Court Opinion

ID: 9738941
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:05:48.596501+00
Date Added: 2024-06-11T07:24:09.348090
License: Public Domain

Boyle, J.
(concurring). I agree with the reversal of the decision of the Court of Appeals and with part ii(c) and part m of Justice Riley’s opinion.1
Plaintiffs’ proofs are insuificient to support the inference of a just-cause contract or an enforceable promise not to change the payment plan. The circumstances identified as guidelines2 with regard *550to the intent to create a just-cause contract in Rowe v Montgomery Ward & Co, Inc, 437 Mich 627; 473 NW2d 268 (1991), are not present.3 Nor have we been provided with any submissions, suggestions, argument or offer of proof that the employer’s statements, interpreted in the light of trade usage or course of performance, permit the conclusion that the factfinder could draw an inference of a durational term for the method of compensation.4
i
Assuming, arguendo,5 that a termination for-cause employment term would support the inference of a durational term for the method of compensation,6 there is no basis on this record to infer *551other than employment-at-will contracts and no ground to question the employer’s good faith. Plaintiffs simply suggest that they were told that if they worked hard in the beginning of their careers they would reap the benefits.7 These were statements that good performance would be rewarded; they were not statements implying a restriction on employment at will, Dzierwa v Michigan Oil Co, 152 Mich App 281; 393 NW2d 610 (1986); Triplett v Electronic Data Systems, 710 F Supp 667, 673 (WD Mich, 1989). This is no more than most employees concerned with building a career hope to achieve. To allow a jury to find on these facts a term limiting termination only to just cause would substitute for the presumptive employment-at-will term a dismissal-for-cause rule in every employment arrangement in which predictions of a rosy future were made to prospective employees. Cummings v Kelling Nut Co, 368 Pa 448; 84 A2d 323 (1951).
Plaintiffs’ commission claims, properly analyzed, assert an irrevocable right to renewal commissions on automobile insurance arising in the context of an employment-at-will relationship,8 on the basis *552of a promise to pay seven percent (Group a) and a promise to pay seven percent "forever” (Groups b and c).
ii
For the reasons stated by Justice Riley in Rowe,91 would hold that plaintiffs in Group A have not alleged circumstances that would permit the factfinder to conclude that the offer of specific compensation would continue for the duration of employment (or beyond). With regard to Groups b and c, I also find that the facts alléged are insufficient to permit a factfinder to conclude that the employer was making a commitment amounting to a promise of a permanent renewal compensation plan.10_
*553A
Plaintiffs’ eighth amended complaint does not distinguish between old and new sales, but rather contends that the Auto Club was perpetually obligated to maintain the compensation scheme.11 The lead opinion and the dissent agree that the durational term now claimed is limited to renewals of old sales. Even if this characterization is correct, it ought logically to follow that if renewals of old sales were intended to be a form of deferred compensation, they would be payable regardless of termination. The promises alleged are indefinite, not only in the sense that there is no durational term for renewals of "old sales,” but also because there are two possible constructions of the duration of "renewal of old sales” claim — renewals of old sales as long as employed — and renewals of old sales whether employed or not.
As observed in the concurrence in Rowe, even under the Uniform Commercial Code’s liberalized requirements of definiteness in relation to commercial contract formation, there must be a manifest intention to make a contract and a reasonably certain basis for giving an appropriate remedy. UCC 2-204(3). Thus, the issue here is not how the plaintiffs characterize their claims before this Court, but, rather, what the Court can discern regarding the parties’ intentions at the time the obligations allegedly were undertaken.
To be sure, courts look to rules of construction in interpreting ambiguous terms or to supply omitted terms reflecting either the actual expectation *554of the parties, if that appears, or objective expectations. Farnsworth, Contracts, §§ 7.15-7.16, pp 517-526. Stated otherwise,
Rules of construction serve the legitimate purpose of aiding courts in their quest to ascertain and give effect to the intention of parties .... They are not meant to be applied as a substitute for that quest. [Burns Mfg Co, Inc v Boehm, 467 Pa 307, 313, n 3; 356 A2d 763 (1976).]
