Ravetto v. Triton Thalassic Technologies

• Decision Date: 04 March 2008
• Docket Number: No. 17792.,17792.
• Court: Connecticut Supreme Court
• Parties: W. Frederick RAVETTO v. TRITON THALASSIC TECHNOLOGIES, INC., et al. Raymond Bartko v. Triton Thalassic Technologies, Inc., et al.

941 A.2d 309

285 Conn. 716

W. Frederick RAVETTO v. TRITON THALASSIC TECHNOLOGIES, INC., et al.

Raymond Bartko v. Triton Thalassic Technologies, Inc., et al.

No. 17792.

Supreme Court of Connecticut.

Argued February 7, 2007.

Decided March 4, 2008.

Jeffrey S. Bagnell, Westport, with whom, on the brief, was Stephen P. Horner, Darien, for the appellants-appellees (plaintiffs).

William G. Ballaine, pro hac vice, with whom was Christopher G. Fretel, pro hac vice, New York City, for the appellees-appellants (defendants).

Marc P. Mercier, Manchester, filed a brief for the Connecticut Employment Lawyers Association as amicus curiae.

NORCOTT, KATZ, PALMER, VERTEFEUILLE and ZARELLA, Js.

VERTEFEUILLE, J.

This consolidated appeal¹ arises out of separate actions² brought by the plaintiffs, W. Frederick Ravetto and Raymond former employees³ of the named defendant, Triton Thalassic Technologies, Inc. (Triton), wherein the plaintiffs alleged that Triton and the defendant Barry Ressler⁴ had failed to pay them wages in accordance with the provisions of General Statutes §§ 31-71a to 31-71i, inclusive. Pursuant to General Statutes § 31-72,⁵ the plaintiffs sought to recover the unpaid wages, double damages, costs, interest and attorney's fees. Bartko also sought damages resulting from Triton's failure to repay in a timely manner a loan he made to the company from his retirement account. Ravetto's claim was tried to the court and the parties agreed to have Bartko's claim decided on the briefs. The plaintiffs now appeal and the defendants cross appeal from the judgment of the trial court, concluding that the plaintiffs were not entitled to double damages and attorney's fees under § 31-72 and that Ravetto was not obligated to repay the excess advances on unearned commissions.

In their appeal, the plaintiffs assert that the trial court improperly: (1) concluded that the plaintiffs were not entitled to double damages and attorney's fees under § 31-72; (2) failed to award the plaintiffs 12 percent prejudgment interest for unpaid wages pursuant to General Statutes §§ 31-265⁶ and 31-72; and (3) failed to award Bartko damages resulting from Triton's failure to repay his loan in a timely manner. In their cross appeal, the defendants claim that the trial court improperly concluded that Ravetto was not obligated to repay advances that he had received against unearned commissions based on the absence of any language in the employment agreement expressly requiring that Ravetto make such repayment. We affirm the judgment of the trial court.

The trial court reasonably found the following facts. Triton was founded in August, 1994, by Ressler and others, to develop and market a technology that uses a monochromatic light source to treat and control bacteria and viruses in certain fluids. In June, 2000, Bartko entered into an employment agreement with Triton, in which the parties agreed that Bartko would be paid an annual salary of $90,000 for the position of engineering manager. Bartko began his employment with Triton on August 1, 2000.

In January, 2001, Ravetto entered into an employment agreement with Triton, in which the parties agreed that Ravetto would be employed in the position of vice president of sales, for which he would be paid an annual base salary of $110,000. In addition, he would be paid a commission on product sales to certain industries. The agreement further gave Ravetto the right to take a draw against his future commissions during each pay period. Ravetto began his employment with Triton on February 1, 2001.

On September 30, 2001, Ressler met with all employees of Triton and advised them that, due to financial difficulties, Triton could not meet its payroll. He further stated that he could not ask the employees to continue working for Triton because it could not pay them. Ressler gave all employees the opportunity to resign, and four employees did so. The remaining employees, including the plaintiffs, continued working with the hope that the company would obtain the funds needed to pay them. Ressler referred to the employees who continued working without payment as employees who were working "on a deferred compensation basis." Ressler had told the remaining employees that Triton would make every effort to obtain funding to pay them, but he did not guarantee the employees that they would be paid. The plaintiffs nevertheless voluntarily chose to remain at Triton and continue working.

On January 16, 2002, during another employees' meeting, Ressler again reviewed Triton's poor financial position. He employed a power point presentation during which he informed employees that Triton could not ask them to work if it could not meet payroll obligations. The plaintiffs nevertheless continued working for Triton.

