Smith v. Batchelor

• Decision Date: 28 April 1992
• Docket Number: Nos. 900153,900157,s. 900153
• Citation: 832 P.2d 467
• Court: Utah Supreme Court
• Parties: 30 Wage & Hour Cas. (BNA) 1586, 121 Lab.Cas. P 35,639 Stephen R. SMITH, Jr., Plaintiff and Appellant, v. Dorothy K. BATCHELOR, Larry Peterman, and Janae Kingston, dba Movie Buffs, Defendants and Appellees. Stephen R. SMITH, Jr., Plaintiff and Appellee, v. Dorothy K. BATCHELOR, Larry Peterman, and Janae Kingston, dba Movie Buffs, Defendants and Appellants.

Page 467

832 P.2d 467

30 Wage & Hour Cas. (BNA) 1586, 121 Lab.Cas.

P 35,639

Stephen R. SMITH, Jr., Plaintiff and Appellant, v. Dorothy K. BATCHELOR, Larry Peterman, and Janae Kingston, dba Movie Buffs, Defendants and Appellees.

Stephen R. SMITH, Jr., Plaintiff and Appellee, v. Dorothy K. BATCHELOR, Larry Peterman, and Janae Kingston, dba Movie Buffs, Defendants and Appellants.

Nos. 900153, 900157.

Supreme Court of Utah.

April 28, 1992.

Stephen R. Smith, pro se.

John T. Caine, Salt Lake City, for defendants and appellees.

ZIMMERMAN, Justice:

This case is before us on appeal from the Second District Court in Davis County. Stephen R. Smith, Jr., sued his former employers, Dorothy K. Batchelor, Larry Peterman, and Janae Kingston, doing business as Movie Buffs (collectively "Movie Buffs"), charging that Movie Buffs violated both the federal Fair Labor Standards Act ("FLSA") and the Utah Payment of Wages Act ("UPWA") in refusing to pay him the back wages and overtime he had accrued before he left the company. ¹ See Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201-19 (1988 & Supp.I 1989); Utah Payment of Wages Act, Utah Code Ann. §§ 34-27-1, 34-28-1 to -13 (1988) (amended 1991). The district judge granted Smith's motion for summary judgment on his UPWA claim but denied his FLSA claim. Although Smith succeeded on his UPWA claim, the judge refused to grant him attorney fees under the UPWA, in part because Smith, an attorney whom Movie Buffs had employed for computer work, had represented himself throughout the litigation. Smith appeals both the trial court's denial of his motion for summary judgment on the FLSA claim and its refusal to award him attorney fees for his successful UPWA claim. He argues that the trial judge improperly formulated an equitable remedy that contravened the express requirements of the state and federal statutes. We agree that the trial court erred in granting summary judgment on Smith's FLSA claim and remand that claim for disposition consistent with this opinion. However, we affirm the trial court's denial of attorney fees.

In reviewing a grant of summary judgment, we state the facts in the light most favorable to the nonmoving party. E.g., Rollins v. Petersen, 813 P.2d 1156, 1158 (Utah 1991); Utah State Coalition of Senior Citizens v. Utah Power & Light, 776 P.2d 632, 634 (Utah 1989). In this case, however, there is no dispute over the facts because Movie Buffs failed to respond in a timely manner to Smith's requests for admissions, thereby admitting the facts as Smith had described them. See Utah R.Civ.P. 36(a). We will consider admissions as undisputed fact even when they apparently contradict other evidence in the record. See Mud Control Labs. v. Covey, 2 Utah2d 85, 90, 269 P.2d 854, 857-8 (1954). We therefore state the facts as drafted by Smith and admitted by Movie Buffs.

In March of 1989, Larry Peterman hired Smith to perform computer service for Movie Buffs, a video rental company with more than ten employees and stores in Utah and Wyoming. Before joining the company, Smith wrote to Peterman, describing his understanding of the terms of his employment. Although Smith characterizes this letter as an employment agreement, there was no formal written employment contract between the parties. In the letter, Smith stated that he was to be a salaried employee paid $2,000 a month. In his requests for admissions, however, he stated that he drew a wage of $11.65 an hour. Despite this discrepancy, because Movie Buffs failed to respond to Smith's requests for admissions, we accept that Movie Buffs paid Smith $11.65 an hour.

The precise nature of the work Smith performed during his tenure with Movie Buffs is far from clear. In addition to his computer work, Smith may have intended to provide Movie Buffs with legal services; however, we are uncertain if and to what degree Movie Buffs expected to enjoy Smith's legal expertise. By default, Movie Buffs admitted the following statements: First, Movie Buffs did not have Smith perform legal services; second, Movie Buffs required Smith to spend more than 50 percent of his time on nonlegal matters; third, Smith spent 90 percent of his time on computer-related work; and fourth, Smith was not hired as an employee-attorney.

