Lester v. Career Bldg. Acad.
| Decision Date | 03 July 2014 |
| Docket Number | Court of Appeals No. 13CA0989 |
| Citation | 338 P.3d 1054,2014 COA 88 |
| Parties | Reid LESTER, Plaintiff–Appellant, v. The CAREER BUILDING ACADEMY, a Colorado Nonprofit Corporation; and Rick Johnson, LLC, a Colorado limited liability company, d/b/a Johnson Heating and Plumbing, Defendants–Appellees. |
| Court | Colorado Court of Appeals |
David Lichtenstein, Ariel DeFazio, Denver, Colorado, for Plaintiff–Appellant
The Law Firm of Lee K. Rosenbaum, P.C., Richard E. Wootton, Colorado Springs, Colorado, for Defendants–Appellees
Sweeney & Bechtold, LLC, Joan M. Bechtold, Denver, Colorado; Lisa R. Sahli, Attorney at Law, LLC, Lisa R. Sahli, Englewood, Colorado, for Amicus Curiae Employment Lawyers Association
Sawaya & Miller Law Firm, David H. Miller, Denver, Colorado, for Amici Curiae Interfaith Worker Justice Committee of Colorado; FRESC; El Centro Humanitario Para Los Trabajadores; 9–5, National Association
of Working Women, Colorado Chapter; and Colorado Immigrant Rights Coalition
¶ 1 This case presents the issue of whether a trial court may apply the same standard in awarding attorney fees to prevailing employees and employers under the Colorado Wage Claim Act (CWCA), sections 8–4–101 to –123, C.R.S.2013. We conclude that it may not.
¶ 2 The legislative declaration contained in the 2007 CWCA amendments has been interpreted to mean that a prevailing employee is presumptively entitled to attorney fees under the CWCA. See Carruthers v. Carrier Access Corp., 251 P.3d 1199, 1208–09 (Colo.App.2010) ; see also ch. 381, sec. 1, 2007 Colo. Sess. Laws 1677. However, the legislative declaration does not contain any provision concerning prevailing employers.
¶ 3 Plaintiff, Reid Lester, appeals the trial court's order denying him attorney fees under the CWCA, and its dismissal of his claims against defendant, Johnson Heating and Plumbing (JHP), under the alter ego theory. We reverse as to the denial of attorney fees and remand the case to the trial court with instructions to reconsider Lester's fee request. We affirm as to the dismissal of Lester's claims against JHP.
¶ 4 Lester's appeal arises from a jury verdict awarding him $12,307.69 in unpaid compensation based on breach of an implied contract with defendant, The Career Building Academy (TCBA). TCBA is a Colorado nonprofit corporation that provides high school students with vocational training with an emphasis on residential construction.
¶ 5 In 2011, Lester orally agreed to work as TCBA's chief operating officer. In exchange, Rick Johnson, the founder of TCBA, promised to pay Lester an annual salary of $150,000, of which $75,000 would be paid by TCBA, and the remaining $75,000 would be paid by JHP, a business owned and operated by Johnson.
¶ 6 During the first six months of Lester's employment, TCBA paid him only twice, totaling $7884 in gross pay for wages and compensation. Lester resigned, and sent a wage demand to TCBA pursuant to section 8–4–109(3)(a), C.R.S.2013.1
¶ 7 TCBA rejected Lester's demand, contending that Lester agreed to volunteer as TCBA's chief operating officer. Lester then filed a complaint against TCBA and JHP, seeking unpaid wages and compensation, as well as penalties and attorney fees under the CWCA.
¶ 8 A jury determined that Lester had entered into an implied contract with TCBA, and returned a verdict in favor of Lester for $12,307.69 in unpaid wages and compensation. However, the trial court dismissed Lester's claim against JHP.
¶ 9 Following the jury's verdict, Lester requested that the trial court award him statutory penalties and attorney fees under the CWCA. TCBA objected, contending that the CWCA did not apply to an implied contract. The court ordered the parties to brief this issue.
¶ 10 In his brief, Lester contended that he was an employee who was owed wages or compensation under the CWCA. Relying on Carruthers, 251 P.3d at 1208–09, he asserted that section 8–4–110(1), C.R.S.2013, presumptively entitles a prevailing employee to an award of attorney fees.
¶ 11 The court agreed with Lester that CWCA applied to an implied contract; however, it denied his request for attorney fees. Specifically, the court applied the Carruthers factors used to determine an award of attorney fees to prevailing employers. The court acknowledged that Carruthers involved a different factual scenario, in which the prevailing employer, not employee, was seeking attorney fees. Nevertheless, it applied Carruthers, stating that the operative language in section 8–4–110(1) was the same for both employees and employers. After applying those factors, the court denied Lester's request for attorney fees.
