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Martinez-Trumm v. Citywide Home Loans

United States District Court, D. Utah, Central Division

June 19, 2018




         This matter is before the court on Defendant Citywide Home Loan's Motion to Dismiss. On May 23, 2018, the court held a hearing on the motion. At the hearing, Plaintiff was represented by Brian Jackson, and Defendant Citywide was represented by Steven Reid. After hearing argument, the court took the matter under advisement. The court has considered the memoranda and other materials submitted by the parties, as well as the law and facts relating to the motions. Now being fully advised, the court issues the following Memorandum Decision and Order.


         From April 2012 to October 2016, Plaintiff Anita Martinez-Trumm worked as a loan officer for Defendant Citywide Home Loans. On January 1, 2014, Martinez-Trumm and Citywide entered into a Loan Officer Agreement (“LOA”) and a Loan Officer Compensation Agreement (“LOCA”) Addendum to comply with the compensation laws under the Dodd-Frank Act. Paragraph 16 of the LOA provided that the parties could only modify the agreement in a mutually-signed writing that referenced the agreement. However, the LOCA Addendum, which set Plaintiff's hourly rate and commission, stated that “Loan Officer understands and agrees that this Loan Officer Compensation Agreement Addendum 1 can change at any time at Citywide's discretion due to Loan Officer's production, quality, profitability, and other performance.”

         Plaintiff alleges that while she was employed at Citywide it had a company-wide policy and protocol to reduce a loan officer's pay if another employee was hired to assist that loan officer. As a result of this policy, Plaintiff sent an email to Citywide in December of 2015, proposing that her commission rate be reduced from 1.75% to 1.50% so that she could have an assistant to help her with her workload. Plaintiff's email also stated, “please let me know what is needed to make the change.” Citywide responded to Plaintiff's email: “Let's make sure this dropping. If so, let's do it!” Plaintiff alleges that there was never a written modification of the LOA. However, Citywide changed Plaintiff's commission amount from 1.75% to 1.5% and Plaintiff received an assistant. Plaintiff further alleges that Citywide had a policy to pay other employees' bonuses out of her paycheck but provides no other details on this practice.

         After Citywide provided Plaintiff with an assistant there is no correspondence or communications between Plaintiff and Citywide related to her commission rate until Plaintiff separated from her employment with Citywide in October 2016. At that time, Plaintiff reached out to Citywide about the issue and Citywide told her that she had agreed to the change in her compensation amount by requesting it, using the assistant, and continuing to work while receiving a paycheck with the lower amount. Citywide's legal counsel also responded to Plaintiff and told her that she acquiesced to the modification by requesting it and failing to object to it while she was employed at Citywide. Citywide also claimed that it had the right to modify the LOCA at its sole discretion at any time.

         The LOA stated that upon termination of employment, Citywide would pay the loan officer all compensation due and payable as set forth in the compensation addendum. Plaintiff alleges that Citywide failed to pay her proper compensation under the LOA and compensation addendum.

         Plaintiff also alleges that Citywide sent out mailers using her name to attract business after she had terminated her employment at Citywide. One of Plaintiff's clients emailed Plaintiff at her Citywide email address and an individual at Citywide, who claimed to be a long-time partner with Plaintiff, responded to the email and offered to assist the client in Plaintiff's absence. However, Plaintiff claims that she was never a partner with the individual.

         Plaintiff brought the present lawsuit against Citywide, alleging that Citywide improperly changed her commission amount, paid other employees' bonuses out of her paycheck, and diverted business from her. Plaintiff's Complaint asserts nine causes of action: (1) breach of contract; (2) violation of the Fair Labor Standards Act (FLSA”); (3) violation of the Utah Pyramid Scheme Act, Utah Code Ann. § 76-6a-1 et seq.; (4) violation of the Utah Payment of Wages Act (UPWA”), Utah Code Ann. § 34-28-1 et seq.; (5) violation of the Utah Truth in Advertising Act (“UTAA”), Utah Code Ann. § 13-11a-1 et seq.; (6) violation of the Utah Sales Representative Commission Payment Act (“USRCPA”), Utah Code Ann. § 13-44-101 et seq.; (7) conversion; (8) breach of fiduciary duty; and (9) wrongful appropriation.


         Citywide's Motion to Dismiss

         Citywide asks this court to dismiss Plaintiff's Complaint, arguing that all of Plaintiff's claims should be dismissed as a matter of law because the controlling statute is inapplicable to Plaintiff's allegations and/or Plaintiff's allegations do not state a claim for relief.

         1. Breach of Contract

         Plaintiff alleges that Citywide breached the agreements she had with it by unilaterally modifying her commission rate. Citywide argues that Plaintiff's allegation that it unilaterally started paying her a lower commission is conclusory and fails to state a claim based on the face of the Complaint and the documents referenced in it. While the LOA required a signed writing to be modified, the LOCA Addendum states that it supersedes the LOA and that Citywide could ...

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