The opinion of the court was delivered by: Honorable Manuel L. Real U.S. District Court Judge
FINDINGS OF UNCONTROVERTED FACTS AND CONCLUSIONS OF LAW
In accordance with Rule 56 of the Federal Rules of Civil Procedure, the Motion for Summary Judgment of Defendant JPMorgan Chase Bank, N.A.'s (as acquirer of certain assets and liabilities of Washington Mutual Bank from the Federal Deposit Insurance Corporation acting as receiver) ("Defendant") came on regularly for hearing on July 27, 2009, the Honorable Manuel L. Real, United States District Judge presiding.
The Court, having considered the points and authorities submitted by the parties, the declarations and exhibits thereto, the relevant pleadings and papers on file with the Court and having heard the oral argument or counsel thereon, and having fully considered the law and facts disclosed by this record, hereby makes the following findings on uncontroverted facts and conclusions of law:
STATEMENT OF UNCONTROVERTED FACTS
1. Plaintiffs Judy Hoffman-Barron ("Hoffman-Barron"), Brian Minkow ("Minkow") and Chris O'Brien ("O'Brien") (collectively, "Plaintiffs") joined Washington Mutual Bank ("WaMu" or the "Bank") following its acquisition of Home Savings of America. After joining WaMu's payroll in late June or early July 1999, Plaintiffs subsequently participated in WaMu's Loan Consultant Incentive Plan and Sales Assistant Program beginning on January 1, 2000.
2. After becoming employees of WaMu in 1999, Plaintiffs were employed by the Bank as at-will Home Loan Consultants in WaMu's Westlake Village, California Home Loan Center until approximately April 2008.
3. Through its Home Loan Centers, WaMu originated and sold residential mortgages and loans to customers. In this capacity, Plaintiffs, as Home Loan Consultants served as the primary salespersons for these home loan products, and they were responsible for, among other things, originating loans and mortgages issued on behalf of the Bank.
4. Generally speaking, Plaintiffs' duties and responsibilities consisted of the following: being responsible for origination of home loans through various sales and marketing efforts, counseling potential customers about various home loan products, assisting prospective borrowers when filling out the home loan application, preparing a good faith estimate, making arrangements for appraisals and title reports, opening and coordinating with escrow companies, communicating with borrowers throughout the process, providing outstanding customers service, and generally shepherding a home loan through the approval process, which ultimately led to closing on the home loan transaction and the funding of a loan.
5. All Loan Consultants, including Plaintiffs, were primarily responsible for performing these duties, and all Loan Consultants, including Plaintiffs, were provided with support within the Bank for all phases of the loan origination process. Among other things, WaMu provided foundational support staff to Plaintiffs through its Loan Fulfillment Center, which was responsible for handling loan processing and other administrative responsibilities following a loan's origination.
6. In connection with the origination and funding of home loan products, WaMu generally received revenues in the form of points and fees in connection with home loans.
7. In turn, based upon all of the terms and conditions of the Bank's Loan Consultant Incentive Plans ("LCI Plan"), Plaintiffs (as Home Loan Consultants) were eligible to earn monthly, quarterly and annual commissions and other incentives, all of which were subject to and governed by the terms and conditions of the LCI Plans and all related plans and policies, including WaMu's Pricing Exception Policy, LCI Plan Administrative Guidelines, Sales Assistant Plan and, in the case of Minkow and O'Brien, WaMu's Partnership Plan.
8. WaMu's LCI Plans were issued annually at the outset of each applicable plan year. The LCI Plans formed the general compensation scheme applicable to all Loan Consultants, and where applicable (as with Plaintiffs), it incorporated the more specific terms and conditions set forth in WaMu's Sales Assistant Plan and Administrative Guidelines.
9. Generally speaking, Plaintiffs were eligible to earn two forms of commissions: (1) a set, per-unit commission for each home loan, and (2) a percentage, or so-called "basis point," commissions based on the gross dollar amount of each home loan. In turn, the value of the Plaintiffs' gross commissions was determined on an incrementally-tiered schedule, such that the value of the per-unit and basis point commissions would increase as the total number and dollar value of the loans originated increased.
10. Commissions were paid to Loan Consultants bi-monthly. In this regard, after the values of Plaintiffs' gross commissions were determined based on Plaintiffs' total loan production each month, their gross commissions were subject to a reconciliation process. During the reconciliation process, Plaintiffs' gross commissions were subject to upward and downward adjustments that ultimately resulted in Plaintiffs' net commissions being determined for the month. These net commissions amounts represented Plaintiffs' gross wages, which were paid to Plaintiffs through WaMu's payroll department.
11. Plaintiffs' commissions were not vested until the reconciliation process was completed and Plaintiffs' net commissions were ultimately determined.
12. In this regard, Plaintiffs' gross commissions were subject to upward adjustments, as well as different types of downward adjustments, during the reconciliation process.
13. For example, if Plaintiffs' loan production during the second half of the month caused Plaintiffs to move to a higher payout "tier" (making the Loan Consultant eligible for a higher gross commission), their gross commissions for the first half of the month would be recalculated at the higher rate, through an upward adjustment applied during the reconciliation process.
14. Alternatively, Plaintiffs' gross commissions were potentially subject to several types of downward adjustments, including adjustments for "pricing exceptions," partnership adjustments, and adjustments related to Plaintiffs' participation in WaMu's Sales Assistant Program.
15. Specifically, Plaintiffs had the ability to utilize "pricing exceptions," whereby, for example, they could quote below published pricing to close a loan. If Plaintiffs chose to use a pricing exception, the LCI Plan provided that "the cost of the pricing exception . . . resulted in a change in the amount of the commissions earned by the [Loan Consultant]." In other words, this resulted in a downward adjustment from Plaintiffs' gross commissions during the reconciliation process.
16. Additionally, Plaintiffs' gross commissions were potentially subject to upward and downward adjustments based on their participation in the Partnership Plan. In fact, Plaintiffs Minkow and O'Brien participated in a Loan Consultant partnership throughout the relevant period of this case. As such, one individual would be designated the primary (or senior) partner each applicable partnership year, while the other was designated the co-partner (or junior partner) during that time period. As such, gross commissions generated by Plaintiffs Minkow and O'Brien were subject to upward ...