# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

__ __ __ __ __ __ __ __ __ __ __ __ __ _
No. 1 3- 23 79

__ __ __ __ __ __ __ __ __ __ __ __ __ _ Tod d Kar le n

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

Jo ne s Lan g LaS al le Am eri cas , Inc

.
ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

__ __ __ __ __ __ __ __ __ __ __ __ __ _
No. 1 3- 28 35

__ __ __ __ __ __ __ __ __ __ __ __ __ _ Tod d Kar le n

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Jo ne s Lan g LaS al le Am eri cas , Inc

.
ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of M in ne so ta - Mi nn eap ol is

__ __ __ __ __ __Su bm it te d: Marc h 1 2, 2 01 4 Fil ed : Se pt em

be r 9, 2 01 4

__ __ __ __ __ __ Befo re COLLOTON, SHEPHERD, and KELLY , Cir cu it Ju dg es

.

__ __ __ __ __ __
KELLY, Cir cu it Ju dg e.

Fo ll owi ng hi s te rm in at io n fro m Jo ne s Lan g Lasa ll e, Am er i c a s , In c., (J LLA), Tod d Karl en su ed JLLA fo r, in te r al ia , fai lu re to pa y hi m a co m m is si on on a de al th at cl os ed sh or tl y aft er hi s de pa rtu re. JLLA m ov ed fo r su m m ary jud gm en t, an d Karl en

res po nd ed

. The di st ric t co ur t su a sp on te gr an te d su m m ary jud gm en t fo r Karl en an d he ld th at JLLA ha d wro ng fu ll y wit hh el d co m m is si on pa ym e n t s ; th e di st ric t co ur t

co ns eq ue nt ly award ed Karl en th e am o u nt of th e co m m is si on as well as st at ut or y
pe na lt ie s fo r la te pa y m en t un de r Mi nn . S ta t. §§ 18 1.0 3, 1 81 .13 , and at to rn ey ’s f ees

an d c os ts un de r Mi nn . Sta t. § 18 1.1 71

. JLLA ap pe al s th e d is tri ct co ur t’s o rd er t ha t it owe d Karl en bo th a co m m is si on an d st at ut or y pe na lt ie s. Karl en ap pe al s th e di st ric t

co ur t’s red uc ti on of hi s req ue st ed at to rn ey ’s fees

. H a vi ng juri sd ic ti on un de r 28 U.S.C. § 12 91
, we rev ers e th e di st ric t cou rt’s ord er g ran ti ng su m m ary jud gm en t for Karl en an d v acat e th e res ul ti ng award of a tt or ne y ’s fees an d c os ts

.

I. Ba ck gr ou nd

Fro m May 20 10 un ti l Ja nu ary 20 12
, Karl en was em pl oyed as a le as i n g
sp eci al is t fo r JLLA, a co m m erci al real es ta te co m

pa ny. Karl en act ed as a br ok er, lo c a t i n g an d se cu rin g ret ai l te na nt s fo r JLLA’s cl ie nt s. Karl en ’s or ig in al

co m pe ns at io n st ru ct ur e co ns is te d of an an nu al sa la ry of $7 5,0 00 wit h th e op po rtu ni ty
to earn an an nu al en d- of

-y ear bo nu s ba se d on pe rfo rm an ce. In Ja nu ary 20 12
, JLLA ch an ge d i ts co m

pe ns at io n s tru ct ur e fo r al l em pl oyees t o a sal ary pl us co m m is si on s. Karl en ’s ba se sa la ry was lo wered to $6 0,0 00
, bu t he ha d th e op po rtu ni ty to earn “ up

-2

-to 30 % of th e le as in g rev en ue ” th at he di rect ly ge ne rat ed st art in g Ja nu ary 1, 20 12

.

Karl en was al so el ig ib le to rece iv e up to a 10 % co m m is si on o n le as es se cu red by

ot he r sa le s re pr es en ta ti ve s i n h is ass ig ne d t erri to ry

.

