Bloomsz, LLC v. Van Bourgondien

540 S.W.3d 380
CourtCourt of Appeals of Kentucky
DecidedNovember 9, 2017
DocketNO. 2016-CA-001347-MR
StatusPublished

This text of 540 S.W.3d 380 (Bloomsz, LLC v. Van Bourgondien) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bloomsz, LLC v. Van Bourgondien, 540 S.W.3d 380 (Ky. Ct. App. 2017).

Opinion

DIXON, JUDGE:

Bloomsz, LLC, appeals the judgment of the Boone Circuit Court in favor of Appellant's former sales representative, Joseph Van Bourgondien. Finding no error, we affirm.

Bloomsz and its affiliate, DeVroomen Bulb Company, are engaged in the business of selling horticultural products to retail outlets and garden centers.1 Prior to 2012, Van Bourgondien sold horticultural products for his family-owned business, K. Van Bourgondien & Sons, until the company was sold in bankruptcy. In February 2012, Van Bourgondien entered into an oral agreement with the owner of Bloomsz and DeVroomen, Hans Philippo, to sell the companies' garden products to various retailers. On February 17, 2012, Van Bourgondien sent an e-mail to Philippo, which stated:

Based on starting on a draw verses [sic] commissions, I would need a monthly draw of 11,250. One other thing we did not discuss was you covering my traveling expenses?
I attached a commission structure that I had given Peter with commission at gross margin levels.
Please let me know if you are in agreement with this.

Philippo later replied, "[M]y answer is yes, I can work with this[.]" Shortly thereafter, the staff accountant for the companies, Maria Anderson, began wiring $11,250.00 to Van Bourgondien's bank account each month. Van Bourgondien resigned from his position at Bloomsz and DeVroomen in February 2013.

Bloomsz filed a complaint against Van Bourgondien for breach of contract. Bloomsz alleged Van Bourgondien was personally liable for repayment of monthly advances that exceeded his commissions in the amount of $67,082.92. Van Bourgondien generally denied the allegations.

On July 7, 2016, the matter came before the Boone Circuit Court for a bench trial. The court heard testimony from Van Bourgondien and from Bloomsz's accountant, Anderson. According to Van Bourgondien's testimony, he agreed to work as an independent contractor salesman for Bloomsz and DeVroomen. Van Bourgondien explained that he, along with his boss at Bloomsz, Peter Zonneveld, worked with major chain retailers throughout the country *382to market Bloomsz's products. Van Bourgondien also worked with Roland Van den Bergh, his supervisor at DeVroomen, to showcase products at trade shows and regional retailers in the Midwest and Northeast. Van Bourgondien testified he had an oral agreement with Philippo to sell products on a commission basis. The e-mail from Philippo approving Van Bourgondien's $11,250.00 monthly advance on his commissions was introduced into evidence. Van Bourgondien maintained he never discussed with anyone that he would be personally liable for repayment in the event his commissions were less than the amount he was advanced each month. He acknowledged he understood the companies would, at some point, reconcile the advances paid and commissions earned; however, he hoped his commissions would exceed his advances.

The circuit court entered findings of fact, conclusions of law, and a judgment in favor of Van Bourgondien. The court concluded there was no agreement between the parties that Van Bourgondien would be personally liable for any advances that exceeded his commissions. This appeal followed.

Bloomsz contends the court erred by disregarding Van Bourgondien's status as an independent contractor, along with his testimony indicating he understood the companies would eventually reconcile the advances paid and commissions earned.

The Boone Circuit Court, ruling in favor of Van Bourgondien, relied on Hibbs-Kiefer Hat Co. v. Schneiderhan , 236 Ky. 470, 33 S.W.2d 304 (1930), which involved an employer's contract with its traveling salesman to sell products on commission. The parties agreed the employer would advance weekly travel expenses to the salesman's drawing account and that the advances would be deducted from the commissions earned. Id. The salesman later resigned, having been paid more in advances than he earned in commissions. Id. The employer sued for breach of contract to recover the difference between the advances paid and commissions earned. Id. The Court concluded the parties' agreement precluded the employer from recovering the funds from its former employee. Id. at 305. The Court explained its reasoning, in relevant part:

No contract can be implied under which personal indebtedness will be created, for the express contract alleged in this petition is that those sums were to be deducted from the commissions which the employee might earn. There is no reference to any personal liability. The sole source of reimbursement was the commissions. It was the belief of the parties that these would be sufficient, not only to reimburse the companies, but to compensate the salesman in addition. To that extent the enterprise was in the nature of a joint speculative adventure from which both parties expected to profit.

Id.

In Agnew v. Cameron , 247 Cal.App.2d 619, 55 Cal.Rptr. 733, 735-36 (Ct. App. 1967), California's Fourth District Court of Appeal cited numerous cases, including Hibbs-Kiefer , when it adopted the majority rule that "the employer cannot recover excess advances from the employee in the absence of an express or implied agreement or promise to repay any excess of advances made over commissions earned." The Agnew court elaborated on the purpose of the majority rule:

The rationale for the existence of the majority rule is that the employee's undertaking is in the nature of a joint enterprise with the employer, the main object of which is the furtherance of the employer's business, and it is not to be assumed that the employee, in furnishing *383his time and ability, likewise assumes all the risk. When advances are made in regular amounts in consideration of continued activity by the employee, because of the regularity in payment and the requirement the employee give his full time and energies to the employment relationship, the presumption arises that the advances constitute salary or wages and thus are recoverable only from commissions.

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Related

Amherst Sportswear Company, Inc. v. Mark McManus
876 F.2d 1045 (First Circuit, 1989)
Frear v. P.T.A. Industries, Inc.
103 S.W.3d 99 (Kentucky Supreme Court, 2003)
Cantrell Supply, Inc. v. Liberty Mutual Insurance Co.
94 S.W.3d 381 (Court of Appeals of Kentucky, 2002)
Agnew v. Cameron
247 Cal. App. 2d 619 (California Court of Appeal, 1967)
First Commonwealth Bank of Prestonsburg v. West
55 S.W.3d 829 (Court of Appeals of Kentucky, 2000)
Hibbs-Kiefer Hat Company v. Schneiderhan
33 S.W.2d 304 (Court of Appeals of Kentucky (pre-1976), 1930)

Cite This Page — Counsel Stack

Bluebook (online)
540 S.W.3d 380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bloomsz-llc-v-van-bourgondien-kyctapp-2017.