Scheduling Corp. of America v. Massello

• Decision Date: 13 January 1987
• Docket Number: No. 85-3662,85-3662
• Citation: 104 Ill.Dec. 944,151 Ill.App.3d 565,503 N.E.2d 806
• Parties: , 104 Ill.Dec. 944 SCHEDULING CORPORATION OF AMERICA, Plaintiff-Counter-Defendant-Appellant, v. Michael F. MASSELLO, Defendant-Counter-Plaintiff-Appellee.
• Court: United States Appellate Court of Illinois

Page 806

503 N.E.2d 806

151 Ill.App.3d 565, 104 Ill.Dec. 944

SCHEDULING CORPORATION OF AMERICA, Plaintiff-Counter-Defendant-Appellant, v. Michael F. MASSELLO, Defendant-Counter-Plaintiff-Appellee.

No. 85-3662.

Appellate Court of Illinois,

First District, Second Division.

Jan. 13, 1987.

Rehearing Denied Feb. 10, 1987.

William J. Harte, Ltd. Chicago (William J. Harte, Sylvia A. Sotiras, of counsel), for appellant.

Erbacci, Syracuse & Cerone, Ltd., Chicago (Sidney Z. Karasik, Chicago, of counsel), for appellee.

Justice STAMOS delivered the opinion of the court:

Counter-defendant Scheduling Corporation of America ("SCA") appeals from the circuit court's ruling in favor of counter-plaintiff Michael F. Massello ("Massello") for $187,627 in damages for sales commissions past due. This case is before this court for the second time; previously we addressed various issues relating to the liabilities of both parties arising out of their contracts with each other. We determined that Massello had not breached his employment agreements and that SCA was liable for commissions on sales which occurred before and after Massello resigned, provided that Massello established that he was the procuring cause of such sales. However, we determined that the trial court's finding in favor of Massello lacked evidentiary support. Therefore, we reversed and remanded for further fact-finding by the trial court to determine if Massello was, in fact, the procuring cause of the sales for which he claims commissions. Because of the many facts detailed in our previous opinion, we only summarize them briefly.

Counter-defendant SCA provides management efficiency services which include scheduling systems to improve a business' efficiency and to allow monitoring by management. Counter-plaintiff Massello began working for SCA in 1974. Massello moved into sales in 1976 and soon took over the primary sales responsibilities for the company. The terms of the contract for which this action is based on were summarized in Massello I:

"Upon moving into sales in 1977, Massello and SCA entered into a "Compensation Agreement for 1977" which provided for a base salary of $26,000 a year plus two commission plans, one for 5% and the other for 2 1/2%. Massello was to receive 5% on what may generally be referred to as "cold sales," i.e., sales without introduction from another source and all referrals from 5% clients which resulted in a sale. He was to receive 2 1/2% on all other sales which included extensions of work within the same project and sales resulting from referrals from 2 1/2% clients. Both the 2 1/2% and 5% commissions were to be paid when SCA received payment for the client." Scheduling Corporation of America v. Massello (1983), 119 Ill.App.3d 355, 74 Ill.Dec. 796, 456 N.E.2d 298. (Emphasis added.)

On March 23, 1979, Massello received his paycheck for the preceding four-week period. The check did not include the 2 1/2% commissions for that period which came to approximately $9,000. Massello continued to perform his duties until April 5, 1979, when he tendered his resignation. Thereafter, Massello formed his own scheduling company, National Business Consultants ("NBC"). He hired several SCA employees and solicited business from several of SCA's prospective, present, and former clients. SCA filed suit to enjoin Massello and NBC from soliciting their present and former clients. Massello counterclaimed for compensation allegedly due him. Following a bench trial, the trial court ruled against SCA and in favor of Massello, who was awarded the $165,619.50 he sought on his counterclaim. SCA appealed. This court held that Massello had not breached his contract and that NBC did not interfere with any of SCA's contractual relations. (119 Ill.App.3d 355, 74 Ill.Dec. 796, 456 N.E.2d 298.) However, we reversed that trial court's finding that Massello had presented sufficient evidence to support his claim that he was the procuring cause of the sales for which he claimed commissions from. Therefore, we remanded this case to the circuit court for a determination of which sales, if any, Massello was the procuring cause. On remand, the trial court judge heard additional testimony, and supplementary exhibits were presented by Massello. At the conclusion of the trial, both parties submitted proposed written findings of fact and conclusions of law. Subsequently, the trial court judge heard oral arguments with respect to the parties' proposals.