The difficulty with applying concepts such as an implied obligation to render cooperation, post, p 605, or trade usage to supply a term in this case, post, pp 602-603, is that the former principle is irrelevant in this context,12 and the Court has not been supplied with guidance supporting plaintiffs’ construction with regard to the latter. Thus, again assuming that a promise of compensation for a durational term would be enforceable, summary disposition might have been appropriate if there was a basis for the factfinder to draw an inference that the parties expected that a prevailing commercial practice obtained.13 None has been advanced. Not even the apparent term of art "book of business,”14 that troubled us in *555Bullock15 has been fleshed out for its effect on the question at issue. On the record, briefs, and argument submitted here, it is entirely speculative that trade usage or other rules of construction assist in supplying omitted durational terms or as bearing on the parties’ intent. Nor, of course, can speculation that representations were made to plaintiffs with regard to "deferred compensation,” post, p 600, create a jury submissible issue regarding the parties’ intent. Unlike the benefit cases noted in Justice Ryan’s dissent in Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579, 648; 292 NW2d 880 (1980), in which the employer or the claimant employee "satisfied the burden of proof that work already performed was in consideration of the announced benefit and that what was sought was merely deferred compensation,” plaintiffs do not characterize their claims as "deferred compensation,” nor do they contend they have fully performed.
Viewed in a light most favorable to plaintiffs, we are left with the precatory term "forever” appended to descriptions of the compensation system, with the fact that the persons making such statements were sales managers and that the state*556ments were made, in some cases, in response to concerns that commissions were low.
In order to give legal effect to these claims, we would have to conclude that a missing term central to the intent of the parties could be inferred by the factfinder, i.e., that the method of compensation would never be changed. We would, in effect, be allowing the factfinder to determine that, despite the fact that the defendant retained the right to discharge these employees when it hired them, it nonetheless intended to assume the risk of a drop in its cash reserves.
Both the Restatement and the ucc express a preference for finding an enforceable obligation and preventing an evasion of obligation by resort to a claim of indefiniteness. Restatement Contracts, 2d, § 33(b); UCC 2-204(3). Under both the Code and Restatement, however, the parties must intend to contract, and there must be a reasonably certain basis for giving an appropriate remedy. Calamari & Perillo, Contracts (3d ed), § 2-9, p 66.
In this case, there is neither an objective manifestation that the employer was making a commitment that amounted to a promise nor a reasonably certain basis for giving an appropriate remedy. Aside from the precatory term "forever,” there is simply no objective indication that overcomes the presumption that there was no durational term for compensation with respect to future renewals.16
*557B
In Toussaint, supra at 613, the Court expressly recognized a nonpromissory basis of "a situation 'instinct with an obligation’ ” distinct from and independent of contract analysis.
Most recently, in In re Certified Question, Ban-key v Storer Broadcasting Co, 432 Mich 438; 443 NW2d 112 (1989), we unanimously reaffirmed the principle that it is socially desirable to recognize the enforceability of personnel policies. In doing so, we explicitly acknowledged that policy considerations extraneous to the contract-as-promise analysis, such as stability and consistency in the work environment, were the judicial premises underlying the legitimate-expectations prong of Toussaint.
In this case, plaintiffs rely principally on a promissory theory of liability. Thus, we are not faced with ''[t]he crucial, difficult question facing the courts in the modern cases . . . not whether to choose unilateral or bilateral contract analysis, but whether to employ any contractual analysis at all.” Pettit, Modern unilateral contracts, 63 Boston U L E 551, 575 (1983). Because plaintiffs assert a promissory claim, we deal with the principles of individual autonomy on which the law of private contract is based, and focus on the promissory basis of the asserted obligation.
As Professor Pettit observes,
Any assessment ... of the appropriateness of modern judicial use of unilateral contract theory *558must focus on the promissory basis of the asserted obligation .... Are courts imposing liability because of words or actions of the defendant manifesting an intention to make a commitment, or are they using unilateral contract as a device to enforce obligations arising from some sense of community standards? ... If the defendant’s commitment-making actions do not predominate, unilateral contract is an inappropriate rationalization that allows judges to avoid confronting their true motivations. [Id., pp 576-577.]
Thus, unless there is a nonpromissory basis for imposing an employer obligation,17 analysis of unilateral contract claims in implied-in-fact employment cases must begin with the question whether the words or action of the defendant manifested an intention to make a commitment.
In the absence of a viable unjust enrichment claim, of promissory estoppel, of bad faith, or a public policy ground for a different result, we have no basis on this record to permit a jury to impose promissory liability on the defendant. Because defendant’s commitment-making actions do not predominate, it cannot be truthfully said that a reasonable juror could find that the defendant assumed the obligation claimed. Id., p 577.
Therefore, I agree with the lead opinion and would reverse the decision of the Court of Appeals.