Sh or tl y aft er th e co m

pe ns at io n ch a n g e , o n Ja nu ary 31
, 20 12
, Karl en was
te rm in at ed fo r pe rfo rm an ce reas on s. JLLA no te s th at fro m 20 10 th ro ug h th e en d of
20 11
, Karl en was co ns is te nt ly rat ed a lo w pe rfo rm er. At th e ti m e of hi s te rm in at io n, K a r l e n w as in th e pr oc es s of co m pl et in g a le as e de al wit h a te na nt , Pri m eb ar: a l l

su bs ta nt iv e ne go ti at io ns ha d be en co m pl et ed
, an d th e fin al le as e ha d be en se nt to Pri m eb ar fo r it s si gn at ur e. Karl en e st im at ed th at hi s 30 % co m m is si on on th e Pri m eb ar de al wou ld ha ve be en wor th $3 7,6 16 .90

. Pri m eb ar ex ecu te d th e pr op os ed fin al lea se on Feb ru ary 3— th ree d ay s af te r Karl en was t erm in at ed

.

Karl en co nt act ed JLLA se ve ral ti mes a n d de m an de d hi s co m m is si on on th e Pri m eb ar tra ns act io n. J LL A mai n ta in ed th at whi le Karl en was no t en ti tl ed to th e

co m m is si on fo ll owi ng te rm in at io n, JLLA w a s w i l li ng to pa y th e Pri m eb ar

co m m is si on an d po s si bl y ot he r co m m is si on s ba se d on a pr ot ect io n li st of fo rm er 1
cl ie n t s , s h o u l d th os e tra ns act io ns oc cu r wit hi n a cert ai n pe rio d of ti m e aft er
te rm in at io n. Bo th pa rti es ag ree t hi s i s st an da rd in du st ry pr act ic e. On Feb ru ary 2 0, 20 12
, Karl en se nt JLLA a pr ot ect io n li st of th e cl ie nt s he ha d be en wor ki ng wit h an d

no te d th at h e “ex p e c t [ed ] to rece iv e co m m is si on s on le as es cl os ed in th e ne xt 90 da y s.” The on ly cl ie nt on th e li st to ha ve cl os ed a tra ns act io n w i t h in th e 90 -d ay
pe rio d was Pri m eb ar.

Acco rd in g to th e pa rti es , i t is co m m on in th e in du st ry fo r a co m pa ny an d a 1
te rm in at ed br ok er to de ve lo p an d ag ree to a pr ot ect io n li st of cl ie nt s who se acco un ts th e br ok er ha d b een work in g o n p rio r to ter m in at io n. If a ny deal is co m pl et ed wit h

a cl ie nt on th e pr ot ect io n li st wit hi n a cert ai n am ou nt o f ti m e fo ll owi ng th e te rm in at io n, th e te rm in at ed br ok er st il l rece iv es so m e co m m is si on on th e tra ns act io n.

-3

-On Apr il 9, 20 12
, Karl en fil ed su it i n M i n n es ot a st at e co ur t cl ai m in g to be

owe d a co m

m is si on on th e Pri m eb ar le as e, as well as ot he r co m m is si on s, a bo nu s fo r 20 1 1
, a n d rei m

bu rs em en t of cert ai n bu si ne ss ex pe ns es

. On May 5, 20 12
, JLLA

rem ov ed th e cas e to fed eral co ur t. Afte r th e st art of th e li ti ga ti on , JLLA se nt Karl en 2
th ree ch eck s rep res en ti ng 30 % of th e rev en ue s JLLA rece iv ed fro m th e P rimebar le as e. Th e ch eck s were da te d May 4, 20 12
, Ju ne 1, 20 12
, an d Octo be r 5, 20 12

. Karl en di d no t cas h th es e ch eck s. In st ead
, he co nt act ed JLLA. JLLA in fo rm ed Karl en th at it wou ld co ns id er cas hi ng th e ch eck s to be a se tt le m en t of an y ad di ti on al cl ai m s fo r m or e m on ey fro m th e Pri m eb a r l e a se

. Karl en co ns eq ue nt ly ret ur ne d th e ch eck s t o J LLA.

Fo ll owi ng ex te nd ed di sc ov ery, JLLA m ov ed fo r su m m ary jud gm en t o n al l cl a i ms

. On May 23
, 20 13
, th e di st ric t co ur t he ld a he ari ng on JLLA’s m ot io n an d
gr an te d JLLA su m

m ary jud gm en t on al l cl ai m s ex cep t th e Pri m eb ar co m m is si on

. The di st ric t co ur t, act in g su a sp on te , th en gr an te d su m m ary jud g m en t to Karl en on th e

rem ai ni ng cl ai m reg ard in g th e Pri m eb ar co m m is si on , co nc lu di ng JLLA br each ed it s

co nt ract wit h Karle n. The di st ric t co ur t fo un d JLLA owe d Karle n a co m m is si on on th e Pri m eb ar de al

