This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
IN COURT OF APPEALS
Dakota County District Court
File No. C70314196
Jonathan D. Cran, Jonathan D. Cran, P.A., Suite 305, 7362 University Avenue, Fridley, MN 55432 (for respondent)
Derrick N. Weber, Jeffrey J. Cohen, Messerli & Kramer, P.A., Suite 250, 3033 Campus Drive, Plymouth, MN 55441 (for appellant)
Considered and decided by Peterson, Presiding Judge; Stoneburner, Judge; and Wright, Judge.
Appellant Northern Life Chiropractic, Inc. appeals from judgment in respondent’s favor on his claim for unpaid wages. Appellant argues that (1) the district court’s findings were clearly erroneous; (2) the evidence does not support the district court’s determination that appellant violated Minn. Stat. § 181.03 (2002); and (3) the court’s damage award was excessive and not supported by the evidence. We affirm.
Appellant Northern Life Chiropractic, Inc. (NLC), which is owned by Jeffrey Danielson, employed respondent David J. Wages from November 2000 to February 25, 2003. Respondent left his employment with appellant voluntarily after giving 30 days’ notice. Respondent provided chiropractic services to clients until his departure on February 25, 2003.
Respondent had an employment contract with NLC and a Northern Life Chiropractic Team Contract, which provided: “Hourly Wage (or percentage commission): 45%.” The contract did not specify when the 45% was considered “earned” or how the 45% was to be calculated, but over the course of respondent’s employment it is undisputed that he was paid 45% of the payment NLC actually received from patients he treated.
Respondent testified that as of his last day of employment his patients’ accounts receivable totaled $30,234.37. He requested payment for 45% of all amounts collected or collectible from these accounts. NLC proposed only to pay 45% of all payments received as of respondent’s last day of employment.
Respondent sued NLC in conciliation court to recover compensation/commissions earned but not yet paid in connection with patients for whom he had performed chiropractic services. The conciliation court awarded respondent $7,500, the maximum jurisdictional amount allowed in conciliation court. NLC removed the matter to district court for a trial de novo. In district court, respondent added a claim for violation of Minn. Stat. § 181.03, subd. 2 (2002), which provides for a doubling of damages and attorney fees if an employer alters the method, timing, or procedures for payment of commissions earned through the last day of employment and the result is to delay or reduce the amount of payment.
NLC’s motion for summary judgment was denied. NLC subsequently asserted a counterclaim for money it claimed was mistakenly paid to respondent. Following a court trial, the district court denied appellant’s counterclaim, found in favor of respondent, and awarded him $18,504 in damages, plus $5,000 in attorney fees, together with costs and disbursements. This appeal followed.
NLC first argues that two of the trial court’s findings of fact are clearly erroneous because the evidence does not reasonably support them. “Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous.” Minn. R. Civ. P. 52.01. Findings of fact are clearly erroneous if the evidence does not reasonably support them. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 102 (Minn. 1999).
NLC specifically argues that the district court’s finding that respondent’s patient’s accounts receivable as of his last day of work totaled $30,234.37 is clearly erroneous because the figure is based on exhibits not admitted into evidence. Respondent offered as evidence of the amount of his accounts receivable, exhibit 3, which he represented to be a printout prepared by NLC’s billing agency of accounts receivable for all doctors in the clinic as of respondent’s last day of employment, and exhibit 2, a summary of information respondent prepared from exhibit 3, showing only amounts owed by respondent’s patients as of his last day of employment. NLC objected to exhibits 2 and 3 as hearsay and lacking foundation. The district court reserved ruling on appellant’s objection. Exhibits 2 and 3 were submitted to the district court and are with the admitted exhibits in the district court file, but the district court never explicitly ruled on their admission. After the district court reserved ruling on admission of exhibits 2 and 3, respondent testified that, to the best of his knowledge, $30,234.37 accurately reflects the amount of his patients’ accounts receivable as of his last day of employment
Danielson testified, relying on exhibit 14, which was admitted, that respondent’s patients’ accounts receivable as of his last day of employment totaled $22,457.42. Exhibit 14 is the sum of respondent’s patients’ accounts with a balance due as well as accounts with a credit balance as of respondent’s last day of employment. There is no explanation in the record about how or why the credits shown on some patients’ accounts were used to reduce the total amount due from other patients. Adding up only the amounts due, the total of respondent’s receivables shown on exhibit 14 is $58,760.18.
NLC argues that Danielson’s testimony of the amount of respondent’s accounts receivable is the only credible evidence in the record and that the district court erroneously relied on unadmitted exhibits 2 and 3 to determine the amount of outstanding accounts receivable for respondent’s patients. See First Trust Co. of St. Paul v. McLean, 254 Minn. 75, 81, 93 N.W.2d 517, 521 (1958) (stating that district court may only decide a case based on evidence presented at trial). But after examining exhibit 14, the district court had reason to find Danielson’s testimony not credible, and the district court did not err by relying on respondent’s unobjected-to testimony that, to the best of his knowledge, $30,234.37 accurately represented the amount of outstanding bills to his patients as of his last day of employment. The finding is supported by the record and will not be set aside as clearly erroneous.
NLC next argues that there is no support in the record for the district court’s finding that:
If the clinic has a 68% rate for collection of all fees billed, [respondent] is entitled to $9,252. (68% of $30,234 = $20,559 x 45% = $9,252).
