Opinion
No. 2-655 / 01-1145.
Filed December 11, 2002.
Appeal from the Iowa District Court for Scott County, JAMES E. KELLEY, Judge.
An employer appeals from the district court's judgment ordering it to pay commissions, liquidated damages, and attorney's fees under Iowa Code chapter 91A (1999). AFFIRMED.
Kyle D. Williamson of Hopkins Huebner, P.C., Davenport, for appellant.
Paul L. Macek of Dircks, Ridenour and Macek, Davenport, for appellee.
Heard by VOGEL, P.J., and ZIMMER and HECHT, JJ.
An employer appeals from the district court's judgment ordering it to pay commissions, liquidated damages, and attorney's fees to a former employee under Iowa Code chapter 91A (1999). The employer argues the district court erred in finding that through its prior course of conduct it had waived any claim for overages that occurred when the employee's annual draws exceeded the commissions he had earned. It also claims the court erred in improperly extending section 91A.3 to preclude the employer from seeking recovery of such overages more than twelve months after they occurred. We affirm.
I. BACKGROUND FACTS AND PROCEEDINGS.
In September 1993, Charles Butler began working for Crystal Refrigeration, Inc. as a salesman. His wage agreement with Crystal Refrigeration provided in relevant part:
[I]t is understood that Charlie's salary will be based on a 33% of net profit of equipment sales that Charlie produces. This will be based on the monthly sales reports that are generated from Crystal's computer. Charlie will receive a [sic] annual draw of $26,000, which will be paid out semi-monthly, and will need adjusting based on sales.
Butler resigned his position in January 1999. He eventually filed suit to recover payment for unpaid commissions and vacation time. His employer counterclaimed, seeking recovery for overpayments that Butler had received when his annual draw exceeded his commissions during the twelve-month period ending September 30, 1997.
Following a nonjury trial, the district court found in favor of Butler, awarding him $22,583.90 in damages and liquidated damages under the Iowa Wage Payment Collection Law. Iowa Code ch. 91A. The court also awarded Butler attorney fees and costs. The court denied Crystal Refrigeration's counterclaim.
The court found that through its prior course of conduct, Crystal Refrigeration had waived any claim for overages that had occurred when Butler's annual draws exceeded his commissions. The district court also held that "by necessary implication" the language in Iowa Code section 91A.3 prevents an employer from seeking recovery of such overages more than twelve months after they are alleged to have occurred. This appeal by Crystal Refrigeration followed.
II. SCOPE OF REVIEW.
This is a case in law, not equity, where jury trial was waived. Accordingly, we review for errors of law and the trial court's findings of fact are reviewed as if they were a special verdict. Iowa R.App.P. 6.4; Wolf v. DaCom Inc., 499 N.W.2d 728, 730 (Iowa Ct.App. 1993).
III. DISCUSSION.
Crystal Refrigeration first contends the trial court erred in finding that Crystal owes any wages, salary, or commissions to Charles Butler. We disagree.
On September 20, 1993, Butler accepted and signed a written employment contract drafted by the president of Crystal Refrigeration. During his first year of employment, Butler demanded and received an increase in his salary. Butler had annual reviews after the end of each fiscal year. His annual review was normally held in October or November.
In Butler's first year of employment (1993-1994), he was paid $29,020 in salary. His annual draw for his first year exceeded his commissions by $16,037.21. At Butler's year-end review in October of 1994, Crystal Refrigeration did not request the return of the sum of $16,037.21.
In Butler's second year (1994-1995), he was paid $33,600 in salary. His annual draw for that twelve-month period exceeded his commissions by $4,280.73. At his annual review, Crystal Refrigeration made no demand for return of any part of the excess of salary over commissions.
In Butler's third year (1995-1996), he was paid $34,200 in salary for the twelve months ending September 30, 1996. Crystal Refrigeration's business records show Butler's commissions exceeded his draw by $9,093.91. Following Butler's annual review, Crystal paid him the sum of $9,093.91 by check.
In Butler's fourth year (1996-1997), he was paid $41,400 in salary. His employer's records show that for the twelve-month period ending September 30, 1997, Butler's annual draw exceeded his commissions by $12,524.49. Crystal Refrigeration made no demand on plaintiff for the return of the sum of $12,524.49 until after Butler resigned in January of 1999, more than two years later.
In Butler's fifth year (1997-1998), he was paid $36,000 in salary. Defendant's business records for the period of October 1, 1997 through September 30, 1998, indicate that Butler's commissions exceeded his annual draw by $8,727.98. Butler did not have his annual review until January 29, 1999, his last day of work. During his abbreviated sixth year, he was paid $12,000 in salary. During his last four months of employment, Butler's commissions exceeded his draw by the amount of $1,813.32.
After Butler's final review on January 29, 1999, Crystal wrote Butler a letter conceding that it owed him wages in the amount of $11,291.95; however, Crystal advised Butler that he had been overpaid by $12,458.49 for 1996-1997. The letter attempted to offset those wages against the claim Butler was making against Crystal. In addition, Crystal made a claim for $8000 against Butler in the letter in an attempt to recover a potential loss due to a default of customer credit. Crystal ultimately recovered its claim against the customer based, in part, on Butler's testimony in a contested court case.
Our supreme court has observed that the purpose of chapter 91A is to "facilitate collection of wages by employees." Condon Auto Sales Serv., Inc., v. Crick, 604 N.W.2d 587, 596 (Iowa 1999). Section 91A.2(7)(a) defines wages to include compensation owed by an employer for: "Labor or services rendered by an employee, whether determined on a time, task, piece, commission, or other basis of calculation." (emphasis added). Section 91A.3(1) of the Code requires that wages be paid at least monthly unless the wages are due employees on a commission basis. In that event, the employer may, upon agreement with the employee, pay a credit against such wages. If the credit is paid, then the employer is required to pay on regular intervals not separated by more than twelve months the commission properly earned.
The trial court concluded that Crystal Refrigeration, by its course of conduct prior to September 30, 1997, waived any claim for overages of annual draws over commissions actually earned. We find ample evidence in the record to support the court's conclusion. The record reveals Butler was paid a salary against his commissions on a monthly basis and then, at the end of the year, was paid the remainder of the commissions that he earned when they exceeded what he had been paid. Butler understood he was getting paid a minimum annual amount of money to work at Crystal. Prior to Butler's resignation in January 1999, Crystal never informed Butler that he owed the company overages for the years in which his draw exceeded the commissions on his sales. Like the district court, we are convinced that Butler has proven his claim that Crystal Refrigeration intentionally failed to pay him wages totaling $11,291.95.
The trial court also ruled that Iowa Code section 91A.3 prevents an employer from seeking recovery of an overage paid after more than twelve months have passed. Crystal contends the trial court improperly extended section 91A.3 in reaching this result. We find it unnecessary to address this contention. The clear language of section 91A.3(1) defeats any claim by Crystal under the facts of this case. That section provides that: "if any of these wages . . . are determined on a commission basis, the employer may, upon agreement with the employee, pay only a credit against such wages." Iowa Code § 91A.3(1). Nowhere in this record is there any agreement by Butler that his commission for any calendar year would be paid with a credit from his salary. Because excess draws cannot be offset against an employee's unpaid wages absent employee authorization, we conclude that Crystal Refrigeration's argument must fail. See Condon Auto Sales, 604 N.W.2d at 596-97.
We affirm the judgment entered by the district court in favor of Butler and against defendant Crystal Refrigeration for regular damages, liquidated damages, attorney fees, interest and costs.
AFFIRMED.