Malone v. AMERICAN BUSINESS INFORMATION
| Decision Date | 21 June 2002 |
| Docket Number | No. S-01-227.,S-01-227. |
| Citation | 647 N.W.2d 569,264 Neb. 127 |
| Parties | Armeda MALONE and Stephen Krantz, Appellees, v. AMERICAN BUSINESS INFORMATION, INC., Appellant. |
| Court | Nebraska Supreme Court |
Patrick M. Flood, of Hotz, Weaver, Flood & Breitkreutz, Omaha, for appellant.
Michael P. Dowd, of Dowd & Dowd, Omaha, for appellees.
Appellees, Armeda Malone and Stephen Krantz, filed suit against their former employer, American Business Information, Inc. (ABI), now known as Info USA, Inc., to recover commissions owed pursuant to the Nebraska Wage Payment and Collection Act, Neb.Rev.Stat. § 48-1228 et seq. (Reissue 1998). A jury awarded Malone and Krantz their requested amounts of commission, and the district court entered judgment pursuant to the jury verdicts. ABI now appeals.
Malone and Krantz began working for ABI as national account managers in 1998. Joseph Szczepaniak, president of ABI's consumer CD-ROM division, induced Malone to leave her previous employment by offering a more favorable commission agreement, despite a lower base salary at ABI. Similarly, ABI recruited Krantz with an offer of a lucrative commission agreement.
Upon joining ABI, Malone and Krantz signed identical 1998 sales commission plans (1998 Commission Plan). Both Malone and Krantz testified that ABI's tiered commission structure depended upon the net quantities shipped from ABI to distributors, based on the distributors' point of sale (POS) reports or direct sales. The 1998 Commission Plan provided, in pertinent part:
Malone and Krantz testified that ABI did not advise them that it could retroactively modify the commission agreement without notice; Malone and Krantz each understood that the plan only allowed for prospective change following notice.
For the first two quarters of 1998, Malone and Krantz reported directly to Marci Vitous, ABI's director of retail sales. William Hippen, vice president of retail sales, supervised Vitous. Vitous wrote Hippen a letter dated March 9, 1998, requesting confirmation that "commissions for the tier 1 group, including myself, would be paid based on the data collected from the distributors' POS reports." Hippen replied via e-mail: "Yes, this is correct." ABI accordingly paid commissions for the first quarter of 1998 to Malone and Krantz with no underpayment. Szczepaniak, the president of Malone and Krantz' division, signed each commission report.
In accordance with this method of calculation, Hippen sent an e-mail to a potential sales representative during the second quarter of 1998, describing how ABI calculated commissions:
Hippen testified that at the end of the second quarter, Malone's and Krantz' calculated commissions included reserves. Hippen incorporated reserves into the commission calculations by estimating that a number of products would be returned and stated that he implemented reserves so the employees receiving commissions would not be overpaid and have to repay ABI if the products were returned. Malone testified that she was not informed until September 1998 that reserves would be withheld from her commissions.
ABI's CD-ROM division, in which Malone and Krantz worked, underwent management changes in 1998: Vitous and Hippen left the division; Steven Malone became director of sales, replacing Vitous and Hippen; and Steven Malone reported to Bruce Lowry, who became vice president of the consumer products division, replacing Szczepaniak.
Malone and Krantz accepted and cashed their second quarter commission checks. Malone testified that in September 1998, she received a memorandum and second quarter commission calculations from Lowry and discovered that her second quarter commission included reserves. After receiving Lowry's memorandum in September, Malone and Krantz made inquiries with Steven Malone, their direct supervisor, about reconciling their second-quarter commissions and paying their third-quarter commissions; they did not receive commission calculation sheets for the third or fourth quarter of 1998.
Steven Malone testified that he initially compiled the third-quarter commission numbers based on POS reports; however, upon presenting these figures to Lowry, Steven Malone testified that Lowry told him "you got to learn how to fuck these people." Lowry denied making that statement. Steven Malone testified that after finding that the commission figures were unacceptable to Lowry, he "bumped the level of reserves" held against the national account managers, utilizing several variables, some of which he found "ridiculous."
