UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BOBBY MYERS,

Plaintiff-Appellant,

v.

No. 97-2457

AVERY DENNISON CORPORATION, a

Delaware Corporation authorized to

do business in Virginia,

Defendant-Appellee.

Appeal from the United States District Court

for the Eastern District of Virginia, at Norfolk.

Raymond A. Jackson, District Judge.

(CA-97-33-2)

Argued: May 5, 1998

Decided: September 3, 1998

Before HAMILTON and MOTZ, Circuit Judges, and

BEEZER, Senior Circuit Judge of the

United States Court of Appeals for the Ninth Circuit,

sitting by designation.

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Affirmed in part and reversed and remanded in part by unpublished

per curiam opinion. Senior Judge Beezer wrote a separate opinion

concurring in part and dissenting in part.

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COUNSEL

ARGUED: Thomas Scott Carnes, SYKES, CARNES, BOURDON &

AHERN, P.C., Virginia Beach, Virginia, for Appellant. Stephen
Wainger, HUFF, POOLE & MAHONEY, P.C., Virginia Beach, Virginia, for Appellee. ON BRIEF: Timothy M. Richardson, HUFF,

POOLE & MAHONEY, P.C., Virginia Beach, Virginia, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

This appeal arises out of a breach of contract action brought by

Bobby Myers against his former employer, Avery Dennison Corporation.

I.

Between 1974 and 1995, Avery employed Myers as a machinery

salesman in the company's Labeling Machinery Division (LMD). At

the time of the events giving rise to this suit, Myers, as an LMD sales

manager, was responsible for overseeing machinery sales originating

in North America and Mexico. Myers received a base salary plus a

"tiered" percentage commission on machinery sales, with the percentage fluctuating as the amount of sales increased. Periodically Avery

would unilaterally restructure the commission tiers; this happened

many times after Myers joined Avery. For projects of unusual volume, resulting in atypically large commissions, Avery was known to

reduce the commission percentage paid to sales staff. On occasion,

Myers had also received a percentage commission on sales of labels

made in conjunction with machine sales.

In April 1992, Avery, through its Security Printing Division, began

negotiating with Duracell, Inc. to supply pressure-sensitive labels for

its batteries. Avery referred to this project as"T2." Myers was asked

to assist in this sales effort to develop a prototype machine that would

manufacture these labels. In late 1992, T2 began to falter, yet by

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1993, Avery had reorganized and expanded the project, referring to

this new phase as "Darwin." Myers played a lesser role in Darwin

than he did in T2.

In November 1993, Avery executives declared Duracell a special

project meriting an alternative tiered commission for machine sales.

At the time the Duracell deal took shape, Myers was compensated

generally at 1.7% for annual machine sales up to $625,000, 3.4% on

sales from $625,000 to $1,000,000 and 5.1% after his sales rose

above the $1 million mark. For Darwin, Avery altered this scheme,

providing 4% commission on the first million dollars of Duracell

machine sales, 3% on the second million and 2% any sales above two

million. At Avery's request, Myers memorialized his agreement to

this special commission structure in a letter dated January 25, 1994.

Of a total of 36 machines sold to Duracell during Darwin, Myers

received commission on the 22 machines sold in North America and

Mexico at this 4-3-2% rate. Myers did not receive any commission on

machines sold in any other area or on any labels sold in connection

with Darwin.

Myers filed this suit against Avery, alleging that he was entitled to

a commission not at the 4-3-2% rate, but at the rate generally applicable to Avery machine sales, for all machines sold to Duracell (not just

those sold in the United States and Mexico). He also alleged that he

was entitled to a commission on all label sales made in connection

with the Duracell deal. The district court granted summary judgment

to Avery, holding that Myers, pursuant to his January 25 letter, was

properly compensated at the 4-3-2% commission rate, and that this

letter entitled Myers only to compensation on machines sold in the

United States. The court also concluded that Myers was not entitled

to a commission on label sales arising from the Duracell deal.

II.

