Craig S. Culbertson v. Wells Fargo Insurance Services U.S.A. Inc.

• Court: Court of Appeals of Washington
• Decided: November 3, 2015
• Docket: 32702-7
• Status: Unpublished

Opinion

FILED

NOVEMBER 3, 2015

In the Office of the Clerk of Court

W A State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION THREE

CRAIG S. CULBERTSON, a married ) m~, ) No. 32702-7-111 ) Appell~t, ) ) v. ) ) UNPUBLISHED OPINION WELLS FARGO INSURANCE ) SERVICES USA, INC., a North Carolina ) corporation; JOSHUA TYNDELL ~d ) JANE DOE, ~d the marital community ) comprised thereof; RHONDA IDE ~d ) JOHN DOE, ~d the marital community ) comprised thereof, ) ) Respondent. )

KORSMO, J. - Craig Culbertson appeals the dismissal at summary judgment ofhis

wrongful termination suit against Wells Fargo Insur~ce Services, primarily contending

that his employer did not live up to the promises of the employee h~dbook ~d that he

was owed commissions earned after his departure from the comp~y. We affirm.

FACTS

Mr. Culbertson was hired by a Wells Fargo subsidiary comp~y in 2006 on ~ at-

will basis to sell employee benefit pl~s, primarily health ~d dental insur~ce. He was No. 32702-7-III Culbertson v. Wells Fargo Ins. Servs. Inc.

at that time given an employee handbook that outlined Wells Fargo policies and

procedures for resolving internal disputes and reviewing termination decisions. The

handbook opened with the disclaimer that it did not constitute a contract and did not alter

at-will employment status. Clerk's Papers (CP) at 59l. It also repeated that disclaimer at

the beginning of both the "Dispute Resolution" and "Involuntary Termination" sections

of the handbook. CP at 634,635,687.

In general terms, Mr. Culbertson was paid a salary and also received a commission

from both existing accounts and new sales. Wells Fargo adjusted his compensation rates

and employment terms on a nearly annual basis. The 2013 sales incentive plan provided

that commissions would be paid on a quarterly basis. CP at 1022. The employee was

entitled only to commissions earned up to the point of termination. CP at 1023. Prior

compensation plans had been silent concerning commissions earned after termination.

Information about the 2013 compensation plan was included in an email that contained a

link to a website posting of the new plan.

When originally hired in 2006, Mr. Culbertson signed a Trade Secrets Agreement

(TSA). Among its provisions, the TSA required Mr. Culbertson to maintain the

company's secrets after his employment, included a noncompetition agreement that

prohibited him from soliciting business from his customers for two years, and expressly

confirmed that his employment remained at-will. CP at 575-578. The TSA was updated

in 2010. CP at 545-547, 566-568. The new TSA again included a confidentiality

No. 32702-7-III

Culbertson v. Wells Fargo Ins. Servs. Inc.

agreement, a strengthened (from the company's perspective) noncompetition agreement,

and a reaffirmation that employment remained at-will. Id. In exchange for signing the

agreement, Wells Fargo agreed to pay an increased commission for one year. CP at 547,

566. Mr. Culbertson signed the agreement. CP at 568.

On February 3, 2014, Mr. Culbertson was called into his supervisor's office,

accused of falsifying customer accounts, and summarily fired without resort to the

company's dispute resolution process. CP at 142. Litigation rapidly ensued, with both

sides suing the other on the same day, March 21, 2014. Wells Fargo filed suit to enforce

the TSA, while Mr. Culbertson filed the present case challenging his termination and the

nonpayment of earned commissions.

Wells Fargo moved for partial summary judgment in the TSA litigation, seeking to

strike Mr. Culbertson's affirmative defense oflack of consideration. There Wells Fargo

took the position that it had provided adequate compensation for the new TSA. Judge

Annette Plese granted the motion, determining that there was sufficient compensation to

support the modification of the TSA.

