Court Opinion

ID: 345
Source: CourtListenerOpinion
Date Created: 2010-03-19 00:25:10+00
Date Added: 2024-06-11T16:41:46.361897
License: Public Domain

NOT RECOMMENDED FOR FULL TEXT PUBLICATION
                            File Name: 10a0172n.06

                                              No. 08-2316                                      FILED
                                                                                           Mar 18, 2010
                           UNITED STATES COURT OF APPEALS                            LEONARD GREEN, Clerk
                                FOR THE SIXTH CIRCUIT

VOTAR, L.L.C.,                                              )
                                                            )         ON APPEAL FROM THE
        Plaintiff -Appellee,                                )         UNITED STATES DISTRICT
                                                            )         COURT FOR EASTERN
                v.                                          )         DISTRICT OF MICHIGAN
                                                            )
HS R AND A COMPANY, LTD.,                                   )
                                                            )         OPINION
        Defendant-Appellant.                                )
                                                            )

        Before: ROGERS, COOK, and WHITE, Circuit Judges.

        HELENE N. WHITE, Circuit Judge. Defendant Hwaseung Rubber Automotive Co., Ltd.

(“HSRA”), a car parts manufacturer, appeals from the district court judgment entered on a jury

verdict in favor of plaintiff Votar, L.L.C. (“Votar”), an independent sales representative company,

and from the district court’s denial of its motion for judgment as a matter of law or, in the alternative,

for a new trial. HSRA asserts that under the unambiguous terms of the contract on which Votar’s

claims are based, no breach occurred, and further, certain sales were erroneously included in the

calculation of damages. We affirm.

                                    Background
A. HSRA and Votar Enter into a Contract

        HSRA is a South Korean company that manufactures hoses, tubes and weatherstripping for

Korean and foreign automotive manufacturers. In 2000, HSRA decided to attempt to sell its
No. 08-2316
Votar, L.L.C. v. HS R&A Company, Ltd.

products to automotive companies in the United States, and to assist in this, on April 9, 2001, HSRA

entered into an “Exclusive Sales Representative Agreement” (“ESRA”) with Votar.

       Pursuant to the ESRA, Votar became the “sole and exclusive sales representative to solicit

orders of and promote the sale of” HSRA’s, and any of its subsidiary’s, products in the United States,

Canada and Mexico for a period of five years. A section of the Agreement titled “The [HSRA]’s

Duties” reads, in part:

           1. The [HSRA] agrees to refer to Votar any and all correspondence, inquiries,
           solicitations and orders pertaining to the sale of its products in the Territory. In
           the event of any direct or indirect sale by [HSRA] of its products in the Territory,
           Votar shall be entitled to its normal commission(s) under this Agreement for such
           sale. The [HSRA] agrees not to sell its products in the Territory through any
           other sales representative.

       The ESRA provides for two forms of remuneration for Votar’s services: a variable rate

commission of between 2% and 4% of sales, and a monthly retainer fee of $3,000. It also provides

that Votar would not receive commissions on any HSRA “carry over business which is used in the

territory, but has originated outside of the North America market,” and contains an integration

clause.1

       1
       Section “D” of the Agreement covers compensation and reads, in its entirety:
       D.    Compensation
             1. Commissions
             The [HSRA] agrees to compensate Votar at the following
             commission rates for any and all products sold by the [HSRA] in the
             Territory, as a result of, in whole or in part, the activities or services
             performed by Votar under this Agreement.

               The business [on] which Votar cannot collect commissions is as

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             follows;
             1) Votar will not be paid commission on carry over business which
             is used in the territory, but has originated outside of the North
             America market.
             2) Votar will not be paid commission for business [HSRA] has with
             Mando machinery and Halla Climate control which originates and is
             used within the territory.

