Attorney
Burke v. Port Resort
MAINE
SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 1999 ME 138
Docket: Yor-98-669
Submitted
on Briefs: September 15, 1999
Decided: September 27, 1999
Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, and CALKINS, JJ.
GREG BURKE
v.
PORT RESORT REALTY CORPORATION
ALEXANDER, J.
[¶1] Port Resort Realty Corp. appeals from the judgment entered in the Superior
Court (York County, Humphrey, J.) in favor of Greg Burke. The court ruled that
Port Resort: (1) breached its employment agreement with Burke; (2) violated 26
M.R.S.A. § 626 (Supp. 1998); and (3) was subject to the statutory damages and
forfeitures authorized by 26 M.R.S.A. §§ 626 & 626-A (Supp. 1998). Port Resort
contends that the court erred in: (1) finding that Burke made a demand for
payment that satisfied section 626; (2) finding that Burke did not refuse the
payment offered by Port Resort; and (3) imposing statutory penalties. Finding no
error in the well reasoned opinion of the trial court, we affirm.
I. CASE HISTORY
[¶2] We previously visited the issues in this case when, on Burke's appeal, we
vacated a summary judgment that had been entered by the court (Fritzsche, J.)
declining to find a violation of 26 M.R.S.A. § 626. See Burke v. Port Resort
Realty Corp., 1998 ME 193, 714 A.2d 837.
[¶3] After trial on remand the court (Humphrey, J.) found the facts, which were
largely undisputed, as follows:
Defendant, Port Resort Realty Corp. ("Port Resort"), was the operator of a
business known as The Shawmut Inn. Defendant, Ralph Bruno ("Bruno"), was the
president of Port Resort.
In October 1994, Plaintiff ("Burke") was hired by Port Resort as general manager
and director of marketing and sales. Burke entered into a written employment
agreement with Port Resort which was subsequently modified by a written
addendum. The agreement as amended provided for Burke to receive a 1% commission
based on revenue received from all groups visiting The Shawmut Inn and a 3%
commission based on revenue received from those groups for which Burke was the
sales person responsible for the account. The amended agreement addressed the
payment of Burke's commissions upon the cessation of his employment with Port
Resort, stating:
It should be noted that should Greg [Burke] be laid off or terminated for any
reason, with or without reasonable cause, all group commissions for business "on
the books" going forward is to be estimated and paid upon departure. Otherwise,
all group commissions are to be paid in full the pay period following payment in
full by the group.
On November 17, 1995, Burke submitted his resignation, effective December 2,
1995. At the time of his resignation, Burke met with Bruno in the latter's
capacity as president of Port Resort and demanded an immediate lump sum payment
reflecting commissions for groups booked for dates subsequent to the date of his
resignation, and the cash value of the three weeks vacation to which he claimed
he was entitled. Bruno refused Burke's demand and said that Por t Resort would
follow the employment agreement and pay Burke as income from the booked events
was realized. Bruno also said that Port Resort would pay Burke 1/12 of the cash
value of his vacation time because Burke had only worked one month into his
second year at the Inn.
At a subsequent meeting between Burke and Bruno on December 2, 1995, Burke
demanded that Port Resort pay him 1/12 of the cash value of his vacation time as
Bruno had previously said was due. However, Burke continued his demand for a
lump sum payment of commission monies owed him. No payment was made at that
meeting.
Burke had no other discussions with Bruno. At trial, Burke testified that he
then assumed Port Resort would send incremental commission checks in the manner
described by Bruno and further testified that he would have accepted any such
incremental payments. However, he never communicated this sentiment to Bruno.
Rather, on December 13, 1995, Burke's attorney sent a letter to Bruno reciting
Burke's initial demand that Port Resort make an immediate lump sum payment for
commissions and three weeks vacation.
On December 14, 1995, Port Resort sent Burke a check for $62.29 and, on December
20, 1995, sent him another check for $17.17. Consistent with his trial
testimony, Burke kept both checks.{1} Aside from these two payments totaling
$79.46, Burke has not been paid for commissions due him from events at The
Shawmut Inn from 1995 through 1996 or for unused vacation pay due him.
[¶4] The parties have stipulated that the outstanding amount owed Burke is
$8,911.24, including $8,680.76 in commissions and $230.48 in vacation time.{2}
[¶5] Port Resort contended in the 1998 trial and contends here that Burke had
failed to make a proper demand for payment of his commissions and that, by
accepting but not cashing two checks totaling $79.46, he had refused to accept a
tender of wages, thus exonerating Port Resort from any violation of 22 M.R.S.A.
