Sep 16 2015, 9:43 am
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Michael L. Einterz, Jr. Robert S. Rifkin
Einterz & Einterz Maurer Rifkin, P.C.
Zionsville, Indiana Carmel, Indiana
IN THE
COURT OF APPEALS OF INDIANA
R.L. Turner Corporation, September 16, 2015
Appellant-Defendant, Court of Appeals Case No.
06A05-1411-PL-540
v. Appeal from the Boone Superior
Court
William Wressell, The Honorable Matthew C.
Kincaid, Judge
Appellee-Plaintiff,
Cause No. 06D01-1201-PL-11
Bradford, Judge.
Case Summary
[1] Appellee-Plaintiff William Wressell brought a claim against his employer
Appellant-Defendant R.L. Turner Corporation (“RLTC”) alleging that he did
not receive wages he was entitled to under the Indiana Common Construction
Wage Act (“CCWA”). The trial court found that RLTC provided insufficient
fringe benefits to meet the minimum wage requirements of the CCWA and
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awarded Wressell compensatory damages for the unpaid fringe benefits as well
as statutory treble damages. The trial court also awarded attorney’s fees to
Wressell pursuant to the fee shifting provision of the Indiana Wage Payment
Statute.
[2] On appeal, RLTC raises several issues which we consolidate and restate as
follows: (1) whether the CCWA can form the basis for a private cause of action;
(2) whether the trial court erred in finding that RLTC provided insufficient
fringe benefits to meet the minimum requirements of the CCWA; and (3)
whether the trial court erred in awarding attorney’s fees to Wressell. Wressell
argues on appeal that the trial court erred in failing to consider his overtime
hours in calculating the amount of wages he was entitled to. We affirm the
judgment of the trial court; however, we remand with instructions that the trial
court award Wressell additional damages for overtime compensation.
Facts and Procedural History
[3] Wressell filed a claim against RLTC on January 5, 2012 for unpaid wages.
(App. 20-23) In December of 2012, the trial court granted a motion for
summary judgment in favor of RLTC. That decision was reversed by this court
on appeal in Wressell v. R.L. Turner Corporation, 988 N.E.2d 289 (Ind. Ct. App.
2013), trans. denied. We have previously outlined the facts of this case, the
relevant portions of which are as follows:
Between September 15, 2009, and June 20, 2010, RLTC employed
Wressell as a skilled cement mason. Wressell worked on two projects
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for RLTC, the Gatewood wing of the Mechanical Engineering
Building at Purdue University (“the Gatewood Project”) and the
Informatics and Classroom Addition at Indiana University (“the
Informatics Project”).
Wressell worked 677 hours on the Gatewood Project, a project whose
common construction wage scale provided that a skilled cement
mason was to be paid an hourly wage of $24.25 and fringe benefits of
$10.68 per hour. All told, a skilled cement mason would have been
entitled to be paid a total of $23,647.61 for working 677 hours on the
Gatewood project….
Wressell worked 452.5 hours on the Informatics Project, a project
whose common construction wage scale provides that a skilled cement
mason was to be paid an hourly wage of $21.75 and fringe benefits of
$8.52 per hour. All told, a skilled cement mason would have been
entitled to be paid a total of $13,697.18 for working 452.5 hours on the
Informatics Project….
RLTC made several other payments on Wressell’s behalf that it
credited against its fringe benefit obligations to him. Specifically,
RLTC paid (1) $268.80 to a benefit consultant to provide employees
with claims assistance, if needed; (2) $128.70 to a pension plan; (3) a
$1397.00 assessment charged to Wressell to recover a portion of fringe
benefits paid by RLTC on his behalf; (4) $245.25 for mandatory first
aid and CPR training; (5) $225.00 for materials used in training; (6)
$1352.00 paid to reimburse Wressell for gasoline used in driving to and
from the Projects; and (7) a $1260 assessment charged to Wressell to
pay RLTC to administer his benefits.
On or about October 10, 2010, Wressell filed common construction
wage complaints with the Indiana Department of Labor (“IDOL”),
claiming that RLTC “switched pay rate in middle of job [and/or]
never agreed upon rate” for the Gatewood and Informatics Projects.
Appellant’s App. pp. 31, 33. Although the IDOL opened
investigations into Wressell’s complaints, it did not resolve them,
“primarily because [RLTC] either failed or refused to cooperate in the
investigations and refused to produce the records necessary for [IDOL]
to determine whether [RLTC] paid wages in accordance with the
[CCWA].” Appellant’s App. p. 35. On December 29, 2011, the
Indiana Attorney General’s office authorized Wressell to pursue his
claims in court. On January 5, 2012, Wressell sued RLTC, contending
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that he had been underpaid for his work on the Gatewood and
Informatics Projects.
On June 29, 2012, RLTC filed a motion for summary judgment,
alleging that there existed no genuine issue of material fact regarding
whether Wressell had been paid the wages and fringe benefits to which
he was entitled. Inter alia, RLTC designated an affidavit from its Chief
Financial Officer (“CFO”) James Gann, in which he averred that the
wages and fringe benefits paid to Wressell for his work on the
Gatewood and Informatics Projects were in compliance with the
common construction wage scale in place for each project.
