Carroll v. Stryker Corp.

Decision Date20 November 2009
Docket NumberNo. 09-cv-29-slc.,09-cv-29-slc.
Citation670 F.Supp.2d 891
PartiesMatthew CARROLL, Plaintiff, v. STRYKER CORPORATION, a foreign corporation, Defendant.
CourtU.S. District Court — Western District of Wisconsin

A. Steven Porter, Attorney A. Steven Porter, Madison, WI, for Plaintiff.

Craig Henry Lubben, Miller Johnson, Kalamazoo, MI, Sarah Anne Zylstra, Boardman, Suhr, Curry & Field LLP, Madison, WI, for Defendant.

OPINION AND ORDER

STEPHEN L. CROCKER, United States Magistrate Judge.

This is a removal case in which plaintiff Matthew Carroll is suing defendant Stryker Corporation for unpaid wages and other compensation under Wis. Stat. Ch. 109, quantum meruit and unjust enrichment relating to his employment as a sales person. On February 13, 2009, the parties consented to my jurisdiction pursuant to 28 U.S.C. § 636(c)(1).

Before the court is Stryker's motion for summary judgment on all of Carroll's claims. Dkt. 15. Carroll has withdrawn his wage claim under Wis. Stat. Ch. 109, admitting that he is not an employee as that term is defined in the statute. Stryker contends that because its 2008 compensation plan constituted a contract with Carroll, Carroll has no equitable relief available. Carroll disagrees, insisting that the compensation plan is not a contract. In the alternative, he has moved for leave to amend his complaint to add a claim of breach of contract. Dkt. 46. Stryker opposes the amendment on the grounds that there was undue delay, it would result in undue prejudice and any amendment would be futile.

Because the compensation plan constitutes a valid contract between the parties, defendant is entitled to summary judgment with respect to plaintiff's claims for equitable relief. I also find that justice does not require granting Carroll leave to amend his complaint because he waited too long, and granting leave at this time would cause undue prejudice to Stryker. Therefore, the motion for leave to amend will be denied and this case will be closed.

For the purpose of deciding the motion for summary judgment, I find from the parties' proposed findings of fact that there is no genuine issue as to the following material facts.

UNDISPUTED FACTS
I. The Parties and the Employment Relationship

Plaintiff Matthew Carroll is a resident of Fitchburg, Wisconsin. Defendant Stryker Corporation is a Michigan corporation with its principal offices located in Kalamazoo. In January 2003, Stryker hired Carroll as a marketing associate. Carroll signed an employment application that stated in part:

I agree to conform to the rules and regulations of the company, and understand that if hired I will be a terminable-at-will employee, and that my employment and compensation can be terminated with or without cause and with or without notice, at any time, at the option of either the company or myself.

On February 17, 2003, Carroll signed an employee handbook receipt that stated in part:

Except for the paragraph below, I understand that nothing contained in the Handbook constitutes an employment contract between the Company and me. I understand that my employment can be terminated with or without cause and with or without notice by the Company or by me.

* * *

I understand that any previous contracts, policies, or representations relating to my employment are no longer in effect and have been replaced by the Handbook. I understand that the purpose of the Handbook is to inform me of the Company's policies and rules and that no one is authorized to make changes in the terms of this Handbook, except through written revision authorized by Stryker Leibinger's General Manager. Stryker Leibinger may add, change, or rescind any of the policies, benefits, or practices listed, with or without notice by me.

In January 2005, Stryker promoted Carroll to sales representative in its instrument division and assigned him a sales territory in Peoria, Illinois. Effective January 1, 2006, Stryker transferred Carroll to Wisconsin and appointed him sales representative in its Navigation Division (a subdivision of the instrument division) for the company's northern region. The Navigation Division is responsible for the manufacturing, marketing and sales of medical instruments used in computer-assisted surgery.

Stryker employed Carroll in a commissioned sales capacity. In a memorandum to the Navigation sales team dated January 10, 2008, Brad Bailey, the sales director, set forth Stryker's 2008 compensation plan for sales representatives. The plan included these provisions:

• $6,000 monthly draw for the first six months.

• Starting with month seven, a sales representative failing to cover his draw in commissions in a given month would incur a draw deficit recoverable by Stryker.

• Commissions were to be paid monthly on orders above the draw.

• Compensation was determined as a percentage of order amounts based on discount levels.

