Branting v. Poulsbo RV

ROBERT BRANTING and THERESA SWEETON, Appellants,

v.POULSBO RV, a Washington corporation, Respondent.

No. 66754-8-I

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

FILED: October 22, 2012

UNPUBLISHED

Cox, J. — Robert Branting and Theresa Sweeton appeal the summary dismissal of their claims against Poulsbo RV: breach of contract, wrongfully withholding pay, negligent and intentional misrepresentation, and breach of fiduciary duty. They seek damages and an accounting of sales commissions paid to them. Sweeton also appeals the dismissal of her wrongful termination in violation of public policy claim. Because there are no genuine issues of material fact for any of these claims, we affirm.

Branting and Sweeton sold new and used recreational vehicles for Poulsbo RV. Sweeton worked at Poulsbo RV for approximately 15 years.Branting worked there from 1998 to September 2004 and then from January 2006 to August 2007.

They both worked on commission. That commission was 25 percent of "gross profits" per sale. "Gross profit" was the final vehicle sale price minus "costs."

During the terms of Sweeton and Branting's employment, there was no mutual agreement of what was included in "costs." According to Joy Heinz, former assistant general manager for Poulsbo RV, costs can typically include the following:

(1) the factory or dealer invoice price, including holdbacks, regional advertising, and any other costs associated with the inventory purchase; (2) dealer-installed options and equipment; (3) transportation for dealer trade-ins; (4) cash paid on the customer's behalf; (5) over-allowances on trade-ins; (6) vehicle "spiffs," which are any bonuses associated with a sale; and (7) vehicle "packs," which are general sales and delivery costs, such as for fuel charges, inspections, minor repairs, and other costs.¹

Neither Sweeton nor Branting was clear on what was included in "costs." During their employment, they believed their commissions were often lower than they expected. When Sweeton and Branting believed that their commissions were incorrect, they would talk to their managers. Nevertheless, both continued to work on commission.

In 2007, Poulsbo RV asked its salespeople to sign a new "Salesperson Commission Policy Agreement." Sweeton and Branting initially declined because they objected to certain provisions. Specifically, they did not like thearbitration clause, and they disagreed with the specification of costs that could be deducted in the gross profit formula for commissions.

Branting quit working for Poulsbo RV in August 2007. In December 2007, Sweeton stopped working for Poulsbo RV after a disagreement with her manager regarding her work schedule.

In 2008, Branting and Sweeton commenced this action against Poulsbo RV. They made the claims and sought the relief we previously described in this opinion.

Poulsbo RV moved for summary judgment, which the court granted. Among other things, the trial court explained that the "evidence in the record is insufficient for the trier of fact to do anything other than speculate as to damages, even assuming any of plaintiff's legal claims are viable under the applicable law."²

Branting and Sweeton appeal.

BREACH OF CONTRACT

Branting and Sweeton argue that there is a genuine issue of material fact whether there was an oral contract regarding the calculation of commissions. We disagree.

A motion for summary judgment may be granted when there is no genuine issue as to any material fact, and the moving party is entitled to a judgment as a matter of law.³ A material fact is one on which the outcome of the litigationdepends.⁴ We review a summary judgment order de novo, viewing the facts and reasonable inferences in the light most favorable to the nonmoving party.⁵

The burden of proving the existence of a contract is on the party asserting its existence.⁶ For a contract to exist, there must be mutual intention or assent on the essential terms of the agreement.⁷ Mutual assent usually takes the form of an offer and acceptance.⁸ Generally, the existence of an oral contract is not appropriately decided on summary judgment because this determination depends on the credibility of witnesses.⁹ However, "bare assertions of ultimate facts and conclusions of fact are alone insufficient to defeat summary judgment."¹⁰

The parties agree that Poulsbo RV promised to pay Branting and Sweeton 25 percent of gross profit. Moreover, it is undisputed that the gross profit formula was the sale price of the recreational vehicle minus costs, which could vary from sale to sale.

Branting and Sweeton point to the 2007 commission agreement as proof that the "fees, costs and charges" changed over time without their consent.They claim that the commission agreement showed that Poulsbo RV was "calculating and paying commissions on a case by case basis anyway it wanted at its sole discretion."

