Adkins v. Am. Mine Research, Inc.

• Decision Date: 30 October 2014
• Docket Number: No. 13–0932.,13–0932.
• Citation: 234 W.Va. 328,765 S.E.2d 217
• Court: West Virginia Supreme Court
• Parties: Christopher D. ADKINS, Plaintiff Below, Petitioner, v. AMERICAN MINE RESEARCH, INC., Defendant Below, Respondent.

234 W.Va. 328

765 S.E.2d 217

Christopher D. ADKINS, Plaintiff Below, Petitioner

v.AMERICAN MINE RESEARCH, INC., Defendant Below, Respondent.

No. 13–0932.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 9, 2014.

Decided Oct. 30, 2014.

J. Michael Ranson, Esq., Cynthia M. Ranson, Esq., Ranson Law Offices, Charleston, WV, and G. Patrick Jacobs, Esq., Jacobs Law Office, PLLC, Charleston, WV, for Petitioner.

Lawrence E. Morhous, Esq., Jerad K. Horne, Esq., Brewster, Morhous, Cameron, Caruth, Moore, Kersey & Stafford, PLLC, Bluefield, WV, for Respondent.

Opinion

WORKMAN, Justice:

Petitioner/plaintiff below Christopher Adkins (hereinafter “ petitioner”) appeals the Circuit Court of Kanawha County's August 30, 2013, order granting summary judgment to respondent/defendant below American Mine Research, Inc. (hereinafter “AMR”) in this case brought pursuant to West Virginia Code § 21–5–1 et seq., (2013 Repl.Vol.) the “Wage Payment and Collection Act” (hereinafter “WPCA”). In granting summary judgment to respondent, the circuit court found that AMR's employment agreement with petitioner contemplated that he was paid commissions upon shipment of products and therefore AMR did not violate the WPCA.

Upon careful review of the briefs, the appendix record, the arguments of the parties, and the applicable legal authority, we find that the circuit court erred in granting respondent's motion for summary judgment. We therefore reverse and remand for further proceedings below inasmuch as we find that the circuit court failed to identify the critical factual issues requiring development and therefore erroneously entered summary judgment.

I. FACTS AND PROCEDURAL HISTORY

Petitioner was employed by AMR as an at-will sales representative from October 1, 2000, until August 15, 2010, when he voluntarily resigned. At the beginning of petitioner's tenure with AMR, AMR primarily sold carbon monoxide monitoring systems; in 2006, it began developing and manufacturing tracking and communication devices for miners in response to the Mine Improvement and New Emergency Response Act of 2006. Petitioner began selling the tracking systems in 2008; however, the tracking systems were not approved by the Mine Safety and Health Administration until September, 2009. During the time that the tracking systems were pending approval, petitioner sold approximately $15 million in systems and associated equipment. Although petitioner had no written commission agreement, petitioner was customarily paid his commissions in the month following shipment of the products he sold. The tracking systems did not begin shipping until December, 2009. In November, 2009, just before the tracking devices began shipping, AMR changed petitioner's commission structure essentially cutting his commission into a third of what he expected to receive on sales of the tracking systems already made but not yet shipped.¹ It is this alteration of his commission structure and its application which gives rise to the suit.

When petitioner began selling the tracking systems, his commission rate structure was as follows: $46,000.00 in salary plus a) 1% of sales between $40,000.00 and $80,000.00; b) 2% of sales between $80,000.00 and $100,000.00; and c) 3% of sales over $100,000.00 (hereinafter the “2004 rate structure”). In November, 2009 and retroactive to October 1, 2009, petitioner's commission rate structure was altered as follows: $50,000.00 in salary plus a) 0% for sales up to $300,000.00; b) 3% over $300,000.00 with a cap of $85,000.00 (hereinafter the “2009 rate structure”).

Petitioner concedes that he was paid the proper commission for all orders shipped prior to October 1, 2009. Petitioner further concedes that AMR's custom and practice of paying commissions the month after the product shipped was agreed to and accepted by him. Finally, petitioner concedes that, as an at-will employee, AMR had the right to enact prospective changes to the rate structure. Petitioner, however, takes issue with AMR's application of the 2009 rate structure to sales made prior to that time. Although he agrees that AMR's payment of those commissions upon shipment was proper, he disagrees with application of the rate structure in place at the time of shipment—the 2009 rate structure, as opposed to the rate structure in place at the time of sale—the 2004 rate structure.² Allegedly as a result of this dispute, petitioner resigned in August, 2010.

