Peter Wilson v. IBM

Filing

Opinion issued by court as to Appellant Peter A. Wilson. Decision: Affirmed. Opinion type: Non-Published. Opinion method: Per Curiam.

Case: 14-14977

Date Filed: 05/11/2015

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 14-14977
Non-Argument Calendar
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D.C. Docket No. 1:12-cv-01406-WBH

PETER A. WILSON,
Plaintiff - Appellant,
versus
INTERNATIONAL BUSINESS MACHINES CORPORATION,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(May 11, 2015)
Before MARCUS, WILLIAM PRYOR, and JORDAN, Circuit Judges.
PER CURIAM:

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This appeal arises out of a breach of contract claim brought by Peter A.
Wilson against International Business Machines Corporation. The district court
granted summary judgment in favor of IBM, ruling that the incentive plan at issue
is not an enforceable contract, and that, even if it is, Mr. Wilson failed to show that
IBM breached. After review of the record and the parties’ briefs, we affirm.
I
We assume the parties are familiar with the litigation history of this case.
Thus, we summarize the proceedings and facts only insofar as necessary to provide
context for our decision.
Mr. Wilson was a software salesman for IBM. His compensation included a
fixed salary as well as a sales commission. The terms of the commission are
governed by an Incentive Plan Letter (“IPL”) which Mr. Wilson accepted in
February of 2011. The IPL sets Mr. Wilson’s sales quota at $798,000 and provides
for a six month sales period—January 1, 2011, through June 30, 2011. The IPL
includes a “Right to Modify or Cancel” clause, which in relevant part states:
IBM reserves the right to adjust the Plan terms (including, but not
limited to, changes to sales quotas or other performance objectives, . .
. or changes to target incentives or similar earnings opportunities) or
to modify or cancel the Plan, . . . at any time during the Plan period up
until any related payments have been earned under the Plan terms.
D.E. 34-3 at 3-4.
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The IPL also gives IBM the “sole discretion” to “adjust incentive payments
associated with [significant] transactions.” Id. at 5. One example of a “significant
transaction” is as a transaction for which “the incentive payment[ is]
disproportionate when compared with [the employee’s] performance contribution
towards the transaction.” Id.
During the first half of 2011, IBM entered into a licensing agreement with
Bank of America worth approximately $63 million. Mr. Wilson’s contribution to
the transaction was estimated at approximately $7.7 million.

Based on that

contribution, Mr. Wilson claims that he earned a commission of $816,947. IBM,
however, classified the Bank of America deal as a “significant transaction,”
thereby triggering an “account level” review (or recalculation) of Mr. Wilson’s
sales quota, and his corresponding commission. Based on IBM’s recalculation,
Mr. Wilson received a commission of $471,299 for his work on the Bank of
America deal.
Mr. Wilson brought a breach of contract action against IBM in Georgia state
court, claiming that IBM owed him an additional $345,718. IBM removed the
case to federal court and later moved for summary judgment. The district court
granted IBM’s motion, ruling that the IPL is not an enforceable contract, and that,
even if it is, IBM did not breach the IPL. Mr. Wilson now appeals.

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II
“The district court's grant of summary judgment is subject to plenary
review.” Harris v. Liberty Cmty. Mgmt., Inc., 702 F.3d 1298, 1301 (11th Cir.
2012). “We will affirm if, after construing the evidence in the light most favorable
to the non-moving party, we find that no genuine issue of material fact exists and
the moving party is entitled to judgment as a matter of law.” Alvarez v. Royal Atl.
Developers, Inc., 610 F.3d 1253, 1263-64 (11th Cir. 2010).
III
The interpretation of a contract is a question of law subject to de novo
review. See Southland Distributors Mktg. Co. v. S&P Co., 296 F.3d 1050, 1053
(11th Cir. 2002). Under Georgia law, which applies here, a contract that is clear
and unambiguous is enforced according to its clear terms. See Begner v. United
States, 428 F.3d 998, 1005 (11th Cir. 2005) (quoting Eudy v. Universal Wrestling
Corp., 611 S.E.2d 770, 773 (Ga. Ct. App. 2005)). “A contract is ambiguous if it
contains a ‘duplicity, indistinctness, an uncertainty of meaning or expression’ that
makes it susceptible to several reasonable interpretations.” Begner, 428 F.3d at
1005 (quoting Holcim (US), Inc. v. AMDG, Inc., 596 S.E.2d 197, 200 (Ga. Ct.
App. 2004)).

