Houben v. Telular Corp.

• Decision Date: 03 November 2000
• Docket Number: Nos. 99-2734,s. 99-2734
• Citation: Houben v. Telular Corp., 231 F.3d 1066 (7th Cir. 2000)
• Parties: (7th Cir. 2000) Susan Cooper Houben, Plaintiff-Appellee/Cross-Appellant, v. Telular Corporation, Defendant-Appellant/Cross-Appellee. & 99-2892
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1066

231 F.3d 1066 (7th Cir. 2000)

Susan Cooper Houben, Plaintiff-Appellee/Cross-Appellant, v. Telular Corporation, Defendant-Appellant/Cross-Appellee.

Nos. 99-2734 & 99-2892

In the United States Court of Appeals For the Seventh Circuit

Argued May 18, 2000

Decided November 3, 2000

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 97 C 1489--Ruben Castillo, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Posner, Diane P. Wood, and Williams, Circuit Judges.

Diane P. Wood, Circuit Judge.

This case is principally about the commissions Susan Cooper Houben claimed she earned working as the director of corporate development for Telular Corporation, a manufacturer of coupling devices for telephones and cellular radios. Houben's employment with Telular came to a rather abrupt end around the same time that she sought to take a second maternity leave, and she later sued for damages under a number of theories. Five claims went to trial, and a jury awarded Houben $98,364 in damages on two of them. Both sides have appealed, Telular from the denial of its motions for summary judgment, judgment as a matter of law, and a new trial, and Houben from the grant of summary judgment in Telular's favor on two of her fraud claims. We find no reversible error in any of the district court's rulings and therefore affirm across the board.

I

Houben became director of corporate development for Telular in 1994. The next year Telular asked her to head the "Motorola Account Team" and focus her energies on selling Telular products to Motorola. As director of corporate development, she was a salaried employee; in her new sales position, however, her compensation changed to a mix of salary and commissions. In August 1995, Houben received a memorandum explaining her new compensation package. In addition to her base annual salary of $75,000, she was eligible to receive monthly sales commissions, an annual bonus, and stock options. The memo described monthly sales commissions as follows

#2 Monthly Sales Commission

Your monthly sales commission will equal one percent of all Motorola generated revenues attributed to the Motorola team. Unless specified differently in writing the Telular team will be credited with 80% of Motorola revenues with the remaining 20% being credit [sic] to the geographic field organization where the equipment was installed.

The maximum amount you can earn from monthly commissions in any one fiscal year is $90,000. Should such a cap be invoked and should you continue to excel in generating revenue above and beyond the point where the cap takes effect, management will recognize such performance when considering the amounts to be granted under items #3 [annual bonus] and #4 [stock options].

An April 19, 1995 memorandum titled "Managing House Account" describes the general operation of Telular's commission plan, including Telular's policy on revenue sharing: "Telular is prepared to pay up to 3% of sales revenue whether that revenue be generated by the geographic field sales force or the Corporate Development staff. . . ." The memorandum went on to explain how the 3% of sales revenues would be allocated among various Telular teams. Neither the general April 1995 memorandum nor thespecific August 1995 memorandum to Houben define the term "revenues."

During Houben's tenure, Motorola was competing for a large order from the telecommunications agency in Hungary. Houben and her team worked to have Telular selected as Motorola's supplier for the deal. For three months of the time leading up to Telular's selection as the supplier (from May 27 to August 21, 1995, to be exact) Houben was out on maternity leave; even then, however, she remained in touch with her team, speaking with them over the telephone and at her home.

The efforts of Houben and her team paid off, as the Hungarian supply contract eventually went to Telular. In the fall of 1995, Telular announced the news that Motorola had agreed to purchase $100 million in Telular products to service the Hungarian deal. (The full $100 million in sales never materialized, but Telular eventually shipped $8.586 million of product to Motorola in 1996 and $21.190 million in 1997.) On January 4, 1996, Houben informed Telular that she was pregnant and would be taking a second maternity leave in August of that year. Later that month Houben was told she was being fired; her employment was terminated on February 2.

Houben never received commission payments related to the sales attributable to the Motorola deal in Hungary. Even though the initial purchase order did not issue until March 1996-- after Houben had been terminated and left Telular--she nonetheless believed that she was entitled to commission payments on the sales that were actually made, because she and her team were responsible for securing the underlying deal.

