Bakker v. Thunder Spring-Wareham, LLC

• Decision Date: 17 February 2005
• Docket Number: No. 30383.,30383.
• Citation: 141 Idaho 185,108 P.3d 332
• Parties: Shannon R. BAKKER, an unmarried individual, Plaintiff-Appellant, v. THUNDER SPRING-WAREHAM, LLC, an Idaho limited liability company and Does 1-10 inclusive, Defendants-Respondents.
• Court: Idaho Supreme Court

108 P.3d 332

141 Idaho 185

Shannon R. BAKKER, an unmarried individual, Plaintiff-Appellant, v. THUNDER SPRING-WAREHAM, LLC, an Idaho limited liability company and Does 1-10 inclusive, Defendants-Respondents.

No. 30383.

Supreme Court of Idaho, Boise, December 2004 Term.

February 17, 2005.

Benjamin W. Worst, PC, Ketchum, for appellant. Benjamin W. Worst argued.

Lawson & Laski, PLLC, Ketchum, for respondents. James R. Laski argued.

KIDWELL, Justice Pro Tem.

This is a dispute concerning the payment to an individual of a commission for marketing condominiums. On a motion for summary judgment, the district court found in favor of the employer, Thunder Spring, holding that the employee had to be employed at close of escrow for the commission to be payable. We affirm.

I. FACTS AND PROCEDURAL BACKGROUND

Shannon R. Bakker (Bakker) was employed by Thunder Spring-Wareham, LLC (Thunder Spring), as an on-site sales agent, marketing units at a private resort in Sun Valley. A written contract established the terms of the employment. Regarding compensation, the contract provided:

Your compensation will be $3500 per month paid semi-monthly at $1750 per period. You will also be paid .25% of 1% override on all successful closings of escrow on units at Thunder Spring. This begins as of your first day of employment estimated to be on or about December 30, 2001. This includes all transactions written inside or outside the sales venue, and will be in effect until all units at Thunder Spring close escrow. This will not be applicable for units previously disclosed by the developer or those in a holdover period with McCann Daech Fenton. Further, this is in affect (sic) only during your term of employment with ... Thunder Spring.

(Emphasis added.)

Bakker met with a customer in early 2002. The customer was not satisfied with the available units, so Bakker showed him a model unit that was currently in escrow. The customer liked the model unit. Bakker negotiated a release of the contract on the model unit and her customer entered into a purchase and sale agreement for the model unit on March 23, 2002. Closing was scheduled for April 15, 2002.

The facts surrounding Bakker's termination are in dispute, but the parties have stipulated that Bakker's employment terminated on April 6, 2002. Bakker alleges she found a printed e-mail dated April 5, 2002, that evidenced an intent on the part of Thunder Spring to terminate her employment immediately. Bakker confronted a supervisor with the e-mail. The supervisor produced a letter indicating that her employment would be terminated April 10, 2002. The next day, the supervisor produced two memoranda, dated February 28, 2002, and March 29, 2002, that appeared to be negative performance evaluations. Bakker then terminated her employment immediately.

Thunder Spring asserts that the e-mail was not a termination of Bakker's employment, but notice that Thunder Spring had a concern and wished to discuss it with the director of sales. Thunder Spring asserts that the letter purporting to terminate Bakker's employment on April 10, 2002, was actually only notice that the contract between the marketing company and Thunder Spring was set to terminate on that date. Thunder Spring asserts that the performance evaluations were personally delivered to Bakker and discussed in a private meeting.

The employment terminated on April 6, 2002, at Bakker's insistence. Escrow on the model unit closed on April 15, 2002, with a purchase price of $2,500,000.00. Bakker believed she earned a commission of $6,250.00 for her work, and made a demand for payment pursuant to I.C. § 45-606. Thunder Spring refused to pay the commission. Bakker sued alleging a contractual and statutory claim to her wages, and a claim for quantum meruit. On cross motions for summary judgment, the district court concluded that the contract was unambiguous and required that Bakker be employed at close of escrow in order to be paid the commission. The district court also concluded: 1) the quantum meruit claim failed because of the existence of the express employment contract; and 2) the complaint did not encompass a claim for breach of the covenant of good faith and fair dealing.

II. STANDARD OF REVIEW

Summary judgment is proper when "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In a motion for summary judgment, this Court should liberally construe all facts in favor of the nonmoving party and draw all reasonable inferences from the facts in favor of the nonmoving party. Summary judgment must be denied if reasonable persons could reach differing conclusions or draw conflicting inferences from the evidence presented.

