Landon v. Labor Standards Division

No. 82-52
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982
HAROLD LANDON,
Petitioner and Appellant,
LABOR STANDARDS DIVISION,
DEPARTMENT OF LABOR AND INDUSTRY,
and TREND BUSINESS COLLEGES, INC.,
Defendants and Respondents.
Appeal from: District Court of the Fourth Judicial District,
In and for the County of Missoula
Honorable John Henson, Judge presiding.
Counsel of Record:
For Appellant:
Jonkel and Kemrnis, Missoula, Montana
For Respondents:
Paul J. Van Tricht, Helena, Montana
Garlington, Lohn and Robinson, Missoula, Montana
Submitted on briefs: May 13, 1982
Decided: September 2, 1982
SEP - % 1902
~iled:
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Harold Landon filed a wage claim with the Labor Standards
Division of the Montana Department of Labor and Industry
(Department) on December 28, 1979. After a hearing, a
decision was rendered in favor of Landon's employer, Trend
Business Colleges (Trend). Landon filed a petition for
judicial review in the District Court of the Fourth Judicial
District, Missoula County. The Department and Trend were
named as respondents. On November 6 , 1981, the District
Court issued an order affirming the Department's decision.
Landon appeals fron that order.
Landon worked as an admissions representative for Trend
from the fall of 1976 until his termination on August 20,
1979. His duties consisted of recruiting high school students
for enrollment and registration in business courses offered
by Trend. Landon was paid on a commission basis as follows:
(a) an agreed-upon portion of the commission was paid at
the time of enrollment upon payment of tuition by the
student; (b) another agreed-upon portion of the commission
was paid when the student completed 30 days of school (referred
to as a "start bonus"); and (c) a final agreed-upon portion
of the commission was paid when the student completed 90
days of school.
Landon's eniployment was covered by a written employment
agreement which provided for payment of con-mission upon
termination of employment as follows:
"In the event of termination, whether voluntary
or involuntary, final settlement will be within
90 days on all collected amounts plus 50% of the
uncollected tuition amounts. (This reduction
is necessary to cover no shcw and dropouts prior
to course completion. ) "
Under this agreement, all of Landon's commissions would
have been calculated as of August 20, 1979. In October 1979,
however, this agreement was modified by a second agreement
which stated:
"I. TREND, upcn execution of this agreement, will
calculate and disburse to LANDON earnings based
upon the following terms:
"A. For purposes of this agreement, the last day
of employment of LANDON is established as August
20, 1979.
"B. For a period of ninety (90) days after his
last date of employment, TREND will calculate as
'earnings' any and all 'start bonuses' and bonuses
due at '90 days-in-school' accruing from in-
school students on contracts accepted by TREND
from LANDON up to and including his last date of
employment.
"C. In addition to the foregoing item B, TREND
will project from any contracts accepted from
Landon up to and including his last date of
employment for student starting dates subsequent
to ninety (90) days after his termination, any
and all 'start bonuses' and bonuses due at '90
days-in-school' that might or might not accrue
from those future transactions, and calculate
as 'earnings' a lump-sum amount equal to fifty
percent (50%) of that aggregated calculation.
"D. From the gross amount of earnings calculated
under items B and C, foregoing, TREND will make
any appropriate standard payroll deductions and
deduct from it any monies due TREND from advances
against such earnings previously disbursed to
LANDON. "
The terms of the agreement were further modified by the
introductory paragraph of the modification, which stated:
"In event of any failure of this agreement to prevail, it is
contemplated by both parties that the terms and policies
governing terminations initially established between them
shall prevail."
Landon interpreted paragraphs I.B. and I.C. of the
modified agreement to mean that he would receive his full
commission for any students who started school in September
and reached the "90-day in school" mark in December. According to
Landon's interpretation, he would have received a net
commission of $3,786.84. Under Trend's interpretation of
the agreement, Landon would receive his full commission only
until November 20, 1979, which is 90 days from Landon's
termination. Therefore, the 90-day commissions for students
starting school in September would be paid at the 50 percent
level, and Landon's net commission would be $207.91.
The Department found that Landon did not prove he was
due more than $207.91. After review of the administrative
record, the District Court affirmed the Department's order.