Meanwhile, after a period of discovery, Wells Fargo moved for summary judgment

on most of the claims in the wrongful termination litigation. Mr. Culbertson filed a

motion for a continuance, seeking additional time to obtain discovery concerning, and

perform a study of, his Wells Fargo computer to confirm that he had never clicked on the

link to the 2013 compensation plan contained in the email he had received. The trial court

denied the continuance.

The trial court, the Honorable Michael Price, then granted Wells Fargo's motion

for summary judgment. After stipulating to dismissal of his remaining additional claims,

Mr. Culbertson timely appealed the summary judgment ruling. The matter ultimately

proceeded to oral argument before this panel.

ANALYSIS

Mr. Culbertson argues that the trial court erred in denying his request to continue

the hearing for additional discovery, erred in determining that the handbook did not

create an enforceable promise, and erred in applying the 2013 compensation plan to deny

him commissions on existing accounts. We address those three claims in the noted

order.!

Continuance for Discovery

CR 56(f) permits the trial court to order a continuance to allow further discovery

where it appears that the responding party, for good reason, cannot present facts essential

to its opposition of summary judgment. Review of a denial of a motion under CR 56(f) is

for an abuse of discretion. Tellevik v. Real Prop. Known As 31641 W Rutherford St., 120

! Mr. Culbertson also argues that he is entitled to attorney fees pursuant to RCW 49.48.030 in the event he successfully obtains his commissions. In light of our disposition of that issue, we do not further discuss the attorney fee request.

Wn.2d 68,90,838 P.2d III (1992). A court may deny such a motion where (1) the

requesting party fails to offer a good reason for the delay, (2) the requesting party does

not state what evidence is desired, or (3) the desired evidence will not raise a genuine

issue of material fact. Id.

The requested information failed the third Tellevik standard. Mr. Culbertson

argued that he was unaware of the terms of the 2013 compensation plan. While we will

discuss the merits of that argument later, discovery in support of that claim was of no

moment here. For purposes of summary judgment, the trial court was required to view

the evidence in Mr. Culbertson's favor. E.g., Lybbert v. Grant County, 141 Wn.2d 29,

34, 1 P.3d 1124 (2000). Mr. Culbertson's affidavit in opposition to the motion for partial

summary judgment stated that he had never clicked the e-mail link to check the terms of

the 2013 compensation plan and had never read the plan. CP at 142. A favorable report

on the anticipated discovery would do no more than corroborate Mr. Culbertson's

affidavit. 2

Thus, the discovery would add nothing to the summary judgment since the trial

court already had to assume the truth of Mr. Culbertson's evidence on that point. The

discovery would not raise an issue of material fact. Under Tellevik, the trial court had

reasonable grounds for denying the request. There was no abuse of discretion.

2 Counsel for Mr. Culbertson agreed during oral argument to this court that the information would corroborate his client.

No. 32702-7-III Culbertson v. Wells Fargo Ins. Servs. Inc.

Employee Handbook

Mr. Culbertson argues that he was wrongfully terminated because Wells Fargo

denied him the process guaranteed him by the employee handbook. That document does

not bear the interpretation he places on it.

Initially, we note the well settled standards governing review of a summary

judgment. This court reviews a summary judgment de novo, performing the same inquiry

as the trial court. Lybbert, 141 Wn.2d at 34. The facts, and all reasonable inferences to be

drawn from them, are viewed in the light most favorable to the nonmoving party. Id. If

there is no genuine issue of material fact, summary judgment will be granted if the moving

party is entitled to judgment as a matter of law. Id. "A defendant in a civil action is

entitled to summary judgment if he can show that there is an absence or insufficiency of

evidence supporting an element that is essential to the plaintiffs claim." Tacoma Auto

Mall, Inc. v. Nissan N Am., Inc., 169 Wn. App. 111, 118,279 P.3d 487 (2012).