On August 27, 2012, Wressell filed a response to RLTC’s summary
judgment motion and cross-moved for summary judgment. The basis
of Wressell’s motion was his contention that much of the work he
performed on the Gatewood and Informatics Projects was actually as a
carpenter or laborer, work for which, overall, he was entitled to be paid
more. Wressell also contended that many of RLTC’s payments
credited against its fringe benefit obligation to him were, in fact, not for
fringe benefits.
***
Wressell also averred to the following
15. The distance between [RLTC]’s Zionsville office and the
Gatewood [Project] is in excess of 50 miles (100 miles round
trip). The distance between [RLTC]’s Zionsville office and the
[Informatics Project] is in excess of 70 miles (140 miles round
trip).
16. When I worked at the Gatewood and Informatics Projects,
I was paid an average of $2.66 per gallon to fuel my pick-up
truck, and it cost me in excess of $17.00 a day in gas to drive to
and from the Gatewood Project ... and in excess of $24.00 per
day to drive to and from the Informatics Project[.]
17. [RLTC] paid me $2.00 per hour to apply to the cost of gas
for my truck for each hour I worked at the Gatewood Project
...; accordingly, if I worked 8 hours ... I was given $16.00 to
cover gas. If I worked less than 8 hours, the amount I was
given for gas was reduced accordingly. [RLTC] gave me no
money for gas to drive the 140 miles to and from
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Bloomington, Indiana for the days I worked on the
Informatics Project.
18. I was not required by [RLTC] to document the miles I
drove each day to the common construction wage worksites
and [RLTC] did not treat the gas payments to me as taxable
fringe benefits or report the gas payments as income to the
IRS. [RLTC] did not provide transportation for me to and
from its out-of-town worksites.
19. I spent more than the $1,352.00 [RLTC] gave me in gas
money to drive to [RLTC]’s work sites in Lafayette, Indiana
and Bloomington, Indiana.
20. [RLTC] did not provide me with a pension or pension
benefit, and [RLTC] did not contribute any money to a
pension for me.
Appellant’s App. pp. 205-06.
***
Wressell also designated an affidavit from Monte Moorhead….
Regarding fringe benefits, Moorhead averred the following:
12. Employer expenses that are a part of its regular
administrative overhead costs of doing business, or that are
primarily for the benefit of the employer, are not treated by
the IDOL as employee fringe benefits. Expenses that are paid
by a company to operate its business and to achieve increases
in productivity and profit are not considered fringe benefits
where the expenses are not a direct cash payment or other
direct benefit to the employee; consequently, even if an
employee gets an incidental benefit, the cost is not treated as a
fringe benefit.
13. When an employee is required to undergo employer
mandated training, and the training is given at the discretion
and the control of the employer, the IDOL would not allow
the employer to claim a fringe benefit allocation or credit for
the training, nor is the employer entitled to claim as a fringe
benefit the cost it pays to provide books or materials to its
employees for the training.
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14. As an example, if a company requires an employee to take
first aid or CPR training, its cost for providing such training
would not be considered by the IDOL as a fringe benefit to the
employee because the training was required by the
Company and the employee was under the direction and
control of the employer.
15. If the employer has a pension plan, but an employee does
not participate in the plan, and the employer does not make
any contributions on the employee’s behalf, then the
employer’s expenses for the pension plan are not credited by
the IDOL as a fringe benefit to the employee.
16. If an employer pays the cost of providing a benefit plan,
but an employee chooses not to elect to participate in the plan,
the IDOL would not allow the employer to claim a fringe
benefit credit for its expenses.
17. The IDOL does not consider an employer’s administrative
costs to provide benefits to employees as a fringe benefit. It
makes no difference whether the employer pays a third party
to administer the benefits or administers the benefits in-house.
18. If employees are given a fixed dollar amount per hour to
reimburse them for having to spend their own money on gas
to drive to and from a company’s principal office to remote
construction sites, and the money paid is not reported by the
employer to the IRS as income to the employee, then the
IDOL does not consider the money paid to the employee to
be a fringe benefit.
Appellant’s App. pp. 211-12.
Wressell, 988 N.E.2d at 292-96 (footnotes omitted).1
1
Much of the litigation prior to this appeal focused on Wressell’s job classification. Under the CCWA, a
worker’s job title (mason, carpenter, laborer, etc.) corresponds to a different pay scale. However, because
neither party has appealed the trial court’s decision regarding Wressell’s job classification, we have not
included the facts from the prior appeal regarding that issue.
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[4] The trial court granted RLTC’s June 29, 2012 motion for summary judgment.
On appeal, we concluded that there were genuine issues of material fact
regarding, among other things, whether Wressell was paid sufficiently for fringe
benefits. Id. at 298. As such, we reversed the trial court’s order of summary
judgment and remanded for further proceedings on “whether RLTC properly
paid Wressell for fringe benefits.” Id.
[5] After the case was remanded, the trial court held a bench trial in which it made
the following findings and conclusions:
17. The Court FINDS that 100% of the hours worked by Wressell on
the Gatewood and Informatics projects was as a skilled cement mason.
…
21. For the Gatewood Project, the Court FINDS that Wressell was
entitled to be paid $24.25 per hour plus $10.68 in fringe benefits.
22. For the Informatics Project, the Court FINDS that Wressell was
entitled to be paid $21.75 per hour plus fringe benefits of $8.52 per
hour.
