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Barnhart v. Compugraphic Corp.

February 6, 1991

MATTHEW BARNHART AND DONALD MCLEAN, APPELLANTS
v.
COMPUGRAPHIC CORPORATION, APPELLEE



On Appeal From the United States District Court for the Eastern District of Pennsylvania; D.C. Civil Action No. 88-8441.

Mansmann, Scirica, Circuit Judges. A. Leon Higginbotham, Jr., Senior Circuit Judge.

Author: Higginbotham

Opinion OF THE COURT

HIGGINBOTHAM, Senior Circuit Judge

This case presents the appeal of the district court's order and judgment dated July 23, 1990 which denied appellant's motion for an award of reasonable attorney's fees and costs. The questions for decision before us are 1) whether the finding of a good faith dispute under the Pennsylvania Wage Payment and Collection Law ("WPCL"), 43 Pa. Stat. Ann. tit. 43, §§ 260.9, 260.10 et seq. (Purdon 1964 & Supp. 1990), precludes a debtor from collecting attorney's fees when that debtor has been awarded damages for past due wages; and 2) whether appellants have complied with Fed. R. Civ. P. 52(a) and 59(e) and Rule 20(c) of the Local Rules of Civil Procedure for the United States District Court for the Eastern District of Pennsylvania. Because we believe that the district court improperly interpreted the Pennsylvania Wage Payment and Collection Law ("WPCL") on the issue of attorney's fees and costs, and because we believe that the plaintiffs below complied with the applicable procedural rules, we will reverse.

I.

Plaintiffs-Appellants, Matthew Barnhart and Donald McLean, were employed as sales representatives by defendant-appellee, Compugraphic Corporation ("Compugraphic") until the fall of 1988.*fn1 On August 5, 1988, the appellants were laid off from the company. Both parties agree that the plaintiffs were laid off due to "poor business conditions and lack of cash flow" at Compugraphic, and not because of the plaintiffs' deficient performance. On November 2, 1988, the plaintiffs filed a complaint against Compugraphic, and sought recovery of commissions for sales which they made prior to their layoffs, but which were not shipped until after their layoffs.

The district court granted a judgment in favor of the employees for past due wages on November 2, 1989. The district court reasoned that since plaintiffs "did most of the work associated with these orders," they were entitled to a percentage of the commissions received. App. at 8. The court also found "that there was a good faith dispute between Compugraphic and the plaintiffs on the issues litigated . . . ." Pursuant to this finding, the court made no award for liquidated damages under the WPCL.*fn2 The district court did not address the attorney's fees petition, but indicated that plaintiffs could file for attorney's fees at the completion of the appellate process. In a Judgment Order dated June 5, 1990, this court affirmed the judgment of the district court. App. at 38-39.

Thereafter, on July 9, 1990, plaintiffs filed a supplemental petition for attorney's fees and costs pursuant to the WPCL. This petition incorporated the original petition which had been filed with the district court prior to its decision issued on November 2, 1989. On July 23, 1990, the district court denied plaintiffs' petition for reasonable attorney's fees and costs, which was based upon the WPCL, on the ground that the existence of a good faith dispute between the plaintiffs and Compugraphic barred plaintiffs' cause of action under the WPCL.

On August 1, 1990, the plaintiff-appellants filed a motion to alter or amend the district court's judgment. The district court denied the motion on September 7, 1990. On the same day, the appellants filed a second motion to alter or amend the judgment. This motion was also denied on September 18, 1990. Subsequently, the plaintiffs filed this appeal.*fn3

Jurisdiction was proper in the district court pursuant to 28 U.S.C. § 1332. We have jurisdiction over this matter pursuant to 28 U.S.C. § 1291.

II.

There are two issues before this court on appeal. We must decide whether a finding of a good faith dispute between an employee and employer precludes an award of reasonable attorney's fees and costs under the WPCL for an employee who has already prevailed on a claim for past due wages. This is an issue of first impression in the federal court, and we have been cited to only one Common Pleas Court decision in the Pennsylvania courts. See Gingrich v. City of Lebanon, 9 Lebanon Co. Legal Journal, 335, 339-340 (C.P. Lebanon Co. 1963).*fn4 Since this issue has not been decided by the Supreme Court of Pennsylvania, we are obligated to predict how that court would decide this issue. Erie Castings Co. v. Grinding Supply, Inc., 736 F.2d 99, 100 (3d Cir. 1984).

We must also determine whether the plaintiffs properly pled their case in accordance with the ...


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