Having reviewed the record, briefs, and relevant case law, and having the benefit of oral argument, we conclude that the district court's

ruling as to the commission percentage to which Myers was entitled

on machines sold during the Darwin project was correct. Myers

agreed in writing to the special 4-3-2% compensation structure and is

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bound by that agreement. Accordingly, we affirm the judgment as to

this claim, on the reasoning of district court.

III.

However, disputed issues of material fact preclude the grant of

summary judgment to Avery at this time on the two remaining claims.

The first of these is Myers' contention that, regardless of which tiered

structure applies, he is entitled to a commission on machines sold outside of his geographic region. Avery maintains that because sales staff

received machinery commission incentives based on the geographical

location of the sale and these machines were sold outside of Myers'

region, Myers was not entitled to commissions on these sales. The

district court apparently found the company's argument persuasive.

Although the court did not directly address this issue, it found that in

paying Myers a commission on six (of the 22) machines sold in Mexico, Avery paid him "more than that to which he was entitled." The

district court seemed to believe that the undisputed evidence revealed

that Myers' January 25 memorandum covered only the 16 machines,

which as of that date, the parties anticipated would be sold in the

United States.

We can find nothing in the record that mandates this conclusion.

Nowhere in the January 25 letter is Myers' commission limited to

machines sold in a certain region. Rather, the letter states that:

[o]n the first one million dollars of business [Myers'] incentive will be 4%. On the next one million dollars of business

the incentive will be 3%. On all subsequent million dollar

incremental business the payout will be 2%.

(Emphasis added). Thus, the letter is ambiguous as to what exactly

constitutes "business" generated by the Duracell deal.

Furthermore, sufficient credible evidence exists to raise a genuine

issue of fact as to whether "business" was limited to machines sold

in the United States. Tom Hampton, LMD's general manager, testified in his deposition that at the time the letter was drafted, "no one

knew exactly how many machines" would be sold and, thus, how

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many machines for which Myers would receive a commission. Myers

also stated in an affidavit that on at least four separate occasions prior

to the Duracell deal, he had received commissions on machines sold

outside his geographic area, indicating that Avery's practice was to

compensate salespersons for machines sold outside the area for which

they were responsible.

As to Myers' remaining contention -- that he is entitled to a commission on labels sales -- both parties agree that Myers' compensation for labels sales is governed by a written memorandum, dated

May 17, 1994, entitled "SSE Label Compensation Program." See

Appellant's Brief at 14, Appellee's Brief at 26. The memorandum

states that it "formalize[s] the definition and procedure for the 1%

commission that will be paid to you [LMD machine salespersons] for

label sales," which includes "new label business sold in conjunction

with a pressure sensitive labeling machine." (J.A. 60 OO) (Emphasis

added). The memorandum further states, in pertinent part, that to

receive compensation:

[The machinery salesperson] must be actively involved with

the Label salesperson in selling the total system to an

account [and] . . . .

The attached "System Sales Qualification" form must be

completed and returned to the appropriate Division.

Avery asserts that it is entitled to summary judgment because this

compensation plan does not apply to any label sales made as a result

of joint sales efforts between LMD machinery salespeople and a label

salesperson in the Security Printing Division, the division credited

with selling Duracell labels. More specifically, Avery asserts that the

uncontroverted deposition testimony of the memorandum's drafter,

Ralph Torres, demonstrates that this compensation plan applied only

to joint sales made between LMD salespeople and labels salespeople

in the following Avery divisions: Decorative Technologies, Durables

and Automotives, and Pharmaceuticals. Torres explained that this is

so because the memorandum was addressed to the heads of each of

these named divisions and not to the head of the Security Printing

Division.

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Yet the May 17 memorandum itself does not provide that it covers

only sales of labels made as part of a joint effort between LMD

machinery salespeople and labels salespeople in one of the above enumerated divisions. Rather, the memorandum seems to"formalize" the

procedure for paying commission on LMD "label sales" generally.

Moreover, in addition to naming the heads of the divisions enumerated above, the memorandum is also addressed to"Label Salesforces." As Myers argues, possibly a factfinder would infer that this

memorandum governs all sales made by LMD machinery salespeople

in conjunction with any of Avery's "Label Salesforces," including the

Security Printing Division's. Accordingly, we cannot say, as a matter

of law, this memorandum does not encompass sales made by LMD

machinery salespeople with label salesforces in the Security Printing

Division.

