LARRY STERLING V BURNSIDE INDUSTRIES LLC
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
LARRY STERLING and THE STERLING
ASSOCIATION, INC.,
UNPUBLISHED
December 20, 2007
Plaintiffs/Counter-DefendantsAppellants,
v
No. 268176
Wayne Circuit Court
LC No. 03-334848-CZ
BURNSIDE INDUSTRIES, L.L.C.,
Defendant/Counter-PlaintiffAppellee,
and
BRIAN BURNSIDE, d/b/a L & K SALES,
Defendant/Counter-Plaintiff.
Before: White, P.J., and Zahra and Fort Hood, JJ.
PER CURIAM.
Plaintiffs filed this action to recover commissions allegedly owed under a sales
agreement with defendants. Following a jury trial, plaintiffs were awarded a judgment of
$132,652.39 against defendant Burnside Industries, L.L.C., for commissions owed before the
agreement was cancelled or terminated. On appeal, plaintiffs challenge the trial court’s earlier
grant of partial summary disposition to defendants, dismissing claims for commissions arising
after the agreement was cancelled or terminated on the basis that the agreement unambiguously
provides that no such commissions are payable. We conclude that the agreement is ambiguous
and reverse.
-1-
Plaintiff Larry Sterling worked as an independent manufacturers sales representative for
defendant Burnside Industries, L.L.C.,1 pursuant to a written contract executed in October 2000.2
The agreement provided:
6. TERM
The term of this Agreement shall be Three Years (3) years [sic]
commencing on October 23, 2000 through October, 2003, however, said contract
shall automatically renew from year to year unless canceled in writing by either
party hereto at least sixty days prior to expiration of any yearly term hereunder.
***
12. TERMINATION
BURNSIDE reserves the right to terminate this Agreement for good cause
by providing Agent with 90 days written notice of termination.
Agent shall be entitled upon termination to full commissions on all
purchase orders accepted by BURNSIDE prior to the actual termination date as
provided for above.
After termination date Agent shall continue to be entitled to full
commissions on sales of all products pursuant to purchase orders accepted by
BURNSIDE prior to the termination date even though such products may be
delivered after said date and even though said purchase order may automatically
renew under a new purchase order number. This right to commissions shall be for
the period of one year (1) year [sic] at 100% commission and at the rate of 50%
for the second. [3
On or about May 12, 2003, plaintiff informed defendant in writing of his intention to
terminate the sales agreement. Shortly thereafter, defendant acknowledged in writing that the
agreement would be cancelled, effective October 2003, in accordance with § 6. Plaintiffs
thereafter filed this action alleging entitlement to both pre-termination and post-termination sales
commissions under the agreement. The trial court determined that the agreement unambiguously
provided that plaintiff was entitled to post-termination commissions only if defendant terminated
1
For purposes of this opinion, the singular “plaintiff” is used to refer to plaintiff Larry Sterling,
and the singular “defendant” is used to refer to defendant Burnside Industries, L.L.C.
2
The instant agreement was between defendant Burnside Industries and plaintiff, and states that
it was entered into on an unspecified date in April, 2001. A prior written agreement, dated
November 23, 1998, was between plaintiff and Burnside Manufacturing. The agreements are
virtually identical, except for the commission rate in the second year after termination.
3
The prior agreement provided for post-termination commissions for two years, without a
decrease in rate from 100% to 50% in the second year.
-2-
the agreement under § 12. Because it was undisputed that defendant did not terminate the
agreement for good cause under § 12, but rather, the agreement was cancelled in accordance with
§ 6, the trial court granted defendant’s motion for summary disposition with respect to post
termination commissions. On appeal, plaintiffs argue that the trial court erroneously construed
the parties’ contract as unambiguously precluding post-termination commissions except where
the agreement is terminated by defendant for cause. We agree.