Iron Eagle Dev., L.L.C. v. Quality Design Sys., Inc., 138 Idaho 487, 491, 65 P.3d 509, 513 (2003) (internal citations omitted); see also Willie v. Bd. of Trustees, 138 Idaho 131, 133, 59 P.3d 302, 304 (2002).

III. ANALYSIS

A. A Condition Requiring Employment On The Date Of Close of Escrow For A Commission To Become Payable Does Not Violate The Public Policy Of Idaho.

Whether a contract violates public policy is a question of law for the court to determine from all the facts and circumstances of each case. Quiring v. Quiring, 130 Idaho 560, 566, 944 P.2d 695, 701 (1997) (citing Stearns v. Williams, 72 Idaho 276, 283, 240 P.2d 833, 840 (1952)). Public policy may be found and set forth in the statutes, judicial decisions or the constitution. Quiring, 130 Idaho at 566, 944 P.2d at 701. The district court did not rule on whether or not the term of compensation at issue violates public policy. Because public policy implicates a question of law and this case is postured as a summary judgment motion, this Court may rule on the issue even where the district court did not.

Idaho Code § 45-601 et seq. (Wage Claim Act) governs an employee's claim to wages against the former employer. The statutes do not contain any clear statement of public policy. For a declaration of public policy, Bakker cites Goff v. H.J.H. Co., 95 Idaho 837, 521 P.2d 661 (1974). However, in that case, the issue was the treble damages award allowed by I.C. § 45-615:

[L]egislative intent and public policy support this requirement that treble damages be allowed where unpaid wages are due and owing. The legislature has logically distinguished between injuries to an interest in real property and withheld wages, making the awarding of treble damages discretionary in one case and mandatory in another. The average wage earner depends greatly on the regular receipt of earned wages. If unpaid, serious economic injury may result to the wage earner. The legislature also has recognized that the wage earner would not fully compensated if he were allowed merely to recover his withheld wages because of the costs of attorney's fees and suit. Although attorney's fees are authorized by statute, they can not be awarded unless the wage earner recovers all that he claims. Therefore, in many cases there is a need for additional compensation. Thus, although the award of treble damages does tend to penalize the employer, it also serves to fully compensate the wage earning employee for the injury caused him by the delay he experiences in recovering his withheld wages in a court of law and the expenses connected with the recovery.

Goff, 95 Idaho at 839-40,521 P.2d at 663-64. This is not a statement of public policy dictating an interpretation of the Wage Claim Act in its entirety. Any public policy stated in Goff is directed at the problem of an employer withholding payment of wages post-employment, and the problem of collecting withheld wages. Nothing in Goff is easily read as dictating public policy regarding how employers and employees may negotiate the terms of compensation for the employment.

In addressing a previous version of the Wage Claim Act, this Court stated: "The statute we are considering is designed for the protection of laborers and mechanics and to prevent the necessity of their being delayed in the collection of wages due upon ceasing their employment and the consequent loss of time while awaiting settlement for services rendered." Marrs v. Oregon Short Line R.R. Co., 33 Idaho 785, 789-90, 198 P. 468, 470 (1921). This statement also does not dictate a clear public policy that employers and employees cannot contract for the terms of compensation regarding when wages are earned and/or due, as long as relevant law is respected.

Under federal and state law, an employee must be paid a minimum of $5.15 for all hours worked. 29 U.S.C. § 206(a)(1); I.C. § 44-1502. As expressed in Idaho law, an employee might find himself paid on a time, task, piece or commission basis. I.C. § 45-601(7) ("Wages" means compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece or commission basis.). Under I.C. § 45-608, an employer is required to adhere to a schedule paying its employees at least once a month. In conjunction, these laws require an employer only to pay a minimum wage for all hours worked and to pay employees at least monthly. Beyond that, the Wage Claim Act does not place any limitations on the ability of the employer and employee to contract for the terms of the employee's compensation.

The original rule governing the earning of commissions was that a broker earned a commission when he procured a buyer "ready, willing and able" to purchase property according to the seller's terms. Margaret H. Wayne Trust v. Lipsky, 123 Idaho 253, 259, 846 P.2d 904, 910 (1993) (citing Rogers v. Hendrix, 92 Idaho 141, 438 P.2d 653 (1968)). However, in Trust v. Lipsky, this Court modified that rule to require the purchaser to close the transaction according to the contract, noting that a growing number of courts had adopted the rationale of Ellsworth Dobbs, Inc. v....