              (a)      A commission of four percent (4%) is to be paid to Votar on
              the initial Ten Million Dollars ($10,000,000.00) of sales each year.
              The calculation of this                 commission structure
              ($10,000,000.00 x 4%) will be applied on the initial Ten million
              Dollars ($10,000,000.00) in sales attained from January 1st to
              December 31st of each year.
              (b)      A commission of 2.5 percent (2.5%) is to be paid to Votar on
              sales between Ten Million Dollars ($10,000,000.00) and Twenty
              Million Dollars ($20,000,000.00) of each year. The calculation of this
              commission structure {($20,000,000.00 - $10,000,00.00 [sic]) x 2.5%}
              will applied [sic] on the sales attained from January 1st to December
              31st of each year.
              (c)      A commission of two percent (2%) is to be paid to Votar for
              all remaining sales in excess of 20 Million Dollars ($20,000,000.00)
              for each year. The calculation of this commission structure {(Total
              annual sales volume - $20,000,000.00) x 2.0%)} is for sales attained
              from January 1st to December 31st of each year.
      2.      The [HSRA] and Votar agree that the commission rates described above may
      be modified upon such terms and conditions only as mutually agreed upon in writing
      signed by both parties. Any modification of commission rates will only be applicable
      to prospective sales, and will not be applied retroactively.
      3.      The [HSRA] agrees to pay Votar its commissions by wire transfer on or
      before the twenty-fifth (25th) day of each month after receipt by the [HSRA] of
      payment for the sale of its products.
      4.      Monthly Sales Development Retainer Fee
              In consideration of and compensation for Votar’s services, the [HSRA] agrees
      to pay Votar a Monthly Sales Development Retainer Fee (the “Fee”) in the amount
      of Three thousand Dollars ($3,000.00) per month upon the following terms and
      conditions:

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Votar, L.L.C. v. HS R&A Company, Ltd.

       Although Votar’s efforts never successfully procured revenue-generating business for HSRA,

HSRA did receive an award to provide parts for a Ford program for production of the Lincoln LS

(i.e., the 2006 F236/F237) models in 2003. That program, however, was cancelled by Ford before

the sale of parts was consummated.

       In October of 2002, HSRA requested changes to the ESRA, including a reduction in

commission percentages to a 2% flat rate, allowing HSRA to contract with other North American

independent sellers, eliminating the monthly retainer fee that HSRA paid to Votar, and a reduction

in the contract period from five to three years. Peter Ulrich, president of Votar, responded to these

                (a) The Fee will not be paid to Votar in any month where the total monthly
       amount of commission described in Paragraph 1 above exceeds the Fee amount;
               (b) Payment of the Fee will be reviewed after two (2) years commencing from
      the effective date of this agreement and will continue each year provided Votar
      performs its duties such as obtaining a purchase order or develops future promising
      business opportunities for the [HSRA].
               (c) In the event of Votar’s business trips to the [HSRA]’s principle place of
      business located in Korea, the [HSRA] agrees to pay Votar the cost and [sic]expense,
      including, by description and not limitation, the cost of business class airline ticket(s),
      and lodging provided that Votar obtains [HSRA]’s approval prior to any business
      trips;
               (d) The HS agrees to pay Votar the Fee by wire transfer on or before the
      Twenty-Fifth (25th) day of each month.
      5.       Payment of compensation to Votar is to be made in United States currency.
      Votar agrees to pay any wire transfer charges issued to Votar by Votar’s banking
      institution. All other exchange, interest, banking, collection or other charges are to
      be for the HS’s account upon such terms and conditions as the parties mutually agrees
      in writing. All other exchange, interest, banking, collection or other charges are to be
      for the HS’s account upon such terms and conditions as the parties mutually agree in
      writing.

                                                 -4-
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requested changes on November 1, 2002 with a counter-proposal. Negotiations between Votar and

HSRA regarding amending the ESRA continued through approximately the end of November 2002.

While HSRA and Votar were negotiating amending the ESRA, HSRA entered into discussions to

hire Votar employee Keon Ho Lee (“Lee”). Lee ultimately resigned from Votar on December 16,

2002, and began working for HSRA on January 1, 2003, as the general manager of HSRA’s Detroit

office.

