Stinger v. Stewart & Stevenson Services, Inc.

DRAUGHN, Justice,

dissenting.

I respectfully dissent from the majority opinion insofar as it affirms the directed verdict against Appellant Stringer as to his contractual claim for commissions due him under the so-called “Commission Arrangement” document. In my opinion, this written document evidencing the agreement between the parties is inherently ambiguous and conflicting in its terms. That alone precludes a directed verdict against Appellant Stinger. Clearly, material ambiguity in a contract raises a fact question for the jury and cannot support a summary judgment or a directed verdict based on that contract. Coker v. Coker, 650 S.W.2d 391, 394 (Tex.1983).

Appellee, Stewart & Stevenson, takes the position that this document is simply an incentive brochure attesting to what the company might pay to Stinger if they feel like it. Whether he sells five dollar’s worth of their equipment or five million, they have the discretion to pay him nothing in commissions.

The formal title of this document under which Appellant seeks commissions on the equipment he sold during 1983-84 is:

DANIEL STINGER COMMISSION ARRANGEMENT STEWART & STEVENSON SERVICES, INC. — ENGINE DIVISION EFFECTIVE FOR PERIOD OF 2/1/83 THROUGH 1/31/84

The document, in my opinion, by its own terms refutes the appellee’s interpretation. It contains repeated specific language to the effect that a commission will be paid. For example, its first paragraph states:

“You will be paid a commission on sales of all turbine engines and turbine engine driven equipment made by the Turbine Sales Group: Mark Axford, Jay Manning and you. Commission paid on Garrett turbine engines and diesel engine driven equipment will be discretionary.” (emphasis added).

The first six words of this beginning paragraph could not be more emphatic. It is specific and non-conditional except as to the last sentence, which is inapplicable to the particular sales in this case. Mr. Stringer will be paid a commission, not he “may” or “might” be paid a commission on his sales, as contended by appellee. The words are clear and unfettered in their meaning. Also, the last sentence of this paragraph further refutes appellee’s interpretation that payment of any commission is entirely discretionary. If that be so, why should there be specific language providing for discretionary commissions on certain engines sold? At best, the paragraph is ambiguous and conflicting when placed against the backdrop of appellee’s interpretation.

But the ambiguity and conflict does not end here. Additional specific commission language is found in other paragraphs throughout the document. For example, Paragraph I.A.2. of this “discretionary” document provides in part:

“In addition, a commission equivalent to 10% of the aggregate income (including loss jobs) will be paid.’’ (emphasis added).

Also, Paragraph II A and E state:

A. “If a job generates a workorder loss, the amount of commission will be zero, except at the sole discretion of the Company, a commission may be paid due to the circumstances relating to the job.” E. “At the end of the 12 month period earned commission balance will be paid to the salesman (after deducting any money owed to the Company).” (emphasis added).

If the payment of commissions is entirely discretionary, why this language in Paragraph II A, to distinguish between loss and non-loss sales transactions? This clause, according to appellee’s interpretation, seems to be whimsically saying: “We may pay you a commission on your equipment sales, but you won’t get anything for sure if there’s a loss on the sale, but then again, you might, even then — if we feel like it.” Such vague, passive language contrasts starkly with the mandatory language in the following paragraph II E, which states, “commission balance will be paid ...”.

*722 Again, I find such language ambiguous and conflicting at best; certainly, it is no sound foundation for a directed verdict.

Other paragraphs in the document concerning termination of employment weigh against discretionary commissions:

F. The procedure for paying commissions to salesmen who terminate from the Company’s employment during a fiscal year is as follows:

1. Termination by the Employee Commissions will be paid on equipment delivered to the customer up to the date of termination by the employee. Such commissions due upon the date of termination will be paid within a reasonable length of time after termination, (emphasis added).

2. Termination by the Company

Same as Item 1,.... In addition, the salesman will be paid a commission equivalent to 75% of full rate on equipment sold as of the date of termination but not yet delivered_ (emphasis added).

3. On partially delivered jobs at the time of termination, the salesman will be paid on an estimated profit and subsequently adjusted upon final completion of the job. (emphasis added).

These paragraphs speak with declarative, mandatory verbs, “will be paid,” and not in discretionary, “may be paid” terms as the appellees suggest. Again it is pertinent to ask, if commission payments are entirely discretionary, then why have these mandatory sounding termination provisions? Why not a simple clause that the employee who quits or is terminated may be paid a commission at the sole discretion of the company?

Appellees rely on language in the last paragraph of the document that refers to this as an incentive arrangement and not an employment contract.

“It is the intent of this arrangement that the results will be for the mutual benefit of both the company and the employee as long as the employee is employed by the company and it is agreed that this arrangement may be modified or changed upwards or downwards at any time at the Company’s discretion.”

Their reliance is overstated. The inconsistency between this self-serving language and that of the commission-termination provisions, previously referred to, is obvious. If this “arrangement” is effective “as long as the employee is employed by the company,” then why the termination provisions, which provide that commissions will be paid to Stinger for sales made after termination? It is difficult to view this “arrangement” as of any mutual benefit to the employee, Stinger. Under the company’s interpretation, he is entitled to nothing, neither during employment nor after termination, except, perhaps, the document itself. And to suggest that the discretion to modify the commissions upwards or downwards wipes out all other mandatory language and means that the company does not have to pay one cent in commissions, no matter what, is covertly obscure at best, and blatantly misleading at worst. At the very least, it is, in my opinion, materially ambiguous and conflicting when considered in the context of the other mandatory language, and the trial court erred in granting a directed verdict on it against the appellant.

I would reverse and remand on this contractual point and allow the jury to determine the intent of the parties concerning this written document.