Charbonneau v. Mortg. Lenders of Am., L.L.C.

BEAU CHARBONNEAU,on behalf of himself and others similarly situated, Plaintiff, v. MORTGAGE LENDERS OF AMERICA, L.L.C., et al., Defendants.

Case No. 2:18-cv-2062-HLT-ADM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

June 30, 2020

MEMORANDUM AND ORDER

Plaintiff Beau Charbonneau brings this putative collective and class action under the Fair Labor Standards Act ("FLSA") and the Kansas Wage Payment Act ("KWPA"). Plaintiff also alleges state law claims for breach of contract and unjust enrichment/quantum meruit. Plaintiff claims that his former employer—Defendant Mortgage Lenders of America, L.L.C. ("Defendant MLOA")—misclassified a certain employment position ("team lead") as an exempt position.¹ Plaintiff also claims that Defendant MLOA requires non-exempt employees (specifically, loan officers) to perform work off the clock, without pay, and that Defendant MLOA unlawfully deducted certain fees from Plaintiff's wages. This matter is before the Court on Defendants' Motion for Partial Summary Judgment. Doc. 144. For the reasons stated below, the Court grants summary judgment on Plaintiff's breach of contract claims because Plaintiff has not demonstrated (1) any damages based on loss of straight-time pay, or (2) a breach of any contractual promiseregarding overtime wages or the withholding of certain fees. The Court also grants summary judgment on Plaintiff's claims under the KWPA because (1) Plaintiff's only statutory cause of action for unpaid straight-time and overtime wages is under the FLSA, and (2) Plaintiff has not presented a genuine issue of fact that any earned wages were wrongfully withheld.

I. BACKGROUND

This case was recently transferred to the undersigned judge. Although the case has been on file for more than two years, a pretrial order has not yet been entered. The Court's discussion of Plaintiff's claims, therefore, is drawn from Plaintiff's claims as described in Plaintiff's Third Amended Complaint. Doc. 93. The discussion of the uncontroverted facts, however, is drawn from the properly cited and supported record, viewed in the light most favorable to Plaintiff.

A. Uncontroverted Facts

Plaintiff is a former employee of Defendant MLOA. While an employee, Plaintiff worked in two different capacities: as a loan officer and as a team lead. He was a loan officer during two separate periods of time and a team lead for a single period of about three years in between. Plaintiff's employment in each role was governed by one or more employment agreements.

1. Originator Compensation Agreement (Loan Officer Position #1)

Plaintiff started as a loan officer and signed an Originator Compensation Agreement on January 8, 2008 (an agreement for loan officers). Section 2 of that agreement, regarding compensation, provides:

2.1 The commission earned on funded loans shall be based on the schedule outlined in Exhibit "A." Originator understands that the Daily Price Sheet shall be modified from time to time by MLOA or the applicable investor in its sole discretion.

2.2 All compensation shall be subject to standard withholding requirements such as federal state and local income tax, social security, and major medical contributions.

2.3 Commissions shall be payable monthly on the 15th of the month for loans that funded during the previous month. See exhibit "A" for more details.

2.4 An hourly wage equal to minimum wage for the applicable period shall be paid twice monthly (15th and last day of the month). See exhibit "A" for more details.

Doc. 145-1 at 2. Section 3.1 of same agreement (which is related to termination of employment) further provides that "[c]ommissions shall be paid after the deduction of any amounts due MLOA and deductions for any unreturned company equipment." Id. Exhibit A to the agreement, titled "Commission Schedule," states, "Retail Loan Officers will be paid minimum wage of $5.85 per hour for hours worked, and will be eligible for overtime pay." Id. at 5. Between February 2013 and August 2013, the lowest monthly commission Plaintiff made was $11,369.24.

2. Exhibit A to the Loan Originator Manager Compensation Schedule (Team Lead Agreement)

Plaintiff then worked as a team lead for about three years beginning in August 2013.² In this position, Plaintiff sold loans and managed loan officers. Plaintiff's monthly pay had three components: $175 per loan officer on his team for the entirety of the prior month; a 4% commission of all loans funded by his reporting loan officers; and a commission of loans that Plaintiff originated and funded. Plaintiff signed Exhibit A to the Loan Originator Manager Compensation Schedule, which detailed his compensation. Doc. 145-5 at 5.