23. RLTC’s pay records show that Wressel was paid $18,344.98 in
base wages on the Gatewood Project and $12,044.50 in base wages for
his work on the Informatics Project for total wages (excluding fringe
benefits) of $30,389.48.
24. The parties agree that RLTC provided Wressell with the following
fringe benefits which may be credited to RLTC’s fringe benefit
obligation to Wressell:
1. Premium payments for health insurance $1,991.76
2. Premium payments for dental insurance $140.22
3. Premium payments for group life insurance $25.02
4. Premium payments for accidental death and
dismemberment insurance $5.94
5. Premium payments for short term disability
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insurance $56.62
6. Premium payments to fund an employee
assistance program of at least $11.40
7. Paid time off (PT) $260.00
8. Payment for three (3) holiday $624.00
9. Payments made by Company to a third party
to comply with COBRA requirements $5.10
TOTAL $3,119.96
25. The Court FINDS that Wressell received no other fringe benefits
meaning compensation of economic value to him.
26. RLTC as a matter of internal cost accounting allocated certain
costs to Wressell which were required to be incurred to complete the
projects, but these are not fringe benefits to Wressell.
27. The total amount of compensation Wressell received for the
Gatewood and Informatics projects was $33,509.44.
28. The total amount of compensation Wressell was entitled to receive
for the Gatewood and Informatics projects as a skilled mason was
$37,362.26 = ((677.5 x ($24.25 + $10.68) + ((452.5) x
($2[1].75+$8.52)).
29. Wressell was underpaid $3,852.82.
30. I.C. 22-2-5-2 provides as follows:
Every such person, firm, corporation, limited liability
company, or association who shall fail to make payment of
wages to any such employee as provided in section 1 of this
chapter shall, 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.
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31. The Court CONCLUDES as a matter of law that it would be error
having found unpaid wages to not award liquidated damages and a
reasonable attorney’s fee for work performed regarding the employer’s
failure to pay for time worked in excess of the hours paid. See Sallee
v. Mason, 714 N.E.2d 757 [(Ind. Ct. App. 1999)].
32. The Court CONCLUDES as a matter of law that the Wage
Payment Statute, IC 22-2-5, governs both the frequency and amount
an employer must pay its employee. St. Vincent Hosp. & Health Care
Ctr., Inc. v. Steele, 766 N.E.2d 699, 2002 Ind. LEXIS 324 (2002), and
therefore that liquidated damages and reasonable attorney fees must be
ordered….
It is therefore ORDERED ADJUDGED and DECREED as
FOLLOWS:
1. Judgment in favor of Plaintiff in the sum of $3,852.82 in damages
plus liquidated damages of $7,705.64 for a total of $11,558.46 and
against Defendant is GRANTED.
Appellant’s App. pp. 10-13.
[6] Following the judgment, both parties filed motions to correct error, both of
which were denied by the trial court. Wressell then filed a petition requesting
that RLTC be ordered to pay his attorney’s fees. On October 23, 2014, the trial
court granted that motion with the following order.
1. After trial on May 13 and 14, 2014, Plaintiff was awarded a
judgment of $3,852.82 in damages plus liquidated damages of
$7,705.64.
2. Defendant took the position at summary judgment, at trial and up
until its Motion to Correct Error that William Wressell was paid at
least what he was entitled to and probably more.
3. Plaintiff took the position that Wressell was underpaid $8,205.82.
4. Plaintiff generally prevailed although not on all issues.
5. The Court found, and even Defendant seems to concede by its
Motion to Correct Error, that Defendant did not pay all of William
Wressell’s wages.
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6. …
7. I.C. § 22-2-5-1, calls for liquidated damages (already awarded) and
reasonable attorney fees.
8. These types of attorney fee shifting statutes can work apparent
inequities. It can cost significantly more to vindicate one’s right than
the value for the right impaired. So as a practical matter, the real
winner in the quest for justice is the attorney by the fees he or she
earns.
9. The retort is that that is precisely the point. If an attorney cannot
earn a fee commensurate with the significant work it takes to vindicate
what might be a modest right or a modest injustice – $3,800 of
underpaid wages over two years – than [sic] modest injustices will
continue.
10. While the fees claimed in this matter are breathtaking and giving of
pause to their imposition, the law is the law. If reasonable fees cannot
be earned, no lawyer will take the case.
11. …
12. Plaintiff’s lawyers took the case on an agreement that limits Mr.
Wressell to a contingency fee of 40% of the judgment [or actual
attorney’s fees awarded by settlement or by a court]. Defendant
suggest that that agreement caps the fees. Defendnat makes a
colorable argument but the Court rejects it.
13. Defendants, the Court concludes, erroneously construe SCI
Propane, LLC v. Frederick as establishing an ipso facto rule that the
contingency fee is always the reasonable fee if it is less than some
hourly calculation. The problem in that case, the Court finds, was that
the estate (the client) was enriched by the fee owed. The estate was
actually enlarged. Here, Mr. Wressell will get no such windfall. He is
only getting his judgment and liquidated damages. The fees awarded
in this case are flowing through him directly to his lawyers.
14. As a matter of professional responsibility, fees must be reasonable.
15. [Wressell’s attorneys] have totaled 349.8 hours of charged time
over the life of the case which included defending a summary
judgment, prevailing at an appeal, defending a transfer petition and
prevailing at trial.
