoug h the deter minat ion of w hic h s tate law shou ld gov ern this agreem entis a q uest ion of law , the re are no oth er facto rs that w ould
w eig h i n fav or o f

departi ng from t he g eneral ru le and c onsi der ing the choi ce of law pro v i s i o n fo r t h e fi rs t t i me o n a p p e a l : ( 1 ) t h e r e d o n o t a p p e a r t o b e i n d i c a t i o n s t hat t he partie s attem pte d to pre sentt he issue butd id notd o so clearlyo r fo rcef ully eno ugh, as in City Ma nagem ent

or United

Food & Co mm ercial W orkers ; ( 2) i t doe s n ot ap pear that inj ust ic e w oul d oth er

w is e resul t i f Mi chi g an, rat her than Ohio, law

is a ppl ied ; ( 3) the g eneral pr inc ipl es of contrac t i nter pr etati on th at w oul d appl y i n i nter preti ng the Sal es Rep re sent ati v e and Ass oci ate Ag re ement do not sig nific antl y diff er from O hio to Mi chi g an, compare Aerel, S. R.L. v. PCC Airfoils, L.L. C. , 448 F.3d 89 9, 90 4 (6th Cir. 200 6) (“contract lan g uag e i s a mbig uous onl y i f it is su sc epti ble of tw o c onfli cti ng but reaso nab le interp retat ions”) (stating Ohio law ) ( intern al qu ota tion o mitt ed) with Cer ti fied R estor

ati on Dry C leaning

Networ k, L.L.C . v

. T enke Cor

p. , 511 F .3 d, 5 35 , 54 4 ( 6t h C i r . 20 07 ) (“ A
c o n t ra c tis a m b ig u o u s if it s wo rd s m a y reaso nab ly be un dersto od in dif

feren t w ays.”) (stating Michig an law) (interna l quot ation o mitt ed); and (4) the ch oice of law decision w ouldNo. 07- 2293

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- 8 - notimpa ir plaintif

f ’s a b il it y to bring a claim und er the Michigan Sale s Represen tatives’ Commi ss ion Ac t ( SR CA ), see Howting-Rob inson A ssocs., In c. v. Bryan Custo mPlastics , 65 F .Supp. 2d 610, 613 (E .D . Mi ch. 1999) (app ly ing SR CA i n a s ale s c ommis si on di sput e despi te t he c ontract ’s Ohi o choi ce of l aw prov is ion ). Gi v en th ese ci rc umstan ces , w e s ee no co mp elling reaso n to con sider the choice-of-law issue for the f irst time on app eal. Contract Dispute
Hardy sig ned a Sal es Represent ati v e and Ass oci ate A g re ement pr ior to beg inn ing his empl oy ment w it h R ey nol ds & R ey nol ds. W hil e thi s a g re ement di d notdetail t he compens ati on th at Ha rd y was to re cei v e from R ey nol ds & R ey nol ds, i t di d s tate that “E mploy ee shal l be enti tl ed to compens ati on acc ordin g to t he formul a, met hod or sy ste m de s c r i be d i n th e th en - c ur r en t c om pe ns at i on pl an . . . as su c h pl an s ha l l c ha ng e from t i me to ti me.” The cont ra ct als o sta ted that “[ t]he spec ificse rv ic es per formed by

Empl oy ee, t he pl ac e of t he i r

p er for ma nc e, a nd E mp l oy ee ’ s t i tl e ma y be mo di fi ed i n an y w ay ata ny t i me in Rey nold s’ sole discretion .”
T he sa les represe nta tiv e com pen sation plans for the 2 0 0 5 and 200 6 f iscal y ears w ere available to Reynolds & Reynolds em ployees on the com pan y ’s intranet . Th ese document s p ro v ide d:
B e c a u s e o f u n u s u a l c i r c u ms t a n c e s o r a n y o t h e r c o n d i t i o n, S ale s Ma nag ement an d/or

Sal es Compen sat ion M anag ement res er v e the r ig ht t o sus pen d or

ch ang e the appl ic ati on of thi s c ompensat ion pl an i n s ele cte dNo. 07- 2293

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- 9 - ind iv idu al si tuati ons. Thi s mean s, in some c ases , c ompensat ion may be ar bit ra ri ly

dete rmi ned w it hout re g ard for the s peci fic d etai ls of thi s p lan

. The compens ati on pl ans als o re q uired s ale s represent ati v es to s ubmitreq uest s for adj ust ments in thei r credi t for sales m ade to the company , in w ri ti ng , w it hin 90 day s o f the compl eti on of the transac ti on. Hardy w as paid an initial base salary of $11 0,0 00 per y ear, w ith ad dition al v ariable compens ati on to be b ased on th e c ompensat ion pl an i n effectfor t hat fis cal y ear . For the 200 6 f iscal y ear (beginnin g on Octob er 1, 20 05 a nd e ndin g Sep tem ber 30 , 200 6) Hardy ’s
v ar iab le compens ati on w as to be based on three different sc ale s, one of w hic h w as to be cal cul ated based on h ow much of the empl oy ee’ s a nnu a l sal es g oal had been met

