Sheaff Brock Investment Advisors, LLC v. David Morton ( 2014 )


Menu:
  • FOR PUBLICATION                                            Apr 07 2014, 9:15 am
    
    
    
    
    ATTORNEYS FOR APPELLANT:                 ATTORNEY FOR APPELLEE:
    
    ANDREW M. MCNEIL                         THOMAS B. BLACKWELL
    JONATHAN L. MAYES                        Hopper Blackwell, PC
    Bose McKinney & Evans LLP                Indianapolis, Indiana
    Indianapolis, Indiana
    
    
    
    
                              IN THE
                    COURT OF APPEALS OF INDIANA
    
    SHEAFF BROCK INVESTMENT ADVISORS, LLC, )
                                           )
         Appellant-Defendant,              )
                                           )
                vs.                        )        No. 29A02-1306-CC-553
                                           )
    DAVID MORTON,                          )
                                           )
         Appellee-Plaintiff.               )
    
    
                   APPEAL FROM THE HAMILTON SUPERIOR COURT
                         The Honorable Steven R. Nation, Judge
                            Cause No. 29D01-1203-CC-2302
    
    
    
                                   April 7, 2014
    
    
                            OPINION - FOR PUBLICATION
    
    
    NAJAM, Judge
                                   STATEMENT OF THE CASE
    
          Sheaff Brock Investment Advisors, LLC (“Sheaff Brock”) appeals the trial court’s
    
    grant of summary judgment in favor of David Morton on Morton’s claims that Sheaff
    
    Brock breached its employment agreement with Morton and violated Indiana’s Wage
    
    Claims Act. Sheaff Brock presents two issues for our review:
    
          1.       Whether the trial court erred when it concluded that Sheaff Brock
                   breached its contract with Morton.
    
          2.       Whether the trial court erred when it concluded that Morton’s
                   additional compensation under the employment agreement
                   constitutes a wage under the Wage Claims Act.
    
    Morton cross-appeals and presents two issues for our review:
    
          1.       Whether the trial court erred when it entered summary judgment in
                   favor of Sheaff Brock on Morton’s constructive fraud claim.
    
          2.       Whether Morton is entitled to appellate attorney’s fees.
    
          We affirm.1
    
                             FACTS AND PROCEDURAL HISTORY
    
          On March 1, 2010, Morton began his employment with Sheaff Brock as an
    
    investment advisor representative.         Morton’s duties included providing prospective
    
    clients with information about Sheaff Brock’s investment styles and strategies. If a
    
    prospective client elected to open an account with Sheaff Brock, the client signed an
    
    investment advisory agreement (“investment agreement”). At that point, Morton had
    
    fulfilled his duties as an investment advisor representative, and other Sheaff Brock
    
    employees assumed responsibility for servicing the client’s needs.
    
    
    
          1
              We held oral argument on March 17, 2014.
                                                     2
          Most of Sheaff Brock’s clients were referred by TD Ameritrade, which assessed
    
    an annual investment management fee against client account balances on a quarterly
    
    basis. TD Ameritrade, on behalf of Sheaff Brock, assessed the management fees at the
    
    start of each quarter. Clients who opened new accounts during a quarter were assessed a
    
    management fee for the pro-rated number of days remaining in the quarter, and clients
    
    who left during a quarter received a credit against the management fee for the pro-rated
    
    number of days remaining in the quarter. Because assessments were subject to proration,
    
    Sheaff Brock did not finally settle each client’s account and determine the management
    
    fees due on account balances until the end of each quarter.
    
          Morton was an at-will employee, but he also had an employment agreement with
    
    Sheaff Brock that provided in relevant part as follows:
    
          3.     Changes in Terms and Conditions of Employment. The terms and
          conditions of your employment may be amended from time to time, as the
          needs of the Employer may require. . . .
    
          4.    Amount and Payment of Compensation. During the term of this
          agreement, Employer shall pay the following:
    
          •     An annual guaranteed draw of thirty thousand dollars ($30,000.00),
          paid in accordance with the Employer’s normal payroll policies and
          procedures.
    
          •      Additional compensation will be paid as follows:
    
          50% of the net management fees paid to Employer during the first year of
          Employer providing investment management services to a client as a direct
          and proximate result of your marketing efforts which result in the client
          entering into an investment advisory agreement with the Employer.
    
