Opinion ID: 655233
Heading Depth: 3
Heading Rank: 1

Heading: Evidence of a Contract

Text: 7
8 New Dimensions argues not only that the parties had not entered into a binding contract, but also that the overwhelming evidence shows that Traynor had no apparent authority to renew Doerge's 1981 dealer contract in the first place. Apparent authority is such authority as a reasonable person would suppose an agent to possess in view of the principal's conduct. Malcak v. Westchester Park Dist., 754 F.2d 239, 245 (7th Cir.1985). In other words, would Doerge, as a reasonably prudent person, have thought New Dimensions held Traynor out as having the authority to renew the dealer contract? 9 Doerge testified that since 1981 he had annually received new quotas from the sales manager. Although Traynor testified that he did not actually set the quotas, he also testified that as far back as 1981 he was the one who communicated the quotas to the dealers. Given Traynor's status as vice president and the custom and the practice of the company to communicate new quotas through the sales manager, the jury was entitled to believe that a reasonable person would suppose that New Dimensions had cloaked Traynor with the authority necessary to renew the dealer contract. 10 New Dimensions argues that any apparent authority Traynor might have had was terminated by Rubin's statements at the November 21, 1988 meeting in which Doerge was told that only Rubin could make a final decision. See Malcak, 754 F.2d at 245 (When a person has notice of the agent's lack of authority, belief that the agent has apparent authority is unreasonable.). Although the New Dimensions officers who were in attendance at that meeting testified to this fact, the defense counsel never asked Doerge on cross examination, or otherwise, whether he had heard or understood that Rubin was the only one able to make a deal. It is possible that Rubin made certain statements that Doerge did not hear or properly interpret. The jury was permitted to entertain this possibility when on direct examination Doerge testified about the November meeting as follows: 11 Question: Did anyone say to you that you would not receive new quotas from Dave Traynor? 12 Answer: No, sir. 13 Plaintiff's counsel likewise did not press the ultimate question of what Doerge had heard from Rubin. But the jury could have inferred from this testimony that if Doerge understood that Traynor could still give him a new quota, Rubin must not have removed such authority. 14 Traynor testified that at the November meeting Mr. Rubin stated flatly that any future negotiations or relationships would be done directly with him. Yet within a few days he was on the telephone with Doerge discussing the sales rep position and negotiating an alternative contract. Rubin admitted knowing about their conversations and consented to negotiations. 15 Rubin's testimony also calls into question whether Traynor's authority was somehow diluted. He testified that at the November meeting he stated that only he could make a decision to renew Doerge's contract. But he also testified that Traynor was still charged with communicating to salespeople. The jury was entitled to find that a reasonable person would believe that any quota received from Traynor was with the approval of Rubin. Because Traynor was Rubin's mouthpiece, we do not think it unreasonable for Doerge to have believed that a vice president serving as a communication link between the dealer and chairman of the board had no apparent authority to renew a contract. Rubin also testified as follows: 16 Question: And you knew that Dave Traynor was discussing quotas with Ron Doerge in December of 1988? 17 Answer: Yes, that's correct. Quotas for a rep position, not a quota for a dealer. 18 Question: You knew he was discussing quotas with Ron Doerge, didn't you? 19 Answer: Yes. 20 Notwithstanding his statements at the November meeting, Rubin admits that Traynor was allowed to negotiate a sales rep contract with Doerge. This runs contrary to the defense's theory of the case that Rubin had made himself out to be the only one who could close any deal. From this the jury was entitled to wonder how Doerge could know the difference when discussing the details of his status for the next year. By showing that Traynor had the authority to make some kind of deal, and that Rubin approved, the jury was entitled to infer that Doerge, as a reasonable person, would see Traynor as having authority to renew the dealer contract as well. 21
22 New Dimensions next argues that assuming Traynor had apparent authority, he made no offer nor did Doerge accept. The evidence is to the contrary. New Dimensions does not dispute that Doerge had a valid contract in 1981. To renew that contract each year, all that remained was for New Dimensions to offer Doerge an acceptable quota. Doerge testified that Traynor telephoned him in early December and offered him a quota of $100,000, which Doerge graciously accepted. On December 19, Doerge also sent a letter to Rubin accepting the $100,000 quota. On December 22, Rubin responded stating that New Dimensions was unwilling to continue the agreement of January 13, 1981. 1 On December 29, Doerge sent another letter to Rubin acknowledging that the quota was $160,000, not $100,000. New Dimensions argues that the timing of these letters shows that the parties never agreed to renew the dealer contract. 23 New Dimensions argues that if Traynor orally offered to renew the contract in early December for a $160,000 quota, Doerge's purported acceptance of a $100,000 quota by letter of December 19 amounts to a repudiation of the offer. Likewise, if Doerge's December 19 letter was a counter-offer for a $100,000 quota, New Dimensions explicitly refused to renew any contract by its letter of December 22. These arguments assume, however, that Doerge and Traynor did not talk to each other and agree on the $160,000 quota between December 19 and 22. 24 The record leaves some gaps and possible conflicts as to who said what, when. Some of these gaps could have been filled with more comprehensive examination of the witnesses by both the plaintiff's and defendants' attorneys. But we examine the record as is. Given that record evidence we must determine whether the jury's conclusion that there was a contract and that New Dimensions breached it was plausible. Pedrick, 229 N.E.2d at 513-14. 25 Traynor testified that he discussed the $160,000 quota with Doerge sometime after December 12. This conversation apparently took place after Doerge told vice president Raymond Haynes that his 1989 quota from Traynor would be $100,000. Haynes in turn told Traynor that the quota was too low. The record allows the jury to conclude that Doerge's conversation with Haynes could have occurred around the time Doerge wrote his December 18 letter to Rubin accepting the $100,000 quota. The jury could also conclude that immediately after the conversation with Haynes, Traynor contacted Doerge and corrected the quota to the $160,000 level. Doerge thought that would be okay. Subsequently Doerge received Rubin's December 22 letter canceling the 1981 agreement. Thus the jury could reasonably determine that there was an initial offer of a renewed contract with a $100,000 quota (graciously accepted) with a corrected quota offer of $160,000 (that's okay) followed by a cancellation of that contract (unwilling to continue the agreement). 26 New Dimensions asserts that Traynor's telephone records show that Traynor and Doerge did not talk between December 19 and 22. The jury, however, was left with the impression that all of Traynor's telephone records were not produced and, even assuming they were, Doerge could have telephoned Traynor. Thus, the jury could have found that the parties renewed the contract with a $160,000 quota. 27 New Dimensions also mischaracterized the effect of any change in quotas. The parties do not dispute that an offer is rejected by a counter-offer. But Doerge's letters do not purport to be counter-offers, but acceptances. The jury could have found that Doerge accepted the $100,000 quota and based its damages accordingly. Or it could have based its damages on a $160,000 quota. The contract appeared to be first offered and accepted at the $100,000 level. Even then Doerge was apparently willing to accept a quota increase from $100,000 to $160,000. Close examination or cross-examination of one or more of the witnesses could have cleared up seeming inconsistencies in the testimony. With the record in its present state, however, the jury could reasonably have found that New Dimensions, after offering Doerge a contract, which he accepted, canceled it, causing the breach.