In the
United States Court of Appeals
For the Seventh Circuit
No. 09-4111
M ATTHEW C ARROLL,
Plaintiff-Appellant,
v.
S TRYKER C ORPORATION,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 09-cv-29—Stephen L. Crocker, Magistrate Judge.
A RGUED JUNE 3, 2010—D ECIDED S EPTEMBER 6, 2011
Before M ANION, E VANS , and S YKES, Circuit Judges.
S YKES, Circuit Judge. Matthew Carroll was a commis-
sioned sales representative assigned to solicit orders in
Wisconsin for Stryker Corporation (“Stryker”), a medical-
instrument manufacturer based in Michigan. Stryker
Circuit Judge Terence T. Evans died on August 10, 2011, and
did not participate in the decision of this case, which is being
resolved by a quorum of the panel under 28 U.S.C. § 46(d).
2 No. 09-4111
terminated Carroll’s employment in 2008 because he
failed to meet his quarterly sales quota. When Stryker
refused to pay him a commission he felt he was
rightfully owed, Carroll sued Stryker in state court for
unpaid wages under Wisconsin’s wage-claim statute
and alternatively sought recovery under equitable con-
tract doctrines. Stryker removed the action to federal
court and later moved for summary judgment, arguing
that Carroll was barred from pursuing a statutory wage
claim because he worked on commission, and also
that equitable contract relief was unavailable because
Carroll’s compensation was the subject of an express
contract.
Carroll responded by voluntarily dismissing his statu-
tory claim and seeking leave to amend his complaint to
add a cause of action for breach of contract. The district
court entered summary judgment for Stryker, agreeing
that Carroll could not recover under any equitable
contract doctrine. The court also denied Carroll’s
motion for leave to amend because the deadline for
amending the pleadings had long since passed and no
reasonable cause had been shown for the undue delay.
Carroll appealed.
At oral argument we noted a possible jurisdictional
issue regarding the amount in controversy. We ordered
supplemental briefing and now conclude that the
damages Carroll seeks exceed the $75,000 threshold for
diversity jurisdiction. See 28 U.S.C. § 1332(a). On the
merits, we affirm. Although Carroll was an at-will em-
ployee, his commission-based compensation was the
No. 09-4111 3
subject of an express contract, which under Wisconsin
law precludes quasi-contractual relief. The district court
did not abuse its discretion in denying leave to amend
the complaint because Carroll’s motion came unjustifi-
ably late in the litigation, many months after the dead-
line for amending the pleadings had passed.
I. Background
In January 2003 Stryker offered Carroll a position as a
marketing associate. At that time Carroll signed an em-
ployment application reflecting that he was a “terminable-
at-will employee” and could be “terminated with or
without cause and with or without notice, at any time, at
the option of either the company or [himself].” Carroll
also signed a confidentiality agreement and an acknowl-
edgment that he had received a copy of Stryker’s em-
ployee handbook. The receipt stated in part:
I understand that any previous contracts, policies, or
representations relating to my employment are no
longer in effect and have been replaced by the Hand-
book. I understand that the purpose of the Handbook
is to inform me of the Company’s policies and rules
and that no one is authorized to make changes in the
terms of this Handbook, except through written
revision authorized by Stryker Leibinger’s General
Manager. Stryker Leibinger may add, change, or
rescind any of the policies, benefits, or practices
listed, with or without advance notice, at the discre-
tion of management.
4 No. 09-4111
Except for the paragraph below [dealing with a six-
month limitation on lawsuits after termination],
I understand that nothing contained in the Handbook
constitutes an employment contract between the
Company and me. I understand that my employment
can be terminated with or without cause and with
or without notice by the Company or by me.
In 2005 Stryker promoted Carroll to commissioned
sales representative and in 2006 assigned him to a
territory in Wisconsin. Every year Stryker sent a written
compensation plan to its commission-based sales
staff outlining the company’s commission structure. As
relevant here, the 2008 compensation plan provided that
for the first six months of employment, a commissioned
sales representative would receive a monthly draw of
$6,000, with commissions paid on a varying percentage
basis (depending on applicable discounts) for orders
above the draw. Starting at month seven, if a sales repre-
sentative’s commissions did not cover the monthly draw,
then the representative would incur a “draw deficit”
recoverable by Stryker. The compensation plan also
included bonuses for meeting or exceeding sales quotas.
