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Spanish v. Dental Health Products, Inc.

United States District Court, D. Minnesota

March 1, 2018

Frank Spanish, Plaintiff,
v.
Dental Health Products, Inc. Defendant.

          Brian J. Kluk, Esq. and McCollum, Crowley, Moschet, Miller & Laak, LDT, counsel for plaintiff.

          Courtney M. Blanchard, Esq. and Nilan Johnson Lewis, PA, counsel for defendant.

          ORDER

          David S. Doty, Judge

         This matter is before the court upon the motion for summary judgment by defendant Dental Health Products, Inc. (DHPI). Based on a review of the file, record, and proceedings herein, the court grants the motion.

         BACKGROUND

         This employment dispute arises out of plaintiff Frank Spanish's claim that DHPI owes him $100, 000 in deferred salary. DHPI is a Wisconsin-based national distributor of dental healthcare equipment and merchandise. N. Roberts Decl. ¶¶ 2, 4. In 2010, DHPI's national field sales manager, Scott Giese, recruited Kelly Krinkie to join DHPI's Minnesota branch office. Giese Dep. at 17:19-23, 21:15-23. At the time, Krinkie was a salesperson with Henry Schein, Inc., a DHPI competitor. She worked closely with her father, Spanish, who was known to be a “heavy hitter” in the industry. Id. at 22:20-23:8. Krinkie told Giese that Spanish wanted to transfer his accounts to Krinkie on his retirement, which was not possible at Schein. Id. at 23:16-25:21-25; Spanish Dep. at 28:1-20. Giese then contacted Spanish to discuss a possible transition for both Krinkie and Spanish from Schein to DHPI. Giese Dep. at 24:5-8.

         After numerous discussions, on September 7, 2010, DHPI offered Spanish a job as a Minnesota outside account manager. Blanchard Aff. Ex. 7. DHPI offered Spanish $250, 000 in salary for the first three years of employment plus commissions exceeding the salary amount. Id. Thereafter, as of September 27, 2013, Spanish would receive full commission with no salary. Id. The offer letter also established performance benchmarks which, if unmet, could result in a salary reduction. Id. For example, at month six Spanish's and Krinkie's combined sales were expected to be “pacing $250, 000 per month.” Id. The offer letter further states that the parties' employment relationship is at-will. Id. Spanish agreed to the terms and signed the letter on September 27, 2010.[1] Id. at 2.

         For various reasons, by June 2011, Spanish and Krinkie were not on track to meet the sales thresholds set forth in the offer letter. Kluk Aff. Ex. 10, at 2. Giese acknowledged, however, that they were doing an excellent job and that he believed they would be able to meet expectations in the future. Id. at 2. He did not recommend a downward adjustment in salary. Id.

         On December 11, 2012, Giese requested that human resources draft an addendum to the offer letter “deferring $100, 000 of salary/compensation from 2013 to 2014.” Blanchard Aff. Ex. 9. With this change, Spanish would receive a $150, 000 salary in 2013 and a $100, 000 salary in 2014.[2] See id.

         According to Spanish, this request followed a conversation he had with DHPI owner, Jim Roberts, in the fall of 2011 in which Roberts asked him to defer a portion of his salary to allow the Minnesota branch office to grow. Spanish Dep. at 21:13-24:1. Roberts did not specifically say how Spanish's deferred salary would benefit the Minnesota branch, nor were specific terms of the deferral discussed. Id. Spanish initially rejected Roberts' request, but changed his mind at the end of 2012. Id. at 22:19-20.

         The resulting agreement between the parties, dated December 12, 2012, states that the parties have agreed to “modify the salary portion of [Spanish's] compensation structure” as follows:

• For the 2013 calendar year Frank will be paid a biweekly base salary of $5, 749.33 ($150, 000.00 annualized)
• For the 2014 calendar year Frank will be paid a biweekly base salary of $3, 832.89 ($100, 000.00 annualized)

Blanchard Aff. Ex. 15. It also states that “[t]his offer will supersede all other compensation agreements made prior to this date.” Id. Vice president James Roberts, Giese, and Spanish signed the salary modification on December 14, 2012. Id.

         According to Spanish, he also had an oral “sidebar” agreement with DHPI that he could request his deferred salary “at any time.” Spanish Dep. at 12:25-13:25; 56:5-17. He explained that the December 12 written agreement only stated that he would receive the deferred salary in 2014 as “a way of keeping tabs on it.” Id. at 56:5-17.

         The parties again modified Spanish's salary in October 2013. Blanchard Aff. Ex. 16. Under the new agreement, Spanish agreed to receive a “bi-weekly base salary of $3, 411.27” ($89, 000 annualized) plus full commission on merchandise sales beginning on September 30, 2013. Id. The parties agreed to review the “compensation structure” in June 2014. Id. As with the prior modification, the agreement states that “[t]his offer will supersede ...


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