Opinion
38651, 38652.
DECIDED APRIL 21, 1961.
Action on employment contract; summary judgment. Chatham Superior Court. Before Judge Harrison.
Hitch, Miller Beckmann, Martin, Snow, Grant Napier, for plaintiff in error.
Cheatham, Bergen Sparkman, Frank S. Cheatham, Jr., contra.
1. ( a) The trial court may grant a motion for summary judgment upon the whole case or for all the relief asked when it has properly determined that there exists no genuine issue as to any material fact.
( b) A primary purpose of the summary judgment procedure is to allow a party to pierce the allegations of the pleadings and show the truth to the court and receive judgment where there is no general issue of material fact, although an issue may be raised by the pleadings.
2. Where the contract is unambiguous, its construction is a question of law for the court. The contract in the present case was properly one for interpretation by the court.
DECIDED APRIL 21, 1961.
The plaintiff below brought an action on an employment contract with the defendant corporation. In the contract the following language appeared: "Mr. Carn is to receive 15% of net profits of the Savannah and Brunswick Districts over and above $40,000 for the fiscal year 1959 during time he is District Manager. He is to [be] paid percentage of profits at end of fiscal year or at time of termination of his services. It is specifically understood that this percentage of profits is to be paid only on net profits earned during the term of Mr. Carn's employment." In the action the petitioner sought to recover under the above quoted clause 15 percent of the net profits of the Savannah and Brunswick Districts over and above $40,000 for the first three months of the year 1959, the petition alleging that he terminated his employment on April 1, 1959. The petition was twice amended, the second amendment charging in substance that the change in his monthly salary rate was in effect to offset the increase in his annual quota of net profits above which he was to receive 15 percent. This amendment also alleged that in the event his services were terminated during the calendar year the $40,000 quota was to be prorated for the portion of the year which expired before termination, and the net profits were to be compiled on the basis of net profit before taxes that has accrued up to the date of termination. The defendant's answer denied liability to the plaintiff in the amount of $4,546.64, which the plaintiff contended accrued to him during the period of his employment in 1959 under the 15 percent of net profits clause of the contract. The defendant admitted owing the plaintiff instead $46.46, which the defendant paid into the registry of the court.
The defendant filed a motion for summary judgment asking that such be entered for the plaintiff in the sum of $46.46. The supporting affidavit to the motion for summary judgment admitted the defendant corporation showed a net profit in the plaintiff's district for the first three months of 1959 in the sum of $40,310.92, and that for the calendar year 1959 the net profits totaled $90,296.28 in the district. The plaintiff countered by filing a motion to dismiss the defendant's motion for summary judgment. The plaintiff also filed his motion for summary judgment in the sum of $4,546.64. Supporting this motion was the plaintiff's affidavit which contended that the proper interpretation of the contract provision for his being paid 15 percent of the net profits above $40,000 annual quota was that this quota would be prorated for the part of the calendar year he worked and that, therefore, the annual quota applicable to the first three months of the year would have been $10,000 based on $40,000 for the entire year, and that under the terms of the contract he was entitled to 15 percent of the net profits over $10,000, thus entitling him to judgment in the amount set forth above. The trial judge, after hearing, overruled the plaintiff's motion to dismiss the defendant's motion for summary judgment and entered up a judgment in favor of the plaintiff in the sum of $1,886.11. In entering the judgment on the motion for summary judgment in favor of the plaintiff, the trial court found there was no genuine issue as to any material fact. The basis of the trial court's judgment was that it was the intent of the parties that the profits were to be calculated on a yearly basis only and cannot be calculated on the basis of the first three months, particularly as the business was seasonal and the profits varied substantially during the year. There, the trial court subtracted the $40,000 exclusion provided in the contract of employment from the total profits for the year in the amount of $90,296.28. Under the terms of the contract as interpreted by the trial court, the plaintiff, if he had worked the entire year, would have been entitled to 15 percent of the difference between these two figures, which equals $7,544.44. Since the plaintiff worked only three-twelfths of the year, the trial court then entered judgment for three-twelfths of this figure, resulting in the judgment for the plaintiff of $1,886.11. The defendant excepted to the judgment on the motions for summary judgment, contending that it is contrary to law and that under the terms of the contract the plaintiff was entitled to only $46.46, which represented 15 percent of the profits in excess of $40,000 during the first three months of 1959.
