Opinion ID: 2978496
Heading Depth: 3
Heading Rank: 3

Heading: The Effect of the CCI Agreement’s Terms

Text: SBC asks the Court to look to the terms of the contract with CCI when deciding whether the jury’s awards should be lowered or reconsidered by the district court. Specifically, SBC argues that the CCI Agreement was unique because it was “wholesale” and CCI was not the end customer of SBC’s services. Thus, the course of dealing evidence that involved “standard” contracts was irrelevant. In the alternative, SBC believes that the LCR calculation should be capped at $15 million in light of a liquidated damages clause in the CCI Agreement. Both of these arguments lack merit. 1. The “Wholesale” Nature of the Contract and Actual Revenue Earned by SBC SBC contends that the CCI Agreement was different from the “standard” contracts that Anton and Snipes had secured in the past, and thus, the course of dealing evidence is irrelevant here. The contract is apparently a “wholesale” contract since SBC is not selling directly to the end customer. Rather, CCI is selling the services to end customers and will be more like a “middle man” for SBC. 15 Because of the “wholesale” nature, SBC argues that the actual revenue earned by the contract should be a factor in the commissions’ calculations. Even if the course of dealing evidence was not applied, the other evidence shows that a jury could reasonably conclude that the plaintiffs should not be paid differently for this contract. No statements by SBC’s management to Anton or Snipes imply that this contract or other “wholesale” contracts would be commissioned differently. In addition, the Plan does not state that “wholesale” contracts will get lower or different commissions than “standard” contracts. Similarly, none of Anton and Snipes’ previous commissions were paid based on the actual revenue the underlying contract earned. Their commissions were calculated when the sale was executed–often before SBC knew what revenue would be earned. Moreover, the jury’s verdict is reasonable even if the course of dealing evidence is not considered. 2. The Liquidated Damages Clause In the alternative, SBC asserts that the LCR should be calculated based on the CCI Agreement’s $15 million liquidated damages clause. SBC contends that the contract’s potential value should not be the basis for any calculation of damages since CCI was not liable for this amount. However, when SBC paid the plaintiffs their commissions for signed contracts prior to the CCI Agreement, it never took into account the contracts’ liquidated damages clauses. Additionally, SBC never had considered what amount the customer was actually liable for, or if the revenue projections were speculative. Even looking at the terms of the Plan, as SBC repeatedly urges us to do, no mention is made of: (1) how a liquidated damages clause affects sales commissions or (2) how the speculative nature of revenue projections affects sales commissions. In other words, neither the parties’ course of dealing nor the language of the Plan makes a liquidated damages clause a factor 16 in LCR calculations. Consequently, the jury acted reasonably in concluding that the liquidated damages clause should play no role in calculating the plaintiffs’ commissions.