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16. There are time entries, to Plaintiff’s attorneys’ credit, which do not
appear to be compensated.
17. The detail in the bills is fairly typical and is adequate to put anyone
asked to pay them on notice of what was done by the lawyers.
18. On any two year recapitulation there may be entries which appear
suspect. Defendant points out 3.7 hours to review a summary
judgment motion. This admittedly is not the best of the Plaintiff’s
attorneys’ time entries. Defendant attacks the entries as self-serving
and made with the incentive to boost them up.
19. But any fee affidavit is self-serving. If there was no detailed billing
statement attached to the fee affidavit then the complaint would be that
there is no detail. The 3.7 hour entry contains itself less detail than
might be desired. If a client got that bill without any other
context around it, they might fairly question it.
20. But in the overall context the hours billed are reasonable. The
entries are adequately precise. It is certainly possible to spend 3.7
hours reading and digesting a motion that would, if granted, punt your
client’s case out of court.
21. The Defendant makes one argument on the fee bill that carries
some merit. Defendants filed a cross-motion for summary judgment.
Much of this work was co-extensive with defending the Plaintiff’s
requests for summary judgment. From reviewing the bill it looks like
about 16.9 hours of time was focused on Plaintiff’s cross-motion. It
did not succeed. It was filed after the Defendant’s motion. It was
tactical in nature…. [T]he cross motion really did not advance the
Plaintiff’s litigation forward. It was not found meritorious on appeal.
Deducting 16.9 hours from the hours spent is reasonable.
22. The Court does not see fit to deduct time on the discovery motion
Defendant chatracterizes as “unsuccessful.” There was a lot of
discovery back and forth in this matter and it was not always
amenable. There are, during any successful litigation efforts, moments
of failure. Overall the litigation was successful.
23. …
24. There is nothing offered by Defendants contrary to the reasonable
rate [of $300 per hour] suggested by [Wressell’s] affidavits.
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25. The Court finds that a blended rate of $300 for [Wressell’s
attorneys] is reasonable for Boone County….
26. Overall 332.9 hours at a reasonable rate of $300 per hour were
necessary for Mr. Wressell to vindicate his claim.
27. Attorney fees awarded should be and are $99,870.00
28. Though proportionally greater than the judgment by a factor of
nearly ten it does not enrich Plaintiff and is not unreasonable under the
Wage Payments Statute.
29. … Plaintiff is entitled to $137.00 to file the suit and $250.00 in
Appellate Court costs for $387.00 total.
Appellant’s App. pp. 209-212.
Discussion and Decision
[7] RLTC raises several issues in this appeal which we consolidate and restate as
follows: (1) whether the CCWA can form the basis for a private cause of action;
(2) whether the trial court erred in finding that RLTC provided insufficient
fringe benefits to meet the minimum requirements of the CCWA; and (3)
whether the trial court erred in awarding attorney’s fees to Wressell. Wressell
also raises one claim of error on appeal, arguing that the trial court failed to
consider his overtime hours in calculating the amount of compensation he was
entitled to.
I. Private Cause of Action Under the CCWA
[8] As a threshold issue, RLTC argues that the CCWA cannot form the basis for a
private civil action. “‘Questions of statutory interpretation are questions of law
and are reviewed de novo.’” In re Howell, 27 N.E.3d 723, 726 (Ind. 2015)
(quoting In re Carroll Cnty. 2013 Tax Sale, 21 N.E.3d 832, 834 (Ind. 2014)).
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[9] As RLTC notes, the text of the CCWA does not expressly create a private cause
of action. However, in Stampco Construction Co., Inc. v. Guffey, 572 N.E.2d 510,
512 (Ind. Ct. App. 1991), this court held that a private cause of action could be
brought under Indiana’s prevailing wage statute. See also Burgess v. E.L.C. Elec.,
Inc., 825 N.E.2d 1, 16 (Ind. Ct. App. 2005); E.L.C. Elec., Inc. v. Indiana Dep’t of
Labor, 825 N.E.2d 16, 18 (Ind. Ct. App. 2005) (acknowledging that a private
cause of action may be brought under the CCWA). RLTC notes that the United
States District Court for the Southern District of Indiana called Stampco
into doubt and certified for the Indiana Supreme Court the question of whether
such a private cause of action exists under the CCWA. Lewis v. Gaylor, Inc., 914
F. Supp. 2d 925 (S.D. Ind. 2012). However, the case was voluntarily dismissed
before the Supreme Court had an opportunity to consider the question. We
acknowledge RLTC’s argument but decline to part from precedent and will
leave any such decision to the Indiana Supreme Court.
II. Fringe Benefits
[10] RLTC claims that the trial court erred in failing to include other proffered fringe
benefits in its calculation of total compensation and that the trial court erred in
shifting the burden of proof on this issue from Wressell to RLTC.
A. Burden of Proof
[11] RLTC argues that trial court improperly shifted the burden of proof to RLTC
regarding whether RLTC provided certain fringe benefits to Wressell.