          In December of 2002, the negotiations to amend the ESRA became negotiations for HSRA

to “buy-out” the ESRA. The buy-out the parties were considering would have provided Votar with

a percentage commission on sales of HSRA products to Ford under the Lincoln LS program, which

sales were still anticipated at the time.

          On December 28, 2002, Ulrich sent HSRA’s manager for its overseas division, Harry Kim

(“Kim”), an email that requested: “Please let me know of [HSRA]’s final position as I verbally

explained over the phone last week, and confirmed by email my final offer.” Kim replied that he

thought Ulrich had his reply already, and he was re-sending it. Ulrich replied to Kim by email on

December 31, 2002, stating in part:

             This proposal seems fair to both parties. We need to have a one page legal
             document releasing [HSRA] and Votar as well as making sure the terms and
             conditions for payment will be enforced once production starts. If all parties
             agree to the commission rate, then I can get the document for your review
             sometime next week.

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       HSRA claims that the ESRA was terminated by this email. However, Lee admitted in

testimony at trial that as of January 27, 2003, there was not a completed contract memorializing the

buy-out.2

       On January 3, 2003, Ulrich sent Kim an email asking:

            Did you receive my latest e-mail? Any answer on your end, so we can move
            forward? Basically, I said I accept your idea and am waiting your go ahead to
            draft the buyout letter.

       Kim responded that same day, writing: “You may go ahead to make draft. Only

[HSRA’s president’s] approval left.”

       On January 9, 2003, Ulrich received an email from Lee acting in his new position at HSRA.

In the email, Lee stated that he would be handling the buy-out negotiations for HSRA going forward,

and asked Ulrich not to contact the Ford Lincoln LS buyer directly to obtain information in reference

to the buy-out. On January 10, 2003, Ulrich sent a letter to Kim stating that Ulrich did not wish to

work with Lee in finalizing the buy-out because of declining personal relations between himself and

Lee due to Lee’s departure from Votar. This email also stated that Ulrich would turnover Lee’s

HSRA documents that were still in Votar’s offices “[o]nce the contract is finalized,” which language

in the context of the paragraph appears to relate to the Ford contract. Ulrich also stated he planned

on “honoring the committmet [sic] we have both made.” Kim replied to this email, and among other

       2
        On re-direct, Lee claimed he was only stating that the particular document was not a
complete agreement, but even if that were so, the fact that edits were still being made to complete
an agreement in late January indicates that neither party believed that they had reached a final
agreement at that time.

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things stated “Please make [b]uy off contract draft and send to me. I will inform you all [sic]

information as soon as the contract completed.”

       On January 13, 2003, Lee sent an email to Ulrich stating that he was the “general manager

of [HSRA’s] Detroit office, responsible for the sales & marketing, and engineering for the [North

American] market.” The email noted that HSRA and Votar were still under contract “even though

Votar is negotiating with [HSRA] to buy out the contract in the near future” and requested various

documents.

       On January 22, 2003, Ulrich sent an email to Kim attaching a proposed buy-out agreement.

Ulrich sent another email to Kim on January 24, 2003, asking him to confirm receipt of the draft

buy-out agreement. Ulrich sent another email to Kim on February 5, 2003, stating:

           I have not heard from you and I am wondering if we are still on track regarding
           the buyout draft I supplied over two weeks ago. Please advise me of when I can
           expect a response from you to close out this issue. This would include the
           pertinent Ford information to be included in the buyout agreed. I thank you in
           advance for your help.

       Kim replied shortly thereafter by email, stating that he had not had time to review the buy-out

agreement, but would send along comments within a week. Ulrich testified that he never received

any comments on the draft buy-out agreement from Kim.

       In February 2003, Ulrich learned that the Ford purchase that was the basis of the draft buy-out

was likely to be cancelled. Because of this, Ulrich sent a letter dated March 3, 2003 to Kim stating

that he was revoking the buy-out proposal, and would continue to rely on the ESRA.

