Holder v. Kansas Steel Built, Inc.

• Citation: 582 P.2d 244,224 Kan. 406
• Decision Date: 15 July 1978
• Docket Number: No. 48754,48754
• Parties: , 88 Lab.Cas. P 55,221 Harold HOLDER, Appellee and Cross-Appellant, v. KANSAS STEEL BUILT, INC. and Glen T. Childers, Appellants and Cross-Appellees.
• Court: United States State Supreme Court of Kansas

Page 244

582 P.2d 244

224 Kan. 406, 88 Lab.Cas. P 55,221

Harold HOLDER, Appellee and Cross-Appellant, v. KANSAS STEEL BUILT, INC. and Glen T. Childers, Appellants

and Cross-Appellees.

No. 48754.

Supreme Court of Kansas.

July 15, 1978.

Syllabus by the Court

1. A statute is not to be regarded as operating retrospectively because of the mere fact that it relates to antecedent events or draws upon antecedent facts for its operation.

2. A cause of action accrues when the right to institute and maintain a suit arises, or when there is a demand capable of present enforcement.

3. The penalty provisions of K.S.A. 44-315 effective July 1, 1973, are applicable under the facts of this case to commissions becoming due and unpaid in November, 1973.

4. Under K.S.A. 44-315 and K.S.A. 44-316 the penalty authorized can be collected only if the employer knowingly or willfully fails to pay the wages due.

5. "Wages" means compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis less authorized withholding and deductions. (K.S.A. 44-313(C ).)

6. The instructions given by the court adequately advised the jury of the respective contentions of the parties.

7. K.S.A. 44-316(A ) requiring the payment of undisputed wages provides that the employee has the remedies provided by the act only as to "any balance claimed."

8. When an employee elects to pursue the statutory remedy provided in case of willful non-payment of wages he is limited to the penalty provided by the statute, K.S.A. 44-315(B ). He is not entitled to recover punitive damages in addition thereto.

Herbert A. Marshall of Marshall, Hawks, McKinney & Hendrix, Topeka, argued the cause, and William T. Nichols, Topeka, was with him on brief, for appellants and cross-appellees.

Roger Sherwood, Wichita, argued the cause and was on brief, for appellee and cross-appellant.

FROMME, Justice:

Harold Holder brought an action in the district court against his former employer, Kansas Steel Built, Inc., to recover commissions due him together with damages for willful non-payment. Glen T. Childers, the president, a director and the controlling stockholder of the corporation, was joined as a party defendant. The action was tried and a jury awarded $7,857.99 in unpaid commissions and $6,664.64 as the penalty provided for willful non-payment of the commissions under K.S.A. 44-315(B ). The maximum penalty was assessed, I. e., an amount equal to the unpaid commissions less the amount conceded due and tendered by the employer.

The employer appeals on various grounds and the employee Holder cross-appeals claiming the penalty should have equaled the total amount of unpaid wages. Before examining the points raised by the respective parties a factual background must be given.

Holder had been employed by Kansas Steel Built, Inc., as a draftsman and salesman since August, 1968. They were engaged in the sale and construction of steel buildings. Holder was hired to sell and to oversee his projects until they were completed. His work included drafting plans, preparing estimates, negotiating with subcontractors and collecting payment from the customers. During actual construction of a building he checked periodically to see that the work was being done correctly and on schedule. He would make the final inspection of the building with the owner-customer and contact the job superintendent of the subcontractor involved to have any final problems corrected.

When Holder was employed it was agreed his wages would be $1,000.00 per month plus commissions. As to the commissions, it was further agreed that when his sales in any year yielded a gross profit to the company of $60,000.00, or more, Holder was to receive a commission of 20% Of the gross profits of the company from his projects which exceeded the first $60,000.00. After the $60,000.00 minimum was met his commission was to be paid whenever a project was completed and paid for by the customer.

In February, 1973, Mr. Holder gave Mr. Childers and the company one month's notice of termination. Holder had not received his commissions on certain projects sold in 1972 but not yet completed and paid for. Holder prepared an estimate of the gross profit on these jobs and gave the estimate to the corporation's bookkeeper. On March 2, 1973, when his employment terminated, Holder and Childers met and discussed the list of projects on which Holder was to receive his commission when the projects were completed and paid for. Certain adjustments were suggested by Childers and made by Holder on his estimate of gross profit on these projects.

