## Facts

- Wood Dimension, Inc. (WDI) manufactured stereo speaker components and had relied heavily on Fisher Corporation orders, which had comprised roughly 30–50% of WDI’s business before Fisher stopped purchasing in early 1982.
- WDI’s president sought to regain Fisher’s business and enlisted L. Dale Watson, who had a social relationship with Fisher’s general manager/vice-president.
- Watson and WDI made an oral agreement for Watson to receive a 3% commission on Fisher business; the parties did not reach agreement on a written contract, including any termination or duration terms.
- Watson’s services were primarily relational rather than traditional sales solicitation: he maintained social contact with Fisher’s decisionmaker and facilitated introductions and goodwill.
- In April 1983 Watson introduced WDI’s president to Fisher’s manager; Fisher resumed purchasing from WDI, generating substantial sales, and WDI paid Watson commissions for a time.
- In May 1984 WDI terminated Watson’s arrangement and stopped paying commissions, although Fisher continued to place orders.
- Watson sued to recover unpaid commissions, asserting contract and quantum meruit theories.
- A court-appointed referee heard evidence and recommended commissions through a fixed cutoff date (December 15, 1984), applying the 3% rate; the trial court largely adopted the report and entered judgment for $155,955.85 plus interest, costs, and attorney’s fees.
- WDI appealed the merits, the reference procedure, and attorney’s fees; Watson appealed seeking commissions beyond the cutoff date.

## Issues

1. Whether an oral commission agreement lacking express duration/termination terms entitled Watson to commissions on Fisher sales occurring after WDI terminated the relationship.
2. Whether limiting recovery to commissions through a specified cutoff date was a proper measure of compensation under contract and/or quantum meruit principles.
3. Whether the trial court committed reversible error by adopting the referee’s report and restricting additional evidentiary submissions by WDI.
4. Whether the attorney’s fee award to Watson was authorized and reasonable.

## Decision

- The Court of Appeal affirmed the judgment for Watson, including the limited commission award and the attorney’s fee award.
- The court rejected Watson’s request to enlarge recovery to commissions on Fisher sales indefinitely beyond the cutoff date.
- The court rejected WDI’s procedural and evidentiary attacks on the reference process and the trial court’s adoption of the referee’s findings.
- The court held the trial court acted within its discretion in awarding attorney’s fees and in determining the amount.

## Legal Principles

- When an oral commission agreement omits express duration or termination terms, courts determine the scope of commission entitlement from the parties’ intent and surrounding circumstances rather than presuming an unlimited right to future commissions.
- Where services confer an ongoing business benefit but the agreement is indefinite as to duration, recovery may be limited to a reasonable period during which the benefit is fairly attributable to the claimant’s efforts.
- Quantum meruit permits recovery of the reasonable value of services where contractual terms are incomplete or indefinite; an agreed commission rate may be evidence of reasonable value but does not mandate payment on all future sales without temporal limitation.
- Trial courts may rely on a properly authorized referee’s report; appellate review defers to supported factual findings (substantial evidence) and discretionary procedural rulings absent abuse of discretion.
- Attorney’s fee awards are generally reviewed for abuse of discretion, and an appellate court will uphold the award when the record supports the trial court’s determination of entitlement and reasonableness.

## Conclusion

The court held that Watson could recover commissions for a limited post-termination period tied to the reasonable value and continuing effect of his relational services in restoring the Fisher account, but not for all future Fisher sales, and it affirmed the trial court’s adoption of the referee’s report and the attorney’s fee award.


Watson v. Wood Dimension, Inc., 209 Cal. App. 3d 1359, 257 Cal. Rptr. 816 (Ct. App. 1989)