Court Opinion

ID: 4026269
Source: CourtListenerOpinion
Date Created: 2016-08-18 15:05:53.20239+00
Date Added: 2024-06-11T09:16:35.666762
License: Public Domain

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

Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016       Page 1 of 13
      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

      Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 2 of 13
      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.

      Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 3 of 13
[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.

      Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 4 of 13
[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.
       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 5 of 13
                                        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.

       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 6 of 13
                                      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.

       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 7 of 13
       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.

       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 8 of 13
                         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

       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 9 of 13
       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

       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 10 of 13
       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

       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 11 of 13
       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

       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 12 of 13
       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.

       Court of Appeals of Indiana | Memorandum Decision 29A05-1509-PL-1525 | August 18, 2016   Page 13 of 13