                                                -7-
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       Votar stipulated at trial that it stopped pursuing business on behalf of HSRA in January 2003,

at which time, Votar claims, HSRA stopped communicating necessary business information to it.

In March 2003, HSRA stopped paying the monthly retainer fee to Votar.

B. The Hyundai Account

       Hyundai and HSRA have had a business relationship since 1967. Kim testified that in 2000,

in South Korea, he negotiated with Hyundai for HSRA to become a supplier for the Hyundai Sonata

and Sante Fe lines of automobiles, and entered into an “implicit agreement” with them to do so.

Hyundai asked HSRA and several other suppliers to establish plants in Alabama close to the new

Hyundai plant that would be producing the Sonata and Santa Fe vehicles. HSRA began producing

parts for the Sonata and Santa Fe programs in its plants in Korea, but then transferred those functions

to the Alabama plant once it was constructed. Ulrich testified that the 2001 versions of the Santa

Fe and Sonata were different in certain respects from the 2007 versions.

       Kim testified that in order to invest the approximately $25 million dollars necessary to

construct a plant in Alabama, HSRA sought guarantees from Hyundai regarding the volume of

business Hyundai would do with HSRA. Those guarantees were in the form of an October 17, 2003

letter of intent from Hyundai Motor Manufacturing Alabama, L.L.C., stating that HSRA, through

its subsidiary in Alabama, Hwaseung Automotive Alabama (“HSAA”), would be a supplier for the

Sonata and Santa Fe car lines.

                                                 -8-
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       In September 2004, HSAA began manufacturing and shipping products to Hyundai Motor

Manufacturing Alabama. HSAA also stores, assembles and/or modifies HSRA products produced

in South Korea for sale to other car manufacturers in the United States.

C. The Jury Verdict

       The jury found that (1) the ESRA did not end until April 9, 2006, (2) HSRA had breached

the ESRA and was liable to Votar for $3,110,912.493 in damages as a percentage of the total sales

derived from seven programs for which HSRA was providing parts, (3) HSRA’s failure to pay

commissions to Votar was intentional, and (4) Votar is entitled to post-termination commissions

under the ESRA. The jury did not reach Votar’s tortious interference with contract claim premised

on HSRA’s hiring of Lee, because it awarded Votar full damages on its breach of contract claim.

       The court entered judgment on January 2, 2008. It awarded $3,108,698.94 for damages

through September 30, 2007, $100,000.00 against HSRA in penalty damages for violating the

Michigan Sales Representatives Commission Act, Mich. Comp. Laws § 600.2961(5) (1992)4, and

$705,110.11 in interest through December 20, 2007, plus an additional $596.15 in interest per day

       3
         This amount was later reduced to $3,108,698.94, after a calculation error was brought to the
attention of the court.
       4
        The Act states that:
       (5) A principal who fails to comply with this section is liable to the sales
       representative for both of the following:
       ...
       (b) If the principal is found to have intentionally failed to pay the commission when due, an
       amount equal to 2 times the amount of commissions due but not paid as required by this
       section or $100,000, whichever is less.

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until entry of judgment, and thereafter interest pursuant to 28 U.S.C. § 1961 until the judgment is

paid in full.

        After the court entered judgment, HSRA made a second renewed motion for judgment as a

matter of law or, in the alternative, for a new trial and/or remittitur. The district court denied the

motion. This timely appeal followed.