. The co ur t al so fo un d th at , by at ta ch in g co nd it io ns to th e cas hi ng of th e co m

m is si on ch eck s, JLLA ha d “ al te red th e m et ho d or pr oc ed ur es fo r pa y m en t”

an d th us co m

m it te d “ a v io la ti on of t he ap pl ic ab le Mi nn es ot a st at ut es .” The di st ric t

co ur t th us award ed Karl en $6 9,0 42 un de r Mi nn

. St at

. § 18 1.0 3, do ub le th e Pri m eb ar

co m mi s si on va lu e of $3 4,5 21

. The di st ric t co ur t al so he ld th at Karl en was en ti tl ed

to av erag e da il y earn in gs fo r 15 da y s— $3 ,46 1.5 4— un de r Mi nn

. St at

. § 18 1.1 3 fo r JLLA’s fai lu re t o p ay wag es pr om pt ly. Fin al ly, th e d is tri ct co ur t o rd ered JLLA “ to
pa y reas on ab le co st s, di sb ur se m en ts , wit ne ss fees
, an d at to rn ey fees ” as req ui red by Mi nn

. St at

. § 18 1.1 71
, whi ch th e co ur t an no un ced it wou ld ad dr es s in a se pa rat e

or de r.

Karl en is a ci ti zen of M in ne so ta an d cl ai m s da m ag es in ex ces s of $1 20 ,00 0.

2 JLLA is a Mar y la nd co rp or at io n wi th it s p rin ci pa l p la ce o f bu si ne ss in Ill in oi s.

-4

-Karl en th en su bm it te d hi s co st s an d at to rn ey ’s fees to th e di st ric t co ur t. Karl en

so ug ht $2 ,01 8.2 2 in co st s an d $4 8,5 48 .31 in at to rn ey ’s fees

. Fi nd in g th e le ga l is su es were “ no t pa rti cu la rly si gn ifi can t or co m pl ex ” an d th at “ [s ]ucces sf ul pr os ecu ti on of th is cl ai m di d no t ne ces si ta te si gn ifi can t am ou nt s of ti m e, di sc ov ery o r le ga l sk il l,” th e d is tri ct co ur t awa rd ed $2 0,0 00 in att or ne y ’s fees an d $ 2,0 18 .22 in co st s.

JLLA ap pe al s th e di st ric t co ur t’ s or de r award in g Karl en bo th a co m m is si on an d

st at ut or y pe na lt ie s. Karl en ap pe al s t he di st ric t co ur t’s awar d o f at to rn ey ’s fees

.

II . Disc us si on .

“ W e rev ie w de no vo th e di st ric t cou rt’s gran t of sum m ary jud gm en t, v ie win g th e ev id en ce an d t he in fere nc es th at m ay be reas on ab ly dr awn fro m th e ev id en ce i n th e li gh t m os t fav or ab le to th e no nm ov in g pa rty.” P e t r o s ki v. H&R Bl oc k Ent ers ., LLC, 75 0 F.3 d 97 6, 97 8 (8 th Ci r. 20 14 ). Su m m ary jud gm en t is ap pr op ria te whe re th e

“ m ov an t sh ows th at th ere is no ge nu in e di sp ut e as to an y m at eri al fact an d th e m ov an t is en ti tl ed to jud gm en t as a m at te r of law.” Fe d. R. C iv . P. 56 (a).

JLLA arg ue s th at th e di st ric t co ur t erre d in award in g a co m m is si on , wag es , an d

st at ut or y la te pa y

m en t pe na lt ie s un de r Mi nn

. St at

. §§ 18 1.0 3 and 18 1.1 3. W e ag ree fo r two reas on s: (1) JLLA di d no t owe K arl en a co m m is si on pa y

m en t at the ti m e of

te rmi n a ti on be cau se co m m is si on pa y m en ts were su bjec t to at le as t two co nd it io ns
p rece de nt th at ha d no t y et be en fu lfi ll ed ; an d (2 ) ev en if JLLA di d ev e n t u a l l y o w e Karl en a co m

m is si o n ( ei th er un de r th e em pl oym en t co nt ract or du e to so m e ot he r th eo ry ), an y su ch am ou nt wou ld no t ha ve be en owe d un ti l aft er te rm in at io n, an d th eref or e, Mi nn . Sta t. § § 1 81 .03 an d 1 81 .13 do no t ap pl y

.

