Hamilton County Convention Center, LLC v. Lee R. Johnson (mem. dec.) ( 2016 )

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), Aug 18 2016, 8:19 am
this Memorandum Decision shall not be CLERK
regarded as precedent or cited before any Indiana Supreme Court
Court of Appeals
court except for the purpose of establishing and Tax Court
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Steven P. Taylor Paul L. Jefferson
Law Offices of Steven P. Taylor, P.C. Jefferson & Brewer, LLC
Indianapolis, Indiana Indianapolis, Indiana
Jeffrey S. Nickloy
Amy E. Higdon
Nickloy & Higdon
Noblesville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Hamilton County August 18, 2016
Convention Center, LLC, Court of Appeals Case No.
Appellant-Cross-Appellee, 29A05-1509-PL-1525
Appeal from the Hamilton
v. Superior Court
The Honorable Wayne A.
Lee R. Johnson, Sturtevant, Judge
Honorable David K. Najjar,
Appellee-Cross-Appellant
Special Judge
Trial Court Cause No.
29D05-1112-PL-12925
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Baker, Judge.
[1] Hamilton County Convention Center (HCCC), LLC, appeals the judgment of
the trial court, which found that HCCC had illegally failed to pay its employee,
Lee Johnson. Johnson cross-appeals the trial court’s award of attorney fees.
We find that (1) the trial court properly concluded that Johnson was an
employee, (2) Johnson’s remuneration was a wage, and (3) the award of
attorney fees was within the sound discretion of the trial court. Accordingly,
we affirm.
Facts
[2] HCCC operated the “Mill Top” event center in Noblesville. Hassan Shanehsaz
was the sole owner of HCCC, as well as the sole owner of Shane, LLC, the
entity that owned the Mill Top building. Johnson had worked for decades in
the event planning industry, experience that Shanehsaz lacked. In October
2010, Shanehsaz came to an agreement with Johnson: she would solicit
customers who were interested in using the event center space, and HCCC
would pay her a commission. The terms were set out in a letter written by
Johnson to Shanehsaz. Each space in the building had a set commission, and
Johnson could earn additional compensation for upsells like linens, chairs, or
catering.
[3] Johnson worked around seventy hours per week. HCCC provided her with an
office, a desk, a computer, a printer, and a cell phone. Shanehsaz set hours for
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Johnson to work, and she performed several tasks in addition to her role of
booking new clients: she also cleaned, handled checks, and hired interns.
[4] Johnson would periodically meet with Shanehsaz’s son in order to calculate her
compensation. Roughly two weeks before leaving the job, Johnson was given a
report that showed $10,904.60 owed to her for unpaid commissions. On
November 1, 2011, Johnson resigned.
[5] On November 21, 2011, Johnson sent a letter to Shanehsaz’s attorney,
demanding that he compensate her for her work. She demanded $22,863.79,
which consisted of the amount previously mentioned in the report along with
other commissions that she believed she had earned. The letter mentioned that
if the dispute ended in litigation, Johnson would be proceeding under the Wage
Payment Statute,1 which might entitle her to attorney fees.
[6] On December 11, 2011, Johnson filed a complaint, alleging claims of breach of
contract and violation of the Wage Payment Statute. After a July 31, 2013, and
November 1, 2013, bench trial, the trial court granted judgment in favor of
Johnson on December 17, 2013. The trial court found actual damages of
$15,408.60, plus an additional $30,817.20 of liquidated damages under the
Wage Payment Statute. The trial court set a hearing regarding Johnson’s
attorney fees for February 12, 2014.
1
Ind. Code § 22-2-5-1.
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[7] One day before this hearing was set to take place, HCCC filed a notice of
bankruptcy, and the trial court stayed the attorney fees hearing. When the
bankruptcy closed in 2015, the trial court held a hearing and awarded Johnson
attorney fees of $25,000. HCCC now appeals the judgment that it violated the
Wage Payment Statute, and Johnson cross-appeals the trial court’s calculation
of attorney fees.