Essentially, RLTC claims that the trial court inappropriately required RLTC to
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prove the fringe benefits it provided Wressell instead of Wressell having to
prove that he did not receive certain benefits. We cannot agree with RLTC’s
characterization of the burden of proof. Their approach would essentially
require Wressell to prove a negative by identifying benefits which he did not
receive. We find this illogical. Wressell met his initial burden by establishing
(1) the amount of compensation which, in his opinion, he actually received in
wages and fringe benefits, and (2) that the amount he received was less than the
total wages required to be paid under the CCWA to a worker of his skill level.
In its defense, RLTC argued that Wressell received additional fringe benefits
which, when considered with his other wages, amounted to a total
compensation in excess of that required by the CCWA. The trial court declined
to credit much of RLTC’s argument as to what it considered fringe benefits.
Whether or not the trial court erred in its determination of what constitutes a
fringe benefit is the crux of this litigation which we will examine in more detail
below. However, the trial court did not improperly shift the burden of proof to
RLTC.
B. Whether the Trial Court Erred in Determining What
Constituted Fringe Benefits
[12] Determining whether certain benefits provided by an employer constitute fringe
benefits for purposes of the CCWA is a question of law. See Burgess, 825 N.E.2d
at 10. Appellate courts evaluate questions of law de novo and owe no deference
to a trial court’s determination of such questions. Seel v. State, 739 N.E.2d
170, 172 (Ind. Ct. App. 2000).
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[13] RLTC claims that the trial court erred in failing to consider the following items
fringe benefits: “health and welfare benefits, availability of a 401K plan2,
training, travel per diem, benefits orientation, and benefits administration.”
Appellant’s Br. pp. 18-19. Aside from travel per diem, RLTC only lists these
proffered benefits by name and provides no explanation as to what these
benefits entail, their monetary value, or why it believes they should be
considered fringe benefits for purposes of the CCWA. As such, we address
only the issue of whether the trial court erred in failing to include travel per
diem as a fringe benefit.3
[14] In Union Township School Corp. v. State ex rel. Joyce, 706 N.E.2d 183 (Ind. Ct.
App. 1998), trans. denied, we concluded that, for purposes of the CCWA, the
term “wages” includes fringe benefits and adopted the following definition for
wages:
Every form of remuneration payable for a given period to an
individual for personal services, including salaries, commissions,
vacation pay, dismissal wages, bonuses and reasonable value of board,
rent, housing, lodging, payments in kind, tips, and any other similar
advantage received from the individual’s employer or directly with
2
The parties agree that RLTC made no contributions to Wressell’s 401(k) or pension
plan. (Tr. 136, 433)
3
We note that although the trial court stated that it did not consider travel per diem a
fringe benefit for purposes of the CCWA, it appears that the trial court included travel
per diem paid to Wressell in its calculation of overall, CCWA-eligible wages.
Therefore, even if RLTC were to prevail on the merits of this issue, the amount
awarded to Wressell would not change. Nevertheless, we will address the argument
so that the trial court may remedy any possible errors on remand.
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respect to work for him. [The] term should be broadly defined and
includes not only periodic monetary earnings but all compensation for
services rendered without regard to the manner in which such
compensation is computed.
Id. at 191. In order to be considered a fringe benefit, there has to be a clear
benefit to the employee. Wressell, 988 N.E.2d at 296.
[15] RLTC’s President and CEO, Greg Turner, testified that RLTC had a policy of
paying a travel per diem of two dollars per hour worked to employees who
traveled more than sixty miles one-way to get to a job site. (Tr. 396-98)
Wressell testified that when he was initially asked by his supervisor to move to
the Gatewood Project he declined because it would cost him too much in gas to
make the trip. (Tr. 141) Wressell agreed to work the Gatewood Project only
after he was informed that he would be paid an additional two dollars an hour
in travel per diem. (Tr. 141)
[16] Following the parties’ closing statements at trial, the trial court stated that “I
think the two dollars [an hour per diem] which comes out to $1452 [sic]
additional to what was stipulated to is appropriate, is an appropriate fringe
benefit but I’m not sure about the rest of it.” Tr. p. 468. However, the trial
court later stated that it did not consider travel per diem to be a legitimate fringe
benefit and explained its rationale for that decision as follows:
In so finding the Court ultimately rejected the notion that Plaintiff
received fringe benefits (including payments for gasoline to travel for
the principal benefit of [RLTC]) beyond $3,119.96 which [RLTC] did
provide. Had Wressell resided closer the gas money would not have
been paid and so the same is not a fringe benefit as contemplated by
the [CCWA]. The principal beneficiary was the employer.
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Appellant’s App. p. 209 n.1.
[17] Based on the facts of this particular case, we are unpersuaded that per diem
paid as a reimbursement for travel costs should be considered a fringe benefit
for purposes of the CCWA. Traveling from Indianapolis to the Gatewood
Project in Lafayette imposed a significant cost on Wressell and similarly
situated employees. RLTC’s payment of travel per diem operated to shift a
portion of that cost from those employees back to the company. However, the
payments did not provide a standalone benefit to Wressell. Should Wressell
have been injured or taken paid time off, he would be paid only his typical
hourly wage, and would not receive per diem because he incurred no travel
costs.
[18] In his appellate brief, Wressell provides an insightful example which we
paraphrase here: if an employee is required by his employer to travel by plane to
another city for work, the employee receives no benefit when the employer
reimburses him for the cost of the plane ticket. The airfare is simply a cost of
doing business which the company incurs, there is no standalone benefit to the
employee. The same logic applies here. RLTC was incurring a cost to assure
its workers were able to travel to the job site.
