Opinion
No. C2-98-1802.
Filed July 27, 1999.
Appeal from the District Court, Dakota County, File No. CX977944.
Daniel E. Warner, Warner Law Office, (for respondent)
Michael Anthony Broback, (for appellant)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
In this consolidated appeal from a judgment awarding Timothy Stiehm unpaid commissions and from an order denying posttrial motions, Dakota County Lumber Co. (DCL) challenges (a) the trial court's finding that Stiehm's commission was a full 4.5% of his gross sales minus the sales tax and (b) the trial courts exclusion as hearsay of notes of a telephone conversation between a DCL employee and a contractor. Because the evidence reasonably supports the trial court's finding and DCL failed to lay the foundation necessary to admit the notes under the business-record exception to the hearsay rule, we affirm.
DECISION I.
DCL first claims the trial court abused its discretion in finding that Stiehm's commission was a full 4.5% of his gross sales minus the sales tax, without deductions for unpaid finance charges on delinquent accounts or commissions paid on sales for which DCL did not collect ("bad sales"). DCL concedes that Stiehm and Stephen Finden, DCL's owner and president, orally agreed at the outset that Stiehm's commission would be calculated at a rate of 4.5% of his gross sales minus the sales tax. It argues, however, that it modified Stiehm's compensation agreement through a memorandum issued in January 1997 and that Stiehm accepted the modifications by remaining in DCL's employ for six weeks after they were announced. Alternatively, DCL argues the January 1997 memorandum did not modify the existing compensation policy, but instead codified changes made to it in 1995 through the "1995 Model Home Program," which changes Stiehm accepted by remaining in DCL's employ. We disagree.
The reviewing court will not set aside factual findings unless they are clearly erroneous. Minn.R.Civ.P. 52.01. Findings are clearly erroneous when not "reasonably supported by the evidence in the record considered as a whole." Hubbard v. United Press Int'l, Inc., 330 N.W.2d 428, 441 (Minn. 1983). In determining whether the evidence reasonably supports the trial court's findings, the reviewing court must view the evidence in the light most favorable to the prevailing party, Weber v. United Parcel Serv., 358 N.W.2d 476, 477 (Minn.App. 1984), and give due regard to the opportunity of the trial court to judge the credibility of witnesses, Minn.R.Civ.P. 52.01.
The trial court's finding that Stiehm's commission was a full 4.5% of his gross sales minus the sales tax is reasonably supported by the evidence in the record considered as a whole. Stiehm testified that he and Finden orally agreed that his commission would be 4.5% of his gross sales minus the sales tax. He also stated that before January 1997, it was not company policy to offset unpaid finance charges or commissions paid on bad accounts against commissions owing. DCL's attorney had the opportunity to cross-examine Stiehm and call witnesses to contradict Stiehm's testimony. Indeed, Finden testified DCL's policy was to offset unpaid finance charges and commissions earned on bad sales against unpaid commissions owed. The trial court believed Stiehm.
Contrary to DCL's claim, the 1997 memorandum did not modify the initial agreement between Stiehm and Finden. Stiehm had not only begun performance on sales he secured before January 1997, but also, in most cases, had completed it by securing payment. DCL could not therefore unilaterally change Stiehm's compensation agreement for those sales. Additionally, the January 1997 memorandum, by its own terms, was effective after January 1, 1997. Accordingly, it did not affect commissions earned on sales completed or secured before January 1, 1997. The trial court did not therefore abuse its discretion in finding that, even if the January 1997 memorandum modified existing compensation policy and Stiehm accepted the modifications, the modifications did not apply retroactively to sales Stiehm made before January 1, 1997.
The "1995 Model Home Program" did not modify Stiehm's unilateral contract either. It was merely a financing agreement with a single builder, whereby DCL agreed to waive finance charges if the builder kept a purchase ratio of ten pre-sold homes to one model home. The Model Home Program made no reference to Stiehm's commissions or company policy on commissions and Stiehm was not a party to it. Consequently, it does not support a finding that DCL's policy was to offset unpaid finance charges or commissions earned on bad sales against commissions owed.
DCL makes two additional arguments, both of which are unsupported by the record. First, DCL claims that Stiehm's acceptance of reduced commissions from time to time proves DCL's commission policy was fluid and Stiehm routinely accepted unilateral modifications to his compensation agreement. The evidence suggests otherwise. Although Stiehm agreed to reduced commissions from time to time to secure a new account or retain an existing one, the reductions were negotiated rather than unilaterally imposed and did not modify Stiehm's initial agreement with DCL.
Additionally, DCL claims the trial court erred in awarding Stiehm commissions on sales that he did not personally collect. It argues that all sales representatives were responsible for collecting on their accounts and were not entitled to commission unless they did so. Stiehm testified, however, that DCL office staff often handled the collection of unpaid accounts and that he had never been denied commissions simply because someone else handled the collection process. Because Stiehm's testimony supports the trial court's finding that his commissions were not contingent on his following a sale through collection, the trial court did not abuse its discretion in awarding him commissions on sales he secured before January 1, 1997, but did not personally collect.
In conclusion, the evidence, viewed in the light most favorable to Stiehm, and with due regard to the opportunity of the trial court to judge the credibility of witnesses, supports both the trial court's finding that Stiehm's commission was a full 4.5% of his gross sales minus the sales tax and its award of unpaid commissions earned on completed sales Stiehm secured before January 1997.
II.
DCL also claims the trial court abused its discretion by refusing to admit notes of a telephone conversation between Denis Tonsager, a DCL employee, and Douglas Pietsch, a builder. DCL sought to admit Tonsager's notes under the business-record exception to the hearsay rule to prove Stiehm had misappropriated bids and pricing information before leaving DCL. The notes recorded a bid number Pietsch had given Tonsager, and he could have obtained the bid numbers only from Stiehm.
On appeal, the reviewing court will not reverse evidentiary rulings absent an abuse of discretion. Uselman v. Uselman, 464 N.W.2d 130, 138 (Minn. 1990). An error in the exclusion of evidence is a ground for a new trial if the evidence might reasonably have changed the trial's outcome had it been admitted. Jenson v. Touche Ross Co., 335 N.W.2d 720, 725 (Minn. 1983).
Business-records are admissible under Minn.R.Evid. 803(6) if kept in the course of a regularly conducted business activity pursuant to regular business practice. National Tea Co. v. Tyler Refrigeration Co., 339 N.W.2d 59, 61 (Minn. 1983). DCL attempted to introduce Tonsager's notes under the business-record exception. It argued the notes were "an ordinary business-record, * * * kept in a file at Dakota County Lumber," but offered no evidence that it was kept in the course of a regularly conducted business activity pursuant to regular business practice. DCL therefore failed to lay the foundation necessary for admission of the notes under the business-record exception.
Even if DCL had laid the proper foundation, the trial court did not abuse its discretion in denying DCL a new trial because admission of the notes would not have changed the trial's outcome. Pietsch testified he did not recall calling Tonsager about the bid Stiehm had allegedly misappropriated. More importantly, DCL's counsel admitted during Stiehm's rebuttal cross-examination that Tonsager had found the missing bid in DCL's files the previous night. Given this testimony, it is unlikely the trial court would have concluded DCL had a legitimate claim for breach of duty of loyalty had the notes been admitted. Any error was therefore harmless.