Discussion and Decision
[8] Our standard of review is the following:
When a trial court has entered findings of fact and conclusions of
law, we engage in a two-tiered standard of review. We must first
determine whether the evidence supports the findings of fact and
then whether the findings support the judgment. We will not
reverse the trial court’s findings and judgment unless they are
clearly erroneous. The judgment is clearly erroneous when it is
unsupported by the findings of fact and conclusions entered on
the findings. In making these determinations, we will neither
reweigh the evidence nor judge witness credibility, considering
only the evidence favorable to the judgment and all reasonable
inferences therefrom.
Mueller v. Karns, 873 N.E.2d 652, 657 (Ind. Ct. App. 2007).
A. Is Johnson an Employee?
[9] Indiana’s Wage Payment Statute applies to “employees.” I.C. § 22-2-5-1(a).
The trial court found that Johnson was an employee. HCCC argues that
Johnson was not an employee, but rather an independent contractor, and that,
therefore, the Wage Payment Statute does not apply to her.
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[10] The Wage Payment Statute does not define “employee” or “independent
contractor,” but our Supreme Court has laid out a ten-factor test to distinguish
between the two:
1. The extent of control which, by the agreement, the master may exercise
over the details of the work;
2. Whether or not the one employed is engaged in a distinct occupation or
business;
3. The kind of occupation, with reference to whether, in the locality, the
work is usually done under the direction of the employer or by a
specialist without supervision;
4. The skill required in the particular occupation;
5. Whether the employer or the workman supplies the instrumentalities,
tools, and the place of work for the person doing the work;
6. The length of time for which the person is employed;
7. The method of payment, whether by the time or by the job;
8. Whether or not the work is a part of the regular business of the employer;
9. Whether or not the parties believe they are creating the relation of master
and servant; and
10. Whether the principal is or is not in business.
Moberly v. Day, 757 N.E.2d 1007, 1010 (Ind. 2001). We are to consider all
factors, and no single factor is dispositive. Id.
1. Extent of Control
[11] HCCC tasked Johnson with many obligations in addition to her booking duties.
When a space flooded in the middle of the night, Shanehsaz called Johnson and
had her clean it up. She also collected tenants’ checks and helped tenants
access the buildings when they forgot their key. Johnson typically worked
seventy hours per week for HCCC, and she did not work anywhere else. We
find that this factor supports the finding of the trial court.
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2. Distinct Business
[12] Johnson was not engaged in a distinct occupation or business. She was not like
a landscaper, who might work on one property but then work on another. Her
efforts were aimed entirely at securing clients for HCCC, and she worked at
that task full time. We find that this factor supports the finding of the trial
court.
3. Kind of Occupation
[13] The record does not indicate whether this type of work is typically done under
the direction of an employer or by a specialist without supervision. Therefore,
this factor neither supports nor contradicts the finding of the trial court.
4. Skill Required
[14] Johnson’s job does not seem to require any specialized training or skill. In fact,
when Johnson left her job at HCCC, it replaced her with a former intern who
had little experience in the field. We find that this factor supports the finding of
the trial court.
5. Who Supplied Instrumentalities
[15] Johnson worked out of an HCCC office, using an HCCC phone, computer,
printer, and desk. HCCC concedes that this factor supports the finding of the
trial court.
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6. The Length of Time
[16] Johnson worked for HCCC for an entire year, and worked nowhere else.
HCCC concedes that this factor supports the finding of the trial court.
7. Method of Payment
[17] Johnson was paid by commission and was not paid a salary. This factor tends
to contradict the finding of the trial court.
8. Part of HCCC’s Regular Business
[18] Johnson provided a necessary part of HCCC’s business, and she was the only
worker who provided this service. HCCC concedes that this factor supports the
finding of the trial court.
