Mortgage Resource Professionals v. Orefice, C.A No. PC 07-3543 (R.I. Super 11/30/2009)

• Court: Rhode Island Superior Court
• Writing for the Court: Vogel
• Decision Date: 30 November 2009
• Docket Number: C.A No. PC 07-3543.
• Citation: Mortgage Resource Professionals v. Orefice, C.A No. PC 07-3543 (R.I. Super 11/30/2009), C.A No. PC 07-3543. (R.I. Super. Nov 30, 2009)
• Parties: MORTGAGE RESOURCE PROFESSIONALS v. ADELITA S. OREFICE, DIRECTOR and RHODE ISLAND DEPARTMENT OF LABOR AND TRAINING.

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MORTGAGE RESOURCE PROFESSIONALS v. ADELITA S. OREFICE, DIRECTOR and RHODE ISLAND DEPARTMENT OF LABOR AND TRAINING.

C.A No. PC 07-3543.

Superior Court of Rhode Island, Providence, Sc.

Filed November 30, 2009.

DECISION

VOGEL, J.

Mortgage Resource Professionals, Inc. ("MRP,") brings this appeal from a decision of the Department of Labor and Training ("DLT"). DLT found that MRP wrongfully withheld wages lawfully owed to Anne Nobrega ("Nobrega"). For reasons set forth in this Decision, the Court dismisses the appeal as untimely under G.L. 1956 § 42-35-15.

I Facts and Travel

MRP is a mortgage brokerage firm that employs loan officers. (Tr. at 6, May 12, 2006.) At times material hereto, Nobrega worked for MRP as a loan officer whose work focused on the preliminary stages of loan transactions. As a loan officer, she solicited and assisted borrowers seeking refinancing or new loans. Id. Most of Nobrega's involvement in the transactions ended once she arranged for a borrower to obtain the financing. She would then turn the file to an MRP underwriter for finalizing.¹ MRP does not pay loan officers for their work on a transaction until the loan is closed and funded. (Decision at 4, Nov. 27, 2006.)

MRP paid Nobrega thirty percent of the broker fee and yield spread premium as a commission with respect to all loans that she handled which were ultimately closed and funded.² (Tr. at 10, May 12, 2006.) Nobrega never signed, nor was she presented with, an employment contract embodying those terms. Id.

After an argument with her supervisors at MRP, Nobrega abruptly left the company on April 22, 2003. MRP refused to pay her commissions on any accounts that were not closed and funded by that date. Nobrega contended that she was entitled to receive commissions on loans she had handled and which were ultimately closed and funded, even if the loans were closed and funded after she had departed the company.

On May 21, 2003, Nobrega filed a complaint with DLT, seeking unpaid commissions for work she had performed on loans that were closed and funded after she had left MRP. (Applicant's Ex. 1, DLT Hearing, 06/12/06.) DLT held hearings on May 12, 2006 and August 3, 2006. The hearing officer found that MRP wrongfully withheld wages lawfully owed to Nobrega. He stated that she was entitled to receive thirty percent of the broker origination fee plus thirty percent of the yield spread premium for loans that closed and funded within thirty days of the date she terminated her employment. (Decision at 5, Nov. 27, 2006.) The hearing officer awarded Nobrega unpaid gross wages in the amount of $7,110.70, less any payments she received following the hearing, and imposed a 25% penalty on MRP of $1,777.68. In accordance with the ruling, all payments were "due within thirty days" of the decision." Id.

The hearing officer issued his written decision on November 27, 2006. On that same day, November 27, 2006, DLT mailed a certified copy of the decision to both parties and their respective attorneys. The decision contained the appeal procedures on the sixth and final page as required by § 42-35-12. It stated in bold type:

Appeal Procedures

If you are aggrieved by this agency decision, you may appeal this final decision to the Rhode Island Superior Court within thirty (30) days from the date of the mailing of this final decision pursuant to the provisions for judicial review established by the Administrative Procedures Act, specifically R.I.G.L. § 42-35-15. (Decision at 6, November 27, 2006.)

Twenty-four or twenty-five days after the decision, MRP President, Lynn Gaulin ("Gaulin") purportedly attempted to contact DLT employee Ann Breton ("Breton") by telephone to inquire about the award calculations. (Tr. at 14, DLT Reconsideration Hearing, 5/31/07.) Breton, however, supposedly was on vacation, and Gaulin claims that DLT advised her to fax over her concerns. For reasons unexplained, Gaulin waited approximately one week before sending the fax to DLT on December 28, 2006.³ (Amended Decision at 4, June 13, 2007.) Thereafter, on January 4, 2007, MRP's attorney contacted DLT by telephone and then submitted a written request for a rehearing in a letter received by DLT on January 9, 2007. Id.

