Stowell v. Action Moving & Storage, Inc.

• Decision Date: 01 June 2007
• Docket Number: No. 05-532.,05-532.
• Citation: 933 A.2d 1128,2007 VT 46
• Court: Vermont Supreme Court
• Parties: Arthur STOWELL v. ACTION MOVING & STORAGE, INC.

933 A.2d 1128

2007 VT 46

Arthur STOWELL v. ACTION MOVING & STORAGE, INC.

No. 05-532.

Supreme Court of Vermont.

June 1, 2007.

Motion for Reargument Denied July 18, 2007.

Thomas C. Nuovo of Bauer, Gravel, Farnham, Nuovo, Parker & Lang, Burlington, for Plaintiff-Appellant.

Gary W. Lange of Swanson & Lange, LLP, Burlington, for Defendant-Appellee.

Present: REIBER, C.J., DOOLEY, JOHNSON and SKOGLUND, JJ., and MORSE, J. (Ret.), Specially Assigned.

¶ 1. DOOLEY, J.

Plaintiff Arthur Stowell appeals the superior court's order denying penalties and attorney's fees under 21 V.S.A. § 347, claiming his employer, defendant Action Moving & Storage, Inc., improperly withheld commission payments in violation of § 342. We-affirm the court's order to the extent it held that commission payments are wages within the meaning of Vermont's wages-and-medium-of-payment law. We reverse the court's order, however, to the extent it held that defendant did not violate § 342 and plaintiff was not entitled to penalties under § 347. We hold that plaintiff is entitled to double damages under § 347 and remand for a determination of costs and attorney's fees pursuant to that statute.

¶ 2. The facts are as follows. Defendant employed plaintiff as a truck driver from January to November 2002. Plaintiff initially performed local hauling jobs, for which he was paid an hourly wage. In April 2002, plaintiff began performing long-haul trucking jobs, for which he was paid by commission, until he voluntarily resigned in November 2002.

¶ 3. In 2002, defendant was an agent of Atlas Van Lines, Inc. ("Atlas"). Atlas divided moving jobs between defendant and other agents and distributed the revenue accordingly. After each move, Atlas provided defendant a moving-distribution sheet showing the amount of money paid each agent for each aspect of the job. Upon receiving the moving-distribution sheet, defendant would determine the commission payment due plaintiff after subtracting advances and other expenses. Defendant completed a driver's commission sheet each week which provided plaintiff with a running total of commission payments, advances, and expenses.

¶ 4. Plaintiff received expense and commission advances of $900 per week¹ and received the balance of the commission for each move about six weeks after the move was completed. Defendant occasionally paid for fuel expenses and Federal Express shipping charges which were deducted from plaintiff's commission payments. Plaintiff was also responsible for damages to the goods he shipped, and defendant held $1,000 of plaintiff's commission aside as a reserve for potential claims. Plaintiff was entitled to the balance of the reserve when the claims period expired. The superior court found the claims period was "several months."²

¶ 5. Plaintiff resigned in November 2002, and on December 6, 2002, alleged he was owed additional commission payments. Defendant made payments to plaintiff of $1,094.88 on December 13, 2002, and $800 on January 17, 2003. Plaintiff subsequently claimed he was entitled to further commission payments. After reconciling advances and other payments, defendant claimed it had actually overpaid plaintiff and refused further payments. Plaintiff filed suit on January 23, 2003.

¶ 6. After two days of trial, the superior court found that plaintiff was entitled to $280.24 on a common law breach-of-contract theory. The court first found that defendant's "bookkeeping records . . . [were] wanting to say the least" and that for many of the commission calculations there were no explanations for the figures. It went through an item-by-item analysis of each party's claims and found the net underpayment to be $280.24. The court arrived at this figure by subtracting "pick and hold" charges ($1015.00), fuel charges ($1,197.25), Federal Express shipping charges ($118.12), and damage claims ($727.67) from the total of all commission payments due plaintiff over the period of his employment. It subtracted from the net total the commission payments and advances actually paid to plaintiff to arrive at the final number. The court concluded that plaintiff's commission payments were wages under 21 V.S.A. § 342, but did not find a violation of that section and refused to assess penalties and attorney's fees for nonpayment as provided in 21 V.S.A. § 347. In response to plaintiffs post-trial motion, the court struck the original judgment of $280.24 and entered judgment for plaintiff in the amount of $2,740.72. The new amount reflected the entire unpaid commission including a part that was to be paid to a third party at plaintiff's direction. The superior court ordered defendant to pay plaintiff this amount, but denied plaintiff's renewed request for penalties and attorney's fees under § 347. Plaintiff appealed.

¶ 7. On appeal, plaintiff claims the court erred in denying penalties under § 347. To resolve, this question, we address four issues in turn: (1) whether plaintiff's commission payments were wages under § 342;³ (2) if so, whether defendant violated § 342 by withholding them; (3) whether plaintiff is entitled to penalties under § 347; and (4) the amount of penalties due.