-5

-A. Comm is si on s a nd Sta tuto ry Pena lti es

The Mi nn es ot a Paym en t of W ag es Act pr ov id es st at ut or y pr ot ect io n fo r t h e
pa y ment of wag es an d co m m is si on s owe d to em

pl oyees who se em

pl oym en t is

te rm in at ed by th ei r em

pl oyers. Mi nn

. St at

. §§ 18 1.0 1– .17 1. Mi nn es ot a la w req ui res th at “ an em

pl oyer

. . . no t al te r th e m et ho d of pa y m en t, ti m in g of pa y m en t, or
pr oc ed ur es fo r pa y m en t of co m m is si on s ea rn ed th ro ug h th e la st da y of emp lo

ymen t

. . . .” Mi nn

. St at

. § 18 1.0 3 (em ph as is ad de d)

. Any em

pl oyer “ who vi ol at es t h i s

se ct io n is li ab le

. . . fo r twi ce th e am ou nt in di sp ut e.” Id

. Mi nn es ot a fu rth er pr ov id es th at “ [w]hen an y em

pl oyer em pl oyin g la bo r wit hi n th is st at e di sc ha rg es an em pl oyee, th e wag es or co m

m is si on s ac tu al ly ea rn ed an d un pa id at th e ti me of th e di sc ha rg e are im m ed ia te ly du e an d pa y ab le up on de m an d of th e em pl oyee.” Mi nn

. St at

. § 18 1.1 3 (em ph as is a d d e d )

. If th e em pl oyer fai ls to pa y th e wag es an d co m m is si on s owe d

“ wit hi n 24 ho ur s aft er de m an d,

. . . th e em pl oyer is in de fau lt .” Id

. Fo r each da y th e

em pl oyer is in de fau lt
, th e em pl oyee is en ti tl ed to an ot he r da y of co m pe ns at io n, ba se d

on hi s av erag e d ai ly earni ng s, u p t o 1 5 d ay s. Id

.

W e h av e fo un d t ha t M in n. St at . § 18 1.1 3 “ ‘is a t im in g s ta tu te , m an da ti ng no t wh at an em

pl oyer m us t pa y a di sc ha rg ed em

pl oyee, bu t wh en an em

pl oyer m us t pa y

a di sc ha rg ed em

pl oyee.’ ” Knu ts on v. Sch wan ’s Hom e Serv
., In c., 71 1 F.3 d 91 1, 91 7 (8 th Ci r. 20 13 ) (q uo ti ng Cal da s v. Affo rd ab le Gran it e & St on e, In c., 82 0 N.W .2d 82 6, 83 7 (Mi nn

. 20 12 )). “ The em pl oym en t co nt rac t go ve rn s whe th er wag es were ‘actu al ly

earn ed an d un pa id ’ fo r pu rp os es of Mi nn

. St at

. § 1 8 1

. 1 3.” Ch am be rs v. Trav el ers Co
., 66 8 F.3 d 55 9, 56 6 (8 th Ci r. 20 12 ) (ci ti ng Lee v. Fres en si us Med

. Care
, In c., 74 1
N.W .2d 11 7, 12 7– 28 (Mi nn

. 2 0 0 7 ) ). Sect io n 18 1.1 3 on ly ap pl ie s if an em pl oyer

owe s an em

pl oyee un pa id wag es or co m m is si on s un de r th e em

pl oym en t co nt ract

. Bec au se Mi nn

. St at

. § 18 1.1 3 crea te s a ci vi l p e n a l t y, it m us t be st ric tl y co ns tru ed

. Lee, 7 41 N.W .2d at 1 25 –2 6 (i nt erp ret in g M in n. St at . § 1 81 .13 ).

-6

-Sect io n 18 1.0 3
, s i mi l a r to § 18 1.1 3, do es no t de te rm in e wh at an em pl oyer

owe s. The em

pl oym en t co nt ract , no t th e st at ut e, de te rm in es wha t co m m is si on s ha ve b e e n “ear ne d th ro ug h th e la st da y of em pl oym en t.” Mi nn

. St at

. § 18 1

. 0 3

. Sect io n 18 1.0 3 al so pr ov id es fo r a pe na lt y b y a ll owi ng th e reco ve ry of do ub le th e

c o mm i ss io ns owe d if an em pl oyer “ al te r[s ] th e m et ho d of pa y m en t, ti m in g o f
pa y m en t, or pr oc ed ur es fo r pa y m en t of co m m is si on s.” See Mi nn

. St at

. § 18 1.0 3, su b.
3. Thu s, li ke § 18 1.1 3, § 18 1.0 3 m us t be st ric tl y co ns tru ed

. Cf. Lee, 74 1 N.W .2d at 12 5– 26

.