                                             Discussion
A. Standard of Review

        Because the district court exercised diversity jurisdiction, this Court reviews the district

court’s legal determinations in its denial of a judgment as a matter of law under Rule 50(a) or 50(b)

de novo, while questions of evidence sufficiency will be reviewed as the forum state would review

them. K & T Enters., Inc. v. Zurich Ins. Co., 97 F.3d 171, 176 (6th Cir. 1996). “In Michigan courts,

the standard of review for judgments notwithstanding the verdict requires review of the evidence and

all legitimate inferences in the light most favorable to the nonmoving party. Only if the evidence

so viewed fails to establish a claim as a matter of law, should a motion for judgment notwithstanding

the verdict be granted. Hence, we review the denial of judgment as a matter of law under a standard

akin to the federal summary judgment standard.” Mannix v. County of Monroe, 348 F.3d 526, 532

(6th Cir. 2003) (internal citations, quotations and brackets omitted).

        The standard of review for a motion for a new trial is abuse of discretion. Denhof v. City of

Grand Rapids, 494 F.3d 534, 543 (6th Cir. 2007).

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Votar, L.L.C. v. HS R&A Company, Ltd.

B. HSRA’s Claim That Votar is Not Entitled to Commissions Because it Did Not Participate
in Certain Sales is Unavailing

       HSRA claims that § C(1) of the ESRA, containing the phrase “[i]n the event of any direct

or indirect sale by [HSRA] of its products in the Territory, Votar shall be entitled to its normal

commission(s) under this Agreement for such sale,” unambiguously refers to the entirety of § D(1)

entitled “Commissions,” including a sentence that begins that section stating that Votar receives

commissions on HSRA products sold “as a result of, in whole or in part, the activities or services

performed by Votar under this Agreement.” HSRA claims this is a limiting provision, and because

Votar did not obtain any revenue-generating business for HSRA, Votar did not contribute “in whole

or in part” to any of the sales and is therefore not entitled to any commissions.

       Votar replies that its lack of participation in the sales was the product of HSRA’s breaches

of the ESRA, which required HSRA to refer to Votar all correspondence, inquiries, solicitations and

orders relating to the sale of its products in North America, and to pay sales commissions to Votar

on any direct or indirect sales by HSRA in North America, and which prohibits HSRA from selling

its products through any entity other than Votar in North America. As a result, Votar claims, the jury

was correct in awarding Votar the commissions it would have received had HSRA not breached the

ESRA. Thus, under Votar’s reading, the term “normal commission(s)” refers only to the provisions

of § D(1) that delineate Votar’s percentage of commission based on volume of sales.

       We conclude that the question whether the ESRA was breached was properly put to the fact-

finder, the jury had sufficient evidence to reasonably find that the ESRA had been breached, and the

                                                - 11 -
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jury could have reasonably found that the HSRA’s breach was the reason Votar did not participate

in the sales.

        In a breach of contract action, the plaintiff has the burden of proving that a breach occurred.

Keywell & Rosenfeld v. Bithell, 657 N.W.2d 759, 790-91 (Mich. Ct. App. 2002). The purpose of

damages in a breach of contract action is to put the injured party “in as good a position as he would

have been in had defendant kept his contract.” Am. Ass’n of Retired Persons v. National Sur. Corp.,

No. 98-820589-CZ, 2001 WL 1530353, at *15 (Mich. Cir. Ct. Feb. 23, 2001) (unpublished) (quoting

Goodwin, Inc. v. Coe (supplemental opinion), 233 N.W.2d 598, 602 (Mich. Ct. App. 1975)); see also

3 Am. Jur. 2d Agency § 261 (2009) (damages for breach of agency contract commonly include

commissions expected).

        The jury could reasonably have found that Votar was not involved in the sales as a result of

HSRA’s breach of the ESRA. Even were we to agree with HSRA that its failure to provide

commissions to Votar on its sales was not itself a breach of the ESRA, discussed infra, there was

sufficient evidence for the jury to find breach based on one of the two other grounds advanced by

Votar, i.e., HSRA’s utilization of in-house sales representatives for the North American territory in

violation of § A(1), or HSRA’s failure to “refer to Votar any and all correspondence, inquiries,

solicitations and orders pertaining to the sale of” HSRA’s products in North America in violation

of § C(1). As a third potential ground for breach, the district court found that when HSRA “hired

Mr. Lee, stopped communicating with Votar, and began informing accounts that Votar was no longer

involved” thus “render[ing] impossible Votar’s continued performance under the agreement,” HSRA

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also committed breach. Votar, L.L.C. v. HSR & A, Ltd., No. 05-60125, 2008 WL 4239113, at *2

(E.D. Mich. Sept. 11, 2008) (unpublished).

