Chrystal Gardner v. Accend Services ( 2016 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-1384
Chrystal Gardner,
Appellant,
vs.
Accend Services,
Respondent.
Filed July 18, 2016
Affirmed
Bratvold, Judge
St. Louis County District Court
File No. 69DU-CV-15-138
Chrystal Gardner, Duluth, Minnesota (pro se appellant)
Craig S. Hunter, Northland Law, Duluth, Minnesota (for respondent)
Considered and decided by Schellhas, Presiding Judge; Reyes, Judge; and
Bratvold, Judge.
UNPUBLISHED OPINION
BRATVOLD, Judge
Appellant Chrystal Gardner challenges the district court’s denial of her motion for
a new trial. She asserts that the district court erred in determining that she was not entitled
to unpaid wages; compensation for unused, accrued paid time off; or a statutory penalty
under Minn. Stat. § 181.13 (2014). Because the record supports the verdict in favor of
Gardner’s former employer, the district court did not abuse its discretion in denying her
motion. We affirm.
FACTS
This case arises from Chrystal Gardner’s employment as a counselor for respondent
Accend Services, where she worked until June 2014. Accend is headquartered in Duluth
and provides behavioral-health psychotherapy and rehabilitative mental-health services.
Accend terminated Gardner’s employment on June 27, 2014. According to Accend
CEO and President Michael Clevette, he met with Gardner “in late June relating to
performance problems, complaints from clients, as well as services that were exceeding
the clinically approved times, [and] a number of other issues relating to performance.”
After their meeting, Clevette required Gardner to meet with her clinical supervisor on
June 24. Gardner did not appear for the meeting and later “indicated to [Accend] that she
. . . simply refused to attend the meeting.” Upon learning of her refusal to appear, Clevette
terminated Gardner for misconduct. The same day, Accend disabled Gardner’s access to
the electronic medical-records system through which counselors logged their time and
services.
While preparing Gardner’s final paycheck, Accend discovered that her electronic
records reflected one week of fully documented, billable hours of mental-health services
and one week of time, June 23 to June 27, for which the documentation of her services was
incomplete.
In early July, Accend paid Gardner for one week of fully documented, billable
hours. Because Gardner had not completed the documentation for her time between
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June 23 and June 27, however, Accend did not pay her for that week. In an effort to
complete the required documentation, several Accend employees attempted to contact
Gardner by phone, email, and text message to arrange for her access to Accend’s electronic
medical-records system. At one point, Accend reenabled Gardner’s access to the system.
Gardner did not respond to any of Accend’s communication attempts.
Gardner took the position that she was not required to complete the documentation
of her services to be compensated for the hours between June 23 and June 27. In an email
to an Accend administrative assistant on July 9, 2014, Gardner stated that “with the request
to complete documentation, I will not be performing or rendering additional services to
Accend Services Inc.” Relying on Minn. Stat. § 181.13 (2014), she demanded a check for
her hours from June 23 to June 27. Accend did not pay Gardner for this week.
Gardner brought an unpaid-wages claim in conciliation court. Gardner claimed that
she was entitled to both the unpaid wages from June 23 to June 27 and the statutory penalty
provided by Minn. Stat. § 181.13. After the conciliation court awarded her partial recovery,
she removed the case to district court.
At the district court, Gardner additionally argued that she was entitled to
compensation for unused, accrued paid time off. At the one-day court trial, where Gardner
represented herself, Gardner and Clevette testified. Following trial, the district court
ordered entry of judgment in favor of Accend, denying Gardner all recovery. 1 With the
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Gardner sought $905.74 in unpaid wages; $1,407.78 for accrued, unused paid time off;
and $1,662.37 for the statutory penalty under Minn. Stat. § 181.13, for a total of $3,975.89.
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assistance of counsel, Gardner moved for a new trial, which the district court denied.
Gardner now appeals.
DECISION
We review a district court’s denial of a new-trial motion for abuse of discretion.
Moorhead Econ. Dev. Auth. v. Anda, 789 N.W.2d 860, 892 (Minn. 2010). In doing so, this
court reviews the district court’s factual findings for clear error and its legal determinations
de novo. Rasmussen v. Two Harbors Fish Co., 832 N.W.2d 790, 797 (Minn. 2013).
A district court may grant a party’s new-trial motion on any one of seven available
grounds. Minn. R. Civ. P. 59.01. Gardner argued that she is entitled to a new trial because
“[t]he verdict . . . is not justified by the evidence, or is contrary to law.” Minn. R. Civ. P.
59.01(g). When a new-trial motion is made following a court trial, the judge is asked to
determine whether the weight of the evidence supports the initial decision. See Clifford v.
Geritom Med, Inc., 681 N.W.2d 680, 686 (Minn. 2004) (“[A] motion for a new trial gives
a district court the opportunity to correct errors without subjecting the parties to the expense
and inconvenience associated with an appeal.”). In fact, the trial judge following a court
trial need not grant a new trial but may modify findings and enter a new judgment. Minn.