9. Parties’ Beliefs
[19] Johnson testified that she viewed Shanehsaz as her boss. On the other hand,
Johnson filled out a tax form in which she listed herself as an independent
contractor. We find that this factor neither clearly supports nor contradicts the
trial court’s finding.
10. Principal in Business
[20] HCCC, the principal, was in the event staging business. HCCC concedes that
this factor supports the finding of the trial court.
[21] Overall, HCCC concedes that four out of the ten Moberly factors support the
trial court’s finding that Johnson was an employee. Appellant’s Br. p. 22.
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Although HCCC argues that the remaining six tend to show that Johnson was
an independent contractor, we believe that only Johnson’s method of payment
tends to contradict the trial court’s finding; the remaining five are either
ambiguous or actually support the trial court’s finding.
[22] We will only reverse if HCCC can show that the “judgment is contrary to law
[because] the evidence is without conflict and leads to but one conclusion which
is opposite from that reached by the trial court.” Mayflower Transit, Inc. v.
Davenport, 714 N.E.2d 794, 798 (Ind. Ct. App. 1999). That is certainly not the
case when only one of ten factors cuts against the trial court’s finding and the
remaining nine strongly support it or are ambiguous.
[23] Finally, HCCC argues that we should reverse the trial court’s finding that
Johnson was an employee because such a finding does not accord with how
HCCC has been filing its taxes.
[24] First, we note that this argument was never presented to the trial court, and is
therefore waived. Mitchell v. Stevenson, 677 N.E.2d 551, 558 (Ind. Ct. App.
1997). Even if it were not waived, we fail to see this argument’s relevance.
While we appreciate HCCC’s candor in admitting that it has been improperly
filing its taxes, we find no legal authority for the proposition that this would
affect our Moberly analysis.
[25] The trial court’s finding, that Johnson was an employee of HCCC, is amply
supported by the evidence, and HCCC’s tax argument has no bearing on the
question before us.
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B. Were the Commissions “Wages”?
[26] The Wage Payment Statute requires that every employer pay its employees “at
least semi-monthly or biweekly, if requested, the amount due such employee”
and that “[p]ayment shall be made for all wages earned to a date not more than
ten (10) days prior to the date of payment.” I.C. § 22-2-5-1. “Employees, upon
separation from employment, must be paid the amount [of wages] due them at
their next and usual payday.” Fardy v. Physicians Health Rehab. Servs., Inc., 529
N.E.2d 879, 882 (Ind. Ct. App. 1988). Failure to pay subjects the employer to a
penalty of up to double the unpaid wages and attorney fees. I.C. § 22-2-5-2.
[27] Although the term “wages” is not statutorily defined for the Wage Payment
Statute, it has been defined in the Wage Claims Act, a definition that courts use
in both contexts: “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 method of calculating such amount.” Ind.
Code § 22-2-9-1(b); Highhouse v. Midwest Orthopedic Inst., P.C., 807 N.E.2d 737,
739 (Ind. 2004).
[28] 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 and, therefore,
subject to the Wage Payment Statute. 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. (quoting Wank v. St. Francis Coll., 740 N.E.2d
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908, 912 (Ind. Ct. App. 2000)). 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.[29] HCCC points to Davis v. All American Siding & Windows, Inc., 897 N.E.2d 936(Ind. Ct. App. 2008), for support. In that case, a salesperson received a
commission, in addition to a base salary, that was based on the final contract
price negotiated by his company. Id. at 938. The salesperson would negotiate a
preliminary deal with clients, but would then direct those clients to the
company for final negotiations. Id. at 939. The undisputed evidence showed
that the process typically lasted three to eight weeks after the salesperson’s work
had been completed. Id. at 944. Because the commission amount could not be
calculated within ten days, and because the level commission ultimately
depended on work performed by the company rather than the salesperson, we
found that these commissions were not “wages” for purposes of the Wage
Payment Statute. Id.[30] We find the instant case entirely distinguishable from Davis. In the letter sent
by Johnson to Shanehsaz, which set out her commission schedule, the parties
agreed to specific amounts of remuneration. For example, if Johnson booked a
customer to use the Ballroom, the rental value was $2,000 and Johnson would
receive 40% of that amount. Appellant’s App. p. 46. Similarly specific
amounts are set for the Great Room, the Skylight Room, and the Gallery. Id.When Johnson successfully booked a customer for these rooms, both she and
HCCC knew precisely the amount of remuneration due. The commissions she
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earned could be calculated instantly, well within the ten days set out by the
statute. Further, the size of the commission did not depend on the work of
another person or entity; Johnson was the only employee booking clients, and
so her commissions were based on her own labor.
