United States District Court, W.D. Pennsylvania
MAURICE B. COHILL, Jr., Senior District Judge.
Plaintiff Joseph Meyers worked for Defendant Dr. Thomas Serena and his companies from July 28, 2006, until he was terminated on September 11, 2009. Mr. Meyers filed this action seeking payment for unpaid wages for 2008, vacation pay for 2008 and 2009, and unpaid expenses for 2008 and 2009. Defendants admit that Meyers was not paid wages for three pay periods in 2008, but explain that the company never had sufficient funds to pay the wages and thus the wages are not actually owed. Defendants deny that Meyers is due any vacation pay. Finally, Defendants claim they paid Meyers all expenses he was due, and in fact have overpaid him, for which Defendants seek reimbursement.
A bench trial in this matter was held on August 14 and August 15, 2013. The parties submitted proposed findings of fact and conclusions of law, and this matter is now ripe for resolution. For the reasons that follow we conclude that Meyers is owed wages for three pay periods in 2008, but that he is not due vacation pay or reimbursement for unpaid expenses. In addition, we conclude that Meyers was overpaid for his expenses, which will be set-off against his award for unpaid wages. We will also dismiss Cynthia Serena as a Defendant and grant Plaintiff's oral motion made at trial to conform the pleadings to the proof. As a result, "Serena Group, Inc." is substituted for Defendant "Serena Group, LLC."
I. Factual Findings
Defendant Thomas Serena, M.D., is a board certified physician who specializes in the areas of wound care and hyperbaric medicine. Defendant Penn North Centers for Advanced Wound Care, P.C. ("Penn North") is a professional corporation founded and solely owned by Dr. Serena. Dr. Serena founded Penn North to open and operate wound care and hyperbaric centers and to conduct research on wound care. The wound care centers are clinics that care for patients with difficult to heal wounds. Hyperbaric medicine is a specialized form of wound treatment involving the use of oxygen.
Over the years Dr. Serena created several affiliated operating companies including Defendant Serena Group, Inc., Serena International, LLC, Oxygen-8, P.C., Serena 6, Serena 7, and October Group. Although these various companies were created, all personnel remained employees of Penn North and Penn North acted as the common paymaster. Testimony at trial indicated that the various companies were either being wound-up or brought under the umbrella of Serena Group, Inc.
Serena International was the company that handled the operations of a wound care ointment that Dr. Serena was attempting to market and distribute. The ointment was called "Suile", and Dr. Serena's venture was backed by an investment group known as Panda Capital.
Dr. Serena's father, E. Anthony Serena, was hired as Penn North's Chief Operating Officer in 2006. Anthony Serena is a former FBI agent and had extensive prior business experience as a Chief Executive Officer of a building company, and later when managing his own architectural design and building company. Thereafter, Penn North hired John P. "Jack" Marnoni as Vice-President in August 2006, Marshall Bernstein as Chief Financial Officer in June 2008, and Heather Young Cummings as Corporate Controller in December 2006.
In May 2006, Plaintiff, Joseph Meyers, and Dr. Serena discussed the possibility of Meyers working for Dr. Serena. At the time of the interview Meyers was unemployed having been discharged from his prior position as Director of Inpatient and Outpatient wound care at Kingsbrook Jewish Medical Center in Brooklyn, New York, when a new Chief Operating Officer was hired.
On July 28, 2006, Dr. Serena hired Meyers as Vice President of Clinical Operations. His job was to conduct corporate development. Specifically, Meyers was tasked with finding new leads for wound care centers and developing and opening new wound care and hyperbaric centers in hospitals. His salary was $135, 000 per year, and he was to be reimbursed for his business expenses.
The parties disagree as to the amount of vacation time Meyers was entitled to and whether he was an equity partner with a 20% stake in the business. There is no written employment agreement.
Meyers contends that he and Dr. Serena entered into an oral contract in which Dr. Serena agreed that Meyers would be a 20% partner in the business and have the same pay and benefits package he had at his former job, including 5 weeks of vacation per year that carried over from year to year. Dr. Serena contends that he did not promise Meyers he would match his prior employer's pay and benefits package, did not promise him more vacation days than other Penn North employees were entitled to, and did not promise him the right to carry over unused vacation days. Dr. Serena also contends that he never offered Meyers a partnership interest or any other type of equity interest in the business, and also notes that Meyers was never asked to invest capital into the business and never did invest any of his own money into the business.
