Barnes v. Van Schaack Mortg., a Div. of Van Schaack and Co., 88CA0404

• Decision Date: 11 January 1990
• Docket Number: No. 88CA0404,88CA0404
• Citation: 787 P.2d 207
• Parties: 29 Wage & Hour Cas. (BNA) 1079, 121 Lab.Cas. P 56,801 James N. BARNES, Plaintiff-Appellee, v. VAN SCHAACK MORTGAGE, A DIVISION OF VAN SCHAACK AND COMPANY, Defendant-Appellant. . IV
• Court: Colorado Court of Appeals

Page 207

787 P.2d 207

29 Wage & Hour Cas. (BNA) 1079, 121 Lab.Cas.

P 56,801

James N. BARNES, Plaintiff-Appellee, v. VAN SCHAACK MORTGAGE, A DIVISION OF VAN SCHAACK AND COMPANY Defendant-Appellant.

No. 88CA0404.

Colorado Court of Appeals Div. IV.

Jan. 11, 1990.

Holland & Hart, Roger D. Hunt and Raymond P. Micklewright, Colorado Springs, for plaintiff-appellee.

Braden, Frindt & Krall, P.C., Ralph A. Braden, Colorado Springs, for defendant-appellant.

Opinion by Judge HUME.

Defendant, Van Schaack Mortgage, appeals from the trial court's judgment awarding plaintiff, James N. Barnes, commissions on loans which closed after his termination from employment together with his attorney fees pursuant to § 8-4-114, C.R.S. (1986 Repl.Vol. 3B). We reverse.

Barnes was employed by Van Schaack Mortgage as a loan originator. His duties included contacting potential customers, helping them fill out loan applications, and sending completed applications to a loan processor for review. The applications were then forwarded to an underwriting committee for final approval or rejection. Following final approval of an application, a loan closing was then scheduled for those applicants who ultimately elected to borrow money from defendant.

Pursuant to a Loan Origination Incentive Agreement (incentive agreement), Barnes' compensation included an origination incentive fee (commission) based on the amount of loans which had closed during the year. The incentive agreement included the following provisions:

"Should Mr. Barnes terminate his employment [with defendant] the Incentive Schedule will be adjusted as follows:

a. For loans which are approved prior to the effective date of termination, Mr. Barnes will receive an origination fee in keeping with the Incentive Schedule above, provided such loans close before the end of the calendar month in which termination occurs.

b. For loans which are not approved prior to effective date of termination, Mr. Barnes will receive 50% of the origination fee called for in the Incentive Schedule, again provided such loans close before the end of the month in which termination occurs.

c. In any event, Mr. Barnes will not receive origination fees for loans, whether approved or not, which close subsequent to the last day of the month in which termination occurs."

Barnes' employment as a loan originator was terminated on June 24, 1986. Relying on the above provisions, defendant refused to pay Barnes any commissions on loans he originated before his termination but which were closed after June 30, 1986. Barnes brought this action seeking to recover such commissions.

The trial court determined that the quoted provisions of the incentive agreement violated § 8-4-125, C.R.S. (1986 Repl.Vol. 3B) of the Wage Claim Act. It reasoned that since the Wage Claim Act confers upon employees the right to earned and unpaid compensation, an agreement purporting to forfeit such rights is unenforceable. Alternatively, the court determined that the contractual provisions for forfeiture of commissions are ambiguous and are unenforceable for that reason.

I.

Defendant first contends that the trial court erred in determining that the forfeiture provision is ambiguous and thus unenforceable. We agree.

Whether a written instrument is inherently ambiguous is a question of law to be determined by the court, and we are not bound by the trial court's findings or conclusions as to that issue. Buckley Brothers Motors, Inc. v. Gran Prix Imports, Inc., 633 P.2d 1081 (Colo.1981).

In ascertaining whether provisions of a written agreement are ambiguous, the instrument's language must be examined in accord with the plain and generally accepted meaning of the words used. Radiology Professional Corp. v. Trinidad Area Health Ass'n, 195 Colo. 253, 577 P.2d 748 (1978).

Extrinsic evidence and presumptive rules in aid of construction may be used only if the instrument itself is ambiguous, unclear, or uncertain as to the meaning the parties intended by it. Pepcol Manufacturing Co. v. Denver Union Corp., 687 P.2d 1310 (Colo.1984).

Here, the agreement states in clear and unequivocal language that plaintiff is not entitled to receive incentive fee commissions on loan applications that he took but that did not result in loan closings within the month when his employment terminated.

We conclude the agreement is clear, unequivocal, and unambiguous on its face and, thus, must be enforced as written. See Fontius Shoe Co. v. Lamberton...