Houben filed suit in March 1997. In addition to alleging federal claims under Title VII, the Pregnancy Discrimination Act, and the Family and Medical Leave Act, she alleged various state law claims related to the breach of her employment contract (e.g., breach of written employment agreement, fraud, accounting, etc.). In the end, only the three federal claims and the state claims for breach of employment contract and commissions under the Illinois Wage Payment and Collection Act (IWPCA), 820 ILCS 115/14, went to trial. The jury returned a verdict in favor of Telular on the federal claims and in favor of Houben on the state law claims, awarding her damages totaling $98,364.

II

Before turning to the merits of the two appeals, we must discuss an issue concerning our appellate jurisdiction. One of the theories under which Houben proceeded, and for which the jury awarded her damages, arose under the IWPCA. Under that statute, an employer who is ordered, either by the Illinois Department of Labor or a court, to pay wages due an employee and fails to do so within an allotted time, is liable for statutory penalties of 1% per calendar day of delay. 820 ILCS 115/14(b). After the district court denied Telular's post- trial motions, including a motion to set aside the IWPCA award, Houben argued that Telular owed her statutory penalties because it had failed to pay its damages immediately. The district court did not resolve the question of Telular's liability for penalties; instead, it imposed a supersedeas bond of $200,000 on Telular. Telular responded with a motion to stay judgment and for a revised supersedeas bond, requesting a ruling that the IWPCA penalty provision did not apply to this case. Again the district court declined to rule on this issue, but it stayed any penalties from accruing.

Normally the failure to rule on an issue would deprive this court of jurisdiction, as we have jurisdiction only over final judgments of the district courts, 28 U.S.C. sec. 1291, which means that all issues in the litigation must be resolved. Alternatively, the district court may enter a Rule 54(b) judgment if there has been a final resolution of one or more (but not all) claims, allowing the parties to appeal from those parts of the judgment while allowing the district court and the parties to continue working on the remaining issues in district court. See, e.g., Union Oil Co. v. John Brown E&C, 121 F.3d 305, 310-12 (7th Cir. 1997); King v. Gibbs, 876 F.2d 1275, 1277 (7th Cir. 1989).

Even without a Rule 54(b) order, however, there are narrow circumstances in which the existence of unresolved issues in the district court does not defeat the finality of the judgment. The most well known of these is the collateral issue of attorneys' fees, where the failure to issue a final order on fees does not mean that appellate jurisdiction is lacking over the merits appeal. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 200-01 (1988) (a post-judgment award of attorneys' fees is separate from the judgment on the merits for purposes of 28 U.S.C. sec. 1291 and appeals can be taken separately from each). Whether penalties under the IWPCA should be treated the same way as fees is the question now before us.¹

There are important functional similarities between the IWPCA penalties and attorneys' fees. Like fees, IWPCA penalties "cannot be quantified until the entry of final judgment. So, if the pendency of such a claim prevented the judgment from becoming final, it could never become final." Alonzi v. Budget Constr. Co., 55 F.3d 331, 333 (7th Cir. 1995). See Budinich, supra; Patzer v. Board of Regents of the University of Wisconsin System, 763 F.2d 851, 859 (7th Cir. 1985) (same). An outstanding request for costs similarly does not defeat finality. See Wielgos v. Commonwealth Edison Co., 892 F.2d 509, 511 (7th Cir. 1989). Furthermore, unlike a subject like prejudgment interest, which must be resolved before the judgment and incorporated into the judgment, see Osterneck v. Ernst & Whinney, 489 U.S. 169, 175-76 (1989), penalties under the IWPCA do not belong in the judgment. They relate instead to the collection proceed ings; indeed, a right to IWPCA penalties may never even arise--a right to such a payment depends entirely on post-judgment facts. We conclude that the unresolved nature of the IWPCA question does not defeat our appellate jurisdiction, see generally 15B Wright, Miller & Cooper, Federal Practice and Procedure 2d sec. 3915.6, at 347-49 (1992), and we therefore proceed to the merits of the appeal and cross-appeal.

III

A. Telular Appeal

The jury found that Telular breached its contract with Houben and that it had violated the IWPCA for failing to pay her the commissions to which she was entitled. The jury was instructed that it could find for Houben on the breach of contract claim if the contract provided that commissions were earned as soon as a conditional sales agreement was entered into or if it concluded that the contract entitled Houben to commissions if she was the "procuring cause" of...