ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
N. KENT SMITH LORIE A. BROWN
LETHA S. KRAMER Brown Law Office, P.C.
Hall, Render, Killian, Heath Indianapolis, Indiana
& Lyman, P.S.C.
Indianapolis, Indiana KENNETH E. LAUTER
RYAN C. FOX
Haskin Lauter & LaRue
Indianapolis, Indiana
ATTORNEYS FOR AMICUS CURIAE
COMMISSIONER OF INDIANA
DEPARTMENT OF LABOR:
STEVE CARTER
Attorney General of Indiana
JON LARAMORE
Deputy Attorney General
Indianapolis, Indiana
NANCY J. GUYOTT
Chief Counsel
Indiana Department of Labor
J. T. WHITEHEAD
Counsel
Indiana Department of Labor
Indianapolis, Indiana
ATTORNEYS FOR AMICUS CURIAE
INDIANA STATE BUILDING &
CONSTRUCTION TRADES COUNCIL:
WILLIAM R. GROTH
GEOFFREY S. LOHMAN
Fillenwarth Dennerline Groth &
Towe
Indianapolis, Indiana
IN THE
SUPREME COURT OF INDIANA
ST. VINCENT HOSPITAL and HEALTH )
CARE CENTER, INC., )
) Supreme Court Cause Number
Appellant-Defendant, ) 34S02-0107-CV-329
)
v. )
) Court of Appeals Cause Number
ROBERT J. STEELE, M.D., ) 34A02-0005-CV-294
)
Appellee-Plaintiff. )
APPEAL FROM THE HOWARD CIRCUIT COURT
The Honorable Lynn Murray, Judge
Cause No. 34C01-9812-CP-951
ON PETITION TO TRANSFER
April 22, 2002
RUCKER, Justice
We grant transfer to resolve a conflict of authority in the Court of
Appeals concerning Indiana’s Wage Payment Statute. We conclude the statute
governs both the frequency and amount an employer must pay its employee.
Facts and Procedural History
The facts of this case are undisputed. Robert Steele is a practicing
physician in Kokomo who is board certified in internal medicine and
oncology. On April 6, 1995, Dr.
Steele and the St. Vincent Hospital and Health Care Center, Inc. (“St.
Vincent”) entered into an employment agreement that extended from April 1,
1995, through March 31, 2000. The agreement provided for the bi-weekly
payment of compensation as follows:
For the first year of this Agreement, Hospital shall compensate
Physician the greater of Five Hundred Twenty-Five Thousand Dollars
($525,000) per annum or fifty-six percent (56%) of Collections . . .
resulting from Physician’s provision of Professional Services at the
Practice Site.
. . .
For years of this Agreement subsequent to its first year, Physician’s
compensation each year shall be Base Compensation or fifty-six percent
(56%) of Collections for that current year or fifty-six percent (56%)
of Collections from the previous year, whichever is greater.
R. at 159. The agreement defined “Collections” as:
[T]hat cash actually received, during the applicable year, from
standard medical office operations performed by Physician at the
Practice Site, including physician charges for offices visits,
Hospital visits, insurance receipts, revenue received from laboratory
and radiology services except for revenue for these services received
from Medicare or Medicaid, and other billed services for which income
is received at the Practice Site.
R. at 160.
During the first two years, St. Vincent compensated Dr. Steele
according to the terms of the agreement. However, in 1998, the third year
of the agreement, St. Vincent began excluding from Collections any monies
Dr. Steele received from Medicare and Medicaid for the administration of
chemotherapy and other medications. In so doing, St. Vincent relied on a
proposed regulation issued by the federal Health Care Financing
Administration in January 1998. The proposed regulation interpreted
congressional legislation known as Stark II. Among other things, Stark II
prohibited physicians from referring Medicare and Medicaid patients, for
certain prescription drugs, to a clinical laboratory in which the physician
had a financial interest.[1]
Dr. Steele filed a complaint against St. Vincent alleging breach of
contract for failure to pay the full amount of compensation due under the
terms of the agreement and for violation of Indiana’s Wage Payment Statute.
He subsequently filed a motion for summary judgment, and St. Vincent filed
a cross-motion contending that it could not pay the full amount due under
the terms of the agreement because of the proposed federal regulation and
thus there was no violation of the Wage Payment Statute. Ruling that St.
