In re American Shelter Systems, Inc., Bankruptcy No. 581-01485-S.
Citation | 40 BR 793 |
Decision Date | 08 June 1984 |
Docket Number | Bankruptcy No. 581-01485-S. |
Parties | In re AMERICAN SHELTER SYSTEMS, INC., Debtors. |
Court | United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Western District of Louisiana |
Lacey P. Wallace, Shreveport, La., for Trustee.
John W. Luster, Natchitoches, La., for Richard V. Hudson.
Gene Howard, Shreveport, La., Trustee.
The issue before the Court is whether an outside salesman, who was not subject to the control of the employer now in bankruptcy, is entitled to a priority claim under 11 U.S.C. Section 507(a)(3).
The claimant, Rick Hudson, did business as Pacesetter Manufacturing Housing. Mr. Hudson conducts his own company, which is in the business of selling mobile homes, called Pacesetter Manufacturing Housing. Pacesetter is a sole proprietorship. American Shelter Systems has not exercised any control over the actions of Pacesetter. Only in the event that a sale is made, does Pacesetter earn a commission. Mr. Hudson then is in the position of an outside salesman, who independently contracted with American Shelter Systems to sell mobile homes for American Shelter Systems on a commission basis.
The debtor, American Shelter Systems, has filed a petition for relief under the Bankruptcy Code. The claimant, Rick Hudson, is asserting his claim for an earned commission of $1,000.00, which was earned within 90 days before the petition for relief was filed by the debtor as a priority claim under 11 U.S.C. Section 507(a)(3).
11 U.S.C. Section 507(a) states that the following expenses and claims have a priority:
The Court is faced with an interpretation of the intent of 11 U.S.C. Section 507(a)(3). The Trustee argues that the statute was intended to cover employees within a master-servant relationship. The claimant, Mr. Hudson, argues that the statute is broader than this and covers also the commissions of outside salesmen.
To support his position the Trustee cited the following two cases:
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