Gradijan v. Bay

[Cite as Gradijan v. Bay, 2011-Ohio-1032.]

COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT

DAVID GRADIJAN JUDGES:
Hon. W. Scott Gwin, P.J.
Plaintiff-Appellee Hon. William B. Hoffman, J.
Hon. John W. Wise, J.
-vs-
Case No. 2010CA00177
CHARLES C. BAY,
dba CBC COMPANY, ET AL.
OPINION
Defendant-Appellant

CHARACTER OF PROCEEDING: Appeal from the Canton Municipal Court,
Case No. 09CVF3952

JUDGMENT: Affirmed in part, Reversed in part, and
Remanded

DATE OF JUDGMENT ENTRY: March 7, 2011

APPEARANCES:

For Plaintiff-Appellee For Defendant-Appellant

ROBERT J. TSCHOLL DAVID A. FERRIS
JENNIFER L. ARNOLD Ferris & Ferris LLP
220 Market Ave. South, Suite 1120 P.O. Box 1237
Canton, Ohio 44702 6797 N. High Street, Suite 214
Worthington, Ohio 43085-1237
Stark County, Case No. 2010CA00177 2

Hoffman, J.

{¶1} Defendant-Appellant Charles C. Bay, dba CBC Company, appeals the

June 4, 2010 Judgment Entry of the Canton Municipal Court entering judgment in favor

of Plaintiff-appellee David Gradijan.

STATEMENT OF THE FACTS AND CASE

{¶2} Appellant Charles C. Bay dba CBC Company (“CBC”), a sole

proprietorship, hired Appellee in March 2006 as a driver. The United States Postal

Service contracted with CBC to drive mail to various locations. Appellee was hired to

provide transportation services as a driver for CBC to transport mail from Canton, Ohio

to Pittsburgh, Youngstown and Akron. Appellee drove a truck provided by CBC. CBC

required their drivers to follow a specific schedule with regard to pickup and delivery of

the mail, and required the drivers to take the most direct route. Drivers were not

permitted to use toll roads unless weather required.

{¶3} Upon his being “hired” as a driver, Appellee executed an Independent

Contractor Agreement expressly stating he was performing driving services as an

“independent contractor”. The contract was entitled, “Independent Contractor Motor

Vehicle Lease Agreement.” Appellee introduced testimony all drivers signed the same

agreement regardless of whether all the provisions applied or not.

{¶4} On January 30, 2009, Appellee was driving a vehicle owned by CBC,

when he was involved in an accident, during which he struck another vehicle in the rear.

The investigating officer determined the accident was caused by mechanical break

failure.
Stark County, Case No. 2010CA00177 3

{¶5} As a result of the accident, CBC deducted monies from Appellee’s pay.

Initially, CBC deducted $275.00 from Appellee’s pay. From February 6, 2009 to April 3,

2009, CBC deducted a total of $2,075 from Appellee’s pay. Additionally, Appellee did

not receive paychecks for the weeks of April 10th and April 17, 2009.

{¶6} As a result, Appellee filed a complaint in the Canton Municipal Court

asserting CBC failed to pay his earned wages and improperly deducted from his pay.

The complaint included a claim for conversion. CBC filed a counterclaim for breach of

contract as a result of Appellee’s failure to pay damages claimed under a written

agreement. CBC further asserted Appellee was negligent in the operation of its truck

causing damage to the vehicle.

{¶7} Following a bench trial, the court determined the relationship between

CBC and Appellee was that of employer and employee, as CBC retained the right to

direct the manner in which the work was completed, controlled Appellee’s work

schedule, route, hours, fines and paperwork requirements. The court further

determined Appellee was entitled to recover the wages earned and not paid, totaling

$2,250. In addition, the court granted Appellee $200 in liquidated damages.

{¶8} On the conversion claim, the trial court determined CBC exercised

dominion over Appellee’s pay, Appellee demanded return of the pay, and CBC refused;

therefore, the measure of damages totaled the converted property in the amount of

$1,050. The court found insufficient evidence to establish the paychecks for the weeks

of April 10, 2009 and April 24, 2009 were wrongfully withheld, and further found CBC

failed to establish either a breach of contract or negligence claim with regard to their

counterclaim against Appellee.
Stark County, Case No. 2010CA00177 4

{¶9} Via Judgment Entry of June 4, 2010, the trial court entered judgment in

favor of Appellee in the amount of $5,575.00 with interest at a rate of 4% from the date

of judgment.