I.

¶ 8. This case arises out of Vermont's wages-and-medium-of-payment statutes, see 21 V.S.A. §§ 341-347, the overriding intent of which is to ensure that workers are paid in a timely manner. See State v. Carpenter, 138 Vt. 140, 143, 412 A.2d 285, 287 (1980) (explaining intent of § 345 as fostering "regular payment of wages to employees" through penalizing nonpayment); Zablow v. Dep't of Employment Sec., 137 Vt. 8, 9, 398 A.2d 305, 306 (1979) (per curiam) (explaining employer's duty under § 342 to "pay their employees in a timely manner"). As remedial statutes, they must be liberally construed. Carter v. Fred's Plumbing & Heating. Inc., 174 Vt. 572, 574, 816 A.2d 490, 493 (2002) (mem.).

¶ 9. The superior court concluded that plaintiff's commission payments were wages under § 342. The various subsections of that section specify when an employer must pay "the wages earned by such employee." 21 V.S.A. § 342(a). Whether commission payments are wages is a question of statutory interpretation which we review de novo. Wright v. Bradley, 2006 VT 100, ¶ 6, 180 Vt. ___, 910 A.2d 893. When interpreting statutes, our goal is to effectuate the intent of the Legislature. Id. To do so, we look first to the language of the statute and, if the meaning is clear, enforce the statute according to its terms. Id. We consider the "entire statute, including its subject matter, effects and consequences, as well as the reason and spirit of the law." In re Estate of Cote, 2004 VT 17, ¶ 10, 176 Vt. 293, 848 A.2d 264.

¶ 10. Although § 342 regulates the payment of wages, the term "wages" is not defined in that statute or in the surrounding ones. The term is defined, however, in other employment-related statutes in the same title. Thus, 21 V.S.A. § 1301(12), which governs unemployment compensation, defines wages as "all remuneration paid for services rendered by an individual, including commissions." The inclusion of commission payments within "wages" is consistent with the traditional use of the word. See Black's Law Dictionary 1610 (8th ed. 2004) ("Wages include every form of remuneration payable for a given period to an individual for personal services, including salaries, commissions, vacation pay, bonuses . . . ." (emphasis added)). Moreover, this Court has broadly defined wages in other contexts to include most forms of compensation for services rendered. Quinn v. Pate, 124 Vt. 121, 124, 197 A.2d 795, 797 (1964) (stating that wages are synonymous with earnings and thus are compensation for labor).

¶ 11. In addition, most jurisdictions view commission payments as wages for purposes of wage-payment statutes. This is true of jurisdictions with statutes that define wages to include commission payments. See Ariz.Rev.Stat. Ann. § 23-350(5); Colo. Rev. Stat. § 8-4-101(8)(a)(II); Kan. Stat. Ann. § 44-313(c); Md.Code Ann., Lab. & Empl. § 3-501(c)(2); Minn. Stat §§ 181.13(b), 181.145; Neb.Rev.Stat. § 48-1229(4). More importantly, it is true of states with statutes, like ours, that do not include a definition of wages. See Licocci v. Cardinal Assocs., 492 N.E.2d 48, 55-56 (Ind.Ct.App.1986) (noting inclusion of commissions as wages in other chapters of wage-and-hour statutes and citing state workmen's compensation statutes, state employment-security act, and Black's Law Dictionary for support that commissions are wages); Brown v. Navarre Chevrolet, Inc., 610 So.2d 165, 169-71 (La.Ct.App. 1992) (collecting Louisiana cases defining commissions as wages and stating "[i]t is well settled that the term `wages' includes commissions and courts have entertained actions for unpaid commissions under the statute."); Cmty. Telecomm. Corp. v. Loughran, 651 A.2d 373, 376 (Me.1994) (holding that inclusion of commissions as wages under statute aligns with protective purpose of the act and "with authority from several other jurisdictions"); see generally S. Samaro, The Case for Fiduciary Duty as a Restraint on Employer Opportunism under Sales Commission Agreements, 8 U. Pa. J. Lab. & Emp. L. 441, 447 (2006) (collecting cases and statutes stating commissions are wages under most wage-payment statutes).

¶ 12. If there is an argument to be made that commission payments were not intended to be wages under § 342, it lies in the requirements set forth by the statute. Section 342 requires an employer to pay wages to employees "each week . . . the wages earned by such employee to a day not more than six days prior to the date of such payment." 21 V.S.A. § 342(a). On proper notice and consent of the employee, however, it allows an employer to pay "bi-weekly or semi-monthly . . . wages earned by the employee to a day not more than six days prior to the date of the payment." Id. § 342(b).⁴ Further, an employee who voluntarily leaves must be "paid on the last regular pay day, or if there is no...