          20% of the net management fees paid to Employer thereafter from the
          continuing retention of Employer to provide investment management
          services to a client as a direct and proximate result of your marketing
          efforts with the client.
                                                3
          The above fee arrangement will also be subject to a pro rata adjustment for
          any increase or decrease in management fees as a result of capital addition,
          capital withdrawal, management termination, management fee discount or
          any other management fee adjustments and deductions.
    
    Appellant’s App. at 23-24 (emphases added).
    
          In approximately March 2011, the owners of Sheaff Brock, Ronald Brock and
    
    David Gilreath, told Morton that they were going to restructure his additional
    
    compensation. Instead of 50% of the net management fees paid during the first year and
    
    20% of the net management fees paid thereafter, Sheaff Brock would pay Morton 30%
    
    during a client’s first year and 10% thereafter. The new percentages were to be applied
    
    both to existing and new client accounts. To help Morton through the transition, Sheaff
    
    Brock temporarily increased Morton’s guaranteed draw to $250,000 per year.             In
    
    November 2011, Sheaff Brock announced that, effective January 1, 2012, Morton and the
    
    other investment advisor representatives would each be assigned a territory constituting
    
    one-third of the country. And Sheaff Brock told Morton that he would receive 50% of
    
    the net management fees obtained from his assigned territory during a client’s first year
    
    and 20% thereafter.
    
          In early 2012, Sheaff Brock learned that Morton had concerns about the
    
    company’s financial health and was looking to start a new business himself.
    
    Accordingly, Sheaff Brock terminated Morton’s employment. On March 7, Morton filed
    
    a complaint against Sheaff Brock alleging breach of contract, unpaid wages, and
    
    constructive fraud. Morton also sought declaratory judgment on the issue of whether the
    
    non-compete and non-solicitation clauses in his contract with Sheaff Brock were valid.
    
    Sheaff Brock filed an answer and counterclaim alleging breach of contract and breach of
                                               4
    fiduciary duty.     On November 5, Sheaff Brock moved for summary judgment, and
    
    Morton filed a cross-motion for summary judgment.
    
          Following a hearing on all pending motions on March 11, 2013, the trial court
    
    granted in part and denied in part Sheaff Brock’s summary judgment motion and granted
    
    in part and denied in part Morton’s cross-motion for summary judgment. In particular,
    
    the trial court concluded that Sheaff Brock did not breach its contract with Morton when
    
    it prospectively changed the compensation structure for Morton’s additional
    
    compensation. But the trial court concluded that Sheaff Brock breached the contract
    
    when it applied those changes to client accounts already under management at the time
    
    the new compensation structure was implemented. The trial court also concluded that
    
    Morton’s additional compensation constitutes a wage under the Wage Claims Act; that
    
    Morton’s constructive fraud claim is without merit; and that neither party is entitled to
    
    summary judgment on the issue of whether the non-compete and non-solicitation clauses
    
    are invalid. This appeal and cross-appeal ensued.2
    
                                    DISCUSSION AND DECISION
    
                                           Standard of Review
    
          Our standard of review for summary judgment appeals is well established:
    
          When reviewing a grant [or denial] of summary judgment, our standard of
          review is the same as that of the trial court. Considering only those facts
          that the parties designated to the trial court, we must determine whether
          there is a “genuine issue as to any material fact” and whether “the moving
          party is entitled to a judgment as a matter of law.” In answering these
          questions, the reviewing court construes all factual inferences in the non-
          moving party’s favor and resolves all doubts as to the existence of a
          material issue against the moving party. The moving party bears the
    
          2
              The judgment is a final judgment under Trial Rule 56(C).
                                                       5
           burden of making a prima facie showing that there are no genuine issues of
           material fact and that the movant is entitled to judgment as a matter of law;
           and once the movant satisfies the burden, the burden then shifts to the non-
           moving party to designate and produce evidence of facts showing the
           existence of a genuine issue of material fact.
    
    Dreaded, Inc. v. St. Paul Guardian Ins. Co., 
    904 N.E.2d 1267
    , 1269-70 (Ind. 2009)
    
    (citations omitted). The party appealing a summary judgment decision has the burden of
    
    persuading this court that the grant or denial of summary judgment was erroneous.
    