¶ 12 Lester contends that the trial court erred in applying the Carruthers factors to a prevailing employee who is presumptively entitled to an award of attorney fees. We agree.
¶ 13 While we ordinarily review a trial court's denial of attorney fees for an abuse of discretion, see Anderson v. Pursell, 244 P.3d 1188, 1193 (Colo.2010), Lester's contention presents a question of statutory interpretation that we review de novo. See Carruthers, 251 P.3d at 1203 ; Madison v. Capital Co. v. Star Acquisition VIII, 214 P.3d 557, 560 (Colo.App.2009) (); Bd. of Cnty . Comm 'rs v. Kraft Bldg. Contractors, 122 P.3d 1019, 1022 (Colo.App.2005) ().
¶ 14 In interpreting a statute, we must discern and effectuate the General Assembly's intent. See Ceja v. Lemire, 154 P.3d 1064, 1066 (Colo.2007). To determine the legislature's intent, we first look to the statute's language, giving words effect according to their plain and ordinary meaning. See City & Cnty. of Denver v. Indus. Claim Appeals Office, 2014 COA 62, ¶ 10. In construing a statute's ordinary meaning, we read the “statutory scheme” as a whole to “give consistent, harmonious, and sensible effect to all parts of [the] statute.” Jefferson Cnty. Bd. of Equalization v. Gerganoff, 241 P.3d 932, 935 (Colo.2010). If we determine that the statute is unambiguous, we enforce it as written, without applying other rules of statutory construction. See Carruthers, 251 P.3d at 1203. If, however, “we determine that the statute is ambiguous in some material way, we may look to extrinsic evidence of legislative intent, including, for example, prior law, legislative history, the consequences of a particular construction, and the goal of the statutory scheme.” Id .
¶ 15 The CWCA allows an employee who has been terminated from employment to sue his or her former employer for earned wages and other compensation the employer has refused to pay. See § 8–4–109. An employee may recover wages and compensation under the CWCA if he or she complies with certain procedural steps. Carruthers, 251 P.3d at 1202. If the employee complies with those steps and the employer refuses to pay, the employee may recover penalties in addition to the unpaid compensation. Id .
¶ 16 Section 8–4–110(1), as noted, allows the court to award costs and attorney fees to the prevailing party on a CWCA claim. As relevant here, the 2007 amended statute provides:
If, in any action, the employee fails to recover a greater sum than the amount tendered by the employer, the court may award the employer reasonable costs and attorney fees incurred in such action.... If, in any such action in which the employee seeks to recover any amount of wages or compensation, the employee recovers a sum greater than the amount tendered by the employer, the court may award the employee reasonable costs and attorney fees incurred in such action.
§ 8–4–110(1) (emphasis added).
¶ 17 In Carruthers, 251 P.3d at 1202–05, the division explained the extent of the trial court's discretion in awarding attorney fees to prevailing employers. In that case, Carruthers, an employee, argued that section 8–4–110(1) allowed an award of attorney fees to a prevailing employer only when the employee's claim was frivolous, and that his claim against the employer was not frivolous. Carruthers, 251 P.3d at 1202. A division of this court disagreed, holding that the plain meaning of the word “may” gave trial courts broad discretion to award attorney fees to an employer. See id. at 1203–05. The court then identified ten factors to guide the trial court in deciding whether to award attorney fees to a prevailing employer. Id . at 1211. Those factors are: (1) the scope and history of the litigation; (2) the ability of the employee to pay an award of fees; (3) the relative hardship to the employee of an award of fees; (3) the ability of the employer to absorb the fees it incurred; (5) whether an award of fees will deter others from acting in similar circumstances; (6) the relative merits of the parties' respective positions in the litigation; (7) whether the employee's claim was frivolous, objectively unreasonable, or groundless; (8) whether the employee acted in bad faith; (9) whether the unsuccessful claim was based on a good faith attempt to resolve a significant legal question under the CWCA; and (10) the significance of the claim under the CWCA in relation to the entire litigation. Id .
¶ 18 In Graham v. Zurich American Insurance Co., 2012 COA 188, ¶¶ 27–28, 296 P.3d 347, a division of this court held in another CWCA case that a prevailing employee was eligible to receive appellate attorney fees. Thus, it remanded the issue to the trial court and instructed the court to consider the following modified Carruthers factors: (1) the scope and history of the litigation; (2) the parties' relative ability to pay and the relative hardship; (3) the relative merits of the parties' positions; and (4) whether any claim or defense was frivolous, groundless, or asserted in bad faith. Id ...
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