In November, 1973, the Holder projects were finally completed and paid for. The accountant for the corporation, Mr. Melton, determined the corporation's gross profit on each of Holder's 1972 projects by using the company ledger. He then took these ledger sheets to Mr. Childers for his review. When the ledger sheets were returned to the accountant additional charges had been entered in pencil by Childers on the ledger sheets. These added charges substantially reduced the gross profit figures on which Holder's 20% Commission was figured. The total commission when figured on these reduced gross figures came to $1,193.35. Holder's estimate after the March 2 adjustments by Childers came to $5,746.00.

The additional adjustments included charges for the time Mr. Childers and another salesman had spent in inspecting the Holder projects, a bond fee, a $250.00 charge per project for estimated expenses that might be incurred for warranty work, plus expenses for insulation strips. In addition to the foregoing charges a further deduction of $1,960.00 was made from the 20% Commission figure for the use of a company car during the last sixteen months Holder had worked for the corporation. Originally, when Mr. Holder had been furnished a car, he lived in Topeka. In October, 1971, he moved from Topeka to Osage City. The mileage charge made by Childers was for personal use of the company car in driving to and from Osage City. None of these charges or deductions had been made in prior years, and they were not discussed at the meeting on March 2, 1973, when other adjustments were suggested by Mr. Childers and made by Mr. Holder on his estimate.

The commission check covering gross pay of $1,193.35 was issued by the corporation in December, 1973. On the back of the check was typed a statement that "Endorsement herein constitutes full and complete satisfaction of any claim which Harold Holder has or may have for monies or damages against Steel-Built, Inc." On receiving the check and a schedule of deductions Mr. Holder called the office and advised the bookkeeper that someone would be getting in touch with Mr. Childers. The check was returned to the corporation and suit was filed.

The first point raised by defendants-appellants is that the trial court erred in applying K.S.A. 44-315 which became effective July 1, 1973. The appellants contend the statutes in effect prior to July 1, 1973, K.S.A. 44-301, Et seq. (Corrick), should have governed the cause of action because the statutes were in effect when plaintiff's employment terminated.

K.S.A. 44-315(A ) provides that when an employee's employment is terminated the employer is to pay the earned wages not later than the next regular payday upon which he would have been paid if still employed. Subsection (B ) provides:

"If an employer knowingly fails to pay an employee wages as required under subsection (A ) of this section, such employer shall be liable therefor and shall be additionally liable for damages in the fixed amount of one percent (1%) of the unpaid wages for each day, except Sunday and legal holidays, upon which such failure continues after the eighth day after the day upon which paymen (Sic ) is required or in an amount equal to the unpaid wages, whichever is smaller: Provided, That such penalty shall apply only in the event of a willful violation. . . . " (The statute was amended again in 1977. However, the changes were minor and are not relevant here.)

The court instructed the jury in the language of this statute and added:

"If the jury finds that the plaintiff is entitled to recover herein beyond that amount admitted by the defendant ($1,193.35) then they should consider this statute and its application under the facts herein. For this statute to apply the jury must find that the defendant knowingly withheld wages from the plaintiff and that the same was willful on defendant's part. . . . "

Appellants here contend the court's application of this statute was retrospective, because appellee terminated his employment on March 2, 1973, and the statute was not effective until the following July. They argue that retrospective application was improper and affected vested rights.

The appellee contends the court was correct in determining K.S.A. 44-315 applied because under the terms of the employment contract no commission was earned until (1) the sale was made, (2) the construction was completed, (3) the gross profit on all jobs totaled $60,000.00, and (4) the customer had paid for the job. Therefore, his cause of action for breach of contract did not accrue until all prerequisites were met in November of 1973.

Mr. Childers testified the commission was not payable to Mr. Holder until the jobs were completed in late November, 1973. At that time the new statute was in effect. Therefore it would appear the court was correct in applying K.S.A. 44-315. The statute was not applied retrospectively, as appellants contend. This court has held that a statute is not to be regarded as operating retrospectively because of the mere fact that it relates to antecedent events or draws upon antecedent facts for its operation. (In re Estate of McKay, 208 Kan. 282, 285, 491 P.2d 932 (1971).) A cause of action accrues when the right to institute and maintain a suit arises, or when there is a demand...