 This opinion responds to the latest draft of a proposed dissent circulated by Justice Levin.

 Among the circumstances identified as objective indications of intent are clarity, specificity, and lack of ambiguity of oral statements; whether there were specific negotiations for job security; the nature of the position; and whether, if policy statements are relied on, *550they support or undercut a reasonable belief that a promise of job security was being extended.

 It is not disputed that the unit compensation plan was undertaken as a business decision after an independent investigation indicated a relationship between the company’s dwindling cash reserves and a significant percentage increase in compensation costs to the commissioned sales force. The situation is not within the ambit of decisions recognizing an implied covenant of good faith and fair dealing in employment-at-will arrangements to prevent the forfeitures of benefits almost earned. Fortune v Nat'l Cash Register Co, 373 Mass 96; 364 NE2d 1251 (1977); Perritt, Employee Dismissal Law & Practice (2d ed), § 4.11, pp 191-197.

 I agree with Chief Justice Cavanagh that it is inappropriate to address the legitimate-expectations issue.

 The dissent would extend the contract prong of Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579, 598; 292 NW2d 880 (1980), to a compensation term and infer a good-cause term. The plaintiffs at oral argument contended that the just-cause agreement together with the compensation promise implied at least that the salary be a fair and reasonable salary.

 It is suggested that the just-cause question is not in issue because the defendant did not assert that there was no factual support for the claim. The Blakley aifidavit raised the factual predicate for the defendants’ claims, the plaintiffs countered with the policy manual, and the defendants argued that "plaintiffs who were allegedly told at the time of hire or thereafter that the percentage-based commission would never change must be treated in the same manner as the plaintiffs who admittedly were not made such a promise,” memoran*551dum in support of partial summary judgment, § 2, p 8, and there was an insufficient evidentiary basis to find other than an at-will contract, § 2(b), p 9, n 11. Moreover, plaintiffs specifically relied on the just-cause theory at oral argument contending that a just-cause term necessarily precluded the. adjustment of compensation.

 Nor does this case raise the issue regarding whether a durational term for a reasonable period of time may be supplied to permit an employee at will to recoup an investment in time and money. See Keller, Ackland & Glad, The evolving doctrine of wrongful termination of employment: Practical considerations regarding employment and insurance agent relationships, 32 Fed’n Ins Couns Q 105 (1982). Further, since the plaintiffs do not rest their claims on an implied obligation to continue the agreement for a reasonable time, we have no occasion to consider whether and how such an implied-in-law "gap filler” might be appropriate when an employment agreement is silent regarding duration. Calamari & Perillo, Contracts (3d ed), § 2-9, p 59, n 17.

 Justice Levin takes the position that when the Auto Club "agreed *552that the sales representatives would be paid a seven percent commission on policy renewals of old sales, it agreed, by implication, that the sales representatives would not be deprived, as a result of discharge from employment other than for good or just cause, of the opportunity to earn the seven percent commission on policy renewals of old sales by exerting whatever additional effort, if any, might be required to obtain such renewals.” Post, p 605. By this construction, Justice Levin seeks to avoid the underlying assumption that if the employment is at will, the terms can be modified at will. The logic of this assumption is that the employer can always terminate an employment-at-will relationship and rehire the employee with different benefit terms. Hathaway v General Mills, Inc, 711 SW2d 227 (Tex, 1986); Wakefield v Northern Telecom, Inc, 769 F2d 109 (CA 2, 1985) (applying New Jersey law). See anno: Sufficiency of notice of modification in terms of compensation of at-will employee who continues performance to bind employee, 69 ALR4th 1145.