. Hardy ’s annual sa les g oal for t he 2006 f is cal ye ar (setin Nov ember

2005) w as fiv e mi ll ion dol lars, and this goal did not incl ude the much larg er GM -I DM S c ontract

. The docu ment tha t describe s the com pen sation p lan also state s thatadd itiona l payment s to em ployees, essen tially

sales com mission s, w ill be “[b]a sed on INDIVI DUAL performa nce. ” ( Em pha sis in or ig ina l. )
Breach o f Co nt ractC laim
Pl ain ti ff ’s breach of contractcl aim depends on t he i nter pretati on acc orded t he Sal es Rep re sent ati v e and Ass oci ate A g re ement an d compens ati on pl an doc uments referenc ed by the ag re ement. T he plai nti ff arg ues that the ag re ement is “ sparsel y w orded” and that, based on p ri or company pract ic e, Hardy shoul d be enti tl ed to re cei v e a percent ag e of theNo. 07- 2293

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- 1 0 - ID MS deal ac cordin g to his co mpensat ion formul a. Hardy cl aims thati t w as company pract ic e t o pay

“ inc enti v e c ompensat ion on a ny sa les co ntract s recei v ed from G eneral Mo tors, not j ustorders w hic h he procured,” so he s houl d recei v e c ompensat ion for t he ID MS deal as w ell

. He als o not es that after his l aw sui t w as filed , t he c ompensat ion pl ans for t he 2007 fisc al y ear w ere c hang ed s o tha t t hey sp eci fical ly

define “i ndi v idu al per formance” for t he first t im e and add ex pli ci t l imi ts for c ompensat ion for e mploy ees inv olv ed i n “ larg e deal s.”
Und er M ic hig an l aw , how ev er , before w e c an l ook to extr ins icev ide nce, su ch as the course of deal ing betw een the parti es, w e look to the inten t of the par ti es as ex press ed by the p lai n l ang uag e of the contra ct’ s t er ms. See Cer ti fied R estor

ati on D ry Clea nin g , 511 F. 3d at543. If

the cont ra ct ter ms are notambi g uous, thati s, if they do n ot al low re asona ble co nflicti ng i nter pretati ons, then the cour t enforc es the cont ra ct’ s t er ms as the par ti es ex pr ess ed them. See id. at 544. Extr ins ic ev ide nce is not cons ide re d unl ess the ter ms are ambi g uous. See id. W hen re adi ng cont ra ctu al prov is ion s, w e must“ g iv e[] the
w ords the ir plain and ordinary mean ings.” Id. (quo ti n g Coate s v. Bastian Bros., Inc. , 741 N.W .2d 539 , 543 (M ich. Ct. App . 200 7)).
Looki ng at the a g re ement be tw een t he par ti es, w e s ee th at t he c ompensat ion form u la , a lt h o u gh n o t e xtre m e ly de ta ile d , in te n d e d th a t Ha rd y’s vari a b le co m p e n sa ti on was to be ca lc ula ted b ased on hi s i ndi v idu al per form a n ce . The dis tr ic t c our t, cons ult ing the dicti onar y defini ti on of the w ord “i ndi v idu al, ” conc lud ed that, “t he ordi nar y m eani ng of

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- 1 1 - w ords thus se ems t o refer t o s ale s t hat, w hil e per haps not e x c lu s ive ly the re sul t of an ind iv idu al’ s e fforts, in larg e par t re sul t from or

are founded on suc h efforts. ” Gi v en th at t he ID MS deal w as in prog re ss before Hardy w as employ ed by Rey nol ds & Rey nol ds and t hat Hardy di d notpl ay

a maj or role i n prepar ing the proposa l for th e ID MS deal or neg oti ati ng the f inal con tract, it do es no t app ear tha t this transa ction resu lted in large part f rom Hardy’s efforts. W hil e H ardy

cl ear ly di d c ontr ibu te i n s ome w ay to the t he ID MS deal , t he defendant arg ued i n the distr ic t cour t that the pl ain ti ff ’s annual sa lar y al re ady co mpensat ed him for hi s w or k o n thi s p ro ject. F ro m a p la in re adi ng of the w ords “b ased on i ndi v idu al performa nce, ” it doe s not follow tha t the plaintif f was to b e com pen sate d for a sale to which he merely

co ntr ibu ted.
In t he fis cal y ear

foll owing h is law sui t, as the p lai nti ff poi nts out, the company re v is ed i ts pol ic ies to more cl ear ly define “i ndi v idu al per

formance” and spec ific all y l imi ted the comm ission tha t sales repre sent atives could receive f rom “l arge deals.” How ever, just bec a u se t h e pl an w as made c lea re r, i t doe s n ot ne ces sar il y foll ow thatthe or ig ina l language w as am biguous a nd “equally suscep tible to mo re t han a singl e me anin g.” Ma yor o f L a n s in g

v. Mic h

. P u b

. S e rv. Co mm’n , 6 8 0 N.W .2d 8 40, 8 47 ( Mi ch. 2004)

