Lapponese v. Carts of Colo., Inc.
| Decision Date | 26 November 2013 |
| Docket Number | No. ED99023,ED99023 |
| Parties | KEN LAPPONESE, Respondent, v. CARTS OF COLORADO, INC., Appellant. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court
of St Charles County
Honorable Ted Clint House
Introduction
Carts of Colorado, Inc. ("Carts of Colorado") appeals from the judgment of the trial court entered upon a jury verdict in favor of Ken Lapponese ("Lapponese") on his claim for damages relating to unpaid sales commissions. Sections 407.911 et seq. of the Missouri Merchandising Practices Act allows for the recovery of statutory damages and attorneys' fees should sales commissions not be paid following the termination of the relationship between a sales representative and principal.1 Carts of Colorado challenges the inclusion of statutory damages and attorneys' fees in the damages awarded to Lapponese. Carts of Colorado maintains that no contract was terminated as required by Section 407.912 and that Lapponese was not "terminated" within the meaning of Section 407.913 because he voluntarily quit his employment. Lastly, Carts of Colorado contests the award of attorneys' fees to Lapponese, claiming that the awardincluded attorneys' fees incurred by Lapponese defending against Carts of Colorado's separate counterclaim.
Because the termination of Lapponese's relationship with Carts of Colorado falls within the scope of Sections 407.912 and 407.913, we affirm the award of damages. However, because we are unable to determine from the record before us how the trial court calculated the attorneys' fee awarded to Lapponese, we reverse and remand for findings of fact and conclusions of law on the issue of attorneys' fees.
Factual and Procedural History
Viewed in the light most favorable to the verdict, the following facts were adduced at trial. In November 2005, Dan Gallery ("Gallery"), president and CEO of Carts of Colorado, approached Lapponese about a sales position with the company. Carts of Colorado designs and sells carts and kiosks for the food service industry. Gallery sent Lapponese a formal offer of employment on December 20, 2005. The offer stated that Lapponese's employment with Carts of Colorado would be one of "voluntary employment 'at will', and either you or Carts can terminate your employment at any time, for any reason, with or without notice." The offer set forth an annual base salary, and also provided for the payment of commissions under a formula utilizing Lapponese's "generated revenue" in excess of $1,200,000. Lapponese accepted the employment offer on December 21, 2005, and on December 22, 2005, signed a document acknowledging that he understood his employment was "terminable at will, so both the Company and I remain free to end our work relationship at any time." Lapponese later signed a confidential non-disclosure agreement related to his employment with Carts of Colorado on December 27, 2005. Lapponese began work at Carts of Colorado on January 2, 2006.
Lapponese did not generate sufficient revenue to earn a commission in 2006 or 2007. In 2008, Lapponese made a $1.65 million sale to the Dallas Cowboys; however, payment of the $1.65 million was not expected until 2009. Rather than booking all of the revenue from the Cowboys' sale in 2009, Carts of Colorado was to credit $400,000 of the sale to Lapponese's 2008 sales. The remaining revenue was to be booked for 2009. Lapponese received a commission bonus of $16,081 for 2008.
In January 2009, Lapponese discovered that Carts of Colorado actually booked $582,000 of the Dallas Cowboy's sale to 2008, $182,000 more than he had been told. Carts of Colorado did not increase Lapponese's 2008 commission payment to reflect the increased allocation of sales to 2008. As a result, Lapponese claimed an additional $6,646 from Carts of Colorado for his 2008 commission.
In 2009, Lapponese generated $3,612,369 in sales, which entitled him to $120,618.45 in commissions under his agreement. After crediting Lapponese for $36,000 advanced to him during 2009, Carts of Colorado owed Lapponese $84,618.45 in commissions. Carts of Colorado did not pay Lapponese the remaining $6,646 of the 2008 commissions or the $84,618.45 due to him for his 2009 commissions. Carts of Colorado explained to Lapponese that the original employment agreement contained a mistake as to how his commission would be calculated, and that his commission was to be determined by a formula based on gross margin, not gross sales. Believing that Carts of Colorado was not going to pay him all of his earned commissions for 2008 and 2009, Lapponese resigned from the company on January 15, 2010, leaving the commission issue unresolved. Lapponese began working for a competitor, B-R Carts and Kiosks, Inc., on January 18, 2010.
