Hendricks Cnty. v. Green, Court of Appeals Case No. 18A-PL-2528

Decision Date19 March 2019
Docket NumberCourt of Appeals Case No. 18A-PL-2528
Citation120 N.E.3d 1118
Parties HENDRICKS COUNTY, Indiana, et al., Appellants-Defendants, v. Gwyn L. GREEN, Appellee-Plaintiff.
CourtIndiana Appellate Court

Attorney for Appellant: Mark J. Crandley, Barnes & Thornburg, LLP, Indianapolis, Indiana

Attorneys for Appellee: Ryan P. Sink, Indianapolis, Indiana

Amicus Curiae: Probation Officers Professional Association, Fred Anthony Paganelli, Stephanie L. Grass, Thomas D. Perkins, Indianapolis, Indiana

Riley, Judge.

STATEMENT OF THE CASE

[1] Appellants-Defendants, Hendricks County, Indiana (County) and Hendricks County Courts,1 appeal the trial court's

decision on Appellee-Plaintiff's, Gwyn L. Green (Green), motion for judgment on the pleadings, concluding that Green was entitled to a cash payout of her paid-time-off (PTO) as a form or earned wages under Indiana's Wage Payment Statute at the time of her resignation as a probation officer from the Hendricks County Courts.2

[2] We affirm.

ISSUES

[3] The County presents us with two issues on appeal, which we restate as:

(1) Whether the County may decline to pay cash for unused PTO pursuant to Indiana's Wage Payment Statute and in accordance with the County's employee manual; and
(2) Whether the Wage Payment Statute waives sovereign immunity even though the Statute is silent as to whether it applies to government entities.
FACTS AND PROCEDURAL HISTORY

[4] Green worked as a probation officer for the Hendricks County Courts from October 1993 until her voluntary resignation on September 29, 2017. At the time of her resignation, Green had accrued 331 hours of unused PTO. Instead of taking the time off, she sought to recover the accumulated hours as a cash payment pursuant to the provisions of the employee manual for the Hendricks County Probation Department, which stated that "[r]egardless of notice given, upon resignation, the Department shall pay for personal time which has accrued not exceeding 420 hours." (Appellant's App. Vol. II, p. 17).

[5] The County maintains that its own employee manual which sets the policies applicable to all County employees is applicable to probation officers. Pursuant to the County's manual, employees are not granted a cash payout for PTO when they resign. Instead, "[a]ccrued PTO will only be paid out upon retirement or disability retirement to eligible employees." (Appellant's App. Vol. II, p. 87). This policy was sent to all County employees and it is undisputed that Green received a copy.

[6] On or about October 6, 2017, the Hendricks County Courts sought an appropriation from the County to pay Green's accrued and unused PTO. The County Council rejected the request, voting 7-0 to deny because "if this payout was awarded, contrary to [the County] Policy Manual, there would be a good argument for other employees to receive the same standing." (Appellant's App. Vol. II, p. 28).

[7] On November 21, 2017, Green filed a Complaint against the County and the Hendricks County Courts, seeking a cash payment of her accumulated PTO pursuant to the Indiana Wage Payment Statute. The County answered the Complaint and moved for summary judgment on February 22, 2018. Green opposed the motion for summary judgment and, on March 9, 2018, moved for judgment on the pleadings, claiming a right to her PTO payment as a matter of law. On June 11, 2018, the trial court denied the County's motion for summary judgment. On September 28, 2018, following a hearing, the trial court entered an Order concluding that Green is "adjudged to be employed by the Hendricks County Courts and entitled to compensation in the principal amount of $11,075.26."

(Appellant's App. Vol. II, p. 11). The trial court reached this conclusion holding that "The Hendricks County Courts, and not [the County] (fiscal body), sets the salary and controls the terms, condition, and privileges of Probation Officers. See Ind. Code § 11-13-1-1 [ ]; Ind. Code § 11-13-1-8 [ ]; Ind. Code § 36-2-16.5-3 [.]" (Appellant's App. Vol. II, p. 9).

[8] The County now appeals. Additional facts will be provided as necessary.

DISCUSSION AND DECISION
I. Standard of Review

[9] On appeal, the County contends that the trial court erred by granting Green's motion for judgment on the pleadings. A judgment on the pleadings pursuant to Indiana Trial Rule 12(C) attacks the legal sufficiency of the pleadings. Shepherd v. Truex , 823 N.E.2d 320, 324 (Ind. Ct. App. 2005). In reviewing a trial court's decision on a motion for judgment on the pleadings, this court conducts a de novo review. Id. We will affirm the trial court's grant of a Trial Rule 12(C) motion for judgment on the pleadings when it is clear from the face of the pleadings that one of the parties cannot in any way succeed under the operative facts and allegations made therein. Id. In addition, when we consider a motion for judgment on the pleadings, we deem the moving party to have admitted "all facts well pleaded, and the untruth of his own allegations which have been denied." Id. (quoting New Trend Beauty Sch., Inc. v. Indiana State Bd. of Beauty Culturist Examiners , 518 N.E.2d 1101, 1103 (Ind. Ct. App. 1988) ). All reasonable inferences are drawn in favor of the nonmoving party and against the movant. Id.