. The
re asona ble readi ng of the p la in m eani ng of the t er m, “ Base d on IN DI VID UA L per formance, ” w oul d not chang e. The re asona ble ness of thi s readi ng of the t er m can be anal yz ed i n l ig ht of oth er te rm s in t h e contract , as the dis tr ic t c our t di d. Con si der ing the pla int iff’s $ 110,000 annual sa lar y and $5 mill ion annual sa les obj ect iv e, w hic h di d notco v er the I D M S d e a l , i t w o u l d n o t s e e m r e a s o n a b l e t h a t t h e p a rt i e s i n t e n d e d , b y t h i s t e r m, toNo. 07- 2293

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nolds & R eynolds Co.

- 1 2 - compens ate t he pla int iff ov er $2 mil li on for a transacti on that w as already i n prog re ss w hen he j oin ed th e c ompany and in w hic h he did not pla y a l eadi ng role

. E ve n if we lo o k t o e xt ri n s ice vid e n c e o f t h e co m p a n y’s p ra c t ic e in p a yin g i n c e n t ive co m p ensat ion to hel p ex pla in the mean ing of the i ndi v idu al per formance ter m, tha t evidence does not app ear to supp ort plaint if f ’s cont ent ion that he shou ld be pa id for every sal e to General Mo tors, re g ardle ss of his deg re e of par ti ci pati on i n the sal e. For i nst ance, a R ey nol ds & R ey nol ds v ic e presi dent ask ed to ex pla in t h e m eani ng of the i ndi v idu al perform a n c e t e r m d e fi n e d i ta s “ w e p a y p e o p l e fo r

w h a tt h e y

s e l l

. ” S h e e x p l a i n e d that ind iv idu al per

formance w as understo od in the c ompany to mean “ that y ou w ere the person w ho w ent o ut an d g ot t he bus ine ss .” She als o stated thatas a “ team effort,” the ID MS deal
w as not i ntended to be c ov ered by the ind iv idu al compens ati on pl ans. In ad dit ion , t h e l ang uag e of the Sal es Rep re sent ati v e and Ass oci ate A g re ement an d su p p o rt in g do cu m e n ts m e n ti o n e d th a t t h e em p lo yer re se rved t h e righ t t o m o d if y or ch a n ge the v ar iab le compens ati on scheme. The ag re ement i tse lf menti ons that the c ompensat ion pla ns “may

ch ang e from t ime to t ime, ” and t he “ General Rul es” from bot h the 2005 and 2006 fis cal y ear compens ati on pla n document s sta te that the company “reser v e[s ] the r ig ht to s uspen d o r chang e the appl ic ati on of thi s c ompensat ion pl an i n s ele cte d i ndi v idu al si tuati ons. ” Both document s ex pla in that “c ompensat ion may be ar bit ra rily d e termine d
w ithou t regard fo r the spe cif ic deta ils of this plan. ”No. 07- 2293

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nolds & R eynolds Co.

- 1 3 - T he plaintif

f cont end s, howev er, tha t the re w as no language in the p la in tif f ’s i nd i v i du al c om pe ns at i on p l an t ha t s ta te d th atRe y no l ds & R ey no l ds c ou l d c ha ng e th e te r ms at an y t im e . The pl ain ti ff al so dis putes thatthe lan g uag e i n the 2005 and 200 6 com pen sation plans ap plied to him be cause these c o mp ensa tion p lans do not explicitly re fer to H ardy ’s j ob ti tl e, O EM Sol uti ons Acc ount Ex ecut iv e. Al tho u gh the Sal es R ep r es en ta ti v e an d As s oc i at e Ag r ee me nt th atH ardy s i g ne d do es i nc or po rat e th e te r ms of “t he then- cur re nt compens ati on plan .