    Knoebel v. Clark Cnty. Superior Ct. No. 1, 
    901 N.E.2d 529
    , 531-32 (Ind. Ct. App. 2009).
    
    Where, as here, the facts are undisputed and the issue presented is a pure question of law,
    
    we review the matter de novo. See Crum v. City of Terre Haute ex rel. Dep’t of Redev.,
    
    
    812 N.E.2d 164
    , 166 (Ind. Ct. App. 2004). The fact that the parties have filed cross-
    
    motions for summary judgment does not alter our standard for review, as we consider
    
    each motion separately to determine whether the moving party is entitled to judgment as
    
    a matter of law. Reed v. Reid, 
    980 N.E.2d 277
    , 285 (Ind. 2012).
    
                                Issue One: Breach of Contract
    
           Sheaff Brock first contends that the trial court erred when it concluded that it
    
    breached its contract with Morton when, in 2011, it changed the additional compensation
    
    structure and applied the changes to existing client accounts going forward. Sheaff Brock
    
    maintains that Morton did not have a vested interest in the additional compensation once
    
    each quarter ended and had not secured any future business for Sheaff Brock as a result
    
    of his work in signing clients. Thus, Sheaff Brock claims that Morton “did not possess a
    
    right to future additional compensation at a specific rate, so when Sheaff Brock
    
    restructured Morton’s pay at the start of a quarter (that is, before Morton earned
    
    
                                                6
    anything), it did not retroactively change Morton’s compensation.” Appellant’s Brief at
    
    22.
    
            The trial court found in relevant part that
    
            the employment was “at will” and the Agreement reserved the right of the
            Employer to prospectively amend or change the compensation structure
            under the Agreement as needed. The ability to amend or change the
            compensation structure only applied prospectively to new accounts and did
            not apply to accounts that were already under management.
    
    Appellant’s App. at 10.
    
            Sheaff Brock points out that, “as a general rule, a person employed on a
    
    commission basis is entitled to his commission on business he has secured even though
    
    payment is not received by the employer until a later date.” See Wells Fargo Ins., Inc. v.
    
    Land, 
    932 N.E.2d 195
    , 200 (Ind. Ct. App. 2010). But here, Sheaff Brock maintains,
    
    Morton’s work did not secure anything.3 As Sheaff Brock explains it:
    
            Morton’s additional compensation is unlike a specific purchase (e.g. crop
            insurance) or the typical sale in which specific services are provided (e.g.
            orthopedic surgery). When Morton signed up a new Sheaff Brock client
            after Brock and Gilreath provided him with the opportunity to make the
            sales presentation, the client signed an investment advisory agreement. The
            client agreement yielded nothing more than an expectancy interest in any
            earnings that may be attributed to that client. In other words, even if the
            client signed an investment advisory agreement with Sheaff Brock, nothing
            obligated the client to stay with Sheaff Brock for any period of time or
            guaranteed any amount of compensation to Sheaff Brock. The client was
            free to leave the following day at no cost to the client.
    
                   The simple fact is that Morton’s right to Additional Compensation
            accrued in the same fashion as Sheaff Brock’s right to fees accrued.
            Although TD Ameritrade assessed fees at the beginning of each quarter and
            issued quarterly payment to Sheaff Brock for the upcoming quarter, Sheaff
            Brock recorded the entire payment as a liability on its books because the
    
            3
              Morton contends that Sheaff Brock did not make this argument to the trial court and the issue is
    waived. But Sheaff Brock directs us to its Reply in Support of its Motion for Summary Judgment, where
    it made the same argument to the trial court. Accordingly, Morton’s contention is without merit.
                                                        7
          fees had not yet been earned. As each day concluded, Sheaff Brock (and
          therefore Morton) earned 1/90th of the fees for that client at that point
          (rounding the number of days in a quarter down to 90). However, the fees,
          and Morton’s accrued Additional Compensation, were not fully earned, or
          vested, until the conclusion of each quarter because there could be reason
          for other adjustments. Once the quarter ended, the fees were fully earned
          by Sheaff Brock, and Morton’s right to Additional Compensation fully
          vested for the prior quarter. So, Sheaff Brock could not, on the last day of
          the quarter, retroactively reduce the percentage payable to Morton; it could,
          however, implement that change for the new quarter going forward.
    