Based on the admissions, we accept that Smith did not handle legal work for Movie Buffs during the course of his employment. However, Smith's letter to Larry Peterman contemplates that Smith would perform collection and other legal services for Movie Buffs as an independent contractor. Smith's letter also indicates that as their employment relationship progressed, Movie Buffs would increase Smith's wages and assign him additional duties and staff. Therefore, we cannot conclude that Smith's employment was to be confined to providing computer services, and we note that the agreement seemed to project his eventual ascension to a supervisory role within the company.

After a dispute over vacation pay, Smith left Movie Buffs, having worked a total of 790.2 hours from March 30, 1989, to August 3, 1989. Movie Buffs paid him for only 580 hours, leaving 210.2 hours' pay due. Because 188.15 of those unpaid hours were overtime hours, Smith claims that Movie Buffs owes him $3,544.80 for back wages and time and a half.

Initially, Smith did not ask Movie Buffs for the overtime compensation, making written demands under UPWA only for the $2,657.95 of back wages. ² When Movie Buffs refused to accede to his demand, Smith sued Peterman, Kingston, and Batchelor for his back wages, overtime compensation, and attorney fees, alleging violations of both the UPWA and the FLSA. We discuss each claim in turn.

First, Smith argued that Movie Buffs' failure to pay his back wages upon his leaving the company violated the UPWA. The UPWA regulates Utah employers' payment of wages to their employees. See Utah Code Ann. §§ 34-27-1, 34-28-1 to -13. When an employer takes an employee off the payroll, the employee's wages become due immediately and must be paid within twenty-four hours. If the employer fails to do so upon the employee's written demand for payment, the employee's wages continue to accrue from the date of written demand until payment is made, but no longer than sixty days. Id. § 34-28-5(1). Consequently, under the UPWA, Smith claimed both his back wages, including overtime compensation, and an additional $4,000 for the sixty days during which his wages accrued. Smith also claimed attorney fees under the UPWA's mandatory attorney fee provision, which requires the court to grant a successful plaintiff a reasonable attorney fee if the attorney recovers at least as much as the employee's original demand. Id. § 34-27-1.

As a second cause of action, Smith argued that Movie Buffs' refusal to pay him time and a half for his 188.15 overtime hours violated the Fair Labor Standards Act. For all employees not specifically exempted, the FLSA establishes the national minimum wage, sets the work week at a maximum of forty hours, and requires that employees who exceed forty hours of work per week must be paid one and one-half times their regular compensation. 29 U.S.C. §§ 206-207. Employers who refuse to pay time and a half are liable to their employees for their unpaid overtime compensation and "an additional equal amount as liquidated damages," unless the employers believed in good faith that their withholding overtime was consistent with the provisions of the FLSA. 29 U.S.C. §§ 216(b), 260. In his motion for summary judgment, Smith argued that he should recover an additional $3,544.80 as liquidated damages, plus costs and a reasonable attorney fee under the FLSA's mandatory attorney fee provision. ³ Id. § 216(b).

Judge Cornaby held that defendants had admitted by default Smith's requests for admissions and granted summary judgment on Smith's UPWA claim. Based on that evidence, he awarded Smith $3,544.80 in back pay, a sum comprised of both overtime and regular compensation, and $4,000 for the sixty days during which his regular wages continued to accrue. See Utah Code Ann. § 34-28-5(1). However, Judge Cornaby denied Smith's request for attorney fees under the UPWA, reasoning that, although the statute called for attorney fees, the $4,000 penalty was sufficient, considering "the equities in this case" and the fact that Smith was an attorney, apparently concluding that because Smith had handled the litigation himself, he had not incurred attorney fees. He also denied Smith's FLSA claim, holding, "The plaintiff cannot recover under both federal and state laws for the same loss."

In all, Judge Cornaby ordered Movie Buffs to pay Smith $7,544.80, plus costs. Movie Buffs subsequently moved to set aside the judgment or, alternatively, for permission to withdraw or amend its admissions by default. Judge Cornaby denied both motions. ⁴

Before our court, Smith attacks Judge Cornaby's denial of the FLSA claim and refusal to grant attorney fees. He argues that Judge Cornaby improperly crafted an equitable remedy that transgressed the express command of the UPWA and the FLSA. Because the FLSA does not preempt the UPWA, he argues, Movie Buffs violated both a state and a federal law and must bear the consequences of both, including their requirements of attorney fees. We agree that Judge Cornaby should not have dismissed Smith's FLSA claim and remand for disposition of that claim. We affirm both Judge Cornaby's summary judgment for Smith under the UPWA and his refusal to grant attorney fees.

We first note the applicable standard of review. Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Utah R.Civ.P. 56(c); Rollins v. Petersen, 813 P.2d 1156, 1159 (Utah 1991); Landes v Capital City Bank, 795 P.2d 1127, 1129 (Utah 1990); Utah State Coalition of Senior Citizens v. Utah Power & Light, 776 P.2d 632, 634 (Utah 1989). Because summary judgment is granted as a matter of...