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May v. S.E. Ga. Ford, Inc.

Court of Appeals of Georgia, First Division

February 8, 2018



          McMillian, Judge.

         Jerry May appeals[1] the trial court's grant of summary judgment to his former employer, S.E. GA Ford, Inc. d/b/a Lilliston Ford of Kingsland ("Lilliston"), on May's claims for breach of his employment contract, unpaid commissions, and attorney fees and litigation costs, as well as on Lilliston's counterclaim seeking to recover what it contends were overpayments in compensation to May. Because we find that genuine issues of material fact remain as to the claims in this case, we reverse.

         "A de novo standard of review applies to an appeal from a grant or denial of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant." (Citation and punctuation omitted.) St. Joseph's Hosp. of Atlanta, Inc. v. Hall, Ga.App. (806 S.E.2d 669) (2017). Viewed in that light, the record shows that Lilliston hired May as the dealership's general sales manager with a start date of December 11, 2012, and over seven months later, the parties executed a document entitled "General Sales Manager Payment Plan, " which provided that May was entitled to a "Draw against Commission" of $6, 000 per month (the "Contract"). The remainder of the Contract provided in its entirety:

5.5 % Commission of total Gross - Front & Back minus wholesale losses, F&I Chargebacks & policy (New/Used)
If CSI is below Region Standards Percentage of Gross is 4.5%. (1.0% penalty)

         May avers that in late October 2014, the parties reached an oral agreement to change the terms of his compensation to a guaranteed monthly salary of $8, 000.00, plus a 5.5% commission, but Lilliston failed to memorialize this agreement in a written contract.[2] Although Lilliston does not dispute that May's compensation was changed at that time, Jedon Lilliston, Lilliston's president, states the parties agreed only to increase May's monthly draw against commissions to $8, 000. The record reflects that the parties' Contract was altered on or about November 3, 2014 by striking the $6, 000 draw amount and writing $8, 000 in its place. However, only Lilliston signed off on this alteration. May did not sign off on the change and asserts that he was unaware that the Contract had been altered. Approximately three months later, on January 31, 2015, Lilliston terminated May's employment citing "[f]ailure to perform at the managerial position level" on his separation notice, although May says that he was simply told that the dealership wanted to go in a new direction. May asserts that Lilliston did not pay him his guaranteed $8, 000 salary, from November 2014 through January 2015 and still owed him commissions.

         May filed suit seeking to recover these unpaid amounts, and Lilliston counterclaimed to recover amounts it asserts it overpaid May. Lilliston subsequently moved for summary judgment on May's claims and its own counterclaim, and the trial court granted that motion, ruling in favor of Lilliston on May's claims and awarding the company $19, 085.27 in overpaid draws on its counterclaim. May contends on appeal that the trial court erred in granting summary judgment to Lilliston because genuine issues of material fact exist as to the terms of the new compensation agreement the parties negotiated in late 2014. We agree.

         1. Our review of the record reveals that a genuine issue of material fact exists as to whether the parties agreed in late 2014 that May would receive a guaranteed monthly salary of $8, 000, plus a commission, or merely an increased monthly draw against commissions as each party has submitted affidavits supporting their relative positions. The Contract does not resolve this issue because May did not sign off on the handwritten alteration to the draw amount and states he was unaware of the altered agreement. Additionally, although Lilliston presented records showing that it treated the $8, 000 monthly payment to May as a draw and not as salary, May averred that he never received his $8, 000 monthly salary payments for November 2014 through January 2015, and instead he only received commissions, and May questioned the shortfall by email soon after his termination. Therefore, we find that the evidence raises issues of material fact regarding the terms of the amended contract, and the trial court erred in granting summary judgment to Lilliston on May's claims.

         2. Additionally, we find that genuine issues of material fact exist as to Lilliston's counterclaim because the parties' Contract and the evidence of record do not establish Lilliston's right to recover the amounts sought as a matter of law. Lilliston asserted counterclaims for breach of contract and unjust enrichment, [3] and Lilliston seeks to recover two elements of damages: (1) overpayment of monthly draws for three months where the amount of the draw exceeded the commissions May earned for the month and (2) overpayment of 1% in commissions during the months of April 2014 to January 2015 when, according to Jedon Lilliston, gross sales did not meet the requirements of the Contract.

         a. Draw/commission shortfalls - Lilliston asserts that it is entitled under the Contract for reimbursement of the amount of draw payments it made to May in excess of commissions he earned. We find, however, that the Contract language is ambiguous, containing numerous undefined terms and abbreviations apparently used in the car sales industry. Under the rules of contract construction,

words generally bear their usual and common signification; but technical words, words of art, or words used in a particular trade or business will be construed, generally, to be used in reference to this peculiar meaning. Ambiguities in terms used in written contracts, and their meanings as understood in the trade and by the contracting parties, may be explained by parol proof of this trade usage and custom. Parol evidence is admissible to explain the meaning of technical terms employed in written contracts.

(Citation and punctuation omitted.) Southland Dev. Corp. v. Battle, 272 Ga.App. 211, 214 (612 S.E.2d 12) (2005). Lilliston provided parol evidence regarding the meaning of only one of the industry terms used in the Contract: "Draw against commissions." Jedon Lilliston defined the term as "a commonly understood pay structure [in] which an employee is prepaid or advanced money to be deducted from future earned commissions."[4] He explained that it

is an industry standard to alleviate the cash flow concerns sales representatives encounter. The dealership pays a set bi-weekly stream of income, otherwise known as a draw, and at the end of the month, the draws are deducted from the monthly commission earned and a check is written for the balance, if there is any. This ...

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