§ 626 (Supp. 1998).{3}
[¶6] On the demand and refusal issues, the trial court ruled as follows:
The first question then is whether Burke's demand for wages, incorrect as to the
amount and the timing of payment, vitiates Port Resort's obligation to pay in
accordance with the terms of the contract. If § 626 is to have any vitality, the
answer must be in the negative. It seems unreasonable and wrong to conclude that
a mistaken demand by an employee, who usually does not have ready access to his
own wage records, particularly at the time his employment is terminated, could
free an employer, who does have ready access to those records, from paying wages
in the timely manner required by the law.
The next question is whether on this record it can be concluded that Burke
refused to accept a tender of wages by Port Resort or so clearly and resolutely
expressed an unwillingness to accept a tender as to constitute some sort of
anticipatory refusal, thereby relieving the employer from making incremental
payments and exonerating it from any violation of 26 M.R.S.A. § 626. Again, the
answer is in the negative. Although Burke clearly made demands upon Port Resort
which did not conform to his entitlements under the employment agreement, he did
not refuse, either in words or in action, to accept any tender by his employer
that did conform. To the contrary, he accepted and retained the two modest
checks totalling $79.46.
The court therefore concluded that by failing to continue to make payments
to Burke, Port Resort was liable under sections 626 and 626-A.
[¶7] The court entered judgment in favor of Burke and against Port Resort on the
breach of contract and section 626 claims. It ordered Port Resort to: (1) pay
Burke $8,911.24 in damages plus lawful interest and the costs of the action for
breaching the employment contract; (2) pay Burke $17,822.48 plus interest at a
rate equal to the statutory post-judgment rate and $10,704.06 in attorney fees
for violating section 626; and (3) pay a forfeiture of $200 as required by
section 626-A{4} for violating section 626. The court also entered judgment for
Port Resort on quantum meruit and unjust enrichment claims. From the judgment,
Port Resort filed this appeal.
II. DEMAND
[¶8] When construing a statute, we seek to give effect to the legislative intent
by examining the plain meaning of the statutory language. See Estate of
Whittier, 681 A.2d 1, 2 (Me. 1996). If the plain meaning of the text does not
resolve an interpretative issue raised, then we consider the statute's history,
underlying policy, and other extrinsic factors to ascertain legislative intent.
See Arsenault v. Crossman, 1997 ME 92, ¶ 7, 696 A.2d 418, 421.
[¶9] It would be inconsistent with the language and the protective purpose of
section 626 to hold that an employer is excused from its requirements when an
employee does not make an error-free demand for payment. Section 626 provides
that "[a]n employee leaving employment must be paid in full within a reasonable
time after demand at the office of the employer where payrolls are kept and
wages are paid . . . ." 26 M.R.S.A. § 626. Section 626 does not define "demand,"
nor does it specify that the demand must be for the proper amount or made at a
particular time. The purpose of section 626 is to "provide a broad guarantee of
prompt payment of wages to all employees on termination." Community Telecomms.
Corp. v. Loughran, 651 A.2d 373, 376 (Me. 1994); see also L.D. 547, Statement of
Fact (115th Legis. 1991); Purdy v. Community Telecomms. Corp., 663 A.2d 25, 28
(Me. 1995); Emmanuel S. Tipon, Annotation, Validity, Construction, and Effect of
State Laws Requiring Payment of Wages on Resignation of Employee Immediately or
Within Specified Period, 11 A.L.R. 5th 715, 732 (1993).
[¶10] Here, there is no dispute that Burke met with Bruno on December 2 and
demanded payment and that he, through his lawyer, sent a letter on December 13
reiterating his demand. Port Resort does not dispute that it owed Burke
commissions and vacation pay.
[¶11] Burke made a sufficient demand for payment by satisfying the
only requirements detailed by section 626-(1) he made a demand; (2) at the place
specified by the statute. Port Resort cannot seriously dispute that it was on
notice, soon after Burke's termination, that he wanted to be paid his
contractual commissions and vacation time. The trial court did not err in
finding that Burke satisfied the demand requirement of section 626.
III. ACCEPTANCE OR REFUSAL OF TENDER
[¶12] Port Resort argues that Burke refused its tender of payment by failing to
deposit or negotiate the two commission checks that he received. The trial court
concluded that:
Although Burke clearly made demands upon Port Resort which did not conform to
his entitlements under the employment agreement, he did not refuse, either in
words or action, to accept any tender by his employer that did conform. To the
contrary, he accepted and retained the two modest checks totaling $79.46.
We review factual determinations for clear error. See White v. Zela, 1997 ME 8,
¶ 3, 687 A.2d 645, 646. Whether a tender of payment has been refused is a
question of fact. See E.S. Herrick Co. v. Maine Wild Blueberry Co., 670 A.2d
944, 946 (Me. 1996) (holding that whether an accord and satisfaction exists is a
question of fact); Williams v. Ubaldo, 670 A.2d 913, 916 (Me. 1996) (holding
that whether a waiver has occurred is a question of fact).
[¶13] Section 626 does not indicate whether an employer is relieved from its
obligation to pay an employee leaving employment, if that employee rejects an
offer of tender. We need not decide that issue of law in this case, however,
because the trial court found acceptance, not rejection, of tender and Port
Resort has not demonstrated that the finding is clearly erroneous.{5}
[¶14] Port Resort presented no evidence showing that Burke refused to accept the
payments that it offered. Burke had not deposited or cashed the checks at the
time that he filed suit against Port Resort, and the checks were still valid at
that time. In addition, Burke did not return the checks to Port Resort or
indicate in any other way that he was refusing to accept this tender. Rather, he
refused to surrender the checks, retaining them without expressing dissent or
condition. Moreover, his dispute over the total amount of wages owed is not
evidence that he rejected tender of the undisputed portion of the wages. The
trial court did not err in finding that Burke did not refuse to accept a tender
of wages by Port Resort.
IV. STATUTORY PENALTIES
[¶15] Port Resort contends that the trial court erred in imposing penalties.
According to Port Resort, it was involved in a good faith dispute with Burke,
thus it did not have to pay Burke pending a resolution and did not violate
section 626.
[¶16] Unlike similar statutes in some other jurisdictions, section 626 does not
have a "bona fide dispute" exception. See, e.g., Colo. Rev. Stat. § 8-4-104
(1994); La. Rev. Stat. Ann. §§ 23:631, 632 (1998); Neb. Rev. Stat. §§ 48-1231,
1232 (1998). Section 626 requires an employer to pay at least the undisputed
wages owed regardless of whether the parties dispute the exact amount of wages
owed. See 26 M.R.S.A. § 626.
[¶17] Courts in jurisdictions that have such a statutory exception usually have
held that employers are required to pay the undisputed wages.{6}
Consequently, neither section 626 nor these cases support Port Resort's
contention that it did not violate section 626, when the amount owed is
undisputed.
[¶18] Port Resort also argues that it did not violate section 626 because the
remaining commissions that it owed were not due until after Burke filed the
lawsuit. However, an employee who is a victim of ongoing violations need not
wait until all possible violations have occurred to file a suit and obtain
relief for all violations of a similar nature that do occur.
[¶19] Port Resort finally contends that the judgment is not in the "favor of the
employee," 26 M.R.S.A. § 626-A, because the trial court found that Port Resort's
"characterization of the amount and timing of the payments owed to Burke under
the agreement was correct." Port Resort's argument is not convincing. Although
the court found that Burke's construction of the employment contract was
incorrect, it still found that Port Resort owed Burke the undisputed wages. The
judgment, therefore, was in favor of the employee on those counts relating to
the section 626 violation. The trial court did not err in imposing statutory
penalties pursuant to sections 626 and 626-A on Port Resort.
The entry is: Judgment affirmed.
________________________________________
Attorney for plaintiff:
Jens-Peter W. Bergen, Esq.
Kennebunk, Maine 04043
Attorneys for defendant:
Alan E. Shepard, Esq.
Bruce M. Read, Esq.
