Opinion
No. C3-00-1356.
Filed February 27, 2001
Appeal from the District Court, Hennepin County, File No. AC99009679.
Robert Edwards, (for appellant)
Joseph F. Lulic, Randall E. Gottschalk, (for respondent)
Considered and decided by Klaphake, Presiding Judge, Amundson, Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Upon her resignation from employment with respondent Midwest Financial Corporation, appellant Barbara Bull filed this lawsuit, alleging failure to pay commissions in violation of Minn. Stat. § 181.14 (1998). Following trial, the court found that Bull was not entitled to commissions on loans that did not close during her employment period because the commissions were not "earned" until the loan closing process was complete. Bull appeals. Because an employer and employee are allowed to define "earned" in a commission situation, we affirm.
DECISION
Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.
Minn.R.Civ.P. 52.01. An appellate court will reverse the trial court's factual findings only if it has "the definite and firm conviction that a mistake has been made." Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) (quotation omitted).
Bull began working for Midwest as a loan officer in September 1997. Bull received a 40 percent commission on the fees involved in closing loans. In November 1998, Bull tendered her resignation with two weeks' notice. Bull had several loans that had not closed by the time she left her employment with Midwest. Midwest's internal policy was to pay commissions on a loan if the closing date was before the loan officer's last day of employment. Thus, Bull did not receive commissions on five of her loans that closed after her last day of employment.
Bull claims that Midwest violated Minn. Stat. § 181.14 by failing to pay her commissions earned on these five loans on which she had worked. That statute provides in part:
When [an] employee quits or resigns employment, the wages or commissions earned and unpaid at the time the employee quits or resigns shall be paid in full[.]
Minn. Stat. § 181.14, subd. 1(a) (1998).
When determining whether the disputed commissions were "earned" by Bull at the time of her discharge, the trial court first applied Minn. Stat. § 181.145, subd. 1 (1998):
For the purposes of this section, the phrase "commissions earned through the last day of employment" means commissions due for services or merchandise which have actually been delivered to and accepted by the customer by the final day of the salesperson's employment.
Applying this definition, the trial court concluded that because the loans had not closed by the last day of Bull's employment, she had not "earned" the commissions within the meaning of section 181.14. Section 181.145, however, only applies to situations where section 181.14 is not applicable, and this occurs only "where disputed commissions are owed an independent contractor, not an employee." See Holman v. CPT Corp., 457 N.W.2d 740, 742-43 (Minn.App. 1990), review denied (Minn. Sept. 20, 1990) (citation omitted). Because Bull was an employee and not an independent contractor, the trial court erred by relying on section 181.145 when interpreting the phrase "earned" as used in section 181.14. See id. (trial court erred by applying section 181.145 where defendant was employee, not independent contractor, because employees governed by sections 181.13 and 181.14).
The trial court's decision was also based on its conclusion that under Midwest's internal policy, a commission was not earned until the loan closed. Since the term "earned" is not defined by statute, the terms of Midwest's internal policy may be considered in determining whether Bull had earned the loan commissions. See id. at 743 (reversing grant of summary judgment where trial court failed to look to employment contract to determine meaning of "actually earned").
An employer and employee are permitted to define "earned" in a commission situation because, by its conception, a commission is uniquely subject to an employee-employer agreement. In this case, the trial court concluded that there was such an understanding, because
[u]nder [Midwest's] internal policy regarding commissions, commissions were to be paid only when a loan closed and [Midwest] received payment during the loan officer's employment.
Because there is significant evidentiary support in the record for the trial court's conclusion that Bull was subject to this policy, the trial court's decision in favor of Midwest is affirmed.