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Ex-employee wins appeal and prejudgment interest

November 7, 2012

A former employee is entitled to commissions owed to him after he left a real estate company, the Indiana Court of Appeals affirmed Wednesday. The judges also found the ex-employee is entitled to prejudgment interest.

Peter Karagan worked for Dennis Larson’s real estate companies for two years before leaving in December 2007. His oral agreement with Larson said Karagan would be paid 75 percent of the gross commissions Larson received for transactions Karagan procured. When Larson didn’t pay up, Karagan sued for breach of contract and conversion. Larson did not respond to Karagan’s motion for summary judgment or to Karagan’s two requests for admission of fact.

The Lake Superior Court found Karagan was entitled to treble damages and awarded him $177,612.50 plus costs and future commissions, but denied his request for prejudgment interest.

In Dennis Larson, Rose Real Estate, Inc., and Diversified Commercial Real Estate v. Peter N. Karagan, 45A04-1112-CC-656, the Court of Appeals found Karagan’s designated evidence doesn’t give rise to a genuine issue of material fact, as Larson argued.

The judges also rejected Larson’s claim that there was no evidence of criminal intent to support the application of the criminal conversion statute that was used to award treble damages. The Court of Appeals cited White v. Indiana Realty Associates II, 555 N.E.2d 454, 458 (Ind. 1990), to support the trial court’s determination that Karagan was entitled to treble damages.

The evidence also established what Karagan’s commission was, the transactions for which he was entitled to commissions, and the amount of the commissions, so the trial court should have awarded Karagan prejudgment interest, Judge Melissa May wrote. The judges remanded the matter to the trial court to do so.

 

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