The refo re, “ [t]o reco ve r un de r [ei th er] st at ut e, th e em pl oyee m us t es ta bl is h an in de pe nd ent subs ta

nti ve le ga l rig ht
, se pa rat e an d di st in ct fro m [§ § 18 1.0 3 an d 18 1.1 3]

to th e pa rti cu la r wag e cl ai m ed .” Cal da s, 82 0 N.W .2d at 83 7 (in te rp ret in g Mi nn

. St at

. § 18 1

. 1 3 )

. Th e te rm s of th e em pl oym en t co nt ract de te rm in e wha t wag es an d

co m m is si on s are “ earn ed ” an d owi ng at th e ti m e of te rm in at io n. Any su ch earn in gs

m ay be “ su bjec t to co nd it io ns sp eci fie d in th e co nt ract .” Lee, 74 1 N.W .2d at 12 6. Und er th e te rm s of th e ap pl ic ab le st at ut es , th eref or e, JLLA is on ly su bjec t to pe na lt ie s fo r fai lu re to pa y (o r fo r al te rin g th e m et ho d of pa y m en t) if it owe d Karl en a

co m m is si on on th e Pri m eb ar de al at th e ti m e of hi s te rm in a t i o n

. S ee Mi nn

. St at

. §§ 18 1.0 3 a nd 18 1.1 3.

W e co nc lu de th at JLLA di d no t owe Karl en a co m m is si on on th e Pri m eb ar de al

at th e ti m e of hi s te rm in at io n. It is un di sp ut ed th at th e Pri m eb a r c o mm i s s i on
pa y m en ts were su bjec t to at le as t two co nd it io ns pr eced en t, ne it he r of whi ch ha d be en

m et at th e ti m e Karl en was te r mi n a t e d
, a nd th us no co m m is si on ha d be en “ earn ed ”

or was o win g u nd er t he em pl oym en t co nt ract at t he ti m e o f hi s t erm in at io n.

Fi rs t, JLLA’s le as in g ag en ts on ly earn co m m is si on s on rev en ue JLLA act ua ll y

rece iv es

. Karl en ag rees th at th e ne w co m pe ns at io n pr og ram was de sc rib ed to hi m in

a Ja nu ary 27
, 20 12
, “ Co m pe ns at io n Ch an ge ” m em o; an d th e pa rti es do no t di sp ut e th at th is m em o was a pa rt of th e e mp l o y m en t co nt ract be twee n JLLA an d Karl en

.

-7

-Thi s m em o p ro vi de d t ha t ag en ts wil l n o l on ge r ha ve a ta rg et bo nu s bu t wi ll in st ead

be el ig ib le to earn “ pr od uc ti on ba se d” co m m is si on s. Age nt s a r e “el i g ib le fo r a
pr od uc ti on ba se d in cen ti ve whi ch in cl ud es co m m is si on pa y m en ts of up to 30 % of th e le as in g re ven ue yo u di re ct ly ea rn .” (Em ph as is ad de d.) If fo r so m e reas on JLLA do es

no t rece iv e rev en ue fro m it s cl ie nt s, th en th e ag en ts wou ld no t be pa id a co m m is si on

. 3
Thi s m ean s th at ag en ts m us t wait to rece iv e co m

m is si on s (an d ev en to kn ow if th ey wil l recei ve a co m

m is si on ) un ti l s om et im e aft er ex ecu ti on of a le as e, whe n rev en ue is rece iv ed

. JLLA st ru ct ur es it s le as es so it rece iv es pa y m en t fro m th e pr op ert y

own ers in two in crem en ts : on e h al f of th e p ay m en t o win g i m

m ed ia te ly after a le as e is ex ecu te d an d th e ot he r ha lf whe n th e ret ai l te na nt op en s f o r bu si ne ss

. The ti m e
pe rio d bet ween whe n a le as e is ex ecu te d and whe n rev en ue is fin al ly rece iv ed m ay , at ti m es , be su bs ta nt ia l. In th is cas e, th e fir st pa y m en t on th e Pri m eb ar le as e di d no t arri ve un ti l M ay

20 12 , lo ng aft er Karl en ’s ter m in at io n.

