Audus v. Sabre Communications Corp.

• Decision Date: 23 October 1996
• Docket Number: No. 95-1362,95-1362
• Citation: 554 N.W.2d 868
• Parties: 132 Lab.Cas. P 58,181, 3 Wage & Hour Cas.2d (BNA) 954 Jerry W. AUDUS, Appellee, v. SABRE COMMUNICATIONS CORPORATION, Appellant.
• Court: Iowa Supreme Court

Page 868

554 N.W.2d 868

132 Lab.Cas. P 58,181, 3 Wage & Hour Cas.2d (BNA) 954

Jerry W. AUDUS, Appellee, v. SABRE COMMUNICATIONS CORPORATION, Appellant.

No. 95-1362.

Supreme Court of Iowa.

Oct. 23, 1996.

William J. Rawlings and Michael P. Jacobs of Rawlings, Nieland, Probasco, Killinger, Ellwanger, Jacobs & Mohrhauser, Sioux City, for appellant.

Steven R. Jensen of Crary, Huff, Inkster, Hecht & Sheehan, P.C., Sioux City, for appellee.

Considered by McGIVERIN, C.J., and LARSON, NEUMAN, SNELL, and ANDREASEN, JJ.

McGIVERIN, Chief Justice.

This case requires us to determine whether the district court properly awarded plaintiff Jerry W. Audus damages in the amount of $228,826.32 in his breach-of-contract and wage-collection action for unpaid sales commissions. We must also decide whether the district court erred in denying Audus' application for attorney fees. We affirm the court's judgment for plaintiff Audus, reverse the ruling denying attorney fees to Audus, and remand for hearing to fix the attorney fees.

I. Background facts and proceedings. The dispute in the present case centers around an oral employment arrangement between Audus and defendant Sabre Communications Corporation (Sabre), which manufactures and sells communication towers and high frequency antenna systems. In early 1985, Audus and David Bailey Aalfs, the president and sole shareholder of Sabre, discussed the possibility of Audus managing tower sales for Sabre. Aalfs offered Audus a salary of $30,000 per year plus a three percent commission on sales. The parties agree that they did not discuss the timing of commission payments. They give differing versions of their arrangement with regard to the basis for the commissions. Plaintiff Audus claims that Aalfs told him the commissions would be based on all sales generated by Audus, while Sabre maintains that Aalfs told Audus the commissions would be based on Audus' sales between $500,000 and $1,000,000 each year, with any additional compensation to be at Aalfs' discretion. The parties did not execute a written agreement.

Pursuant to the oral arrangement, Audus started working for Sabre in March 1985. During the period of Audus' employment at Sabre, the company expanded and prospered. Sales rose from $65,055 in 1984 to over $2 million in 1990, leveling off at over $1 million in 1991 and again in 1992. The number of Sabre's employees increased from five or six in 1985 to twenty-three or twenty-four in 1992.

Audus' compensation during that period of employment followed a somewhat irregular pattern. Audus claims that he generated more than $10.5 million in sales while working for Sabre. He received his $30,000 yearly salary in weekly payments. On the basis of a log in which he recorded his sales and calculated the commissions to which he claims he was entitled, Audus from time to time requested payments in varying amounts as draws upon the accumulating commissions. Audus maintains that those requests were never refused, while Aalfs contends there were occasions when Aalfs did not pay what Audus asked. In any event, during the several years of Audus' employment, Aalfs paid Audus considerably more than the maximum commission allowed under Aalfs' version of the employment arrangement. According to Aalfs, the extra amounts were paid solely at his discretion. In addition to those sporadic commission payments, in March 1988, Audus began drawing $1,000 in commission payments every four weeks, although he initially asked for $1,500 every four weeks.

During Audus' employment at Sabre, any references by the parties to the commission arrangement were only in general terms. Audus claims that he asked Aalfs to obtain life insurance in order to protect Audus' accumulating commissions and that Aalfs mentioned the possibility of revising the commission arrangement. Audus also contends that during conversations with Aalfs, Audus referred to, and Aalfs did not dispute, the accrual of commissions. Aalfs asserts that the conversation regarding insurance involved only the possible purchase of an annuity as an incentive for Audus to continue working for Sabre. Aalfs further asserts that during the time Audus was employed at Sabre, Audus never mentioned any accrued commissions or indicated he felt he was entitled to further payments.