[31] HCCC argues that, because Johnson’s original demand letter requested a
different amount than what the trial court ultimately awarded, the commissions
were inherently incapable of calculation. This argument is unavailing—the trial
court disagreed that Johnson earned several of the commissions listed in her
demand letter. But whether Johnson did certain work that entitled her to wages
is an entirely different inquiry than whether the remuneration was a wage at all.
HCCC has provided no authority for the proposition that a discrepancy
between the wages initially claimed and the wages eventually awarded requires
a reversal, and we decline to adopt such a rule today.
C. Johnson’s Cross-Appeal
[32] Johnson cross-appeals, arguing that the trial court improperly awarded $25,000
in attorney fees after finding that Johnson’s $41,725 in claimed fees were
unreasonable. The trial court noted that this amount was nearly double the
amount of wages Johnson was seeking, which resulted in “concerns as to
whether such amount is reasonable.” Appellant’s App. p. 26. It also
questioned several conferences, emails, and conversations that were related to
Johnson’s refusal to cooperate with document review rather than to proving her
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case. Finally, the trial court found that Johnson had not proved that this was a
particularly vexing case.
[33] Johnson argues that the trial court’s decision is in conflict with our decision in
R.L. Turner v. Wressel, 44 N.E.3d 26 (Ind. Ct. App. 2015), which was published
just after the trial court’s order. In that case, we affirmed an award of attorney
fees of $99,870 for an unpaid wage claim of $3,852.82. Id. at 29-30. Johnson
concludes from Wessel that, since we have previously affirmed an attorney fee
award with such a large disparity, the trial court in this case committed
reversible error by deciding that the attorney fees should be decreased based on
a smaller disparity.
[34] An award of attorney fees is within the discretion of the trial court. Id. at 38.
We will reverse only when the trial court’s award is clearly against the logic and
effect of the facts and circumstances before the court. Id. We do not reweigh
the evidence; rather, we determine whether the evidence before the trial court
can serve as a rational basis for its decision. Id.[35] In determining a reasonable amount of attorney fees, consideration should be
given to the nature and difficulty of the litigation; the time, skill, and effort
involved; the fee customarily charged for similar legal services; the amount
involved; the time limitations imposed by the circumstances; and the result
achieved in the litigation. Id. at 39.
[36] We do not believe that Wressel stands for the proposition advanced by Johnson.
In that case, we rejected the employer’s contention that proportionality alone
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could place a cap on the amount of attorney fees. Id. We never stated that the
amount of wages was irrelevant; instead, we explained that the “recovery is
only one consideration which the court may take into account when
determining what amount of fees are reasonable.” Id.[37] The trial court did not err by awarding $25,000 in attorney fees. The disparity
between the wages recovered and the attorney fees was only one factor the trial
court relied upon. It also noted that it did not believe several charged items
were necessary to advance Johnson’s case, and that this case was not
exceptionally difficult or complex. To be sure, the trial court would have been
within its discretion to award the full $41,725 claimed by Johnson; but this does
not mean that any amount lower than this would be error. The trial court
found $25,000 to be a reasonable amount of attorney fees, and we will not
second guess that determination.
[38] The judgment of the trial court is affirmed.
Vaidik, C.J., and Najam, J., concur.
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