Court of Appeals hears dispute over deferred compensation, damages and attorney fees in CWS v. Montgomery

The Utah Court of Appeals heard oral argument in CWS v. Montgomery on matters including whether the operating agreement allowed the company manager to defer salary and bonuses, whether factual disputes should have barred summary judgment, and whether the district court correctly calculated prejudgment interest and attorney-fee awards.

At argument, Beth Ranshaw, counsel for appellant and cross-appellee CWS, told the three-judge panel that the district court mischaracterized CWS’s position by treating the dispute as one only about the amount of compensation rather than the fact of compensation itself. “The plain language of the agreement simply did not allow for a deferred compensation that Mr. Montgomery requested,” Ranshaw said, arguing the operating agreement’s reserved-actions provision limited a manager from changing terms of employment or compensation without approval of owners holding more than 50% of ownership interest. She noted Montgomery held roughly 45% and never a majority.

Ranshaw added that Exhibit B to the operating agreement specified payroll timing and quarterly bonus procedures, and that those timing provisions were part of the contract’s terms: “The operating agreement makes clear. It does not merely define the amount of compensation. It also defines when compensation was supposed to occur,” she said. She told the court that, based on Montgomery’s deferral over 12 years, the company now faced a near $2,000,000 liability the parties had not…