        Any of these breaches would have entitled Votar to damages, which at this point, where the

sales have already occurred, are reasonably calculated as the commissions Votar would have earned

had the ESRA been honored.5

        HSRA makes the additional argument that the ESRA did not require HSRA to pay Votar

commissions on sales that HSRA obtained itself.              However, whether the term “normal

commission(s)” in § C(1) only entitles Votar to commissions on sales in which it played a role (as

opposed to all North American sales) such that HSRA’s failure to pay the commissions was itself

a breach of the agreement is sufficiently ambiguous in the context of the ESRA as a whole for

        5
         HSRA appears to claim that the remedy for breach under any theory other than failure to pay
commissions would be different. For example, at one point in its Reply Brief, HSRA claims that
Votar’s remedy for breach on the basis of hiring other sales representatives or failing to refer sales
inquiries would be limited to an injunction “requiring [HSRA] to comply with its obligations to refer
it any inquiries and to refrain from hiring an alternative sales agent.” While an injunctive remedy
may have been available at one time, the term of the ESRA has now concluded, and Votar’s remedy
would be for damages measured as lost commissions. See Lasala v. Gupta, No. 283983, 2009 WL
2195102, at *3 (Mich. Ct. App. July 23, 2009) (“[E]quity will not take jurisdiction where there is
an adequate and complete remedy at law, as where the account involved is based on a claim which,
in effect, is merely for damages for breach of contract . . . .”) (quoting Basinger v. Provident Life &
Accident Ins. Co., 239 N.W.2d 735, 739 n.21 (Mich. Ct. App. 1976)).
        Similarly, HSRA states elsewhere that breach for failure to forward purchase inquiries or the
hiring of another sales representative “would have had damages measured by a much smaller number
of particular lost sales,” but it does not cite any authority for this and it is not clear why this would
logically be so. All of HSRA’s sales were made after, or involved actions constituting, breach of the
contract, under any of the breach theories applied.

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submission to the jury.    This Court has previously summarized Michigan law on contract

interpretation:

               In Michigan, the proper interpretation of a contract is a question of law. That
           contracts are enforced according to their terms is a corollary of the parties’ liberty
           to contract. The goal of contract construction is to determine and enforce the
           parties’ intent on the basis of the plain language of the contract itself. Michigan
           courts examine contractual language and give the words their plain and ordinary
           meanings. If the language of the contract is unambiguous, the court construes
           and enforces the contract as written. If the contract language is ambiguous,
           testimony may be taken to explain the ambiguity. Only when contract language
           is ambiguous does its meaning become a question of fact.
               A contract is ambiguous if its words may reasonably be understood in
           different ways. In other words, a contract is ambiguous when its provisions are
           capable of conflicting interpretations. Courts cannot simply ignore portions of
           a contract in order to avoid a finding of ambiguity or in order to declare
           ambiguity. Instead, contracts must be construed so as to give effect to every word
           or phrase as far as practicable. However, courts may not impose an ambiguity on
           clear contract language.
Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 543-44 (6th Cir.
2007) (internal citations, emphasis & brackets omitted).

       HSRA claims that to read the ESRA as requiring HSRA to pay commissions to Votar on all

North American sales would render the “in whole or in part” language in § D(1) nugatory, contrary

to a canon of contract construction. But this is not necessarily so. That phrase must be read in the

context of a scheme set up earlier in the ESRA that arguably makes Votar the only allowed

representative of HSRA goods in North America. See “The [HSRA]’s Duties,” supra; Wilkie v.

