Watson v. Wood Dimension, Inc.

257 Cal.Rptr. 816 (1989)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

D manufactures stereo speakers for resale. Fisher Corporation accounted for 30 to 50 percent of D's business. Fisher ceased purchasing from D in early 1982. Gene Hedlund, president of D, and P had known each other for many years. In early 1983, Hedlund's desire to reacquire Fisher's business surfaced in conversation with P. P was socially acquainted with Ira Horon, Fisher's general manager and vice president. D originally offered P 5 percent of all Fisher orders if he got the business back to D. The parties eventually orally agreed upon a 3 percent commission. The parties were unable to agree on specific terms for a written version of their agreement, in particular the termination provision. Hedlund announced, 'I wouldn't cheat you out of your commission -- Let's shake hands,' they did just that and agreed a writing was unnecessary. Horon came to Palm Springs approximately once a month for relaxation. P frequently met him at the airport and joined him for golf and dinner. P was to maintain these activities, generally wining and dining Horon with a view to introducing him to Hedlund at the propitious moment. Everything went well. In April, Fisher again became a customer of D. P continued to entertain Horon and to collect his 3 percent commission on Fisher orders through 1983. In early 1984, D unilaterally attempted to reduce the commission to 2 percent and, on May 15, P was summarily terminated. P's friendship with Horon endured until the latter's death in January 1985; his commissions did not. Fisher continued to place orders with D, accounting for almost $10 million in business through July 1985. P sued D in quantum meruit, and fraud. P had compiled, from D invoices, a listing of all Fisher invoices from April 1983 through July 1985, including total dollar amounts, commissions due to P, and amounts received against those totals. Hedlund objected. A referee found $241,314.34 due and owing through July 15, 1985. This amount was the cumulative total of the monthly commissions payable to P beginning on the date of his termination. The court awarded $155,955.84, the amount appearing on the referee's report as cumulative commissions due as of December 15, 1984. The court found that P was entitled to the reasonable value of the services he performed. The court weighed the factors favoring each party. It then concluded awarding commissions through December 15, 1984, provided P 'with reasonable compensation for placing the account with D and yet does not compensate him beyond a point when he could no longer influence the placement of the account.' Both parties appealed. D objects to any award of commissions based on sales made to Fisher after P's termination. P argues because he was the procuring cause of Fisher's involvement with D, he is essentially entitled to commissions for the life of that relationship.