    Appellant’s Brief at 24-25 (emphases added, citations omitted). And Sheaff Brock points
    
    out that, under paragraph 3 of the employment agreement, it was entitled to amend
    
    Morton’s compensation “from time to time” as Sheaff Brock’s “needs . . . may require.”
    
    Appellant’s App. at 23.
    
          But Morton maintains that his right to the additional compensation at the
    
    contracted-for percentage vested once a client signed an investment agreement with
    
    Sheaff Brock. Morton contends that “[o]nce he had fully performed under the agreement
    
    it was a breach of the agreement for Sheaff Brock to refuse to pay him according to the
    
    terms in place at the time he performed his labor.” Appellee’s Brief at 31 (emphasis
    
    added). In support of that contention, Morton relies on our supreme court’s opinion in
    
    Highhouse v. Midwest Orthopedic Institute, P.C., 
    807 N.E.2d 737
     (Ind. 2004), and on
    
    this court’s opinions in Wells Fargo, 932 N.E.2d at 195, and Vector Engineering &
    
    Manufacturing Corp. v. Pequet, 
    431 N.E.2d 503
     (Ind. Ct. App. 1982). In Highhouse, our
    
    supreme court stated that, absent some other arrangement or policy, when an employer
    
    makes an agreement to provide compensation for services the employee’s right to
    
    compensation vests when the employee renders the services. 807 N.E.2d at 739. And in
    
    Wells Fargo and Pequet, this court observed that, as a general rule, a person employed on
                                               8
    a commission basis is entitled to his commission on business he has secured even though
    
    payment is not received by the employer until a later date. 932 N.E.2d at 200; 431
    
    N.E.2d at 505. This general rule may be altered by a written agreement or by the conduct
    
    of the parties that clearly demonstrates a different compensation scheme. Id.
    
           Here, nothing in the parties’ agreement altered the general rule. See id. The
    
    agreement provided that Morton would be paid a certain percentage of net management
    
    fees after a client entered into an investment agreement with Sheaff Brock. Thus, Sheaff
    
    Brock did not have discretion to change the fee percentages owed to Morton on a client’s
    
    account after that client had signed an investment agreement. Likewise, there is no
    
    designated evidence that the parties’ conduct demonstrated a different compensation
    
    scheme. See id. We hold that Morton had secured business for Sheaff Brock, and
    
    Morton’s interest in the additional compensation vested, when the client signed an
    
    investment agreement and that Morton was entitled to additional compensation based on
    
    the fee percentages in effect at that time. The trial court did not err when it entered
    
    summary judgment in favor of Morton on his breach of contract claim with regard to
    
    those clients already under management.
    
                                 Issue Two: Wage Claims Act
    
           Sheaff Brock also contends that the trial court erred when it concluded that
    
    Morton’s additional compensation constitutes a “wage” under the Wage Claims Act (“the
    
    Act”). Indiana Code Section 22-2-9-1(b) provides that the term “wages” under the Act
    
    means all amounts at which the labor or service rendered is recompensed, whether the
    
    amount is fixed or ascertained on a time, task, piece, or commission basis, or in any other
    
    
                                                9
    method of calculating such amount. In his complaint, Morton alleged that Sheaff Brock
    
    violated the Act, which provides in relevant part that, whenever any employer separates
    
    any employee from the payroll, the unpaid wages or compensation of such employee
    
    shall become due and payable at the regular pay day for the pay period in which
    
    separation occurred. See Ind. Code § 22-2-9-2. Morton contends that Sheaff Brock owes
    
    him unpaid additional compensation under the terms of his employment agreement.
    
    Failure to make payment subjects the employer to liquidated damages of up to double the
    
    amount of wages due and attorney’s fees. I.C. §§ 22-2-5-2, -9-4(b).
    
