Loading...
HomeMy WebLinkAbout01-1053 CivilMICHAEL SCHRIM, PLAINTIFF RIVERSIDE HEARING SERVICES, INC., DEFENDANT Bayley, J., January 2, 2003:-- IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 01-1053 CIVIL TERM IN RE: WAGE CLAIM OPINION AND VERDICT Plaintiff, Michael Schrim, was employed for defendant, Riverside Hearing Services, Inc., from January, 1999, until April, 2000.1 Plaintiff, who was trained by the owner of defendant, William Kovach, worked as a hearing aid consultant who tested, sold, fitted and provided follow-up care for persons who purchased hearing aids. Plaintiff's employment was terminated by written notice from defendant dated April 10, 2000. Plaintiff instituted this suit seeking (1) unpaid salary and vacation pay, (2) commissions due on his sales of hearing aids, (3) liquidated damages and attorney fees under the Wage Payment and Collection Law,2 and (4) credit for part of a commission retained by defendant. The case was bench tried on December 9 and 23, 2002. Plaintiff maintains that when he undertook employment that defendant, by Defendant operates as Beltone Hearing Aid Centers. 43 P.S. § 260.1 et seq. 01-1053 CIVIL TERM William Kovach, orally agreed to pay him a $400 a week salary plus full commissions on sales. Defendant, by William Kovach, maintains that he offered plaintiff two ways of being paid, (1) full commission on sales,3 or (2) a base salary of $400 per week plus a reduced commission of 10% on sales. One hearing aid consultant who worked for defendant received a base salary plus reduced commissions. All other consultants were paid on full commissions. Kovach testified that plaintiff chose to be paid on full commissions. After some delay by plaintiff he signed a written employment contract on November 11, 1999, providing for wages in the form of full commissions. For all of 1999, plaintiff received wages based on full commissions totaling $34,900. He was terminated on April 10, 2000.4 In 2000, until he was terminated, he received wages based on full commissions of approximately $15,000. In Ingrassia Construction Company, Inc. v. Walsh, 337 Pa. Super. 58 (1984), the Superior Court of Pennsylvania stated that, "In ascertaining the intent of the parties to a contract, it is their outward and objective manifestations of assent, as opposed to their undisclosed and subjective intentions, that matter." After reviewing all of the evidence and weighing the credibility of all of the witnesses, we find that notwithstanding that plaintiff may have hoped and believed that defendant would pay him a salary of $400 per week plus commissions, there was no such meeting of the Commission rates are set on a price list prepared by defendant and are generally 22% of the minimum net sales price net of options. The employment contract was terminable "by either party immediately." -2- 01-1053 CIVIL TERM minds in this regard, or did defendant make an outward and objective manifestation of such assent. The only contact between the parties was for wages based on full commissions as is provided for in plaintiff's written employment contract? Plaintiff is not entitled to his claim for wages at $400 a week totaling $20,400. He is not entitled to his claim for $800 for two weeks vacation pay that is not provided for in the employment contract? In his complaint plaintiff claims commissions due on his sales to seven customers totaling $6,071.95. claim is $5,970. DATE September 2, 1999 December 3, 1999 February 12, 2000 February 25, 2000 March 20, 2000 In conformity with the proofs he offered at trial, the total CUSTOMERS SALE COMMISSION Weaver $4,990 $1,010 Stoerzimer $6,190 $1,010 Frady $5,690 $866 Grissimer $3,000 $505 Ernest $6,190 $1,004 ~ The employment contract contained a notation that, "Addendum not considered part of contract." Defendant testified that this addendum referred to its testing, fitting and post- fitting protocol. Plaintiff testified that it referred to an addendum that he signed, but was not signed by defendant, providing that he would be paid $400 per week plus full commissions. 