Company fails to pay sales commissions and salary; $2.192 million bench verdict. Butte County.
Summary
Sales exec says he brought in business but did not get paid; employer goes bankrupt and plaintiff proceeds on alter ego theory against primary stockholder.
The Case
- Case Name: Silvestro v. NLP International Corporation, et al.
- Court and Case Number: Butte County Superior Court / 153734
- Date of Verdict or Judgment: Wednesday, July 23, 2014
- Date Action was Filed: Thursday, May 05, 2011
- Type of Case: Breach of Contract, Employment, Fraud
- Judge or Arbitrator(s): Hon. Robert A. Glusman
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Plaintiffs: Kyle Silvestro, 34, Vice President of Business Development
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Defendants: NLP International Corporation, Bernhard Keppler
- Type of Result: Bench Verdict
The Result
- Gross Verdict or Award: $2,192,000.00
- Net Verdict or Award: $2,192,000.00
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Award as to each Defendant:
All awards against defendant Keppler (on alter ego theory) and none against defendant NLP (as a result of it filing for bankruptcy the day before trial). The court allowed NLP’s corporate veil to be pierced upon a finding of lack of corporate formality.
The trial court disagreed with all of defendants' contentions regarding what was owed to plaintiff. It found that NLP’s settlement agreement with Columbia University was derived directly as a result of plaintiff’s sales efforts and that defendants accordingly owed him a commission on those sales totaling $487,000. It further found that plaintiff was owed $30,000 in unpaid salary wages for five of the last six months he was employed.
The court determined that the failure to pay Mr. Silvestro was willful and thus awarded an additional $31,000 in waiting time penalties. Plaintiff was also awarded attorneys fees and costs, to be determined. He also beat an early CCP 998 settlement offer in the case, the interest on which has not yet been awarded.
Awarded $487,000 in unpaid commissions; $30,000 in unpaid salary; $31,000 in waiting time penalties; $1,644,000 in punitive damages. Attorney fees, costs, and CCP 998 interest pending.
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Economic Damages:
$487,000.00 in unpaid commissions
$30,000.00 in unpaid salary.
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Punitive Damages:
The court found that defendants had acted fraudulently in entering the sales agreement with Mr. Silvestro and in further promising him repeatedly that he would be paid everything he was owed. In accord, Mr. Silvestro was awarded punitive damages totaling $1,644,000, plus $31,000.00 in waiting time penalties.
- Trial or Arbitration Time: 1 day
The Attorneys
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Attorney for the Plaintiff:
Del Rio & Carichoff, P.C. by Robert A. Carichoff, Sacramento.
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Attorney for the Defendant:
Defendants were not represented by counsel at trial. Defense counsel Leland Schultz & Morrissey, by Andrew Morrissey, withdrew shortly before trial.
Facts and Background
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Facts and Background:
Plaintiff Kyle Silvestro was employed by NLP as its Vice President of Business Development beginning October 26, 2009. NLP agreed to pay Mr. Silvestro a $6,000 monthly salary as well as a fifteen percent (15%) commission on all contracts he secured. NLP’s business was comprised of services it offered in connection with proprietary software licensed to it by Columbia University.
During the course of his employment, plaintiff generated contracts with a minimum value of $3,321,300. He was paid a mere $7,500 commission during his employment with NLP and was not paid his $6,000 salary in five of the last six months of his employment. During that time, NLP repeatedly promised Mr. Silvestro that he would be paid everything to which he was due.
By April 22, 2011, those promises remained unkept and Mr. Silvestro resigned his employment with NLP. Within two months of his resignation, Columbia University pulled NLP’s license to the software upon which its business was based. NLP sought to recover the value of the sales plaintiff secured against Columbia University. The effort ultimately resulted in a settlement agreement upon which the university agreed to pay NLP $3,000,000.
Defendant NLP filed for Chapter 13 bankruptcy protection the business day before trial began in the matter. Trial was permitted to proceed against its majority shareholder, Bernhard Keppler, on an alter ego liability theory.
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Plaintiff's Contentions:
That plaintiff was not paid salary and commission wages to which he was entitled.
That as to the alter ego theory, there was ample evidence of commingling of funds between NLP, Mr. Keppler, and several of his other companies.
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Defendant's Contentions:
That it owed no money to plaintiff. Defendants argued that plaintiff was not entitled to anything more than he had previously been paid by NLP. Its position was that plaintiff’s $6,000 salary was actually an advance on commissions and that the advances paid to him exceeded the commissions to which he was due at the time of his termination. To support its position, NLP submitted financial documentation demonstrating that as of that date, it had been paid less than ten percent of the total contract value secured by plaintiff: $303,316.35.
Demands and Offers
- Plaintiff §998 Demand: $600,000