The company expressly reserved the right to change
the commission compensation plan at any time.
In 2006 and 2007, Carroll’s sales totaled less than half
of his quota. As a result, for the 2008 calendar year,
Stryker placed Carroll on a “performance improvement
plan” that required him to meet his year-to-date sales
quotas each quarter or face termination. On March 31—the
last day of the first quarter of 2008—Carroll’s sales
No. 09-4111 5
were still under his quarterly quota, but he had a sale
in progress with Aurora Health Care (“Aurora”) that
might allow him to meet his quota and save his job.
That day Carroll emailed an Aurora purchase order to
his supervisor in the amount of $299,008.13. Stryker did
not accept this order, however. Aurora had proposed
substantial modifications to Stryker’s standard terms
and conditions, most of which were unacceptable to
Stryker. In particular, Aurora demanded 120 days to
pay, while Stryker normally required payment to be
made within 30 days. Also, Stryker’s finance depart-
ment had advised Aurora that it would have to sign a
financing agreement to obtain financing for the order.
When presented with this requirement, Aurora re-
fused. Stryker offered a compromise, but Aurora
balked again. In the meantime Carroll’s supervisor ex-
tended his deadline for making his quarterly quota
from March 31 to April 1. When it became clear that
Aurora would not complete the transaction on terms
that were acceptable to Stryker, Stryker informed Carroll
that he had not met his quota as required by his perfor-
mance improvement plan. His employment was termi-
nated on April 2.
After his termination Carroll asked Stryker to treat
the Aurora deal as a “contingent order”—a term for an
unofficial order that would likely be finalized on a
timely basis—so that he could meet his quota, save his
job, and receive a commission. Contingent orders were
generally not permitted, although sales representatives
who were not on performance improvement plans were
sometimes given credit for contingent orders toward
6 No. 09-4111
the end of the year. Because Carroll was on a per-
formance improvement plan, Stryker declined to treat
the Aurora transaction as a contingent order.
Later in April 2008, Stryker resumed negotiations
with Aurora through the sales representative who re-
placed Carroll, but Aurora maintained its refusal to sign
a financing agreement. Stryker eventually arranged for
financing on terms that put itself on the hook to the
financing company if Aurora failed to pay. Stryker ac-
cepted Aurora’s purchase order on April 30, 2008, and
credited Carroll’s replacement with the commission.
Carroll sued Stryker in Wisconsin state court for
unpaid wages under section 109.03 of the Wisconsin
Statutes and also asserted claims for quantum meruit
and unjust enrichment. Carroll’s complaint sought a
little over $67,000 in damages (the commission on the
Aurora deal plus a 50% civil penalty authorized by W IS.
S TAT. § 109.11) in addition to “costs, disbursements, and
attorney’s fees.” Stryker removed the case to federal
district court. In the notice of removal, Stryker asserted
that the $75,000 threshold for diversity jurisdiction was
satisfied by the statutory damages (the commission + the
50% penalty = $67,276.83) plus an award of attorney’s
fees also available by statute (a demand letter from
Carroll’s counsel pegged prefiling attorney’s fees at
$19,105). The docketing sheet accompanying the notice
of removal stated that the complaint demanded
“$67,276.83, plus attorney’s fees.”
In its answer, however, Stryker asserted that Carroll
could not recover under section 109.03 because the
No. 09-4111 7
statute by its terms does not apply to commissioned
sales representatives. Stryker asserted that Carroll was
informed of this by letter from the Equal Rights
Division of the Wisconsin Department of Workforce
Development before he filed his suit in state court. The
letter pointed Carroll to an alternative statutory cause of
action: one under section 134.93 of the Wisconsin Statutes,
which governs wage disputes for commissioned sales
representatives. After Stryker’s answer was filed, the
magistrate judge, presiding by consent of the parties, see
28 U.S.C. § 636(c)(1), held a scheduling conference and
set a deadline for amending the pleadings, which Carroll
let pass without seeking leave to file an amended com-
plaint.