The moving party bears the initial burden of establishing that it is entitled to

judgment because there are no disputed issues of material fact. Young v. Key Pharm.,

Inc., 112 Wn.2d 216,225,770 P.2d 182 (1989). Ifa defendant makes that initial

showing, then the burden shifts to the plaintiff to establish there is a genuine issue for the

trier of fact. Id. at 225-226. "A material fact is one that affects the outcome of the

litigation." Owen v. Burlington N & Santa Fe R.R., 153 Wn.2d 780,789, 108 P.3d 1220

(2005). While questions of fact typically are left to the trial process, they may be treated

No. 32702-7-111

as a matter of law if "reasonable minds could reach but one conclusion" from the facts.

Hartley v. State, 103 Wn.2d 768, 775, 698 P.2d 77 (1985). A party may not rely on

speculation or having its own affidavits accepted at face value. Seven Gables Corp. v.

MGMlUA Entm 't Co., 106 Wn.2d 1, 13,721 P.2d 1 (1986). Instead, it must put forth

evidence showing the existence of a triable issue. Id.

Here, the trial court concluded that there was no material issue of fact to present to

a jury because the handbook did not provide a promise of specific treatment and did not

alter the at-will nature of the employment relationship. CP at 223. We agree.

The handbook describes a process of escalating responses to issues at work,

starting with a discussion with a supervisor, then proceeding to either the supervisor's

supervisor or a human resources representative, and possibly even mediation. CP at 634­

635. However, the policy also expressly states:

In most cases, if you have a performance issue your supervisor will work with you to provide the appropriate performance counseling and corrective action so that you have the opportunity to improve. However, the policy is not progressive. This means that we reserve the right to escalate the process or use any part of it that we feel is appropriate for the situation­ and, if necessary, to terminate employment without implementing performance counseling and corrective action. This is consistent with our "employment at will" policy below.

CP at 633 (emphasis in original).

The handbook then goes on to discuss at will employment:

This Handbook is not a contract of employment. Your employment with a Wells Fargo company has no specified term or length; both you and Wells

Fargo have the right to terminate your employment at any time, with or without advance notice and with or without cause.

This is called "employment at will." Only an officer of Wells Fargo at the level of executive vice president or higher, authorized by the senior Human Resources Manager for your region or line of business, may alter your at­ will status or enter into an agreement for employment for a specified period of time. Any modification to your at-will employment status must be , confirmed in writing by an officer of Wells Fargo at the level of executive vice president or higher, authorized by the senior Human Resources Manager for your region or line of business.

Id.

Reasonable minds could reach but one conclusion in this situation. Although

Wells Fargo had a process for resolving disputes, neither party had to follow that process

and the existence of the process did not alter the at-will nature of the employment

relationship. Indeed, Wells Fargo expressly stated that it reserved the right not to follow

the process in cases of termination. CP at 633.

The handbook stated a possible dispute resolution process, but did not specifically

promise that the process would apply in all circumstances, and particularly noted the

termination process as one likely exception. Instead, the handbook stated a process that

both sides could agree to use, but did not require either side to do so.

The handbook did not create a right of Mr. Culbertson to invoke the dispute

resolution process. Summary judgment was properly granted on this issue.

No. 32702-7-II1 Culbertson v. Wells Fargo Ins. Servs. Inc.

Commissions After Termination

Mr. Culbertson also argues that Wells Fargo owed him commissions earned on his

existing accounts after he left employment. He contends that the 2013 compensation plan

was ineffectual because his compensation was subject to bilateral agreement due to the

2010 TSA amendment and that Wells Fargo was judicially estopped from contending

otherwise. Since he did not agree to the 2013 plan, he concludes that the procuring cause

doctrine would allow him to earn post-termination commissions. However, Judge Price

concluded that the 2013 compensation plan was effective and that Wells Fargo already

had made all payments owing under that plan. CP at 223-224. We again agree.

Several different legal doctrines relate to this argument. First, we note that a

terminable-at-will employment contract may be modified unilaterally by the employer.

Duncan v. Alaska USA Fed. Credit Union, Inc., 148 Wn. App. 52, 73, 199 PJd 991

(2008). Modification is an inherent feature of at-will employment since the employer

could simply terminate the old contract and offer a new one. Id. at 77-78.

