The Honorable G. Patrick Murphy of the Southern District 

of Illinois, sitting by designation.

In the

United States Court of Appeals

For the Seventh Circuit

No. 10-3166

JILL L. TREAT and CODY W. TREAT,

Plaintiffs-Appellants,

v.

TOM KELLEY BUICK PONTIAC GMC, INC., 

d/b/a KELLEY SUPERSTORE, and KELLEY

AUTOMOTIVE GROUP, INC.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Indiana, Fort Wayne Division.

No. 08-cv-00173—William C. Lee, Judge.

ARGUED JANUARY 18, 2011—DECIDED JULY 13, 2011 

Before TINDER and HAMILTON, Circuit Judges, and

MURPHY, District Judge.



HAMILTON, Circuit Judge. Jill and Cody Treat sued their

employer, Tom Kelley Buick Pontiac GMC, Inc., and its
2 No. 10-3166

parent dealership group for failure to pay them their

correct wages under Indiana state law. The question

presented by this appeal is whether the Treats properly

brought their claims under the state’s Wage Payment

Statute, Ind. Code § 22-2-5-1 et seq., or whether their

claims against Kelley arose under a different Indiana

wage recovery law, known as the Wage Claims Statute,

Ind. Code § 22-2-9-1 et seq. The district court concluded

that the Treats erroneously brought their claim under

the Payment Statute rather than the Claims Statute.

Because the Treats had not filed their claim according

to the procedure required under the Claims Statute, the

court granted summary judgment to Kelley. Treat v.

Tom Kelley Buick Pontiac GMC, Inc., 710 F. Supp. 2d 762

(N.D. Ind. 2010), and 710 F. Supp. 2d 777 (N.D. Ind. 2010).

We agree with the district court and affirm its judgment.

I. Facts and Procedural Background

Reviewing the district court’s decision to grant summary judgment to the defendants, we take all facts in

the light reasonably most favorable to the plaintiffs as the

non-moving parties. See Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 255 (1986). The facts material to this appeal

are undisputed. Defendant-appellee Tom Kelley Buick

Pontiac GMC runs a used car dealership in Fort Wayne,

Indiana, as part of a group of dealerships known

as the Kelley Automotive Group. Plaintiff Jill Treat

began working at the dealership on July 3, 2006 as Assistant Co-Director of the Special Finance Department. She

persuaded the head of the department to hire her son,
No. 10-3166 3

plaintiff Cody Treat, who began work in the Special

Finance Department on July 10, 2006. The Treats’ employment with Kelley did not last long, however. Both were

fired on October 12, 2006.

Following the termination of their employment, the

Treats filed a complaint in federal court alleging a

variety of federal and state claims against Kelley. The

district court granted Kelley’s summary judgment

motion on all of the Treats’ claims, exercising supplemental jurisdiction over the matters of state law.

The Treats appeal only one of their substantive

claims. They argue that the district court erred by dismissing their claim for unpaid wages brought under

the Indiana Wage Payment Statute. They also contend

that the district court abused its discretion by striking

portions of Jill Treat’s affidavit and attached documents,

but we do not reach this issue. We conclude the Treats

failed to take the necessary steps to pursue a claim

under the correct Indiana state law.

II. Discussion

We begin by reviewing the two Indiana wage recovery

statutes: the Payment Statute and the Claims Statute.

Both of these statutes, and questions about their application, have received substantial attention from the

Indiana state courts. Although both provide the same

remedy for similar wrongs, they require distinct procedural steps before such a remedy may be granted.

The question of which statute applies controls the
4 No. 10-3166

outcome here, so we excerpt the relevant provisions

at length.

The Treats brought their suit under Indiana Code § 22-2-

5-1 et seq., entitled “Frequency of Wage Payments,” which

we refer to as the Wage Payment Statute. This statute

provides in relevant part:

Payment; voluntarily leaving employment

Sec. 1. (a) Every person, firm, corporation, limited

liability company, or association, their trustees, lessees,

or receivers appointed by any court, doing business

in Indiana, shall pay each employee at least semimonthly or biweekly, if requested, the amount due

the employee. . . . 