R. Civ. P. 59.01; see, e.g., Johnson v. Johnson, 223 Minn. 420, 424–25, 27 N.W.2d 289,
292 (1947) (noting that, after a court trial, a party may move the district court to modify its
legal conclusions to correspond with its factual findings). Our scope of review is limited to
determining whether the findings of fact support the conclusions made by the trial court.
Johnson, 223 Minn. at 424–25, 27 N.W.2d at 292.
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Gardner argues that the district court abused its discretion in denying her motion for
a new trial and challenges the district court’s conclusions that (1) she did not prove by a
preponderance of the evidence that she was entitled to compensation for the hours between
June 23 to June 27, 2014; (2) she was not entitled to compensation for her unused, accrued
paid time off upon her discharge; and (3) Accend was not liable for the statutory penalty
for unpaid wages. We address each argument in turn.
Unpaid Wages
Discharged employees are entitled to prompt payment of any unpaid wages upon
their separation from an employer. Minn. Stat. § 181.13(a) (2014). Whether the wages have
been earned is governed by the employment contract between the parties. Lee v. Fresenius
Med. Care, Inc., 741 N.W.2d 117, 127–28 (Minn. 2007). Where, as here, neither party
introduces evidence of a written agreement, “the burden of proof shall be upon the
employer to establish the terms of the verbal agreement in case of a dispute with the
employee as to its terms.” Minn. Stat. § 181.56 (2014). The existence and terms of an oral
contract are factual issues. Rios v. Jennie-O Turkey Store, Inc., 793 N.W.2d 309, 315
(Minn. App. 2011).
Here, the district court found that “part of the basis on which Ms. Gardner was to
be paid involved documenting services provided to clients.” This finding is supported by
the evidence. Regarding the parties’ agreement, Clevette testified that Accend’s pay policy
has been the same since its establishment in 2006 and Accend pays its counselors an hourly
rate for the billable mental-health services they provide clients. Counselors are required to
enter billing information in Accend’s electronic medical-records system and must complete
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the documentation within 24 hours of providing the client service. Documentation must
specify any travel time associated with the session, the amount of time spent with a client,
and the services provided. Only after a counselor has fully documented and confirmed his
or her time as an accurate delivery of a medical service will Accend pay the counselor for
his or her hours. Clevette also testified that Accend may bill for the services only if the
counselor completes documentation of services. He testified that Accend does not
compensate counselors for additional time spent fully documenting their services.
In her own direct testimony, Gardner described Accend’s pay policy consistently
with Clevette’s testimony. Additionally, as noted by the district court, the trial exhibits
(i.e., letters and emails) established that Gardner understood Accend’s requirement.
On this record, the district court correctly concluded that the parties’ agreement
required Gardner to complete the electronic documentation of her services before Accend
was obligated to compensate her for the hours. Stated in other terms, complete
documentation was a condition precedent to Accend’s payment obligation to Gardner. See
Schwickert, Inc. v. Winnebago Seniors, Ltd., 680 N.W.2d 79, 84 (Minn. 2004) (citing
Restatement (Second) of Contracts § 237 (1981) to reiterate that “remaining duties of one
party to a contract are conditioned on there being no previous ‘uncured material failure’ by
the other party”). Further, it is undisputed that, under the parties’ agreement, Accend did
not compensate counselors for additional time spent documenting their services.
Because the parties’ agreement included a condition precedent, Minnesota law
requires that Gardner must prove that she had completed performance before she was
entitled to demand payment by Accend. See Briggs Transp. Co v. Ranzenberger, 299 Minn.
6127, 129, 217 N.W.2d 198, 200 (1974) (stating that, to recover, plaintiff must establish
“(a) the formation of the contract; (b) performance by plaintiff of any conditions precedent
to his right to demand performance by defendant; and (c) a breach of the contract by
defendant” (emphasis added)).
The record also supports the district court’s determination that Gardner did not
complete the documentation of her services for the period of June 23 to June 27, 2014.
Accend promptly paid Gardner for her fully documented hours. But the district court found
that Gardner refused to complete the remaining documentation when Accend asked her to
do so, despite being given multiple opportunities to access the electronic medical-records
system. Based on these findings, the district court concluded that Gardner was not due
wages for June 23 to June 27.
Gardner challenges the district court’s conclusion, arguing that completing the
documentation of her services amounted to work, which Accend could not require her to
perform once it terminated her employment. She maintains that she is entitled to
compensation because she delivered approximately 20 hours of services from June 23 to
June 27. Gardner’s argument fails because her refusal to complete the documentation
defeats her claim for breach and excuses Accend from compensating her for any time
during this period. See, e.g., Schwickert, 680 N.W.2d at 86 (holding that insurer’s erroneous
denial of coverage relieved insured of contractual obligation to protect insurer’s
subrogation rights).
In sum, the district court did not abuse its discretion in denying Gardner’s motion
for a new trial. Gardner did not meet her burden of proving by a preponderance of the
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evidence that she is entitled to payment for the week of June 23 to June 27, and the district
court did not err in its factual determinations or legal conclusions.