[19] We also note that the travel per diem payments had few similarities as other
wages or benefits. Wressell did not receive per diem in the same fashion as he
did other wages or fringe benefits, but received a tax-free cash payment at the
end of each day as per diem. Aside from his daily work, Wressell incurred no
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cost in order to receive his other fringe benefits, e.g. health, dental, and life
insurance, paid time off, and paid holidays.
[20] This reasoning is supported by other jurisdictions which have addressed this
issue and have declined to include travel per diem as a wage or fringe benefit
where the per diem did not exceed the cost incurred by the employee. See
Antillon v. N.M. State Highway Dep’t, 820 P.2d 436, 440 (N.M. Ct. App. 1991)
(reimbursement for travel expenses is not considered part of a worker’s wage
unless the reimbursement is in excess of the employee’s actual expenses and
thus constitutes a real economic gain to the employee); see also Hackett v. W.
Express, Inc., 21 A.3d 1019, 1022 (Me. 2011) (per diem payments to reimburse
employee for travel expenses is “not includable to any extent in average weekly
wage”). Accordingly, we affirm the trial court’s decision regarding the amount
of fringe benefits received by Wressell for purposes of the CCWA.
III. Attorney Fees
[21] We review a trial court’s award of attorney’s fees, and the amount of any such
award, for an abuse of discretion. Daimler Chrysler Corp. v. Franklin, 814 N.E.2d
281, 286 (Ind. Ct. App. 2004) (citing Malachowski v. Bank One, Indpls., N.A., 682
N.E.2d 530, 533 (Ind. 1997)). “An abuse of discretion occurs when the trial
court’s award is clearly against the logic and effect of the facts and
circumstances before the court.” Id. at 286-87. “An award of attorney’s fees
will be reversed on appeal as excessive only where an abuse of the trial court’s
discretion is apparent on the face of the record.” Id. at 287 (citing Owen v.
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Vaughn, 479 N.E.2d 83, 88 (Ind. Ct. App. 1985)). “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.” DePuy Orthopaedics, Inc. v. Brown, 29
N.E.3d 729, 732 (Ind. 2015) (citation omitted).
A. Whether Wressell was Entitled to Attorney’s Fees Under
Indiana’s Wage Payment Statute
[22] Indiana Code Section 22-2-5-2 provides that employers who fail to pay their
employees’ wages are liable for an employee’s reasonable attorney’s fees and
court costs incurred as a result of litigation to obtain unpaid wages. RLTC
contends that fringe benefits should be treated differently than wages for
purposes of the attorney fee shifting provision of Indiana’s Wage Payment
Statute (Ind. Code § 22-2-5-1 et. seq.). For several reasons, we disagree with this
proposition.
[23] The purpose of the fee shifting provision is to deter employers from playing
“fast and loose with wage obligations” by imposing treble damages and
attorney’s fees for non-compliant employers. St. Vincent Hosp. & Health Care
Ctr., Inc. v. Steele, 766 N.E.2d 699, 706 (Ind. 2002). Fringe benefits are a distinct
form of compensation but are nonetheless an obligation owed to the employee
by the employer. We have no reason to believe that the legislature did not
intend for this deterrent scheme to extend to fringe benefits.
[24] Furthermore, this court has previously treated employee benefits as wages in
several different contexts. When this case was on appeal previously, we noted
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that “for the purposes of the CCWA, ‘wages’ include fringe benefits,” and that
fringe benefits are “a subset of wages.” Wressell, 988 N.E.2d at 296 (citing
Union Township School Corp., 706 N.E.2d 183). We have also determined that
deferred benefits, such as “PTO, pension benefits, retirement savings plans,”
etc., which have accrued during an employee’s tenure, are wages for purposes
of the Wage Payment Statute. Taylor v. Cmty. Hospitals of Ind., Inc., 860 N.E.2d
1200, 1203 (Ind. Ct. App. 2007). RLTC was required to compensate Wressell
at an expressly defined rate under the CCWA and failed to do so.
Consequently, Wressell was entitled to treble damages and attorney’s fees
under the Wage Payment Statute.
B. Whether the Trial Court’s Award of Attorney’s Fees was
Reasonable
[25] RLTC argues that the trial court’s award of attorney’s fees was unreasonable (1)
compared to the damages awarded and (2) because it was based on an
unreliable calculation of actual hours worked.
[26] In determining a reasonable amount of attorney’s 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. See In re Eiteljorg, 951 N.E.2d 565, 573 (Ind. Ct. App.
2011); see also Zebrowski & Assocs., Inc. v. City of Indpls., By & Through its Bd. of
Dirs. for Utils. of its Dep’t of Pub. Utils., 457 N.E.2d 259, 264 (Ind. Ct. App. 1983).
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i. Amount Involved and Result Achieved
[27] RLTC neglects to analyze the reasonableness of the fee award under the
aforementioned factors and instead argues that an attorney fee award of four
times the potential recovery is patently unreasonable. RLTC cites Ponziano
Construction Services. Inc. v. Quadri Enterprises, LLC to suggest that limits on
attorney’s fee awards based on potential recovery have been upheld in Indiana.
