Hammons v. NVR, Inc.
Filing
50
MEMORANDUM. Signed by Judge William M Nickerson on 3/11/2015. (jnls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
TROY HAMMONS
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NVR, INC.
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Civil Action No. WMN-14-1673
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MEMORANDUM
Before the Court is Defendant’s Motion for Summary
Judgment.
ECF No. 40.
The motion is fully briefed.
Upon
review of the motion and the applicable case law, the Court
determines that no hearing is necessary, Local Rule 105.6, and
that the motion should be granted in part and denied in part.
I. FACTUAL AND PROCEDURAL BACKGROUND
Most of the relevant facts in this action are undisputed.
Briefly summarized here, but presented in more detail below,
those facts are as follows.
Defendant NVR, Inc. is in the business of selling new homes
in various communities throughout the country.
Defendant
contracts with a purchaser and then builds a home to that
customer’s specifications.
Plaintiff Troy Hammons was employed
by Defendant as a Sales and Marketing Representative (SMR) from
September 2008 through May 2012, except for a brief period in
2009 in which he was laid off because of the poor real estate
market.
As an SMR, Plaintiff was responsible for both procuring
contracts with customers for the purchase of homes and also for
shepherding those contracts through to settlement.
Those post-
contract/pre-settlement responsibilities included: maintaining
contact with the customer, assisting the customer in obtaining
financing, monitoring the construction of the home, dealing with
any change orders, inspecting the home with the customer to
assure it is being built to their specifications, and any other
related tasks to ensure that the customer is satisfied and that
the contract goes to settlement.
Defendant compensates its SMRs under a commission-based
program.
See ECF No. 48-3 (copy of SMR Compensation Program
dated 2/11/11).
Under that Compensation Program, SMRs are paid
a commission, typically $5000 per sale, but do not actually earn
that commission until the contract has been brought to
settlement.
Because the period between contracting and
settlement can be several months, the compensation program
provides for advances to be paid in an amount equal to 50% of
the anticipated commission.
These advances are in the nature of
a loan and must be repaid or used to offset other earned
commissions should the contract not go to settlement.
Id. at 2.
In the spring of 2012, Plaintiff was successfully selling
homes for Defendant in a community known as Ashby Commons in
Easton, Maryland.
When Defendant was unable to come to an
agreement with the developer of that community, it ceased
2
selling homes there and transferred Plaintiff to the closest
development to Plaintiff’s home, a community in Severn,
Maryland, known as Woodberry.1
After the transfer to Woodberry,
Plaintiff was unable to meet his sales quota and several
meetings were held and correspondence generated concerning what
his supervisors perceived to be inconsistent performance on the
part of Plaintiff.
At one such meeting, Plaintiff made a
request for a monthly draw to meet his living expenses.
request was denied.
That
Shortly thereafter, on May 18, 2012,
Plaintiff sent an email to his division manager, Roy Grant,
protesting the criticism of his performance and the denial of
the requested draw and indicating that this email was his
“written notice of resignation,” as of that date.
ECF No. 40-5.
At the time of his resignation, Plaintiff had several home
sales under contract but yet to be brought to settlement.
In
his Amended Complaint, Plaintiff identified 11 home sales that
were under contract at the time that he resigned.
He also
alleged that, to the best of his knowledge, 10 of the 11 went to
settlement.
Plaintiff asserts that the unpaid commissions on
1
In his Amended Complaint, ECF No. 18, Plaintiff alleges he was
transferred to a community known as Evergreen Commons, also in
Anne Arundel County. Id. ¶ 9. Plaintiff further alleged that
he was transferred to this underperforming community with the
goal of forcing him to resign and forfeit his pending
commissions. Id. ¶ 12. In opposing the motion for summary
judgment, Plaintiff makes no further reference to any improper
motive associated with the transfer.
3
these sales are wages due him under the Maryland Wage Payment
and Collection Law (MWPCL), Md. Code Ann., Employ. §§ 3-501 et
seq.