This Court reviews a trial court’s decision on summary disposition de novo. Spiek v
Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). Defendant moved for
summary disposition under MCR 2.116(C)(8) and (10). Although the trial court did not identify
the subrule under which it granted defendant’s motion, it is apparent that the court considered
evidence beyond the pleadings. We therefore review the motion under MCR 2.116(C)(10).
A motion under MCR 2.116(C)(10) tests the factual support for a claim. The court must
consider the pleadings, affidavits, depositions, admissions, and other documentary evidence.
MCR 2.116(G)(5). Summary disposition should be granted if, except as to the amount of
damages, there is no genuine issue of material fact and the moving party is entitled to judgment
as a matter of law. Babula v Robertson, 212 Mich App 45, 48; 536 NW2d 834 (1995).
A court’s obligation when interpreting a contract is to determine the intent of the parties.
Quality Products & Concepts Co v Nagel Precision, Inc, 469 Mich 362, 375; 666 NW2d 251
(2003). The agreement must be read as a whole. Pickering v Pickering, 268 Mich App 1, 13;
706 NW2d 835 (2005). If apparent to the reader, contractual language is construed according to
its plain and ordinary meaning, while technical or constrained constructions are to be avoided.
Wilkie v Auto-Owners Ins Co, 469 Mich 41, 47; 664 NW2d 776 (2003); Dillon v DeNooyer
Chevrolet Geo, 217 Mich App 163, 166; 550 NW2d 846 (1996). On the other hand, a trial court
may grant summary disposition of a breach of contract claim only if the terms of the contract are
not subject to two or more reasonable interpretations. BPS Clinical Laboratories v Blue Cross &
Blue Shield of Michigan (On Remand), 217 Mich App 687, 700; 552 NW2d 919 (1996).
While the agreement uses varying terms, “termination,” “expiration” and “canceled,” it
does not make a clear distinction between termination and cancellation in the context of
commissions. Nor does the use of separate terms establish that the parties intended to give the
meanings to these terms ascribed by the trial court. Paragraph 6 sets forth the term of the
agreement. That this paragraph uses the word “canceled” to describe the act and consequence of
sending notice to the other party of a desire that the contract not continue beyond the yearly
renewal, and the word “expiration” to describe the end of a yearly renewal term, does not
establish that the words “termination date” in ¶ 12 do not refer to the date at which the contract
ends, whether by expiration due to cancellation by one of the parties, or by termination by
defendant for good cause or bankruptcy.4
4
The agreement also provides:
13. BANKRUPTCY
(continued…)
-3-
Contrary to the trial court’s conclusion, the agreement does not state that post-termination
commissions will only be paid if the agreement is terminated by defendant for good cause. This
was an inference drawn by the trial court; and, although this is a reasonable reading of an
ambiguous contract, it is not compelled, and is somewhat strained. As plaintiff points out, the
trial court read the contract as providing plaintiff with a right to post-termination commissions in
the event the contract is terminated for good cause by defendant, but as providing no right to
such commissions in the event the contract is terminated without cause, at the expiration of a
yearly renewal period. Under this construction, plaintiff could have secured his commissions
simply by suspending performance under the contract without canceling as provided for in ¶ 6.
Defendant would have then presumably terminated the contract for cause, and plaintiff would
have had a right to commissions under ¶ 12. While this Court will not rewrite an unambiguous
contract for the parties in order to provide them with a better or more sensible one, nor will it
construe an ambiguous contract as necessitating an incongruent result.
We conclude the trial court erred in granting defendant summary disposition, and reverse
and remand for further proceedings.5 We do not retain jurisdiction.
/s/ Helene N. White
/s/ Karen M. Fort Hood
(…continued)
In the event Agent shall declare bankruptcy, receivership or insolvency, or
shall go out-of-business BURNSIDE shall have the right to terminate this
Agreement effective immediately upon written Notice of Termination.
5
Defendant’s cross appeal was dismissed for failure to timely file a brief on cross appeal.
Plaintiffs may tax their costs for the additional transcripts that defendant required plaintiffs to file
for the cross appeal.
-4-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
