Opinion ID: 852921
Heading Depth: 2
Heading Rank: 1

Heading: Bonus Based on Post Resignation Collections

Text: The Court of Appeals took the view that Highhouse's right to bonus payments vested at the time he performed the services that the bonus was based upon. Highhouse v. Midwest Orthopedic Inst., 782 N.E.2d 1006, 1011 (Ind.Ct.App.2003). We agree with that interpretation of this agreement. Accordingly, as a matter of contract law, Highhouse was entitled to a bonus based on post-resignation collections. Paragraph 9 of the employment agreement provides: Termination without Cause. Employer may terminate this Agreement at any time and without cause effective upon ninety (90) days advance written notice provided to Employee. In such event, Employee shall continue to render his services, and shall be paid his regular compensation up to the date of termination. MOI claims this clause applies to termination by either the employee or the employer, and provides for payments to stop at the date employment ends. First, this provision does not appear to apply to resignation and therefore does not unambiguously terminate the right to payment after the effective date of a resignation. By its terms it applies only if MOI terminates the employee, which can be done only by 90 days notice. After an employee leaves an employer, bargained-for compensation is still payable when earned in the absence of a clear and unambiguous intent to terminate payments when employment ends. Moreover, absent some other arrangement or policy, when an employer makes an agreement to provide compensation for services, the employee's right to compensation vests when the employee renders the services. See, e.g., Baesler's Super-Valu v. Ind. Comm'r of Labor, 500 N.E.2d 243, 246 (Ind.Ct.App.1986); Die & Mold, Inc. v. Western, 448 N.E.2d 44, 46-47 (Ind.Ct. App.1983). Although not entirely clear on the point, Highhouse's agreement does not unambiguously call for termination of bonus payments as of his resignation. Because there is no clear indication that Highhouse was to be denied a bonus based on collections after his resignation, as a matter of contract law, the bonus is payable on post-June 30, 1999 collections for Highhouse's services. A post termination bonus is to be calculated in the same manner as Highhouse's earlier bonuses. The contract is less than precise in providing that the bonus was to be based upon these factors. However, the practice of the parties in calculating the bonus provides reasonably clear guidance as to its meaning. According to the undisputed affidavit of MOI's accountant, the bonus was paid quarterly by deducting fixed, variable and personal expenses from collections attributable to Dr. Highhouse. These expenses were for the most part allocated costs over which [Highhouse] had no control. This course of conduct, which is undisputed, is a reliable guide to determine the contract's meaning, and we accept it as such. See, e.g., Bain v. Memorial Hosp., 550 N.E.2d 106, 110 (Ind.Ct.App. 1990).