The second doctrine at play is judicial estoppel. This equitable doctrine prevents a

party from gaining an advantage by asserting one position in court and later taking a

clearly inconsistent position. Cunningham v. Reliable Concrete Pumping, Inc., 126 Wn.

App. 222, 224-225, 108 PJd 147 (2005). A second purpose of the doctrine is to

'" preserve respect for judicial proceedings.'" Arkison v. Ethan Allen, Inc., 160 Wn.2d

535, 538, 160 P.3d 13 (2007) (quoting Cunningham, 126 Wn. App. at 225). Courts focus

on three factors when deciding whether to apply judicial estoppel: (1) whether the party's

later position is clearly inconsistent with its earlier position, (2) whether accepting the

new position would create the perception that a court was misled> and (3) whether a party

would gain an unfair advantage from the change. Miller v. Campbell, 164 Wn.2d 529,

539,192 P.3d 352 (2008) (citing Arkison, 160 Wn.2d at 538-539).

The third doctrine implicated by this argument involves Washington's policy on

noncompetition agreements. A noncom petition agreement entered into at the start of

employment is ordinarily valid as part of the employment contract, but any change to the

agreement or a newly incorporated noncompetition agreement requires independent

consideration to be valid. See Labriola v. Pollard Grp., Inc., 152 Wn.2d 828, 100 P.3d

791 (2004). This third doctrine was at issue before Judge Plese. As noted previously,

Judge Plese concluded that the increased commission was adequate consideration for the

amended TSA.

Mr. Culbertson argues that Wells Fargo's representations before Judge Plese

estop it from challenging his argument that he now had a bilateral compensation

agreement due to his signing the 2010 TSA. This argument fails on several bases. First,

there is nothing in the arguments to Judge Plese indicating that Wells Fargo contended

Mr. Culbertson's future compensation was governed by the new TSA agreement.

Instead, it simply argued, and Judge Plese found, that the one year bump in commissions

was adequate compensation for the more stringent noncompetition agreement. The fact

that Mr. Culbertson signed the 2010 TSA was not in dispute in the prior litigation. Mr.

Culbertson wants to draw a legal conclusion from that action, but it was not a conclusion

that Wells Fargo argued for in the TSA litigation and there is no basis for applying

estoppel in this case.

Second, the 2010 TSA itself does not support the argument Mr. Culbertson is now

making. The TSA expressly indicated that the new compensation was for 2010 only, and

the TSA agreement again confirmed that it did not alter the at-will employment status. 3

CP at 566, 568. There is no basis for finding that the 2010 TSA agreement implicitly

created a provision contrary to its expressed terms.

Third, even if the parties in 2010 had a bilateral compensation agreement, the

continued existence of the at-will employment relationship still permitted Wells Fargo to

unilaterally change the terms of employment. Duncan, 148 Wn. App. at 73. That was

done here. Wells F argo first changed the terms of compensation in 2011. Wells Fargo

changed the terms of compensation again in 2013. 4 The at-will nature of the employment

permitted the changes. Id.

3"I understand that my employment with the Company is 'at will' and nothing in this document changes, alters or modifies my 'at will' status ...." CP at 568. 4We note that whether or not he knew about the 2013 terms, Mr. Culbertson did know that the company had unilaterally implemented them and did not challenge that action when it was taken, just as he did not challenge the 2011 changes.

11 No. 32702-7-II1 Culbertson v. Wells Fargo Ins. Servs. Inc.

For all three of the noted reasons, we agree with the trial court that the 2013

compensation plan was in effect. Wells Fargo paid Mr. Culbertson the commissions he

was owed under that plan. Accordingly, the trial court also correctly granted summary

judgment on that issue.

Affirmed.

A majority of the panel has determined this opinion will not be printed in the

Washington Appellate Reports, but it will be filed for public record pursuant to RCW

2.06.040.

WE CONCUR:

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