On July 11, 2011, Lapponese filed an amended petition seeking payment of $90,052.09 in commission payments owed to him by Carts of Colorado for 2008 and 2009. Lapponese claimed that Carts of Colorado's refusal to pay the commissions constituted a breach of the employment agreement between the parties. Lapponese further sought payment of statutory damages and attorneys' fees provided under Sections 407.911 through 407.913. Carts of Colorado filed a counterclaim alleging that Lapponese breached its contract with Carts of Colorado and also breached the parties' separate non-disclosure agreement.
The case was tried to a jury in May 2012. At the close of Lapponese's evidence, Carts of Colorado moved for a directed verdict, which was denied by the trial court. After a four-day trial, the jury found in favor of Lapponese on his breach of contract claim and awarded damages totaling $135,000. The jury found against Carts of Colorado on its counterclaims. The trial court entered its judgment ordering that Lapponese recover $135,000 in damages, $69,411.50 in attorneys' fees under Section 407.913, and taxable costs of $2,585.85, for a total judgment of $206,997.35. Carts of Colorado filed a motion for judgment notwithstanding the verdict, new trial, or to amend judgment, which was denied. This appeal follows.
Points on Appeal
Carts of Colorado presents four points on appeal, two of which focus on the meaning of the term "terminated" as used in Section 407.913. First, Carts of Colorado argues that the trial court erred in giving Instruction No. 11, which allowed for an award of statutory damages under Section 407.913 because Lapponese was not "terminated" within the meaning of Section 407.913. Second, Carts of Colorado claims the trial court erred in denying its motions for directed verdict, judgment notwithstanding the verdict, new trial, or to amend judgment because the evidence was undisputed that Lapponese voluntarily resigned his position with Carts ofColorado, and therefore was not "terminated" within the meaning of Section 407.913 as a matter of law. Third, Carts of Colorado asserts that the trial court erred in denying its motions for directed verdict, judgment notwithstanding the verdict, new trial, or to amend judgment because Section 407.912 is applicable only upon the termination of a contract, and the evidence failed to establish that a contract was terminated by any party. Finally, Carts of Colorado avers that the trial court erred in awarding Lapponese attorneys' fees because the award included fees Lapponese incurred defending against Carts of Colorado's counterclaim for breach of the nondisclosure agreement and not in connection with the prosecution of his claim under Section 407.911 et seq.
Standards of Review
Whether a jury was instructed properly is a question of law that we review de novo. Klotz v. St. Anthony's Med. Ctr., 311 S.W.3d 752, 766 (Mo. banc 2010). "Review is conducted in the light most favorable to the submission of the instruction, and if the instruction is supportable by any theory, then its submission is proper." Id. We will reverse for instructional error only if the error resulted in prejudice that materially affects the merits of the action. Id. Instructional error is presumed prejudicial when the verdict is in favor of the party who submits the instruction. Children's Wish Found. Int'l, Inc. v. Mayer Hoffman McCann, P.C., 331 S.W.3d 648, 654 (Mo. banc 2011).
We review a trial court's denial of a motion for directed verdict and a motion for judgment notwithstanding the verdict by determining whether the plaintiff made a submissible case. Drury v. Missouri Youth Soccer Ass'n, Inc., 259 S.W.3d 558, 565 (Mo. App. E.D. 2008). We review the evidence in the light most favorable to the verdict, giving the plaintiff the benefit of all reasonable inferences and disregarding evidence and inferences to the contrary. Johnson v.Allstate Indem. Co., 278 S.W.3d 228, 235 (Mo. App. E.D. 2009). If the denial of a directed verdict or judgment notwithstanding the verdict is based upon a conclusion of law, we review the trial court's decision de novo. Boggs ex rel. Boggs v. Lay, 164 S.W.3d 4, 15 (Mo. App. E.D. 2005). The trial court's interpretation of a statute is an issue of law that warrants de novo review. Gasconade Cnty. Counseling Servs., Inc. v. Missouri Dep't of Health, 314 S.W.3d 368, 372 (Mo. Ct. App. 2010).
Where the award of attorneys' fees is not mandatory, "the granting or refusal to grant attorneys' fees by the trial judge is primarily discretionary and will not be disturbed absent the showing of an abuse of discretion." Tate v. Golden Rule Ins. Co., 859 S.W.2d 831, 835 (Mo. App. W.D. 1993) (quoting City of Lexington v. Seaton, 819 S.W.2d 753 (Mo. App. W.D. 1991)). We will not reverse a trial court's award of attorneys' fees unless the amount awarded is arbitrary or so unreasonable as to indicate "indifference and lack of proper judicial consideration." Tate, 859 S.W.2d at 835.
Discussion
The first two points on appeal...
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