Case Name: Charles L. PRESCOTT vs. LYON METAL PRODUCTS, INC.
Court: Massachusetts Appellate Division
Jurisdiction: Massachusetts
Decision Date: 1983-02-02
Citations: 4 Mass. Supp. 208
Docket Number: No. 325
Parties: Charles L. PRESCOTT vs. LYON METAL PRODUCTS, INC.
Judges: Robert A. Welsh, Ir., P.I.
Reporter: Massachusetts Reports Supplement
Volume: 4
Pages: 208–212

Head Matter:
Charles L. PRESCOTT vs. LYON METAL PRODUCTS, INC.
No. 325
District Court/Norfolk, ss. Appellate Division/Southern District Trial Court of the Commonwealth of Massachusetts
February 2, 1983
Albert Auburn, Esquire, counsel for plaintiff.
Patrick T. Jones, Esquire, counsel for defendant.

Opinion:
DECISION AND ORDER
This cause came on to and was heard in the Appellate Division for the Southern District sitting at Orleans upon Report from the District Court Department, Dedham Division and it is found and decided that there was no prejudicial error.
It is hereby ORDERED: That the Clerk of the District Court Department, Dedham Division make the following entry in said case on the docket of said Court, namely: REPORT DISMISSED.
Opinion filed herewith.
Robert A. Welsh, Presiding Iustice
Richard O. Staff, Justice
Milton R. Silva, Justice
Patricia D. Minotti, Cleric
OPINION
Welsh, J.
This is a civil action based upon an account annexed for certain commissions alleged to be due by reason of the plaintiff's services to the defend ? as a salesman.
The court found for the defendant.
There was evidence tending to show >1- . following:
On or about October 18, 1971, i'> - plaintiff and defendant entered into w contract of employment whereby fk; plaintiff was engaged as a sales representative for the defendant's line of metal furniture, lockers and other products. The defendant was to receive r. salary, originally $8400.00 .per year and subsequently $10,000.00 per yez.:, as web as commissions based upon certain bonus volume credits accruing on business lie obtained for the company. The method of determining the bonus volume credits, and consequently, the commissions due was based on a complex formula to which both parties assented. The precis;', mechanism for determination need nos. detain us since it is agreed that the amount to be awarded the plaintiff if he is determined to be entitled thereto Ip $10,622.64. Suffice it to say that im-policy was structured by the defendant so as to encourage the salesmen to • their primary efforts at making sales to dealers rather than to direct customers. The commercial motive for this preference is the fact that the dealer sal;a can usually be shipped within 10 days from inventory available and are less uncertain as to the date for delivery. I.u contrast, direct customers, consisting primarily of contractors in construction projects, often delay .the requested shipment and generally make such accounts more troublesome to administer from the defendant's viewpoint. Although the defendant accepted orders from direct customers, it made it dear so its sales representatives that they ought <o concentrate on the dealer sales. .
Although the plaintiff was t'¡ kodi.y» salesman in direct sales volume he was the least effective in dealer sales. Despite being reminded on occasion by Ts supervisors of the policy of preference ".r . dealer sales over direct sales, the plained; persisted in concentrating on direct sate... /i., ,...... . v and ' , <;.. U.d (' >K; I ¡•vrMÚ>'.1e the ,1 . . v r.ei vii.es
l> i ¡«va of -1 >-• : roo,-; ui This .case t ¡a n*>U- (ú ; is entitled •v> - .missions occurring on orders which lx:,;.jed prior to his termination, but v ti were not shipped to customers until id'!'-, delivery The evidence shows that tfic plaiafiil received a commission of Í5.000.00 bused upon orders that his predcf ls;;»-,; had written but-which had nm i»*..;.tí : hipped until after the plaintiff n 4, «c-suutóíl bis position. The evidence íurfíií./ tended to show that the «.m.umii'ih.wt, which arc in issue-in this ? t'ííion were paid by the company to the p.aL.smau who was the plaintiff's -'.i'M-.uiiM. The /nilón contract of ¡y,it ip spt-i'.iiies that no bonus credit 'v"{> ; r allowed for goods tiot shipped «• < 4 Tier termination of employment of >y. • ! .?;},nun, leg&rdless of when any Tr «n, . , d ordw was obtained or claimed Í- . been obtained. There was - v i' ;í . siiat the plaintiff was aware of mo bniiivv. iredit policy and was reminded <»' i> .* <;.u '«siod by Iris superiors.
T i.,. i ho original shipping dates av , o. so üii. pbbntiff.s termination: . tl h.V'VHjd,. As io those that were !'.bn •;> « luü'i/bioii ,mk' rescheduled after > the ch-u-.ge in shipping date ?<."; ;.;ii-i in mability of the buyer o .tí'pt deljvc. v or the originally !';S, ,; :'.,¡i t'i'ue or the inability by the u,> fubmate specially ordered rvw t.'iim*. for ddimy on the original phippoig date. This inability was oAp-x Uved by ihr. forced shut down of -,k.' -tiv-.«I-f»-ijda.«t«.'sovens during the. so /.ifit.'.' 'V.iiMgy Oil,
At :,|o com Cisión of the trial and Ev.-hw- fh/uí nrqum* nt, ihf. plaintiff filed ;> ;•; T x i.'lhigs i f Uw. He claims to i"_.\l m il. t-• • oí requests 2, 3, : ¡h' as iullowu:
'5 ir. 'í.Ji'.'ikiuü that the 1 . in the employ of the deh/ífhmt m mder for the ííwntíff to be paid lor his past • .«¡lings or commissions is unenforceable, as it is a forfeiture of earnings, and is unconscionable and against public policy.
