Abelman v. Wells Fargo Bank, N.A.
Filing
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MEMORANDUM OPINION. Signed by Judge Mark A. Barnett on 09/30/2013. (bas, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
STEVEN ABELMAN
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Plaintiff,
v.
WELLS FARGO BANK, N.A.
Defendant.
Civil No. MAB 8:13-00669
MEMORANDUM OPINION
Defendant Wells Fargo Bank, N.A. now moves to dismiss Plaintiff Steven Abelman’s
complaint for breach of contract and violation of the Maryland Wage Payment and Collection
Law (“MWPCL”). Md. Code Ann., Lab. & Empl. § 3-505, et. seq. The parties have fully
briefed the issues, and the court now rules without a hearing pursuant to Local Rule 105.6. For
the reasons that follow, the court DENIES Defendant’s motion.
I.
Background & Procedural History
Wells Fargo Bank, N.A. (“Wells Fargo”) employed Steven Abelman (“Plaintiff”) as a
Private Mortgage Banker from September 30, 2010 through April 24, 2012. (Compl. ¶¶ 6-7.)
During Plaintiff’s employment, Wells Fargo agreed to pay him commissions pursuant to the
Wells Fargo Home Mortgage 2011 Incentive Compensation Plan for Private Mortgage Bankers
(“Compensation Plan”). (Compl. ¶ 8.) Under the Compensation Plan, Wells Fargo was to credit
him for commissions on the last day of the month in which each of his loans funded. (Compl. ¶
11.) Wells Fargo would then pay him the commissions on the last pay date of the month
following the month in which the commissions were credited. (Compl. ¶ 11A.)
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When Plaintiff’s employment with Wells Fargo ended, he was working on thirty-seven
loan applications that had not yet closed, and he alleges that these loan applications closed after
he left Wells Fargo’s employment. (Compl. ¶¶ 12, 14.) Plaintiff pleads that he had “performed
all, or virtually all, of the tasks required of a Private Mortgage Banker in order to bring these
loans at issue to close.” (Compl. ¶ 13.) On this basis, Plaintiff asserts that he had earned his
commissions on the thirty-seven loans. (Compl. ¶ 13.) However, Wells Fargo has not paid
commissions to Plaintiff on any of these loans. (Compl. ¶ 15.)
Plaintiff filed this action in the Circuit Court for Montgomery County on January 17,
2013, alleging that Wells Fargo breached its contract by failing to pay him commissions for
loans that closed after he left Wells Fargo’s employment and that the MWPCL prohibits any
terms in the Compensation Plan that serve as a forfeiture of earned wages. Wells Fargo removed
the action to this Court based on diversity jurisdiction on March 4, 2013.
On March 7, 2013, Wells Fargo moved to dismiss Plaintiff’s complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). In its Motion to Dismiss, Wells Fargo avers that,
under the Compensation Plan, it has no obligation to pay commissions to Plaintiff for any of the
loans in question because Plaintiff’s employment ended before the loans at issue closed and,
therefore, he could not have completed all of his obligations with respect to those loans. (Def.’s
Mot. to Dismiss 3, 5.) Wells Fargo further argues the requirement that, in order for the Plaintiff
to receive commissions he be employed by Wells Fargo on the date the loans closed, is valid
under the MWPCL. (Def.’s Mot. to Dismiss 6.)
II.
Standard of Review
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency
of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006). The
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court must consider all well-pleaded allegations in a complaint as true, Albright v. Oliver, 510
U.S. 266, 268 (1994), and must construe all factual allegations in the light most favorable to the
plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999)
(citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)).
A court may only grant a motion to dismiss if the complaint lacks “enough facts to state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007); see also Ashcroft v. Iqbal, 556 U.S. 662 (2009). A claim has facial plausibility when a
plaintiff “pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citation omitted).
“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555 (citations and quotation marks omitted).
In reviewing a motion to dismiss, courts may consider documents attached or
incorporated by reference into the complaint. Phillips v. LCI Int’l, Inc., 190 F.3d 609, 618 (4th
Cir. 1999); Tech. Patents, LLC v. Deutsche Telekom AG, 573 F. Supp. 2d 903, 920 (D. Md.
2008).
III.