In addition to separate counts in his Amended Complaint
relating to each of these potential commissions (Counts I–XI),
Plaintiff brings an additional claim for unjust enrichment
related to the work he performed procuring all 11 of those sales
(Count XII).2
Defendant answered the Amended Complaint and also
filed counterclaims for breach of contract (Count I) and unjust
enrichment (Count II) to recover the advances paid to Plaintiff
for contracts that did not settle until after his resignation.
Defendant has now moved for summary judgment in its favor both
on Plaintiff’s claims and its own counterclaims.
II. LEGAL STANDARD
“The court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed. R.
Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (citing predecessor to current Rule 56(a)).
The burden
is on the moving party to demonstrate the absence of any genuine
dispute of material fact.
Adickes v. S.H. Kress & Co., 398 U.S.
2
Plaintiff’s original Complaint was filed in the Circuit Court
for Talbot County and contained a single count encompassing the
commissions owed on all 11 pending contracts. ECF No. 2.
Defendant removed the case to this Court and the Plaintiff
subsequently filed an Amended Complaint bringing a separate
MWPCL claim related to each contract and adding the claim for
unjust enrichment.
4
144, 157 (1970).
If sufficient evidence exists for a reasonable
jury to render a verdict in favor of the party opposing the
motion, then a genuine dispute of material fact is presented and
summary judgment should be denied.
See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
However, the “mere
existence of a scintilla of evidence in support of the [opposing
party's] position” is insufficient to defeat a motion for
summary judgment.
Id. at 252.
The facts themselves, and the
inferences to be drawn from the underlying facts, must be viewed
in the light most favorable to the opposing party, Scott v.
Harris, 550 U.S. 372, 378 (2007), who may not rest upon the mere
allegations or denials of his pleading but instead must, by
affidavit or other evidentiary showing, set out specific facts
showing a genuine dispute for trial.
Fed. R. Civ. P. 56(c)(1).
Supporting and opposing affidavits are to be made on personal
knowledge, contain such facts as would be admissible in
evidence, and show affirmatively the competence of the affiant
to testify to the matters stated in the affidavit.
Id.
56(c)(4).
III. DISCUSSION
The MWPCL provides, in pertinent part, that “each employer
shall pay an employee or the authorized representative of an
employee all wages due for work that the employee performed
before the termination of employment, on or before the day on
5
which the employee would have been paid the wages if the
employment had not been terminated.”
Empl. § 3-505.
Md. Code Ann., Lab. &
“Wages” are defined under the MWPCL as “all
compensation that is due to an employee for employment” and are
defined so as to include bonuses and commissions.
501(c)(1)&(2).
Id. § 3–
Section 3–507.2(a) provides the employee with a
civil cause of action to recover wages withheld in violation of
§ 3–505.
Furthermore, courts have held that an employer cannot
contract around the provisions of the MWPCL because “a contract
conflicting with public policy set forth in a statute is invalid
to the extent of the conflict between the contract and that
policy.”
Medex v. McCabe, 811 A.2d 297, 304 (Md. 2002).
The
type of contractual provision most often cited as conflicting
with the public policy embodied in the MWPCL is one that
conditions the payment of a bonus or commission on the
employee’s continued employment at the time that the payment is
to be made.
See, e.g., Id. at 300 (invalidating contractual
provision conditioning payment of incentive fees on the
plaintiff being “employed at the time of the actual payment”);
Rogers v. Sav. First Mortg., LLC, 362 F. Supp. 2d 624, 640-43
(D. Md. 2005) (finding unenforceable a provision that
conditioned payment of year-end bonuses on continued employment
six months after the end of the year in which the bonuses were
earned).
6
Plaintiff asserts that, under the Compensation Program, his
“commissions are expressly contingent on his continued
employment with NVR,” a condition which he characterizes as a
“clear violation of the MWPCL.”
ECF No. 48-2 at 13.
Taken out
of context, some of the language of the Program would appear to
provide support for that assertion.
