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Hammons v. NVR, Inc.

United States District Court, D. Maryland

March 11, 2015

TROY HAMMONS
v.
NVR, INC

MEMORANDUM

WILLIAM M. NICKERSON, Senior District Judge.

Before the Court is Defendant's Motion for Summary Judgment. ECF No. 40. The motion is fully briefed. Upon review of the motion and the applicable case law, the Court determines that no hearing is necessary, Local Rule 105.6, and that the motion should be granted in part and denied in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

Most of the relevant facts in this action are undisputed. Briefly summarized here, but presented in more detail below, those facts are as follows.

Defendant NVR, Inc. is in the business of selling new homes in various communities throughout the country. Defendant contracts with a purchaser and then builds a home to that customer's specifications. Plaintiff Troy Hammons was employed by Defendant as a Sales and Marketing Representative (SMR) from September 2008 through May 2012, except for a brief period in 2009 in which he was laid off because of the poor real estate market. As an SMR, Plaintiff was responsible for both procuring contracts with customers for the purchase of homes and also for shepherding those contracts through to settlement. Those post-contract/pre-settlement responsibilities included: maintaining contact with the customer, assisting the customer in obtaining financing, monitoring the construction of the home, dealing with any change orders, inspecting the home with the customer to assure it is being built to their specifications, and any other related tasks to ensure that the customer is satisfied and that the contract goes to settlement.

Defendant compensates its SMRs under a commission-based program. See ECF No. 48-3 (copy of SMR Compensation Program dated 2/11/11). Under that Compensation Program, SMRs are paid a commission, typically $5000 per sale, but do not actually earn that commission until the contract has been brought to settlement. Because the period between contracting and settlement can be several months, the compensation program provides for advances to be paid in an amount equal to 50% of the anticipated commission. These advances are in the nature of a loan and must be repaid or used to offset other earned commissions should the contract not go to settlement. Id. at 2.

In the spring of 2012, Plaintiff was successfully selling homes for Defendant in a community known as Ashby Commons in Easton, Maryland. When Defendant was unable to come to an agreement with the developer of that community, it ceased selling homes there and transferred Plaintiff to the closest development to Plaintiff's home, a community in Severn, Maryland, known as Woodberry.[1] After the transfer to Woodberry, Plaintiff was unable to meet his sales quota and several meetings were held and correspondence generated concerning what his supervisors perceived to be inconsistent performance on the part of Plaintiff. At one such meeting, Plaintiff made a request for a monthly draw to meet his living expenses. That request was denied. Shortly thereafter, on May 18, 2012, Plaintiff sent an email to his division manager, Roy Grant, protesting the criticism of his performance and the denial of the requested draw and indicating that this email was his "written notice of resignation, " as of that date. ECF No. 40-5.

At the time of his resignation, Plaintiff had several home sales under contract but yet to be brought to settlement. In his Amended Complaint, Plaintiff identified 11 home sales that were under contract at the time that he resigned. He also alleged that, to the best of his knowledge, 10 of the 11 went to settlement. Plaintiff asserts that the unpaid commissions on these sales are wages due him under the Maryland Wage Payment and Collection Law (MWPCL), Md. Code Ann., Employ. §§ 3-501 et seq. In addition to separate counts in his Amended Complaint relating to each of these potential commissions (Counts I-XI), Plaintiff brings an additional claim for unjust enrichment related to the work he performed procuring all 11 of those sales (Count XII).[2] Defendant answered the Amended Complaint and also filed counterclaims for breach of contract (Count I) and unjust enrichment (Count II) to recover the advances paid to Plaintiff for contracts that did not settle until after his resignation. Defendant has now moved for summary judgment in its favor both on Plaintiff's claims and its own counterclaims.

II. LEGAL STANDARD

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to current Rule 56(a)). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing the motion, then a genuine dispute of material fact is presented and summary judgment should be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the "mere existence of a scintilla of evidence in support of the [opposing party's] position" is insufficient to defeat a motion for summary judgment. Id. at 252. The facts themselves, and the inferences to be drawn from the underlying facts, must be viewed in the light most favorable to the opposing party, Scott v. Harris, 550 U.S. 372, 378 (2007), who may not rest upon the mere allegations or denials of his pleading but instead must, by affidavit or other evidentiary showing, set out specific facts showing a genuine dispute for trial. Fed.R.Civ.P. 56(c)(1). Supporting and opposing affidavits are to be made on personal knowledge, contain such facts as would be admissible in evidence, and show affirmatively the competence of the affiant to testify to the matters stated in the affidavit. Id . 56(c)(4).

III. DISCUSSION

The MWPCL provides, in pertinent part, that "each employer shall pay an employee or the authorized representative of an employee all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated." Md. Code Ann., Lab. & Empl. § 3-505. "Wages" are defined under the MWPCL as "all compensation that is due to an employee for employment" and are defined so as to include bonuses and commissions. Id . § 3-501(c)(1)&(2). Section 3-507.2(a) provides the employee with a civil cause of action to recover wages withheld in violation of § 3-505. Furthermore, courts have held that an employer cannot contract around the provisions of the MWPCL because "a contract conflicting with public policy set forth in a statute is invalid to the extent of the conflict between the contract and that policy." Medex v. McCabe, 811 A.2d 297, 304 (Md. 2002). The type of contractual provision most often cited as conflicting with the public policy embodied in the MWPCL is one that conditions the payment of a bonus or commission on the employee's continued employment at the time that the payment is to be made. See, e.g., Id. at 300 (invalidating contractual provision conditioning payment of incentive fees on the plaintiff being "employed at the time of the actual payment"); Rogers v. Sav. First Mortg., LLC, 362 F.Supp.2d 624, 640-43 (D. Md. 2005) (finding unenforceable a provision that conditioned payment of year-end bonuses on continued employment six months after the end of the year in which the bonuses were earned).

Plaintiff asserts that, under the Compensation Program, his "commissions are expressly contingent on his continued employment with NVR, " a condition which he characterizes as a "clear violation of the MWPCL." ECF No. 48-2 at 13. Taken out of context, some of the language of the Program would appear to provide support for that assertion. The Program states,

[T]he commission for the sale of a home is earned only when (1) settlement (closing) of that sale with the customer has been completed and (2) provided the SMR is employed by NVR, Inc. on that date.

ECF No. 48-3 at 1. The Program further states,

[i]f employment with NVR, Inc. ends for any reason, other than retirement or death, the SMR will not have earned or be entitled to any compensation on sales which have not completed ...

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