{¶10} CBC now appeals, assigning as error:

{¶11} “I. THE TRIAL COURT ERRED IN HOLDING THAT IT HAD SUBJECT

MATTER JURISDICTION OVER THE CAUSES OF ACTION ALLEGED BY PLAINTIFF

IN THIS COMPLAINT.

{¶12} “II. THE TRIAL COURT ERRED IN GRANTING PLAINTIFF’S CLAIM FOR

UNPAID WAGES UNDER SECTION 4113.15 OF THE OHIO REVISED CODE.

{¶13} “III. THE TRIAL COURT ERRED IN GRANTING PLAINTIFF’S CLAIM

FOR CONVERSION OF PERSONAL PROPERTY.

{¶14} “IV. THE TRIAL COURT ERRED IN FAILING TO GRANT DEFENDANT’S

COUNTERCLAIM AND CORRESPONDING CLAIMS AGAINST PLAINTIFF FOR

PLAINTIFF’S BREACH OF CONTRACT OR NEGLIGENCE, AND FURTHER ERRED

IN FAILING TO AWARD DEFENDANT DAMAGES.”

I.

{¶15} In the first assignment of error, Appellant asserts Appellee’s claims were

preempted by the Davis-Bacon Act, 40 U.S.C. Section 276a et seq.; thereby, divesting

the trial court of jurisdiction in this matter.

{¶16} The Davis-Bacon Act governs prevailing wages on public works contracts.

The Act requires contractors on federally assisted construction projects to pay their

employees the “prevailing wage” as specified by the United States Department of Labor.
Stark County, Case No. 2010CA00177 5

The act provides private rights of action are not permitted, and are preempted by the

act.

{¶17} Appellee’s complaint sought recovery under Ohio’s Prompt Pay Act

statute, O.R.C. 4113.15, which requires employees be paid promptly for hours worked.

The statute does not relate to or govern prevailing wages. Appellee’s complaint claimed

CBC failed to pay Appellee for hours worked and wrongfully deducted expenses from

his hourly pay. The Davis-Bacon Act cited by CBC relates to disputes of fact or law

concerning payment of prevailing wage rates. Further, CBC’s contract with the United

States Post Office has no relationship to Appellee’s claim CBC failed to promptly pay

him for hours worked and wrongfully withheld expenses from his pay. Accordingly, we

conclude the Act does not preempt Appellee’s claims herein.

{¶18} CBC’s first assignment of error is overruled.

II.

{¶19} In the second assignment of error, CBC asserts the trial court erred in

granting Appellee’s claim for unpaid wages under O.R.C. Section 4113.15, Ohio’s

Prompt Pay Statute.

{¶20} The statute reads, in pertinent part:

{¶21} “(A) Every individual, firm, partnership, association, or corporation doing

business in this state shall, on or before the first day of each month, pay all its

employees the wages earned by them during the first half of the preceding month

ending with the fifteenth day thereof, and shall, on or before the fifteenth day of each

month, pay such employees the wages earned by them during the last half of the

preceding calendar month. If at any time of payment an employee is absent from his
Stark County, Case No. 2010CA00177 6

regular place of labor and does not receive his wages through an authorized

representative, such person shall be entitled to said payment at any time thereafter

upon demand upon the proper paymaster at the place where such wages are usually

paid and where such pay is due. This section does not prohibit the daily or weekly

payment of wages, the use of a longer time lapse that is customary to a given trade,

profession or occupation, or establishment of a different time lapse by written contract

or by operation of law.

{¶22} “(B) Where wages remain unpaid for thirty days beyond the regularly

scheduled payday or, in the case where no regularly scheduled payday is applicable, for

sixty days beyond the filing by the employee of a claim or for sixty days beyond the date

of the agreement, award, or other act making wages payable and no contest [FN1] court

order or dispute of any wage claim including the assertion of a counterclaim exists

accounting for nonpayment, the employer, in addition, as liquidated damages, is liable

to the employee in an amount equal to six per cent of the amount of the claim still

unpaid and not in contest or disputed or two hundred dollars, whichever is greater.

