MAINE
SUPREME JUDICIAL COURT
Decision: 1998 ME 193
Docket: Yor-98-24
Submitted
on Briefs: June 29, 1998
Decided: July 29, 1998
Panel: WATHEN, C.J., and ROBERTS, RUDMAN, and DANA, JJ.
GREG BURKE
v.
PORT RESORT REALTY CORP., et al.
RUDMAN, J.
[¶ 1] Greg Burke appeals from the summary judgment entered in his favor by the
Superior Court (York County, Fritzsche, J.). Burke contends that the court (i)
erroneously interpreted a provision in his employment contract with Port Resort
Realty Corp., operator of The Shawmut Inn, governing the payment of wages to
Burke following his resignation, and (ii) erroneously determined that Port
Resort did not violate 26 M.R.S.A. § 626 (Supp. 1997), and thereby deprived him
of the exemplary damages to which he is entitled pursuant to section 626.
Because a material issue of fact exists precluding a summary judgment on the
issue of whether Port Resort violated section 626, we vacate the judgment.
[¶ 2] In October of 1994, Burke was hired by Port Resort to serve as The Shawmut
Inn's general manager and director of marketing and sales. The terms and
conditions of Burke's employment were contained in an employment agreement,
subsequently modified by a written addendum signed by Burke and the president of
Port Resort, Ralph Bruno, that added a number of performance incentives and
increased Burke's base salary. The agreement as amended provided for Burke to
receive a 1% commission based on revenue received from all groups visiting The
Shawmut Inn and a 3% commission based on revenue received from those groups for
which Burke was the sales person responsible for the account. The amended
agreement addressed the payment of Burke's commissions upon the cessation of his
employment with Port Resort, stating: It should be noted that should Greg
[Burke] be laid off or terminated for any reason, with or without cause, all
group commissions for business "on the books" going forward is to be estimated
and paid upon departure. Otherwise, all group commissions are to be paid in full
the pay period following payment in full by the group.
[¶ 3] Thirteen months to the day after his hiring, Burke submitted his
resignation, effective that day. At the time of his resignation, Burke demanded
an immediate lump sum payment reflecting commissions for groups booked for dates
subsequent to the date of his resignation, and the cash value of the three weeks
vacation to which he claimed he was entitled. Port Resort refused Burke's demand
and instead allegedly offered to pay Burke as the income from the booked events
was realized. Port Resort also allegedly offered Burke 1/12 of the cash value of
his vacation time because Burke had only worked one month into his second year
at the Inn. Aside from two checks paid in December of 1995 totaling $79.46,
Burke was not paid commissions due from events at The Shawmut Inn from 1995
through 1996.
[¶ 4] Burke commenced this suit and subsequently moved for a summary judgment
against Port Resort. The Superior Court entered a summary judgment awarding
Burke his earned commissions and 1/12 of the cash value of his vacation time.{1}
The court specifically declined to find that Port Resort violated section 626,
reasoning that "[a]ny attempt to pay the commissions through a series of smaller
checks would have been pointless as [Burke] wanted all his estimated commissions
in advance."
I.
[¶ 5] The employment agreement, not section 626, governs how wages are earned
and, if specified, when wages are to be paid. See Purdy v. Community Telecomm.
Corp., 663 A.2d 25, 28-29 (Me. 1995) (wages due to employee determined by
reference to employee agreement); cf. Rowell v. Jones & Vining, Inc., 524 A.2d
1208, 1210-11 (Me. 1987) ("the conditions for earning vacation and the amount of
vacation earned are governed by the terms of employment, not by [section 626]").
In this case, Burke was not owed wages subsequent to his resignation until his
commissions were earned pursuant to his employment agreement with Port Resort.
Burke's employment agreement unambiguously specifies how Burke's future
commissions would be paid if Burke was "laid off or terminated for any reason
with or without cause," and how Burke's commissions would be paid if his
employment "otherwise" ended. Burke was not laid off or terminated and thus the
trial court correctly determined that, pursuant to the employment agreement,
Burke's commissions were due "in full the pay period following payment in full
by the group."
II.