In the written request, which was dated a week after the thirty day appeal period had run, MRP sought reconsideration of the decision contending that the original award miscalculated the amount owed to Nobrega and that the hearing officer overlooked pertinent evidence. MRP claimed it was not challenging the "substance of the rulings" of the original decision and that its argument would be limited to evidence and testimony presented at the original hearings. (Tr. at 6, DLT Reconsideration Hearing, 5/31/07.) MRP claimed that the original award contained commissions from loans that were funded outside of the thirty day window. Id. Of significance to the issues before this Court, MRP claimed that the hearing officer overlooked testimony and exhibits, and MRP suggested that certain credits should have been deducted from the overall commission. Id. at 7; Appellant's Exs. 2 and 3, DLT Hearing, 6/12/06. MRP asked DLT to review the original decision and to adjust the award accordingly. Nobrega objected to the request and challenged the authority of DLT to reopen the matter after the appeal period had passed. (Tr. at 10-11, DLT Reconsideration Hearing, 5/31/07.)

The hearing officer who decided the case had left DLT, and the request for reconsideration was assigned to a second hearing officer. (Tr. at 2, DLT Reconsideration Hearing, 5/31/07.) On May 31, 2007, he conducted a limited hearing to determine two issues: first whether the case should be reopened, and second, whether the evidence supported the November 27, 2006 decision of the previous hearing officer. He did not allow the parties to present any additional evidence.

At the reconsideration hearing of May 31, 2007, counsel for MRP acknowledged that he had failed to focus on issues relating to damages at the original hearing and chose instead to concentrate solely on issues of liability. In essence, MRP made a strategy decision that backfired and sought an opportunity on reargument to articulate issues it chose to ignore when the matter was first heard. MRP explained such failure by stating that "[n]ot knowing how [the original hearing officer] was going to come down on the substantive issue and without trying to prejudice our claim that Ms. Nobrega was entitled to absolutely nothing . . . we did not go through each closing sheet demonstrating what credits were awarded, nor could we anticipate what credits needed to be charged back to the loan for consideration in her commission." (Tr. at 7, DLT Reconsideration Hearing, 5/31/07.) Clearly, such strategy is fraught with danger, and nothing prevented counsel for MRP from arguing in the alternative at the first hearing. Over the objection of Nobrega, the second hearing officer permitted MRP's request to reopen the proceedings.

DLT issued an amended decision on June 13, 2007. In that decision, the second hearing officer stated that "[t]here is no question that this department did not receive a reconsideration request within the thirty (30) day period." (Amended Decision at 4, June 13, 2007.) Noting that he lacked guidance from either DLT rules or the Administrative Procedures Act (hereinafter "APA") as to the time frame for an agency to reopen a decision, the hearing officer referred to the Superior Court Rules of Civil Procedure.⁴ He cited to Super. Ct. R. Civ. P. Rule 59 and 60 and seemed to base his decision to allow MRP to reopen the case on Gaulin's failed effort to reach Breton by telephone. He noted that during that telephone call, Gaulin may have been given the impression that she had further time to seek reconsideration. The record is devoid of any factual basis for this conclusion. He alluded to the letter and telephone call received from MRP's attorney after the thirty day appeal period and concluded that "[t]hese time periods are within reason for a request for reconsideration." Id.

Although the hearing officer allowed the rehearing and "reopened" the original decision, he ultimately upheld that decision as constituting a "reasonable conclusion drawn from the evidence presented." Id. at 5. He ruled that the November 27, 2006 decision of the first hearing officer would remain in full force and effect.⁵ He informed the parties of his ruling in a so-called amended decision issued on June 13, 2007. DLT mailed a copy of that decision to both parties on that same day. Like the decision of November 27, 2006, the decision of June 13, 2007 also cited the appeal procedures set forth in § 42-35-15.

On July 13, 2007, MRP took its appeal from the adverse rulings of DLT, asserting that this Court has jurisdiction over the appeal pursuant to § 42-35-15.

II Issue

The Court reaches only one issue in determining this appeal. Nobrega contends that the appeal period began to run on November 27, 2006, not on June 13, 2007. Accordingly, Nobrega argues that the second hearing officer erred when he reopened the case and that his decision of June 13, 2007 did not extend the appeal period which had run months earlier. The Court agrees.

III

Law and Analysis

A Agency Authority To Rehear

There is no specific statutory authority authorizing an administrative agency, such as DLT, to rehear final judicial decisions. See In re Denisewich, 643 A.2d 1194, 1197 (R.I. 1994) (analyzing administrative agencies' authority to rehear cases although no specific statutory authority exists). Nonetheless, our Supreme Court has recognized that there is a general consensus between courts and scholars that administrative tribunals have the inherent power to reconsider their judicial acts. See Perrotti v. Solomon, 657 A.2d 1045, 1048-49 (R.I. 1995) (obligating retirement board to convene to reconsider applicant's pension pursuant to inherent authority); In re Denisewich, 643 A.2d at 1197-98...