Crowther v. Gerber Garment Technology, Inc.

• Decision Date: 29 July 1986
• Docket Number: No. 4179,4179
• Citation: 8 Conn.App. 254,513 A.2d 144
• Court: Connecticut Court of Appeals
• Parties: N. Denis CROWTHER v. GERBER GARMENT TECHNOLOGY, INC.

Page 144

513 A.2d 144

8 Conn.App. 254

N. Denis CROWTHER v. GERBER GARMENT TECHNOLOGY, INC.

No. 4179.

Appellate Court of Connecticut.

Argued March 18, 1986.

Decided July 29, 1986.

Albert Zakarian, with whom, on brief, was James Sicilian, Hartford, for appellant-appellee (defendant).

William H. Narwold, Hartford, for appellee-appellant (plaintiff).

Before DUPONT, C.J., and BORDEN and BIELUCH, JJ.

BIELUCH, Judge.

This action arises out of the plaintiff's claim for sales commissions due from the defendant, his former employer. The defendant has appealed from the modified judgment of the trial court in favor of the plaintiff in the amount of $214,619.52. The plaintiff has also filed a cross-appeal from the judgment. We find no error.

The trial court found the following facts. The plaintiff is the former national sales manager of the defendant corporation. He was hired by the defendant through its vice president for marketing, Peter Lanzer, on September 9, 1980, as national sales manager for the defendant's computerized marker-making machine known as the AM1 system which consisted of a computer, plotter, printer, disc, screen and software. That system uses a computer to lay out patterns for use in the apparel, automobile and aerospace industries. In the spring of 1981, the AM1 system was modified and was then redesignated AM5. The marker-making system is used in conjunction with a cutting machine known as the Gerber Cutter.

The plaintiff had previously been employed by Hughes Aircraft as a regional sales manager for the AM1 marker-maker before its purchase by the defendant. When the plaintiff was hired as the defendant's national sales manager to work out of Atlanta, Georgia, the written contract of employment provided for an annual salary of $50,000 and a commission of 1 percent on "systems and upgrades." The agreement also gave him a $20,000 annual draw against his future commissions as well as the use of a company car. The defendant took over a "bridging loan," then held by his former employer in the amount of $16,000, on the plaintiff's home in Wilmington. Finally, the plaintiff was to receive a commission of one-eighth of one percent on all service contracts for the systems and upgrades. Both parties agreed to give two months notice of termination of the employment.

From September, 1980, through April 30, 1981, this agreement remained in effect. The plaintiff served as the defendant's national sales manager while living in Atlanta. However, the parties came to realize that the plaintiff would be better able to discharge his responsibilities if he lived closer to the defendant's home office in South Windsor, Connecticut. The plaintiff and Lanzer, therefore, agreed that the plaintiff would move to Connecticut. The plaintiff, however, expressed concern about the cost of housing and the high rate of interest in selling his Atlanta home and in purchasing a replacement home which he had found in Glastonbury. As a result, as of May 1, 1981, the plaintiff's compensation agreement with the defendant was modified to increase his commission on service contracts from one-eighth to one-quarter percent. Further, to defray moving and housing expenses, the plaintiff was to receive an override of 1 percent commission on the first $2,000,000 of AM1 systems and upgrade sales, or $20,000, in the first year, and a similar override of 1 percent on sales of $1,000,000, or $10,000, annually thereafter. The plaintiff's annual draw against anticipated commissions was also increased to $40,000.

At approximately the same time as this new compensation agreement was being negotiated, the plaintiff was discussing with Lanzer his employment as national sales manager for an additional machine made by the defendant, the Gerber Cutter, also referred to as the System 91. The cutter is an automated pattern cutting device designed to be used in conjunction with a computer-aided design system, such as the AM1 or AM5. This expansion of the plaintiff's duties to cover another product was finalized in the late spring of 1981, and Lanzer and the plaintiff worked throughout June of that year reorganizing the cutter sales program in preparation for a sales meeting to be held on July 10. Projections by the plaintiff for sales of the cutter in the period between July 1, 1981, and April 30, 1982, were $12,000,000 to $14,000,000. AM system sales were expected to be between $8,000,000 and $10,000,000.

After the sales meeting, Lanzer met with the plaintiff to discuss the success of the meeting. Lanzer then told the plaintiff: "Of course, Denis, that leaves only your compensation to be agreed." The plaintiff laughingly responded: "Don't worry, Peter, all you have to do is continue my one percent." Lanzer responded: "Don't be crazy, Denis. This would mean you would receive more money than Joe Gerber, Stan Leven or Bob Maerz [of management]." With that discussion, the matter then ended.