Alternatively, Avery argues that even if this memorandum applies

to label sales made in conjunction with Darwin, Myers is ineligible

for the 1% commission because he failed to fill out and submit a

"System Sales Qualification" form required under the May 17 memorandum. Although Myers admits that he did not submit this form, he

asserts that this is not fatal to his claim and nothing in the record conclusively demonstrates that it is. The May 17 memorandum does not

specify a time by which the form must be filed, or that failure to submit the form results in denial of a commission. Torres stated in deposition that occasionally salespersons had submitted these forms "after

the fact," i.e., after the labels were sold and shipped, and they were

nonetheless entitled to commission. Myers testified that label forms

were often filed after the label sales were completed and that there

was no firm deadline for filing. Thus, we cannot conclude, as a matter

of law, that failure to submit this form deprives Myers of the claimed

commissions.

Finally Avery argues that Myers was not "actively involved" in the

"total sales" made during Darwin project as required pursuant to the

May 17 memorandum, and thus, is not entitled to label compensation.

Myers admits that he played a lesser role in the Darwin phase as compared to the T2 phase, but nonetheless asserts that he was sufficiently

active in selling the "total system" to warrant a label commission. The

record lends some support to this contention. After all, Myers' participation in the Duracell project (whether in the Darwin or T2 phase)

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was "active" enough to receive commissions on the machine sales.

Indeed, according to Hampton, Myers was "actively involved" in

"working with . . . Duracell" during the T2 phase. Moreover, the

record reflects that Myers' participation extended well into the Darwin phase. Bill Kennerly, an Avery executive instrumental to Darwin,

testified in his deposition that the T2 team had not been "disbanded"

but "expanded" to accommodate the additional personnel required to

execute the Darwin project and that even during this expansion,

Myers remained the only salesperson on the team, staying "in contact"

with Duracell staff through the spring of 1994. Accordingly, a disputed issue of material fact exists as to whether Myers was "active"

enough to warrant compensation under the memorandum, and so

summary judgment in Avery's favor as to this claim cannot stand.

IV.

In sum, we affirm the district court's grant of summary judgment

to Avery Dennison Corporation on the commission rate claim. As to

the other two issues, we reverse and remand for further proceedings

consistent with this opinion.

AFFIRMED IN PART AND REVERSED

AND REMANDED IN PART

BEEZER, Senior Circuit Judge, concurring in part and dissenting in

part:

I concur in the opinion of the court, except for Part II. In Part II,

the court adopts the reasoning of the district court and holds that

Myers is bound by the written agreement for a reduced commission

rate. I respectfully dissent.

To decide Avery's motion for summary judgment, the district court

properly assumed that Myers' right to his standard 5.1% commission

on machinery sales had already vested when Myers agreed to the 4-

3-2% reduced commission structure. Avery could not have unilaterally reduced Myers' commission rate once Myers' right to his commission had vested. See Progress Printing Co., Inc. v. Nichols, 244

Va. 337, 340-41 (1992).

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The district court determined, however, that the 4-3-2% commission agreement was a superseding contract based on an offer, acceptance and valid consideration. The district court concluded that

"consideration for the agreement is clearly exhibited in the commission payments" Myers ultimately received. That conclusion is in

error. "[A] new promise, without other consideration than the performance of an existing contract in accordance with its terms, is a naked

promise without legal consideration therefor[e] and unenforceable."

Seward v. New York Life Ins. Co., 154 Va. 154, 168 (1930). As consideration for the 4-3-2% commission agreement, Avery promised

only to pay a portion of the commission already owed to Myers under

the standard 5.1% commission agreement. Because the 4-3-2% agreement was not supported by valid consideration, it was not a superseding contract, and Myers is entitled to enforce the standard commission

agreement.

I would reverse the decision of the district court on this issue and

remand for the trier of fact to determine whether Myers' right to the

5.1% commission had actually vested at the time the 4-3-2% agreement was reached.

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