Petitioner filed the instant action asserting 1) intentional infliction of emotional distress; and 2) violation of the WPCA. In support of his WPCA claim, petitioner alleges that AMR violated West Virginia Code § 21–5–4(c), which requires that “[w]henever an employee quits or resigns, the person, firm or corporation shall pay the employee's wages in full no later than the next regular payday.” Petitioner alleged that upon his resignation, AMR was required to pay him the commissions which he was due and owing by the next regular payday, specifically the amounts owing under the 2004 rate structure for items that he sold while that structure was in place. The parties filed cross-motions for summary judgment. In short, petitioner argued that the commission was “earned” when the sale was made; therefore, the rate structure in place at the time of sale was applicable. Respondent argued that AMR's “custom and practice” of paying petitioner a month after products shipped established that their employment agreement as to the accrual and payment of commissions contemplated that commissions were not “earned” until the product was shipped.

Citing an unpublished Fourth Circuit opinion, the circuit court agreed that the WPCA “ ‘does not regulate the amount of wages, and it does not establish how or when wages are earned.’ ” Gregory v. Forest River, Inc., 369 Fed.Appx. 464, 469 (4th Cir.2010). As such, the court concluded that since “the amount of wages is at issue in this matter ... the implied agreement and custom and business practices of Defendant ... do not contravene any provision of the WPCA.” The circuit court acknowledged the “general rule” that “a person employed on a commission basis to solicit sales orders is entitled to his commission when the order is accepted by his employer,” but found that petitioner's “compensation package and [ ] agreement therewith constitute[d] an exception to the ‘general rule’ such that [petitioner] was not entitled to any commission compensation until shipment of ordered products.” This appeal followed.

II. STANDARD OF REVIEW

As is well-established, “[a] circuit court's entry of summary judgment is reviewed de novo. ” Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). Moreover, “ ‘ “[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syllabus Point 3, Aetna Casualty & Surety Co. v. Federal Insurance Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).’ Syllabus Point 1, Andrick v. Town of Buckhannon, 187 W.Va. 706, 421 S.E.2d 247 (1992).” Syl. Pt. 2, Id. “The circuit court's function at the summary judgment stage is not to weigh the evidence and determine the truth of the matter, but is to determine whether there is a genuine issue for trial.” Syl. Pt. 3, Id.

III. DISCUSSION

This Court has observed that the WPCA is “remedial legislation designed to protect working people and assist them in the collection of compensation wrongly withheld” and therefore must be construed “liberally so as to furnish and accomplish all the purposes intended.” Mullins v. Venable, 171 W.Va. 92, 94, 297 S.E.2d 866, 869 (1982) (citation omitted); State ex rel. McGraw v. Scott Runyan Pontiac–Buick, Inc., 194 W.Va. 770, 777, 461 S.E.2d 516, 523 (1995) (citations omitted). West Virginia Code § 21–5–4(c) provides: “Whenever an employee quits or resigns, the person, firm or corporation shall pay the employee's wages in full no later than the next regular payday.” “Wages” are statutorily defined to include commissions: “The term ‘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 of calculation.” W. Va.Code § 21–5–1(c).

In this case, petitioner contends that when he resigned, the accrued commissions he claims were due and owing under the 2004 rate structure should have been paid to him by the next pay day. Respondent contends that petitioner was customarily paid upon shipment, impliedly (but not expressly) arguing that the rate structure in place at the time of shipment was used to calculate commissions, and that he was not due and owing any additional commission upon his resignation. In support of their positions, the parties argue two competing sets of largely extra-jurisdictional cases³ which purport to resolve the issue of when sales commissions are “earned” for purposes of the WPCA.

To that end, the parties do appear to agree on the applicability of the following generally accepted rule as to entitlement to commission:

As a general rule, a person employed on a commission basis to solicit sales orders is entitled to his commission when the order is accepted by his employer. The entitlement to commissions is not affected by the fact that payment for those orders may be delayed until after they have been shipped. This general rule may be altered by a written agreement by the parties or by the conduct of the parties which clearly demonstrates a different compensation scheme.

Vector Eng'g and Mfg. Corp. v. Pequet, 431 N.E.2d 503, 505 (Ind.Ct.App.1982) (citations omitted). See Little v. USSC Group, Inc., 404 F.Supp.2d 849, 854 (E.D.Pa.2005) (“Generally ... the terms of the contract determine when commissions are computed and paid.”); Davis v. All American Siding & Windows, Inc., 897 N.E.2d 936, 940 (Ind.Ct.App.2009) (“Absent some other arrangement or policy, when an employer makes an agreement to...