Opinion
CA No. 99C-11-205-JEB
Submitted: January 31, 2002
Decided: July 8, 2002
Decision after Trial.
James S. Green, Esquire, Attorney for Plaintiff.
Joseph J. Longobardi, III, Esquire, Attorney for Defendants.
This is the Court's decision following trial on Plaintiff Francis Kutney's action for unpaid compensation against his former employers, Defendants First Choice Health Care, Inc. and Med Plus Management, Inc. Plaintiff contends that he was an employee of Defendants, Defendants contend that Plaintiff was an independent contractor.
Although the parties disagree about most of the factual questions, certain facts are undisputed. Plaintiff worked as Medical Director of First Choice Health Care from February 1997 until he resigned on June 30, 1999. From 1997 until the end of 1998, he was an employee of First Choice for purposes of the Wage Payment and Collection Act ("the Wage Act"). In January 1999, the terms of his employment changed, but a written contract was never completed. Most other facts are in contention.
Title 19 Del. C. § 1101-§ 1115.
Plaintiff argues that he was an employee of First Choice within the meaning of the Wage Act from January 1999 until he left his job on June 30, 1999, and is therefore entitled to full relief under the Act. Defendants concede that Plaintiff was an employee under the Act from 1997 until the beginning of 1999, but argue that he became an independent contractor in January 1999, when negotiations for a new contract failed. Defendants emphasize the undisputed facts that Plaintiff received straight checks and used his own equipment in 1999. Defendants concede that, based on an oral understanding between Plaintiff and Saggese, Plaintiff was entitled to receive $2000 per week for his work in June 1999. However, Defendants argue that Plaintiff did not work the last two weeks in June and that there was no agreement as to additional wages for special services or vacation time.
The Wage Act was enacted by the General Assembly to provide payment of employees' wages and to enforce collection. It also provides for a penalty in an amount equal to the amount of the outstanding wages, if the employer has withheld pay from an employee without reasonable grounds. Under 19 Del. C. § 1101(a)(4), an "employee" is "any person suffered or permitted to work by an employer under a contract of employment either made in Delaware or to be performed wholly or partly therein." The legislative intent was to have the courts decide, on a case-by-case basis, whether a person is an employee for purposes of the Act. There are three criteria to be considered in such a determination: (1) whether the employer retained control over the means and methods of doing the work; (2) whether the person was taxed like an employee; and (3) whether other benefits consistent with a standard employment contract were provided.
Rypac Packaging Machinery Inc. v. Poges, 2000 WL 567895 at *13 (Del.Ch.) (citing State of Delaware v. Planet Ins. Co., 321 A.2d 128, 133 (Del.Super. 1974)).
Title 19 Del. C. § 1103(b).
Fairfield Builders, Inc. v. Vattilana, 304 A.2d 58, 60 (Del. 1973).
Id.
In the case at bar, the parties dispute who controlled Plaintiff's work. At trial, Saggese testified that neither he nor anyone else at First Choice exercised any control over Plaintiff's duties and responsibilities. Saggese stated that Plaintiff set his own hours and scheduled his own patients. Plaintiff asserts that First Choice instructed him as to the days, hours and locations of his work. In support of this position, he points to the contract Saggese offered him in January 1999, which reflects four, 7-hour work days at two different office locations. However, Plaintiff never accepted this contract, and his reconstructed calendars do not conform to the suggested schedule. Plaintiff also asserts that First Choice employees did his scheduling for him, but no witnesses testified to the manner in which Plaintiff's appointments were set up or whether Plaintiff specified which days he would be available.
Even if employees handled scheduling for Plaintiff, staff support does not constitute supervision or oversight, and does not establish that an employer has retained control over an employee, unless the supervisor dictates the schedule. Nothing in the record suggests that Saggese dictated Plaintiff's schedule. The parties agree that Plaintiff diagnosed patients and prescribed their treatment plans without any oversight. Furthermore, in 1999, Plaintiff used his own EMG equipment for which he was not reimbursed by Defendants. He saw patients according to his own availability and was not overseen by Saggese or any other individual at First Choice.
Delaware courts have recognized that whether a worker supplies his own instrumentalities is a factor that may be considered in determining whether the worker is an employee or an independent contractor. Fisher v. Townsend, Inc., 695 A.2d 53, 59 (Del. 1997); Miller v. Preston, 1998 WL 733191, at **4.
Based on the evidence presented, the Court finds that Plaintiff maintained active control over his work.
The second factor to be considered is whether the person was taxed like an employee. The parties agree that Plaintiff was issued straight checks without tax deductions for his 1999 work. Plaintiff asserts that Saggese suggested this change and that the testimony of Dana May Downing corroborates this assertion. Saggese testified that Plaintiff requested this form of payment. The only relevant fact is that during 1999 Plaintiff was offered and accepted direct, non-payroll checks that did not make deductions for taxes or other withholdings.
