Grubb v. Spengler

Opinion

Defendant, Daniel S. Spengler (Spengler), who appears here in pro. per., purports to appeal from the memorandum of decision and notice of intended judgment. A memorandum of decision is not an appealable order. (Estate of Pieper (1964) 224 Cal.App.2d 670 , 675 [ 37 Cal. Rptr. 46 ].) However, we construe the notice of appeal, filed November 26, 1980, as referring to the judgment entered August 4, 1980. (See Gregory v. Hamilton (1978) 77 Cal.App.3d213, 215, fn. 1. [ 142 Cal.Rptr. 563 ]; Channell v. Anthony (1976) 58 Cal.App.3d 290 , 302 [ 129 Cal.Rptr. 704 ].)

Suit was originally filed by Grubb and Ellis Commercial Brokerage Company (Grubb and Ellis) on certain promissory notes executed by Spengler in favor of Grubb and Ellis totaling $9,100, of which Grubb and Ellis claimed $6,574.84 remained due and payable by Spengler, plus interest at the rate of 7 percent per annum. Grubb and Ellis took the position that Spengler had been engaged by them on July 12, 1976, as a real estate salesman under what they termed an “independent contractor agreement” that provided for compensation based solely on commissions to be collected from parties to real estate transactions. Grubb and Ellis claimed that the promissory notes executed by Spengler represented loans made by Grubb and Ellis to Spengler in the form of a monthly

In Tsarnas v. Bailey (1962) 205 Cal.App.2d 593 [ 23 Cal.Rptr. 336 ], the court, in construing former Code of Civil Procedure section 634 which provided for service of proposed findings upon all parties, stated at page 596: “The final contention on appeal is that the judgment is invalid since the findings of fact were not served on the defendant before the signing of the judgment in violation of section 634 of the Code of Civil Procedure. However, both the cases decided before and after the 1959 amendment to this section have uniformly held that failure to serve the findings is a mere irregularity and not grounds for reversal [citations].” (See Ball v. City Council (1967) 252 Cal.App.2d 136 atpp. 146-147 [ 60 Cal.Rptr. 139 ].) The same reasoning is applicable with respect to the requirements of service of proposed findings contained in rule 232 of the California Rules of Court at the time here pertinent. (See Estate of Cooper (1970) 11 Cal.App.3d 1114 , 1121-1122 [ 90 Cal.Rptr. 283 ].) Spengler has made no showing of prejudice as a result of the failure to serve proposed findings and judgment upon him. He has not demonstrated cause for reversal of the judgment on this ground.

In its findings of fact, the trial court found that Spengler executed various promissory notes while a real estate salesperson for Grubb and Ellis, and that, pursuant to stipulation of the parties, the amount outstanding on the notes was $5,694.42 with interest at the rate of 7 percent (7%) from November 30, 1976, to date of judgment. The trial court found that the relationship between Spengler and Grubb and Ellis was governed by the written independent contractor agreement, that Spengler’s service with Grubb and Ellis was terminated in accordance with the agreement, and that Grubb and Ellis had not breached the agreement.

In its conclusions of law, the trial court stated, “Defendant Daniel S. Spengler at all times material to the above-entitled case, was not an employee of the Plaintiff, but rather an independent contractor and therefore, was not entitled to a minimum wage,” and “was not subject to the Social Security System . . . and was entitled only to compensation based on commissions earned according to the Independent Contractor Agreement. ...”

Spengler challenges the trial court’s finding that he was an independent contractor.

It seems clear that for purposes of the administration of the real estate law, the salesperson is the employee and agent of the broker. (See Bus. & Prof. Code, §§ 10132, 10137, 10151, 10160, 10177, subd. (h); Grand v. Griesinger (1958) 160 Cal.App.2d 397 , 404-406 [ 325 P.2d 475 ].)

For purposes of establishing tort liability, the California courts have held that a broker is liable under the doctrine of respondeat superior for the tortious acts of his salespeople during the course and scope of business because a salesperson is the agent of the broker. Thus, in Gipson v. Davis Realty Co. (1963) 215 Cal.App.2d 190 , at pages 206-207 [ 30 Cal.Rptr. 253 ], the court stated: “We are satisfied, accordingly, that while it may be a question of fact whether in each case a real estate salesman is an employee within the common law definition of master and servant, the Legislature has, by virtue of statutory enactment, made such a salesman an agent of the broker as a matter of law. A consideration of the several statutory provisions applicable to a real estate salesman impels the conclusion that such person can act only for, on behalf of, and in place of the broker under whom he is licensed, and that his acts are limited to those which he does and performs as an agent for such broker. [Citation.] We conclude, therefore, that a salesman, insofar as his relationship with the broker who employs him is concerned, cannot be classed as an independent contractor. Accordingly, any contract which purports to change that relationship from that of agent to independent contractor is invalid as being contrary to the provisions of the Real Estate Law. [Citation.]”

The status of a real estate salesman for purposes of workers’ compensation insurance is less clear. In two early cases, prior to the enactment of the Real Estate Law (Bus. & Prof. Code, § 10000 et seq.), the courts found that an employer-employee relationship existed. In so concluding, the courts reviewed the circumstances surrounding the work relationship, considering the amount of control the broker exerted over his salesmen and weighing such factors as the method of compensation, who paid the salesman’s expenses, how much time the salesman devoted to his work, and how much control the broker exerted over the salesman’s movement and method of selling.

Payne v. White House Properties, Inc. (1980) 112 Cal.App.3d 465 [ 169 Cal.Rptr. 373 ], considered the same question, but after the enactment of Business and Professions Code section 10177, subdivision (h), which provides that the commissioner may suspend or revoke the license of a broker who has failed to exercise reasonable supervision over the activities of his salesmen. The

Insofar as our research reveals, no case or statutory enactment has specifically addressed itself to the question whether minimum wage laws are applicable to real estate salesmen. The federal legislation ( 29 U.S.C.A. § 206 ) applies only to employees engaged in interstate commerce. ( 29 U.S.C.A. § 203 (b).) Nothing in the record indicates that Grubb and Ellis was engaged in interstate commerce. In any case, in light of the fact that federal legislation excludes real estate salespersons from the definition of employees for purposes of federal employment taxes, it is unlikely that they would be considered employees for purposes of the minimum wage laws.

The state minimum wage laws specifically exclude outside salesmen from coverage. (Lab. Code, § 1171.) “The apparent reason for specifically providing that this chapter does not apply to individuals employed as outside salesmen is that such employees normally control their own hours and are paid on a commission basis.” (Review of Selected 1972 Legislation (1973) 4 Pacific L.J. 213, pp. 482-483.) In title 8, California Administrative Code, section 11345, subdivision 2(J), “Outside salesperson” is defined as follows: “‘Outside Salesperson’ means any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities.” Under Labor Code section 1171, there is a distinction between an independent contractor, who is not an employee, and an outside salesperson, who is an employee, but has been specifically excluded from the application of the minimum wage law. In the usual case, a real estate person would probably qualify as a non-employee either under the traditional common law “control” rule or as an outside salesperson as defined in Labor Code section 1171. In both circumstances, the minimum wage laws would not be applicable to real estate salespersons.