Vincent breached the agreement and violated the statute, the trial court
entered summary judgment in favor of Dr. Steele. After a series of
hearings on damages, the trial court ordered St. Vincent to pay $277,823.92
in unpaid wages, $555,625.84 in liquidated damages, and $48,000.00 in
attorney fees.
St. Vincent appealed contending the trial court erred in awarding
liquidated damages and attorney fees. Citing Court of Appeals authority in
support of its position, St. Vincent argued that the Wage Payment Statute
governs only the frequency with which an employer must pay its employee.
Thus, the argument continued, there was no violation of the statute here
because the dispute between the parties concerned only the amount of wages
due. Relying on contrary authority, Dr. Steele insisted the statute
governs both the frequency as well as the amount due. Acknowledging the
conflict of authority on the issue, the Court of Appeals affirmed the trial
court ruling that the statute governs both the frequency and amount an
employer must pay its employee. St. Vincent Hosp. & Health Care Ctr., Inc.
v. Steele, 742 N.E.2d 1029, 1035 (Ind. Ct. App. 2001). St. Vincent seeks
transfer.[2] Although we reach the same conclusion as the Court of
Appeals, we grant transfer to resolve the conflicting opinions on the
question of whether the Wage Payment Statute governs both the frequency and
amount an employer must pay its employee.
Standard of Review
Summary judgment is proper if the evidence shows that there is no
genuine issue of material fact and the moving party is entitled to judgment
as a matter of law. Ind. Trial Rule 56(C); Felsher v. Univ. of Evansville,
755 N.E.2d 589, 592 (Ind. 2001). On appeal, we construe all facts and
reasonable inferences drawn from those facts in a light most favorable to
the nonmoving party. Felsher, 755 N.E.2d at 592. We carefully review the
trial court’s decision to ensure that the responding party was not
improperly denied its day in court. Id.
Discussion
I.
The Wage Payment Statute
Indiana Code section 22-2-5, commonly referred to as the Wage Payment
Statute, provides:
(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.
The payment shall be made in lawful money of the United States, by
negotiable check, draft, or money order, or by electronic transfer to
the financial institution designated by the employee. Any contract in
violation of this subsection is void.
(b) Payment shall be made for all wages earned to a date not more than
ten (10) 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:
(1) ten (10) 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 section, then the employer:
[A]s liquidated damages for such failure, [shall] 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.
I.C. § 22-2-5-2.
There is no dispute that the Wage Payment Statute governs the
frequency with which an employer must pay its employee. However, a line of
authority on this point takes the position that the statute addresses only
the frequency and not the amount an employer must pay. See Ind. Dep’t of
Labor v. Richard, 732 N.E.2d 810, 813 (Ind. Ct. App. 2000), trans. denied;
Haxton v. McClure Oil Corp., 697 N.E.2d 1277, 1281 (Ind. Ct. App. 1998);
Huff v. Biomet, Inc., 654 N.E.2d 830, 835 (Ind. Ct. App. 1995). This view
was first expressed in Hendershot v. Carey, 616 N.E.2d 412 (Ind. Ct. App.
1993). That case involved a class action lawsuit against the City of
Muncie by municipal employees. Among other things, the employees contended
that the City wrongfully withheld their wages in violation of the Wage
Payment Statute when more than two weeks elapsed before it issued
paychecks. The court observed that in order to place liability upon an
employer for failure to issue paychecks at least every two weeks, an
employee must first submit a request to that effect. Because some
employees apparently accepted the City’s offer to go four weeks rather than
two before receiving a paycheck, the court held that those employees could
not now charge the City with responsibility that the employees had
undertaken. Without elaboration the court went on to say that it was not
relevant that the amount of the checks was in dispute because “the statute
addresses the frequency with which an employer must pay its employees, not
the amount that it must pay.” Id. at 415. Subsequent Court of Appeals
opinions have cited Hendershot for the quoted proposition.
There is another line of authority awarding employees liquidated
damages and attorney fees where the claim involves the failure of an
employer to pay the amount of wages when due. However, in those cases
there is no discussion about the tension between frequency versus amount.
See, e.g., Sallee v. Mason, 714 N.E.2d 757, 764 (Ind. Ct. App. 1999),
trans. denied; Valadez v. R.T. Enterprises, Inc., 647 N.E.2d 331, 333 (Ind.
Ct. App. 1995); Gurnik v. Lee, 587 N.E.2d 706, 710 (Ind. Ct. App. 1992);
Baesler’s Super-Valu v. Ind. Comm’r of Labor ex rel. Bender, 500 N.E.2d
243, 249 (Ind. Ct. App. 1986).