Steven Malone reassured Malone and Krantz in November 1998 that the underpayment of their second-quarter commissions and their third-quarter commissions were forthcoming, but Malone and Krantz did not receive these commissions within 30 days of the end of the quarter as required by the 1998 Commission Plan. Around December 14, 1998, Lowry advised Steven Malone that ABI would pay commissions due from the third and fourth quarters of 1998; on December 15, Lowry informed Steven Malone that the commissions would not be approved and that a new model to determine commissions would be implemented.
On December 15, 1998, Steven Malone informed Malone that commissions were going to be changed, and Malone objected to a retroactive change to the commission plan. On December 16, Malone sent a letter to the executive chairman of Info USA, formerly known as ABI, demanding her third-quarter commission. Krantz sent a similar e-mail to the executive chairman and other ABI management on December 17, demanding payment of his third-quarter commissions.
Internal auditor Julie Engel testified that Steven Malone asked her around January 1999 to recalculate commissions based on paid sales, i.e., cash ABI actually received from its sales. Engel recalculated commissions of all national account managers, including Malone and Krantz, for all four quarters of 1998. Lowry sent Krantz a letter on December 23, 1998, claiming that Krantz owed ABI $15,197.73 after the recalculation of commissions for the third quarter.
Malone and Krantz no longer work for ABI. They both claim that ABI owes unpaid commissions from 1998, and each calculated their respective amounts based on POS reports provided by ABI. Krantz adduced evidence that ABI owed him $108,802 in unpaid commissions. Malone presented evidence that ABI owed her $75,350 in unpaid commissions.
Malone and Krantz filed an amended petition against ABI to recover damages owed under the Nebraska Wage Payment and Collection Act, § 48-1228 et seq. Malone and Krantz alleged that ABI failed and refused to pay commissions earned in 1998, in violation of the contractual 1998 Commission Plan. Malone and Krantz prayed for, inter alia, the commissions for 1998 to which they are entitled and reasonable attorney fees in an amount not less than 25 percent of the total recovery.
At trial, ABI moved for a directed verdict at the close of Malone and Krantz' case in chief, and again at the close of its own case; the district court overruled both motions. The jury found in favor of Malone for the sum of $75,350, and in favor of Krantz for the sum of $108,802. The district court entered judgment accordingly and awarded Malone and Krantz attorney fees pursuant to § 48-1231. ABI now appeals.
ABI assigns, restated, that the district court erred (1) in failing to grant ABI's motion for a directed verdict, (2) in instructing the jury that the 1998 Commission Plan was ambiguous as a matter of law, and (3) in failing to instruct the jury on what constitutes an unenforceable promise.
When a motion for a directed verdict made at the close of all the evidence is overruled by the trial court, appellate review is controlled by the rule that a directed verdict is proper only where reasonable minds cannot differ and can draw but one conclusion from the evidence, and the issues should be decided as a matter of law. Steele v. Sedlacek, 261 Neb. 794, 626 N.W.2d 224 (2001).
Whether the jury instructions given by a trial court are correct is a question of law. Springer v. Bohling, 263 Neb. 802, 643 N.W.2d 386 (2002).
ABI assigns, first, that the district court erred in failing to grant a directed verdict in favor of ABI. ABI argues that the 1998 Commission Plan upon which Malone and Krantz base their claims cannot be interpreted to provide an enforceable contractual right and that Malone and Krantz did not present evidence upon which a jury could award reasonably certain damages.
A directed verdict is proper at the close of all the evidence only where reasonable minds cannot differ and can draw but one conclusion from the evidence, that is to say, where an issue should be decided as a matter of law. Mondelli v. Kendel Homes Corp., 262 Neb. 263, 631 N.W.2d 846 (2001), modified 262 Neb. 663, 641 N.W.2d 624. The party against whom a motion for directed verdict is made is entitled to all reasonable inferences deducible from the...
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