Meyers contends that he and Dr. Serena had two face-to-face meetings to discuss the terms of his employment as well as several telephone conversations before Dr. Serena offered him a job. In contrast, Dr. Serena contends that there was only one face-to-face meeting with Meyers regarding his potential employment. Dr. Serena contends that the meeting took place in Erie, Pennsylvania in May 2006, and that his father, Anthony, also attended.
In June 2008, Meyers job duties and salary changed. He was given the title of National Sales Manager for the Suile ointment and his salary increased to $175, 000. The Suile venture failed because the company was never able to generate significant sales of the ointment and eventually Panda Capital, the outside investor, pulled its investment from the venture. Therefore, in early 2009 Meyer was returned to his original salary of $135, 000.
There is no dispute that the business was financially struggling during the relevant time periods. Because of the financial difficulties, a decision was made in the Fall of 2008 to withhold paychecks from four employees: Dr. Serena, Anthony Serena, Marshall Bernstein, and Meyers. Four pay checks were withheld from October 2008 through January 2009. The employees agreed to the withholding of their pay for the simple reason that they would be out of a job if they did not. All parties agree that the withheld pay was temporary and would be repaid when the company had the funds. One of the skipped pay periods was repaid, but three were not.
In early June 2009, Meyers was terminated by Anthony Serena. The Serenas contend he was fired at this time because he missed an important meeting that could have otherwise led to a significant contract. In addition, the Serenas contend that Meyers refused to explain why he missed the meeting. Meyers agrees that he missed the meeting, but explains that it was because he had already met with the lead three previous times and was already scheduled at another meeting. Meyers contends that he was fired for non-job related reasons based on Anthony Serena's personal disagreement with how Meyers conducted his personal life.
In any event, the termination was short-lived as Dr. Serena offered Meyers further employment as a nurse/manager for the wound care center at New York Methodist Hospital in charge of day-to-day operations, and that he would no longer be in sales and development. By memorandum dated July 15, 2009, Dr. Serena set forth Meyers' new job responsibilities, explaining that his current salary and benefits would remain the same. Memo from Serena to Meyers, 7/15/2009, "NY Methodist: New role for Joseph Meyers, " Ex. 41, EX. M. Dr. Serena noted that Meyers should be at the center daily "with the exception of 4 weeks of vacation time." Id.
On September 9, 2009, Anthony Serena terminated Meyers for the second and final time, by email, stating as follows:
Effective immediately your employment with Serena Group and all of its subsidiaries is terminated for cause.
Email from A. Serena to J. Meyers, 9/9/2009, "Termination, " Ex. S.
Reimbursement Requests for Expenses
It was Meyers' practice to incur expenses over a lengthy time period and then submit a request for reimbursement for expenses and an estimated mileage amount that covered the time period. In addition, from time to time Penn North would permit Meyers to request funds for past expenses and Penn North would wire Meyers money or issue a check to him when requested. This practice did not involve the submission of a reimbursement request but the funds provided to him were to be counted against expenses that would eventually be formally requested by Meyers. Additionally, Meyers was permitted to retain cash co-payments received by the wound care center at the New York Methodist Hospital for his expenses.
Meyers submitted a reimbursement request for expenses and mileage for the time period November 2007 through September 2008. This request for reimbursement was approved and he was paid.
Meyers also submitted a reimbursement request for expenses and mileage for the time period from September 9, 2008 through December 30, 2008, in the amount of $15, 888.93. After review of the request, Penn North claims that it reimbursed Meyers $14, 919.17 of his requested amount, but required further documentation and information from Meyers for the remainder. Meyers claims that Penn North did not include all of his 2008 requested expenses in its system and in fact failed to reimburse him for expenses for 2008 in the amount of $14, 919.
Meyers submitted a final request for expenses and mileage for the time period from January 1, 2009 through June 3, 2009, in the amount of $19, 771. Penn North reviewed this request, and declined to reimburse Meyers without further documentation and information from Meyers. Meyers did not provide further documentation and information as he believed he had ...