Stryker later moved for summary judgment, reiterating
its defense that section 109.03 did not apply to commis-
sioned sales representatives. In addition, Stryker con-
tended that Carroll’s equitable claims could not pro-
ceed because the 2008 compensation plan constituted
an express contract regarding Carroll’s compensation.
Carroll responded by withdrawing his statutory wage
claim and later moving to amend his complaint to add
a claim for breach of contract. The magistrate judge
granted Stryker’s motion for summary judgment, holding
that equitable contract remedies were unavailable in
light of the express contract governing Carroll’s com-
pensation. The judge also denied leave to amend the
complaint, explaining that Carroll had delayed well
beyond the deadline for amending the pleadings and
had not shown good cause for waiting so long to seek
leave to amend.
8 No. 09-4111
II. Discussion
A. Jurisdiction
Although neither the parties nor the district court
addressed subject-matter jurisdiction, we have an inde-
pendent obligation to satisfy ourselves that jurisdiction
is secure before proceeding to the merits. Smith v. Am.
Gen. Life & Accident Ins. Co., 337 F.3d 888, 892 (7th Cir.
2003); see also McNutt v. Gen. Motors Acceptance Corp., 298
U.S. 178, 189 (1936). At oral argument we asked whether
it was clear that the $75,000 amount-in-controversy re-
quirement for diversity jurisdiction was met, see 28
U.S.C. § 1332(a), and ordered the parties to file supple-
mental briefs on the matter. Not surprisingly, Carroll
argued against federal jurisdiction, while Stryker sup-
ported it.
As the party removing the case to federal court,
Stryker had the initial burden of establishing by a prepon-
derance of the evidence facts that suggest the juris-
dictional amount has been satisfied.1 Oshana v. Coca-Cola
Co., 472 F.3d 506, 511 (7th Cir. 2006). Once it has made
this showing, jurisdiction will be defeated only if it
appears to a legal certainty that the stakes of the lawsuit
do not exceed $75,000. Back Doctors Ltd. v. Metro. Prop. &
1
In Meridian Security Insurance Co. v. Sadowski, 441 F.3d 536, 539-
40 (7th Cir. 2006), we retracted language in previous opinions,
beginning with Shaw v. Dow Brands, Inc., 994 F.2d 364, 366
(7th Cir. 1993), suggesting that the proponent of jurisdiction
must “prove” to a “reasonable probability” that jurisdiction
exists.
No. 09-4111 9
Cas. Co., Inc., 637 F.3d 827, 830 (7th Cir. 2011)
(“[T]he estimate of the dispute’s stakes advanced by the
proponent of federal jurisdiction controls unless a re-
covery that large is legally impossible.”); Rising-Moore
v. Red Roof Inns, Inc., 435 F.3d 813, 815-16 (7th Cir. 2006);
see also St. Paul Mercury Indem. Co. v. Red Cab Co., 303
U.S. 283, 289 (1938). The amount in controversy is evalu-
ated as of the time of removal, Oshana, 472 F.3d at 511,
although events subsequent to removal may clarify what
the plaintiff was actually seeking when the case was
removed, Rising-Moore, 435 F.3d at 816; BEM I, L.L.C. v.
Anthropologie, Inc., 301 F.3d 548, 552 (7th Cir. 2002).
If Carroll’s damages were measured by reference to
the statutory claim alone, the “legal certainty” test might
kick in to defeat jurisdiction. As the Wisconsin Depart-
ment of Workforce Development informed both Carroll
and Stryker before the suit was filed, section 109.03,
Wisconsin’s wage-claim statute, was amended in 2003
to specifically exclude commissioned salespersons. So
Carroll was not a proper claimant under that statute
and could not receive its enhanced recovery of a 50%
penalty and attorney’s fees. The Department told Carroll
that he could potentially file suit under section 134.93,
which provides a statutory cause of action to recover
payment of commissions owed to independent sales
representatives and applies to any sales representative
“who is compensated, in whole or in part, by commis-
sion.” W IS. S TAT. § 134.93(1)(b).