In Case No. 38652 the plaintiff excepted to the judgment below overruling the plaintiff's general demurrer to the defendant's motion for summary judgment and also to the judgment in his favor in the amount of $1,886.11, the plaintiff contending that the trial court misinterpreted the contract provision which should have been interpreted to give the plaintiff judgment in the amount of $4,546.64. The plaintiff further excepted to the allowance of interest on the judgment from January 1, 1960, contending that the contract plainly allows interest from April 1, 1959.
In Case No. 38651, the defendant excepted to the judgment on the motion for summary judgment, contending that the plaintiff's judgment should have been $46.46, not $1,886.11, as rendered.
The two questions determinative of this case are (1) whether the trial court erred in granting the motion for summary judgment and (2) if the summary judgment was properly granted, was it granted in the correct amount. Here the summary judgment was granted upon the whole case.
1. Under the Georgia summary judgment statute ( Code Ann. Ch. 110-12), the function of the motion is to avoid a useless trial where there is no genuine issue as to any material fact. In no sense does the statute authorize the courts to sit as both judge and jury, for where there is a genuine issue as to any material fact a trial in the normal process is as absolutely essential today as it was prior to the enactment of the summary judgment procedure. Thus, it will always be error for a trial court to grant a motion for summary judgment upon a whole case or for all the relief asked where a genuine issue of material fact exists in the case. The first duty, then, of any court, before ruling on a motion for summary judgment upon the whole case or for all the relief asked is to determine whether there actually exists a genuine issue of material fact. See Caldwell v. Mayor c. of Savannah, 101 Ga. App. 683, 684 ( 115 S.E.2d 403). But the presence of a genuine issue in the case must be apparent in some manner other than by a mere allegation in the petition and the denial of the allegation in the answer, for "We think the legislature had as a primary purpose in enacting the summary judgment procedure to allow a party to pierce the allegations of the pleadings and show the truth to the court and receive judgment where there is no genuine issue of material fact, although an issue may be raised by the pleadings." Scales v. Peevy, 103 Ga. App. 42 ( 119 S.E.2d 193).
2. In the present case the sole matter in dispute is the interpretation to be applied to a particular paragraph of a written employment contract. This paragraph reads as follows: "Mr. Carn is to receive 15% of net profits of the Savannah and Brunswick District over and above $40,000 for the fiscal year 1959 during time he is District Manager. He is to [be] paid percentage of profits at end of fiscal year or at time of termination of his services. It is specifically understood that this percentage of profits is to be paid only on net profits earned during the term of Mr. Carn's employment."
The contention of Mr. Carn is that the proper interpretation of this provision is that the $40,000 annual quota should be prorated for the part of the year he worked and, therefore, the applicable portion of the quota for the first three months of the year should be $10,000; that the company earned during the first three months the sum of $40,310.92 and earned more than $40,000 for the entire fiscal year; and, therefore, he is entitled to 15 percent of the net profits over $10,000, which is 15 percent of $30,310.92, thus entitling him to judgment in the amount of $4,546.64.
The interpretation of the contract provision urged by the General Gas Corporation is that Mr. Carn would be entitled to 15 percent of the net profits over $40,000 earned by the company during the first three months of the year; that since the company earned, during the first three months, the sum of $40,310.92, and earned more than $40,000 for the entire fiscal year, Mr. Carn would be entitled to 15 percent of $310.92, which equals $46.46.