3. The condition that the plaintiff be in the employ of the defendant at the time shipments were made on sales made by the plaintiff in order for the plaintiff to be paid for his commissions is an unenforceable condition as it operates as a forfeiture of the plaintiff's earnings and is unconscionable and against public policy.
5.. On all the evidence as a matter of law there must be a finding for the plaintiff.
1. The plaintiff-appellant contends in his brief and in oral argument that the defendant was guilty of bad faith in discharging the plaintiff and that he is entitled to recover as damages commissions based upon orders he obtained for the defendant but not shipped until after delivery. In support of this theory of recovery, he cites the case of Gram v. Liberty Mutual Ins. Co., Mass. (1981).
Gram holds that an at-will employee who is discharged without cause by his employer is entitled to recover damages based upon renewal commissions reasonably anticipated less an amount determined to be attributable to time and effort required to service the renewal accounts. Id. at 2300, 2301. Gram expanded the doctrine announced in the case of Fortune v. National Cash Register Co., 373 Mass. 96 (1977), which recognized for the first time in this Commonwealth the right of an employee hired at will to recover damages from his former employer if he was found to have been wrongfully discharged in bad faith. Id. at 102. See: Monge v. Beebe Rubber Co., 114 N.H. 130, 133, (1974). Gram holds that even in the absence of an improper motive for discharge, an at-will employee discharged without cause may recover for loss of compensation clearly related to the employee's past service. Gram, supra, at 2300. This, of course, represents a growing recognition of a common law duty to compensate an at-will employee for losses incurred as a result of wrongful termination. But see, Fenton v. Federal St. Bldg. Trust, 310 Mass. 609, 612 (1942).
We think that reliance on the Gram and Fortune cases is misplaced. The complaint framed by the plaintiff did not seek damages for wrongful discarge or for bad-faith termination of employment. The case does not appear to have been tried in the trial court on that theory, but rather by mutual consent on the issue of whether or not the plaintiff was entitled to receive as compensation for his employment the commissions for sales not consummated by shipment or delivery at the time his employment ceased. "The theory of law on which by assent a case is tried cannot be disregarded when the case comes before an Appellate Court for review of the acts of the trial judge." Santa Maria v. Trotto, 297 Mass. 442, 447 (1937); Atlantic Building Corp. v. Whyte, 341 Mass. 234, 236 (1960). The question of wrongful termination of employment and the entitlement to damages therefrom was neither reported by the trial judge nor made thesubject of a request for ruling by the plaintiff. The duty of the Appellate Division is to deal with the questions reported and no others. James J. Derba Inc. v. Hamilton Service, Inc., 355 Mass. 127, 130 (1969). The appeal brings before the Appellate Division rulings of law reported by the judge and, upon further appellate review, questions of law touching the action of the Appellate Division. Gaston Electric Co. v. American Construction Co., Inc. 336 Mass. 454, 456 (1957).
2. The trial judge was clearly correct in refusing to grant request number 5. Rarely can it be ruled in a case heard upon oral evidence that a party, upon whom rests theburden of proof has sustained his burden as a matter of law. Winchester v. Missin, 278 Mass. 427, 428 (1932). The record in this case falls far short of establishing the plaintiff's entitlement to judgment in his favor as a matter of law.
The issue raised by requests 2 and 3 is whether or not the provision in the contract of . employment limiting the plaintiff's entitlement to commissions on sales to goods shipped before his termination is unconscionable as a forfeiture of earnings and therefore unenforceable. We are of the opinion that the trial judge's refusal to rule that the contract provisions ip issue were unconscionable was correct. It is axiomatic that an agreement openly and fairly arrived at between competent parties that does not violate public policy does not become unenforceable solely because in the final analysis one party gains and the other party does not. Hiller v. Submarine Signal Co., 325 Mass. 546, 550 (1950). For example, in this case the plaintiff received a windfall when he commenced his employment which he apparently accepted without complaint. His successor received a similar windfall. The choice of the shipping date as the event determining the accrural of the commission is neither irrational nor commercially unreasonable. Possibly an order for goods might be cancelled, changed or delayed by the customer because of unforeseen contingencies. The parties might competently agree in accordance with common understanding that a sale be consummated by shipment, or delivery before liability for a commission attached. Cf. Tristram's Landing, Inc. v. Wait, 367 Mass 622, 628-630 (1975). In the Hiller case, the event which triggered payment of the commissions was actual receipt of payment by. the party employing the salesman for the goods sold. This clause was still upheld as not unconscionable. Hiller, supra at 550.
Finally, the argument that this clause works a forfeiture of commissions earned begs the question, because it assumes as a premise the very proposition to be established, namely, that the commissions were either actually or at the least conditionally the property of the plaintiff. Th.e contractual language already discussed adequately disposes of this contention.
It is ORDERED that the report be, and hereby is, dismissed.
SO ORDERED
Robert A. Welsh, Ir., P.I.
Richard O. Staff, I.
Milton R. Silva, I.
This certifies that this is the opinion of the Appellate Division in this cause.
Patricia D. Minottl, Clerk
Mass. Adv. Sh. (1981) 2287; 429 N.E. 2d 21.
There is no suggestion in this record that he offered to return this benefit. We do not intimate a different result if he had done so.