During the summer of 1981, Robert Maerz, who was a senior vice-president of marketing and operations for the defendant's parent company, and a director of the defendant, saw figures on a computer printout which suggested that the plaintiff's salary was a guaranteed $90,000. He called Lanzer to discuss the situation because that salary was significantly out of line with other compensation at the company. Lanzer, Maerz and H. Joseph Gerber, the chairman of the board of directors, met to discuss the situation. Lanzer explained to Maerz that the computer printout was incorrect. Maerz then directed Lanzer to establish a graduated scale providing for increased commissions based on increased sales.

The defendant's fiscal year runs from May 1 through April 30. From July 1, 1981, through April 30, 1982, the defendant's accounting office accrued, as a potential expense in contemplation of commissions to be paid, 1 percent on sales of AM systems and Gerber Cutters. This accrual was directed by Lewis Caron, vice president and comptroller of the defendant. In the summer of 1981, Caron also specifically instructed his subordinates not to pay commissions to the plaintiff because no new agreement had been reached.

Caron pressed Lanzer to formalize a compensation agreement with the plaintiff as the end of the 1981-1982 fiscal year neared. On May 5, 1982, Lanzer met with the plaintiff and informed him that although the plaintiff claimed a commission of 1 percent on all sales, the defendant would pay no more than one-quarter percent. The plaintiff responded: "Well, if that is so, then it will have to be so." The trial court found that the plaintiff accepted this modification of the commission rate as a resolution of the question for the future only. The defendant subsequently gave the plaintiff a check for $38,596.02. This sum was a net adjusted figure which included a commission payment of $37,471.49, computed at one-quarter percent of all sales of AM systems and upgrades and Gerber Cutters during the period of July 1, 1981, through April 30, 1982. This payment reflected sales of AM systems in the amount of $5,911,352, and cutter sales of $9,077,256.

The sole dispute between the parties at trial related to their disagreement as to the amount of commissions to which the plaintiff was entitled during the ten-month period from July 1, 1981 through April 30, 1982. The parties agree that the plaintiff has been properly paid from September, 1980, through June 30, 1981, and from May 1, 1982, until the time of his resignation in October, 1982. The amount disputed by the parties is the difference between the plaintiff's demand of 1 percent on the AM systems and cutter sales and what the defendant paid him at one-quarter percent.

The trial court concluded that the parties' original compensation agreement, as modified by them prior to July 1, 1981, for sales of AM systems and upgrades was never terminated in accordance with its provision for two months cancellation notice. Therefore, the plaintiff was entitled to receive a commission of 1 percent on all sales of AM systems and upgrades during the ten-month period in question. By that computation he was entitled to receive the amount of $59,113.52, representing 1 percent of total sales of $5,911,352. The court also ruled that since the Gerber Cutter was not an upgrade of the AM systems, it was not covered by the parties' original contract. For that reason, the court found that there was no meeting of the minds regarding the plaintiff's compensation for cutter sales until May 5, 1982, at which time the one-quarter percent commission rate for all products was agreed upon as a further amendment to the employment contract. The court, therefore, found that the plaintiff was entitled to a commission of one-quarter percent on cutter sales of $9,077,256, amounting to $22,693.14. The total due to the plaintiff from the defendant was found to be $81,806.66. Since he was previously paid $37,471.49 on or about May 5, 1982, the balance due him was $44,335.17.

Upon this amount due, the trial court awarded the plaintiff statutory interest of $12,030.01. Pursuant to General Statutes § 31-72, ¹ the plaintiff sought, and the court awarded, double damages in the sum of an additional $44,335.17. Further, under § 31-72, the court allowed reasonable attorney's fees and expenses through trial of $32,997.37 and post-trial to judgment of $30,957. Total judgment was rendered for the plaintiff to recover of the defendant $164,654.72 plus costs. From this judgment, the defendant appealed and the plaintiff cross-appealed.

Subsequent to the rendition of judgment and filing of the defendant's appeal, the plaintiff moved, pursuant to General Statutes § 52-212a and Practice Book § 326 allowing such motion within four months of judgment, to open and modify the judgment to include an additional 12 percent interest, compounded annually, on the amount previously awarded for the period from the filing of the complaint on October 19, 1982, to the judgment of April 30,...