(b) Payment shall be made for all wages earned to

a date not more than ten (10) business days prior to

the date of payment. However, this subsection

does not prevent payments being made at shorter

intervals than specified in this subsection, nor repeal

any law providing for payments at shorter intervals.

However, if an employee voluntarily leaves employment, either permanently or temporarily, the employer shall not be required to pay the employee an

amount due the employee until the next usual and

regular day for payment of wages, as established by

the employer. If an employee leaves employment

voluntarily, and without the employee’s whereabouts

or address being known to the employer, the

employer is not subject to section 2 of this chapter

until:
No. 10-3166 5

(1) ten (10) business days have elapsed after

the employee has made a demand for the wages

due the employee; or

(2) the employee has furnished the employer

with the employee’s address where the wages

may be sent or forwarded. 

Ind. Code § 22-2-5-1.

If an employer fails to make payment of wages in

accordance with this chapter, then the employer must,

as liquidated damages for such failure, pay to such

employee for each day that the amount due to him

remains unpaid ten percent (10%) of the amount due

to him in addition thereto, not exceeding double the

amount of wages due, and said damages may be

recovered in any court having jurisdiction of a suit to

recover the amount due to such employee, and in

any suit so brought to recover said wages or the

liquidated damages for nonpayment thereof, or both,

the court shall tax and assess as costs in said case

a reasonable fee for the plaintiff’s attorney or attorneys.

Ind. Code § 22-2-5-2.

Kelley argues, and the district court held, that the

Treats should have proceeded under Indiana Code § 22-2-

9-1 et seq., entitled “Wage Claims,” which we refer to as

the Wage Claims Statute. This statute provides in

relevant part: 

Discharge of employee; unpaid wages; payment;

labor disputes
6 No. 10-3166

Sec. 2. (a) Whenever any employer separates any

employee from the pay-roll, the unpaid wages or

compensation of such employee shall become due

and payable at regular pay day for pay period in

which separation occurred . . . . 

Disputes; payment of amount agreed upon

Sec. 3. In case of a dispute over wages, the employer

shall give notice to the employee of the amount of

wages which he concedes to be due, and shall pay

such amount, without condition, within the time

fixed by this chapter, but the acceptance by the employee of any payment made under this chapter

shall not constitute a release as to any balance of his

claim. 

Ind. Code §§ 22-2-9-2 and -3.

When such a dispute arises between an employer and

a fired employee, the Claims Statute makes it the “duty

of the [Indiana] commissioner of labor to enforce and to

insure compliance with the provisions of this chapter, to

investigate any violations of any of the provisions of

this chapter, and to institute or cause to be instituted

actions for penalties and forfeitures provided under this

chapter.” Ind. Code § 22-2-9-4(a). The commissioner

may refer claims to the state attorney general, who may

then initiate a civil action on behalf of the claimant or refer

the claimant to an attorney. See Ind. Code § 22-2-9-4(b).

Under the Claims Statute, claimants are entitled

to recover liquidated damages and attorney fees as set

forth in Ind. Code § 22-2-5-2, the same provision that

allows for recovery under the Payment Statute. Thus,
No. 10-3166 7

although the ultimate remedy under either statute is the

same, a claimant under the Claims Statute must proceed

through the Indiana commissioner of labor, who has the

duty of investigating a claim and instituting an action

on behalf of a claimant, whereas the Payment Statute

permits a claimant to bring his or her own claim in

“any court having jurisdiction.” Ind. Code § 22-2-5-2.

The Treats argue that they properly filed their complaint in the district court rather than with the commissioner of labor because, they maintain, their claims are

governed by the Payment Statute. We disagree. The

language of the Indiana Code suggests, and the Indiana

state courts have repeatedly confirmed, that the Payment Statute provides an avenue for relief to employees

seeking unpaid wages who voluntarily leave their employment or who remain employed and whose wages

are overdue. The Claims Statute, on the other hand,

applies to employees seeking unpaid wages after their

employer has fired them. Here, all agree that the termination of the Treats’ employment was involuntary. The

Treats’ claims therefore arise under the Claims Statute.