[10] When reviewing a Trial Rule 12(C) motion, we may look only at the pleadings and any facts of which we may take judicial notice, with all well-pleaded material facts alleged in the Complaint taken as admitted. Consol. Ins. Co. v. Nat'l Water Servs., LLC , 994 N.E.2d 1192, 1196 (Ind. Ct. App. 2013). "The ‘pleadings’ consist of a complaint and an answer, a reply to any counterclaim, an answer to a cross-claim, a third-party complaint, and an answer to a third-party complaint." Id. "Pleadings" also consist of any written instruments attached to a pleading, pursuant to Ind. Trial Rule 9.2. Id.

II. Unused PTO

[11] Indiana has established a system of governmental checks and balances that divides the authority over the courts' administration between the judiciary and the executive branches. The judiciary is an independent branch of the government and is constitutionally obligated to keep the courts open for the administration of justice. Ind. Const. art. 1 § 12. The power of the judiciary is, therefore of necessity, coequal to its duties. Knox Co. Council v. State ex. rel. McCormick , 29 N.E.2d 405, 408 (Ind. 1940). Because courts are constitutionally obligated to be open and because the operation of a probation office is a court-related function, the courts have the corresponding constitutional power to pay probation officers at a level sufficient to attract and maintain qualified personnel. Noble Co. Council v. State ex rel. Fifer , 234 Ind. 172, 125 N.E.2d 709,714-17 (1955). As such, the Indiana Legislature has determined that "probation officers serve at the pleasure of the courts that appoint them." I.C § 11-13-1-1(c).

[12] The task of adopting rules and regulations prescribing minimum standards applicable to probation officers was assigned by the Legislature to the Board of Directors of the Judicial Conference of Indiana. I.C. § 11-13-1-8(b)(2). Using a central judicial entity with special expertise to establish minimum salary levels for probation officers, rather than having separate determinations in each county, is more efficient and insures fairness and some degree of uniformity in the setting of salaries by trial courts statewide. Matter of Madison Co. Probation Officers' Salaries , 682 N.E.2d 498, 501 (Ind. 1997).

[13] However, while the power of appointment and establishment of minimum salary levels fall squarely within the province of the judiciary, our Legislature has also determined that "the salary of a probation officer shall be paid out of the county, city, or town treasury by the county auditor or city controller." I.C. § 11-13-1-1(c). "In consultation with (1) at least one (1) judge of a court or division of a court authorized to impose probation; and (2) at least one (1) probation officer; the county, city or town fiscal body shall adopt a salary schedule setting the compensation of a probation officer. The salary schedule must comply with the minimum compensation requirements for probation officers adopted by the judicial conference of Indiana under I.C. § 11-13-1-8." I.C. § 36-2-16.5-3. As such, the county, city, or town fiscal body shall fix the salary of a probation officer based on the salary schedule adopted under this chapter. I.C. § 36-2-16.5-4. "Unless otherwise specified in the salary schedule, a probation officer is entitled to the same benefits, holidays, and hours as other county, city, or town employees." I.C. § 36-2-16.5-5.

[14] Focusing on I.C. § 36-2-16.5-5's promulgation that "a probation officer is entitled to the same benefits" as other county employees, the County contends that the trial court's Order to require the County to make a cash payment of Green's PTO violates the County's policy for its employees, as the County's own employee manual unequivocally prohibits the use of County funds to pay unused PTO when—as in the case before us—an employee resigns. On the other hand, Green characterizes the PTO as a deferred compensation which, pursuant to I.C. § 36-2-16.5-5, is not regulated by the County's employee manual.

[15] "Deferred payment of compensation that accrued during an employee's tenure is a wage." Swift v. Speedway Superamerica, LLC , 861 N.E.2d 1212, 1215 (Ind. Ct. App. 2007). "Common forms of deferred compensation include various forms of PTO, pension benefits, retirement savings plans, stock options, healthcare plans, annuities, etc." Id. Unlike present compensation, which is generally provided for by contract, deferred compensation may be provided for by contract, by policy, or a combination of the two. Id. In Die & Mold, Inc. v. Western , 448 N.E.2d 44, 46-47 (Ind. Ct. App. 1983) (internal quotations omitted), which involved a dispute about vacation time, we concluded, as an issue of first impression, that

[v]acation pay is in the nature
...

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