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Sheaff Brock Inv. Advisors, LLC v. Morton

Court of Appeals of Indiana

April 7, 2014

SHEAFF BROCK INVESTMENT ADVISORS, LLC, Appellant-Defendant,
v.
DAVID MORTON, Appellee-Plaintiff

Page 279

APPEAL FROM THE HAMILTON SUPERIOR COURT. The Honorable Steven R. Nation, Judge. Cause No. 29D01-1203-CC-2302.

ATTORNEYS FOR APPELLANT: ANDREW M. MCNEIL, JONATHAN L. MAYES, Bose McKinney & Evans LLP, Indianapolis, Indiana.

ATTORNEY FOR APPELLEE: THOMAS B. BLACKWELL, Hopper Blackwell, PC, Indianapolis, Indiana.

NAJAM, Judge. BAKER, J., and CRONE, J., concur.

OPINION

Page 280

NAJAM, Judge

STATEMENT OF THE CASE

Sheaff Brock Investment Advisors, LLC (" Sheaff Brock" ) appeals the trial court's grant of summary judgment in favor of David Morton on Morton's claims that Sheaff Brock breached its employment agreement with Morton and violated Indiana's Wage Claims Act. Sheaff Brock presents two issues for our review:

1. Whether the trial court erred when it concluded that Sheaff Brock breached its contract with Morton.
2. Whether the trial court erred when it concluded that Morton's additional compensation under the employment agreement constitutes a wage under the Wage Claims Act.

Morton cross-appeals and presents two issues for our review:

Page 281

1. Whether the trial court erred when it entered summary judgment in favor of Sheaff Brock on Morton's constructive fraud claim.
2. Whether Morton is entitled to appellate attorney's fees.

We affirm.[1]

FACTS AND PROCEDURAL HISTORY

On March 1, 2010, Morton began his employment with Sheaff Brock as an investment advisor representative. Morton's duties included providing prospective clients with information about Sheaff Brock's investment styles and strategies. If a prospective client elected to open an account with Sheaff Brock, the client signed an investment advisory agreement (" investment agreement" ). At that point, Morton had fulfilled his duties as an investment advisor representative, and other Sheaff Brock employees assumed responsibility for servicing the client's needs.

Most of Sheaff Brock's clients were referred by TD Ameritrade, which assessed an annual investment management fee against client account balances on a quarterly basis. TD Ameritrade, on behalf of Sheaff Brock, assessed the management fees at the start of each quarter. Clients who opened new accounts during a quarter were assessed a management fee for the pro-rated number of days remaining in the quarter, and clients who left during a quarter received a credit against the management fee for the pro-rated number of days remaining in the quarter. Because assessments were subject to proration, Sheaff Brock did not finally settle each client's account and determine the management fees due on account balances until the end of each quarter.

Morton was an at-will employee, but he also had an employment agreement with Sheaff Brock that provided in relevant part as follows:

3. Changes in Terms and Conditions of Employment. The terms and conditions of your employment may be amended from time to time, as the needs of the Employer may require. . . .
4. Amount and Payment of Compensation. During the term of this agreement, Employer shall pay the following:
o An annual guaranteed draw of thirty thousand dollars ($30,000.00), paid in accordance with the Employer's normal payroll policies and procedures.
o Additional compensation will be paid as follows:
50% of the net management fees paid to Employer during the first year of Employer providing investment management services to a client as a direct and proximate result of your marketing efforts which result in the client entering into an investment advisory agreement with the Employer.
20% of the net management fees paid to Employer thereafter from the continuing retention of Employer to provide investment management services to a client as a direct and proximate ...

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