Opinion
CV136046958S
03-01-2016
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Jane S. Scholl, J.
Introduction
This is an action instituted by the plaintiff, the State of Connecticut Commissioner of Labor, against the defendants, Dental Care of Connecticut, John F. Gallagher, Shabir Ahmed, and Gary F. Anusavice, claiming unpaid wages and civil penalties. Default judgments have been entered against Dental Care, Gallagher, and Anusavice. Trial to the court on the claims against Ahmed was held on October 27th and 28th, 2015. At that time the court heard testimony from David Wu, a dentist who contracted with Dental Care; Tina Liang, a dentist employed by Dental Care; the defendant Ahmed; Gissel Mercedes Veras, an employee of Dental Care; and Jennifer Hartnett, a wage enforcement agent for the Labor Department.
Post-trial briefs were filed on December 11th and 28th, 2015 and the plaintiff filed a reply brief on January 8, 2016.
Discussion
The Plaintiff's Burden of Proof
This is a wage enforcement action brought pursuant to General Statutes § 31-72. That statute provides: " When 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 or where an employee or a labor organization representing an employee institutes an action to enforce an arbitration award which requires an employer to make an employee whole or to make payments to an employee welfare fund, such employee or labor organization shall recover, in a civil action, (1) twice the full amount of such wages, with costs and such reasonable attorneys fees as may be allowed by the court, or (2) if the employer establishes that the employer had a good faith belief that the underpayment of wages was in compliance with law, the full amount of such wages or compensation, with costs and such reasonable attorneys fees as may be allowed by the court . . . The Labor Commissioner may collect the full amount of any such unpaid wages, payments due to an employee welfare fund or such arbitration award, as well as interest calculated in accordance with the provisions of section 31-265 from the date the wages or payment should have been received, had payment been made in a timely manner. In addition, the Labor Commissioner may bring any legal action necessary to recover twice the full amount of unpaid wages, payments due to an employee welfare fund or arbitration award, and the employer shall be required to pay the costs and such reasonable attorneys fees as may be allowed by the court. The commissioner shall distribute any wages, arbitration awards or payments due to an employee welfare fund collected pursuant to this section to the appropriate person."
In his complaint, the Commissioner claims that Ahmed, " at all times pertinent to this wage enforcement action was the owner, operator, corporate official and/or decision maker of Dental Care and had the right and authority to set the hours of work of each of the claimants and to cause their earned wages and earned overtime wages to be paid, and was the employer of the claimants . . . As an employer of the claimants, Shabir Ahmed specifically caused the earned wages and earned overtime wages to be wrongfully withheld from the claimants." Complaint, Third Count, Paragraphs 10, 11.
The plaintiff brings this wage enforcement action against the defendant Ahmed on the principles espoused by the court in Butler v. Hartford Technical Institute, Inc., 243 Conn. 454, 704 A.2d 222 (1997). There the court held that: " The trial court properly reasoned that the defendant personally was liable for the nonpayment of [the employee's] overtime wages pursuant to § 31-72 because [h]e was the president and treasurer and the person in control of the institute. The evidence at trial clearly indicated that he was solely responsible for all decisions in regard to wages. He was specifically the cause for the withholding of, and the failure and refusal to pay the overtime wages to [the employee]." (Internal quotation marks and footnote omitted.) Id., p. 458. The Court concluded that " an individual personally can be liable as an employer pursuant to § 31-72, notwithstanding the fact that a corporation is also an employer of the claimant, if the individual is the ultimate responsible authority to set the hours of employment and to pay wages and is the specific cause of the wage violation." Id., pp. 463-4.
Here, it was the plaintiffs' burden to prove, by a preponderance of the evidence, his claims. In order to satisfy the burden of proof by a preponderance of the evidence, all the plaintiff needs to have shown is that it was more likely than not that the defendant Ahmed met the standard set forth in Butler. See, Tianti v. William Raveis Real Estate, Inc., 231 Conn. 690, 702, 651 A.2d 1286 (1995).