Seco nd
, an d pe rh ap s m or e fu nd am en ta ll y , th e Pri m eb ar le as e was no t ex ecu te d

un ti l aft er Karl en was te rm in at ed

. J LL A arg ue s th at an y co nt ract ua l ex pe ct at io n

en de d whe n Karl en was te rm in at ed

. W e ag ree th at ex ecu ti on of th e l e a s e was a 4
cri ti cal co nd it io n to Karl en earn in g a co m m is si on

. The Co m

pe ns at io n Ch an ge m em o

ex pr es sl y st at es th at “ Co m m is si on pa y m en t am ou nt s are de pe nd en t up on th e type of l e a s e

. . . an d le as in g ag en ts in vo lv ed in exec ut in g th e de al .” (Em ph as is a d d e d

. ) Pri or to t e r mi na ti on , Karl en ha d, at m os t, an ex pe ct at io n of earn in g “ up to 30 %”

The Co m pe ns at io n Ch an ge m em o de scrib es th e el ig ib le co m m is si on s as be in g 3

“ up to 30 % o f t h e l e as in g rev en ue y ou di rect ly earn .” The ag reem en t is no t cl ear whe th er th e 3 0 % is gu aran te ed on ev ery tra ns act io n. W e al so no te th at th e Co m pe ns at io n Ch an ge m em o su gg es ts th at co m m is si on pa y m en ts wou ld no t be pa id p r i o r t o A pr il 20 12

. It ex pr es sl y st at es : “ You wil l be el ig ib le to rece iv e th e
co m m is si on pa y

m en ts be gi nn in g in Apr il
, su bjec t to yo ur reco ur se dr aw be in g
co m pl et el y rep ai d.”

JLLA is care fu l to di st in gu is h be twee n co nt ract ua l ex pe ct at io ns pr i o r to 4
te rm in at io n an d it s wil li ng ne ss to pa y Karl en ba se d on so m e ot he r eq ui ta bl e th eo ry

. -8

-co m

m is si on sh ou ld th e Pri m eb ar le as e be ex ecu te d. Thi s ex pe ct at io n la st ed on ly as lo ng as Karl en was em

pl oyed wit h JLLA

. Bec au se Karl en ha d no t fin al iz ed th e P r im eb ar le as e pr io r to hi s te rm in at io n, Karl en ha d no co nt ract ua l en ti tl eme n t t o a

co m m is si on at th e ti m e of hi s te rm in at io n. Thu s, th e fai lu re of on e or bo th of th es e 5

co nd it io ns pre ced en t m ean s t ha t J LLA d id no t owe Karl en an y pa y m en t at th e ti m e of te rm in at io n. As a res ul t, JLLA di d no t br each it s co nt ract wi t h K a r l e n su ch th at
st at ut or y la te pa y m en t pe na lt ie s were owi ng pu rs ua nt to Mi nn

. St at

. §§ 18 1.0 3 an d
18 1.1 3.

Nev ert he le ss , th e di st ric t co ur t fo un d th at JLLA owe d Karl en a co m m is si on on th e Pri m eb ar le as e, an d hel d th at JLLA ha d im pr op erl y at ta ch ed co nd it io ns to th os e
pa y m en ts th ereb y ch an gi ng th e m et ho d or te rm s of th e pa y m en ts

. It is no t e n t i r e ly cl ear fro m th e reco rd un de r wha t th eo ry th e di st ric t co ur t co nc lu de d th at JLLA owe d th e co m m is si on ; n or is it cle ar wh en ex act ly the co m m is si on was o wed

. But ev en 6
if JL L A ev en tual ly owe d Karl en co m m is si on pa y m en ts un de r a su bs eq ue nt ag re em en t

or un de r so m e ot he r e q u i t a bl e th eo ry , we do no t be li ev e th at Mi nn . S ta t. §§ 18 1.0 3

an d 18 1.1 3 m ay be in te rp ret ed so br oa dl y as to pr ov id e pe na lt ie s fo r la te pa y m en t of

co m m is si on s th at were no t owe d un de r th e em pl oym en t co nt ract pr io r to te rm in at io n. By th ei r te rm s, th es e two st at ut or y pro vi si on s ar e li m it ed to pr ov id in g pe na lt ie s fo r th e de la y ed pa y m en t of am ou nt s “ earn ed th ro ug h th e la st da y of em pl oym en t” an d/ or

W e no te th is m ig ht be a di ffer en t cas e ha d Karl en be en te rm in at ed in ba d fai th 5 in an at te m

pt to av oi d pa y in g a co m m is si on

. Howev er, at t h e s u mm a r y jud gm en t he ari ng , Karle n c on ced ed he was n ot ter m in at ed in ba d fa it h.

