Rhodes v. National Homes Corp.

• Decision Date: 18 September 1979
• Docket Number: No. 13910,13910
• Citation: Rhodes v. National Homes Corp., 163 W.Va. 669, 263 S.E.2d 84 (W. Va. 1979)
• Court: West Virginia Supreme Court
• Parties: Charles G. RHODES v. NATIONAL HOMES CORPORATION.

Page 84

263 S.E.2d 84

163 W.Va. 669

Charles G. RHODES v.NATIONAL HOMES CORPORATION.

No. 13910.

Supreme Court of Appeals of West Virginia.

Sept. 18, 1979.

Rehearing Denied Nov. 8, 1979.

Syllabus by the Court

1.In a case involving a contract which provides for different levels of compensation depending on the particular factual circumstances, and where the controversy centers not on the meaning of the contract language but on the factual conduct of the parties as it relates to one of the contemplated contract levels of compensation, it is the jury's task to resolve the factual dispute in order to determine what contract level of compensation is appropriate.

2." 'Where, in the trial of an action at law before a jury, the evidence is conflicting, it is the province of the jury to resolve the conflict, and its verdict thereon will not be disturbed unless believed to be plainly wrong.'Point 2, Syllabus, French v. Sinkford, 132 W.Va. 66(54 S.E.2d 38)."Syllabus Point 6, Earl T. Browder, Inc. v. County Court, 145 W.Va. 696, 116 S.E.2d 867(1960).

3."The action of the trial court in setting aside a verdict for the plaintiff and awarding the defendant a new trial will be reversed by this Court where it appears that the case, as a whole, was fairly tried and no error prejudicial to the defendant was committed therein."Syllabus Point 7, Earl T. Browder, Inc. v. County Court, 145 W.Va. 696, 116 S.E.2d 867(1960).

Orville L. Hardman, Parkersburg, for appellant.

John S. Bailey, Jr., Parkersburg, for appellee.

MILLER, Justice:

Charles G. Rhodes, the plaintiff below, appeals a final order of the Circuit Court of Wood County setting aside a jury verdict in his favor in the amount of $59,191.84 returned against his employer, National Homes Corporation(herein National).

Rhodes had brought suit to recover certain commissions he claimed were due him as a result of sales of housing units manufactured by National.He claimed that under his District Sales Manager contract (herein commission contract) with National, he was entitled to a 5 percent commission on the sales price of the housing units but that he had only been paid a 1 percent commission.

The area of controversy in regard to the written commission contract centered on its Article II, entitled "Earnings," which set out a schedule of commissions that Rhodes would be entitled to receive according to the type of sale.The basic commission was 5 percent, exclusive of sales tax, transportation, builder-dealer commission, and unspecified other costs.A 1 percent commission was to be paid on a Series 70 home.The contract also provided: "(W)here the Builder-Dealer earns Volume-Discounts, the District Sales Manager's commission, based on each volume plateau, shall be less than the normal 5% . . .", and a graduated scale of commissions based on sales volume was set out.¹The contract further provided that certain special sales could be excluded from the contract, and concluded with a provision that as to sales where "price negotiation is necessary the District Sales Manager's commission rate will be depressed . . . but in no event be less than 1%."(Ellipsis in original)

The commission controversy arose with respect to seven housing developments sold by Rhodes to Theodore D. Morlang which had a total purchase price of $1,479,813.Rhodes claimed that he was entitled to a 5 percent commission on these sales, while National asserted that a 1 percent commission was due and that it had paid Rhodes this amount.

At trial, Rhodes introduced the commission contract which covered the year 1968.He testified that in March of 1968, he met with a Mr. McKenzie, an officer of National, and a Mr. Wilmoth, who was associated with the Morlang project, and that the parties were in the final stages of completing the sale of the housing units.A discussion ensued between Rhodes and McKenzie as to Rhodes' commission on the Morlang sale.Rhodes asked if his 5 percent commission were assured, and, according to Rhodes' testimony, McKenzie responded that Rhodes would not receive "any lower than the Builder-Dealer's commission."