In June 1992, Audus quit his job with Sabre and told Aalfs that he wanted payment of his outstanding commissions by the end of the year. According to Audus, Aalfs said he would have the company's bookkeeper calculate the amount of those commissions. Aalfs, on the other hand, maintains that he told Audus all commissions had been paid. In a letter written to Aalfs in August 1992, Audus again demanded the remaining commissions. Aalfs responded in October 1992 with a letter setting forth his version of the oral employment arrangement and denying Audus was entitled to any further payments. At trial, however, Aalfs testified that Sabre probably owed Audus approximately $4,000 in additional commissions.

On September 29, 1993, Audus filed a petition in district court. Count I of the petition alleged a breach of the oral employment contract and sought unpaid commissions plus interest and court costs. Count II alleged a violation of the Iowa Wage Payment Collection Law, Iowa Code chapter 91A, and sought unpaid commissions plus liquidated damages, court costs, and attorney fees. See Iowa Code § 91A.8 (1993). Sabre's answer denied any liability and affirmatively alleged that Audus' claims were partially barred by the statute of limitations. See Iowa Code ch. 614.

After defendant Sabre filed, and the district court denied, an application for separate adjudication of law points, Sabre filed a motion for reconsideration of its application for separate adjudication of law points, or, alternatively, summary judgment. See Iowa R.Civ.P. 105, 237. Sabre contended that a portion of Audus' claims were barred by the two-year limitations period, Iowa Code section 614.1(8), arguing that commissions claimed by Audus constituted "wages" for purposes of Iowa Code section 614.1(8), that section 91A.3 precluded deferral of commission payments beyond twelve months, and that the commissions were due and payable at the time of each sale made by Audus. The district court deemed the motion to be a motion for summary judgment and determined: 1) that the two-year limitations period of section 614.1(8) applied to Audus' breach-of-contract claim; 2) that Audus' chapter 91A claims accrued in regular twelve-month intervals; 3) that chapter 91A did not limit Audus' breach-of-contract claim; and 4) that the finder of fact must determine when the twelve-month intervals ended for purposes of the chapter 91A claim and when the commissions became due and payable for purposes of the breach-of-contract claim.

The case was tried to a jury. At the close of plaintiff's evidence, defendant Sabre moved for a directed verdict based on the two-year limitations period of section 614.1(8). The motion also challenged the sufficiency of the evidence to establish either an oral contract for the payment of commissions on demand or a breach of such contract. The trial court overruled both that motion and Sabre's renewed motion for a directed verdict made after the close of all evidence.

The jury returned a verdict in favor of plaintiff Audus in the amount of $228,826.32, and the trial court entered judgment for that amount plus interest and taxed court costs to Sabre. Sabre then filed a motion for judgment notwithstanding the verdict and motion for new trial, and Audus filed an application for the award of attorney fees. The trial court overruled Sabre's motions and Audus' application.

Defendant Sabre appeals from the trial court's judgment and ruling denying the motions for judgment notwithstanding the verdict and new trial; plaintiff Audus cross-appeals from the trial court's ruling denying his application for attorney fees.

II. Standard of review. Our review in this law action is for correction of errors at law. Iowa R.App.P. 4. We are bound by the district court's findings of fact if they are supported by substantial evidence. Iowa R.App.P. 14(f)(1).

III. Award of damages to plaintiff Audus. On appeal, defendant Sabre raises three contentions: 1) the parties' alleged agreement regarding commission payments was too vague and indefinite to be enforceable; 2) Audus' claim for commissions allegedly earned more than twelve months before the last commission payment is unenforceable as a matter of law; and 3) Audus' claim for commissions allegedly earned before September 29, 1991, is barred as a matter of law. We turn now to these arguments.

A. Terms of the agreement concerning commissions. In its motion for directed verdict and motion for judgment notwithstanding the verdict, defendant Sabre contended the evidence did not support enforceability of the commission agreement as urged by plaintiff Audus. In determining that Audus was entitled to recover damages in the amount of $228,826.32 from Sabre, the jury apparently agreed with Audus that the parties had an oral agreement for commissions based on three percent of all sales generated by Audus, rather than three percent of sales between $500,000 and $1 million in a given year. The trial court overruled Sabre's motions and entered judgment on the verdict for Audus.

The existence of an oral contract, as well as its terms and whether it was breached, are ordinarily questions for the trier of fact. Dallenbach v. Mapco Gas Prod., Inc., 459 N.W.2d 483, 486 (Iowa 1990). In order to find that an oral contract existed, there must be sufficient evidence of its terms to ascertain the duties and conditions established. Burke v. Hawkeye Nat'l Life Ins. Co., 474 N.W.2d 110, 113 (Iowa 1991). However while courts cannot find a contract where none exists, they are reluctant to hold that a contract is too uncertain to be enforceable. In re Estate of Ohrt, 516 N.W.2d 896, 901 (Iowa 1994).

Sabre contends...