Crisman v. Determan Chiropractic, Inc., No. 22968

• Decision Date: 08 September 2004
• Docket Number: No. 22968, No. 22976
• Citation: 2004 SD 103,687 NW 2d 507
• Parties: BRUCE A. CRISMAN, Plaintiff and Appellant, v. DETERMAN CHIROPRACTIC, INC., Defendant and Appellee.
• Court: South Dakota Supreme Court

2004 SD 103

687 NW 2d 507

BRUCE A. CRISMAN, Plaintiff and Appellant, v. DETERMAN CHIROPRACTIC, INC., Defendant and Appellee.

Nos. 22968, 22976

Supreme Court of South Dakota.

Considered on Briefs on April 26, 2004

Opinion Filed September 8, 2004

JOHN K. NOONEY of Thomas Nooney Braun Solay & Bernard, Rapid City, South Dakota, Attorneys for plaintiff and appellant.

THOMAS G. FRITZ of Lynn Jackson Shultz & Lebrun, Rapid City, South Dakota, Attorneys for defendant and appellee.

GORS, Circuit Judge.

[¶ 1.] Dr. Crisman sued Determan Clinic after he was fired by Dr. Determan. Dr. Crisman appeals the denial of double damages and the reduction of attorney fees. Dr. Determan filed a notice of review appealing the determination that Dr. Crisman was the prevailing party entitled to attorney fees. We affirm and remand for findings of fact and conclusions of law on attorney fees.

FACTS

[¶ 2.] Dr. Determan owns and operates a chiropractic clinic known as Alternate Healthcare Center of the Black Hills or Determan Chiropractic, Inc., (Determan Clinic) in Rapid City, South Dakota. Dr. Crisman is a licensed chiropractor who began to work for Determan Clinic in October 1996. The relationship between Determan Clinic and Dr. Crisman was set forth in a document entitled "Employment Agreement" dated October 28, 1996, which expressly noted that it was not an employment contract.

[¶ 3.] The 1996 employment agreement provided that Dr. Crisman was an at-will employee. In a clause, inconsistent with at-will employment, the agreement also provided that the employer would give ninety days written notice prior to terminating the employee. The 1996 employment agreement included a noncompetition agreement. The 1996 employment agreement also provided that "In the event that any legal action or arbitration is filed in connection with this agreement, the prevailing party shall be entitled to all costs and reasonable attorney's fees in any such action relating to this agreement."

[¶ 4.] On January 6, 1997, Dr. Crisman and Dr. Determan signed a nine page office policy. The 1997 office policy expressly noted that it was not an employment contract. The office policy made no reference to the ninety days written notice of job termination that was found in the original 1996 employment agreement. Instead the office policy noted that all staff were at-will employees and their employment could end with or without notice at any time. The office policy expanded the noncompetition agreement from a 25 mile radius to a 50 mile radius and provided for reimbursement for training costs incurred by the Determan Clinic as damages if the noncompetition agreement was violated.

[¶ 5.] Dr. Crisman was paid on the 15th of each month. Dr. Crisman's monthly salary was $2,100 plus a percentage of the monthly receipts in excess of $7,000 (30% over $7,000, 35% over $10,400 and 40% over $14,600).

[¶ 6.] Over time Dr. Crisman and Dr. Determan lost confidence in one another.

[¶ 7.] On January 10, 2002, Dr. Determan sent a message to, "All Staff & Drs," which read:

As per our conversation today — you need to show up at our a.m. `sched review' meetings w/your planner. If you don't show up w/your planner tomorrow — you won't show up on Monday, and so on for each meeting.

Dr. Crisman had never been required to bring his planner with him to a meeting. Dr. Crisman did bring his planner to the staff meeting on January 11, 2002. When Dr. Determan asked to see it, Dr. Crisman refused, claiming it was personal property like his wallet. Dr. Determan then told Dr. Crisman that he was through and no longer worked at Determan Clinic.

[¶ 8.] On January 15, 2002, Dr. Crisman sent a letter to Dr. Determan requesting pay for work performed through Saturday, January 12, 2002, and pay for accrued vacation. On January 17th Dr. Crisman asked for his check and was told that it could not be located. Dr. Crisman filed a summons and complaint on January 17, 2002, seeking wages for December 2001 through January 12th plus accrued vacation, double damages and ninety days severance pay. The complaint also sought an accounting of receivables realized by the clinic relating to his employment as well as a declaratory judgment on the noncompetition agreement, costs and attorney fees.

[¶ 9.] Dr. Determan was deposed on March 5, 2002. When asked why Dr. Crisman was not paid, he replied, "because I have not paid him." Dr. Determan's answer, counterclaim and application for restraining order and preliminary injunction sought to enforce the noncompetition agreement in the 1996 employment agreement.