There was some evidence suggesting that the Morlang project was a builder-dealer arrangement, which under the contract schedule (SeeNote 1Supra, at 2) would have yielded a 2 1/2 percent commission to Rhodes at the approximate sales price of $1.5 Million.National, however, through its chief witness McKenzie, viewed the commission level as 1 percent because the project came under that section of the contract where prices were negotiated independently of the published price list: "(T)he District Sales Manager's commission rate will be depressed . . . but in no event be less than 1%."²In his testimony Rhodes denied that the prices were negotiated specially under this provision.The evidence also tended to establish that the separate written sales contracts were signed on the seven phases of the Morlang project beginning in 1968 and extending into 1970.

At the conclusion of all the evidence, the court gave, among other instructions, a plaintiff's instruction consisting of a series of possible findings keyed to the various commission levels stated in the contract and asserted by the parties.The first paragraph stated that if the jury found from a preponderance of the evidence that the parties had agreed on a 1 percent commission, then the verdict should be in favor of National.³

After repeating the preponderance of the evidence rule, the second paragraph stated that if the jury found the parties had agreed to a 5 percent commission, then Rhodes would be entitled to a commission of $73,990.65, less the $14,798.81 already paid, or the amount of $59,191.84.

The third paragraph stated that if the jury found the parties had agreed to a 2 1/2 percent commission, then Rhodes would be entitled to $36,995.32, less the $14,798.81 paid, or $22,196.51.

The final paragraph stated that if the jury found the parties had no "meeting of their minds" as to the commission, then Rhodes was not entitled to recover.

National objected to this instruction on the basis that it was not warranted by the evidence, that it invited the jury to compromise the case, and that there was no evidence of a 2 1/2 percent commission agreement.

The jury initially returned a verdict in favor of Rhodes, but left the commission amount blank.They were asked to return and complete the verdict, and subsequently returned with a verdict "assess(ing)Plaintiff's damages at 5% Of the total."The court then had counsel retire to chambers, where he proposed to again give the jury the foregoing instruction.National agreed to this procedure and the jury was so reinstructed, and then returned a verdict for Rhodes for $59,191.84.

In setting aside the verdict, the trial court took the view that although the written contract had expired, Rhodes had continued to work for National, and therefore there was a presumption that both parties were operating under the terms of the commission contract, citing 53 Am.Jur.2dMaster and Servant§§ 23, 31 & 75, and 12 M.J.Master and Servant§ 7.It was the court's position that Rhodes had attempted to modify the compensation level to which he was entitled under the commission contract, and that his evidence on modification failed to overcome the legal presumption.The court concluded, without elaboration, that the evidence did not support a finding that there was a "meeting of their minds" as to the commission, and therefore ruled that the case was "tried contrary to the law, and the Jury instructed contrary to the law."

There was some conflict in the evidence as to whether all the sales contracts for the Morlang project were signed in 1968, the year covered by the commission contract.There is no dispute that Rhodes continued in National's employment in 1969 and 1970, and that the Morlang sales were completed during those years.While the trial court was correct in its holding that the law presumes the original agreement continues, it erred in concluding that the record demonstrated that Rhodes had sought to modify the compensation terms of the written contract.

There is no doubt from the record that both parties tried the case on the theory that one of the commission levels contained in the commission contract controlled the amount of commission Rhodes was entitled to receive.National claimed the 1 percent level, since it took the position that the Morlang sales were specially priced and that it could depress Rhodes' commission to 1 percent.Rhodes urged the 5 percent figure, which was his regular commission.There was also some evidence to suggest that this was a builder-dealer project where the 2 1/2 percent commission would apply because of the volume discount.There was, in short, conflicting evidence as to what was the proper commission.

The comprehensive instruction discussed above correctly advised the jury of the various commission levels to which the conflicting evidence related.Indeed, on appeal National states in its brief:

"All parties agreed that the contract was the law of the case and that the Plaintiff's rights were determined by its provisions."

The parties not only urged different compensation levels, but each also presented evidence to attempt to persuade the jury that the other side had orally agreed to the other's contract level of commission.This evidence of mutual agreement obviously caused the instruction in question to contain language about the parties having "a meeting of their minds and agree(ment)" as to a certain level of commission.

The principal problem in this case was not that the contract language was ambiguous, but rather that the contract contained various levels of commission predicated on the type of sale, and the parties were in disagreement as to the factual character of the underlying sales constituting the Morlang project.

The present case is somewhat analogous to Nesbitt v. Flaccus, 149 W.Va. 65, 138...