Thereafter, on March 11, 2002, Ressler convened a final employees' meeting. Triton issued a memorandum to all of its employees, informing them that: "Effective [immediately], all employees will be furloughed until further notice. On a person by person basis, we may ask some of you to provide services on an assigned, independent contractor basis." Bartko continued working for Triton on a contract basis until March 25, 2002. Ravetto did not continue his employment with Triton after March 11, 2002.

Approximately one month later, Ravetto and Bartko filed separate claims with the state department of labor seeking unpaid wages in the amounts of $88,356 and $41,725.32, respectively. The plaintiffs thereafter withdrew their complaints with the department of labor and brought these actions in the Superior Court, seeking unpaid wages, attorney's fees, costs, prejudgment interest, and double damages. Bartko's complaint also sought damages for breach of contract for Triton's failure to repay the $50,000 loan that he had made to the company.

On March 31, 2004, while the actions were pending in the trial court, Triton made payments to Ravetto and Bartko. Triton paid Ravetto his unpaid wages plus interest, less $40,000 in advances that had been paid to Ravetto that exceeded his actual commissions earned. Triton paid Bartko all of his unpaid wages plus interest. On April 4, 2005, Triton repaid Bartko the principal and interest on the loan that he had made. Prior to trial, therefore, the plaintiffs had been paid their wages, and Bartko had been paid his loan.

After the trial court consolidated the two actions, Ravetto's claim was tried to the court, and the parties agreed that Bartko's claim could be decided by the court on the briefs. The trial court concluded that: (1) the plaintiffs were not entitled to double damages and attorney's fees pursuant to § 31-72 because they failed to establish that the defendants acted with bad faith, arbitrariness or unreasonableness; and (2) with regard to the calculation of Ravetto's unpaid wages, the defendants improperly had deducted the excess advances over actual commissions because Ravetto's employment agreement did not contain any express language requiring him to reimburse the company if the advances exceeded commissions earned. This appeal and the cross appeal followed. Additional facts will be set forth as necessary.

I

The plaintiffs first claim that the trial court improperly concluded that they were not entitled to double damages and attorney's fees under § 31-72 for the defendants' failure to pay their wages in a timely manner. Specifically, the plaintiffs assert that the defendants' salary deferral plan⁷ was unreasonable as a matter of law. The plaintiffs also assert that the trial court's factual finding that the defendants did not induce the employees to remain at work, without pay was clearly erroneous. We disagree with the plaintiffs.

Section 31-72 provides in relevant part that "[w]hen any employer fails to pay an employee wages in accordance with the provisions of sections 31-71a to 31-71i, inclusive, or fails to compensate an employee in accordance with section 31-76k ... such employee ... may recover, in a civil action, twice the full amount of such wages, with costs and such reasonable attorney's fees as may be allowed by the court...." The statute provides for "a discretionary award of double damages, with costs and reasonable attorney's fees, to employees who are successful in actions against their employers for wages due." Crowther v. Gerber Garment Technology, Inc., 8 Conn.App. 254, 265-66, 513 A.2d 144 (1986) (affirming judgment of trial court awarding double damages and attorney's fees where employer unilaterally reduced employee's commission rate despite employment agreement). Although § 31-72 does not set forth a standard by which to determine whether double damages should be awarded in particular cases, "it is well established . . . that it is appropriate for a plaintiff to recover attorney's fees, and double damages under [§ 31-72], only when the trial court has found that the defendant acted with bad faith, arbitrariness or unreasonableness." (Internal quotation marks omitted.) Schoonmaker v. Lawrence Brunoli, Inc., 265 Conn. 210 269, 828 A.2d 64 (2003), quoting Sansone v. Clifford, 219 Conn. 217, 229, 592 A.2d 931 (1991).

A

The plaintiffs' claim that they were entitled to double damages and attorney's fees because the defendants' salary deferral was unreasonable as a matter of law presents a question of law. Our review of a question of law is plenary. A & M Towing & Recovery, Inc. v. Guay, 282 Conn. 434, 440, 923 A.2d 628 (2007).

The plaintiffs claim that, as a matter of law, it was unreasonable for the defendants to permit employees like the plaintiffs to continue working with the hope that they could be paid in the future if Triton obtained adequate funding. The plaintiffs assert that the defendants were obligated to terminate the employment of Triton's employees once Triton became unable to meet payroll because of financial difficulties.

We recognize that the wage statutes were designed to "[effectuate] the statutory policies of compensating...