In St. Vincent Hospital and Health Care Center, Inc.

v. Steele, 766 N.E.2d 699, 705 (Ind. 2002), the

Indiana Supreme Court taught that the two statutes

apply to different, mutually exclusive categories of claimants — those fired by their employers, and those who

left voluntarily or are still employed. Dr. Steele filed a

complaint suing his employer for violating the Payment Statute by failing to pay him the full amount of

compensation due under the parties’ agreement. Throughout the dispute and the subsequent litigation, Dr. Steele
8 No. 10-3166

remained an employee of St. Vincent. The court found

that because Dr. Steele was a current employee at the

time of the wage dispute, he proceeded correctly under

the Payment Statute. The court explained: 

The Wage Claims Statute references employees who

have been separated from work by their employer

and employees whose work has been suspended as

a result of an industrial dispute. I.C. § 22-2-9-2(a)(b).

By contrast, the Wage Payment Statute references

current employees and those who have voluntarily

left employment, either permanently or temporarily.

I.C. § 22-2-5-1(b).

766 N.E.2d at 705. Although this pronouncement from

the court was not central to its holding in that case, it

was a clear indication of the Indiana Supreme Court’s

view. Our job in this case is to apply the state law as

we predict the state supreme court would. See Lewis v.

Methodist Hospital, Inc., 326 F.3d 851, 856 (7th Cir. 2003).

Following Steele, the Indiana Court of Appeals has

applied and interpreted the two statutes and the state

supreme court’s language in several decisions. One

favors the Treats’ position and the others weigh against

it. The Treats rely on McCausland v. Walter USA, Inc., 918

N.E.2d 420 (Ind. App. 2009), in which the plaintiff filed

a complaint against his employer for violations of both

the Payment Statute and the Claims Statute. First,

McCausland claimed that his employer failed to timely

pay him sales commissions, bonuses, and vacation pay

throughout the course of his employment as required

by the Payment Statute. Second, he claimed that the
No. 10-3166 9

The McCausland footnote might be distinguished on a

1

narrow factual basis because the claims that arose during

employment in that case were only for late payment, not for

(continued...)

employer failed to pay him earned sales commissions

following his termination, so that he was also entitled

to damages under the Claims Statute for those wrongs.

The Court of Appeals affirmed the trial court’s

summary judgment in favor of the employer. In a footnote, the court explained:

Walter [the employer] claims that McCausland may

not bring any claims under the Wage Payment

Statute because he was fired. However, McCausland’s

claims concern the alleged untimely payment of

commissions, bonuses, and vacation pay that he

received while still employed with Walter and

unpaid commissions he did not receive after his

termination. Therefore, we conclude that he

properly brought claims under both the Wage

Payment Statute and the Wage Claims Statute.

918 N.E.2d at 424 n.2. We agree with the Treats that

the statutes are ambiguous as applied in a case like the

Treats’ that combines claims that arose both during

employment and after firing. If the McCausland footnote

were the only solid evidence of Indiana law, it would

carry more weight. But the McCausland footnote did not

cite or address the Indiana Supreme Court’s dictum in

Steele. Several other Court of Appeals decisions have

followed the Steele dictum, and one specifically rejected

the McCausland footnote.1
10 No. 10-3166

(...continued) 1

underpayment, but neither the statutory language nor the

court’s opinion indicates that such a distinction should carry

any weight.

In Gavin v. Calcars AB, Inc., 938 N.E.2d 1270 (Ind. App.

2010), a former employee filed a complaint against his

employer after he was fired. Relying on the Indiana

Supreme Court’s guidance in Steele, the Court of Appeals

determined that when a claimant “brings a wage

dispute after being involuntarily terminated . . . he must

bring his claim under the Wage Claims Statute.” 938

N.E.2d at 1271. The court declined to follow the

language in the McCausland footnote and concluded

that the plaintiff’s claim was barred as a matter of law

because he did not file his complaint with the state commissioner of labor as required by the Claims Statute. See

id. at 1271-72.

The Court of Appeals applied the same reasoning

in Hollis v. Defender Security Co., 941 N.E.2d 536 (Ind.