This argument fails to address the lack of objective manifestation of mutual intent by the parties to the alleged contract prior to the written agreement in 2007. Specifically, there is no showing of mutual assent to what was included within the term "costs" used to calculate commissions.

Sweeton testified that "it was never fully disclosed" as to how gross profit was calculated, but costs would typically include the "cost of a unit," "repair orders," and "any pack," which usually includes general sales and delivery costs. Branting testified that Poulsbo RV promised that the costs deducted from the sale price would be "actual costs" and "a pack of 6 percent on new and 12 percent on used with a maximum pack of $5,000." But Branting also testified that he was "sure" that costs changed over time even though he did not know "specifics." When Poulsbo RV asked Branting if it made any oral promises about whether "certain things would be exempt from [the] pack or certain things would not be included as part of the cost of doing business," he testified, "No."

In sum, the testimony of Branting and Sweeton demonstrates that there was no oral contract regarding the "costs" that could be deducted from the sale price to determine the gross profit on which commissions were based. There was no objective manifestation of mutual assent to the material term "costs."

Branting and Sweeton argue that summary judgment was inappropriatebecause the existence of an oral contract involves states of mind and witness credibility. They rely on Crown Plaza Corp. v. Synapse Software Systems, Inc.¹¹ This reliance is misplaced.

There, this court reversed the trial court's grant of summary judgment holding that the existence of an oral contract should not be decided on summary judgment due to the importance of witness credibility.¹² But in that case, Synapse alleged it entered into an oral contract and Crown Plaza completely denied the contract's existence.¹³

Here, Branting and Sweeton argue that there is a genuine issue of material fact whether Poulsbo RV orally promised what costs could be deducted from the sales price to calculate gross profit. But, as discussed previously in this opinion, the evidence does not support the existence of any factual dispute on this critical term. Thus, witness credibility is not at issue.

There is an additional, independent reason why Branting and Sweeton failed to show the existence of any genuine issue of material fact on their breach of contract claim. They failed to show any proof of damages. Absent such a showing, there can be no other material factual issues for this claim.

To prevail on a claim for breach of contract, a plaintiff must show that the contract imposed a duty, the duty was breached, and the breach proximately caused damage to the plaintiff.¹⁴ Thus, it is not enough for a plaintiff to showthat a breach occurred.¹⁵ The plaintiff must also establish that damages resulted from the breach with a reasonable degree of certainty.¹⁶ Damages need not be proven with "mathematical certainty," but they must be supported by evidence that provides "a reasonable basis for estimating the loss and does not subject the trier of fact to mere speculation or conjecture."¹⁷

Even if Branting and Sweeton could establish that there was a breach of a duty owed them to only deduct certain costs, they fail to show, with any reasonable certainty, damages causally connected to such a breach. They rely on the 2007 commission agreement to fill this gap. The agreement lists various fees, charges, packs, and expenses that could be deducted from the sale price to reach gross profit. They claim they can estimate their damages by multiplying these costs by their total number of sales. But this estimation is purely speculative. It does not take into account the fact that the parties originally agreed that some costs could be deducted from the sale price to reach a gross profit. It is also not clear if any of these costs have changed over time or how this method accounts for the difference in costs for each sale. Thus, this evidence does not establish a reasonable basis for estimating their damages, which is the governing standard for damages.¹⁸

Branting and Sweeton argue that they were not able to establish damages with more certainty because Poulsbo RV refused to permit inspection of the"deal jackets," which would include the calculation of commissions. At best, this appears to be a discovery issue that they chose not to appeal. Thus, we reject this argument as a basis for their inability to fulfill their burden of proof of damages.

They also argue that they provided descriptions of specific transactions where they were not paid correctly. But they only cite one example where Branting alleges he was paid $2,000 when he believed he should have been paid $18,000. Branting provides no specific dates or documentation to support this assertion. A review of the record reveals that Sweeton also describes receiving less commission than she expected. But neither Branting nor Sweeton provide any documentation or other evidence to support...