Our reading of the statute compels the conclusion that the Wage
Payment Statute governs both the frequency and amount an employer must pay
its employee.[3] The first step in interpreting any Indiana statute is to
determine whether the legislature has spoken clearly and unambiguously on
the point in question. Rheem Mf’g Co. v. Phelps Heating & Air
Conditioning, Inc., 746 N.E.2d 941, 947 (Ind. 2001). When a statute is
clear and unambiguous, we need not apply any rules of construction other
than to require that words and phrases be taken in their plain, ordinary,
and usual sense. Id. Clear and unambiguous statutory meaning leaves no
room for judicial construction. Id.
Indiana Code section 22-2-5-1 provides that an employer “shall pay
each employee at least semimonthly or biweekly, if requested, the amount
due the employee.” I.C. § 22-2-5-1(a) (emphasis added). This section
later provides 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.” Id. (emphasis
added). If an employee voluntarily leaves employment, the section
continues, then “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 . . . .” I.C. § 22-2-5-1(b) (emphasis added). In our view, the
plain, ordinary, and usual meaning of the phrases “all wages” and “amount
due” unambiguously establishes that the legislature intended the Wage
Payment Statute to govern not only the frequency but also the amount an
employer must pay its employee. To conclude otherwise would be to read out
of the statute that which clearly exists.[4]
Another familiar canon of statutory construction supports this
conclusion as well: statutes are to be construed so as not to produce an
absurdity. Civil Rights Comm’n v. County Line Park, Inc., 738 N.E.2d 1044,
1048 (Ind. 2000). If we interpreted the statute as St. Vincent suggests,
namely: that the Wage Payment Statute governs only the frequency, then an
employer could avoid the penalty provisions of the statute by simply
tendering $1.00 biweekly or semimonthly regardless of the amount of wages
agreed to by the parties. Likewise, if the statute governed only the
amount of wages due, then an employer could avoid the penalty provisions of
the statute by tendering the entire wage agreed to by the parties on the
last day of the year. The legislature surely did not intend either result.
That the statute governs both the frequency and amount recognizes that
these two concepts are inextricably intertwined and cannot logically be
separated under the text of the statute.
II.
The Wage Claims Statute
Our conclusion that the Wage Payment Statute governs both the
frequency and amount an employer must pay its employee does not resolve the
dispute between the parties before us. This is so because another statute,
which we will refer to as the “Wage Claims Statute,” also concerns disputes
over the amount of wages due and provides for the recovery of liquidated
damages and attorney fees. According to St. Vincent, there is a lack of
clarity regarding when a claimant should proceed under the Wage Claims
Statute as opposed to the Wage Payment Statute. St. Vincent argues that in
any event Dr. Steele should have proceeded under the former.
The Wage Claims Statute provides in relevant part:
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.
I.C. § 22-2-9-3. Claimants who proceed under this statute may not file a
complaint with the trial court. Rather, the wage claim is submitted to the
Indiana Department of Labor. It then becomes “the duty of the 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.” I.C. § 22-2-9-4(a). To that
end, the commissioner “may hold hearings to satisfy himself as to the
justice of any claim, and he shall cooperate with any employee in the
enforcement of any claim against his employer in any case whenever, in his
opinion, the claim is just and valid.” Id. Further, the commissioner may
take assignments of wage claims under $800 and refer wage claims to the
Attorney General, who may then initiate a civil action on behalf of the
wage claimant or refer the wage claim to a private attorney. I.C. §§ 22-2-
9-4(b), -5. Claimants whose lawsuits have been initiated by the Attorney
General or the Attorney General’s designee are entitled to recover
liquidated damages and attorney fees as set forth in Indiana Code section
22-2-5-2. I.C. § 22-2-9-4(b).
Although both the Wage Claims Statute and the Wage Payment Statute
set forth two different procedural frameworks for wage disputes, each
statute applies to different categories of claimants. 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).
Because Dr. Steele was a current employee of St. Vincent at the time of the
wage dispute, he proceeded correctly under the Wage Payment Statute.
III.