Auto-Owners Ins. Co., 664 N.W.2d 776, 781 n.11 (Mich. 2003) (“We read contracts as a whole,

giving harmonious effect, if possible, to each word and phrase.”); Roberts v. Titan Ins. Co. (On

Reconsideration), 764 N.W.2d 304, 315 (Mich. Ct. App. 2009) (“It is a cardinal principle of

                                               - 14 -
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construction that a contract is to be construed as a whole . . . .”). By the ESRA’s terms, Votar was

the “sole authorized and exclusive representative to solicit orders of and promote the sale of

[HSRA’s] products in the Territory,” HSRA was required to “refer to Votar any and all

correspondence, inquiries, solicitations and orders pertaining to the sale of its products in the

Territory,” and HSRA “agree[d] not to sell its products in the Territory through any other sales

representative.”

       In that context, the “in whole or in part” language could be interpreted as simply a clarifying

clause specifying that, given Votar’s sole authority for sales in North America6, Votar may not be

denied a payment on a theory that procuring the sale was not exclusively the work of Votar. Such

a reading does not render the “in whole or in part” phrase “meaningless.” Nor would such an

interpretation constitute the imposition of ambiguity on a contract with clear meaning.

       Additionally, because the amount of damages is tied to the commissions Votar would have

earned had HSRA not breached the ESRA, HSRA’s argument that the damages award is

“disproportionate” also must fail.

       Therefore, the district court did not err in denying HSRA’s motion for judgment as a matter

of law, and did not abuse its discretion in denying HSRA’s motion for a new trial.

C.     The ESRA is Ambiguous and Sufficient Evidence Supports a Reasonable Jury Verdict
that Votar was Entitled to Damages Based on the Hyundai Sales

       6
           Exclusive of the exceptions specifically laid out in § D(1).

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        HSRA next argues that even if there was breach, there was insufficient evidence for the jury

to conclude that the damages calculation should include HSRA’s sales to Hyundai, and also that

those sales are precluded as “carry over” business under § D(1) of the ESRA. Votar replies that it

presented sufficient evidence for the jury to determine that the sales to Hyundai did not “originate”

outside of North America and were not “carryover” business, but were in fact sales as to which Votar

was entitled to commissions under the ESRA.

        The ESRA states that “Votar will not be paid commission on carry over business which is

used in the territory, but has originated outside the North America market.” Although the ESRA

goes on to specifically exclude other companies by name, Hyundai is not among them. The district

court found that HSAA’s sales to Hyundai were properly factored into the damages calculation,

stating: “Votar presented evidence to the jury that HSAA sales were not carryover business that

originated outside North America.” Most significantly, this evidence included Hyundai’s purchase

order, which was sent from its subsidiary in Alabama to HSAA’s headquarters in Alabama.

Additionally, Votar presented evidence that the Sonata and Santa Fe models had changed since

HSRA had first begun providing parts to Hyundai.

        The parties failed to define in the ESRA what constitutes business that “originated outside

the North America” market or what was “carry over” business, and thus it was appropriate for the

district court to allow that question to go to the jury. While the failure to define a term in a contract

does not itself render that term ambiguous, see Terrien v. Zwit, 648 N.W.2d 602, 613 (Mich. 2002),

because the terms “originate” and “carryover” do not appear to have a standard meaning in this

                                                 - 16 -
No. 08-2316
Votar, L.L.C. v. HS R&A Company, Ltd.

context, it was appropriate for the jury to make that determination. Thus, HSRA’s argument that

“[t]he fact that Hyundai issued a letter of intent as a purchase order does not say anything regarding

where the relevant business ‘originated,’” or that changes in the design of the Sonata and Santa Fe

models are irrelevant to this issue, are just one possible view, one which the jury clearly rejected.

       The ambiguity of the ESRA was sufficient for the district court to put the question to the jury,

and the evidence, seen in a light most favorable to Votar, is sufficient for the jury to reasonably find

that Votar was entitled to commissions on those sales.

       We AFFIRM.

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