Gibbens v. Champion Industries, Inc.
Filing
152
ORDER AND REASONS granting 142 Motion for Summary Judgment on Contract Formation. Signed by Judge Helen G. Berrigan on 03/20/2013. (kac, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SUSAN GIBBENS
CIVIL ACTION
VERSUS
NO. 11‐868
CHAMPION INDUSTRIES, INC.
SECTION ʺCʺ (4)
ORDER AND REASONS
This matter comes before the Court on reurged motion for summary judgment
on contract formation filed by Champion Industries, Inc. (“Champion”). Rec. Doc. 142.
Having considered the record, the memoranda of counsel and the law, the Court rules
as follows.
The plaintiff, Susan Gibbens (“Gibbens”), filed this claim in diversity for breach
of contract seeking additional commissions allegedly owed by her current employer,
Champion. The Court previously denied a motion for summary judgment on contract
formation filed by Champion by Order and Reasons dated September 12, 2012, prior to
the continuance of the October 9, 2012, trial due to lack of preparation.1 Rec. Docs 59,
1
The Court is also issuing a separate order and reasons ruling on the motion to
strike plaintiff’s proposed expert, Matthew C. Person, and his report. Rec. Doc. 133.
That ruling sets forth in greater detail the problems that led to the continuance of this
trial setting.
101. That first motion for summary judgment focused on three alleged shortcomings in
the November 2006 email exchange between plaintiff and her supervisor, Doug
McElwain (“McElwain”) relative to the alleged change in the plaintiff’s commission
formula:2 (1) lack of consent (offer and acceptance); (2) lack of cause for contracting; and
(3) lack of capacity. Rec.Doc. 41. The Court’s denial was based on the evidence
developed at that time. The plaintiff’s position was that the email was merely evidence
of a year earlier modification of the plaintiff’s contract by McElwain. Rec. Docs. 59, 46
at 18.
In this reurged motion, the defendant relies on additional evidence to argue that
it is undisputed that at no time did McElwain have actual or apparent authority to
change the plaintiff’s commission formula and that Champion did not have cause to
2
In that email exchange, Gibbens asked McElwain for confirmation “that we split
the net profit 50/50 if it’s printed in Baton Rouge and 60/40 if it’s printed anywhere else.”
McElwain responded that Gibbens should contact corporate for the answer to her
questions about how commissions are calculated. The next day, Gibbens again emailed
McElwain: “My question to you is more general. At the beginning of the year when you
switched me from my old commission formula to the Bourque system at one point you
said the split as 50/50 for jobs printed in Baton Rouge and 64/36 for sublet jobs and at
another time I have written down that the sublet is 60/40. I just need to know which it is
so that I’m using the right formula on my spreadsheet.” Rec. Doc. 41‐4. This time,
McElwain responded “You make 36% on anything that is sublet. The 18% pack is for the
warehouse operating expense and should be treated separately.” It appears that the
plaintiff may be now challenging the application of that portion of the email relative to
the 36% sublet and/or the 18% “pack” as well.
2
change the plaintiff’s commission formula. Rec. Doc. 142. The plaintiff opposes with
the arguments that a “binding contract” regarding the alleged modification of
commissions was formed by virtue of the representations of McElwain and the
corporate headquarter’s failure to respond to her communications, that cause existed
because the plaintiff “was a very successful salesperson” and that McElwain had actual
and/or apparent authority and/or Champion ratified the change in the commission
formula. Rec. Doc. 144 at 22–25.
Rule 56 of the Federal Rules of Civil Procedure states: “The Court shall grant
summary judgment if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” FED.R.CIV.P.
56. When considering whether any genuine issues of material fact exists, courts view
the evidence and inferences drawn from that evidence in the light most favorable to the
non‐moving party. United States ex re. Reagan v. East Texas Medical Center Regional
Healthcare System, 384 F.3d 168, 173 (5th Cir. 2004) (citing Daniels v. City of Arlington,
Texas, 246 F.3d 500, 502 (5th Cir. 2001)).
An issue is material if its resolution could affect the outcome of the action. Wyatt
v. Hunt Plywood Co., Inc., 297 F.3d 405, 409 (5th Cir. 2002) (citing Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2502, 91 L.Ed.2d 202 (1986)). A factual dispute
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precludes summary judgment if the evidence would permit a reasonable jury to return
a verdict for the nonmoving party. Hunt v. Rapides Healthcare Sys. LLC, 277 F.3d 757, 762
(5th Cir. 2001).
The party moving for summary judgment bears the initial burden of “informing
the district court of the basis for its motion, and identifying those portions of [the
record] which it believes demonstrate the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “If the moving party meets the initial
burden of showing that there is no genuine issue of material fact, the burden shifts to
the non‐moving party to produce evidence or designate specific facts showing the
existence of a genuine issue for trial.” Engstrom v. First Nat’l Bank of Eagle Lake, 47 F.3d
1459, 1462 (5th Cir. 1995) (citing Celotex, 477 U.S. at 322‐24). In order to satisfy its
burden, the nonmoving party must put forth competent evidence and cannot rely on
“unsubstantiated assertions” and “conclusory allegations.” See e.g., Hopper v. Frank, 16
F.3d 92 (5th Cir. 1994); Lujan v. Nat’l Wildlife Federation, 497 U.S. 871, 871‐73 (1990). The
mere argued existence of a factual dispute will not defeat an otherwise properly
supported motion. See Anderson v. Liberty Lobby Inc., 477 U.S. 242, 247‐48 (1996). “If the
evidence is merely colorable, or is not significantly probative,” summary judgment is
appropriate. Id. at 249‐50.