. . a s s u c h p la n ma y c h a n g e f ro m ti me to t ime .” (e mphasi s a dded) , i n i ts order g ran ti ng su mmary

j udg ment, the d is tr ic t c our t di d notfind itnec ess ar

y to re sol v e the se is sues . Fi nal ly , t he par

ti es dis pute t h e a p p l i c abi li ty of the M ic hig an procur ing ca use doct ri ne, w hic h g ov er ns the l iab il ity of pr inc ipa ls to pay

co mmiss ion s t o the ir

sa les ag ents

. As sta ted by the Mi chi g an Sup re me C our t, “t he ag ent i s e nti tl ed to re cov er hi s c ommis si on w hether or not he has personal ly

co ncl uded an d c omplet ed th e s ale , i t bei ng su ff ic ien t i f his efforts
w ere the procu ring cause of the sale .” Ree d v

. Ku rd z iel , 89 N.W .2d 479 , 483 (M ich. 19 58). This doctr ine appli es w hen a sal es ag ent’ s author ity or employ ment is ter minat ed and no ex pli ci t ag re ement ha d been re ached ov er the pay m e n t o f

c o m m is si ons in the e v ent o f ter minat ion

. See R andal l J. Gi lla ry & Kev in P. A lbu s, Uns uppor table Li m it ati ons on Mi chi gan’ s P ro cur ing C ause Doc tr

ine i n the C ase of Rob erts Ass oci a te s, I n c. v. Bl az er Inter nati onal C or p., 2004 M I CH . S T . L. R EV . 101, 106. Thus, i n a c ase in w hic h the ag ent did th e w ork required to brin g a b outa sale bu t is termina ted before the transact ion is compl eted, the “p ro cur ing ca use” doc tr ine w oul d al low the a gent to be compens ated forNo. 07- 2293

Har dy v. Rey

nolds & R eynolds Co.

- 1 4 - w ork perf o rm e d an d prevent th e principa l from taking advantage of the agen t’s performa nce wi tho ut com pen sating him o r her.
The pla int iff cont ends thatthe ag re ement an d oth er doc uments di d notreq uire tha t Hardy be t he procur ing ca use of a sal e i n order to re cei v e compens ati on. In fact , H ardy tes ti fied th at “ he w as pai d i ncent iv e c ompensat ion o n a n y sa les co ntract s recei v ed from General Mo tors, not j ustorders w hic h he procured.” H e al so notes thathe w as compens ated for trans act ion s that other sales represent ati v es compl eted and, therefore, shoul d be compens ated for th e ID MS transacti on as w ell

. Und er the doct ri ne as s tated i n Ree d , H ardy w oul d be enti tl ed to co mpensat ion for sal es that he or ig ina ted a nd c los ed, a nd al so for s ale s forwh ich h e w as the p ro cur ing caus e, ev en i f others w o rke d o n t h e transacti on or cl osed the d eal

. He w oul d, cons eq uentl y , be enti tl ed to co mmiss ion “on s ale s w hic h w ere the su bje ct or the re sul t of d i s c u s s i o n s , n e g o t i a t i o n s , q u o t a t i o n s , o r p r e - s a l e c u s t o me r

s e r v i c e s i n w h i c h t h e p l a i n t i ff actu ally participat ed, ” Rob er

ts Ass ocs ., In c. v. Bla zer Int ’ l Cor p. , 741 F .Supp. 650, 655 (E .D . M ic h. 19 90) , ev en th oug h he did not par ti ci pate in the fin al cont ra ct neg oti ati ons. I n this ca se , the plai nti ff

cl aimed that he w as the “ most impor tant person in sec ur ing the busi ness ” and w as “i n real ity . . . the lea d person. ” Al thoug h H ardy di d s er v e as the poi nt person for q uest ion s t o be subm it te d to General Mo tors a nd at tend meeti ng s for the Rey nol ds & R ey nol ds team w or ki ng on t he proposa l, he did not tak e any lea d ro le in the activity leadin g up t o t h e IDMS negotiat ions. He also did not pla y a role in discussion s,No. 07- 2293

Har dy v. Rey

nolds & R eynolds Co.

- 1 5 - neg oti ati ons, q uotat ion s, or pre- sal e c ust omer ser v ic e. As a resul t, he c annot be cons ide re d a p ro cur ing ca use of the ID MS sa le, and t hus is not enti tl ed to co mpensat ion on th at ba sis.
Sales Rep resen ta ti v es’ C om miss io n ActC laim
T he p laint if

f also raises a claim u nde r the Michigan Sales Rep resen tatives’ Commi ss ion Act , M I CH . C O MP . L AW S A NN . § 600. 2961. The Ac t req uires employ ers t o pay commi ss ion s d ue to sa les re p re s e ntati v es w it hin 45 d ay s o f the c ommis si on bec oming due. Pr inc ipa ls w ho v iol ate t he Ac t are l iab le f o r tr e b le damages and attor ney s’ fees i f they
w it hhol d or

del ay pay ment. Id. § 60 0.2961( 5)

. This cl a im is der iv ati v e of the breach of cont ra ct cl aim, how ev er , and i f t h ere i s n o l iab il ity

on t he c ontractcl aim for s ale s commi ss ion s, there i s n o c or re spond ing v iol ati on of the Act

. CO NC LU SION
For the re asons se t outabov e, w e AF FI RM the jud g ment of the dis tr ic t c our t.