After reviewing the record and the evidence presented, the trial court judge adopted Massello's proposed findings of fact. While the court awarded Massello $187,627 in damages, it denied Massello's request for pre-judgment interest. SCA now appeals the trial court's order.

The counter-defendant SCA argues that the trial court's holding was against the manifest weight of the evidence in that counter-plaintiff Massello failed to provide sufficient evidence that he was the procuring cause of the sales for which he claims commissions. This court stated in Massello I that Massello was "clearly entitled to commissions on sales which occurred prior to resignation, and, as to post-resignation sales, a commission is in order if it is established that Massello was the procuring cause of the sale." (119 Ill.App.3d 355, 366, 74 Ill.Dec. 796, 456 N.E.2d 298.) Therefore, this court determined that on remand Massello must "come forward with evidence, as to each item of claimed commission, that the sales were made prior to his resignation or that his involvement with post-resignation sales was such as to entitle him to commissions." (119 Ill.App.3d 355, 366, 74 Ill.Dec. 796, 456 N.E.2d 298.) We find that Massello has met this burden.

Under the procuring cause rule, a party may be entitled to commissions on sales made after the termination of a contract if that party procured the sales through its activities prior to termination. The rule applies, however, only if the contract does not expressly provide when commissions will be paid. (Technical Representatives, Inc., v. Richardson Merrell, Inc. (1982), 107 Ill.App.3d 830, 833, 63 Ill.Dec. 668, 438 N.E.2d 599.) This rule protects a salesman who is discharged prior to culmination of a sale but who has done everything necessary to effect the sale. (Heuvelman v. Triplett Electrical Instrument Co. (1959), 23 Ill.App.2d 231, 237, 161 N.E.2d 875.) The salesman or agent who is the procuring cause is entitled to the commission notwithstanding the fact that the sale was consummated by the principal personally or through another agent. 23 Ill.App.2d 231, 237, 161 N.E.2d 875.

Massello's claimed commissions are embodied in counter-plaintiff's Exhibit No. 1, which reflects a total claim of $187,627 as follows:

Arkansas Blue Cross/Blue Shield --$6,876 in commissions for sales in gross revenues received by SCA from 8/81 to 1/82 representing a 5% commission.

Kansas City Blue Cross/Blue Shield --$17,830 for sales on gross revenues received by SCA from 6/79, representing a 5% commission.

Philadelphia Blue Cross --$13,255 in commissions for sales on gross revenues received by SCA from 4/79 to 9/79, representing a 5% commission.

St. Louis Blue Cross/Blue Shield --$40,845.40 in commissions for sales on gross revenues received by SCA between the period 6/80 through 3/84 representing a 5% commission. At trial Massello modified his claim for commissions for St. Louis from 5% to 2.5%. This adjustment is reflected in the trial court's judgment.

Washington D.C. Blue Cross/Blue Shield --$80,947.90 in commissions for sales on gross revenues received by SCA between the period 5/80 through 10/83 representing a 5% commission.

Wyoming Blue Cross/Blue Shield --$8,005 in commissions for sales on gross revenues received by SCA from 6/80 to 12/80 representing a 5% commission.

Kroehler Manufacturing --$3,340 in commissions for sales on gross revenues received by SCA in 4/79, representing a 5% commission.

Ryder Truck Rental, Inc.--$10.995 in commissions for sales on gross revenues received by SCA in 4/79, representing a 2.5% commission.

Encyclopedia Britannica --$16,156 in commissions for sales on gross revenues received by SCA in 5/79 representing a 2.5% commission.

American Banker's Life Assurance Company --$1,035 in commissions for sales on gross revenues received by SCA in 2/80, representing a 2/5% commission.

SCA alleges that Massello failed to present sufficient facts and evidence to support Massello's claim that he was the procuring cause of these sales. SCA alleges...