• Commissions were to be paid on all orders.

• Stryker reserved the right to change the compensation plan at any time to more effectively drive their goals.

II. Plaintiff's Performance

In 2006, Carroll achieved only 45.4% of his sales quota. His supervisor, William McCrary, sent him a letter dated January 17, 2007:

... I know that no one is more disappointed than you with the outcome of 2006 in the Milwaukee Navigation Territory, and I know you realize the importance of having the Milwaukee Navigation Territory on track in all performance measurement categories to ensure the success of the Great Plains Region and Stryker Navigation. ... Failure to achieve YTD quota by the end of 1st quarter 2007 or present a positive assessment of the above referenced metrics during this period of time could result in our immediate consideration of a territory split and a formulation of new and ongoing performance measurement categories at that time.

At the end of the third quarter of 2007, Carroll had met only 35.8% of his sales quota for the year. McCrary sent Carroll a letter dated November 6, 2007 in which he warned Carroll that "[f]ailure to meet this requirement at the end of the year will result in further action, potentially including termination."

On January 16, 2008, McCrary sent Carroll a letter, indicating that he had failed to meet quota in 2007 and stating in part:

The year 2007 is behind us and your sales results were a disappointing ... 44.8% percent-to-quota. This places your current performance at a less-than-effective level for the second year in a row....

Due to your historical performance levels, your performance and employment status will be evaluated on a quarterly basis in 2008 instead of annual basis and we are requiring you be at a minimum of 100% YTD PTQ at the end of each quarter of 2008. Failure to meet this requirement may result in termination.

III. The Aurora Contract

On March 31, 2008, Carroll procured an order from Aurora Health Care for equipment in the total amount of $299,008.13 and e-mailed the purchase order to McCrary. Although the purchase order was legitimate, McCrary noticed that Aurora had attached lengthy, detailed terms and conditions. Aurora had asked for 120 days within which to pay the order in full after Stryker shipped the order. This arrangement is referred to as a "net 120" payment term. Typically, Stryker requires a customer to pay for the product within 30 days after it is shipped. If a payment term exceeded 45 days, Stryker usually had a finance company finance the transaction.

Because McCrary was not sure if Aurora's terms and conditions would be acceptable, he forwarded them to Stryker's finance department—including Nikki Hoenes, David Kilgo (Stryker's Regional Finance Manager) and Wendi Ruggles. Hoenes told McCrary via e-mail on March 31 that a net 120 payment term was not acceptable and that Aurora would have to use a financing or leasing arrangement for any payment term over 30 days. Hoenes advised McCrary that someone would have to "review the very lengthy terms" in the purchase order "to ensure none of them contradict the lease agreement terms and conditions." She also noted that Aurora would have to sign certain documents in order to set up a financing or leasing arrangement.

Kilgo and Kris Vincent, Stryker's Director of Finance for the Navigation Division, then entered the e-mail exchange. Kilgo immediately contacted Aurora about getting the finance documents signed. However, given the late hour on March 31, Aurora had no one around with authority to sign on such a large deal. Kilgo e-mailed Carroll, McCrary and Vincent to inform them that he had been told that Aurora representatives would be available to sign the next day (April 1). McCrary extended Carroll's quarterly quota deadline until the end of business on April 1, 2008, so that signatures could be obtained from Aurora on the financing documents. Carroll spoke with Roger Peoples of Aurora on the night of March 31 about signing the purchase order, but Peoples refused to do so.

By mid-day on April 1, McCrary learned that Aurora did not finance a purchase from Stryker and assumed that it had no intention of doing so because it was seeking a cash deal with a 120-day payment term. Carroll told McCrary in an e-mail that he agreed with that conclusion. In the afternoon of April 1, McCrary drafted a letter to Aurora's chief financial officer and asked Carroll to forward it to her by e-mail. Recognizing that Aurora was unwilling to sign a financing agreement, McCrary offered a compromise, stating that Stryker would accept a signed purchase order assignment in lieu of finance documents. However, Aurora refused to sign the purchase order assignment. Later that afternoon, Kilgo e-mailed Carroll and told him that it would take a week to amend Aurora's purchase order in order for the lender to agree to extend financing. McCrary told Carroll that he was sorry that things had not worked out.

IV. Termination

Although the parties dispute many of the details surrounding plaintiff's termination, they agree that on ...

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