The Program states,
[T]he commission for the sale of a home is earned only
when (1) settlement (closing) of that sale with the
customer has been completed and (2) provided the SMR
is employed by NVR, Inc. on that date.
ECF No. 48-3 at 1.
The Program further states,
[i]f employment with NVR, Inc. ends for any reason,
other than retirement or death, the SMR will not have
earned or be entitled to any compensation on sales
which have not completed settlement on or before the
SMR’s last day of employment.
Id. at 9.
The Program, however, also explains that the SMR must be
employed through the time of settlement “because SMRs are not
only required to obtain executed purchase agreements . . . but to
also assist in making sure Customer Contracts procured by the SMR
complete settlement (including, but not limited to performing the
duties set forth below) and because NVR, Inc. is not paid until
settlement.”
Id. at 1.
The “duties set forth below” are quite
extensive and include:
(i) acting as a liaison between the customer and the
company and the point of contact for the customer and
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otherwise communicating with the customer to keep the
customer informed of the status of home construction;
(ii) meeting with the customer and processing any
amendments/addenda or other changes to the sales
contract;
(iii) handling the selection process and meeting with
the customer to select items such as cabinets, kitchen
and bathroom fixtures, upgrades, options, etc.;
(iv) attending the pre-start, pre-drywall, and other
meetings with the customer and the production team to,
among other things, review all elements of the master
sheet and site plan and to discuss the building/
construction process;
(v) being available during regular working hours to
take calls and/or meet with the customer to address
customer concerns, questions or requests for changes;
(vi) assisting in and monitoring the loan process,
including assuring that the customer has, within 48
hours, called for an appointment with the lender, and
following up with the customer and mortgage lender to
assure the customer has and maintains financing
allowing the customer to complete settlement;
(vii) keeping the company informed of customer status,
including changes in financial conditions and/or any
behavior or events that could impact on a customer’s
willingness and/or ability to make timely settlement
on the customer’s house;
(viii) monitoring the house construction process to
make certain it is being built per the contract and
customer selections, and providing assistance when
required;
(ix) monitoring the customer’s actions and/or inaction
to make certain the customer is not in default of the
home purchase contract with the company; and
(x) accompanying customers who visit homes under
construction in his/her assigned community and
ensuring that all safety procedures are followed.
8
Id. at 1-2.
An additional factor for requiring continued
employment through settlement is identified as “the continuing
costs to NVR, Inc. of administering sales including (but not
limited to) compensation to other SMRs for assuming the duties
of a departed SMR and servicing sales through settlement.”
Id.
at 1.
In moving for summary judgment, Defendant contends that its
refusal to pay commissions on contracts that were not settled
until after Plaintiff’s voluntary resignation was based on
Plaintiff’s failure to complete all of the tasks necessary to
earn those commissions and not on the simple fact that he was
not employed as of the date of settlement.
Relying primarily on
the Declaration of Plaintiff’s immediate supervisor, Sales
Manager Amy Stoianowski, ECF No. 40-1, Defendant identifies the
tasks that it maintains were unfinished regarding the pending
contracts and the efforts that had to be expended by others to
complete those tasks.
Stoianowski explains that, because
Defendant was closing its business in Easton, Defendant had no
SMRs working in Easton when Plaintiff resigned.
Therefore,
instead of assigning another SMR to the contracts that Plaintiff
had initiated, she took over the accounts herself.
She states
that bringing these contracts to settlement took up a
“significant amount of [her] time and compromised [her] ability
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to devote time and attention to [her] own duties as a Sales
Manager.”
Stoianowski Decl. ¶ 18.
In similar circumstances, courts have found the refusal to
pay post-termination commissions or bonuses to be permissible
under the MWPCA.
In McLaughlin v. Murphy, 372 F. Supp. 2d 465
(D. Md. 2004), the plaintiff was a mortgage broker paid on a
strict commission basis.