Appellate Attorney Fees
While this case was pending on transfer, Dr. Steele filed a petition
requesting appellate attorney fees. St. Vincent did not file a memorandum
in response. In any event, the request is based on the same provision of
the Wage Payment Statute that provided the basis for attorney fees awarded
by the trial court. See I.C. § 22-2-5-2 (“[T]he court shall tax and assess
as costs in said case a reasonable fee for the plaintiff’s attorney or
attorneys.”). This statute does not expressly address whether the quoted
provision includes appellate attorney fees. However, the Court of Appeals
has held that it does include them. See Valadez, 647 N.E.2d at 333;
Johnson v. Wiley, 613 N.E.2d 446, 451 (Ind. Ct. App. 1993); Vazquez v.
Dulios, 505 N.E.2d 152, 154-55 (Ind. Ct. App. 1987). When first so holding,
the Court of Appeals relied on this Court’s opinion in Templeton v. Sam
Klain & Son, Inc., 425 N.E.2d 89 (Ind. 1981). See Vazquez, 505 N.E.2d at
154-55. In Templeton, we determined that a lien enforcement statute that
provided for the recovery of “reasonable attorney’s fees” included
appellate attorney fees because otherwise a reasonable fee for the
prosecution of the claim alone would not be a reasonable fee for those
services plus the costs of defending the judgment on appeal. Templeton,
425 N.E.2d at 95. Thus, we agree with the Court of Appeals’ resolution of
this issue – appellate attorney fees are included under Indiana Code
section 22-2-5-2. We therefore remand this cause to the trial court with
instructions to conduct a hearing to determine the amount, and the
reasonableness, of appellate attorney fees in this case.
Conclusion
We affirm the judgment of the trial court.
SULLIVAN, J., concurs.
SHEPARD, C.J., concurs with separate opinion.
BOEHM, J., concurs with separate opinion.
DICKSON, J., concurs in result.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
N. Kent Smith Lorie A. Brown
Letha S. Kramer Indianapolis, Indiana
Indianapolis, Indiana
Kenneth E. Lauter
Ryan C. Fox
Indianapolis, Indiana
ATTORNEYS FOR AMICUS CURIAE
COMMISSIONER OF INDIANA
DEPARTMENT OF LABOR
Steve Carter
Attorney General of Indiana
Jon Laramore
Deputy Attorney General
Indianapolis, Indiana
Nancy J. Guyott
J.T. Whitehead
Indiana Department of Labor
Indianapolis, Indiana
ATTORNEYS FOR AMICUS CURIAE
INDIANA STATE BUILDING &
CONSTRUCTION TRADES COUNCIL
William R Groth
Geofrey S. Lohman
Indianapolis, Indiana
IN THE
SUPREME COURT OF INDIANA
ST. VINCENT HOSPITAL AND )
HEALTH CARE CENTER, INC., )
) No. 34S02-0107-CV-329
Appellant (Defendant Below), ) in the Supreme Court
)
v. )
) No. 34A02-0005-CV-294
ROBERT J. STEELE, M.D., ) in the Court of Appeals
)
Appellee (Plaintiff Below). )
APPEAL FROM THE HOWARD CIRCUIT COURT
The Honorable Lynn Murray, Judge
Cause No. 34C01-9812-CP-951
April 22, 2002
SHEPARD, Chief Justice, concurring.
I write separately to observe that the reason treble damages can be
imposed on the employer in this case is that the court ultimately
determined that the employer’s grounds for reducing its payments to the
employee were legally unavailing. Thus, the holding of this case is that
the full amount of the employee’s earnings were the “amount due him” under
the statute. Had the employer’s grounds for withholding a part of the
employee’s wages been upheld, then the employer would have already paid the
full “amount due” and treble damages would not be available.
ATTORNEYS FOR APPELLANT
N. Kent Smith
Letha S. Kramer
Indianapolis, Indiana
ATTORNEYS FOR APPELLEE
Lorie A. Brown
Indianapolis, Indiana
Kenneth E. Lauter
Ryan C. Fox
Indianapolis, Indiana
ATTORNEYS FOR AMICUS
CURIAE COMMISSIONER OF
INDIANA DEPARTMENT OF
LABOR
Steve Carter
Attorney General of Indiana
Jon Laramore
Deputy Attorney General
Indianapolis, Indiana
Nancy J. Guyott
J.T. Whitehead
Indiana Department of Labor
Indianapolis, Indiana
ATTORNEYS FOR AMICUS
CURIAE INDIANA STATE
BUILDING & CONSTRUCTION
TRADES COUNSEL
William R. Groth
Geoffrey S. Lohman
Indianapolis, Indiana
__________________________________________________________________
IN THE
SUPREME COURT OF INDIANA
__________________________________________________________________
ST. VINCENT HOSPITAL and )
HEALTH CARE CENTER, INC., )
)
Appellant (Defendant Below), ) Indiana Supreme Court
) Cause No. 34S02-0107-CV-329
v. )
) Indiana Court of Appeals
ROBERT J. STEELE, M.D., ) Cause No. 34A02-0005-CV-294
)
Appellee (Plaintiff Below). )
__________________________________________________________________
APPEAL FROM THE HOWARD CIRCUIT COURT
The Honorable Lynn Murray, Judge
Cause No. 34C01-9812-CP-951
__________________________________________________________________
ON PETITION TO TRANSFER
__________________________________________________________________
April 22, 2002
BOEHM, Justice, concurring.
