Programmers' Consortium v. Clark

• Decision Date: 01 July 2008
• Docket Number: No. 1317, September Term, 2007.,1317, September Term, 2007.
• Citation: 180 Md. App. 506,951 A.2d 914
• Parties: PROGRAMMERS' CONSORTIUM, INC. v. Karl CLARK.
• Court: Court of Special Appeals of Maryland

951 A.2d 914

180 Md. App. 506

PROGRAMMERS' CONSORTIUM, INC. v. Karl CLARK.

No. 1317, September Term, 2007.

Court of Special Appeals of Maryland.

July 1, 2008.

John D. Quinn of Washington, D.C., for appellant.

Barton D. Moorstein of Rockville, for appellee.

Argued before ADKINS, BARBERA, and CHARLES E. MOYLAN, JR. (retired, specially assigned), JJ.

MOYLAN, J.

On the ultimate merits, the trial process managed to resolve this case without undue difficulty. Essentially what is before us on appeal are several procedural tangles. We will attempt to untangle those procedural snarls so as to effectuate what we perceive to have been the jury's decision on the merits.

The appellee, Karl Clark, filed suit in the Circuit Court for Montgomery County against his former employer, the appellant, Programmers' Consortium, Inc., for unpaid wages. On November 22, 2006, at the end of a two-day trial, the jury returned an award of $80,000.01 in favor of the appellee. On September 27, 2006, the trial judge further ordered the appellant to pay attorney's fees in the amount of $41,100 plus costs in the amount of $2,794.17. On appeal, the appellant raises the three contentions

1. that the judge erroneously permitted the jury to render its verdict on a redundant statutory claim for unpaid wages and erroneously submitted to the jury a confusing verdict sheet;

2. that the judge erroneously awarded attorney's fees to the appellee; and

3. that the judge erroneously dismissed the appellant's claims for trespass, conversion, and punitive damages.

Factual Background

Taking, as we must, that version of the facts most favorable to the prevailing party (the appellee), there was evidence to support the following version of events. The appellee was hired by the appellant on October 14, 2003, to perform computer software sales services at a base salary of $85,000 per year. Both parties signed a written employment agreement. The appellee was to be paid, on a semi-monthly basis, a net amount, after deductions, of $3,541.67. The employment was subject to a 90-day probationary period, during which the appellee was obligated to generate nine demonstrations of the appellant's product. The appellee successfully performed during the probationary period, scheduling the requisite number of customer demonstrations.

It was during that probationary period that the appellee first became aware that the appellant was suffering financial difficulties. Several of the appellee's paychecks bounced. They were subsequently made good by the appellant, who explained that because of the nature of the business and the fact that it was a start-up company, there were sometimes difficulties with the cash flow. The appellee accepted the explanation and continued to perform services for the appellant. The appellee trusted the appellant and enjoyed working for it. After the conclusion of the 90-day probationary period, the appellee continued to work and was never advised that his compensation arrangement was being modified in any way. Specifically, he was never told that his compensation was being switched to a commission only basis. The appellee continued working on a full-time basis.

Over the course of succeeding months, the payment of the appellee's salary remained irregular and intermittent. The appellant continued to explain that it needed to close some sales and that, as it did so, the appellee would be paid. The appellee remained patient. In the months of July, October, and November of 2004, the appellee received paychecks representing essentially the monthly fraction of an annual salary of $85,000. At no time was there any suggestion that the appellee was being switched onto a "commission only" compensation basis. The "monthly" payments, however, remained sporadic, and the appellee, increasingly concerned, inquired more insistently about his paycheck. The appellant continued to explain that the cash in hand was in short supply and that the appellee should be patient.

It was in January of 2005 that the appellant initiated discussions with the appellee about a modification of their compensation arrangement. The appellant offered the appellee a base salary of $60,000 per year plus commissions after a certain threshold of sales had been passed. The suggested arrangement was unsatisfactory to the appellee, and he discontinued working for the appellant.

Procedural Background

On March 4, 2005, the appellee filed suit. The complaint consisted of two counts. The first count charged the appellant with a breach of contract, alleging the appellant's failure to fulfill its contractual obligation to pay the appellee's wages pursuant to the employment agreement. The basic damages clause requested was $80,000.01 in unpaid wages. The count also sought punitive damages, court costs, and reasonable attorney's fees.