6 Plaintiff was required to work long hours for 50 weeks a year. He received two weeks vacation without pay. Defendant's dissatisfaction with plaintiff's attendance to his employment resulted in the termination. -3- 01-1053 CIVIL TERM March 29, 2000 March 27, 2000 Jameson Lorenz $5,190 $1,050 $2,595 $525 TOTAL $5,970 William Kovach testified that plaintiff is not entitled to any commissions. argues in his brief: alia: He Plaintiff was not present to make final delivery of the hearing aid devices to customers and as such, was not owed any commissions at time of firing. In other words, the sale, the fitting and the collection of payment from the customer had not been completed, and as such, the final commissions were not owed to plaintiff at time of firing. Defendant cites its testing, fitting, and post-fitting protocol that provides, inter COMMISSION THIS POSITION IS A COMMISSION SALES POSITION. COMMISSION IS STRUCTURED AS A FIXED AMOUNT ON THE SALE, FITTING, AND AFTER-FITTING SERVICE OF HEARING AIDS. SEE CURRENT PRICE LIST FOR CURRENT COMMISSION STRUCTURE. COMMISSION IS PAID BY AN OUTSIDE SERVICE EVERY TWO WEEKS BASED ON THE FITTINGS TO DATE. THE PAYMENT OF COMMISSION MAY BE WITHHELD IF THE FITTING IS UNSUCCESSFUL OR THE SATISFACTION OF THE CLIENT IS IN DOUBT. PARTIAL (1/3) COMMISSION MAY ALSO BE SURRENDERED WHEN ROUTINE FOLLOW-UP PROTOCOL IS NOT DONE AND LOGGED. (Emphasis added.) In its termination letter to plaintiff, defendant stated: You will be paid for your current sales and fitting according to your contract and our company policy. You will have to wait until these contracts are out of recission [sic]. (Emphasis added.) The parties' employment contract provides in pertinent part: -4- 01-1053 CIVIL TERM 4. COMPANY AGREED TO PAY CONSULTANT A COMMISSION BASED ON SALES MADE BY CONSULTANT DURING THE TERM OF THIS AGREEMENT. THE RATE OF COMMISSION TO BE DETERMINED IN ADVANCE BY THE COMPANY AND WILL APPEAR ON THE CURRENT SALES PRICE SHEET. COMMISSIONS SHALL BE PAID BI-WEEKLY BASED ON FITTING AND CONSEQUENT MONIES RECEIVED BY THE COMPANY ON THE CONSULTANTS SALES AND ACCOUNTS. CONSULTANT IS PERSONALLY RESPONSIBLE FOR COLLECTION OF ACCOUNTS AND SHORT-SALES AND NO PAYS WILL BE DEDUCTED FROM EARNED COMMISSIONS, SO THIS IS TO BE AVOIDED BY CONSULTANT. THIS INCLUDES 10% MOLDING FEES ON NEW ORDERS NOT CANCELLED WITHIN THREE BUSINESS DAYS AND THIRTY DAY CANCELS AFTER FITTING. COMMISSIONS WILL NOT BE PAID ON ANY ACCOUNT UNLESS PROPER AND LEGAL FORMS AND CONTRACTS AND HEARING TEST PROCEDURES UNDER PA ACT 262 ARE PROPERLY COMPLETED AND EXECUTED. (Emphasis added.) 12. UPON TERMINATION OF THIS AGREEMENT COMPANY AGREES TO PAY CONSULTANT ON A REGULAR BASIS ALL COMMISSIONS ON ALL ACCOUNTS SOLD AND MONIES RECEIVED ON COMPANY'S BEHALF BY CONSULTANT. COMPANY MAY WITHOLD [SIC] COMMISSIONS ON SALES OF QUESTIONABLE CUSTOMER SATISFACTION, INCLUDING DURING PERIODS OF CUSTOMER RECISSION [SIC] UNDER ACT 262, OR SALES THAT ARE STILL IN RECISSION [SIC]. UPON RESOLUTION OF SUCH SALES AND RECISSIONS [SIC] CONSULTANT SHALL BE PAID ON THE BASIS OF 1/3 FOR THE SALE, 1/3 FOR THE FITTING, AND 1/3 FOR THE FOLLOW-UP OR ANY SALES MADE ON THE COMPANIES BEHALF, LESS ANY UNPAID ACCOUNTS AND SHORT-SALES. (Emphasis added.) A determination of whether plaintiff, whose employment was terminated by defendant, is owed commissions is based on his employment contract, not defendant's protocol/company policy that he admits was not incorporated into the employment contract. The operative part of the employment contract that defendant has failed to apply to plaintiff is that on termination, "upon resolution of such sales and recissions -5- 01-1053 CIVIL TERM [sic] consultant shall be paid on the basis of 1/3 for the sale, 1/3 for the fitting, and 1/3 for the follow-up for any sales made on the companies behalf, less any unpaid accounts and short-sales." It is on this basis that we will review plaintiff's claims for commissions seriatim. WEAVER Defendant claims that