           The trial court found that Morton’s additional compensation is a wage and
    
    concluded in relevant part as follows:
    
           n. That the Additional Compensation was earned based upon work
           performed by the Plaintiff and was not produced as part of a team effort.
           Such team effort only came after the account had been secured and the
           Plaintiff’s sale efforts were completed.
    
           o. That the Additional Compensation based on the unambiguous language
           of the Agreement was mandatory and not discretionary and was not based
           on the financial success of the Defendant.
    
           p. That as to the payment being calculated or being paid within ten days,
           the Defendant would bill the clients at the beginning of each quarter.
           However, such amount would remain a liability until the end of the quarter
           when the fee was earned. Such fees were not earned until the end of the
           quarter for the reason that the Plaintiff could not collect payments until the
           end of the quarter or at termination. The Defendant has testified that the
           percentage owed to the Plaintiff was calculated using a set formula at the
           end of the quarter when the fee is a “sum certain.” Therefore, the Court
           finds that the designated evidence before the Court is that the amount is
           calculated to a “sum certain” at the end of the quarter when the fee was
           earned. Therefore, the Court finds that the Additional Compensation is a
           “wage” because it is capable of being calculated and paid within ten days of
           the end of the quarter.
    
    Appellant’s App. at 11-12.
                                                10
           The name given to the method of compensation is not controlling. Gress v.
    
    Fabcon, Inc., 
    826 N.E.2d 1
    , 3 (Ind. Ct. App. 2005).          Rather, we will consider the
    
    substance of the compensation to determine whether it is a wage.           Id.   We have
    
    recognized that wages are something akin to the wages paid on a regular periodic basis
    
    for regular work done by the employee. Id. In other words, if compensation is not linked
    
    to the amount of work done by the employee or if the compensation is based on the
    
    financial success of the employer, it is not a “wage.” Id.
    
           In Highhouse, our supreme court observed that a bonus is a “wage” under the Act
    
    if it is not linked to a contingency such as the financial success of the company. 807
    
    N.E.2d at 740. Also, to qualify as a wage, the compensation must be connected to the
    
    work performed by the employee. Wank v. St. Francis College, 
    740 N.E.2d 908
    , 912
    
    (Ind. Ct. App. 2000), trans. denied. Other factors for determining whether compensation
    
    is a wage are whether it can be calculated and paid within ten days of having been
    
    “earned” and whether it is paid with regularity. See Highhouse, 807 N.E.2d at 740. This
    
    court has also held that, where compensation is mandatory rather than discretionary, it is
    
    a wage. See, e.g., Quezare v. Byrider Finance, Inc., 
    941 N.E.2d 510
    , 514 (Ind. Ct. App.
    
    2011) (noting discretionary nature of compensation plan supported conclusion that bonus
    
    payments were not wages), trans. denied; see also Pyle v. Nat’l Wine & Spirits, 
    637 N.E.2d 1298
    , 1301 (Ind. Ct. App. 1994) (holding bonus system was discretionary and
    
    therefore bonuses were not wages).
    
           Here, both the terms of the employment agreement and the parties’ conduct
    
    establish that Morton’s additional compensation was a wage because it was directly
    
    
                                                 11
    connected to his work recruiting prospective clients, it was mandatory, and it was not tied
    
    to Sheaff Brock’s financial success. First, the undisputed designated evidence establishes
    
    that Morton’s compensation was directly related to his efforts in acquiring new customers
    
    for Sheaff Brock. When the client signed an investment agreement, the client’s assets
    
    were placed under Sheaff Brock’s management, and Morton’s work on that account was
    
    done. Morton’s employment agreement provided that additional compensation would be
    
    paid “as a direct and proximate result of [Morton’s] marketing efforts, which result[ed] in
    
    the client entering into an investment advisory agreement with the Employer.”
    
    Appellant’s App. at 24. Second, it is undisputed that Morton’s additional compensation
    
    was not discretionary but was paid regularly following the end of each quarter. And
    
    third, whether Morton would be paid additional compensation was not dictated by Sheaff
    
    Brock’s financial success. Morton’s employment agreement provided that “Employer
    
    shall pay” and that “[a]dditional compensation will be paid” as a direct and proximate
    
    result of Morton’s marketing efforts. Id. at 23-24. Finally, as the trial court found,
    
    Morton’s additional compensation was based only on his effort and was not produced as
    
    part of a team effort.
    