The second count was brought pursuant to Maryland Code, Labor and Employment Article, § 3-501 et seq. That count also sought basic damages of $80,000.01, representing the unpaid wages. It also sought, pursuant to § 3-507.1(b), treble damages on the basis that the wages had been withheld "not as a result of a bona fide dispute." Both counts were based upon the same conduct by omission, the failure to pay the wages that were due. The appellee simply based his claim, as he was entitled to do, on two alternative legal predicates—a generic breach of contract claim and a statutory claim pursuant to §§ 3-505 and 3-507.1(a). The second count also included a claim for treble damages pursuant to subsection 3-507.1(b). Section 3-507.1(a) and (b) provide:

(a) In general. — Notwithstanding any remedy available under § 3-507 of this subtitle, if an employer fails to pay an employee in accordance with § 3-502 or § 3-505 of this subtitle, after 2 weeks have elapsed from the date on which the employer is required to have paid the wages, the employee may bring an action against the employer to recover the unpaid wages.

(b) Award and costs. — If, in an action under subsection (a) of this section, a court finds that an employer withheld the wage of an employee in violation of this subtitle and not as a result of a bona fide dispute, the court may award the employee an amount not exceeding 3 times the wage, and reasonable counsel fees and other costs.

(Emphasis supplied).

The Maryland Wage Payment Law

It will be helpful to put the statutory claim in historic perspective. Title 3 of the Labor and Employment Article deals generally with "Employment Standards and Conditions." Subtitle 5 thereof is the Maryland Wage Payment and Collection Law, embracing §§ 3-501 through 3-509. As Judge Battaglia pointed out in Baltimore Harbor Charters, Ltd. v. Ayd, 365 Md. 366, 380-81, 780 A.2d 303 (2001), the Maryland Wage Act was enacted by the General Assembly in 1966. Initially it conferred "enforcement duties and powers on the Commissioner of the Department of Labor and Industry," thereby giving "the State the ability to litigate wage disputes on behalf of private citizens who were suffering the abuse of non-payment of wages from their employers." With specific reference to § 3-507.1 now before us, the General Assembly, by ch. 578 of the Acts of 1993, amended the Wage Act "to provide employees with a private cause of action against employers for failure to pay wages owed to the employee upon termination of the employment relationship." 365 Md. at 383, 780 A.2d 303.

In Battaglia v. Clinical Perfusionists, Inc., 338 Md. 352, 356, 658 A.2d 680 (1995), Judge Rodowsky elaborated upon that addition of a private remedy by the aggrieved employee.

Prior to October 1, 1993 Md.Code (1991), LE § 507 was the exclusive civil enforcement mechanism in the Act. It provides for initial informal mediation by the Commissioner of Labor and Industry. Id. § 3-507(a)(1). Thereafter, with the consent of the employee, the Attorney General may bring an action on the employee's behalf, id. § 3-507(a)(2), in which "the court may award the employee an amount not exceeding 3 times the wage." Id. § 3-507(b)(1). The private remedy which Battaglia seeks to enforce was added to the Act as § 3-507.1 by Chapter 578 of the Acts of 1993, effective October 1, 1993.

(Emphasis supplied).

In Baltimore Harbor Charters, Ltd. v. Ayd, 134 Md.App. 188, 204-05, 759 A.2d 1091 (2000), aff'd, 365 Md. 366, 780 A.2d 303 (2001), Judge Adkins wrote for this Court in explaining that the "principal purpose of the private remedy provided under the Act was `to provide a vehicle for employees to collect, and an incentive for employers to pay, back wages.'" Focusing in on § 3-505, Judge Adkins pointed out that its particular purpose was to insure prompt payment of wages that were due following a termination of employment.

The Act also requires prompt payment of wages after termination, by specifying when an employer must pay wages due for work performed before termination of employment. Section 3-505 provides that "[e]ach employer shall pay an employee ... all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated."

134 Md.App. at 205, 759 A.2d 1091. For a violation of § 3-505 (as well as for a violation of § 3-502), § 3-507.1 is then the enforcement mechanism for an employee bringing a private action.

To enforce both of these provisions, the Act creates a remedy if "an employer fails to pay an employee in accordance with" either the "regular pay" requirements of section 3-502 or the "prompt pay after termination" requirements of section 3-505 ... Section 3-507.1.

Id.

"Redundant Claims" and "Inconsistent Verdicts"

Against that statutory backdrop, the appellant's first contention rings hollow. The contention is that:

The Circuit Court Erred by Permitting the Jury to Render a Verdict on a Redundant Statutory Claim for Unpaid Wages That Was Not Pled in the Complaint and by Submitting a Flawed Jury...