CARROLL v. STRYKER CORP. (September 6, 2011)

Matthew Carroll was a commissioned sales representative for Stryker Corporation, a medical instrument manufacturer. Each year, Stryker sent its commissioned salespeople a compensation plan that sets sales targets and described the compensation structure. Carroll failed to meet his sales quotas in 2006 and 2007. Beginning in 2008, Stryker warned Carroll that he had to meet his sales quota each quarter or face termination. Although he was short of his quota on March 31, 2008, Carroll had a sale in progress that, if closed, would put him over his target. Stryker rejected the purchase order on March 31 because it sought to modify Stryker's normal terms and conditions. The company gave Carroll an extra day to submit a satisfactory purchase order. When he did not, Stryker fired him. Within a month, Stryker had resumed negotiations with Carroll’s potential customer, modified the financing term that it had earlier refused to modify, consummated the deal, and paid a commission to Carroll’s successor. Carroll brought suit in state court under a Wisconsin wage payment statute. He also asserted claims for quantum meruit and unjust enrichment. Stryker removed the case to federal court, asserting that the statutory claim plus attorneys fees met the $75,000 diversity jurisdiction amount in controversy threshold. But Stryker then asserted in its answer that the statutory claim was unavailable to Carroll because it did not apply to commissioned salespeople. When Stryker made the same argument in its motion for summary judgment, Carroll sought to withdraw the statutory claim and add a claim for breach of contract. Magistrate Judge Crocker (W.D. Wis.) granted summary judgment to Stryker, holding that the equitable remedies could not succeed in light of the written compensation contract, and denied the motion for leave to amend, citing delay and lack of good cause. Carroll appeals.

In their opinion, Seventh Circuit Judges Manion, Evans (who, as a result of his death, took no part in the decision), and Sykes affirmed. The Court first addressed the propriety of the removal, given that the statutory damages on which it was based appeared to be unavailable to a commissioned salesperson. The Court noted that it may have concluded that it lacked jurisdiction if the statutory claim was the only claim presented. It noted, however, that Carroll included claims for compensatory damages under the quantum meruit and unjust enrichment counts that satisfied the jurisdictional amount requirements. Turning to the merits, the Court stated that Wisconsin law permits quantum meruit and unjust enrichment claims only in the absence of an express contract. Although the Court conceded that Carroll had no employment contract and could be discharged at will, it also concluded that he did have an express compensation contract. Each year, the company sent out a compensation plan. Although the plan was not signed by the parties, Carroll continued to work and Stryker continued to pay him. That is all that is required for an express contract. The equitable claims were properly dismissed. Finally, the Court had little difficulty in finding no abuse of discretion in the district court's denial of Carroll's request to amend. It was filed seven months after a court-imposed deadline and less than a month before the end of discovery. Particularly given that Carroll was aware of the statutory problem from the very onset of the case, the denial was quite reasonable.