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Cleland v. Mortara Instrument, Inc.

United States District Court, E.D. Wisconsin

June 15, 2018

CARLTON CLELAND, Plaintiff,
v.
MORTARA INSTRUMENT, INC., Defendant.

          DECISION AND ORDER

          LYNN ADELMAN, United States District Judge

         The plaintiff, Carlton Cleland, alleges that the defendant, Mortara Instrument, Inc., failed to pay him commissions that he earned while working as its sales agent. He brings this action under Wisconsin law, seeking damages for breach of contract or, in the alternative, equitable relief under the doctrines of promissory estoppel and unjust enrichment.[1] Before me now is Mortara's motion for summary judgment.

         I. BACKGROUND

         Mortara makes and sells medical devices throughout the country. Between June 2007 and May 20, 2016, Mortara employed Cleland as a Cardiology Account Executive. Cleland's duties in this position included selling medical devices to customers, providing training to customers, and servicing equipment. During his employment, Cleland had an assigned sales territory that consisted of the southern half of Nebraska, all of Kansas, the northern half of Arkansas, all of Missouri, and the bottom half of Iowa.

         Cleland's compensation took the form of both a fixed salary and commissions on sales. The commissions portion of his compensation was governed by a written agreement. This agreement is a somewhat skeletal document that mostly describes how commissions would be calculated. (Decl. of Carlton Cleland, Ex. A, ECF No. 40-1.) However, it also contains some terms. As is relevant here, the agreement states that “[c]ommissions are earned upon shipment, paid by the end of the subsequent month.” (Id. at p. 1.) The agreement also states that “[a]ll commission determinations are subject to approval by” Mortara. (Id.)

         On May 20, 2016, Mortara terminated Cleland's employment. Mortara contends, and Cleland does not dispute, that it terminated him “because of customer complaints and Cleland's ongoing issues with properly managing his territory.” (Def. Prop. Finding of Fact (“PFOF”) ¶ 25.) Cleland's last paycheck was dated June 23, 2016, and it included commissions on sales that had shipped during the last month of his employment.

         After Mortara terminated Cleland, it promoted an existing employee, Kevin Tecce, to the position of account executive for Cleland's former territory. However, it took Mortara until August 2016 to move Tecce into Cleland's former position. At that point, Mortara and Tecce entered into a commission agreement that was in all material respects identical to the agreement between Mortara and Cleland. Mortara then began paying Tecce commissions on orders that shipped into the territory. (Def. PFOF ¶ 36.) Some of these commissions were for orders that Cleland had worked on while he was the account executive for the territory. These commissions were for orders that closed sometime after Cleland had sent quotes to the customers but did not ship until after Cleland had been terminated. (Id.)

         Cleland and Tecce are close friends. After Tecce was promoted to Cleland's former position, the two men had a conversation in which Tecce told Cleland that he was receiving commissions based on work that Cleland had performed. Cleland was surprised to learn that Mortara was paying Tecce those commissions because he “just assumed that management would absorb all those commissions.” (Def. PFOF. ¶ 38.)

         Tecce remained the account executive for Cleland's former territory until January 2017. At that point, a different Mortara employee, David McNeel, became the account executive for the territory. Mortara and McNeel then entered into the same commission agreement as Mortara had entered into with Cleland and Tecce Once McNeel took over, Mortara began paying him the commissions on orders that shipped into the territory, including on orders that resulted from Tecce's work but which did not ship until after McNeel became the account executive.

         Cleland commenced this suit in February 2017. He contends that Mortara breached the commission agreement by failing to pay him commissions on orders that resulted from his work as the account executive for the territory but did not ship until after he was terminated. He also contends that, if the commission agreement proves to be “illusory, ” then he is entitled to recover those commissions under the doctrines of promissory estoppel and unjust enrichment. (Br. in Opp. at 1, ECF No. 37.)

         II. DISCUSSION

         Summary judgment is required where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). When considering a motion for summary judgment, I take evidence in the light most favorable to the non-moving party and must grant the motion if no reasonable juror could find for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 255 (1986). The parties agree that Wisconsin substantive law applies to their dispute.

         A. Breach of Contract

         Under Wisconsin law, a court tasked with interpreting a contract attempts to identify the intent of the parties as expressed by the contractual language they used. Betz v. Diamond Jim's Auto Sales, 355 Wis.2d 301, 320 (2014). In ascertaining the parties' intent, the court must give contract terms their plain or ordinary meaning. Id. If the contract is unambiguous, the court's attempt to determine the parties' intent ends with the four corners of the contract, without consideration of extrinsic evidence. Id. Only when the contract is ambiguous, meaning it is susceptible to more than ...


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