J-S47037-18

                                 2018 PA Super 284

MICHAEL YABLONSKI,                        :    IN THE SUPERIOR COURT OF
                                          :          PENNSYLVANIA
                      Appellee            :
                                          :
                 v.                       :
                                          :
KEEVICAN WEISS BAUERLE &                  :
HIRSCH LLC,                               :
                                          :
                      Appellant           :   No. 197 WDA 2018

           Appeal from the Judgment Entered January 19, 2018
            in the Court of Common Pleas of Allegheny County
                   Civil Division at No(s): GD 16-19374

BEFORE: OLSON, J., MCLAUGHLIN, J., and STRASSBURGER, J.*

OPINION BY STRASSBURGER, J.:                         FILED OCTOBER 17, 2018

     Keevican Weiss Bauerle & Hirsch LLC (KWBH) appeals from the

judgment entered on January 19, 2018, against it and in favor of Michael

Yablonski. We affirm.

     The trial court summarized the facts of this case as follows.

           [Yablonski], an attorney with approximately twenty-six
     years of experience as a civil litigator, began working for
     [KWBH] in June of 2013. A letter agreement between the
     parties states that Yablonski’s “compensation will be
     $125,000.00 per year, which will be paid to [Yablonski] at the
     rate of $10,416.66 per month, subject to normal withholding.”
     In 2014 KWBH became late with Yablonski’s paychecks, did not
     pay employer[-]withheld taxes until the end of the year[,] and
     failed to provide [Yablonski] with an entire month of
     compensation. In 2015 KWBH also did not pay Yablonski’s
     [employer-]withheld taxes until the end of the year and failed to
     provide him the month’s pay of $10,416.66 still owed from
     2014.




* Retired Senior Judge assigned to the Superior Court.
J-S47037-18

             From January through May of 2016, [instead of
      paychecks], KWBH paid Yablonski a total of $31,000 without
      making payroll tax payments [via checks labeled advance
      checks]. KWBH paid no compensation to Yablonski during June,
      July[,] and August of 2016, and on August 31, 2016[, KWBH]
      presented a letter agreement to Yablonski that proposed the
      elimination of his $125,000 yearly salary. Effective September
      1, 2016, Yablonski’s compensation instead would consist of 50%
      of fees collected from work he performed for clients originating
      from him and 25% of the value of fees from work he performed
      for clients not originating from him.     Sometime during the
      following week[,] Yablonski met with partners Leo Keevican and
      James Bauerle to discuss the terms of any future employment
      with KWBH. When Yablonski asked what they were going to do
      about his back salary, Keevican said: [“]Oh, we owe you the
      money, and we’re going to pay it. We just don’t know[] when
      we’ll be able to.[”]     On September 13, 2016[,] Yablonski
      informed Keevican and Bauerle that he was ending his
      employment with KWBH.

Trial Court Opinion, 4/2/2018, at 1-2 (titles and record citations omitted).

      On October 13, 2016, Yablonski commenced this action by filing a

complaint against KWBH, which he later amended on November 2, 2016.

Yablonski alleged that KWBH failed to pay his salary in breach of their

employment agreement and in violation of the Wage Payment and Collection

Law (WPCL), 43 P.S. §§ 260.1–260.12.        He sought $65,249.91 of unpaid

salary, interest, liquidated damages, and attorneys’ fees.           Amended

Complaint, 11/2/2016, at ¶¶ 1-16. “On December 6, 201[6], in return for

[]Yablonski’s agreement to a thirty-day extension for filing a response to the

complaint, KWBH paid Yablonski additional compensation such that only four

of the nine months of his salary he claimed was owed in the complaint




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J-S47037-18

remained due.” Trial Court Opinion, 4/2/2018, at 2. KWBH filed an answer

and new matter, and asserted counterclaims against Yablonski.1

      After a non-jury trial on November 8, 2017, the trial court entered a

verdict in favor of Yablonski and against KWBH for $57,654.12.       Non-Jury

Verdict, 12/4/2017, at 1.        The trial court explained the verdict was for

Yablonski’s unpaid salary for May, June, July, and August 2016, which

amounted to $41,666.64, plus liquidated damages of $15,987.48 pursuant

to 43 P.S. § 260.10 (entitling an employee to claim liquidated damages in an

amount equal to 25% of the total amount of wages due). Non-Jury Verdict

Explanation, 12/4/2017, at 1.         The trial court stated that it based its

calculation of liquidated damages on the amount claimed in the complaint.2

Id.