The single issue presented on appeal is: Whether the
District Court erred as a matter of law in affirming the
order of the Department.
Landon contends that the District Court did in fact err
in affirming the Department's order because the District
Court failed to apply the proper rules of interpretation to
the employment agreement. Landon argues that paragraph I.B.
is ambiguous, and should therefore be construed most strongly
against Trend, the party that drafted the agreement.
Trend, on the other hand, argues that the agreement entered
by the parties on October 22, 1979, modified, but did not
supersede, the original employment agreement. If both
agreements are read together, Trend argues, the meaning of
the agreement is not ambiguous.
The Department, in its findings of fact, agreed that
the October 22, 1979, agreement modified, but did not supersede
the original agreement. Therefore, the Department found
that Trend owed Landon $207.91.
When reviewing an administrative decision, the District
Court function is set forth in section 2-4-704, MCA:
"(1) The review shall be conducted by the
court without a jury and shall be confined to
the record.. . .
"(2) The court may not substitute its judgment
for that of the agency as to the weight of the
evidence on questions of fact. The court may
affirm the decision of the agency or remand the
case for further proceedings. The court may reverse
or modify the decision if substantial rights of the
appellant have been prejudiced because the administrative
findings, inferences, conclusions, or decisions are:
"(a) in violation of constitutional or statutory
provisions;
"(b) in excess of statutory authority of the
agency;
"(c) made upon unlawful procedure;
"(dl affected by ~ t h e rerror of law;
"(e) clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole
record;
"(f) arbitrary or capricious or characterized by
abuse of discretion or clearly unwarranted exercise
of discretion; or
"(9) because findings of fact, upon issues essential to
the decision, were not made although requested."
The Supreme Court is constrained by limitations when
reviewing District Court orders which uphold agency decisions.
As stated in In the Matter of Shaw (1980), - Mont . I
615 P.2d 910, 37 St.Rep. 1480, "In reviewing administrative
decisions, this Court need only determine whether there is
substantial evidence to support the findings. We will not substitute
our judgment for that of the administrative body if such
evidence is found to exist."
Applying these principles to the present case, we find
there is substantial evidence to support the Department's
order. Landon contends an error of law exists unser section
2-4-704(2)(d), MCA, because the ambiguities in the employment
agreement were not correctly dealt with by the Department.
Therefore, section 28-3-206, MCA, applies: "In cases of
uncertainty ... the language of a contract should be
interpreted most strongly against the party who caused the
uncertainty to exist." In this case, Landon contends that
Trend drafted the employment agreement, Trend caused the
uncertainty to exist, and the agreement sh~uldbe construed
most strongly against it.
Viewing the agreement most strongly in Landon's favor,
he contends paragraph I.B. should be read to mean that any
commission which might accrue from students who are actually
"in-school" during the 90-day period from September 20,
1979, to December 20, 1979, will be paid in full to Landon.
Landon's interpretation is clearly incorrect. Even when the
agreement is read in Landon's favor, it is clear that payment
of full comrnissi~nsends on November 20, 1979. Paragraph
I.B. states, "For a period of ninety (90) days after his last
date of employment, TREND will calculate as 'earnings'
any . . . bonuses due at '90 days-in-school'. . ." Landon's
employment was terminated on August 20, 1979. Therefore, "a
period of 90 days after his last date of employment" ends on
November 20, 1979. Therefore, November 20, 1979, is the
date when payment of the full commission ceases, and com-
missions paid for students who complete the "90 days-
in-school" mark on December 20, 1979, will be paid at the 50
percent commission level.
Nowhere in the original agreement or the modification
is there a provision for more than a 50 percent commission
after the expiration of 90 days from termination of employment.
The record reveals substantial evidence existed upon which
the Department based its findings that the original employment
agreement was modified by the October 22, 1979 agreement.
Under this interpretation, the Department acted within its
discretion in finding that Landon was due $207.91. In
contrast, a review of the record reveals that Landon is
unable to sustain his burden of proving that he was owed
more than $207.91. Therefore, this Court cannot rule that
the District Court's order was either clearly erroneous or
based on an error of law.
The District Court's order is affirmed.
j/
hQc n p Q A 3
Justice C/
We Concur: