Tacke v. Energy West, Inc.

• Decision Date: 23 February 2010
• Docket Number: No. DA 09-0456.,DA 09-0456.
• Citation: 227 P.3d 601,2010 MT 39,355 Mont. 243
• Parties: Delores TACKE, Plaintiff and Appellee, v. ENERGY WEST, INC., Defendant and Appellant.
• Court: Montana Supreme Court

227 P.3d 601

2010 MT 39

355 Mont. 243

Delores TACKE, Plaintiff and Appellee, v. ENERGY WEST, INC., Defendant and Appellant.

No. DA 09-0456.

Supreme Court of Montana.

Submitted on Briefs January 13, 2010.

Decided February 23, 2010.

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For Appellant: Mark F. Higgins; Ugrin, Alexander, Zadick & Higgins, P.C.; Great Falls, Montana, Richard N. Selby, II; Dworken & Bernstein Co., L.P.A.; Painesville, Ohio.

For Appellee: Elizabeth Best; Best Law Offices, P.C.; Great Falls, Montana, Howard F. Strause; Attorney at Law; Great Falls, Montana.

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Energy West, Inc. appeals from a jury verdict and subsequent District Court orders entering a judgment in favor of its employee, Delores Tacke, for overtime wages, liquidated damages, costs, and attorneys' fees under the Fair Labor Standards Act (FLSA). We affirm.

¶ 2 Energy West presents five issues on appeal, which we restate as follows:

¶ 3 1. Did the District Court err in denying Energy West's motions for summary judgment and directed verdict regarding Tacke's status as an exempt employee for purposes of overtime compensation under the FLSA?

¶ 4 2. Did the District Court err in awarding liquidated damages to Tacke?

¶ 5 3. Did the District Court err in awarding attorneys' fees to Tacke without requiring Tacke's counsel to provide contemporaneous time records?

¶ 6 4. Did the District Court err in awarding costs pursuant to FLSA instead of the Montana costs statute?

¶ 7 5. Did the District Court err in admitting Tacke's exhibits 2, 3, 4, and 13 over Energy West's objections?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 8 Tacke began work for Energy West in 1970 and held various positions within the company during her more than thirty-year career. Tacke filed suit against Energy West to recover overtime wages she claimed she had earned between September 15, 2002, and July 15, 2005.

¶ 9 During those years, Tacke worked as the Supervisor of the Credit and Collection Department, a position for which she received a salary and was classified by Energy West as an exempt employee. Tacke's exempt classification meant she was not entitled to receive overtime wages in addition to her salary.

¶ 10 In 2004, Tacke and other Energy West employees attended a wage and hour seminar in Billings. The seminar spurred several management employees to question Tacke's classification as an exempt employee. Energy West's Human Resources Department advised Kurt Baltrusch, Director of Operations and Tacke's direct supervisor, of the potential error, and Baltrusch investigated the matter further.

¶ 11 Baltrusch testified that he sought advice from John Allen, who was both corporate counsel and the Human Resources Officer for Energy West. Allen instructed Baltrusch to ask Tacke to prepare a written list of her duties. Allen also provided Baltrusch a checklist to aid in determining whether Tacke should be classified as an exempt or nonexempt employee. Tacke provided a listing of her duties and the percentage of her time expended on each duty. After reviewing the list, Baltrusch testified that he again spoke with Allen and, although testimony was unclear about whether the two relied upon either the "executive" or "administrative" exemption set forth in law, both agreed that Energy West should reclassify Tacke as a non-exempt employee entitled to receive overtime compensation. Baltrusch testified he also spoke with others about the issue, including Energy West CEO David Cerotzke. Cerotzke initially disputed Baltrusch's conclusion but eventually allowed Baltrusch to reclassify Tacke as non-exempt.

¶ 12 On June 30, 2005, Baltrusch wrote a letter to Tacke informing her that Energy West was reclassifying her as non-exempt. The letter provided, in relevant part: "For some time there has been a question on your employment status, that is whether you are exempt or non-exempt for overtime. From my standpoint, you are a non-exempt employee and must be paid when you work extra hours, that is, over 40 hours each week." Tacke testified that she discussed the details of the letter with Baltrusch and Allen, but that the issue of past uncompensated overtime was not resolved.

¶ 13 Tacke filed suit against Energy West in September 2005 in the Eighth Judicial District Court to recover claimed overtime compensation. After Tacke filed suit, Energy West reversed its decision to classify her as non-exempt, returning her to exempt status.

¶ 14 The District Court denied cross-motions for summary judgment, and the case proceeded to a jury trial. On November 14, 2008, the jury returned a special verdict in favor of Tacke for $35,220.00 in uncompensated overtime wages. The jury did not, however, find that Tacke proved by a preponderance of the evidence that Energy West's failure to pay overtime was willful.

¶ 15 The District Court entered a judgment on January 15, 2009, awarding Tacke $35,220.00 for uncompensated overtime wages, an additional $35,220.00 in liquidated damages, and $4,958.73 in costs. On July 21, 2009, the District Court awarded Tacke an additional $4,372.10 in expert witness fees, $1,147.10 for travel expenses for Attorney Howard Strause, and attorneys' fees of $95,737.50 for Strause and $90,675.00 for Elizabeth Best. Tacke obtained a total final judgment against Energy West for $267,330.43. Energy West appeals.

STANDARD OF REVIEW

¶ 16 We review the District Court's denial of motions for summary judgment and directed verdict de novo. Tucker v. Farmers Ins. Exch., 2009 MT 247, ¶ 23, 351 Mont. 448, 215 P.3d 1 (citation omitted); McKay v. Wilderness Dev., LLC, 2009 MT 410, ¶ 26, 353 Mont. 471, 221 P.3d 1184 (citation omitted). When considering a summary judgment motion, a court may not "make findings of fact, weigh the evidence, choose one disputed fact over another, or assess the credibility of witnesses." Anderson v. Schenk, 2009 MT 399, ¶ 2, 353 Mont. 424, 220 P.3d 675. The court may only "examine the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits to determine whether there is a genuine issue as to any material fact relating to the legal issues raised and, if there is not, whether the moving party is entitled to judgment as a matter of law on the undisputed facts." Andersen, ¶ 2 (citing M.R. Civ. P. 56(c); Corporate Air v. Edwards Jet Ctr., 2008 MT 283, ¶ 28, 345 Mont. 336, 190 P.3d 1111). Similarly, a motion for a directed verdict is "proper only when there is a complete absence of any evidence to warrant submission to a jury." Ryan v. City of Bozeman, 279 Mont. 507, 510, 928 P.2d 228, 229-30 (1996) (citation omitted).

¶ 17 We review the District Court's award of attorneys' fees, costs, and evidentiary rulings for an abuse of discretion. In re Marriage of Cameron, 2009 MT 302, ¶ 17, 352 Mont. 375, 217 P.3d 78 (citation omitted); Ritchie v. Town of Ennis, 2004 MT 43, ¶ 8, 320 Mont. 94, 86 P.3d 11 (citation omitted); Malcolm v. Evenflo Co., 2009 MT 285, ¶ 29, 352 Mont. 325, 217 P.3d 514 (citation omitted).

DISCUSSION

¶ 18 1. Did the District Court err in denying Energy West's motions for summary judgment and directed verdict regarding Tacke's status as an exempt employee for purposes of overtime compensation under the FLSA?

¶ 19 Energy West argues Tacke provided no facts establishing that she fell outside the administrative exemption to the FLSA and the District Court therefore erred in denying its motions for summary judgment and directed verdict. Tacke counters that she indeed presented evidence that her work did not qualify for the administrative exemption and that Energy West failed to show, as a matter of law, that she fit within the administrative exemption.

¶ 20 In 1938, Congress passed the FLSA "to prevent the use of unfair trade practices in interstate commerce leading to `labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers....'" Stewart v. Region II Child and Family Servs., 242 Mont. 88, 94, 788 P.2d 913, 917 (1990) (citation omitted). The FLSA requires employers to pay employees overtime compensation for hours worked in excess of forty hours per week. 29 U.S.C. § 207(a)(1). The FLSA provides exemptions for certain executive and administrative employees, but employers bear the burden of proving that the employee fits "plainly and unmistakably within the exemption's terms." Mont. Public Employee's Assoc. v. Mont. Dept. of Transp., 1998 MT 17, ¶ 11, 287 Mont. 229, 954 P.2d 21 (citing Spradling v. City of Tulsa, 95 F.3d 1492, 1495 (10th Cir.1996); Aaron v. City of Wichita, 54 F.3d 652, 657 (10th Cir.1995); Reich v. Wyo., 993 F.2d 739, 741 (10th Cir.1993)).

¶ 21 The administrative exemption relied upon by Energy West applies if three elements exist.¹ First, the employee must be "compensated on a salary or fee basis at a rate not less than $455.00 per week ... exclusive of board, lodging, or other facilities." 29 C.F.R. § 541.200(a)(1). Second, the employee's "primary duty" must be "the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers." 29 C.F.R. § 541.200(a)(2). "To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business...." 29 C.F.R. § 541.201(a). Third, the employee's "primary duty" must include "the exercise of discretion and independent judgment with respect to matters of significance." 29 C.F.R. § 541.200(a)(3). Such discretion or independent judgment must be "more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources." 29 C.F.R. § 541.202(e). To aid in applying these three elements, the regulations provide examples of positions that qualify for the administrative exemption. 29 C.F.R. § 541.203; see...