Gustafson v. SAP America, Inc.
MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that defendant SAP America, Inc.'s motion to dismiss (ECF# 8) is denied as moot. IT IS FURTHER ORDERED that defendant SAP America, Inc.'s motion to dismiss count I of the first amended complaint (ECF #18) is DENIED. Signed by District Judge Stephen N. Limbaugh, Jr on 4/3/2015. (JMC)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
SAP AMERICA, INC.,
Case No. 4:14CV1497 SNLJ
MEMORANDUM AND ORDER
This matter is before the Court on defendant’s motion to dismiss count I of the
first amended complaint. The motion has been fully briefed and the matter is ripe for
disposition. For the following reasons, the Court will deny the motion.
Plaintiff Mark Gustafson, a former Senior Account Executive for SAP America,
Inc., filed this cause of action pursuant to section 407.913 RSMo against defendant SAP
America. Plaintiff alleges that defendant failed to pay him commissions earned in the
course of generating sales on behalf of defendant. Defendant filed a motion to dismiss
arguing it did not owe plaintiff commissions as that term is statutorily defined by section
407.911(1) RSMo. Subsequently, plaintiff filed a first amended complaint setting forth
the claim for violation of section 407.913 RSMo as count I and adding a claim for breach
of contract based on the same allegations as count II. Defendant filed a motion to dismiss
count I of the first amended complaint again arguing that it does not owe plaintiff
commissions as that term is statutorily defined by section 407.011(1) RSMo.
Motion to Dismiss Standard
The purpose of a Rule 12(b)(6) motion to dismiss for failure to state a claim is to
test the legal sufficiency of a complaint so as to eliminate those actions “which are fatally
flawed in their legal premises and deigned to fail, thereby sparing litigants the burden of
unnecessary pretrial and trial activity.” Young v. City of St. Charles, 244 F.3d 623, 627
(8th Cir. 2001) (citing Neitzke v. Williams, 490 U.S. 319, 326-27 (1989)). A complaint
must be dismissed for failure to state a claim if it does not plead enough facts to state a
claim to relief that is plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
560 (2007). A petitioner need not provide specific facts to support his allegations,
Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam), but “must include sufficient
factual information to provide the grounds on which the claim rests, and to raise a right to
relief above a speculative level.” Schaaf v. Residential Funding Corp., 517 F .3d 544,
549 (8th Cir. 2008), cert. denied, 129 S.Ct. 222 (2008) (quoting Twombly, 550 U.S. at
555–56 & n. 3).
In ruling on a motion to dismiss, a court must view the allegations of the
complaint in the light most favorable to the petitioner. Scheuer v. Rhodes, 416 U.S. 232
(1974); Kottschade v. City of Rochester, 319 F.3d 1038, 1040 (8th Cir. 2003). “To
survive a motion to dismiss, a claim must be facially plausible, meaning that the factual
content . . . allows the court to draw the reasonable inference that the respondent is liable
for the misconduct alleged.” Cole v. Homier Dist. Co., Inc., 599 F.3d 856, 861 (8th Cir.
2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). When determining the
facial plausibility of a claim, the Court must “accept the allegations contained in the
complaint as true and draw all reasonable inferences in favor of the nonmoving party.”
Id. (quoting Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir.2005)).
When reviewing a Rule 12(b)(6) motion, if documents outside the pleadings are
presented and not excluded, the motion must be treated as a motion for summary
judgment. Fed.R.Civ.Pro. 12(d). However, “Rule 12(b)(6) motions are not automatically
converted into motions for summary judgment simply because one party submits
additional matters in support of or [in] opposition to the motion.” Gorgo v. Best Buy Co.,
Inc., 760 F.3d 787, 791 (8th Cir. 2014) (citation omitted). Documents that are necessarily
embraced by the pleadings are not matters outside the pleadings for purposes of Rule
Plaintiff seeks recovery of unpaid commissions and statutory penalties under
section 407.913 RSMo which provides:
Any principal who fails to timely pay the sales representative commissions earned
by such sales representative shall be liable to the sales representative . . . an
additional amount as if the sales representative were still earning commissions
calculated on an annualized pro rata basis from the date of termination to the date
of payment. In addition the court may award reasonable attorney's fees and costs
to the prevailing party.
The statute applies if plaintiff was paid based on “commission” as defined in section
407.911(1) RSMo. Section 407.911(1) RSMo defines commission as “compensation
accruing to a sales representative for payment by a principal, the rate of which is
expressed as a percentage of the dollar amount of orders or sales, or as a specified
amount per order or per sale.” Based on the plain language of the statute, there are two
compensation schemes that qualify as commission in Missouri including compensation
expressed as (1) a percentage of the dollar amount of orders or sales, or (2) a specified
amount per order or per sale. Schwab v. National Dealers Warranty, Inc., 298 S.W.3d
87, 90 (Mo.App. E.D. 2009).
In the first amended complaint, plaintiff alleges that his employment included
sales commissions “pursuant to a specified formula” but fails to allege what the formula
contains. This allegation is insufficient to fall within either of the compensation schemes
of the statutory definition of commission. Standing alone, plaintiff’s first amended
complaint fails to plead a compensation scheme that qualifies as a commission under
section 407.911(1) RSMo.
The parties, however, do not address this issue. Instead, the
parties have submitted the Sales Incentive Plan that is the basis for plaintiff’s claim on
the issue of whether the commissions paid under the plan fall within the statutory
definition for purposes of the motion to dismiss.
Because the parties have briefed the sufficiency of plaintiff’s claim based on the
plan and that document is necessarily embraced by the pleadings, the Court will consider
the plan in making its determination. In the plan, commission rate is defined as
“[p]ercentage applied to net commissionable revenue to determine the corresponding
commission payment.” It is, therefore, indisputable that commissions are expressed as a
percentage of a dollar amount (the net commissionable revenue).
The disputed issue is whether commissions are based on a dollar amount of orders
or sales. The plan contains a detailed formula to determine the amount of commissions
owed. However, plaintiff alleges that the commission is still based on a percentage of
sales. Under the plan, the “net commissionable revenue” appears to be an adjusted sales
price used to determine commission. The statute does not preclude the use of a formula
to determine what sales consists of for purposes of commissions. The statute does not
define sales as gross sales or net sales. Based on the plan, plaintiff states a claim under
sections 407.911 and 407.013 RSMo that is plausible on its face. The Court will deny the
motion to dismiss Count I of the first amended complaint.
IT IS HEREBY ORDERED that defendant SAP America, Inc.’s motion to
dismiss (ECF# 8) is denied as moot.
IT IS FURTHER ORDERED that defendant SAP America, Inc.’s motion to
dismiss count I of the first amended complaint (ECF #18) is DENIED.
Dated this 3rd day of April, 2015.
STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE
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