{¶23} “(C) In the absence of a contest, court order or dispute, an employer who

is party to an agreement to pay or provide fringe benefits to an employee or to make

any employee authorized deduction becomes a trustee of any funds required by such

agreement to be paid to any person, organization, or governmental agency from the

time that the duty to make such payment arises. No person shall, without reasonable

justification or excuse for such failure, knowingly fail or refuse to pay to the appropriate

person, organization, or governmental agency the amount necessary to provide the

benefits or accomplish the purpose of any employee authorized deduction, within thirty
Stark County, Case No. 2010CA00177 7

days after the close of the pay period during which the employee earned or had

deducted the amount of money necessary to pay for the fringe benefit or make any

employee authorized deduction. A failure or refusal to pay, regardless of the number of

employee pay accounts involved, constitutes one offense for the first delinquency of

thirty days and a separate offense for each successive delinquency of thirty days.”

{¶24} Specifically, CBC maintains Appellee was an independent contractor

pursuant to the terms of the parties’ agreement; therefore, the statute does not apply.

{¶25} The determination as to whether to classify a person as an employee or

an independent contractor is a factual determination made on a case by case basis.

Bostic v. Connor (1988), 37 Ohio St.3d 144. In Bostic, supra, the Ohio Supreme Court

held,

{¶26} “Whether someone is an employee or an independent contractor is

ordinarily an issue to be decided by the trier of fact. The key factual determination is

who had the right to control the manner or means of doing the work. In Gillum v. Indus.

Comm. (1943), 141 Ohio St. 373, 25 O.O. 531, 48 N.E.2d 234, this court set forth the

following test in paragraph two of the syllabus:

{¶27} “ ‘Whether one is an independent contractor or in service depends on the

facts of each case. The principal test applied to determine the character of the

arrangement is that if the employer reserves the right to control the manner or means of

doing the work, the relation created is that of master and servant, while if the manner or

means of doing the work or job is left to one who is responsible to the employer only for

the result, an independent contractor relationship is thereby created.’ See, also,

Marshall v. Aaron (1984), 15 Ohio St.3d 48, 15 OBR 145, 472 N.E.2d 335; Richardson
Stark County, Case No. 2010CA00177 8

v. Mehan (1982), 69 Ohio St.2d 52, 23 O.O.3d 90, 430 N.E.2d 927; Behner v. Indus.

Comm. (1951), 154 Ohio St. 433, 43 O.O. 360, 96 N.E.2d 403, paragraphs one and two

of the syllabus; Firestone v. Indus. Comm. (1945), 144 Ohio St. 398, 29 O.O. 570, 59

N.E.2d 147, paragraph one of the syllabus; Indus. Comm. v. Laird (1933), 126 Ohio St.

617, 186 N.E. 718, paragraph four of the syllabus; and 1 Restatement of the Law 2d,

Agency (1958) 12, Section 2. Cf. Whittington v. New Jersey Zinc Co. (C.A. 6, 1985),

775 F.2d 698; and Western Express Co. v. Smeltzer (C.A. 6, 1937), 88 F.2d 94.

{¶28} “The determination of who has the right to control must be made by

examining the individual facts of each case. The factors to be considered include, but

are certainly not limited to, such indicia as who controls the details and quality of the

work; who controls the hours worked; who selects the materials, tools and personnel

used; who selects the routes travelled; the length of employment; the type of business;

the method of payment; and any pertinent agreements or contracts. See Restatement,

supra, at 485-486, Section 220; Young, Workmen's Compensation Law of Ohio (2

Ed.1971) 33, Section 3.3; and Gillum, supra, 141 Ohio St. at 380-382, 25 O.O. at 534-

535, 48 N.E.2d at 237-238.”

{¶29} We find the trial court had sufficient evidence before it to support its

determination Appellee was an employee, rather than an independent contractor.

Appellee was paid regularly, drove a regular route prescribed by CBC and CBC

required Appellee to work at certain times and to take certain routes. Further, CBC

provided the equipment, and paid for the maintenance of the truck. Therefore, the trial

court did not error in finding there was sufficient evidence to determine Appellee was an

employee of CBC at all times relevant herein.
Stark County, Case No. 2010CA00177 9

{¶30} Accordingly, Appellant’s second assignment of error is overruled.

III.

{¶31} In the third assignment of error, CBC maintains the trial court erred in

granting Appellee’s claim for conversion of personal property.