His employment agreement specified
that,
[i]t is understood that getting the loan to settlement
is a major part of the Employee's role and that if the
loan is not settled before the employee resigns, is
terminated, laid off, dismissed, or any other action
resulting in the Employee not working for the
Employer, then the Employer will incur administrative
costs and obligations. Thus, the parties agree that
the Employee shall not be entitled to receive
compensation for loans not settled and funded prior to
the termination of employment.
Id. at 472.
The plaintiff had signed up three customers for
mortgage loans that had yet to close at the time that he was
fired and he argued that, under the MWPCL, he was “entitled to
compensation for the work he did perform in prospecting and
developing the loans.”
Id. at 473.
In denying his MWPCL claim, this Court noted that one of
the loans had yet to close at the time the decision was issued
and that the other two loans had to be completely redone because
the plaintiff had signed the customers up for loan programs for
which they did not qualify.
The plaintiff argued in support of
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his claim that “the most difficult aspect of selling mortgage
loans is obtaining clients” and “that placing someone into a new
loan program because the original one was inappropriate is
common and does not require much effort or expenditure.”
Id.
Rejecting that argument, this Court held that,
[t]he language of the contract [] demonstrates
McLaughlin should not have expected to be paid for the
work he performed prior to closing a loan, and that
[the defendant] did not expect to compensate him for
this work. It does not matter that it might be more
difficult to obtain clients than to close loans, or
that placing someone in a new loan program is
relatively simple. The parties agreed when they
signed the contract that McLaughlin would only be paid
when he closed the loans, and he admits that he did
not do so for the three loans in question.
Id.
This Court distinguished the case before it from the
Maryland Court of Appeals’ decision in Medex by observing that
the employment contract at issue in McLaughlin did not condition
payment of commissions on an arbitrary factor such as continued
employment but, instead, on closing the loan.
“It is not
contrary to public policy for [the defendant] to decide that
commissions will only be paid for those loans that are fully
settled,” observing that closing a loan is a key element of the
broker’s job and brokerage fees from settled loans are likely
crucial to the defendant’s income.
Id. at 473-74.
The Court
concluded that “the contract makes clear that his job was to
prospect, develop, and settle loans completely, and that he
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would be paid when those duties were performed.
Under the
MWPCL, only when [the plaintiff] completed all those tasks would
his right to any payment vest.”
Id. at 474.
Similarly, the Maryland Court of Special Appeals considered
the MWPCL claims of an “outside sales representative” for
commissions allegedly due on sales for which he generated
purchase orders while still employed but where the products were
not shipped and invoiced until after he left his employment.
Hoffeld v. Shepherd Elec. Co., Inc., 932 A.2d 1197 (Md. Ct.
Spec. App. 2007).
In affirming the trial court’s rejection of
those claims, the Court of Special Appeals noted that “obtaining
purchase orders is not the lone service to be performed by an
outside salesman and there was more work to be done after a
purchase order was received.”
Id. at 1208.
That additional
work included continuing to service the customer, processing
change orders, and resolving other post-purchase order problems.
On that basis, the court held that the defendant had “a
legitimate, non-pretextual business justification for
designating the shipping/invoice date as the point when a sale
is made and a commission is earned” and thus the commission plan
“was not against the public policy in the MWPCL.”
10.
Id. at 1209-
See also, Adams v. Wells Fargo Advisors, LLC, Civ. No. 12-
2130, 2014 WL 2124447, at *25-27 (D. Md. May 21, 2014)
(following McLaughlin and holding that incentives payable to a
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financial advisor that were conditioned, not only on developing
finance plans for clients, but also on servicing those clients
for a period of nine years did not violate the MWPCL).
Plaintiff appears to have abandoned his claims related to
four of the pending contracts as he makes no response in his
opposition to Defendant’s arguments directed at Counts I, VI, X,
and XI.3
See Grant-Fletcher v. McMullen & Drury, P.A., 964 F.
Supp. 2d 514, 525 (D. Md. 2013) (opining that the plaintiff
appeared to have abandoned claims by not responding to arguments
directed at those claims in the defendant’s summary judgment
motion).