JLLA m ai nt ai ns th at th e Pri m eb ar co m m is si on pa y

m en ts were no t owe d un de r 6 th e em pl oym en t co nt ract , whi ch te rm in at ed o n J a n u a ry 31
, 20 12
, bu t were in st ead pa id du e to a la te r a g r e e men t m ad e wit h Karl en fo ll owi ng hi s te rm in at io n. W he n JLLA ev en tu al ly rece iv ed rev en ue , JLLA is su ed ch eck s to Karl en fo r th e co m m is si on
am ou nt s. It i s t h e s e p a y m en ts th at th e di st ric t co ur t he ld were in su ffi ci en t, un de r Mi nn . Sta t. § § 1 81 .03 an d 1 81 .13 , du e to res tri ct io ns th at JLLA pu rp or te dl y pl aced

on cas hi ng th e ch eck s.

-9

-“ act ua ll y earn ed an d un pa id at th e ti m e of di sc ha rg e.” Mi nn

. St at

. §§ 18 1.0 3, 18 1.1 3.

No su ch am ou nt s were owe d at th e ti m e of Karl en ’s di sc ha rg e. As su ch
, an y am ou nt s la te r owe d are ou ts id e th e sc op e of th e st at ut es

. The refo re, w e co nc lu de as a m at te r of law t ha t Karlen was no t o wed eit he r co m m is si on s o r pe na lt ie s b as ed on a br each of co nt ract th eo ry

.

In hi s ap pe l l at e br ie f, Karl en ad m it s th at “ [n ]o ag reem en t was ev er reac he d be twee n Karl en an d App el la nt JLL[A] po st -te rm in at io n

. . . .” Thi s ad m is si on fo recl os es hi s ab il it y t o p r o c e e d on rem an d un de r th e th eo ry th at th ere was a po st

te rm in at io n ag reem en t th at was br each ed

. Karl en al so ha s no t ap pe al ed th e di sm is sa l of hi s un jus t en ric hm en t an d pr om is so ry es to pp el cl ai m s. As su ch
, JLLA is en ti tl ed

to su m m ary jud gm en t.

B. Atto rney ’s Fees

Karl e n ap pe al s th e di st ric t co ur t’s or de r award in g at to rn ey ’s f ees fo r a le ss er

am ou nt th an req ue st ed

. As ex pl ai ne d, Karl en is no lo ng er a pr ev ai li ng pa rty en ti tl ed

to at to rn ey ’s fees an d co st s un de r Mi nn

. St at

. § 18 1.1 71

. At or al arg um en t, Karl en ’s

co un se l ag reed hi s ap pe al wou ld be m oo t if we fai le d to affi rm th e ru l i n g on th e

m eri ts of th e award

. Giv en ou r rev ers al of th e un de rlyin g award
, we m us t al so va cat e th e la te r or de r award in g c os ts an d a tt or ne y ’s fees

.

II I. Co ncl us io n

Fo r th e reas on s st at e d ab ov e, we rev ers e th e di st ric t co ur t’s or de r gr an ti ng

su m m ary jud gm en t in fav or of Karl en on hi s b reac h o f co nt ract cl ai m in vo lv in g th e Pri m eb ar co m

m is si on an d va cat e th e di st ric t co ur t’s or de r gr an ti ng Karl en at to rn ey ’s fees an d c os ts

.

-1 0-JLLA’s br ie f on ap pe al ack no wled g e s th at aft er Karl en ’s se pa rat io n fro m

em pl oym en t, the co m

pa ny ag reed to pa y Karl en a th irt y -p erce nt co m m is si on on th e Pri m eb ar deal

. At oral arg um en t, cou ns el fo r JLLA li ke wis e ad vi se d th e co ur t th at Karl en is “ en ti tl ed to a co m m is si on on th e Pri m eb ar de al ” of $3 4
, 5 2 1

. Th e co ur t

ex pe ct s t ha t J LLA will fol lo w th ro ug h o n i ts rep res en ta ti on s.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-1 1-