U.L. Coleman Co. v. Gosslee

244 So.3d 783

U.L. COLEMAN COMPANY, LTD., Plaintiff–Appellant

v.Keitha Dickson GOSSLEE, Defendant–Appellee

No. 51,396–CA

Court of Appeal of Louisiana, Second Circuit.

Judgment rendered November 3, 2017

McMICHAEL, MEDLIN, D'ANNA, WEDGEWORTH & LAFARGUE, LLC By: James C. McMichael, Jr.Anna Brown Priestley Counsel for Appellant

STROUD, CARMOUCHE & BUCKLE, P.L.L.C. By: Nichole M. Buckle Counsel for Appellee

BARHAM & WARNER, L.L.C. By: Vicki C. Warner

Before BROWN, WILLIAMS, MOORE, STONE, and BLEICH (Pro Tempore ), JJ.

MOORE, J.

Both sides appeal aspects of judgments that divided, between a real estate broker and its former agent, real estate sale commissions on two large sales, awarded the former agent lease commissions, and assessed penalty wages and an attorney fee against the broker. For the reasons expressed, we affirm in part, reverse in part, and render.

FACTUAL BACKGROUND

U.L. Coleman Co. ("ULCC") is a real estate broker in Shreveport with a large business in commercial sales, leases and property management. In July 1994, it hired Keitha Gosslee as a leasing agent and sales associate. ULCC designated her as an employee and paid her a monthly salary (initially $2,000) plus commissions on her leases and sales. Apparently, Ms. Gosslee was an energetic and successful agent, although ULCC's principal, Linc Coleman ("Coleman"), felt she was always angling for higher salary and bigger commissions.

They signed an employment agreement, December 1, 1995, which divided all commissions according to an attached schedule and recited that lease commissions were either paid monthly over the term of the lease or up front (most were monthly). Ms. Gosslee's lease commission was 37½%; in October 1997, ULCC increased this to 47¼%. By letter agreement in December 1999, ULCC added a 15% bonus commission if she exceeded a sale and lease volume of $137,500 in a given year; she exceeded the threshold every year and qualified for the bonus. None of these agreements included a covenant not to compete.

On August 22, 1997, Tom Bradshaw, a developer for Walgreens, called ULCC and came in to discuss his company's plans to expand to north Louisiana and east Texas. This was an enormous deal, as Walgreens was looking to build perhaps 10 stores in the area. Coleman chose Ms. Gosslee to join the meeting, and they persuaded Bradshaw to sign an exclusive representation agreement with ULCC to identify and develop locations for new Walgreens stores. This agreement had a stated term of one year, but Coleman testified he considered it to be in force as long as ULCC was still providing services to Bradshaw. Coleman gave Ms. Gosslee the assignment, and she dove in energetically, as it was a career project.

Of relevance to this case, she worked to get suitable sites at the intersections of Pines Road and W. 70th St., in Shreveport; Shed Road at Airline Dr., in Bossier City; and Lamy Lane and Louisville Ave., in Monroe. Through July 23, 2001, she negotiated Bradshaw's purchase of five sites for new Walgreens locations. She and Coleman testified that in these transactions, the sale commission was divided 62½% to ULCC and 32½% to Ms. Gosslee.¹

In July 2001, Ms. Gosslee resigned from ULCC. She left because she felt Coleman had reneged on a lucrative commission involving the Chase Bank building. Coincidentally, she had just obtained her own real estate broker's license, and could open her own real estate company.

Before leaving ULCC, Ms. Gosslee made a list of pending projects, including the Shed Rd. Walgreens. Coleman agreed she could complete these deals on ULCC's behalf. She closed on Shed Road in December 2001, at a price of $1.325 million, subject to a 5% commission, or $66,250, of which she remitted to ULCC only 47½%, feeling she was entitled to the 15% bonus for exceeding her threshold. She also had three pending commercial leases generating monthly lease commissions. Sometime after her departure, Coleman and his staff discovered that she had carried off a number of active files, including Walgreens files.

After leaving ULCC, Ms. Gosslee formed her own company, Keitha Gosslee & Associates ("KGA"). On August 21, 2001, she signed an exclusive representation agreement with Bradshaw for the Walgreens account. She then got back to work on the Pines Road and Lamy Lane projects. She closed a sale on Pines Road in November 2002, at a sale price of $1.16 million and 6% commission, and retained the whole commission, or $69,600. She closed a sale on Lamy Lane in May 2004, at a sale price of $1.225 million and 6.857% commission, and retained the whole commission, $84,000. There was much testimony regarding what (if anything) ULCC did to work these sales after Ms. Gosslee left.