plaintiff is not entitled to any commission on the September 2, 1999 sale because when plaintiff was terminated on April 10, 2000, the customer still owed $400 on the $4,990 sale. The customer still owes $326 which defendant testified the company is not likely to receive because the customer is unable to pay. Pursuant to plaintiff's employment contract, he is entitled to a full commission on $4,664 ($4,990 minus $326), or $932.80. STOERZIMER Defendant claims that plaintiff is not entitled to any commission on the December 3, 1999 sale because when plaintiff was terminated the customer still owed $1,000 on the $6,190 sale. The $1,000 was paid on September 17, 2000. Pursuant to plaintiff's employment contract, he is entitled to a full commission of $1,010. FRADY Defendant claims that plaintiff is not entitled to any commission on the February 12, 2000 sale because after plaintiff was terminated Frady changed the hearing aid, and defendant received $432 less than it would have on the initial sale of $5,690. The customer's initial dissatisfaction was resolved and the sale was completed. Plaintiff -6- 01-1053 CIVIL TERM was not involved in the refitting and follow-up care. Pursuant to plaintiff's employment contract, he is entitled to one-third of the commission of $866, or $288.67. GRISSIMER Defendant claims that plaintiff is not entitled to any commission on the February 25, 2000 sale because the paperwork he submitted was incorrect on the $3,000 sale. Notwithstanding, the sale was completed and the customer paid in full. Pursuant to the plaintiff's employment contract, he is entitled to the full commission of $505. ERNEST Defendant claims that plaintiff is not entitled to any commission on the March 20, 2000 sale of $6,190 because (1) the initial testing before the sale to determine the need for the hearing aid was done by another employee, (2) he did the fitting on April 14, 2000, and (3) he did the follow-up care. The employment contract makes no provision for a reduction in commission if prior to the sale by plaintiff another employee conducted the testing on the customer.7 Pursuant to the plaintiff's employment contract, he is entitled to one-third of the commission of $1,004, or $334.67. JAMESON Defendant claims that plaintiff is not entitled to any commission on the March 29, 2000 sale of $5,190 because he did not do the follow-up care, and the customer 7 Plaintiff testified that this happened occasionally. Defendant did not rebut that testimony. -7- 01-1053 CIVIL TERM exchanged hearing aids on July 18, 2000.8 The dissatisfaction of the customer was resolved. Pursuant to the plaintiff's employment contract, he is entitled to one-third of the commission of $1,050, or $350. LORENZ Defendant claims that plaintiff is not entitled to any commission on the March 27, 2000 sale because (1) he did not make the sale (William Kovach claims he sold the hearing aid on March 27, 2000), (2) he did fit it (William Kovach fit it on May 3, 2000), and (3) he did not do the follow-up care. Defendant's own internal documents show that plaintiff sold the hearing aid as he claims. Pursuant to plaintiff's employment contract, he is entitled to one-third of the commission of $525, or $175. In his complaint, plaintiff averred that he is owed $264.88 on a commission he earned on a sale on March 11, 1999, that defendant, on February 7, 2000, withheld from another commission due him. Defendant filed an answer to the complaint averring that the original account was not paid in full, and it retained the $246.88 as credit against other money owed plaintiff "by agreement of the parties." At trial, plaintiff testified that there was no such agreement. Defendant did not rebut this testimony. Plaintiff is entitled to recover the $264.88. The Wage Payment and Collection Law at 43 P.S. Section 260.2(a), defines "Wages," to include "[alii earnings as an employee, regardless of whether determined on time, task, piece, commission or other method of calculation." (Emphasis added.) The second hearing aid