The legal-certainty test sets the bar high for excluding
federal subject-matter jurisdiction, and for good reason:
10 No. 09-4111
District courts should not get bogged down at the time
of removal in evaluating claims on the merits to deter-
mine if jurisdiction exists. See Rising-Moore, 435 F.3d at
816. Nonetheless, removal is obviously improper if juris-
diction never existed in the first place. See Cunningham
Charter Corp. v. Learjet, Inc., 592 F.3d 805, 807 (7th Cir.
2010). Counting the statutory damages—including the
50% penalty and attorney’s fees—toward the jurisdic-
tional amount when the statute by its terms does not
apply would rest jurisdiction on a form of recovery
that was legally impossible. True, this case does not
involve a statutory or contractual cap on dam-
ages—common examples of claims that are considered
“legally impossible” for jurisdictional purposes. See
Johnson v. Wattenbarger, 361 F.3d 991, 994 (7th Cir. 2004).
But from the face of the statute and Carroll’s complaint,
it was clear from the beginning that as a sales representa-
tive who worked on commission, he could not recover
under section 109.03.
But statutory damages are not the sole measure
of the amount in controversy in this case. The com-
plaint also demands “wages and other compensation
and benefits” as general compensatory damages under
the equitable contract doctrines of quantum meruit and
unjust enrichment. In its supplemental brief in this court,
Stryker supplied evidence of Carroll’s damages demand
under these doctrines. First, Stryker pointed to a letter
from Carroll’s counsel sent before the state-court suit
was initiated. In it Carroll demanded $41,122.35 in lost
commissions, nine months of draw in the amount of
$54,000, and prefiling attorney’s fees of $19,105, for a
No. 09-4111 11
total of $114,227.35 in damages. Minus the attorney’s
fees, Carroll’s damages demand totaled $95,122.35. More-
over, Carroll testified in deposition that he was seeking
$50,000 to $60,000 in commissions, $200,000 to $300,000
in lost salary (presumably future salary in the form of
commissions), a 10% bonus, a 401K distribution, and
$15,000 to $20,000 in attorney’s fees.
Finally, during the pendency of the case in federal
court, Carroll’s counsel sent a settlement offer to
Stryker’s counsel by email stating that Carroll had
reduced his demand from an earlier figure of “$100,000 or
more” and would now settle for $60,000 plus certain
nonmonetary relief.2 We also note that the parties
agreed in their proposed findings of fact that Carroll
was seeking $200,000 to $300,000 in lost wages and that
the jurisdictional amount had been met. While litigants
cannot create federal jurisdiction where none exists,
we take this agreement as further proof that the stakes
of the suit exceeded the $75,000 jurisdictional threshold
at the time of removal.
This evidence is enough to establish that the jurisdic-
tional amount has been satisfied. In his supplemental
2
Even though settlement offers are inadmissible to prove
liability under Rule 408 of the Federal Rules of Evidence, they
are admissible to show that the amount in controversy for
jurisdictional purposes has been met. See Rising-Moore v. Red
Roof Inns, Inc., 435 F.3d 813, 816 (7th Cir. 2006) (holding that
“the willingness to accept $60,000 [in a settlement] supports
a conclusion that the ‘controversy’ exceeds $75,000”).
12 No. 09-4111
brief arguing against jurisdiction, Carroll concentrates
solely on the subject of statutory damages, ignoring the
abundant evidence that the stakes of the suit exceeded
the jurisdictional threshold when just the common-law
claims are considered. We conclude that Stryker has
shown more than the “theoretical availability of certain
categories of damages,” McMillian v. Sheraton Chi. Hotel &
Towers, 567 F.3d 839, 844 (7th Cir. 2009) (quotation
marks omitted); it has established that “what the plain-
tiff hopes to get out of the litigation,” Rising-Moore, 435
F.3d at 816, was well over $75,000. Subject-matter juris-
diction is secure, removal was proper, and we proceed
to the merits.
