ASSOCIATION RESOURCES, INC. v. JOSEPH J. WALL, SC 18316

Judicial District of Hartford

 

Contracts; Employment; Whether Bonus Payments Constituted Wages Under General Statutes 31-71a (3); Whether There was an Accord and Satisfaction with Regard to the Defendant's Claim for Bonus Payments; Whether the Defendant Had Standing to Pursue his Claim due to Bankruptcy Filing. The plaintiff corporation commenced this action against the defendant, its former employee. The defendant counterclaimed, alleging that the plaintiff breached the parties' 2003 employment contract in failing to pay him certain bonuses and monthly office allowance fees. He asserted that the plaintiff's refusal to pay the bonuses amounted to an unauthorized withholding of statutory wages. The plaintiff, which withdrew its complaint, moved to dismiss the counterclaim. It asserted that the defendant lacked standing to pursue the counterclaim because he filed for bankruptcy and surrendered ownership of his bonus and monthly allowance claims to the bankruptcy trustee. In denying the plaintiff's motion, the court ruled that the defendant's bankruptcy cases had been dismissed and that he had never been discharged in bankruptcy. The plaintiff also raised several special defenses, including claims that there was an accord and satisfaction with regard to the bonus payments and that the bonus payments did not constitute statutory wages. With regard to the accord and satisfaction defense, the plaintiff asserted that it had made an offer to settle the dispute as to bonus payments for $8000, and that the defendant accepted the money and signed a new employment contract in 2005, in which he agreed to forego his previously earned bonuses. The court rejected the plaintiff's defenses and rendered a judgment for the defendant. In concluding that plaintiff did not prove the defense of accord and satisfaction, the court credited the defendant's testimony that he only took the $8000 because he was in financial trouble and in no way agreed to that amount being the full satisfaction of his claim. It further determined that the 2005 contract did not contain any language eliminating the defendant's right to his previously earned bonuses. Moreover, it found that the bonuses constituted wages as defined in General Statutes 31-71a (3), which provides that "'[w]ages' means compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation." It indicated that the bonuses were compensation for the defendant's labor, which were determined by an "other basis of calculation." It thus found that the plaintiff was in violation of General Statutes 31-71e by withholding the defendant's wages and in violation of General Statutes 31-72 because it failed to pay the wages in accordance with the provisions of General Statutes 31-71a through 31-71i. In this appeal, the Supreme Court will determine whether the trial court properly determined that the bonuses constituted wages under 31-71a (3) and whether it properly calculated the amount of the unpaid bonus payments. It will also decide whether the court properly denied the plaintiff's motion to dismiss and rejected its defense of accord and satisfaction.