The "Time of Calculation and Payment of Commissions" section of the agreement provides:

Commissions (to the extent earned pursuant to the calculations set forth below and subject to applicable adjustments) shall be payable monthly on the fifteenth (15th) of the month for loans that fundduring the previous month. Loans shall be considered funded when loan proceeds are disbursed at a loan closing and all applicable loan documents are in the possession of MLOA and have been duly executed. See also the Commission Conditions set forth below concerning the time that commissions are earned.

Id. at 4. The agreement contains a "Required Lender Fees" section, which provides: "Manager is required to collect lender fees in advance from borrowers on each loan in accordance with MLOA policies as adopted, pronounced or changed from time to time." Id. at 3. And the agreement provides that Defendant MLOA may—but is not required to—contribute toward the costs of ordering credit reports. Id.

The agreement also includes a "Formula for Calculating Commissions":

To calculate the Commission Compensation, MLOA will first total GCI assigned to all loans originated by Manager for which Manager is entitled to a commission that funded during the preceding month ("Total GCI"). Percentages will then be applied to the Total GCI . . . .

The "GCI Payout" will be equal to Total GCI multiplied by the applicable percentages . . . . The amount of Commission Compensation paid to Manager will be equal to the GCI Payout after deductions for the amount of the Hourly Wage, shortages for uncollected fees, uncollected costs for credit reports, and any commissions previously advanced for EPOs and EPDs. See also the Commission Conditions set forth below concerning the time that commissions are earned.

Id. at 4.³

Finally, importantly for the purposes of this motion, the "Commission Conditions" section of the agreement specifies:

MLOA shall make adjustments in the process of calculating Commission Compensation for Hourly Wage, shortages for uncollected fees, costs for uncollected credit reports and commissions paid to Manager on EPOs or EPDs.. . . .

Commission Compensation is not earned until all deductions are made for Hourly Wage, shortages for uncollected fees, and uncollected costs for credit reports, pursuant to the formula for calculating commissions.

Id. Plaintiff claims that the actual calculation of commissions was not in conformity with this agreement. In support, Plaintiff points to the testimony of Defendant MLOA's president, Philip Kneibert, who testified (over objection) that Defendant MLOA deducted credit report fees and uncollected appraisal fees "from the wages of [its] producers." Doc. 156-1 at 260:21-261:12, 267:1-6. Plaintiff also submits his own pay stub for the pay period ending September 9, 2017 (which was after Plaintiff returned to his position as a loan officer). This stub shows credit reports and appraisal fees deducted post-tax, which was Defendant MLOA's policy at the time. Doc. 156-20.

3. Exhibit A to the Loan Officer Compensation Schedule (Loan Officer Position #2)

On August 1, 2016, Plaintiff returned to the position of loan officer, which he held until leaving Defendant MLOA's employment on November 10, 2017. Loan officers are hourly employees, so Plaintiff entered into a new compensation agreement, which included Exhibit A to the Loan Officer Compensation Schedule. Doc. 145-7. This agreement provides that loan officers are paid commissions, but they receive an hourly wage equivalent to the federal minimum wage as a draw against those commissions. Specifically, the agreement states:

MLOA shall pay Officer an hourly wage equal to the then-existing minimum wage, as set forth under applicable Federal and state law, for each hour Officer performs work for MLOA, subject to the standard withholding requirements such as federal, state and local income tax, social security and medical contributions ("Hourly Wage"). The Hourly Wage is considered an advance against future commission payments paid to Officer. Future commission paymentswill be reduced by the amount of the advance. However, Officer shall not be paid less each month than the amount of Hourly Wage, regardless of the amount of Commission Compensation, as calculated under the section on Commission Compensation below . . . .

Officer will be paid the hourly wage twice monthly, on the fifteenth (15th) and last day of the month, pursuant to MLOA's standard payroll practices. Officer will be eligible for overtime pay in accordance with the applicable law. The amount of overtime pay will not be deducted from the amount of commission payments. Officer is required to obtain written permission from Officer's Loan Originator manager, also known as the Team Lead or Team Leader, in advance before overtime work is performed. Unauthorized overtime work may subject Officer to verbal or written warning and/or disciplinary action, up to and including termination.

Officer is required to use the MLOA time clock system to record Officer's hours worked. Officer shall notify Officer's Loan Originator manager as soon as possible, if Officer misses or incorrectly records an entry into the time keeping system. MLOA has the right to adjust the time clock record to accurately report the time Officer worked.

Id. at 2. This agreement also...