I concur in the majority opinion. I write separately to observe that
the facts of this case dramatize the point that the statute confers on all
employees the right to recover treble damages and attorney’s fees for
failure to pay wages, regardless of the employees’ circumstances. This is
perfectly understandable as applied to the vast majority of workers who are
dependent on their paychecks for their day-to-day expenses. These
employees need the money currently, not at the end of protracted
litigation, and often do not have the economic staying power to engage in a
court battle over relatively small amounts. A statute providing one party
with treble damages and attorney’s fees is a very substantial deterrent to
an employer’s playing fast and loose with wage obligations. As applied to
claims of most workers this is very understandable legislative policy. But
the “employee” who earns mid six figures should be able to fend for himself
or herself, and there seems to me to be no reason to tip the balance of
settlement value of any dispute so dramatically against the employer. The
statute as written requires that result for all employees. I write simply
to point out what seems to me to be an unnecessary and perhaps unfair
skewing of the negotiation as applied to highly compensated executives and
professionals.
-----------------------
[1] See Medicare and Medicaid Programs; Physicians’ Referrals to
Health Care Entities With Which They Have Financial Relationships, 63 Fed.
Reg. 1659, 1680 (proposed Jan. 9, 1998). The proposed regulation was
superceded January 4, 2001, by another regulation which allows the
compensation at issue here. See Medicare and Medicaid Programs; Physicians’
Referrals to Health Care Entities With Which They Have Financial
Relationships, 66 Fed. Reg. 856, 881 (Jan. 4, 2001) (to be codified at 42
C.F.R. pt. 411, 424).
[2] Before the Court of Appeals, St. Vincent argued that it had a
good faith basis for withholding a portion of Dr. Steele’s earned wages
because of the Stark II legislation and the HFCA proposed regulation. The
Court of Appeals observed that there is no good faith exception to the Wage
Payment Statute. St. Vincent, 742 N.E.2d at 1035. On transfer, St.
Vincent does not challenge that portion of the Court of Appeals’ decision,
and we express no opinion on the issue.
[3] As written, this statute applies equally to highly compensated
professionals as well as “the vast majority of workers who are dependent on
their paychecks for their day-to-day expenses.” Slip op. at 2 (Boehm, J.,
concurring). Apparently recognizing that the two groups do not stand on
equal footing, a number of states have excluded certain classes of
employees from the application of their wage payment statutes. See, e.g.,
D.C. Code Ann. § 32-1301 (excluding persons employed in a bona fide
executive, administrative, or professional capacity from its payment of
wages statute); Md. Code Ann., Labor and Employment § 3-502 (setting forth
a different set of rules in its payment of wages statute for
administrative, executive, or professional employees); Mass. Gen. Laws Ann.
ch. 149, § 148 (setting forth a different set of rules in its payment of
wages statute for employees engaged in a bona fide executive,
administrative, or professional capacity); Miss. Code Ann. § 71-1-35
(excluding individuals employed in a bona fide executive, administrative,
or professional capacity from its payment of wages statute); N.Y. Labor Law
§ 191 (confining its payment of wages statute to manual workers).
[4] Conceding that the plain language of the statute cuts against its
position, St. Vincent argues that the Wage Payment Statute cannot possibly
govern the amount an employer must pay its employee because the statute
does not establish what that wage is or how it is to be calculated. Reply
in Support of Appellant’s Petition to Transfer at 1-2. However, as long as
an employer is in compliance with the applicable minimum wage laws, an
employee’s wage is a mutual decision not governed by statute. See I.C. §§
22-2-2-1 to –4. Therefore, even though the Wage Payment Statute does not
establish what that wage is or how it is to be calculated, that fact does
not affect our conclusion.