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Grimm v. Universal Medical Services, Inc.

Superior Court of Pennsylvania

March 1, 2017


          Appeal from the Order Entered March 24, 2016 In the Court of Common Pleas of Beaver County Civil Division at No(s): 10815-2014

          BEFORE: BENDER, P.J.E., BOWES, J., and SOLANO, J.


          BENDER, P.J.E.

         Appellants, Universal Medical Services, Inc. and Roderick K. Reeder, CFO, appeal from the trial court's March 24, 2016 order granting Appellee's, Jeffrey P. Grimm, request for attorneys' fees. In this appeal raising an issue of first impression, we must consider the interplay between the Pennsylvania Wage Payment and Collection Law (referred to herein as "WPCL")[1] and Pennsylvania Rule of Civil Procedure 1311.1, which allows a plaintiff to limit the maximum amount of damages recoverable to $25, 000.00 in exchange for relaxed requirements in admitting certain documentary evidence at a de novo trial following compulsory arbitration. After close review, we affirm.[2]

         The trial court stated the factual background and procedural history of this case as follows:

This is a two-count action brought by [Appellee], Jeffrey P. Grimm, against [Appellants], Universal Medical Services, Inc. (hereinafter "Universal") and Roderick K. Reeder, CFO. In Count I, [Appellee] asserted a breach of contract action against [Appellant] Universal … for failure to reimburse [Appellee] for business expenses and in Count II, [Appellee] asserted a [WPCL] claim against both [Appellants] on the same basis. The matter proceeded through compulsory arbitration before an arbitration panel of this [c]ourt, with an award in favor of [Appellants].
[Appellee] appealed that arbitration award to the [c]ourt and filed an election to limit monetary recovery to $25, 000 pursuant to Pa.R.Civ.P. 1311.1. A jury trial was held commencing on Monday, January 18, 2016, resulting in a verdict in favor of [Appellee] and against [Appellant] [] Universal, with regard to both counts on January 20, 2016. The jury found in favor of [Appellant], Roderick K. Reeder, with regard to Count II ([WPCL]). The jury awarded damages to [Appellee] in the amount of $11, 683.92[, ] and found that [Appellant Universal] acted in bad faith in denying the reimbursement. Accordingly, the [c]ourt added 25%, or $2, 920.98, to the jury award, bringing the total award to $14, 604.90.
[Appellee] requested attorney[s'] fees and costs, and this [c]ourt scheduled a hearing on that matter on March 3, 2016. At the hearing, [Appellee] presented evidence regarding his claim for attorney[s'] fees and costs, and counsel for both parties argued certain matters to the [c]ourt, including an issue of first impression. For the reasons specified below, this [c]ourt granted [Appellee's] claim for attorney[s'] fees.
As stated above, [Appellee] made claims for both breach of contract and [a] violation of the [WPCL]. The essence of the claims is that [Appellee] permitted use of his credit card by an employee working for [Appellant] Universal. [Appellee] was the chief executive officer of [Appellant] Universal and left his employment with Universal in dispute. The evidence at trial revealed that Universal had an employee by the name of Bill Dunford. Universal had an account with a corporate customer by the name of Welsh Allen. Dunford worked on this account and was required to travel to service the account. Dunford could not meet the financial requirements of the travel on his own, and [Appellee] arranged for Dunford to have access to his ([Appellee's]) credit card for use on these business trips.
[Appellee] submitted the expenses on the credit card for reimbursement by [Appellant] Universal, and the expenses were paid for a period of time. [Appellee] claimed that he was not fully reimbursed for the expenses and made claim for the outstanding balance due.
[Appellant Universal] contended that many of the expenses were Dunford's personal expenses and that [Appellee] had been fully reimbursed for all business expenses claimed. The factual dispute was submitted to the jury based upon the evidence at trial. As stated above, the jury found in favor of [Appellee] and against [Appellant] Universal on both counts in the amount of $11, 683.92. Since the jury determined that [Appellant] Universal acted in bad faith, the [c]ourt awarded $2, 920.98 in liquidated damages (25% of the verdict), pursuant to 43 P.S. § 260.10, bringing the total award to $14, 604.90.
Also, as noted above, [Appellee] appealed the arbitration award against him pursuant to Pa.R.Civ.P. 1311.1, which included an election to limit monetary recovery to $25, 000. At the hearing on March 3, 2016, [Appellee] presented evidence showing $25, 946.25 for attorney[s'] fees, including an amount for preparation for the hearing on March 3, 2016[, ] and costs, such as attorney travel expenses, filing fees, etc., in the amount of $2, 529.51. The total claimed for attorney[s'] fees and costs is $28, 475.76, which brings the total amount claimed between the jury verdict, the addition of liquidated damages and attorney[s'] fees and costs to $43, 080.66, and which exceeds the $25, 000 monetary limit provided for as a cap in Pa.R.Civ.P. 1311.1. This presents the [c]ourt with the issue[] of whether attorney[s'] fees can be awarded in the amount claimed in excess of the Rule 1311.1 cap….

Trial Court Opinion (TCO), 3/24/2016, at 1-3 (internal headings omitted).[3]

         In disposing of the issue regarding whether Appellee may receive attorneys' fees in excess of Rule 1311.1's cap, the trial court acknowledged that "[t]his is an issue of first impression in Pennsylvania, and the [c]ourt could not find any case law or statutory authority addressing this issue under the [WPCL]." Id. at 4. Nevertheless, after carefully considering and comparing relevant case law, the trial court determined that it was compelled to award attorneys' fees to a prevailing plaintiff under the WPCL, even though it caused Appellee's total award to surpass the $25, 000 monetary limit set forth in Rule 1311.1. See id. at 6.

         In their appeal to this Court, Appellants raise the following issue for our review:

Whether it is error for a trial court to mold a jury verdict to add attorney[s'] fees to an award for wages under the [WPCL] and thus increase the total verdict in excess of $25, 000 following [Appellee's] election to proceed at trial under [Pa.R.C.P.] 1311.1?

Appellants' Brief at 9 (formatting omitted).

         Initially, to the extent we must interpret Rule 1311.1, we note that "[b]ecause questions concerning interpretation of the Rules of Civil Procedure raise questions of law, we are not constrained by the determination of the trial court; our standard of review is de novo." LaRue v. McGuire, 885 A.2d 549, 553 (Pa. Super. 2005) (citation, emphasis, and quotation marks omitted). Similarly, to the extent we must interpret the WPCL, we acknowledge that, "[a]s the proper interpretation of a statute is a pure question of law, our standard of review is de novo and our scope of review is plenary." Meyer v. Community College of Beaver County, 93 A.3d 806, 813 (Pa. 2014) (citation omitted).

         In the case sub judice, Appellants argue that "[a] plaintiff may take full advantage of the statutory damages available under the WPCL if he so chooses[;]" however, "once that same plaintiff elects to take advantage of a procedural rule allowing him to forego the authentication of documentary evidence in exchange for a limit on his total award, [] he cannot add a legislative remedy that would result in an award in excess of his own voluntarily imposed cap." Appellants' Brief at 18. Moreover, Appellants assert that allowing an award in excess of the cap in the case at bar "would give effect to an act of ...

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