Analysis
The parties do not dispute that the Compensation Plan governs Plaintiff’s entitlement to
the commissions he seeks in this lawsuit.1 The Compensation Plan provides:
Provided Employee satisfies all conditions and minimum
requirements as set forth in the Plan, and subject to all Plan terms,
commission credit will be granted on the last day off for the month
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The Compensation Plan was referenced in the Complaint and provided to the Court as Exhibit 1 to the Defendant’s
Motion to Dismiss.
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in which the loan actually funds (i.e., disbursement of funds to the
closing/settlement agent). . . .
....
. . . To earn commissions, bonuses, or other incentives under
this Plan, the Employee must be actively employed by Wells Fargo
through the date commission credit is granted and through the end
of the applicable performance period, unless otherwise expressly
provided in this Plan or required by applicable law. This is an
express condition of earning incentives under this Plan, it being one
purpose of this Plan to provide an incentive to the Employee to
remain in employment with Employer. This condition also
recognizes the Employee’s ongoing job responsibilities with respect
to the closing of loans on which the Employee may be eligible to
receive commissions/incentives. . . .
(Def.’s Mot. to Dismiss Ex. 1 (Compensation Plan 2, 9).)
The Compensation Plan thus conditions payment of commissions on employment with
Wells Fargo on “the date commission credit is granted and through the end of the applicable
performance period, unless otherwise expressly provided in this Plan or required by applicable
law.” (Def.’s Mot. to Dismiss Ex. 1 (Compensation Plan 9).) Wells Fargo interprets this term to
mean that Plaintiff had to remain employed through the loan’s closing to earn a commission. 2
(See Def.’s Mot. to Dismiss 5; see also Def.’s Reply 3.) Plaintiff, in turn, argues that he is
entitled to commissions under the contract and Maryland law because he “performed all or
substantially all of the work necessary” to close the loans at issue. (Pl.’s Opp’n 5; accord
Compl. ¶ 13.)
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The contract language actually conditions commissions on employment “through the date commission credit is
granted and through the end of the applicable performance period, unless otherwise expressly provided in this Plan
or required by applicable law.” (Def.’s Mot. to Dismiss Ex. 1 (Compensation Plan 9).) The MWPCL voids any
contract term that conditions payment on employment through an arbitrary date rather than on completion of the job
in question. See Medex v. McCabe, 372 Md. 28, 39-41 (2002). In its Motion to Dismiss, Wells Fargo’s argument
appears to be limited to whether the Plaintiff needed to remain employed through the loan closing, rather than
through the end of the applicable performance period.
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Under § 3-505 of the MWPCL, employers must pay employees “all wages due for work
that the employee performed before the termination of employment, on or before the day on
which the employee would have been paid the wages if the employment had not been
terminated.” § 3-505. The law defines “wages” as “all compensation that is due to an employee
for employment.” Medex v. McCabe, 372 Md. 28, 35 (Md. App. 2002) (citing § 3-501(c)).
“Commissions are clearly within the scope of the Act, and a cause may arise under the Act for an
employer’s failure to pay commissions earned during employment yet not payable until after
resignation.” Id.
Thus, the MWPCL requires an employer to pay commissions to a former employee if the
employee has done everything required to earn that commission before his or her termination.
Id. at 41; cf Stevenson v. Branch Banking & Trust Corp., 159 Md. App. 620, 635, 646-47 (2004)
(finding severance pay not to be wages earned prior to termination for purposes of MWPCL). A
court will not give force to any contract term that deprives an employee of commissions in
violation of the MWPCL, for example by conditioning payment on employment through the date
the employer pays the commission rather than on the employee’s completion of all legitimate job
functions necessary to earn the commission. See Medex, 372 Md. at 39-41; Hoffeld v. Shepherd
Elec. Co, 176 Md. App. 183, 201-02 (2007).
Wells Fargo argues that its interpretation of the Compensation Plan is valid under the
MWPCL because the requirement that a loan officer remain employed through a loan’s closing
merely recognizes the “ongoing job responsibilities with respect to the closing of loans on which
the Employee may be eligible to receive commissions/incentives.” (Def.’s Mot. to Dismiss Ex. 1
(Compensation Plan 9).) Wells Fargo argues that Plaintiff is not entitled to commissions on the
loans in question because his employment ended before any of the loans closed and therefore he
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could not have satisfied the job responsibilities related to their closings. (See Def.’s Mot. to
Dismiss 5.)