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A
We assume, without deciding, that the IPL is an enforceable contract.
Nonetheless, IBM is entitled to summary judgment because it did not breach the
IPL.
The express language of the IPL gives IBM the exclusive right to adjust,
modify, or cancel the Plan. See D.E. 34-3 at 3-4. This includes the right to
“change[ ] sales quotas [and] other performance objectives[.] Id. The IPL also
gives IBM—at its “sole discretion”—the unilateral authority to “adjust incentive
payments associated with [significant] transactions.” Id. at 5. Mr. Wilson does not
dispute that he assented to the terms of the IPL. In fact, he argues here—as he did
in the district court—that the IPL is an enforceable contract. Nor does Mr. Wilson
deny that the Bank of America transaction was significant. Indeed, he admits it
was a “blockbuster deal.” D.E. 32 at 60 (Wilson Dep.). In any event, whether Mr.
Wilson concedes that the Bank of American transaction was significant is of no
moment, because the IPL leaves that call to IBM.
In short, the clear terms of the IPL provide that IBM holds the cards with
respect to how sales commissions are calculated. The IPL may indeed include
terms that are very favorable to IBM, but those are the terms Mr. Wilson
admittedly accepted. Mr. Wilson cannot argue that the IPL is an enforceable

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contract on the one hand, while refusing to accept its disadvantageous terms on the
other.
We hold that the unambiguous language of the IPL gave IBM the unilateral
and unconditional authority to modify Mr. Wilson’s sales quota.

And we

conclude—like the district court—that IBM did not breach the IPL when it
modified the Mr. Wilson’s quota for the Bank of America deal based on its
determination that the transaction was significant. See, e.g., Knight Indus., Inc. v.
Turner Mktg., Inc., 276 S.E.2d 860, 862 (Ga. Ct. App. 1981) (where provisions of
contract gave one of the parties “complete and absolute discretion” as to a matter,
exercise of that discretion does not constitute a breach).
B
Mr. Wilson also argues that IBM breached the IPL by retroactively
modifying his sales quota when it recalculated the quota after the applicable sales
period had closed—i.e., after June 30, 2011. 1 Again, Mr. Wilson ignores the plain
language of the IPL.
The “Right to Modify or Cancel” clause states that IBM may modify the IPL
“at any time during the Plan period up until any related payments have been
earned[.]” D.E. 34-3 at 4 (emphasis added). The “Full-Plan Earnings” clause
1

Mr. Wilson admitted that IBM did not modify the original sales quota for his other first-half
2011 transactions ($798,000). D.E. 37 at ¶ 58. D.E. 34-2 at ¶ 58.
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provides that “incentive payments are earned . . . only after the measurement of
complete business results following the end of the full-Plan period[.]”

Id.

(emphasis added). 2 The terms of the IPL are clear: Commissions are not earned
until business results are complete—i.e., until IBM assesses the impact of a
significant transaction on an employee’s sales quota. And results are deemed
complete only after the Plan term ends. IBM’s right to modify the IPL, therefore,
did not end on June 30, 2011.
C
Mr. Wilson next argues that because he received commission statements
associated with the Bank of America transaction, and those statements were
stamped “earned,” IBM breached the IPL when it subsequently modified the
amount of his commission. Once again, Mr. Wilson’s argument is foreclosed by
the language of the IPL.
The “Plan-to-Date Advance Payments” clause provides that “[i]ncentive
payments [an employee] may receive for Plan-to-Date achievements (before the
full-Plan period is over and before its business results are complete) are a form of
advance payment based on incomplete business results.” D.E. 34-3 at 4. And as
noted above, the “Full-Plan Earnings” clause states that incentive payments are not
2

The “Plan-to-Date Advance Payment” clause similarly provides that “[m]easurement of
achievement requires complete, final, and accurate business results which become available only
after the completion of the applicable full-Plan period.” D.E. 34-3 at 4 (emphasis added).
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earned until IBM concludes its measurement of complete business results. The
fact that IBM provided interim commission statements—stamped “earned” or
otherwise—did not preclude IBM from later modifying Mr. Wilson’s quota and
concomitant commission within the time specified in the IPL.
IV
In granting summary judgment in favor of IBM, the district court also ruled
that Mr. Wilson was not entitled to attorney’s fees under O.C.G.A § 13-6-11. We
agree. “A prerequisite to any award of attorney fees under O.C.G.A. § 13–6–11 is
the award of damages or other relief on the underlying claim.” United Companies
Lending Corp. v. Peacock, 475 S.E.2d 601, 602 (1996).

Because summary

judgment in favor of IBM was appropriate on the breach of contract claim, Mr.
Wilson is not entitled to attorney’s fees under § 13-6-11.
V
For the forgoing reasons, we affirm the district court’s grant of summary
judgment in favor of IBM. 3
AFFIRMED.

3

We have considered Mr. Wilson’s remaining arguments on appeal and find they are without
merit.
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