United States District Court, S.D. Indiana, Indianapolis Division
ERIC S. TESLER, Plaintiff,
MILLER/HOWARD INVESTMENTS, INC., a Delaware Corporation, Defendant.
ENTRY ON DEFENDANT'S MOTION FOR SUMMARY
WALTON PRATT, JUDGE
matter is before the Court on Defendant Miller/Howard
Investment Inc.'s (“Miller/Howard”) Motion
for Summary Judgment. (Filing No. 84.) Plaintiff
Eric S. Tesler (“Tesler”), a former employee of
Miller/Howard, raises multiple claims against Miller/Howard
concerning unpaid compensation. (Filing No. 35.)
Specifically, Tesler is asserting claims of unjust enrichment
(Count III), negligence (Count V), breach of fiduciary duty
(Count VI), and breach of contract (Count VIII). For the
following reasons, the Court grants in part and
denies in part the Motion for Summary Judgment.
following facts are not necessarily objectively true, but as
required by Federal Rule of Civil Procedure 56, the facts are
presented in the light most favorable to Tesler as the
non-moving party. See Zerante v. DeLuca, 555 F.3d
582, 584 (7th Cir. 2009); Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986).
is a financial management corporation that sells securities.
It hired Tesler in October 2010 as a Regional Sales Director
to perform sales duties from his home in Fishers, Indiana.
Tesler's job was to market Miller/Howard's financial
services to investment advisors in his assigned region, the
“Middle United States, ” and hopefully induce
them to patronize Miller/Howard instead of another financial
services company. Tesler did not provide investment
management services; rather, he sold the investment
management services that other Miller/Howard employees
provided. He reported to Steve Chun (“Chun”),
Miller/Howard's Director of Marketing. (Filing No.
85-1 at 3.)
to hiring Tesler, Miller/Howard recruited him. During this
recruitment process, Tesler spoke with Chun both over the
telephone and at Miller/Howard's corporate headquarters
in Woodstock, New York. He also spoke to Tracee Cannon-Gordon
(“Cannon-Gordon”), a recruiter employed by a
recruiting firm that Miller/Howard had hired to assist in
filling the Regional Sales Director position. Id.
The parties dispute whether Cannon-Gordon was an agent of
Miller/Howard and whether she was empowered to negotiate
employment terms with Tesler on Miller/Howard's behalf.
(Filing No. 85 at 3; Filing No. 93 at 2-3.)
discussed compensation with Chun in anticipation of being
hired at Miller/Howard. (Filing No. 85-2 at 11.)
Chun told Tesler that, for accounts he generated, he would
receive a “25 percent commission the first year the
account is opened, 10 percent in the second year, and 5
percent in the third year, and 3 percent perpetuity.”
Id. When asked whether Chun used the word
“perpetuity, ” Tesler testified “I believe
his words were ‘ongoing,' but he also referenced,
when I asked him what, you know, ‘ongoing' meant,
if I recall correctly, he used the words
‘perpetuity,' which also appears in their
documentation.” Id. Tesler also discussed
compensation with Cannon-Gordon, who quoted the same
commission structure as Chun, but specifically explained that
Tesler would continue to receive the 3% commission on
accounts he originated even after he left the firm's
employ. Id. at 14.
October 27, 2010, Tesler accepted Miller/Howard's offer
of employment as a Regional Sales Director. (Filing No.
85-1 at 2.) When he was hired, he signed three relevant
documents. First, on October 27, 2010, both Tesler and Chun
signed a document titled “Terms of employment and
compensation.” Id. at 9. That document laid
out the compensation structure Tesler would receive at
Miller/Howard, which included a “$75, 000 base
salary” and a “commission schedule for
[separately managed] accounts-25%-10%-5%-3% ongoing, ”
enacting the discussions Tesler had with Chun and
Cannon-Gordon prior to his hiring. Id. Tesler would
also receive a 15%-10%-5% commission schedule for
institutional accounts (“UMA”) and a “3%
ongoing trail for current accounts-to service existing
business in territory.” Id.
parties designated Miller/Howard's employee handbook,
titled “Employee Policies”. (Filing No. 85-1
at 14-27; Filing No. 8-2.) The employee
handbook specifies that “[t]erminated employees will be
paid for vacation hours earned and not taken up to the point
of termination. Sick hours earned and not taken will
not be paid upon termination.” (Filing No.