The third factor is whether Plaintiff was provided with the benefits typically provided to an employee. The parties agree that Defendants provided Plaintiff with a vehicle, automobile insurance and malpractice insurance. The record is silent as to health insurance, which means that none was provided. As to vacation, the only controversy seems to be whether Plaintiff could carry over vacation days from one year to the next. However, there is no evidence as to how much vacation Plaintiff could take. The Court finds that, although Defendants did provide Plaintiff with certain benefits, this factor alone is not sufficient to establish that Plaintiff was an employee within the meaning of the Wage Act.
As this Court has previously stated, an independent contractor is one who has agreed to work in an independent manner, is accountable only for the results obtained and is not subject to the control or supervision of the employer. In this case, Plaintiff retained control over his work and was paid non-payroll checks that did not withhold taxes or other deductions. For these reasons, the Court finds that Plaintiff, despite having received certain benefits from Defendants, was an independent contractor for purposes of the Wage Act from January 1999, when the employment relationship indisputably changed, until June 1999, when Plaintiff quit. Therefore he is not entitled to any relief under the Wage Act.
Miller v. Preston Trucking, 1998 WL 733191 at ** 4 (Del.Super.) (citing Weiss v. Security Storage Co., 272 A.2d 111, 114 (Del.Super. 1970)).
The parties concede that in January 1999 Plaintiff and Saggese agreed that Plaintiff would be paid $2000 per week. They dispute when this agreement started and which day was Plaintiff's last day of work. They also dispute whether Plaintiff is entitled to payment for vacation time and special services.
The evidence as to the beginning date of the $2000 per week wage is scant. However, Plaintiff's Exhibit at Tab 5 shows that in January 1999 he worked 42 hours for $75 per hour, totaling $3150. He was paid a total of $3612 for January and is therefore not owed any additional hourly wage for January. This concession eliminates the need to decide the exact start date of the agreement. For both February and March, Plaintiff was paid $7000 for four weeks' work, and therefore entitled to an additional $1000 for each of those two months. Plaintiff was paid the full $8000 for April, and he was overpaid $336 in May. (Plaintiff credited this amount against his special services fees, which are addressed below.) Plaintiff's calendars also show that in May 1999 Plaintiff was offered and accepted a biweekly wage of $3850, or $1925, instead of $2000 per week.
In June, Defendants stopped payment on two checks to Plaintiff for $3850, resulting in a $16.00 bank overdraft fee charged to Plaintiff's account. Defendants allege that Plaintiff abandoned his practice and that his last day of work was June 17, 1999. Plaintiff asserts that he worked through the end of June and also seeks punitive damages for the $16.00 overdraft fee. As to Plaintiff's final day of work, the Court finds that Plaintiff is entitled to his weekly wage of $1925 through the end June 1999, as indicated in his letter of resignation, dated June 15, 1999. He is also entitled to recoup the $16 bank overdraft fee but not to punitive damages. For weekly services, Plaintiff is awarded $9716.00.
See E.I. DuPont de Nemours Co. v. Pressman, 679 A.2d 436, 445 (Del.Supr.) (noting that the goal of contract law is compensation for losses resulting from the breach and that punitive damages are not recoverable for breach of contract unless the conduct also amounts independently to a tort).
As to vacation, Defendants do not assert that Plaintiff was not entitled to vacation but merely argue that Plaintiff could not carry over vacation from 1998 into 1999. Plaintiff's Exhibit 5 shows that he took eight days of vacation in May 1999 and was apparently paid for them. He claims that he is entitled to payment for four more vacation days which he did not take, but he has not offered any evidence to support this contention. The Court finds that Plaintiff is not entitled to compensation for vacation.
Plaintiff's special services included EMG's, trigger point injections and depositions that he gave in his capacity as medical director of First Choice. The record shows that Plaintiff received payment for depositions, and Defendants do not dispute this contention. Plaintiff's Exhibit at Tab 17 charges Defendants $1500 for a deposition regarding Rashawn King, but Plaintiff's Exhibit at Tab 19 presents a check dated October 20, 1999, made out to "Dr. Francis Kutney" and endorsed as a deposit into First Choice's account. Plaintiff is entitled to this fee, as well as any other outstanding deposition fees.
As to EMG's and injections, Defendants cannot dispute that Plaintiff was paid for services which were paid by insurance companies because Defendant's Exhibit 2, Tab 11 verifies this fact, as does the testimony of Dana Downing, office manager at First Choice during Plaintiff's tenure. The Court finds that Plaintiff is entitled to each $200 EMG fee and each $20 injection fee for which First Choice has been reimbursed by insurance carriers. The record in its current form shows payments made through June 1999, but Defendants are liable to Plaintiff for any fees covered by insurance carriers since that date.
For the reasons stated herein, judgment is entered for Plaintiff together with interest from June 30, 1999. The parties are to present and order on notice.
It Is So ORDERED.