The question thus arises as to whether this contractual provision is a question of law for the court to construe under the authority of Code § 20-701 or is the provision so filled with ambiguities that the meaning becomes a factual matter for the jury to determine. Atlanta Baggage Cab Co. v. Loftin, 88 Ga. App. 98 ( 76 S.E.2d 92). In McCann v. Glynn Lumber Co., 199 Ga. 669, 679 ( 34 S.E.2d 839), the Supreme Court stated: ". . . a mere lack of clarity on casual reading is not the criterion for determining whether a contract is afflicted with ambiguity within the rule as to the admission of parol evidence to explain its meaning. Nor is a contract ambiguous within that sense merely because it may be even difficult to construe. The construction of a contract, if needed, being a question of law for the court, as well as a duty that rests upon the court, there can be no ambiguity within the rule to which we have referred, unless and until an application of the pertinent rules of interpretation leaves it really uncertain which of two or more possible meanings represents the true intention of the parties."
We think the trial court correctly interpreted the clause to mean that the plaintiff was entitled to recover three-twelfths, the fraction of the year he worked under the contract, of 15 percent of the profits for the fiscal year 1959 in excess of $40,000. The first sentence of the disputed provision provides, "Mr. Carn is to receive 15 percent of net profits of the Savannah and Brunswick Districts over and above $40,000 for the fiscal year 1959 during time he is District Manager." This sentence, as we view it, establishes a condition precedent to the receipt of any further money by Mr. Carn that the company earn a net profit in the fiscal year of over $40,000. The next sentence provides that if Carn works the entire year, he will receive the stipulated percentage of the profits for the entire year, or, if he works less than the year, as he did, then the measure of his profits will be determined by the fraction of the year he worked under the contract in the position of district manager. Even if there were to be irreconcilable conflicts between the first sentence and the last two sentences in the paragraph, the first one would prevail. Whitney v. Hagan, 65 Ga. App. 849, 852 ( 16 S.E.2d 779). Any other interpretation of this sentence would create an impossibility of performance, since the amount due Carn could not be computed until the fiscal year was over, when it could be determined whether the company had earned net profits of over $40,000, and, if so, how much above the $40,000 had been earned. Obviously, Mr. Carn would not be entitled to any amount except 15 percent of the earnings above $40,000 for a fiscal year. It is equally evident that the amount of these earnings could only be determined at the end of the fiscal year.
The evidence discloses that the net profits actually earned by the company during the fiscal year totaled $90,296.28 in the district. Since Mr. Carn worked three-twelfths of the year, or one-fourth of the year, the trial court correctly ruled that he would be entitled to one-fourth of 15 percent of the net profits above $40,000 earned during the fiscal year.
It thus appears that there is no issue of material fact in the case; the only issue present for determination by the court was a matter of the construction of an unambiguous contract, and summary judgment for Mr. Carn in the amount of $1,886.11 was properly entered.
The only remaining matter for determination is whether the trial court correctly included in its judgment interest upon the amount due Carn at 7 percent, to be computed from the first day of January, 1960. Under the interpretation of the trial court as approved here, it is obvious that the interest could not begin to run until the plaintiff's share of the profits could be determined, and this share of the profits could only be determined at the end of the fiscal year. The order of the trial court granting interest on the judgment from the first day of the next succeeding fiscal year, in this case January 1, 1960, was correct.
The judgment of the trial court is affirmed in Cases 38651 and 38652. All the Judges concur, except Felton, C. J., who dissents.
It is my opinion that the contract involved was unambiguous and that under the undisputed facts the court should have rendered a judgment in favor of the plaintiff for the sum of $46.46. The last pertinent provision in the contract removes all doubt as to its meaning. That part is as follows: "It is specifically understood that this percentage of profits is to be paid only on net profits earned during the term of Mr. Carn's employment." This may not be what the parties intended to agree upon but that is no concern of this court. Under the plain terms of the contract the plaintiff was not entitled to any percentage of profits or any net profits earned after the termination of Mr. Carn's employment. I think the court erred in finding that it was the intent of the parties that the profits were to be calculated on a yearly basis only, because such a finding is absolutely in contradiction of the plain and unambiguous terms of the contract.