85-1 at 19.) (Emphasis in original.) Tesler signed a
document acknowledging he had read and understood the
Employee Policies on November 5, 2010. Id. at 57.
That acknowledgment form stated,
I understand that the contents of the policies are presented
as a matter of information only and are not to be construed
as a contract between the Company and any of its
employees…. I further understand that my employment is
not for a specified term and that it may be terminated with
or without cause at the will of either the Company or myself.
third document Tesler signed upon his employment with
Miller/Howard was called “CONFIDENTIALITY
AGREEMENT.” Id. at 54-55. By that agreement,
also signed on November 5, 2010, Tesler agreed to keep
Miller/Howard's proprietary information confidential,
including investment techniques and strategies and
information pertaining to principals and investors.
Id. The agreement prohibited Tesler from
“tak[ing] possession outside of the office or on
electronic media any documents, formulas, notes, files,
client or contact lists, or work product of the employer,
notwithstanding that he employee may have participated in the
creation of such work product.” Id.
November 5, 2010, Tesler signed a document certifying that he
had read and understood Miller/Howards' Code of Ethics.
Id. at 49. Tesler certified in that document that he
would comply with the “Code of Ethics” as well as
“Miller/Howard Investments' Insider Trading
Policy” and its “Personal Emails Policy.”
Id. Neither party designated the Miller/Howard's
Code of Ethics or the Insider Trading Policy or Personal
Emails Policy, and thus those documents are not part of the
record of this case.
Tesler's employment with Miller/Howard, he opened
numerous separately-managed accounts (“SMA”) and
managed numerous UMA accounts, yielding management fees for
Miller/Howard. Miller/Howard paid commissions as a percentage
of the management fee collected for an account. When a
customer opened an account for management at Miller/Howard,
the company would assess a management fee against the account
on a quarterly basis. Regional Sales Directors earned a
commission based on a percentage of that management fee. For
example, if an SMA was opened, the Regional Sales Director
would receive a quarterly commission in the amount of 25% of
the management fee paid on that account each quarter (with
the exception of the quarter in which the account was
opened). This 25% commission would continue each quarter for
the first year the account was opened and then decrease from
there according to the commission schedule.
asserts it paid the quarterly commissions to Regional Sales
Directors during the calendar quarter for which they were
due. (Filing No. 85-1 at 4.) For example, Tesler was
paid $27, 900.84 commission on February 7, 2014. Id.
at 12. That commission was based on the management fees
assessed against accounts in Tesler's assigned territory
during January, February, and March of 2014. Tesler either
did not understand this process or does not agree that
commissions were paid during the calendar quarter for which
they were due. He testified that “[t]he commission-the
second quarter commission would be paid after they collect
the management fee to-from my understanding, and so it would
be after the-basically after the end of the quarter.”
(Filing No. 85-2 at 20.)
it was because he did not understand the process or for some
other reason, in April 2012, Tesler became concerned that the
commission amounts he was being paid were not consistent with
the Terms of Compensation agreement he signed. (Filing
No. 85-3 at 4.) Tesler requested from Chun a detailed
accounting of his “commission run” so that he
could independently calculate the amount he was owed.
Id. Neither Chun nor anyone else at Miller/Howard
fulfilled that request. Id. Tessler contends that
Miller/Howard disciplined, and ultimately terminated him
because he raised questions about the proper calculation of
his commission. Id. at 5.
terminated Tesler effective March 6, 2014. On that date, Chun
telephoned Tesler to inform him his employment was terminated
and instructed him to return all company property by the
following day. Miller/Howard sent overnight shipping supplies
to Tesler so that he could return company property the
following day. Following his ...