cost $600 more than the first. -8- 01-1053 CIVIL TERM Section 260.10 provides: Where wages remain unpaid for thirty days beyond the regularly scheduled payday, or, in the case where no regularly scheduled payday is applicable, for sixty days beyond the filing by the employe of a proper claim or for sixty days beyond the date of the agreement, award or other act making wages payable, or where shortages in the wage payment made exceed five percent (5%) of the gross wages payable on any two regularly scheduled paydays in the same calendar quarter, and no good faith contest or dispute of any wage claim including the good faith assertion of a right of set-off or counter-claim exists accounting for such non-payment, the employe shall be entitled to claim, in addition, as liquidated damages an amount equal to twenty- five percent (25%) of the total amount of wages due, or five hundred dollars ($500), whichever is greater. (Emphasis added.) The total amount of plaintiff's recovery for unpaid wages in the form of commissions is $3,861.02. This lawsuit was filed on February 22, 2001. Sixty days beyond that date is April 22, 2001. The wages have remained unpaid. Based on defendant's complete disregard for plaintiff's employment contract, that provided that on termination and "upon resolution of [plaintiff's] sales and recissions [sic] consultant shall be paid on the basis of 1/3 for the sale, 1/3 for the fitting, and 1/3 for any follow-up on any sales made on the companies behalf less any unpaid accounts and short- sales," defendant's claim that plaintiff is not entitled to any wages after the termination of his employment is not in good faith. Defendant is not entitled to any right of set-off or counterclaim against the wages due plaintiff. Therefore, plaintiff is entitled to liquidated damages of twenty-five percent of the total amount of wages due of $3,861.02, or $965.26. Section 260.9(f) of the Wage Payment and Collection Law provides: -9- 01-1053 CIVIL TERM The court in any action brought under this section shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow costs for reasonable attorneys' fees of any nature to be paid by the defendant. (Emphasis added.) The bulk of plaintiff's claim was for unpaid wages of $20,400 based on his assertion that he was owed a $400 per week salary for the time he worked for defendant. We rejected this claim which constituted a large part of the testimony and evidence. The claim for unpaid commissions and the return of the credit which was wrongfully withheld by defendant, for which we have granted relief, was a straightforward claim that was easy to litigate. However, plaintiff's attorney had to meet with his client, research the claim, make a demand, file a complaint, obtain discovery, communicate with opposing counsel, prepare and litigate the claim before a board of arbitrators,9 prepare a pre-trial memorandum, attend a pre-trial conference, file a trial brief, prepare and litigate the case in this court, and otherwise manage the case. Plaintiff has been billed $18,483.43 for legal fees through November 27, 2000, which does not include the trial. If the claim had been limited to the collection of the commissions and the credit, we find, conservatively, that a reasonable attorney fee would be $5,000, which plaintiff is entitled to recover. In conclusion, we will award plaintiff (1) $3,861.02 for unpaid wages, (2) liquidated damages of $965.26, and (3) an attorney fee of $5,000, for a total of 9 Defendant filed this appeal from an award of the board of arbitrators. -10- 01-1053 CIVIL TERM $9,826.28. Prejudgment interest is due on the $3,861.02 in unpaid wages from April 10, 2000.1° VERDICT AND NOW, this day of January, 2003, plaintiff is awarded $9,826.28 from defendant, with prejudgment interest of six percent per annum from April 10, 2000, on $3,861.02 of that award. By the Court, J. Jay Cooper, Esquire For Plaintiff Richard C. Rupp, Esquire For Defendant :sal Edgar B. Bayley, J. 10 Fernandez v. Levin, 519 Pa. 375 (1988). -11-