Goodwin v. Johnson Controls, Inc.
1:24-cv-00989
| D. Colo. | Mar 27, 2025Background
- Will Goodwin (Plaintiff) sued Johnson Controls, Inc. (Defendant) in a dispute over unpaid commissions allegedly owed under a series of incentive plans.
- Goodwin claimed commissions earned prior to changes in the 2024 Incentive Plan, pursuant to the Colorado Wage Act (CWCA), as well as for breach of contract, unjust enrichment, and breach of the implied duty of good faith and fair dealing.
- Johnson Controls sought to dismiss all claims, arguing commissions were not earned or vested under the express terms of the incentive plans, which required certain conditions be met (e.g., contract reconciliation, transfer, and payment collected).
- Magistrate Judge O’Hara recommended denying the motion to dismiss most claims, but Defendant objected to parts of the recommendation.
- District Judge Rodriguez reviewed the objections de novo, sustaining in part and overruling in part, resulting in a partial dismissal and an opportunity for Plaintiff to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether commissions were “earned, vested, and determinable” wages under CWCA | Commissions were earned and vested prior to plan changes | Commissions were not vested/earned until conditions in plan were met | Dismissed (not sufficiently alleged as vested per plan terms) |
| Breach of contract: entitlement to backlogged commissions | Earned right to commissions under existing agreement | No entitlement; conditions precedent for commission payment unmet | Dismissed (failure to plead satisfaction of conditions) |
| Unjust enrichment as an alternative remedy | Can pursue in alternative to contract theory | Not allowed if contract covers the same subject matter | Allowed (can plead in the alternative at this stage) |
| Breach of implied duty of good faith and fair dealing | Discretion exercised in bad faith to deprive commissions | No claim; can’t change express contract terms through implied covenant | Allowed (claim properly stated under Colorado law) |
Key Cases Cited
- Amoco Oil Co. v. Ervin, 908 P.2d 493 (Colo. 1995) (implied duty of good faith does not override bargained contract terms)
- Barnes v. Van Schaack Mortgage, 787 P.2d 207 (Colo. App. 1990) (CWCA covers only compensation earned under an agreement)
- Fang v. Showa Entetsu Co., 91 P.3d 419 (Colo. App. 2003) (compensation is earned if vested per employment agreement at termination)
- New Design Constr., Inc. v. Hamon Contractors, Inc., 215 P.3d 1172 (Colo. App. 2008) (Colorado contract law includes implied covenant of good faith)
- Shell v. Am. Fam. Rights Ass'n, 899 F. Supp. 2d 1035 (D. Colo. 2012) (elements of breach of contract under Colorado law)