980 N.E.2d 867, 877 (Ind. Ct. App. 2012). However, the Ponziano court was
addressing a very narrow issue.
The award of attorney’s fees in an action to foreclose on a mechanic’s
lien is not an attempt to compensate the attorney for all the legal
services performed in connection with the lien; rather, the amount of
the award is intended to reflect the amount the lienholder reasonably
had to expend to foreclose on the lien. Such awards should be made
with caution so that excessive awards of attorney’s fees do not
discourage property owners from challenging defective workmanship
on the part of lien holders. The amount awarded as attorney’s fees
therefore should be reasonable in relation to the amount of the
judgment secured.
Id. at 877 (citations omitted). Ponziano dealt with too distinct of an issue to
provide significant support for a comparable limitation here. RLTC cites no
other cases or statutes which support the imposition of limits to attorney’s fee
awards based solely on the potential compensatory award.
[28] We acknowledge the policy dilemma faced by lawmakers in striking an
appropriate balance between (1) creating a mechanism which helps employees
vindicate wage claims and (2) the risk of exploitation of that mechanism by
attorneys to the detriment of employers. Our courts play a part in maintaining
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this balance by using the abovementioned factors to assure that all attorney’s
fees awarded are reasonable. Despite RLTC’s argument, there is no precedent
which provides for a definitive cap to attorney’s fee awards based on the
potential or actual recovery. The recovery is only one consideration which the
court may take into account when determining what amount of fees are
reasonable. RLTC is free to lobby the legislature to promulgate such a rule but
it is not this court’s place to do so.
[29] In the same vein, RLTC argues that the trial court erred by failing to consider
either the actual or potential award in its decision to award attorney’s fees.
However, the trial court addressed both the “amount involved” and “result
achieved” factors enunciated above. Wressell claimed that he was underpaid
$8,205.82, (App. 209), and was ultimately awarded $3,852.82 in compensatory
damages for unpaid wages and $7,705.64 in treble damages. The trial court
noted that the disputed amount was relatively small, especially when compared
to the attorney’s fees, but “[i]f an attorney cannot earn a fee commensurate with
the significant work it takes to vindicate what might be a modest right or a
modest injustice––$3,800.00 of underpaid wages over two years––than [sic]
modest injustices will continue.” Appellant’s App. p. 210. The trial court’s
reasoning echoes the purpose of the fee shifting provision; to deter employers
from failing to pay workers their due wages. Steele, 766 N.E.2d at 706.
ii. Calculation of Attorney Time Billed
[30] Wressell’s attorney’s requested fees for 349.8 hours of work. The trial court
found that, overall, the amount of hours worked was reasonable considering the
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complexity of the issues and the length of the case, which lasted several years
and included defending and losing on summary judgment, prevailing in a 2013
appeal in which this court overturned that summary judgment, and ultimately
prevailing at trial. The trial court found the attorneys billing statements to be
adequately precise and detailed. Of the over 300 hours billed, the trial court
found only 3.7 hours to contain “less detail than might be desired.” Appellant’s
App. p. 211. The trial court also deducted 16.9 hours from the requested
amount for time spent on a failed cross-motion for summary judgment and
ultimately determined the reasonable fees to be 332.9 hours at a rate of $300 per
hour for a total of $99,870 (RLTC does not contend that the hourly rate was
unreasonable).
[31] RLTC makes no specific argument as to why the calculation of hours worked is
unreasonable and instead argues only that the documents cataloguing the
attorney’s hours worked should be viewed with skepticism because the client,
Wressell, was not actively reviewing the accuracy of those billed hours.
Further, RLTC argues that the trial court erred when it “accepted and awarded
fees based on the time entries as presented.” Appellant’s Br. p. 33. However,
as described above, the trial court conducted its own objective review of the
time entries and, with the exception of 16.9 hours deducted for time spent on a
failed cross-motion, found the total calculation of hours to be reasonable. As
such, RLTC’s argument is essentially a request for this court to reweigh the
evidence and reevaluate the credibility and accuracy of the time entries. “We
do not reweigh the evidence; rather, we determine whether the evidence before
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the trial court can serve as a rational basis for its decision.” DePuy Orthopaedics,
29 N.E.3d at 732. Based on the fact that this case has continued for nearly four
years and is now on appeal for a second time, we think the trial court had
ample basis for its decision on the reasonableness of the amount of hours billed
by Wressell’s attorneys.
iii. Culpability for Protracted Litigation
[32] When determining an appropriate attorney fee award, this court has also looked
to whether either party is responsible for unduly delaying the litigation.
Eiteljorg, 951 N.E.2d at 573. The reason for the protracted litigation in this case
was due, in large part, to RLTC’s reluctance to cooperate during mediation or
during the IDOL investigation, as well as RLTC’s attempts to hinder discovery.