B. Quasi-contractual Remedies
We review de novo a district court’s grant of summary
judgment, construing all facts and reasonable inferences
in favor of the nonmoving party. Musch v. Domtar Indus.,
Inc., 587 F.3d 857, 859 (7th Cir. 2009). Stryker argues
that under Wisconsin law Carroll cannot invoke the
equitable remedies of quantum meruit and unjust en-
richment in light of the parties’ express contract
regarding compensation. Carroll responds that the 2008
compensation plan laying out Stryker’s commission
structure did not amount to an express contract because
he did not sign it, Stryker reserved the right to modify
it, and the receipt for the employee handbook dis-
claimed the existence of a contract.
In Wisconsin the quasi-contractual theories of quantum
meruit and unjust enrichment are legal causes of action
No. 09-4111 13
grounded in equitable principles and can be invoked
only in the absence of an enforceable contract. See Lindquist
Ford, Inc. v. Middleton Motors, Inc., 557 F.3d 469, 476 (7th
Cir. 2009); Meyer v. Laser Vision Inst., 714 N.W.2d 223, 230
(Wis. Ct. App. 2006) (equitable claims barred by express
contract); Greenlee v. Rainbow Auction/Realty Co., 553
N.W.2d 257, 265 (Wis. Ct. App. 1996) (doctrine of unjust
enrichment does not apply where parties have entered
into a valid contract). Where there is an enforceable
contract, the proper claim is for breach of contract; quan-
tum meruit and unjust enrichment are unavailable. See
Lindquist Ford, 557 F.3d at 476; Gorton v. Hostak, Henzl &
Bichler, S.C., 577 N.W.2d 617, 624 n.13 (Wis. 1998);
Schultz v. Andrus’ Estate, 190 N.W. 83, 84 (Wis. 1922)
(“Where a valid, express contract is proven, no recovery
can be had on an implied contract.”). Carroll insists that
there was no express contract between the parties.
We have little trouble rejecting this argument. It is
undisputed that Carroll was an at-will employee; he
had no employment contract. Under employment at
will, the “employer may discharge an employee for
good cause, for no cause, or even for cause morally
wrong, without being thereby guilty of legal wrong.” Tatge
v. Chambers & Owen, Inc., 579 N.W.2d 217, 222-23 (Wis.
1998) (internal quotation marks omitted). Though he
could be discharged at will, his compensation was the
subject of an express contract. The 2008 compensation
plan spelled out in detail the pay structure for Stryker’s
commission-based sales representatives. See Piaskoski &
Assocs. v. Ricciardi, 686 N.W.2d 675, 679 (Wis. Ct. App.
2004) (listing the three basic requirements for a con-
14 No. 09-4111
tract: offer, acceptance, and consideration); Petersen v.
Pilgrim Vill., 42 N.W.2d 273, 274 (Wis. 1950) (“An offer
must be so definite in its terms, or require such definite
terms in the acceptance, that the promises and perfor-
mances to be rendered by each party are reasonably
certain.” (quotation marks omitted)). The parties mani-
fested their consent to be bound by the compensation
plan when Carroll continued to work for the company
after receiving it, and Stryker paid him in accordance
with its terms until he was terminated. Ricciardi, 686
N.W.2d at 679 (holding that “[o]ffer and acceptance
exist when the parties mutually express assent”). This
exchange of services for pay also supplied the consider-
ation. See Wis. Dep’t of Revenue v. River City Refuse
Removal, Inc., 729 N.W.2d 396, 408 (Wis. 2007) (defining
consideration as either a benefit to the promisor or a
detriment to the promisee).
That Carroll did not sign the plan doesn’t mean it’s not
a contract. Carroll accepted the 2008 compensation plan
by performing under its terms, and the lack of his signa-
ture does not defeat this acceptance by performance.
See Chudnow Constr. Corp. v. Commercial Disc. Corp.,
180 N.W.2d 697, 698 (Wis. 1970) (explaining that a
contract may be effective even though it is not signed
by parties). Nor is the contract illusory because
Stryker reserved the right to change the terms of pay-
ment in the future. A promise is illusory and thus unen-
forceable only where one party “assumes no detriment
or obligation” and therefore has given no consideration.
Devine v. Notter, 753 N.W.2d 557, 559 (Wis. Ct. App. 2008).