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It is undisputed that Gibbens worked for Upton Printing (“Upton”) in New
Orleans beginning in 1995 with a commission formula of “11% value added.” Upton
was acquired by Champion and the plaintiff’s commission formula did not change. The
plaintiff alleges that it did change in 2006 when she was “placed” in the Baton Rouge
office of Bourque Printing, Inc. (“Bourque”), a wholly owned subsidiary of Champion,
under McElwain’s supervision. For purposes of this motion, the Court finds that the
plaintiff has shown a genuine issue of material fact as to whether McElwain did
represent to Gibbens that he was going to modify her commission formula to the
“Bourque” formula allegedly applicable to the Bourque salespeople he supervised in
Baton Rouge.
Turning first to the issue of capacity, it should be noted that in the first motion,
the defendant argued a lack of capacity “because both the e‐mail exchange and
Gibbens’ testimony establish that McElwain did not have the capacity to increase her
commission percentage,” based on the email exchange and the deposition testimony of
Gibbens and McElwain. Rec. Doc. 41 at 1–2, 41‐3 at 12. This reurged motion asks for
reconsideration with additional evidence including the sworn and unrebutted
statements from McElwain and the officers at the Champion headquarters who were
empowered to modify the rate of a salesperson’s commission. Rec. Doc.142‐4, 142‐5,
5
142‐6. This record now contains undisputed evidence that McElwain did not have
actual or apparent authority to modify the commission agreement at any time, nor was
it ratified by the defendant.
In his deposition testimony, McElwain testified that he did not set commissions,
keep track of commissions, or have any idea what salespeople make. Rec. Doc. 41‐6 at
51. In his more recent affidavit, he states that he was “simply stating what I thought her
commission structure was” in the email exchange and that he never recommended
directed anyone to change her commission structure. Rec. Doc. 142‐4 at 3. The
affidavits of those who undisputedly had that authority, Toney Adkins (“Adkins”) and
Marshall Reynolds (“Reynolds”) confirm that Gibbens was always paid on an “11%
value added” commission formula, that neither conveyed to Gibbens that McElwain
had that authority to change that formula, and that McElwain did not, in fact, have that
authority.3 Rec. Docs. 142‐5 at 2, 142‐6 at 2. Gibbens opposes with the argument that
because McElwain was in charge of operations in New Orleans and a corporate vice‐
president, he had authority. Rec.Doc. 144. She admits that no one in corporate told the
plaintiff that her commissions would be modified. Rec. Doc. 144 at 24. The plaintiff
also relies on the deposition testimony from a former co‐worker in accounting that at
3
It appears that the plaintiff chose not to depose either of these affiants.
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one time McElwain had asked for five months of commission reports on Gibbens
because he said he was going to change her formula, and a statement from a
commissioned co‐salesman in Baton Rouge that McElwain set the commission rates in
Baton Rouge and that his commissions were consistent with the “Bourque” formula.4
Rec.Doc. 144‐7 at 3. Gibbens also argues that McElwain had “actual or at least apparent
authority to set Ms. Gibbons’ [sic] commission schedule, and/or that Champion ratified
the commission schedule he set” because for approximately four years, no one at
corporate headquarters would respond to her demands and/or accountings that
additional commissions were owed. Rec. Doc. 144 at 24–25.
The plaintiff can present no proof that McElwain had any actual5 or apparent6
4
There appears to be no dispute that the “Bourque” formula was in use at the
Baton Rouge office prior to the plaintiff’s transfer there, or that McElwain correctly
described the “Bourque” formula in the emails. Instead, the issue is whether the
plaintiff’s commission formula was changed to that method and, more specifically,
whether McElwain had authority to make that change after Gibbens arrived in Baton
Rouge.
5
Under La.Code.Civ. art. 2989: “A mandate is a contract by which a person, the
principal, confers authority on another person, the mandatary, to transact one or more
affairs for the principal.”
6
Under La.Civ.Code art. 3021: “One who causes a third person to believe that
another person is his mandatary is bound to the third person who in good faith
contracts with the putative mandatary.” There must be some manifestation from the
principal for the third person to have notice of the mandatary’s authority. Tresch v.
Kilgore, 868 So.2d 91 (La.App.1st Cir.2003).
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authority to change her commission formula under Louisiana law. The Court also
finds that no one in corporate headquarters made any change in her commissions.
Under the undisputed facts, corporate’s inaction only suggest that they were ignoring
her repeated demands, not that they were “ratifying” McElwain’s unauthorized
statement. McElwain repeatedly advised the plaintiff that she needed to direct inquiries
as to commissions to headquarters after the initial alleged “change.” Furthermore,
Gibbens was never paid commissions at the alleged new rate over a period of four years
despite her repeated demands. Her insistence is not the equivalent of ratification
under these undisputed facts.
Gibbens may have felt that it was unfair for her commission rate not to be
changed to the one apparently applicable to the others in the Baton Rouge office when
she was placed there as a former Upton employee with the Upton commission formula.
Gibbens expended great effort to obtain the corporate authority and/or ratification she
knew she needed to make her argument that McElwain’s alleged statement was
effective. Her endeavor was unsuccessful, however, and in this contract case, she is
unable to establish express or implied consent of those with the authority to make the
change in her commission formula, or ratification.
Accordingly,
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IT IS ORDERED that the reurged motion for summary judgment on contract
formation filed by Champion Industries, Inc. is GRANTED. Rec. Doc. 142.
New Orleans, Louisiana, this 20th day of March, 2013.
____________________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT COURT
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