           But the question remains whether the amount of Morton’s additional
    
    compensation could be calculated and paid within ten days of having been “earned.” In
    
    its argument, Sheaff Brock uses the words “accrued,” “vested,” and “earned,” but the
    
    controlling term here is the statutory term, “earned.” See I.C. § 22-2-5-1.4 Employee
    
    
           4
              Indiana Code Section 22-2-9-4(b) of the Wage Claims Act provides in relevant part that the
    provisions of Indiana Code Section 22-2-5-2 of the Wage Payment Act apply to claims brought under the
    Wage Claims Act. And Indiana Code Section 22-2-5-2 provides in relevant part that an employer must
    pay wages to an employee “as provided in” Indiana Code Section 22-2-5-1, which includes the
                                                     12
    compensation and payment arrangements vary widely, and no Indiana case has defined
    
    the term “earn” for purposes of the Act. Indeed, in Highhouse, our supreme court used
    
    the term in quotation marks and considered alternative hypotheticals where the plaintiff
    
    had “earned” his purported wage both at the time he had rendered services to a patient
    
    and at the time the patient later paid his bill. 807 N.E.2d at 740. We conclude that when
    
    compensation is earned for purposes of the Act is not a fixed concept but is a fact-
    
    sensitive determination.
    
           Nevertheless, the common denominator of a valid claim under the Wage Claims
    
    Act is that the compensation is “earned” when the amount of wages owed by the
    
    employer has been fixed and the employee has the right to payment of a sum certain, that
    
    is, a liquidated sum. We reach that conclusion by considering the statutory provisions
    
    that require payment of a wage within ten days after the wage is earned and provide for
    
    liquidated damages based on a percentage of that wage. See I.C. §§ 22-2-5-2, -9-4(b). In
    
    other words, the wage is earned when the amount is settled and it becomes due, after
    
    which the wage must be paid on time or the employer may be subject to a statutory
    
    penalty under the Act. Id.
    
           Here, again, Morton’s contract right to additional compensation accrued and was
    
    vested, albeit in an amount to be determined, when he recruited a client who signed an
    
    investment agreement with Sheaff Brock. Morton then “earned” the right to payment of
    
    specific wages, to payment of a liquidated sum that Sheaff Brock owed him, at the end of
    
    
    
    
    requirement that an employer shall pay an employee “for all wages earned to a date not more than ten
    days prior to the date of payment.” (Emphasis added).
                                                    13
    each quarter when that sum could be determined. Indeed, as Sheaff Brock describes it in
    
    its brief on appeal,
    
           Morton’s right to Additional Compensation accrued in the same fashion as
           Sheaff Brock’s right to fees accrued. Although TD Ameritrade assessed
           fees at the beginning of each quarter and issued quarterly payment to Sheaff
           Brock for the upcoming quarter, Sheaff Brock recorded the entire payment
           as a liability on its books because the fees had not yet been earned. As each
           day concluded, Sheaff Brock (and therefore Morton) earned 1/90th of the
           fees for that client at that point (rounding the number of days in a quarter
           down to 90). However, the fees, and Morton’s accrued Additional
           Compensation, were not fully earned . . . until the conclusion of each
           quarter because there could be reason for other adjustments.
    
    Appellant’s Brief at 24-25 (emphasis added). Thus, by Sheaff Brock’s own assessment,
    
    Morton did not and could not earn the additional compensation until the end of each
    
    quarter. And it is undisputed that the amount due at that time was readily ascertainable
    
    within ten days. During each quarter, Morton was paid advances on account toward his
    
    additional compensation, but his additional compensation was not earned until his
    
    accounts were reconciled at the end of each quarter.
    
           We agree with the trial court and hold that, in light of all of the designated
    
    evidence in this case, Morton’s additional compensation was a wage for purposes of the
    
    Wage Claims Act. The additional compensation was connected to Morton’s work, was
    
    mandatory, was not tied to Sheaff Brock’s financial success, could be calculated to a sum
    
    certain at the end of the quarter, and could be paid regularly within ten days of that
    
    calculation. In fact, not only could Morton’s additional compensation be calculated
    
    within ten days of the date earned, but the course of conduct between the parties shows
    
    that Sheaff Brock regularly calculated the additional compensation within ten days
    
    
    
                                                14
    following the end of each quarter. The trial court did not err when it entered summary
    
    judgment in favor of Morton on his wage claim.
    
                                       CROSS-APPEAL
    
                                Issue One: Constructive Fraud
    
           Morton contends on cross-appeal that the trial court erred when it entered
    
    summary judgment in favor of Sheaff Brock on Morton’s constructive fraud claim.
    
