Broward County v. Finlayson

• Decision Date: 25 January 1990
• Docket Number: No. 73475,73475
• Citation: 555 So.2d 1211
• Parties: 15 Fla. L. Weekly S39 BROWARD COUNTY, Petitioner, v. Keith FINLAYSON, et al., Respondents.
• Court: Florida Supreme Court

Page 1211

555 So.2d 1211

15 Fla. L. Weekly S39

BROWARD COUNTY, Petitioner, v. Keith FINLAYSON, et al., Respondents.

No. 73475.

Supreme Court of Florida.

Jan. 25, 1990.

John C. Copelan, Jr., County Atty., Broward County, Fort Lauderdale, and James C. Crosland and Gordon D. Rogers of Muller, Mintz, Kornreich, Caldwell, Casey, Crosland & Bramnick, P.A., Miami, for petitioner.

Paul R. Regensdorf and Stuart A. Rosenfeldt of Fleming, O'Bryan & Fleming, Fort Lauderdale, for respondents.

OVERTON, Justice.

We have for review Broward County v. Finlayson, 533 So.2d 817 (Fla. 4th DCA 1988), in which the Fourth District Court of Appeal held that an affected class of county employees claiming back pay was entitled to recover prejudgment interest from Broward County. In its opinion, the district court noted a possible conflict with the Third District Court of Appeal's decision in Sigman v. City of Miami, 500 So.2d 693 (Fla. 3d DCA 1987). We find conflict and have jurisdiction. Art. V, § 3(b)(3), Fla. Const. For the reasons discussed below, we approve the district court's decision but find that prejudgment interest on the amount recovered should start accruing on June 17, 1980, the date the first claim for back pay was made.

The relevant facts reflect that Finlayson brought a class action on behalf of herself and other emergency medical technicians (EMTs), employees of Broward County, seeking overtime pay. The EMTs worked twenty-four hours on duty followed by forty-eight hours off duty, averaging fifty-six hours per week. The county's civil service rules, written for all employees, set forth what constituted overtime. The county subsequently entered an administrative order which stated, in pertinent part: "Overtime is work beyond the normal hours of any scheduled work week. After forty (40) hours actually worked, employee will be paid at the rate of time and one-half." In 1979 and 1980, the EMTs bargained collectively for their regular compensation on the basis of a fifty-six-hour workweek and a reduction in the average hours worked per week. On March 11, 1980, the EMTs entered into a contract with the county, which provided for a regular workweek of fifty-six hours, overtime for those hours worked in excess of their scheduled shifts, and a future reduction in the regular workweek to fifty-three hours. This contract was made retroactive to October 1, 1979. On June 17, 1980, three months after the contract was entered into, Finlayson filed a grievance with the county, seeking overtime pay, straight time pay, sick leave credit, and annual leave credit for time worked in excess of forty hours per week from 1973 to September 30, 1979. This was the first time the county received notice of the EMTs' claim for overtime. Broward County administration denied the grievance, stating that it was not timely filed. Following the county's denial, Finlayson, on behalf of herself and the other EMTs, filed a notice of administrative appeal with the Fourth District Court of Appeal. She also filed a complaint in the circuit court. After filing this complaint, she voluntarily dismissed the administrative appeal. Because of the statute of limitations, the pay period for the claimed loss of overtime was reduced to the period between July 16, 1978, and September 30, 1979. The trial court initially granted a summary judgment in favor of the county; however, on appeal, the district court reversed, holding that the EMTs were entitled to proceed on their claim for overtime for those hours worked in excess of a forty-hour-week. Finlayson v. Broward County, 471 So.2d 67 (Fla. 4th DCA 1985). On remand, the parties agreed that the matter would proceed before the jury on the following special verdict question Did the annual salary received by each member of the Class constitute payment for forty (40) hours per week or fifty-six (56) hours, on average, per week?