To support its argument, Wells Fargo cites two cases in which the Maryland District
Court concluded that an employee was not entitled to commissions under the MWPCL. In
McLaughlin v. Murphy, the court held that a mortgage broker was not entitled to commissions on
loans that he worked on before his employer terminated his employment because he “did not do
everything required of him under the contract with respect to the three loans at issue.” 372 F.
Supp. 2d 465, 474 (D. Md. 2004). In Hoffeld, the court concluded that a sales representative had
not earned commissions on orders that had not yet shipped because the representative was
responsible for “servicing both the customer and its individual purchase orders through the
shipment date.” 176 Md. App. at 207.
In both cases, however, the court based its decision on detailed evidence addressing the
responsibilities that the employee had failed to complete prior to termination. In McLaughlin,
the evidence indicated that other employees had to rework two of the loans in question and that a
third had not closed as of the time of the proceeding. 372 F. Supp. 2d at 474. In Hoffeld, the
evidence demonstrated that the employer terminated the sales representative before he could
complete significant customer service responsibilities between the time he took certain orders
and the dates they shipped. 176 Md. App. at 204-07. While these cases demonstrate that Wells
Fargo may be justified in its legal position that Plaintiff did not earn the claimed commissions if
he failed to complete certain job responsibilities before he left Wells Fargo’s employment, they
do not answer the factual question of whether such job responsibilities existed and remained
uncompleted.
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This court’s decision in Rogers v. Savings First Mortgage, LLC is instructive in this
regard. 362 F. Supp. 2d 624 (D. Md. 2005). In Rogers, former loan officers for a residential
mortgage company sued to collect unpaid commissions on loans that closed after their
termination. Id. at 627. The employer relied on McLaughlin to argue that the employees were
not entitled to commissions because they were not employed at the time of the loan closings. Id.
at 643. The court denied summary judgment to the employer, observing that the decision would
depend on findings of fact on which the record was yet unclear. Id. at 645-46.
Although 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. . . . For those loans where no additional work
was done, the relevant considerations are the same as those in
Medex: compensation . . . is being linked to the arbitrary factor of
employment on a particular date. . . .
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In light of the evidence in the record, the Court cannot
conclude that Defendants’ bright line rule denying all Plaintiffs their
terminal commissions is reasonable. It may well be that there were
some loans, like the loans in McLaughlin, where another loan officer
had to take over after a Plaintiff left [the employer], had to do
substantial work, and was paid the commission for that work.
Defendants have not provided examples, however, of such a
situation.
Id.; see also Admiral Mortg., Inc. v. Cooper, 357 Md. 533, 537 (2000) (involving jury award of
commissions to employee who had completed responsibilities for developing loans before he
quit, where another team was responsible for processing and closing loans).
The pleadings and the attachments thereto do not sufficiently address what, if any,
responsibilities Plaintiff failed to fulfill before the loans could close. The Compensation Plan
does not specify Plaintiff’s job responsibilities through closing, and Wells Fargo’s attempt to
demonstrate Plaintiff’s remaining responsibilities depends on evidence that did not form part of
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the complaint, the attachments thereto, and the documents referenced within the complaint. See
Phillips, 190 F.3d at 618; Tech. Patents, 573 F. Supp. 2d at 920.
Indeed, Plaintiff pleads that he had in fact “performed all, or virtually all, of the tasks
required . . . to bring the loans at issue to close.” (Compl. ¶ 13.) Construing the assertions in the
Complaint in the light most favorable to Plaintiff, Plaintiff could plausibly prove facts that would
support this scenario.
Defendant has not met its burden of showing that Plaintiff cannot prove facts that would
entitle him to recover commissions under the Compensation Plan and the MWPCL on all or
some of the thirty-seven loans at issue.
IV.
Conclusion
For the foregoing reasons, the court DENIES Wells Fargo’s motion to dismiss. (ECF
No. 10.)
September 30, 2013
s/ Mark A. Barnett
Mark A. Barnett
Judge
United States Court of International Trade
(sitting by designation)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
STEVEN ABELMAN
Plaintiff,
v.
WELLS FARGO BANK, N.A.
Defendant.
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Civil No. MAB 8:13-00669
ORDER
In accordance with the Court’s Memorandum Opinion of this date, and for the reasons
stated therein, it is hereby ORDERED that Defendant’s Motion to Dismiss is DENIED.
s/ Mark A. Barnett
Mark A. Barnett
Judge
United States Court of International Trade
(sitting by designation)
September 30, 2013
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