Mark Dietrich v. Bell, Inc.

554 F. App'x 418
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 10, 2014
Docket13-1239
StatusUnpublished
Cited by2 cases

This text of 554 F. App'x 418 (Mark Dietrich v. Bell, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mark Dietrich v. Bell, Inc., 554 F. App'x 418 (6th Cir. 2014).

Opinions

OPINION

HELMICK, District Judge.

We are presented with a dispute over an employment agreement between a manufacturer and its sales representative that is silent about termination. We must decide whether a provision in that agreement providing two years of commission payments on any new customer procured by the representative survives termination. Applying Michigan’s rules of contract interpretation to the particular facts in this case, we find this compensation agreement specified a finite period of commissions on new accounts and does not have any conflicting termination provision, so the representative is entitled to commissions for a period after his termination. We reverse the district court’s contrary decision.

I.

Defendant-Appellee Bell, Inc. hired Plaintiff-Appellant Mark Dietrich as an Account Executive in late 2009. Bell manufactures folding, corrugated cardboard cartons and Mr. Dietrich’s role was to bring in new customer accounts. When it hired Mr. Dietrich, Bell provided him with an offer letter that spelled out certain details of the employment arrangement. The compensation portion is at issue here:

Your starting compensation will be $85,000 (eighty-five thousand dollars) annualized base wages. In addition, you will receive a commission program as follows:
• New Business Sales — you will receive 1.25% commission on new business sales in the first year of the business contract. This rate will be adjusted to 0.75% in the second year. Subsequent years will not be eligible for commission.
• Commissions will be paid on a quarterly basis on shipment dollars minus freight. Fifteen percent (15%) of the quarterly commission dollars will be [420]*420retained by the company and paid at year end to be trued up for returned product, unpaid invoices and product over 90 days old (unless terms are negotiated separately in the supply agreement with the customers).
• We will guarantee a commission of $1,000 per month to be paid quarterly for a maximum of 24 months with the qualifier that the guaranteed commission in the second year of your employment will only be paid if a minimum of $2MM (two million dollars) in new sales is booked in your first year.
• The guaranteed commissions will be deducted from actual commissions earned as outlined above should actual commissions exceed the guaranteed commission.

(R. 1 at 13.)

During his tenure, Mr. Dietrich brought in several new accounts for Bell and Bell paid him according to the agreement while he remained employed. In 2011, Bell terminated Mr. Dietrich’s employment and stopped paying commissions.

Mr. Dietrich brought this suit against Bell to recover commissions for up to two years on each of the accounts he procured. He alleges Bell breached their contract, violated Michigan’s Sales — Representative Commission Act, and was unjustly enriched. He moved for summary judgment as to the first two counts and Bell cross-moved for summary judgment as to all of Mr. Dietrich’s claims.

Because it determined the parties’ agreement was silent about post-termination commissions, the district court applied the “procuring cause doctrine,” a principle of fair dealing created to protect salespeople, to determine whether Mr. Dietrich was entitled to commissions after his termination. Reed v. Kurdziel, 352 Mich. 287, 89 N.W.2d 479, 483 (1958) (“In Michigan, as well as in most jurisdictions, the agent is entitled to recover his commission whether or not be has personally concluded and completed the sale, it being sufficient if his efforts were the procuring cause of the sale.”). Nevertheless, the district court found in Bell’s favor because it determined this doctrine only applies to the acquisition of orders, not the acquisition of customers. See William Kehoe Assocs. v. Ind. Tube Corp., 891 F.2d 293, 1989 WL 146439, *2 (6th Cir.1989) (Table) (“Under Michigan law announced in Reed v. Kurdziel, ... this court must conclude that it is the acquisition of orders, not the acquisition of the customer that is protected by the ‘procuring cause’ doctrine.”).

Citing Lilley v. BTM Corp., 958 F.2d 746, 751 (6th Cir.1992), the district court noted the distinction between “customer procurement” and “sales procurement” commission arrangements. A sales procurement salesperson is paid only on those sales he personally brings in, but a customer procurement salesperson is paid on every purchase made by a customer the salesperson acquired for his employer. Id. The district court concluded that the contract’s “New Business Sales” language put Mr. Dietrich into a sales procurement role and meant “Plaintiff must have procured all sales, even all reorders, in order to receive commissions on those sales or reorders that were procured after his termination.” (R. 43 at 8) (citing Jack Peddie & Assocs., Inc. v. Whitmor Mfg. Co., Inc., 980 F.2d 729,1992 WL 355475, *7 (6th Cir. Dec. 2, 1992) (Table) (noting that sales procurement salespersons are not entitled to commissions on renewal order in which they do not participate, but finding the plaintiff was a customer procurement agent who may be entitled to commission on renewal orders); Roberts Assocs., Inc. v. Blazer Int’l Corp., 741 F.Supp. 650, 653 (E.D.Mich.1990) (finding that salespeople [421]*421are not entitled to commissions on customer order renewals unless they have an express contract to that effect).)

On this reasoning, the district court declined to extend the procuring cause doctrine to Mr. Dietrich’s claim for payment of the commissions. The court denied Mr. Dietrich’s motion and granted judgment in favor of Bell on all claims.

II.

A.

Neither party has raised a question of jurisdiction, but we must nonetheless consider whether we have subject matter jurisdiction to decide this appeal. Answers in Genesis of Kentucky, Inc. v. Creation Ministries Intern. Ltd., 556 F.3d 459, 465 (6th Cir.2009). Mr. Dietrich originally filed this action in the Kent County, Michigan, Circuit Court. Bell removed the matter to the District Court for the Western District of Michigan, asserting that Mr. Dietrich was a citizen of Michigan, that Bell was incorporated under the laws of South Dakota and had its principal place of business in South Dakota, and that the amount in controversy exceeded $75,000. (R. 1 at 2.) Mr. Dietrich did not dispute these facts or otherwise contest removal. The district court had jurisdiction pursuant to 28 U.S.C. § 1332(a) and removal was proper pursuant to 28 U.S.C. § 1441.

The district court’s decision granting judgment in Bell’s favor represented the final order of that court and disposition of the case. (Judgment Entry, R. 45.) Mr. Dietrich timely filed a notice of appeal. This Court has jurisdiction to consider the appeal. 28 U.S.C. § 1291.

B.

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554 F. App'x 418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mark-dietrich-v-bell-inc-ca6-2014.