Levin v. C.O.M.B. Co.Levin v. C.O.M.B. Co.
Aрpellant Don Levin obtained review of a court of appeals decision affirming summary judgment on Levin’s claim for unpaid commissions due pursuant to an employment contract with respondent C.O.M.B. Co. Judgment was granted summarily on alternative grounds: as a matter of lаw, either Levin’s claim for unpaid commissions was barred by the two-year statute of limitations or the contract had been rescinded. We reverse and remand for further proceedings.
In June 1979 Levin and C.O.M.B. entered into a two-year employment agreement. The agreement provided that for his services as C.O.M.B.’s advertising director Levin should receive an annual salary of $30,000 plus a monthly commission of 1% of the gross sales of certain products sold by C.O.M.B. At the end of the two-year term, the agreement was to renew automatically for successive terms of one year absent written notice of termination 30 days prior to the expiration of the initial or any renewal term. When the 1979 agreement expired in June 1981, it automatically renewed on the same terms and conditions for a period оf one year.
In September 1981 C.O.M.B. president Dennis Carlson, vice president Clinton Shaver, and Levin met to discuss the compensation element of Levin’s contract. After the meeting Levin informed the chief financial officer of the company that effective September 1, 1981 he was to be compensated pursuant to a new plan: Levin was to receive lh°/° of C.O.M.B.’s total sales with a guaranteed annual minimum of $75,-000. Put another way, Levin’s compensation was to be $75,000 per year plus lh% of all sales in excess of $15 million.
The parties disagree about the prоvisions of the 1981 compensation plan. Levin asserts that the change went only to the way the commission was to be computed. C.O.M.B. contends that the 1981 plan put Levin on an annual salary añd phased out the commission entirely after payment of a commissiоn or bonus for the 1981-82 contract year. (The record does not disclose the closing date of the corporate fiscal year, whether the company’s fiscal year and the employment contract year coincide, or even whether the сontract year was changed by the September 1981 revision. Consequently, for purposes of this opinion we have assumed that the fiscal year and the contract year end on August 31.)
Levin did not receive a commission payment for the year ended August 31, 1983. Neither did he request payment until August 1984, 11 months after close of the 1982-83 contract year, when he wrote a note to Shaver inquiring about his commission payment. Shaver did not respond, but later thаt month Carlson discussed the matter with Levin. Levin said the “thrust” of Carlson’s message was that “there would be no bonus commissions above my base pay in the future and no payment of back commissions * * *.” Levin made no further inquiry into either the subject of commission for the 1983-84 contract yеar or the terms of the renewal contract for the year beginning September 1, 1984, or any subsequent renewal. In January 1986, following an annual performance review, Lev-in’s annual salary was reduced from $75,-000 to $40,000.
Levin commenced this action in October 1986. C.O.M.B. moved for summary judgment on alternative grounds: Levin’s claim was barred by the two-year limitation set by
Both the trial court and the court of appeals took the position that Levin’s claim for unpaid commissions, a form of wages, accrued not later than August 1984. Certainly, Levin’s claim for unрaid commissions for the year ending August 31, 1983, could not have accrued later than August 1984, but Levin’s claim is not limited to commissions for a single year. Levin’s complaint alleges as well nonpayment of commissions based on sales made during the year ending August 31, 1984, the year ending August 31, 1985, and the period beginning September 1, 1985 and ending June 4, 1986, and from June 4, 1986 forward; and Levin’s cause of action with respect to each contract period could not have accrued prior to the close of the period. A cause of action accrues when the right to institute and maintain a lawsuit arises, when the action can be brought in a court of law without dismissal for failure to state a cause of action,
Dalton v. Dow Chemical Co.,
Based on their conclusion that Levin knew or should have known in August 1984 that he wоuld receive no further commissions, the lower courts accelerated accrual of all of Levin’s claims to August 1984. It has long been established, however, that the renunciation and repudiation of a contract by one of the parties does not set the statute of limitation in motion against the
Since, unfortunately, the 1981 amendment of the employment cоntract does not fix a due date for payment of the unguaranteed portion of commission, the date on which the statute commences to run is not discernible on the record before us, so the due date, based on a reasonable time after clоse of the contract year for calculation of the amount of commission, is a question of fact which cannot be summarily resolved.
Ylijarvi v. Brockphaler,
The limitation of time for commencement of Levin’s action is found in
Except where the uniform commercial code or this section otherwise prescribes, the following actions shall be commenced within two years:
* * * * * *
(5) For the recovery of wages or overtime or damages, fees or penalties accruing under any federal or state law respecting the payment of wages or overtime or damages, fees or penalties except, that if the employer fails to submit payroll records by a specified date upon request of the department of labor and industry or if the nonpayment is willful and not the result of mistake оr inadvertence, the limitation is three years. (The term “wages” means all remuneration for services or employment, including commissions and bonuses and the cash value of all remuneration in any medium other than cash, where the relationship of master and servant exists and the term “damages,” means single, double, or treble damages, accorded by any statutory cause of action whatsoever and whether or not the relationship of master and servant exists);
See Portlance v. Golden Valley State Bank,
The three-year limitation period is an exception engrafted onto the ordinarily aрplicable two-year limitation by Act of May 2, 1984, ch. 608, § 4, 1984 Minn. Laws 1450, 1454. While C.O.M.B. argues that the legislative history of the 1984 amendment reveals an intention to enlarge the limitation period only for the commencement of civil claims for violations of the Minnesota Fair Labor Standаrds Act, we do not consider the statute susceptible to that construction. Long before the 1984 amendment this court declined to restrict the application of
Whether there has been “willful” nonpayment of wagеs within the meaning of
That only the first of these three alternatives would constitute a willful nonpayment of wages and thus extend the limitation of the time for commencement of аn action for unpaid wages reveals a unique characteristic of
As an alternative basis for summary judgment the trial court ruled that the agreement for payment of a commission had been rescinded. The court of appeals did not address the issue. It is true, of course, that a repudiation by one party to a contract, if acquiesced in by the other party, is tantamount to a rescission. Whether a contract has been rescinded by mutual consent is, as a general rule, a question for thе trier of fact; but, as we have previously noted, “mutual abandonment, cancellation or rescission must be clearly expressed, and acts and conduct of the parties to be sufficient must be positive, unequivocal, and inconsistent with the existence of the contract.”
Desnick v. Mast,
Reversed and remanded for further proceedings.