{¶32} The trial court determined Appellee was entitled to back wages for April

17, 2009, under the theory of conversion. The court awarded Appellee $1,050 the

amount of a paycheck issued but never sent to Appellee, and awarded Appellee the

deductions wrongfully withheld from his pay in the amount of $2,075.

{¶33} Conversion is the wrongful control or exercise of dominion over the

property belonging to another inconsistent with or in denial of the rights of the owner.

Bench Billboard Co. v. Columbus (1989), 63 Ohio App.3d 421.

{¶34} Pursuant to the “Independent Contractor Motor Vehicle Lease

Agreement,” between the parties, Subsection E “Authorized Deductions” provides,

{¶35} “Contractor expressly agrees that any of the following amounts owed

Carrier by Contractor at the time any settlement payment is made may be deducted

from such settlement by Carrier, and that in the event such deduction is made, Carrier

shall include as part of Contractor’s settlement a written explanation of the amount and

reason for the deduction:

{¶36} “***

{¶37} “4. Repairs and maintenance performed on Contractor equipment by

Carrier or any other repair facility.

{¶38} “***
Stark County, Case No. 2010CA00177 10

{¶39} “6. Any amount, arising out of the injury of any person or the loss or

damage to Carrier’s equipment or intermodal equipment or to property transported,

which is the result of operations on the part of Contractor or any driver, employee or

other worker engaged by Contractor, and which is not covered by insurance or which is

excluded from insurance coverage by virtue of a deductible feature.”

{¶40} As the parties’ agreement specifically provided Appellant was to provide a

written explanation and the reason for the deduction at the time the compensation is

withheld, and Appellant failed to do so herein, we conclude the trial court did not err in

finding Appellant wrongfully converted the compensation.

{¶41} Appellant’s third assignment of error is overruled.

IV.

{¶42} In the fourth assignment of error, CBC argues the trial court erred in failing

to grant its counterclaim against Appellee.

{¶43} At trial, CBC asserted a counterclaim against Appellee for breach of

contract. Specifically, CBC argued Appellee failed to pay damages which occurred as a

result of the January 30, 2009 accident in breach of the parties’ agreement. CBC

further maintained Appellee was negligent in the operation of the truck resulting in

damages to CBC.

{¶44} CBC began deductions from Appellee’s pay prior to giving notice to

Appellee, and prior to obtaining an estimate. As stated in our analysis and disposition

of CBC’s third assignment of error, CBC wrongfully withheld the compensation from

Appellee’s pay without providing Appellee with a written explanation for the reason for

the deduction. However, we find that does not preclude CBC’s claim for breach of
Stark County, Case No. 2010CA00177 11

contract. While CBC was not entitled to automatically deduct the cost of repairs from

Appellee’s pay, CBC did not waive any right to pursue an action against Appellee for

breach of contract or negligence for the damages sustained. Accordingly, we find the

trial court erred in granting judgment in favor of Appellee as to CBC’s counterclaim for

breach of contract.

{¶45} CBC’s fourth assignment of error is sustained.

{¶46} The June 4, 2010 Judgment Entry of the Canton Municipal Court is

affirmed in part, reversed in part, and remanded for further proceedings relative to

CBC’s counterclaim.

By: Hoffman, J.

Gwin, P.J. and

Wise, J. concur

s/ William B. Hoffman _________________
HON. WILLIAM B. HOFFMAN

s/ W. Scott Gwin _____________________
HON. W. SCOTT GWIN

s/ John W. Wise _____________________
HON. JOHN W. WISE
Stark County, Case No. 2010CA00177 12

IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT

DAVID GRADIJAN :
:
Plaintiff-Appellee :
:
-vs- : JUDGMENT ENTRY
:
CHARLES C. BAY, :
dba CBC COMPANY, ET AL. :
:
Defendant-Appellant : Case No. 2010CA00177

For the reasons stated in our accompanying Opinion, The June 4, 2010

Judgment Entry of the Canton Municipal Court is affirmed in part, reversed in part, and

remanded for further proceedings in accordance with the law and this opinion. Costs to

be divided.

s/ William B. Hoffman _________________
HON. WILLIAM B. HOFFMAN

s/ W. Scott Gwin _____________________
HON. W. SCOTT GWIN

s/ John W. Wise _____________________
HON. JOHN W. WISE