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12/05/97 FRANK BURNS v. INTERDIGITAL COMMUNICATIONS

December 5, 1997

FRANK BURNS, INC, APPELLANT
v.
INTERDIGITAL COMMUNICATIONS CORPORATION, WILLIAM W. ERDMAN, RICHARD SAUNDERS AND MARK LEMMO, APPELLEES



Appeal from the JUDGMENT Entered June 27, 1997, Docketed April 23, 1997, in the Court of Common Pleas of MONTGOMERY County, CIVIL No. 93-22652. Before BERTIN, J.

Before: Cirillo, P.j.e.; Saylor and Olszewski, JJ. Opinion BY Olszewski, J.

The opinion of the court was delivered by: Olszewski

Filed December 5, 1997

OPINION BY OLSZEWSKI, J.:

Frank Burns, Inc. (appellant) appeals from the denial of its post-trial motions to amend a verdict entered in its favor following a bench trial before the Montgomery County Court of Common Pleas. We affirm.

Appellant is a Pennsylvania corporation organized to provide the engineering services of its only employee, Mr. Frank Burns. On February 9, 1993, appellant entered a consulting agreement with InterDigital Communications Corporation (ICC). ICC is a Pennsylvania corporation that produces and markets sophisticated telecommunications systems. In 1993, ICC became aware that a component used on two of its electrical boards was becoming obsolete. Consequently, ICC decided to redesign the boards and eliminate the obsolete component. ICC contracted with appellant for this purpose. The agreement terms essentially require appellant to review the board designs for problems, perform any necessary redesign, debug the boards, and supply full manufacturing documentation for the new boards. In return appellant would receive sixty ($60) dollars per hour for Mr. Burns's services. The agreement specifically identified appellant as an independent contractor and not an employee. The agreement also allowed ICC to terminate appellant for any reason upon one week's notice.

Mr. Burns worked for appellant throughout February and March without incident. In April, however, ICC became dissatisfied with Mr. Burns's work product and a dispute arose. Daniel Kim and Mark Lemmo, ICC employees responsible for reviewing Mr. Burns's work, became convinced that Mr. Burns was logging excessive hours and providing unprofessional documentation. Consequently, ICC refused to pay appellant for 491 hours that Mr. Burns logged, even though ICC had already approved 425 of those hours in writing. Mr. Burns ceased working for ICC on June 10th. ICC formally terminated appellant on July 8th.

Appellant filed a complaint against ICC and three of ICC's employees (appellees) in the Montgomery County Court of Common Pleas on November 9, 1993. The complaint alleges violation of the Pennsylvania Wage Payment and Collection Law (WPCL) *fn1, breach of contract, and unjust enrichment. Under the WPCL claim appellant seeks $31,860 in unpaid wages, plus liquidated damages in the amount of $7,965, as well as attorney's fees and costs. In the alternative, appellant seeks either $31,860 under the breach of contract claim or $29,460 for unjust enrichment. In response, appellees filed a counterclaim in the amount of $29,460 alleging appellant breached the consulting agreement by failing to provide the specified services.

A two-day bench trial was held on November 20 and November 21, 1996. On November 25, the court dismissed appellant's WPCL claim finding the statute inapplicable to appellant. The trial court, however, entered a verdict in favor of appellant in the amount of $25,500 plus interest for breach of contract. The trial court also dismissed appellees' counterclaim. All parties filed motions for post-trial relief, which were denied after oral argument. In the instant appeal, appellant challenges both the dismissal of its WPCL claim and the adequacy of the monetary verdict. *fn2

The Wage Payment and Collection Law

Appellant's first three issues challenge the finding that the WPCL is inapplicable to appellant. The trial court found the WPCL inapplicable because appellant is not an employee. We agree.

Section 260.9a of the WPCL provides that "any employee or group of employees, labor organization or party to whom any type of wages is payable" may institute actions provided under [the WPCL]." 43 P.S. § 260.9a(a). Appellant presents no argument that it is a group of employees, a labor organization, or a "party to whom any type of wages is payable." Instead appellant contends that the WPCL is applicable because it was an employee of ICC.

Reasoning that the definition of "employee" is limited to natural persons, the court below found that appellant, a corporation, cannot qualify. We agree. The WPCL provides no statutory definition of the term "employee." Where a statute does not supply a definition for a term, we must apply the rules of statutory construction. 1 Pa.C.S. § 1502(a)(1). Under these rules, technical words are to be construed according to their "peculiar and appropriate meaning." 1 Pa.C.S. § 1903(a). Two Pennsylvania statutes, the Unemployment Compensation Act *fn3 and the Worker's Compensation Act, *fn4 provide technical definitions of the term "employee." These definitions specifically exclude corporations. See Unemployment Compensation Act, 43 Pa.C.S. § 753; Worker's Compensation Act, 77 Pa.C.S. § 22. In contrast, under common law agency theory a corporation may be an employee. See generally Myszkowski v. Penn Stroud Hotel, 430 Pa. Super. 315, 634 A.2d 622 (1993) (reaching the merits on the question of whether an employer-employee relationship exists between two corporations). We find the statutes more persuasive than agency theory as to the WPCL meaning of "employee" because the statutes, like the WPCL, concern compensation for employees and, therefore, provide a more similar context. Thus, we conclude that a corporation cannot qualify as an employee for purposes of the WPCL.

Appellant argues that the use of the term "person" in the WPCL definition of "employer" demonstrates that corporations may be employees. We agree that the "employer" definition is relevant, but reach the opposite Conclusion. The WPCL defines "employer" as including "every person, firm, partnership, association, corporation, receiver or other officer of a court of this Commonwealth and any agent or officer of any of the above-mentioned classes employing any person in this Commonwealth." 43 P.S. ยง 260.2a. Grammatically, an "employee" is an entity that is employed. See Webster's Ninth New Collegiate Dictionar y 397 (1984) (defining the suffix "-ee" as "recipient or beneficiary of (a specified action)"). In the definition of employer, the entity employed ...


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