Findings of Fact
From the evidence presented the court makes the following findings of fact: Dr. Wu is a licensed dentist. Dr. Wu, through his company Arbor, entered into a contract with Dental Care of Connecticut, Inc. in July 2011. He hired Dental Care to run a dental office in New Britain. Dental Care was to hire the employees and pay them. In November 2011 he entered into another contract with Dental Care to manage offices in Hartford and Cromwell. Dr. Wu negotiated the contracts with Gallagher. Gallagher was president of Dental Care. Anusavice was the organizer of Dental Care who solicited dentists to come under its management. Ahmed played no role in the negotiations with Dr. Wu. Under the arrangement with Dental Care, all insurance proceeds including from Medicaid were paid to Dr. Wu. He retained six per cent of those proceeds and passed the remainder onto Anusavice at Dental Care.
The court will not, as the plaintiff suggests, revisit rulings on the admissibility of evidence made in the course of trial.
Dr. Liang was one of the dentists who worked at the New Britain office. She was paid on a commission basis. If she had a problem she would go to Veras, the office manager. Gallagher and Anusavice would review her treatment plans but did not interfere with her treatment. Ahmed never represented to her that he held any title or position in Dental Care.
Ahmed was a boss, a manager, a supervisor of each of the three office managers, but not an owner or an ultimate decision maker. He made reports to Anusavice including payroll reports which Anusavice approved. Ahmed compiled the payroll information from each office and gave it to Anusavice for approval. The payroll was reviewed by Anusavice who then authorized payment of the payroll. The checks were signed by Anusavice, Ahmed never signed any checks on behalf of Dental Care. Once the payroll was approved, Ahmed sent it on to the payroll agency, Paychex. The approval of Anusavice was necessary before forwarding the payroll to Paychex for processing because neither Ahmed nor the other office managers knew if there were sufficient funds in the account to cover the payroll. Ahmed and the two other office managers were authorized to call Paychex and request that they issue the checks for the payroll. When he was away, Veras carried out the same functions. Ahmed also composed work schedules which he forwarded to Anusavice for his review.
Veras was an office manager. She did payroll and scheduled the employees. She was aware that Ahmed was not an owner of Dental Care and that he worked for Anusavice, the owner.
Anusavice would be sent daily production reports. Dr. Wu, Anusavice and Gallagher made the decisions about hiring and firing. Anusavice also determined the rate of pay of Dental Care employees. As Ahmed described it, Anusavice was a micro-manager.
On May 24, 2012 the FBI closed down the New Britain office and Anusavice was arrested. After that Ahmed sent Dr. Wu a payroll list and discussed how the employees would get paid. Dr. Wu also spoke to him about continuing the business.
Legal Conclusions
" The term employer has been defined in Butler v. Hartford Technical Institute, Inc. to encompass an individual who possesses the ultimate authority and control within a corporate employer to set the hours of employment and pay wages and therefore is the specific or exclusive cause of improperly failing to do so. Although the Butler case considers hours and wages the courts have viewed the facts as a whole to determine what level of control or authority an individual demonstrates to determine if they satisfy the statutory term employer. The issue in the cases cited as well as the instant action is whether the defendants had the ultimate authority and/or responsibility for the payment of wages." (Internal quotation marks omitted.) Binder v. Windmill Management, LLC, Superior Court of Connecticut, Judicial District of Stamford-Norwalk, Docket No. FSTX08CV106004435S, (Jan. 17, 2013, J. Brazzel-Massaro) . The plaintiff has failed to prove that the defendant Ahmed possessed such authority or responsibility.