[¶ 6] Burke contends that, regardless of whether his employment contract
required the immediate or incremental payment of his commissions, Port Resort
violated section 626 because Port Resort failed to pay him in a timely manner{2}
under either interpretation. Burke thus argues that he is entitled to recover
exemplary damages{3} pursuant to section 626. In reviewing the motion court's
determination that Port Resort did not violate section 626, we examine the
evidence supporting the motion court's conclusion that Burke refused incremental
payment of wages as they became wages earned.
[¶ 7] A party is entitled to a summary judgment if no genuine issue of material
fact exists and if the party on the undisputed facts is entitled to a judgment
as a matter of law. See Seashore Performing Arts Ctr., Inc. v. Town of Old
Orchard Beach, 676 A.2d 482, 484 (Me. 1996). We review the grant of a summary
judgment for an error of law, viewing the evidence in the light most favorable
to the party against whom the judgment has been granted. See Key Trust Co. of
Maine v. Nasson College, 1997 ME 145, ¶ 9, 697 A.2d 408, 409. In ruling on a
motion for a summary judgment, "'the court is to consider only the portions of
the record referred to, and the material facts set forth, in the Rule 7(d)
statements.'" Handy Boat Serv., Inc. v. Professional Servs., Inc., 1998 ME 134,
¶ 16, __ A.2d __ (Me. 1998) (quoting Gerrity Co. v. Lake Arrowhead Corp., 609
A.2d 295, 295 (Me.
1992)).
[¶ 8] Our review of the parties' respective statements of material fact reveals
that a genuine issue of material fact exists as to whether Burke refused to
accept Port Resort's incremental tender of wages pursuant to his employment
agreement with Port Resort. Burke, in his statement of material facts, states
that, as of March 11, 1997, Port Resort had not "paid or unconditionally
tendered to Burke the amount of commissions admittedly owed to him." In
contrast, Port Resort, in its statement of material facts, states that Burke,
"through his attorney, refused to accept commissions to be paid in full the pay
period following payment in full by the group." Port Resort also relates that
Burke was offered, and refused, 1/12 of the cash value of his vacation time.
Because the record reveals a material fact in dispute regarding whether Burke
refused to accept a tender of wages by Port Resort, the motion court erred in
entering a summary judgment. See Roy v. Buckley, 1997 ME 155, ¶ 9, 698 A.2d 497,
501 ("At the summary judgment stage of the proceeding, the court's task is not
to decide any disputed factual questions, but to determine whether the record
before the court generates a genuine issue of material fact.").
The entry Judgment vacated. Remanded for proceedings
consistent with this opinion.
________________________________________
Attorney for plaintiff:
Jens-Peter W. Bergen, Esq.
Kennebunk, ME 04043
Defendants did not file a brief.
FOOTNOTES******************************** {1} After a hearing the parties
stipulated to $8,911.24 in damages, which represented $8,680.76 in owed
commissions and $230.48 for owed vacation time. This stipulation was
incorporated into the judgment entered in favor of Burke. The parties expressly
preserved their right to appeal the summary judgment, despite the stipulation as
to damages. {2} Section 626 provides: An employee leaving employment must be
paid in full within a reasonable time after demand at the office of the employer
where payrolls are kept and wages are paid . . . . Whenever the terms of
employment include provisions for paid vacations, vacation pay on cessation of
employment has the same status as wages earned. 26 M.R.S.A. § 626 (Supp. 1997).
The statute defines "a reasonable time" as "the earlier of either the next day
on which employees would regularly be paid or a day not more than 2 weeks after
the day on which the demand is made." Id. {3} If an employer fails to pay due
wages within a reasonable time, the employer: is liable for the amount of unpaid
wages and, in addition, the judgment rendered in favor of the employee or
employees must include a reasonable rate of interest, an additional amount equal
to twice the amount of those wages as liquidated damages and costs of suit,
including a reasonable attorney's fee. 26 M.R.S.A. § 626 (Supp. 1997).
Additionally, an employer who violates section 626 "is subject to a forfeiture
of not less than $100 nor more than $500 for each violation." Id.