{"id":695,"date":"2014-10-01T20:07:06","date_gmt":"2014-10-01T20:07:06","guid":{"rendered":"https:\/\/www.bfvlaw.com\/questions-fact-employers-breach-fiduciary-duty-claim\/"},"modified":"2023-03-21T16:44:13","modified_gmt":"2023-03-21T16:44:13","slug":"questions-fact-employers-breach-fiduciary-duty-claim","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/questions-fact-employers-breach-fiduciary-duty-claim\/","title":{"rendered":"Questions of Fact on Employer\u2019s Breach of Fiduciary Duty Claim"},"content":{"rendered":"

Matthew Focht Enterprises, Inc. v. Michael Lepore<\/em>, No. 1:12-CV-4479-WSD, 2014 WL 1153338 (N.D. Ga. March 21, 2014), involved claims against a former sales representative of a sales organization that sells credit card processing services to retail merchants on behalf of credit card processing companies.\u00a0 This blog previously addressed a threshold decision in this case regarding claims based on the former employee\u2019s restrictive covenants.\u00a0This blog entry addresses the most recent decision in the case, which considers the parties\u2019 cross-motions for summary judgment.<\/p>\n

As noted above, Matthew Focht Enterprises, Inc. (\u201cMFE\u201d) sells credit card processing services to merchants on behalf of credit card processing companies.\u00a0 MFE receives a portion of the processing fees that those companies charge the merchants. \u00a0MFE contracts with sales agents like Mr. Lepore to solicit merchants.\u00a0 MFE pays such sales agents on commission.<\/p>\n

In 2009, MFE and Mr. Lepore entered into an Independent Contractor Agreement.\u00a0 That agreement, among other things, addresses the commissions to be paid to Mr. Lepore.\u00a0 The agreement provides the method for calculating commissions.\u00a0 It also provides as follows:\u00a0 \u201c[Mr. Lepore] shall have 60 days from the receipt of any compensation or residuals to notify [MFE] of any errors in payment of compensation or residuals.\u00a0 If [Mr. Lepore] does not notify [MFE] within the 60 day time period, [Mr. Lepore] shall be deemed to have accepted without question such residual or compensation payment and may not in the future contest the amount he was paid or seek reimbursement for any discrepancies.\u201d<\/p>\n

One of the claims asserted was a claim by Mr. Lepore for commissions owed.\u00a0 In this claim, he alleged that some of his commissions were not calculated in accordance with the parties\u2019 agreement.\u00a0 MFE argued that Mr. Lepore\u2019s claims are barred because he failed to comply with the above paragraph.\u00a0 That is, Mr. Lepore never notified MFE of \u201cany errors\u201d in the compensation he received.\u00a0 Mr. Lepore argued he complied with this requirement because he complained from time to time that his commissions seemed too low.\u00a0 The District Court rejected Mr. Lepore\u2019s argument because he failed to satisfy the contractual requirement that he notify MFE of compensation errors.\u00a0 Because the record showed that Mr. .Lepore did not comply with this requirement, the District Court granted summary judgment in MFE\u2019s favor as to Mr. Lepore\u2019s counterclaim for commissions owed.<\/p>\n

The District Court also addressed MFE\u2019s claim that Mr. Lepore had acted as an unfaithful agent in violation of O.C.G.A. section 10-6-31.\u00a0 This statue provides that:\u00a0 \u201c[a]\u201dn agent who shall have discharged his duty shall be entitled to his commission and all necessary expenses incurred about the business of his principal.\u00a0 If he shall have violated his engagement, he shall be entitled to no commission.\u201d<\/p>\n

MFE argued that Mr. Lepore violated his engagement by breaching fiduciary duties owed to MFE.\u00a0 MFE identified four examples which showed that Mr. Lepore had breached his fiduciary duties.\u00a0 Mr. Lepore did not dispute that if he breached his fiduciary duty, he would be liable as an agent of MFE under O.C.G.A. section 10-6-31.\u00a0 However, he disputed that the examples identified by MFE established that he breached his fiduciary duties.<\/p>\n

The District Court reviewed each of the examples presented by MFE.\u00a0 MFE\u2019s position was that the examples showed Mr. Lepore having communications with clients of MFE while he was still in an employment relationship with MFE about moving the clients\u2019 business to a new credit card processing firm or about no longer using MFE\u2019s services.\u00a0 However, the District Court found that the examples offered by MFE did not necessarily support the conclusions MFE proffered.\u00a0 The evidence thus did not establish that there was no question of fact that Mr. Lepore had breached his fiduciary duties to MFE.\u00a0 The Court therefore denied MFE\u2019s motion for summary judgment.<\/p>\n

In addition to addressing the parties\u2019 motions for summary judgments, the District Court also ruled on a motion to amend filed by Mr. Lepore.\u00a0 In his motion, he claims that he had recently discovered evidenced that MFE had intercepted and recorded certain telephone calls between him and third parties.\u00a0 Based on this evidence, Mr. Lepore sought to add a claim for violation of the California Privacy Act.<\/p>\n

The District Court found that Mr. Lepore\u2019s proposed amended claim was unrelated to the pending claims.\u00a0 The District Court further found that because the case was so advanced, with multiple motions for summary judgment having been filed and decided, and the case being ready to proceed to trial, the addition of the new claim would cause unreasonable delay.\u00a0 The District Court therefore denied Mr. Lepore\u2019s motion to amend.<\/p>\n

The District Court\u2019s rulings in Lepore<\/em>, including its earlier ruling, indicate that while these two parties had serious disagreements and believe they had valid claims against each another, many if not all of those claims are unlikely to be successful.<\/p>\n","protected":false},"excerpt":{"rendered":"

Matthew Focht Enterprises, Inc. v. Michael Lepore, No. 1:12-CV-4479-WSD, 2014 WL 1153338 (N.D. Ga. March 21, 2014), involved claims against a former sales representative of a sales organization that sells credit card processing services to retail merchants on behalf of credit card processing companies.\u00a0 This blog previously addressed a threshold decision in this case regarding […]<\/p>\n","protected":false},"author":18,"featured_media":14147,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"no","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[23,16],"acf":[],"yoast_head":"\nQuestions of Fact on Employer\u2019s Breach of Fiduciary Duty Claim<\/title>\n<meta name=\"description\" content=\"Questions of Fact on Employer\u2019s Breach of Fiduciary Duty: This article discusses Matthew Focht Enterprises, Inc. v. 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