This is unlike the situation in Petronella ex rel. Maiorano v. Venture Partners, Ltd., 60 Conn.App. 205, 210-12, 758 A.2d 869 (2000), where the Appellate Court held that the trial court had made the necessary factual findings to support its conclusion that the defendants Laskowski and Betts had the ultimate responsibility to pay the claimants' wages, and that they had failed to pay them, and therefore could be held personally liable for such failure. There the trial court found that: " Laskowski and Betts in their new positions managed, directed and ran the daily operations of Specialty Publishers, Inc., with particular emphasis on the financial operations of the company. They had complete dominion over how the moneys at Specialty Publishers, Inc., were to be spent. Gary Laskowski and Jonathan Betts in their positions as the officers of Venture Partners, Ltd., controlled and dominated Specialty Publishers, Inc., and in that position of authority at Specialty Publishers, Inc., promised to pay the claimants all wages due them. From the beginning of their involvement at the company, Laskowski and Betts assumed authority and control. Their control resulted from their specific, unencumbered dominion and control over how the moneys at Specialty were to be spent. They decided which creditors would be paid and which would not be paid. All decisions concerning the running of the company were made by them. They directed the day-to-day business of the company and decided what the responsibilities of the employees were to be. Prior to his leaving the company, Dennis Flavin, as president of Specialty, had made 95 percent of the decisions concerning the company. After [Flavin's] removal, Laskowski and Betts made 95 percent of the decisions, even to the extent of not allowing employees to open the mail. Said defendants terminated the health insurance of the employees, refused to pay the landlord back rent, fired the accountant who had worked for Specialty, hired other accountants, changed the payroll system, and failed to pay back wages of the five claimants. Although they did not pay wages for August, September, and October, they continued to promise the claimants that those wages would be paid in order to induce them to keep working. They did pay them for work they did in November and December, but fired them in December without paying them for the back wages . . . Ultimate dominion, authority and control over Specialty Publishers by Gary Laskowski, Jonathan Betts, and Venture Partners was also exhibited in ownership and signatory authority over the bank accounts in which moneys belonging to Specialty Publishers were deposited. Laskowski and Betts possessed sole signatory authority over at least two checking accounts in which moneys from Specialty were paid from and deposited to the accounts of Venture. In summary, the court finds that the three defendants namely, Laskowski, Betts, and Venture Partners were in complete control of Specialty, and that they are liable for refusing to pay wages to the claimants, especially in light of their promise to pay those wages to induce the claimants to continue working during the months of November and December." (Internal quotation marks omitted.) Id., 210-12.
Ahmed did not have control over how the money of Dental Care would be spent, how the business would be run, nor did he promise the employees that they would be paid. He did not have ultimate dominion, authority, and control over the company such as to make him personally liable for the company's failure to pay wages.
Even assuming the plaintiff proved that Ahmed was an employer under the act, which this court finds he did not, the plaintiff failed to prove the amount of wages due. Although the court allowed the plaintiff to submit a list of the amounts he claimed were due, no evidence was presented to support them. No evidence was provided as how the amounts due were calculated, based on hours worked and rates of pay, such that the court could determine the validity of the amounts claimed.
The plaintiff claims that if Ahmed is found to be a statutory employer he cannot re-litigate the amount of damages awarded against the other defendants. He argues that the liability of an individual decision maker is derivative and since Dental Care was the direct employer and liability and damages have been awarded against it, Ahmed cannot collaterally attack the determination of those issues. He cites Zarate v. Jamie Underground, Inc., 629 F.Supp.2d 1328 (2009) in support of this position. A review of that case, however, reveals it is clearly inapplicable here. There the court simply found that since the company defendant was not subject to the Fair Labor Standards Act the defendant owner and officer of the company could not be held liable under the act.
In addition, the affidavits of debt submitted in support of the motions for judgment as to the defaulted defendants contained a 122-page printout of the alleged wages due each claimant including dates for which the payments were due, the salary rate, and hours worked. See, pleading #156 . As noted above, no similar evidence was presented at trial on the claims against Ahmed.
Thus the plaintiff did not meet his burden of proof on his claims.
Conclusion
The court finds the issues for the defendant Ahmed as to claims set forth in the Third and Fifth counts of the complaint.