[¶ 10.] Dr. Crisman received his December wages on March 11, 2002. They were later determined to be $161.03 short. He received a partial payment for the first 12 days of January on April 30, 2002.

[¶ 11.] The trial court held that Dr. Crisman was underpaid for December by $161.03, and January by $4,357.67. The court determined that the wages for January needed to include two weeks of vacation and a percentage of receipts prorated through his vacation time. The trial court held that Dr. Crisman was the prevailing party and awarded costs of $3,365.12 and $10,000 in attorney fees.

[¶ 12.] Dr. Crisman appeals the denial of his claim for double damages and reduction of his claim for attorney fees from $35,579.50. Dr. Determan filed a notice of review of the determination that Dr. Crisman was the prevailing party entitled to attorney fees.

STANDARD OF REVIEW

[¶ 13.] The standard of review for the issue of whether the failure to timely pay wages was oppressive, fraudulent or malicious conduct is a mixed question of fact and law. Baldwin v. National College, 537 NW2d 14, 17 (SD 1995). The trial court's findings of fact are reviewed under the clearly erroneous standard and findings will not be disturbed unless this Court is left with a definite and firm conviction that an error was made. Id. Conclusions of law are reviewed de novo. Hoffman v. Olsen, 2003 SD 26, ¶7, 658 NW2d 790, 792. Statutes are interpreted de novo without deference to the trial court. Estate of Fountain v. Schroeder, 2001 SD 139, ¶6, 637 NW2d 27, 28. Mixed questions of fact and law are reviewed de novo. Id.

DECISION

Double Damages

[¶ 14.] Dr. Crisman's employment was terminated on January 11, 2002. Dr. Crisman sued on January 17, 2002. Dr. Determan did not pay Dr. Crisman's December wages until March 11, 2002, and did not pay his January wages until April 30, 2002. Both payments were less than the trial court ultimately awarded. SDCL 60-11-10 requires prompt payment of wages from an employer upon an employee's termination at the next regular pay day which was January 15, 2002, for Dr. Crisman's December 2001 wages. Dr. Crisman asked for double damages under SDCL 60-11-7 which provides:

In any action for the breach of an obligation to pay wages, where a private employer has been oppressive, fraudulent, or malicious, in his refusal to pay wages due to the employee, the measure of damages is double the amount of wages for which the employer is liable.

The trial court held that Dr. Determan's conduct was not oppressive.

[¶ 15.] "Whether conduct is oppressive is a legal conclusion." Lien v. Lien, 2004 SD 8, ¶30, 674 NW2d 816, 825; Landstrom v. Shaver, 1997 SD 25, ¶37, 561 NW2d 1, 7. A legal conclusion of oppressive conduct must be supported by the trial court's findings of fact. Baldwin, 537 NW2d at 19. In Baldwin, which was also a double damages lawsuit under SDCL 60-11-7, this Court applied the dictionary definition of oppressive as "unreasonably burdensome: unjustly severe, rigorous, or harsh." Id. In South Dakota Civil Pattern Jury Instruction 35-03 oppression is also defined as "conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights."

[¶ 16.] Here, as in Baldwin, there are no facts that support a finding that Dr. Determan's conduct was "unjustly severe, rigorous, or harsh." Baldwin, 537 NW2d at 19. Dr. Crisman argues that Dr. Determan's conduct was oppressive because he did not give a reason, or alternatively a good reason, for withholding his wages. However, Dr. Crisman sued not just to collect undisputed wages due, but for a judicial determination of the amount of wages due and for other relief. Dr. Determan, like National College in Baldwin, was "merely exercising [his] right to have a judicial determination made on the obligation" under the terms of employment. Id.

[¶ 17.] There was a genuine dispute about what Dr. Determan owed Dr. Crisman. Dr. Crisman not only sued Dr. Determan for double his December wages but also for an additional ninety days wages under the ninety days notice provision in the original 1996 employment agreement. However, the trial court held that the subsequent 1997 office policy modified the 1996 employment agreement. Consequently, Dr. Crisman was not entitled to ninety days notice and pay before separation. In addition, the monthly bonus payable to Dr. Crisman based on a percentage of the receipts was in dispute. Finally, there was a dispute over whether Dr. Crisman was entitled to vacation pay. The amounts could not be determined until the trial court developed a formula, calculated the December and January wages, and resolved the severance and vacation pay issues. Ultimately, the trial court determined that the wages for both December and January were less than the amount claimed by Dr. Crisman and greater than the amount paid by Dr. Determan. The trial court found that the need to determine a formula and to calculate¹ the wages was evidence that there was a genuine dispute. Therefore, the trial court concluded that there was no oppression. We agree that the delay in payment of the disputed wages in this case, pending a judicial determination, failed to rise to the level of oppression. The trial court did not err by denying double damages.

Attorney Fees

[¶ 18.] The 1996 employment agreement provided that:

In the event that any legal action or

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