Here, Stryker undertook an obligation to pay Carroll
No. 09-4111 15
in accordance with the terms of the compensation plan
as long as the plan was in force. A contract can be
modified by future agreement, see Lakeshore Commercial
Fin. Corp. v. Drobac, 319 N.W.2d 839, 845 (Wis. 1982), and
Stryker’s reservation of the right to modify the pay
plan does not make this an illusory contract. The
company agreed to pay for services performed in accor-
dance with the compensation plan’s terms while the
plan was in effect. If Stryker had exercised its right to
modify the commission structure, Carroll would have
had an opportunity to accept the new terms by con-
tinuing to work for the company.
Finally, we reject Carroll’s argument that the receipt
he signed when he accepted a copy of the employee
handbook disclaimed the existence of any contract
between the parties. Carroll is misreading both the
receipt and the employee handbook. The receipt simply
acknowledged that the handbook was meant “to
inform me of the Company’s policies and rules,” and
cautioned that “nothing contained in the Handbook
constitutes an employment contract” and “any previous
contracts, policies, or representations . . . are no longer in
effect and have been replaced by the Handbook.” The
receipt was thus a straightforward acknowledgment of
the handbook’s purpose: It was not an employment
contract but rather a statement of the company’s work-
place policies and practices. By all accounts nothing in
the receipt or the handbook sheds any light on whether
the compensation plan is an enforceable contract;
neither the receipt nor the handbook itself specifies pay-
ment schedules for Stryker’s commission-based em-
16 No. 09-4111
ployees.3 Accordingly, we agree with the magistrate
judge that Stryker’s 2008 compensation plan constitutes
an express contract and Carroll may not recover under
the quasi-contractual doctrines of quantum meruit or
unjust enrichment.
C. Denial of Leave to Amend Complaint
We review a district court’s denial of leave to amend
the complaint for abuse of discretion and “reverse only
if no reasonable person could agree with that decision.”
Schor v. City of Chicago, 576 F.3d 775, 780 (7th Cir. 2009).
The magistrate judge denied the motion to amend
because Carroll had no good cause for missing the
deadline established in the scheduling order and the
undue delay prejudiced Stryker.
Carroll sought leave to amend his complaint more
than seven months after the deadline for amending the
pleadings, less than a month before discovery was to
close, and eleven days after Stryker had filed its reply
to Carroll’s opposition to its motion for summary judg-
ment. Carroll’s counsel insists that he did not fully under-
stand Stryker’s argument that quasi-contractual causes
of action were unavailable until after Stryker had filed
3
While the parties did not include a copy of the employee
handbook in the record, no one has suggested that it contained
specific salary schedules for any of Stryker’s employees. At
oral argument Carroll’s counsel acknowledged that it prob-
ably did not.
No. 09-4111 17
its reply brief in support of its motion for summary
judgment. This is doubtful. Stryker had asserted in its
answer that quantum meruit and unjust enrichment were
unavailable forms of relief, so Carroll was alerted to the
basic problem with these claims—and the need for an
amended complaint substituting a breach-of-contract
claim—at the outset of the federal proceedings.
Regardless, ignorance is hardly a valid reason for
missing the deadline by so many months; the failure to
anticipate an obvious and legally well-grounded defense
does not excuse the delay. More than a month before the
deadline for amending the pleadings, our decision in
Lindquist Motors explained in some detail the conceptual
and remedial distinctions between contract and quasi-
contractual claims under Wisconsin law. 557 F.3d at 476-
81. Accordingly, the magistrate judge reasonably denied
Carroll’s motion for leave to amend based on his lack
of good cause for missing the deadline and the prejudice
to Stryker of allowing an amended complaint so late in
the day. See Alioto v. Town of Lisbon, No. 09-3921, 2011
WL 2642369, at *3 (7th Cir. July 7, 2011) (explaining the
interplay between the requirements of Rule 15(a) per-
taining to amendments to pleadings and Rule 16(b)(4)
pertaining to modifications of scheduling orders);
Trustmark Ins. Co. v. Gen. & Cologne Life Re of Am., 424 F.3d
542, 553 (7th Cir. 2005) (same).
A FFIRMED.
9-6-11