Count VI relates to a contract signed by Paul
Cunningham.
The Cunningham Contract never went to settlement,
Stoianowski Decl. ¶ 27, and thus, Plaintiff has no basis on
which to claim a commission, or to retain the $2,500 advance
that he received on that contract.
3
Therefore, there is no
Where the Amended Complaint references 11 contracts for which
Plaintiff asserted he was entitled to commissions, in his
Opposition he states that, when he resigned, “he had eight
contracts which had not yet closed, but which did close after he
left. Plaintiff had done all, or substantially all, the
necessary work for each account, and therefore, the full
commission for these properties is due and owing to Plaintiff.”
ECF No. 48-2 at 2 (emphasis added). In the portion of his
Opposition captioned as “Material Facts in Dispute,” however, he
only addresses seven of the contracts, the Medved Contract
(Count V), the Spiker Contract (Count II), the Blum Contract
(Count IX), the Smith Contract (Count VIII), the Warner Contract
(Count III), the Nichols Contract (Count VII), and the Trego
Contract (Count IV). Id. at 3-11.
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dispute of fact as to this claim and Defendant is entitled
summary judgment on this claim.
Count X relates to a contract signed by David Lewis.
Plaintiff received an advance of $2500 on this sale but problems
arose with the loan and the contract was cancelled a few days
before Plaintiff’s resignation.4
While that cancellation would
have required Plaintiff to return the advance, in the same month
as the cancellation of the Lewis Contract, another of
Plaintiff’s contracts (the Webb Contract) went to closing
entitling Plaintiff to a $2500 commission.
The Webb Contract is
the subject of Count I of the Amended Complaint.
Defendant
simply offset the commission on the Webb Contract against the
requisite repayment of the advance on the Lewis Contract.
By
failing to address the Lewis Contract or the Webb Contract in
his opposition, Plaintiff concedes that he is owed no further
commissions associated with those transactions.
Count XI relates to a contract signed by James Kever.
Unlike the other sales contracts at issue, the Kever Contract
was for a home, not in Easton, but in Severn, Maryland.
Also
unlike the Easton contracts, the Kever Contract was turned over
to another SMR who worked with Mr. Kever for three months to
4
A new employee picked up the attempted sale to Lewis and was
able to resolve the problems with the loan and a new contract
went to settlement about three months after Plaintiff’s
resignation. Jason Brant Decl., ECF No. 40-6, ¶ 5.
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bring the contract to settlement and whose efforts included
resolving several problems that he had with the home.
SMR was paid a commission on the sale.
The new
Although Plaintiff
questions why that SMR received only a $500 commission, as
opposed to the $2000 that he represents that he would have
received, he makes no other response in his opposition regarding
this contract and the Court finds Defendant is entitled to
summary judgment as to Count X.5
In arguing in his Opposition that he is entitled to
commissions on the remaining contracts, Plaintiff asserts that
he “performed all necessary functions to complete the sales at
issue.”
ECF No. 48-2 at 3.
To prove that assertion, Plaintiff
both challenges Stoianowski’s representations that she did any
meaningful work to bring the contracts to settlement and also
offers affidavits from five of the customers that signed
contracts with Plaintiff – Jeff Medved, Matthew Spiker,
Christopher Warner, Robert Nichols, and Thomas Trego.
48-4, 48-6, 48-7, 48-8, 48-9.
ECF Nos.
In those affidavits, the
customers state generally that Plaintiff did all of the work on
5
There appears to be some confusion as to the amount of the
potential commission on this sale. In its Motion, Defendant
states that Plaintiff received a $2000 advance on this contract
but had the potential to earn $5000 for this sale. Stoianowski
Decl. ¶ 26. In his Opposition, Plaintiff opines that he would
have received an additional $2000. ECF No. 48-2 at 14.
Regardless, it appears undisputed that Plaintiff received an
advance of $2000 related to this contract.