Unused, Accrued Paid Time Off
An employer’s “liability as to vacation-pay rights is wholly contractual.” Tynan v.
KSTP, Inc., 247 Minn. 168, 177, 77 N.W.2d 200, 206 (1956). The Minnesota Supreme
Court has stated,
when employers choose to offer paid time off as a benefit,
employers and employees can contract for the circumstances
under which employees are entitled to paid time off and
payment in lieu of paid time off, so long as the contract
provisions are not prohibited by or otherwise in conflict with a
statute.
Lee, 741 N.W.2d at 123.
Here, Clevette’s testimony established the relevant terms of Accend’s paid-time-off
policy. According to Clevette, Accend notified Gardner when she accepted her current
position that “PTO would not be paid out to employees who left without adequate notice
or who were terminated for misconduct.” Clevette also testified that Gardner was
terminated for misconduct. Clevette added that, as a result of Gardner’s termination for
misconduct, she was ineligible for compensation for any accrued paid time off.
The district court relied on Clevette’s undisputed testimony in denying Gardner’s
claim. Gardner argued that Accend’s policy was contrary to Minnesota law, relying on Lee
v. Fresenius Med. Care, a Minnesota Supreme Court case that states “we now conclude
that paid time off or vacation pay constitutes wages for purposes of section 181.13(a).” Id.
at 124–25. The district court determined that this quote is taken out of context and does not
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support Gardner’s claim. In this appeal, Gardner again relies on Lee and also asserts that
an unemployment-law judge’s decision establishes that she was not terminated for
misconduct.
Gardner’s challenges fail for at least two reasons. First, Gardner relies on
impermissible evidence to claim that she was not terminated for misconduct. At trial,
Gardner twice attempted to introduce evidence of an unemployment-law judge’s decision
granting her unemployment benefits; opposing counsel objected, and the district court
sustained the objections. Gardner offered no other evidence on the reason for her
termination. On appeal, she again asserted the unemployment-law judge’s decision in her
brief and addendum. Accend successfully objected by motion, obtaining this court’s order
striking four documents from Gardner’s addendum.
Minnesota law provides that, “regardless of whether the action involves the same or
related parties or involves the same facts,” an unemployment-law judge’s decision is not
admissible in any other forum nor binding as collateral estoppel. Minn. Stat. § 268.105,
subd. 5a (2014). The district court therefore correctly excluded this evidence. Moreover,
the unemployment-law judge’s decision is not in the record and therefore will not be
considered on appeal. See Fabio v. Bellomo, 489 N.W.2d 241, 246 (Minn. App. 1992),
aff’d, 504 N.W.2d 758 (Minn. 1993).
Second, the district court properly interpreted and applied Lee, in which the
employee handbook “specif[ied] that an employee who resigns without giving proper
notice or who is terminated for misconduct will not be eligible for payment of earned but
unused paid time off.” Id. at 120. Fresenius terminated Lee for a “pattern of behavior” that
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resulted in “performance and patient safety issues,” which it concluded was misconduct;
Fresenius then refused to pay Lee for her unused, accrued paid time off upon her discharge.
Id. at 120–21.
The supreme court determined that, “[u]nder the terms of Lee’s employment
contract with Fresenius, Lee is not entitled to payment in lieu of her paid time off because
the terminated-for-misconduct provision in the employment contract explicitly makes Lee
ineligible for payment.” Id. at 123. The supreme court then reinstated the district court’s
determination that Lee was not entitled to payment in lieu of unused paid time off. Id. at
130.
Like the employee handbook in Lee, Gardner’s employment agreement with Accend
contained a terminated-for-misconduct provision, which disqualified such employees from
cashing out their unused, accrued paid time off upon discharge. Because Accend
terminated Gardner for misconduct, she had no contractual claim to compensation for her
unused, accrued paid time off.
Statutory Penalty
Under Minnesota law, once an employer discharges an employee, “the wages or
commissions actually earned and unpaid at the time of the discharge are immediately due
and payable upon demand of the employee.” Minn. Stat. § 181.13(a). If an employer does
not pay the earned, unpaid wages within 24 hours, the employer is “in default” and is liable
to the discharged employee for a statutory penalty in addition to the unpaid wages. Id. For
the purposes of enforcing the statutory penalty, the employment contract governs whether
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wages were “actually earned and unpaid.” Lee, 741 N.W.2d at 136; accord Chambers v.
Travelers Companies, Inc., 668 F.3d 559, 566 (8th Cir. 2012).
Accend is not liable for the statutory penalty because it was never “in default.”
Under the terms of the employment contract, Gardner had not actually earned the unpaid
wages she sought because she failed to complete the documentation requirement.
Regarding the paid-time-off compensation, Clevette’s undisputed testimony established
that Gardner was ineligible for it under the terminated-for-misconduct provision of the
parties’ employment agreement. Accordingly, Accend did not fail to promptly deliver any
unpaid wages at the time of Gardner’s discharge, thus it cannot be liable for the
corresponding statutory penalty, and the district court did not err in its determination.
The district court did not abuse its discretion in denying Gardner’s motion for a new
trial.
Affirmed.
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