PROCEDURAL HISTORY

ULCC filed this petition in November 2003 demanding the return of all active files Ms. Gosslee had taken from the office in 2001. It also alleged that ULCC was entitled to a share of the commission she earned on any Walgreens file that she closed after she left. By subsequent brief, ULCC argued that Ms. Gosslee wrongly withheld sale commissions of $105,937, and conceded that it (ULCC) had withheld her lease commissions of $27,875. It demanded the balance, $78,062.

Ms. Gosslee filed a denial, asserting that she and ULCC had no noncompetition agreement. She also reconvened, alleging that she was entitled to lease commissions that ULCC had either not paid at all, or had paid without the 15% bonus commission to which she was entitled. She also alleged that commissions are deemed to be "wages" under the Payment of Employees Law, La. R.S. 23:631 -634, and ULCC's failure to remit them entitled her to the unpaid wages, 90 days' wages as a penalty, and reasonable attorney fees. By subsequent brief, she claimed she was due salary and commissions of $48,377, with penalty wages to be calculated.

The matter languished in discovery for several years. Trial began over two days in June 2012, before Judge Leon Emanuel. Over the first day, and half of the second, Coleman offered his interpretation of Ms. Gosslee's commission scheme and of the relationship with Bradshaw after Ms. Gosslee left ULCC. On the second day, Bradshaw testified, out of order, saying that after Ms. Gosslee left ULCC, he never heard another word out of Coleman or anybody else at ULCC. He bluntly described his exclusive representation agreement with ULCC as "dead" before he signed with KGA.

The trial recessed until June 26, but another (unspecified) delay intervened, and then Judge Emanuel retired (in December 2013). The trial finally resumed in April 2015, when it was heard over two days by Judge Mike Pitman, who stated for the record that he had read the transcript from 2012. The parties announced that in the interim, an important witness, Bradshaw, had died, and the court would have to rely on the transcript of his earlier testimony.

ULCC called its controller, David Lester, to describe in detail the different ways the company treated commissions for sales and for leases of managed and nonmanaged properties. ULCC spent some time trying to qualify a Benjamin Dowis III as an expert in real estate broker-agent relations, but the court refused to accept him.

Ms. Gosslee called Daniel Hutchinson, one of the owners of the Pines Road property. He admitted that in 2000, Ms. Gosslee had negotiated with him and his co-owner about buying their old Goodyear store, but the co-owner refused to sell at Bradshaw's price. By late fall 2001, however, Ms. Gosslee contacted them again about the same property, but this time she said Bradshaw would pay a $50,000 relocation fee, with an extra $50,000 on the purchase price; remarkably, the co-owner agreed, and the deal closed in November 2002. Hutchinson admitted that Ms. Gosslee had identified the property, negotiated and reached a purchase price before July 2001, but he felt that she had closed the deal on KGA's behalf, not ULCC's.

Ms. Gosslee then testified, giving her understanding of ULCC's commission structure. When she left, she was earning a commission of 31½% on nonmanaged and 47¼% on managed lease properties; however, after she left, ULCC paid her only 31½%, on all leases , including managed ones. She gave her account of the Pines Road deal, largely agreeing with Hutchinson. On the Lamy Lane deal, she testified that she had identified the southwest corner of the intersection and negotiated, unsuccessfully, with the owners in 2000. After she left ULCC, she identified the northeast corner and negotiated with those owners, closing the deal in May 2004. She felt she did not owe ULCC any portion of the commission on either of these deals. On cross-examination, she described in great detail the three commercial leases on which she had been receiving monthly commissions when she left ULCC. She felt that by securing those tenants and getting them to sign leases, she had earned her full commission, and it should not be reduced simply because she was now off ULCC's payroll.

On rebuttal, Coleman described the culture and history of his company, largely repeating his testimony from 2012. He insisted that after Ms. Gosslee left, he still considered Bradshaw to be "his" client, but was "not sure" if he even talked to him until long after he signed with KGA. Also, Coleman strongly felt that only a "licensed employee" was entitled to receive the 15% bonus commission; after Ms. Gosslee left, he had every right to quit paying it. He also admitted "crediting" some of her lease commissions against the sale commissions he felt she owed ULCC for Pines Road and Lamy Lane.

ACTION OF THE TRIAL COURT

The court rendered an opinion in September 2015, finding: (1) ULCC was the "procuring cause" of the Pines Road deal and thus entitled to a portion of that commission; (2) ULCC was not the procuring cause of the Lamy Lane deal, and thus not entitled to a portion of that commission; (3) Ms. Gosslee was entitled to the 15% bonus on lease commissions withheld by ULCC from August to December 2001 (as well as a 15% bonus on the Shed...