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their sales and that they do not remember work being done by any
other employee of Defendant.
Mr. Medved’s affidavit is typical:
Mr. Hammons helped me through the entire sales
process. I met with him on numerous occasions, he
answered all my questions and was there for me as
needed. I was aware when Mr. Hammons left the
company. I cannot recall having any contact with Amy
Zarewczynski6 or any salesperson after his departure.
I also do not recall any confusion or other issue with
any of the fixtures in my house. Likewise, I cannot
recall any issue with my loan, or that my loan
required modification.
ECF No. 48-4 (emphasis added).
Defendant challenges the submission of these affidavits on
several grounds.
First, Defendant notes that Plaintiff failed
to produce these affidavits in discovery and on that basis,
argues that they should be excluded.
See Fed. R. Civ. P.
37(c)(1) (“If a party fails to provide information or identify a
witness as required by Rule 26(a) or (e), the party is not allowed
to use that information or witness to supply evidence on a motion,
at a hearing, or at a trial, unless the failure was substantially
justified or is harmless.”).
Second, Defendant correctly observes
that, even if not excluded, these affidavits do not create a
dispute of fact because they generally just reflect a lack of
recall on the part of the customer.
See Kennedy v. City of New
York, 570 F. App’x 83, 84 (2d Cir. 2014) (concluding that
deposition testimony which essentially claims a lack of
6
Ms. Stoianowski was then known as Amy Zarewczynski.
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recollection is not sufficient to raise a genuine dispute of fact).
Furthermore, the customer would not necessarily be aware of work
that Stoianowski was doing to bring the contract to settlement as
her tasks involved interaction with others besides just the
customer, including project managers, loan officers, and settlement
administrators.
The Court will not strike or exclude those affidavits7 but
finds, nonetheless, that Plaintiff has failed to generate a genuine
dispute of material fact as to several of his claims as the
undisputed evidence demonstrates that Stoianowski had to perform
more than trivial tasks to bring the relevant contracts to
settlement.
As to the Medved Contract (Count V), settlement did
not occur until a month and a half after Plaintiff resigned.
Stoianowski Decl. ¶ 22.
In the interim, Stoianowski had to resolve
some confusion over fixtures in the basement powder room and also
met weekly with the loan officer to follow up on the loan.
Id.
Medved’s testimony that he simply “does not recall” any issues with
the fixtures in his house or modification of his loan is
insufficient to create an issue of material fact.
Regarding the Smith Contract (Count VIII), the customer, Mary
Ann Smith, retired before going to settlement which resulted in her
loan needing to be rewritten and reevaluated by underwriting.
7
Id.
The Court notes that, while challenging the submission of these
affidavits in its Reply, Defendant did not file an actual motion
to strike or exclude these affidavits. As a result, Plaintiff
was not provided a clear opportunity to oppose their exclusion.
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¶ 24.
Stoianowski states that she had daily conversations with the
loan officer and weekly conversations with Ms. Smith and settlement
was delayed about a month because of these issues.
Id.
The Smith
Contract did not settle until July 30, 2012.
The Warner Contract (Count III) was scheduled to close on June
28, 2012, but the customer’s loan was denied.
Id. ¶ 25.
After a
month of effort and many conversations with the loan officer,
Defendant was able to broker the loan to an outside lender.
Id.
Mr. Warner acknowledges in his affidavit that he “did experience
some complications with the approval of his loan, and ultimately
received financing through another lender.”
ECF No. 48-7.
His
opinion that he “did not require the assistance of Mr. Hammons or
another salesperson regarding this issue” and that he “cannot
recall having any meaningful conversations with Amy [Stoianowski]”
does not create a genuine issue of fact.
He may or may not have
been aware of what efforts Stoianowski was making to resolve the
problems with his loan.
Regarding the remaining four contracts – the Spiker Contract,
the Blum Contract, the Nichols Contract, and the Trego Contract the Court finds that Defendant has not met its burden to
demonstrate its entitlement to summary judgment.