    Morton maintains that Sheaff Brock committed constructive fraud “by failing to provide
    
    honest, accurate documentation to Morton of the amount of commissions he was owed,
    
    despite repeated requests for such documentation.” Appellee’s Brief at 33. And Morton
    
    seeks punitive damages on this claim.
    
           The elements of constructive fraud are: (1) a duty owing by the party to be
    
    charged to the complaining party due to their relationship; (2) violation of that duty by
    
    the making of deceptive material misrepresentations of past or existing facts or remaining
    
    silent when a duty to speak exists; (3) reliance thereon by the complaining party; (4)
    
    injury to the complaining party as a proximate result thereof; and (5) the gaining of an
    
    advantage by the party to be charged at the expense of the complaining party. Fiederlein
    
    v. Boutselis, 
    952 N.E.2d 847
    , 860 (Ind. Ct. App. 2011).
    
           Here, again, the trial court concluded that Morton’s constructive fraud claim was
    
    merely a repackaging of his breach of contract claim. It is well settled that a breach of
    
    contract claim may not lead to an award of punitive damages. Tobin v. Ruman, 
    819 N.E.2d 78
    , 86 (Ind. Ct. App. 2004), trans. denied. Rather, only if the claimant proves that
    
    the conduct of the breaching party independently establishes the elements of a common
    
    
                                                15
    law tort for which punitive damages are allowed may the claimant receive punitive
    
    damages. Id. Thus, a claimant who brings both a breach of contract and a fraud claim
    
    must prove that (1) the breaching party committed the separate and independent tort of
    
    fraud; and (2) the fraud resulted in injury distinct from that resulting from the breach. Id.
    
    While “[b]reaches of contract will almost invariably be regarded by the complaining
    
    party as oppressive, if not outright fraudulent,” the claimant must nonetheless prove the
    
    independent tort to recover punitive damages. Id. (quoting Epperly v. Johnson, 
    734 N.E.2d 1066
    , 1073 (Ind. Ct. App. 2000)).
    
           Morton’s constructive fraud claim is based on allegations that Sheaff Brock did
    
    not provide “documentation from which Morton could determine whether or not he was
    
    being paid appropriately” and that Morton was “forced to rely upon false and deceptive
    
    documentation” provided by Sheaff Brock. Appellee’s Brief at 35; Appellant’s App. at
    
    343. But Morton does not allege that he sustained an injury distinct from that alleged in
    
    his breach of contract claim. See Tobin, 819 N.E.2d at 86. In particular, in support of his
    
    constructive fraud claim, Morton contends only that he “clearly has been injured in an
    
    amount of hundreds of thousands of dollars as a result of the lies and omissions of Sheaff
    
    Brock.” Appellee’s Brief at 35. Morton did not make cogent argument or designate
    
    evidence to establish that Sheaff Brock’s actions constitute the separate and independent
    
    tort of constructive fraud. The trial court did not err when it entered summary judgment
    
    in favor of Sheaff Brock on this issue.
    
    
    
    
                                                 16
                             Issue Two: Appellate Attorney’s Fees
    
           Finally, Morton contends that he is entitled to appellate attorney’s fees. Sheaff
    
    Brock acknowledges that Morton is entitled to appellate attorney’s fees if he prevails on
    
    his claim under the Wage Claims Act. Because we hold that the trial court did not err
    
    when it entered summary judgment in favor of Morton on his wage claim under the Act,
    
    Morton is entitled to appellate attorney’s fees.
    
                                            Conclusion
    
           The trial court did not err when it concluded that Sheaff Brock breached its
    
    contract with Morton when it unilaterally applied an amended compensation structure to
    
    client accounts already under management. And the trial court did not err when it
    
    concluded that Morton’s additional compensation constitutes a wage under the Wage
    
    Claims Act.    Accordingly, Morton is entitled to attorney’s fees, including appellate
    
    attorney’s fees. Finally, the trial court did not err when it entered summary judgment in
    
    favor of Sheaff Brock on Morton’s constructive fraud claim. Thus, we remand to the trial
    
    court for proceedings not inconsistent with this opinion.
    
           Affirmed.
    
    BAKER, J., and CRONE, J., concur.
    
    
    
    
                                                 17