IDOL stated that it was unable to resolve Wressell’s claim “primarily because
[RLTC] either failed or refused to cooperate in the investigations and refused to
produce the records necessary for [IDOL] to determine whether [RLTC] paid
wages in accordance with the [CCWA].” Appellant’s App. p. 47. Therefore,
litigation may have been unnecessary had RLTC cooperated with IDOL’s
investigation. Additionally, it appears RLTC was guilty of dilatory discovery
tactics. The trial court described the parties’ discovery as “not always
amenable,” Appellant’s App. p. 211, and, at one point, Wressell was forced to
file a motion to compel discovery and requesting sanctions before RLTC
ultimately complied with certain discovery requests. (App. 4)
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iv. Reasonableness of Attorney Fees - Analysis
[33] In light of the protracted nature of this litigation, RLTC’s obstructive litigation
behavior, the complexity of the issues, the mostly successful result achieved for
Wressell, and the purpose behind the fee shifting provision of the Wage
Payment Statute, we find that the trial court did not abuse its discretion in
fashioning its attorney’s fees award. As the trial court noted, “While the fees
claimed in this matter are breathtaking and giving of pause to their imposition,
the law is the law. If reasonable fees cannot be earned, no lawyer will take the
case.” Appellant’s App. p. 210. Were we to find that the fees awarded in this
case were unreasonable solely in light of the ultimate compensatory award,
there would be a chilling effect on the ability of injured employees to find
attorneys willing to take their cases.
C. Fee Agreement
Finally, RLTC argues that the attorney’s fees awarded should have been limited
to forty percent of the total award pursuant to the contingency fee arrangement
between Wressell and his attorneys. Wressell’s attorney fee agreement reads as
follows:
Client agrees to pay to said Attorneys, in consideration of their
services, a sum of money equal to the greater of: (a) forty percent
(40%) of any and all sums received or recovered upon said claim or (b)
actual attorney’s fees awarded by settlement or by a court of
competent jurisdiction and paid by the Defendant.
Appellant’s App. p. 198. RLTC argues that an award of attorney’s fees greater
than forty percent of the recovery would be punitive in nature and provide a
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“windfall” to Wressell. Appellant’s Br. p. 36. This argument is without merit.
The trial court’s award of attorney’s fees was based on the total hours worked
by Wressell’s attorneys and will compensate the attorneys for their time spent
on the case. In the fee agreement with his attorneys, Wressell agreed to pay
“actual attorney’s fees awarded…by a court.” Appellant’s App. p. 198.
Therefore, despite RLTC’s contention otherwise, Wressell will not be enriched
in any manner by the attorney fee award because he will retain none of that
award for himself.
D. Appellate Fees
[34] RLTC claims that, pursuant to Indiana Appellate Rule 66(E), Wressell was not
entitled to receive attorney’s fees for appellate work or appellate court costs for
work regarding Wressell’s appeal in 2013. Appellate Rule 66(E) provides that
“[t]he Court may assess damages if an appeal, petition, or motion, or response,
is frivolous or in bad faith. Damages shall be in the Court’s discretion and may
include attorneys’ fees.” However, Wressell’s claim for attorney’s fees was
made under Indiana Code section 22-2-5-2, not under Rule 66(E). Section 22-2-
5-2 does not exclude appellate work from that recoverable as reasonable
attorney’s fees. Furthermore, the Indiana Supreme Court has previously held
that appellate attorney’s fees are properly awardable under Section 22-2-5-2. St.
Vincent Hosp. & Health Care Ctr., Inc. v. Steele, 766 N.E.2d 699, 706 (Ind. 2002).
RLTC cites to no cases or statutes supporting its contention that appellate fees
are not recoverable under Section 22-2-5-2.
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IV. Overtime
[35] In his cross-appeal, Wressell argues that the trial court erred in failing to include
overtime hours in its calculation of his rate of pay. RLTC did not address
Wressell’s claim for overtime compensation in either its initial brief or reply
brief. Failure to respond to an issue raised in an opposing party’s brief is akin to
failing to file a brief, as to that issue. Gwinn v. Harry J. Kloeppel & Assocs., Inc., 9
N.E.3d 687, 690 (Ind. Ct. App. 2014). Where one party fails to file an appellate
brief, we may reverse the trial court if the appellant presents a case of prima
facie error. Id. “Prima facie means ‘at first sight, on first appearance, or on the
face of it.’” Id. (quoting Ponziano, 980 N.E.2d at 875.)
[36] Indiana Code section 22-2-2-4(k) provides that “no employer shall employ any
employee for a work week longer than forty (40) hours unless the employee
receives compensation for employment in excess of the hours above specified at
a rate not less than one and one-half (1.5) times the regular rate at which the
employee is employed.” Wressell claims, and the trial court acknowledged in
its judgment, that Wressell worked 22 hours of overtime on the Gatewood
Project and 21.5 hours of overtime on the Informatics Project. However, the
trial court did not include any overtime compensation in its calculation of total
compensation Wressell is entitled to under the CCWA.
[37] Wressell claims that he is entitled to an additional $500.56 in compensatory
damages for the uncalculated overtime hours and a cooresponding $1,001.12 in
additional liquidated damages pursuant to Indiana Code section 22-2-5-2.
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According to Wressell’s time sheets, Plaintiff’s Ex. 7, it appears that Wressell
did work overtime on both the Gatewood and Informatics Projects and his
calculations of the total overtime compensation are correct. Therefore,
Wressell has established prima facie error by the trial court. We remand with
instructions that the trial court award Wressell an additional $500.56 in
compensatory damages and $1,001.12 in liquidated damages.
[38] The judgment of the trial court is affirmed in part, reversed in part, and
remanded with instructions.
May, J., and Crone, J., concur.
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