 Plaintiffs contend that Group a claims rest on an express promise. As in Rowe, plaintiffs’ claims rest on an express statement, and the issue is whether an omitted durational term can be supplied.

 The dissent in Rowe observes that the signers of the lead opinion in Dumas proceed "on the apparent premise that such a promise, if made, would be enforceable,” p 694. In view of my conclusion that the facts are insufficient to permit such a finding, I need not reach the question, not decided in Toussaint, supra, with regard to whether, if a sufficient "promise” of permanent compensation was made, it would be enforceable on a contract theory in an at-will context. See Pettit, Modern unilateral contracts, 63 Boston ULR 551, 555-557 (1983).

 In their eighth amended complaint, ¶ 11, plaintiffs allege that they were "precluded from receiving their full 7.0% commission on all new policies sold and all pre-existing policies renewed.” In ¶ 20, plaintiffs further allege that they were "promised that they would earn a 7% commission from the renewal of pre-existing clients and from all new policies sold . . . .”

 The duty of cooperation is imposed in all contracts that leave the particulars of performance to be specified by one party, or where one party’s cooperation is necessary to, or materially affects, the performance of the other. See, e.g., the analogous provision of UCC 2-311(1), (3).

 The term "renewal commission” is defined in Gram v Liberty Mutual Ins Co, 391 Mass 333; 461 NE2d 796 (1984), as damages measured by the annual renewal commissions payable under the compensation agreement in effect at time of discharge. Future premium levels and future policy changes are not included because they are speculative.

 The term "expirations” has a definite meaning in insurance and refers to information enabling contact with the insured to secure another contract. An agency functioning under the American Agency System which usually represents several insurance companies is the owner of records and expirations. An agency serving a direct writing *555contract represents a single company and must place all insurance with that company and, customarily, does not own the record in the hands of the agent. 4 Couch, Insurance, 2d, § 26A:260, pp 492-496; anno: Rights to expirations as between insurer and insurance agent or broker, 88 ALR3d 1142; Woodruff v Auto-Owners Ins Co, 300 Mich 54; 1 NW2d 450 (1942).

 In Bullock v Automobile Club of Michigan, 432 Mich 472, 483; 444 NW2d 114 (1989), the plaintiff alleged an oral promise of job security. The motion for summary disposition pursuant to GCR 1963, 117.2(3) was filed before any meaningful discovery. We noted the "isolation” in which the alleged promise was reviewed and the presence of factors such as the "book of business” which "may” constitute distinguishing features. Id. at 484, n 11. We held that whether the alleged promise was either intended by defendant (or understood by Bullock) as an enforceable obligation “must await further discovery and perhaps trial.” Id. at 483. (Emphasis added.)

 Observing, as Justice Griffin did, in In re Certified Question, Bankey v Storer Broadcasting Co, 432 Mich 438, 446-447; 443 NW2d 112 (1989), that unilateral contract theory poses conceptual difficulties in contracts implied in fact, Professor Perritt suggests that closer to employment law are cases of modification of benefit promises under the Employment Retirement Income Security Act, 29 USC 1001-1461, and collectively bargained individual right analyses, and that these cases suggest the following principles to guide employer modification of employment security promises in the implied-in-fact context:
(1) The employer should be presumed to have reserved the *557right impliedly to modify the employment security promise any time before a termination is effected; and
(2) A course of conduct involving successive employer modification is evidence that the right to modify was reserved and that employees could not reasonably expect otherwise. [Perritt, supra, § 4.19, p 218.]

 The instability of employment jurisprudence, observed by Justice Riley in Rowe is in part a function of the fact that courts have used unilateral contract theory as a vehicle for expanding employer obligations on the basis of the courts’ unarticulated nonpromissory notion of abusive employment practices. If the bar distinguishes the theories and confronts judges with the arguments for and against nonpromissory theories of liability, and if judges are willing to openly confront their true motivations, we may at least produce a forum for debate on the most "critical and difficult question” in employment law— whether and under what circumstances it is appropriate to apply a court’s sense of community standards as a basis for recognizing enforceable obligations in employment relationships.