Thompson v. Creswell Industrial Supply, Inc.

936 S.W.2d 955, 1996 Tenn. App. LEXIS 516
CourtCourt of Appeals of Tennessee
DecidedAugust 21, 1996
StatusPublished
Cited by28 cases

This text of 936 S.W.2d 955 (Thompson v. Creswell Industrial Supply, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thompson v. Creswell Industrial Supply, Inc., 936 S.W.2d 955, 1996 Tenn. App. LEXIS 516 (Tenn. Ct. App. 1996).

Opinion

OPINION

McMURRAY, Judge.

This is an appeal from the judgment of the Chancery Court of Hamilton County concerning commissions allegedly due under two oral employment contracts. The plaintiff/Ap-pellee, Paul Thompson, filed suit against Creswell Industrial Supply, Inc., and Cherokee Supply, Inc., claiming that they were obligated to pay him 35 percent of the gross sales he generated for each company during parts of 1991. 1 The defendants claimed that the plaintiff had agreed to a revision of his employment contracts concerning commissions. The Chancellor ruled for the plaintiff, and awarded damages in the amount of $1,118.75 against Creswell Industrial Supply, Inc., and $18,242.06 against Cherokee Supply, Inc. This appeal resulted. We affirm the judgment of the trial court.

The plaintiff began working for Creswell Industrial Supply in 1978 as a sales agent/representative. He worked under an oral agreement whereby he would receive a 35 percent commission on gross profits fi*om his sales, regardless of the amount of profitability to the company. The plaintiff was hired by the company’s president, Robert Creswell. The plaintiff never entered into a written employment agreement, even though other sales agents had done so. In 1988, Creswell formed Cherokee Supply, Inc. The majority stockholder in the new company was Joe Garren. The company was set up as a minority-owned business (Garren is Cherokee Indian) in order to compete for TVA contracts. In addition to his responsibilities to Creswell, the plaintiff worked as a sales agent/representative for Cherokee as well. He had a similar oral agreement with Cherokee to work for 35 percent of gross profits from his sales, regardless of their profitability.

In 1991, the defendants in an attempt to reverse declining profits instituted a new compensation structure for their sales agents/representatives. In April, 1991, Cherokee introduced a sliding scale of commission rates for its agents, providing for a maximum sales commission of 35 percent. Creswell instituted a new commission scale in September of 1991 which provided for sales incentives which, it claimed, could produce commissions greater than 35 percent. The plaintiff, however, presented testimony from another sales agent/representative that the plaintiff was in fact the only sales agent who was subject to the changes.

The plaintiff claims that he never agreed to the new scales at either company, and voiced numerous complaints about the changes in the commission calculations. The defendants submitted the testimony of four witnesses that the plaintiff had never complained about the changes. The Chancellor however rejected that testimony, and found that the plaintiff had not accepted a modification of his contracts as contended by the defendants.

Defendants present three issues for appeal:

1. Whether an employee-at-will in Tennessee working solely on a commission basis pursuant to an oral employment contract, who is given notice by his employer prior to the implementation of a new commission scale, and who continues to work for the employer after the new scale is implemented, can *957 still bind his employer to the original commission rate in the event he receives less money under the new scale by merely “complaining” several times to his employer about such change?
2. Whether the evidence preponderates against the trial court’s finding that the appellee did not agree to the changes in how the appellants calculated the appellee’s commissions?
3. Whether the trial court’s award of damages to the appellee under the original contracts were [sic] excessive since the evidence revealed the failure of the appellee to fully perform all of the appellee’s duties?

Our standard of review is is controlled by Rule 13(d), Tennessee Rules of Appellate Procedure. “Unless otherwise required by statute, review of findings of fact by the trial court in civil actions shall be de novo upon the record of the trial court, accompanied by a presumption of the correctness of the finding, unless the preponderance of the evidence is otherwise.”

As to the first issue, the defendants argue that the Chancellor improperly relied upon our decision in Balderacchi v. Ruth, 36 Tenn.App. 421, 256 S.W.2d 390 (1952), where we held that there was no modification of an employment contract when the employer attempted to reduce the employee’s compensation against the employee’s will. Defendants argue that the instant case is distinguishable from Balderacchi in that: (1) Balderacchi dealt with an employer who attempted to alter a written contract; (2) the plaintiff in Balderacchi refused to accept the reduction in salary; (3) the plaintiff in Balderacchi constantly told his employer he was not accepting the new terms; (4) the plaintiff in Balderacchi gave his employer prompt notification of his rejection of the new terms; and (5) there was no contention by the employer in Balderacchi that the old contract had been terminated. We do not find any of these issues sufficiently distinguishable from the facts before us to require a rejection of the Chancellor’s reliance on Balderacchi

We find the distinction between the written contract in Balderacchi and the oral one in the instant case to be a distinction without a difference. Oral contracts in Tennessee are valid and binding so long as the terms are definite and certain. See Simmons v. Foster, 622 S.W.2d 838 (Tenn.App.1981). We find nothing in the Balderacchi opinion that demonstrates that the contract was written as opposed to oral was of any consequence. We do find it significant, however, that both contracts were for indefinite terms, yet contained a definite measure of compensation.

The other arguments the defendants set forth as to why the Chancellor was in error in relying on Balderacchi regard the manner in which the plaintiff allegedly refused to accept the new compensation terms. Defendants insist that the complaints plaintiff claims to have made were not enough to equal the rejection of the new contract by the plaintiff in Balderacchi. As we stated in Balderacchi the burden of showing the modification by mutual assent or of establishing facts either constituting an accord or forming the basis of an estoppel falls upon the defendants. Balderacchi 256 S.W.2d at 391-92. Defendants have failed to meet that burden. Defendants submitted the testimony at trial of four witnesses that the plaintiff did not reject the proposed revisions of his contracts. The Chancellor found that the witnesses who testified for the defendants regarding the plaintiffs acquiescence to the new terms were not credible. Indeed, there were numerous inconsistencies regarding statements the defendants’ witnesses made. A trial court “on an issue which hinges on witness credibility, will not be reversed unless, other than the oral testimony of the witnesses, there is found in the record clear, convincing evidence to the contrary.” Tennessee Valley Kaolin Corp. v. Perry,

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Bluebook (online)
936 S.W.2d 955, 1996 Tenn. App. LEXIS 516, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thompson-v-creswell-industrial-supply-inc-tennctapp-1996.