Court: Colorado Court of Appeals; November 29, 1985; Colorado; State Appellate Court
Howard T. Hyland filed a lawsuit against Pikes Peak Capital Corp., seeking unpaid commissions from his time as a salesman for the company. A March 16, 1979, agreement outlined that salesmen would receive 70% of commissions, but Hyland's specific commission arrangement was not detailed. An April 29, 1981, agreement settled disputes regarding his commissions, stating he would receive 100% of his commissions, minus 1/5 of operating expenses, for one year starting April 1, 1981. Hyland's salesman status ended in May 1982, after which he claimed he only received 70% of certain commissions and sought the remaining 30%, along with penalties and attorney fees.
The trial court ruled in favor of Hyland, allowing him to claim the 30% less expenses, but noted he was not considered an employee under Colorado law, thus denying him penalties for wage nonpayment. Transwestern appealed, arguing the court erred in awarding Hyland any portion of the 30% commissions. The appellate court agreed, stating the 1981 agreement was clear and effective only until March 31, 1982, with no evidence of an extension. The commissions in question were from sales contracted after the agreement's termination date, making them ineligible for distribution under the terms of the agreement. The appellate court reversed both judgments.
Hyland argued that the 1979 agreement became effective again after the 1981 agreement expired, claiming entitlement to 30 percent of commissions minus expenses, similar to the terms of the 1981 agreement. However, there was no evidence of mutual agreement regarding the reactivation of the 1979 agreement in the absence of the 1981 agreement, and the 1979 agreement did not specify the commission split. Consequently, Hyland's claim lacked merit, and the trial court mistakenly did not rule in favor of Transwestern on this commission dispute.
Hyland also challenged the trial court’s award of attorney fees to Transwestern, which were granted under C.R.S. § 8-4-114, applicable when an employee initiates a civil action for wage recovery. The court needed to determine Hyland's status as an "employee" under C.R.S. § 8-4-101(5), which defines an employee as someone whose labor is directed by an employer. Evidence indicated that Transwestern did not control Hyland's sales activities or withhold taxes, and he, along with five other salesmen, co-owned 5/6 of the corporation's stock. While common law employee status is not determinative, similar cases suggest Hyland was not an employee. Thus, the trial court's conclusion that Hyland was not an employee was supported by the record. Since Hyland did not qualify as an employee, the provisions of § 8-4-114 were not applicable, making it unnecessary to consider further arguments. The judgment was reversed, and the case was remanded with instructions to dismiss both parties' claims. Judges Van Cise and Metzger concurred.
