One frequent use of contracts is to establish how much someone will be paid for specified work. Clear contractual language can help prevent disputes down the road. What happens if you do not receive all the compensation to which you are entitled under your contract?
Clifton Franklin and Fountain Group Adjusters signed a contract where Franklin would provide Fountain with insurance adjusting services related to claims from Superstorm Sandy. The contract outlined how Franklin would be compensated by Fountain. Franklin claimed Fountain wanted him to sign a second contract because it could not find the first contract. While the second contract set Franklin’s compensation at 75% rather than the 65% in the initial contract, Franklin only asserted claims for the original 65% commission.
Claims One employed Franklin during this time. Fountain also signed a contract with Claims One. Although Franklin received some compensation from Fountain, he filed a lawsuit against Fountain, claiming he had not been fully compensation.
Franklin filed a summary judgment motion, arguing the contract between him and Fountain clearly established the compensation he was owed, and Fountain had not paid him the full amount. In its opposition, Fountain argued it was not liable to Franklin in light of its separate contract with Claims One. Fountain claimed it had paid Claims One the full amount due to Franklin, except for a 10% holdback until all audits had been completed, as was standard in the industry.
Fountain claimed Claims One was supposed to pay Franklin the full amount. The trial court denied Franklin’s summary judgment motion because it found there were genuine issues of material fact. Franklin then filed an appeal.
The appellate court explained the proper resolution of Franklin’s summary judgment motion depended on the interpretation of the parties’ contracts. When a contract’s words are clear, a court cannot make an additional search to determine the parties’ intent. See La. C.C. art. 2046.
Franklin claimed the contract was clear and unambiguous about the amount of money Fountain owed him. Fountain claimed the method of payment was understood to be routed through Franklin’s employer, Claims One, as was standard in the industry.
To support his claim, Franklin submitted Requests for Admissions that Fountain had not answered, along with the applicable signed contracts. Because Fountain had not responded to the Requests for Admission, the trial court should have deemed them admitted. See St. Julien v. Landry. The contract Franklin submitted with his summary judgment motion, along with the requests for admissions, established the amount Fountain owed Franklin for his work.
Nothing in the contract or other evidence supported Fountain’s claim of how Franklin was supposed to be compensated. Therefore, the appellate court reversed the trial court’s denial of Franklin’s summary judgment motion and ruled in favor of Franklin for the issue of whether Fountain owed him unpaid commissions. However, the case was sent back to the trial court to determine the specific amount Fountain owed Franklin, because there was insufficient evidence to establish the sum owed to Franklin.
A knowledgeable attorney can review a contract before you sign it to ensure it is clear and unambiguous, which can help prevent disputes down the road like the one Franklin found himself in with Fountain.
Additional Sources: Clifton Franklin v. Fountain Group Adjusters LLC
Article Written By Berniard Law Firm
Additional Berniard Law Firm Article on Commissions: Seeking Unpaid Wages in Louisiana: Clarifying Petition Requirements for Employees