Samuel v. Benson Kearley IFG, 2021 ONSC 3627

COURT FILE NO.: CV-16-126176

DATE: 20210518

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Valerie Samuel

Plaintiff

– and –

Benson Kearley IFG and Stephen Kearley

Defendants

Ted Flett, for the Plaintiff

Alex Van Kralingen, for the Defendants

HEARD: In-Writing

REASONS FOR DECISION

CHARNEY J.:

Introduction

1On February 20, 2020 I released Reasons for Decision granting the employee plaintiff’s motion for summary judgment: Samuel v. Benson Kearley IFG, 2020 ONSC 1123.

2The Reasons for Decision did not fully accept either party’s position, and therefore neither party’s calculation of damages was adopted. Instead, I provided the parties with a methodology for calculating damages in this case, and indicated, at para. 159 of the decision, that if the parties were not able to agree on the calculation of damages based on this methodology, either party could bring a motion before me to determine the amount of damages. The parties were each asked to provide their respective calculations for this motion.

3The parties have been unable to agree on damages, and the plaintiff has now brought such a motion. While the motion is well outside the 30 day period proposed in my decision, neither party has objected to the time delay, and I will proceed on that basis.

Methodology for Calculating Damages

4The methodology for calculating damages is set out at paragraphs 154-158 of the Reasons for Decision:

As indicated at paras. 131-137 of this decision, the plaintiff should have been paid commission whenever her commissions in any month exceeded $3,333 first year (or new) commissions, without regard to any cumulative deficit or deficits from previous months. The additional compensation earned by the plaintiff was payable only on commissions earned above $3,333 first year commissions.

To the extent that these commissions were not paid by the defendants, damages should be calculated on this basis for the period November 25, 2012 (two years before the service of the Notice of Action) to the date of termination of employment.

As indicated at para. 136 of this decision, the plaintiff should have been paid a quarterly bonus of $500 for each $10,000 of written premium above $180,000 written premium, regardless of whether the written premiums were first year or renewal premiums.

To the extent that these bonuses were not paid by the defendants, damages should be calculated on this basis for the period November 25, 2012 (two years before the service of the Notice of Action) to the date of termination of employment.

The plaintiff is entitled to four months’ pay (salary and benefits) in lieu of reasonable notice, minus whatever she was paid for the three weeks’ notice she received. Salary and benefits should be calculated in accordance with paras. 154-157, above. Salary and benefits should be calculated using the plaintiff’s average salary (including commission and bonuses) and benefits for her final year of employment.

Positions of the Parties

5The plaintiff takes the position that the total damages are $63,804.92, comprised of the following amounts:

(a) Unpaid Commission = $38,673.98

(b) Unpaid Bonuses = $6,500

(c) Notice Period (average salary over 4 months (inclusive of base salary, commissions, bonuses and benefits) minus amount paid by the defendant at termination of employment ($2,302.70)) = $18,630.94

6The defendant takes the position that the total damages are $24,247.39 comprised of the following amounts:

(a) Unpaid Commission = $4,017.32

(b) Unpaid Bonuses = $6,500

(c) Notice Period = $13,730.07

Analysis

7The primary difference between the plaintiff’s and defendant’s position relates to the calculation of unpaid commissions.

8The plaintiff’s calculation is based on the premise that once her sales generated more than $3,333 in commission, her commission is calculated on the entire monthly sale.

9The defendant’s calculation is based on the premise that the commission is calculated only on the amount of the monthly sale that would generate more than $3,333 in commission.

10Based on my reading of the contract, the defendant’s calculation is correct. This is made clear in the calculations set out in paras. 19 – 22 of the Reasons for Decision. The salesperson’s base salary of $40,000 per year was based on the assumption that the salesperson would sell at least $37,000 worth of new policies each month, which would earn approximately $3,333 in commission. The $40,000 salary was based on $3,333 X 12 months. It was only if the salesperson earned commission in excess of what was already covered by their base salary that she would earn additional commission. As explained in para. 22 of the Reasons for Decision:

To continue with the example in the offer letter, assuming that the first $37,000 in sales actually generated $3,333 in commission, and the salesperson wrote $60,000 in new premiums in one month, the salesperson would receive 60% of 15% of $23,000, or $2,070.

11If the plaintiff’s calculation were adopted, this example would have led to $5,403 in commission ($3,333 + $2,070).

12Accordingly, I agree with the methodology proposed by the defendant: the commission is calculated only on the amount of monthly sales that generate in excess of $3,333 commission. This is also consistent with what I stated in para. 154 of the Reasons for Decision:

As indicated at paras. 131-137 of this decision, the plaintiff should have been paid commission whenever her commissions in any month exceeded $3,333 first year (or new) commissions, without regard to any cumulative deficit or deficits from previous months. The additional compensation earned by the plaintiff was payable only on commissions earned above $3,333 first year commissions. [Emphasis added.]

13My one departure from the defendant’s calculation is that the defendant did not include any commission for the month of November 2012, since my decision states that damages are calculated commencing November 25, 2012 – two years before the service of the Notice of Action. The defendant argues that only sales made after November 25, 2012 should be included in the calculation.

14In my view, the damages should include payment for the entire sales for November 2012, since the plaintiff’s salary for that month became due and payable at the end of that month, that is, after November 25, 2012. The expiry of the limitation period prevents the plaintiff from suing for any amounts that were due and payable before November 25, 2012, but not amounts due and payable after that date. Accordingly, the plaintiff is also entitled to her commission over $3,333 for the entire month of November 2012, which would net her an additional ($4,659.66 - $3,333) = $1,326.66. Adding this amount to the defendant’s calculations results in a total unpaid commission payment of $5,343.98.

15The parties dispute regarding the calculation of the plaintiff’s average salary also stems from the dispute over the calculation of the plaintiff’s commissions in excess of $3,333. In other words, the primary difference between the plaintiff’s calculation and the defendant’s calculation is that in calculating her average salary the plaintiff has added $3,333 commission to her salary for each of February, May and August 2014. For the reasons explained above, this is not the correct way to calculate her commission, and these amounts must be deducted. I therefore accept the defendant’s calculation in this regard.

16There is also a minor difference in the calculation of the value of the plaintiff’s benefits. The plaintiff argues that benefits should be calculated at 10% of salary, inclusive of bonuses and commissions, approximately $666 over the four-month notice period. The defendant calculates that the actual amount would be $405.89 based on the actual cost of the plaintiff’s 50% contribution for her benefit.

17In the absence of other evidence, courts in wrongful dismissal cases frequently estimate the value of benefits as 10% of base salary: Halupa v. Sagemedica Inc., 2019 ONSC 7411, at para. 23, and cases cited therein. In the present case, I am satisfied that the evidence provided by the employer presents a more accurate picture of the value of the plaintiff’s benefits, and there is no need to rely on the 10% proxy. Accordingly, I accept the defendant’s calculation of notice period damages of $13,730.

Conclusion

18In conclusion, I calculate the plaintiff’s total damages as $25,573.98, comprised of:

(a) Unpaid Commissions = $5,343.98

(b) Unpaid Bonuses = $6,500

(c) Notice Period = $13,730

19As indicated at para. 160 of the Reasons for Decision, now that damages have been resolved I will consider the parties’ costs submissions if they are not otherwise able to agree on costs. If the parties are not able to agree on costs, the plaintiff may serve and file costs submissions of no more than 3 pages, plus costs outline and any offers to settle, within 20 days of the release of this decision, and the defendant may file responding submissions on the same terms within a further 15 days.