From the limited
record before the Court, it is difficult to discern the true scope
of the work that Stoianowski was called upon to perform regarding
these loans.
As to the Spiker Contract, the loan closed on June
29, 2012, and the only work Stoianowski represents that she
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performed was “keeping in contact with Mr. Spiker and providing the
customer service necessary to bring the sale to settlement.”
Stoianowski Decl. ¶ 21.
In her deposition, Stoianowski
acknowledged that the sale “went smoothly to closing,” Stoianowski
Dep. at 40, and when asked what customer service was necessary, she
testified in only general terms about those tasks.
The only
specific task identified regarding Mr. Spiker’s contract was
setting up a “pre-settlement demonstration,” but she then testified
that, in Mr. Spiker’s case, she did not attend that meeting.
Id.
at 41-42.
Regarding the Blum Contract which also went to settlement on
June 29, 2012, the only specific task that she references was
changing a backsplash that required two conversations with Mr.
Blum.
Stoianowski Decl. ¶ 20.
In her deposition, Stoianowski
clarified that it was not an issue of changing a backsplash, but
that the backsplash was not initially installed so Defendant had to
go back and install one.
Stoianowski Dep. at 62.
As to the
Nichols Contract, which settled on June 27, 2012, the only specific
task identified by Stoianowski besides “keeping in contact with Mr.
Nichols” was preparing a title addendum.
Stoianowski Decl. ¶ 19.
In her deposition, Stoianowski testified that preparing the
addendum took 10 to 12 minutes to draft.
Stoianowski. Dep. at 35.
Finally, as to the Trego Contract, Stoianowski simply states that
her assumed duties were “keeping in contact with Mr. Trego and
providing ongoing customer service.”
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Stoianowski Decl. ¶ 23.
From
her deposition testimony, it could be concluded that the customer
service which she provided appears to have been a single telephone
call in which she introduced herself.
Stoianowski Dep. at 49-50.
In Hoffeld, the Maryland Court of Special Appeals opined that,
while not finding a violation of the MWPCL in the case before it,
“an employee might establish such a violation in circumstances
involving a bright line ‘all or nothing’ commission policy.”
A.2d at 1209.
932
In Rogers v. Savings First Mortgage, LLC, supra,
this Court found such a bright line rule to be unreasonable.
In
Rogers, the defendant cited the difficulty of apportioning a
commission between a terminated loan officer and the individual
taking over the loan and seeing it through settlement as
justification for a “‘bright line rule,’ i.e., that loan officers
receive nothing at all unless they are employed at the time of
closing, regardless of whether any work had to [be] done on the
loan after their termination.”
362 F. Supp. 2d at 643-44.
In
finding that entry of summary judgment for the defendant was
inappropriate on commissions denied under that bright line rule,
this Court noted that,
[a]lthough Plaintiffs admit that some additional work
is often required on pending loans right up until the
time of closing, it is unclear how substantial that
work truly is for each of the different loans at issue
here. Certainly, it is unlikely if much or any
additional work had to be done by others on loans that
closed immediately after a Plaintiff was terminated. .
. . For those loans where no additional work was
done, the relevant considerations are the same as
those in Medex: compensation . . . is being linked to
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the arbitrary factor of employment on a particular
date.8
Id. at 645.
The Court has the same uncertainty here regarding the Spiker,
Trego, Nichols, and Blum Contracts.
While that is not to say that
Defendant will not be able to establish that some further work was
required to bring these sales to settlement, on the current record,
the additional effort referenced appears to be so de minimis that,
drawing all inferences in Plaintiff’s favor, the finder of fact
could conclude that the denial of the commissions for these sales
was simply the result of an impermissible “continuing employment”
requirement.
For this reason, the Court will deny Defendant’s
motion as to these four counts (Counts II, IV, VII, and IX) at this
time.9
The Court finds that Defendant is entitled to summary judgment
as to Plaintiff’s unjust enrichment claim.