NLC does not dispute that 68% accurately reflects the historical collection rate for respondent’s billings but claims that this finding is erroneous because the parties agreed that respondent had always been paid 45% of the amounts actually collected from his patients’ receivables. Therefore, NLC argues, the finding is inconsistent with the parties’ established course of conduct and is outside the issue the district court was asked to decide. We disagree. NLC, through Danielson, testified that it had only collected $4,530.44 of respondent’s accounts receivable. The district court apparently found this testimony not credible and based the damages award on the undisputed historical collection rate. The record supports the amount of the historical collection rate, and the determination of damages was one of the primary issues the district court was asked to decide. The district court explicitly found that NLC “has total control over which bills and fees incurred by patients are pursued for payment and collected” and rejected NLC’s claim that respondent had reduced fees incurred by a family he treated from $9,977 to $480 as “not believable.” Implicitly, the district court also rejected Danielson’s testimony that fees billed to a family that subsequently relocated out of the country were uncollectible. This court defers to trial court rulings on witness credibility. Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988); see also Minn. R. Civ. P. 52.01 (stating that due regard shall be given to the opportunity of the trial court to judge the credibility of witnesses). Therefore, we cannot say that the district court’s findings are clearly erroneous. See Fletcher, 589 N.W.2d at 102 (stating that an appellate court may not reverse a trial court due to mere disagreement with its findings, but only when the facts are clearly erroneous.)
NLC argues that the district court’s conclusion that it violated Minn. Stat. § 181.03, subd. 2 (2002), is not supported by the evidence. The statute provides:
Except as otherwise provided in section 181.13, an employer or a person, firm, corporation, or association, may not alter the method of payment, timing of payment, or procedures for payment of commissions earned through the last day of employment after the employee has resigned or been terminated if the result is to delay or reduce the amount of payment.
Minn. Stat. § 181.03, subd. 2 .
A reviewing court is not bound by and need not give deference to a trial court’s decision on a purely legal issue. Modrow v. JP Foodservice, Inc., 656 N.W.2d 389, 393 (Minn. 2003). This court need not defer to the district court’s application of law when the material facts are not in dispute. Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn. 1989).
NLC paid respondent based on all the fees it had collected prior to respondent’s last day of employment and now claims that it has satisfied its obligation because a commission was not “earned” until it was collected by NLC. Although during his employment respondent was never paid until after NLC had been paid by a patient, that is not evidence that respondent had not earned and was not entitled to commissions for bills collected, or that should have been collected, after his last day of employment.
NLC relies on the “NLC Team Contract,” which states that respondent’s salary will be 45% of receipts and that the agreement will continue until terminated by either party, to argue that the agreement did not obligate NLC to pay respondent commissions on amounts collected after he left. NLC asserts that under respondent’s interpretation of the contract, it would be forced to “indefinitely pay him a commission of 45%.” We disagree. Respondent has only claimed 45% of the amount collected on charges billed for his services that were uncollected at the time he ended his employment.
The basis of NLC’s argument is that respondent did not “earn” his commissions until the money was received by NLC, and therefore, the statutory language “commissions earned through the last day of employment” does not apply to respondent’s uncollected receivables. We disagree. The timing of the payment of a commission does not determine when it was earned. The district court concluded that commissions were earned when the services were provided even if the 45% applied only to amounts collected. It was not error for the district court to conclude that under the parties’ agreement respondent had earned commissions on collectible receivables outstanding for his services at the time he left employment with NLC and that NLC’s refusal to pay those commissions due violated Minn. Stat. § 181.13, subd. 2.
NLC’s final argument is that the district court’s damage award was excessive and not supported by the evidence. The district court granted judgment in favor of respondent in the sum of $18,504 plus attorney fees of $5,000. NLC argues that the evidence does not support this award. But the district court clearly explained in its findings of fact and conclusions of law how it arrived at the damages award. Because NLC violated Minn. Stat. § 181.03, respondent was entitled to double damages. Minn. Stat. § 181.03, subd. 3 (2002). The district court found that respondent had incurred reasonable attorney fees of $5,000 in bringing the action. The double damages plus attorney fees amounted to $23,504. The calculation provided by the court was as follows: (68% of $30,234 = $20,559 x 45% = $9,252) ($9,252 x 2 = $18,504 + $5,000 = $23,504).
In an action under Minn. Stat. § 181.13 (penalty for failure to pay wages promptly), the district court “shall order an employer who is found to have committed a violation to pay to the aggrieved party reasonable costs, disbursements, witness fees, and attorney fees.” Minn. Stat. § 181.171, subd. 3 (2002). A district court’s determination of the reasonableness and amount of attorney fees is a question of fact and should not be reversed unless clearly erroneous. Amerman v. Lakeland Dev. Corp., 295 Minn. 536, 537, 203 N.W.2d 400, 400-01 (1973). Appellant does not argue that $5,000 in attorney fees is unreasonable.
This award has clear support in the record, and therefore the district court did not err in awarding damages of $23,504.
 The information for respondent’s patients is identical with the information shown on the first three pages of respondent’s exhibit 3. The remaining pages of exhibit 3 are another printout of accounts receivable produced approximately 20 minutes after the first 3 pages and respondent’s exhibit 2 is the sum of amounts owed by his patients from this later printout.