Hodsdon, Read & Shepard
Kennebunk, Maine 04043
FOOTNOTES******************************** {1} . At the hearing after remand,
Burke testified that he had not yet cashed the two checks and still had
possession of them. He indicated that he was merely waiting for other larger
commission checks in order to cash them all at once. {2} . That these sums are
owed has not been disputed at least since the court (Studstrup, J.) entered
judgment for this amount on December 11, 1997. {3} . Section 626 states, in
pertinent part: Title 26 M.R.S.A. § 626 (Supp. 1998) provides: An employee
leaving employment must be paid in full within a reasonable time after demand at
the office of the employer where payrolls are kept and wages are paid, provided
that any overcompensation may be withheld if authorized under section 635 and
any loan or advance against future earnings or wages may be deducted if
evidenced by a statement in writing signed by the employee. Whenever the terms
of employment include provisions for paid vacations, vacation pay on cessation
of employment has the same status as wages earned. For purposes of this section,
the term "employee" means any person who performs services for another in return
for compensation, but does not include an independent contractor. For purposes
of this subchapter, a reasonable time means the earlier of either the next day
on which employees would regularly be paid or a day not more than 2 weeks after
the day on which the demand is made. 26 M.R.S.A. § 626 (Supp. 1998). {4} . 26
M.R.S.A. § 626-A (Supp. 1998) provides: § 626-A. Penalties Whoever violates any
of the provisions of section 621 to 623 or section 626, 628, 629 or 629-B is
subject to a forfeiture of not less than $100 nor more than $500 for each
violation. Any employer is liable to the employee or employees for the amount of
unpaid wages and health benefits. Upon a judgment being rendered in favor of any
employee or employees, in any action brought to recover unpaid wages or health
benefits under this subchapter, such judgment includes, in addition to the
unpaid wages or health benefits adjudged to be due, a reasonable rate of
interest, costs of suit including a reasonable attorney's fee, and an additional
amount equal to twice the amount of unpaid wages as liquidated damages. The
action for unpaid wages or health benefits may be brought by either the affected
employee or employees or by the Department of Labor. The Department of Labor is
further authorized to supervise the payment of the judgment, collect the
judgment on behalf of the employee or employees and collect fines incurred
through violation of this subchapter. When the Department of Labor brings an
action for unpaid wages or health benefits, this action and an action to collect
a civil forfeiture may both be joined in the same proceeding. {5} . On the issue
of whether accepting but not cashing a check may be acceptance or refusal as a
matter of law, see Bogosian v. Woloohojian, 158 F.3d 1, 10 (1st Cir. 1998).
Bogosian addressed, inter alia, whether a corporation was entitled to an
abatement of interest for checks that were sent to a shareholder through her
counsel, but were never cashed or returned and remained in her attorney's
possession until they were subpoenaed. The shareholder never informed the
corporation that she intended to reject the checks or never cash them. See Id.
The court concluded that this was not a refusal of tender, finding that "since a
valid tender does stop the accrual of interest, it was obviously bad strategy
merely to hold the checks failing either to deposit them or to reject the tender
(if possible)." Id. The court, however, also found that the corporation should
have known that Bogosian did not intend to cash the checks when the overdraft
protection eventually expired and the checks remained uncashed. Consequently, it
limited the abatement of interest to the period between the delivery of the
checks and the expiration of overdraft protection. See id. Bogosian indicates
that since the checks at issue here had not yet expired when this action was
commenced, failure to deposit or return them was not a rejection of tender.
Precedents in other jurisdictions indicate that tender is only waived if the
tenderee clearly repudiates it by declaration, act, or omission. See Preload
Techs., Inc. v. A.B. & J. Constr. Co., Inc., 696 F.2d 1080, 1087 (5th Cir.
1983); Isaacs v. Caterpillar, Inc., 765 F.Supp. 1359, 1374 (C.D. Ill. 1991);
Modern Aero Sales, Inc. v. Winzen Research, Inc. (Tx. Civ. App. 1972); Beeler v.
American Trust Co., 170 P.2d 439, 441-42 (Ca. 1946); Restatement (Second) of
Contracts § 255, cmt. a (1981). In addition, acceptance can be indicated by
refusing to return payment or retaining payment without expressing within a
reasonable time any dissent or condition to it. See McGowin v. Cobb, 32 So. 2d
36, 38-39 (Ala. 1947); 86 C.J.S. Tender § 44 (1997). {6} . See, e.g., Stutes v.
Rossclaire Constr., Inc., 575 So. 2d 466, 470 (La. Ct. App. 1991) (holding no
good faith dispute existed over whether employer could not claim right of offset
because carpenter was an employee and not an independent contractor); Lee v.
Great Empire Broad. Inc., 794 P.2d 1032, 1034 (Colo. Ct. App. 1989) (holding
that future payment must be made immediately upon becoming due or the employer
becomes liable for statutory penalties); Alexander v. Brown Builders, Inc., 490
So. 2d 653, 655-56 (La. Ct. App. 1986) (holding employer was not engaged in a
bona fide wage dispute because it could have easily verified the number of days
that the employee worked); cf. Rohr v. Ted Neiters Motor Co., 758 P.2d 186, 189
(Colo. Ct. App. 1988) (refusing to assess penalties or attorney fees but
awarding wages because a genuine dispute existed as to the amount of bonus);
Landry v. Pauli's, Inc., 496 So. 2d 431 (La. Ct. App. 1986) (awarding wages and
attorney fees but not penalties when equitable defense existed and trial court
could find that good faith dispute existed regarding owed vacation wages);
Strickland v. American Pitch Pine Export Co., 71 So. 2d 338 (La. 1954) (awarding
wages without penalties to employee when employee refused to accept tender by
employer of undisputed wages ten days after employee made demand).