App. 2011), in which Hollis had been fired and then

sued his employer for violating the Payment Statute

by failing to pay agreed wages in a timely fashion.

941 N.E.2d at 537. Hollis argued that the Payment

Statute applied because he sought payment only

for violations that occurred while he was an employee. Looking to Steele, the Court of Appeals rejected

Hollis’s reasoning: “Based on [Hollis’s] proposed application of the statutory framework, an involuntarily

separated employee would have to file a complaint
No. 10-3166 11

based on the Wage Payment Statute for alleged violations

that occurred prior to the separation and then submit

a separate claim with the DOL under the Wage Claims

Statute for alleged violations that occurred during

the final pay period.” Id. at 539. “It also seems that

[Hollis’s] interpretation would remove all but the last of

an involuntarily separated employee’s claims from the

purview of the Department of Labor.” Id. The Hollis

court concluded that an employee’s status at the time

the claim is filed determines whether the employee

must proceed under the Payment Statute or the Claims

Statute, and the court upheld the trial court’s dismissal

of claims of the fired Hollis under the Payment Statute.

See id. at 540; see also Quimby v. Becovic Management

Group, Inc., 946 N.E.2d 30, 33-34 (Ind. App. 2011)

(affirming judgment in favor of employer where employee, who voluntarily left her employment, had already

recovered for her lost wages through the department

of labor even though she could have brought her claim

in court under the Payment Statute); E & L Rental Equipment, Inc. v. Bresland, 782 N.E.2d 1068, 1070 (Ind. App.

2003) (holding that employee who quit voluntarily

should have brought his claim under the Payment

Statute rather than the Claims Statute). The plaintiffs in

Hollis and Gavin petitioned the Indiana Supreme Court

for transfer. After consolidating their claims for review,

the court denied both petitions on June 22, 2011.

To support their position that the employment status

of an employee at the time a wage claim arises, that is,

when the discrepancy in pay arises, determines which

statute should apply, the Treats also rely on two federal
12 No. 10-3166

decisions, Anderson v. Northeast Otolaryngology, P.C., 2006

WL 2331142, at *2 (S.D. Ind. Aug. 10, 2006), objections

overruled, 2006 WL 3487333 (S.D. Ind. Dec. 1, 2006), and

Harney v. Speedway SuperAmerica, LLC, 2007 WL 2710824,

at *3-*5 (S.D. Ind. Sept. 13, 2007), but neither counters

the weight of the Steele dictum and the other Indiana

Court of Appeals decisions.

The issue in Anderson v. Northeast Otolaryngology

was whether the plaintiff had filed her wage claims

within the statute of limitations. See 2006 WL 2331142,

at *2. The case sheds no light on the issue in this case. In

fact, the plaintiff in Anderson had filed a complaint with

the commissioner of labor and was proceeding properly

under the Claims Statute, as is evident from the complaint in the case. See Complaint, Docket Entry No. 1,

Cause No. 1:06-cv-0037 (S.D. Ind. Jan. 10, 2006).

The Treats’ reliance on Harney v. Speedway SuperAmerica,

LLC is also misplaced. The plaintiffs in that case were

store managers who claimed that they were paid bonuses

too late under both the Payment Statute and Claims

Statute. The district court granted summary judgment

to the employer on the merits, but also stated in dictum

that claims for bonuses that the fired Harney plaintiffs

did not receive before being fired were governed by

the Claims Statute, while those paid when the plaintiffs

were still employed, though past the time due, would be

governed by the Payment Statute. See 2007 WL 2710824,

at *3. In light of the ambiguity in the statutes, the district court’s dictum in Harney is a reasonable way to

interpret them in a case mixing pre-firing and post-firing
No. 10-3166 13

claims. But in light of the more recent Indiana Court of

Appeals decisions and the Indiana Supreme Court’s

decisions to deny review, our best prediction at this

point is that the Indiana Supreme Court would agree

with Hollis and Gavin and the district court’s analysis in

this case. The Treats’ claims for unpaid wages here fell

under the Wage Claims Statute. They cannot recover

under the Wage Payment Statute on the claims for

unpaid wages they brought after they were fired.

The district court’s judgment is AFFIRMED.

7-13-11