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Short v. Elliott Equipment Co.

Court of Appeals of Iowa

January 24, 2018

ZACHARY SHORT, Plaintiff-Appellee,
v.
ELLIOTT EQUIPMENT COMPANY, Defendant-Appellant.

         Appeal from the Iowa District Court for Polk County, Bradley McCall, Judge.

         The employer appeals from the district court's ruling awarding a former employee unpaid commission and attorney fees.

          James W. Carney of Carney & Appleby P.L.C., Des Moines, and David L. Brown of Hansen, McClintock & Riley, Des Moines, for appellant.

          Kristina M. Stanger and Mitchell R. Kunert of Nyemaster Goode, P.C., Des Moines, for appellee.

          Heard by Vogel, P.J., and Vaitheswaran and Potterfield, JJ.

          POTTERFIELD, JUDGE.

         Zachary Short sued his former employer, Elliott Equipment Company, under the Iowa Wage Payment Collection Law, found in Iowa Code chapter 91A (2015). Following a bench trial, the district court awarded Short $4660.22 in unpaid commission and $44, 397.75 in attorney fees. Elliott Equipment appeals from the district court's decision, claiming the district court erred in its determination that Short was entitled to commission and that it abused its discretion in awarding the amount of attorney fees after finding they were the "usual and necessary attorney's fees in recovering unpaid wages and expenses." See Iowa Code § 91A.8.

         I. Background Facts and Proceedings.

         Short was an at-will employee of Elliott Equipment from April 2012 until March 2014, when he voluntarily terminated his employment with the company. Short was hired to sell garbage trucks-both to private entities and municipalities. Elliott Equipment paid Short an annual base salary of $35, 000 plus a $15, 000 draw against commission for the first year. According to the "Commission Policy and Territory Agreement" he signed, the company's policy was that "[a]ll commissionable new equipment sales with profit levels up to 25% will be paid a commission of 1% of the new equipment sales price not including the new chassis portion of the sale if applicable."

         Short was specifically assigned to Missouri as his sales territory. During his time with the company, he pursued the City of Columbia as a target customer. Elliott Equipment had sold the municipality one truck approximately two years before Short began his employment, but it did not have an ongoing relationship or contract with the city.

         During the fall and winter of 2013, the City of Columbia purchased nine garbage trucks from Elliott Equipment. Short was the employee who submitted bids to the city and who ordered the trucks from the manufacturers. None of the nine trucks had been delivered to the city by the time Short left the company's employment.

         In May, DaLena Elliott-the wife of the owner of the company, Gene Elliott, and the person who was in charge of payroll at the time-sent an email to Gene and Rick Vanwassenhove, the company's vice president and the person in charge of signing off on all commissions, asking, "So was the final decision to pay [Short] for 50% commission on ALL Cit[y] of Columbia sales? Looks like they're starting to come through in May." Vanwassenhove responded, "I would wait and see how much his mistakes end up costing us after all is said and done before paying if up to me, " and Gene responded that he agreed with Vanwassenhove.

         The salesperson who replaced Short, Patrick Wisor, delivered the trucks to the City of Columbia as they were ready, throughout the summer of 2014. A number of trucks had issues-either at the fault of the manufacturer or Short-and Wisor spent a large amount of time correcting those issues so the city would ultimately accept the trucks and issue final payment on them.

         In June, DaLena emailed Vanwassenhove asking "what [he] would like to pay out to Patrick Wisor on the prior sales he's assisted with that were Zac Short's and also what [he] would like [her] to extend to Zac for those sales prior to his depart[ure]." Vanwassenhove responded, telling her to pay Wisor for half of the normal commission Short would have received. He also indicated, "I am finding things out about [Short] since he left that are of low honor and integrity. I would not pay him another dollar at this point."

         Based on the company's own calculation, 1% of profits on the trucks amounted to $8331.71. Of that commission, Wisor was paid $3576.95. No action was taken with the remaining $4754.76.

         In July, Short emailed Vanwassenhove asking "how things were coming with the trucks[ he] sold to Columbia." The email also stated, "I was expecting to have received some commission from something by now. Let me know." Three days later, Vanwassenhove responded to the email, stating, "We will not be paying commission for the items which you started the sales process on but did not finish all the way through the completion and equipment delivery stage."

         A number of emails were exchanged between Short and various personnel at Elliott Equipment.

         In an August 18 email, Gene informed Short he did not "think [Short was] owed one cent from Elliott Equipment Company." The email included several reasons the company would not be paying Short, including that "[p]art of the sales process is to follow through with everything that has to do with the sale" and salesmen "are not paid a commission until all those things are done"; that he "failed to turn in the bid [to the City of St. Louis] or turned it in late"; and that he was "trying to sell [a private hauler] a piece of equipment that was coming from somewhere other than Elliott Equipment Company."

         Vanwassenhove and DeLena were also included on the email. Within a few minutes of the email being sent to Short, Vanwassenhove responded to Gene and DaLena with the following:

It is really a simple thing if anyone else ever asks if they will get commission for items sold while they were our salesman of record . . . If you sell it, it gets delivered and we get paid before the salesman quits then the ...

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