The county argued that the EMTs had an annual pay agreement for which they were to work a normal fifty-six-hour week and any hours worked in excess of fifty-six hours would constitute overtime. On the other hand, the EMTs contended that they were entitled to overtime for that time worked between forty and fifty-six hours each week. The jury found that the EMTs' annual salary was payment for only forty hours per week. As a result, a judgment was entered providing that each class member was owed retroactive overtime at time-and-one-half the normal rate for sixteen hours per week for the applicable fourteen and one-half-month period. The amount of the judgment entered against the county was for $740,151.65 in back pay overtime wages, $534,739.74 in prejudgment interest commencing at the time the wages accrued, and $241,233.71 in attorney's fees.

On appeal, the district court affirmed, addressing only the prejudgment interest question. Relying on Pan-Am Tobacco Corp. v. Department of Corrections, 471 So.2d 4 (Fla.1984), the court held that sovereign immunity does not apply in a breach-of-contract action. It concluded that "fundamental fairness suggests that where the sovereign is liable for a debt because of a wrongful act, it is not improper to award prejudgment interest." 533 So.2d at 818. The district court did not expressly address when that interest should commence.

Although numerous issues were raised, we choose to address only the prejudgment interest issue. First, we address the claim that sovereign immunity prohibits an award of prejudgment interest against a subdivision of the state in a contract dispute. In Pan-Am Tobacco Corp., we stated:

[W]here the state has entered into a contract fairly authorized by the powers granted by general law, the defense of sovereign immunity will not protect the state from action arising from the state's breach of that contract.

471 So.2d at 5. We find that the principle set forth in Pan-Am controls and that Broward County is not protected by sovereign immunity in its contract with the EMTs.

The next question concerns whether Broward County should be required to pay prejudgment interest in these circumstances and, if so, whether the amount should date back to when the wages accrued or to when the first claim was made. In Kissimmee Utility Authority v. Better Plastics, Inc., 526 So.2d 46 (Fla.1988), we reaffirmed our decision in Argonaut Insurance Co. v. May Plumbing Co., 474 So.2d 212 (Fla.1985), and stated the general rule concerning the payment of prejudgment interest: "[O]nce damages are liquidated, prejudgment interest is considered an element of those damages as a matter of law, and the plaintiff is to be made whole from the date of the loss." 526 So.2d at 47. See also Florida Steel Corp. v. Adaptable Devs. Inc., 503 So.2d 1232 (Fla.1986). This general rule is not absolute. In Flack v. Graham, 461 So.2d 82 (Fla.1984), we refused to permit recovery of any prejudgment interest, stating: " '[I]nterest is not recovered according to a rigid theory of compensation for money withheld, but is given in response to considerations of fairness. It is denied when its exaction would be inequitable.' " Id. at 84 (quoting Board of Commissioners v. United States, 308 U.S. 343, 352, 60 S.Ct. 285, 289, 84 L.Ed. 313 (1939)). We did not recede from this principle in Argonaut Insurance or Kissimmee Utility Authority. Further, in Ball v. Public Health Trust, 491 So.2d 608 (Fla. 3d DCA 1986), the Third District Court of Appeal allowed prejudgment interest but restricted the date it commenced to the date of demand or the commencement of the lawsuit, whichever occurred first. The district court did so on equitable grounds, relying on our decision in First State Bank v. Singletary, 124 Fla. 770, 169 So. 407 (1936). As noted by these decisions, the law is not absolute and may depend on equitable considerations.

In the instant case, we hold that it would be unfair to permit the EMTs to recover interest for that period of time in which they addressed their compensation on an annual pay basis of a fifty-six-hour workweek rather than on the basis of their entitlement to overtime. The county engaged in good faith collective bargaining with the EMTs concerning the work schedule, which both parties viewed as unique among county employees. Until June 17, 1980, the county was never aware that the EMTs believed they were entitled to sixteen hours' of overtime a week. Given the circumstances in this cause, we find that it would be inequitable to allow the recovery of prejudgment interest prior to the time of the first claim for overtime pay.

Accordingly, we find that Finlayson is entitled to prejudgment interest, but that interest should be calculated from June 17, 1980, the date of the first demand for overtime compensation. We approve in part and quash in part the district court's decision, disapprove Sigman to the extent that it...