Courts, both state and
8
This Court noted in Rogers that there were certain untoward
practices at issue that created further doubt as to whether the
defendant was entitled to summary judgment. Id. at 645. There
do not appear to be any similar allegations here. See, supra,
n.1.
9
The Court notes that the Compensation Program itself at least
implicitly acknowledges the particular inequity of clawing back
the advance in situations where the SMR has completed the
majority of the work on a contract but leaves Defendant’s
employment prior to settlement. The Program allows for
Defendant “to elect to forgo collection of and forgive all or a
portion of outstanding Advances on Non-Settled Sales. . . .”
ECF No. 48-3 at 9. This forgiveness, however, is conditioned on
the SMR signing a release at the time of termination/separation,
something Plaintiff obviously did not do.
21
federal, have consistently held that unjust enrichment claims are
barred where there is a valid and enforceable contract governing
the same subject matter as the unjust enrichment or quasi-contract
claim.
Cnty. Comm’rs of Caroline Cnty. v. J. Roland Dashield &
Sons, Inc., 747 A.2d 600, 607-08 (Md. 2000) (collecting cases).
“Generally, courts are hesitant to deviate from the principle of
the rule and allow unjust enrichment claims only when there is
evidence of fraud or bad faith, there has been a breach of contract
or a mutual recission of the contract, when recission is warranted,
or when the express contract does not fully address a subject
matter.”
Id. at 608-09 (footnotes omitted).
Opposing Defendant’s
motion as to this count and relying on that just-quoted language,
Plaintiff suggests that this rule can be circumvented because both
sides are claiming that the contract was breached.
15.
ECF No. 48-2 at
Defendant notes that Plaintiff did not allege a breach of the
contract in his Complaint or Amended Complaint, but raises the
issue for the first time in his opposition.
Furthermore, the
“breach of contract” exception to the rule is limited to situations
where the alleged breach does not concern the same subject matter
as the claim at issue.
Janusz v. Gilliam, 947 A.2d 560, 568 (Md.
2008); Doll v. Ford Motor Co., 814 F. Supp. 2d 526, 551 (D. Md.
2011). Here, it clearly does.
10
10
By the same reasoning, Plaintiff would be entitled to summary
judgment on Defendant’s unjust enrichment counterclaim, although
Plaintiff did not move for summary judgment.
22
Turning to Defendant’s request for summary judgment in its
favor as to its breach of contract counterclaim, the Court will
grant the motion, but only as it relates to the contracts for which
the Court will grant summary judgment on Plaintiff’s claims.
The
Compensation Program provides that “[a]dvances made to SMRs whose
employment terminates before a corresponding sale has completed
settlement” will be owed by the SMR to Defendant and, are “due,
owing and payable to [Defendant] on the SMR’s last day of
employment.”
ECF No. 48-3 at 2, 9.
Recognizing that in light of
the MWPCL policy discussed above Plaintiff’s right to retain the
advances cannot be conditioned on his employment at the time of
settlement, Defendant moves for summary judgment by arguing
“Plaintiff did not complete all the duties required to bring those
sales to settlement, and therefore failed to earn a commission on
those sales.”
ECF No. 40 at 26.
Except for the claims related to
the Spiker, Blum, Nichols, and Trego Contracts, the Court would
agree, for the reasons stated above, that Plaintiff did not perform
all the work necessary to be entitled to retain the advances.
IV. CONCLUSION
Accordingly, the Court will grant Defendant’s motion for
summary judgment as to Counts I, III, V, VI, VIII, X, XI, and XII
but will deny the motion as to Counts II, IV, VII, and IX of the
Amended Complaint.
The Court will grant Defendant’s motion for
summary judgment as to Defendant’s Counterclaim for breach of
contract as to the advances related to all but the Spiker, Blum,
23
Nichols, and Trego Contracts.
An order consistent with this
memorandum will issue.
_______________/s/________________
William M. Nickerson
Senior United States District Judge
DATED: March 11, 2015
24
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