1 KWBH divided the counterclaim into two counts it entitled “Breach of Duty
to Perform Assigned Work” and “Breach of Duty to Make Reasonable Efforts
to Generate Business.” Answer, New Matter, and Counterclaim, 1/9/2017,
at ¶¶ 30-43. The trial court ruled in Yablonski’s favor on the counterclaim,
and KWBH does not contest that ruling on appeal.

2
  Specifically, the trial court stated that it used the figure of $63,949.91,
which purportedly is the amount claimed in the complaint less $1,300 for a
claim for medical reimbursement. Id. The trial court awarded Yablonski
nothing for his claim for medical reimbursement because he neglected to
explain the claim during trial. Id. However, in the amended complaint,
Yablonski claimed KWBH owed him $2,500 for improperly deducting that
amount for a medical plan in which Yablonski never participated. Amended
Complaint, 11/2/2016, at ¶ 11. Thus, it is unclear from where the trial court
derived the $1,300 figure, although Yablonski briefly referenced a claim for
“reimbursement of $1,300 on a medical plan” at trial. N.T., 11/14/2017, at
27. Nevertheless, KWBH does not argue that the trial court improperly
calculated the amount claimed in the amended complaint. See KWBH’s Brief
(Footnote Continued Next Page)


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J-S47037-18

      Both Yablonski and KWBH filed post-trial motions.      In his motion,

Yablonski challenged the trial court’s failure to award him prejudgment

interest. Yablonski’s Motion for Post-Trial Relief, 12/14/2017, at 1. KWBH,

inter alia, challenged the verdict on the grounds that (1) Yablonski’s salary

was conditioned upon his fulfillment of the duties of loyalty and diligence,

and the evidence at trial demonstrated that Yablonski had failed to fulfill

such duties; (2) it was error to award liquidated damages pursuant to the

WPCL because it had a good faith reason as to why it did not pay Yablonski;

and (3) it was error to award liquidated damages based upon the amount

claimed in the amended complaint instead of the amount awarded at trial.

KWBH’s Motion for Post-Trial Relief, 12/8/2017, at 1-2.    After briefing and

argument, the trial court entered an order denying KWBH’s post-trial

motion; granting Yablonski’s post-trial motion and modifying the verdict to

include $4,637.62 in prejudgment interest; and entering judgment in favor

of Yablonski for $62,291.74. Order and Judgment, 1/19/2018, at 1.

      KWBH timely filed a notice of appeal. Both KWBH and the trial court

complied with Pa.R.A.P. 1925.

      KWBH presents the following issues on appeal, which we have re-

ordered for ease of disposition: (1) whether the trial court erred by

determining that Yablonski had earned his salary for May, June, July, and
(Footnote Continued)   _______________________

at 18 n.4. (“The trial court’s elimination of $1,300 medical plan
reimbursement [from the amount claimed in the amended complaint] is not
at issue in this appeal.”).



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J-S47037-18

August 2016 when Yablonski failed to exercise diligence and loyalty in his

professional duties; (2) whether the trial court erred by awarding liquidated

damages despite KWBH’s evidence of its good faith dispute of Yablonski’s

salary claim; and (3) whether the trial court erred by basing liquidated

damages on the amount claimed in the amended complaint instead of the

amount awarded in the verdict. KWBH’s Brief at 3-5.

     Our standard of review in a non-jury trial is well established:

     We must determine whether the findings of the trial court are
     supported by competent evidence and whether the trial judge
     committed error in the application of law. Additionally, findings
     of the trial judge in a non-jury case must be given the same
     weight and effect on appeal as a verdict of a jury and will not be
     disturbed absent error of law or abuse of discretion.

Davis ex rel. Davis v. Gov’t Employees Ins. Co., 775 A.2d 871, 873 (Pa.

Super. 2001) (citations omitted).

     The issues presented by Yablonski require us to examine the WPCL.

“The WPCL does not create a statutory right to compensation. Rather, it

provides a statutory remedy when the employer breaches a contractual right

to earned wages. Whether specific wages are due is determined by the

terms of the contract.” Braun v. Wal-Mart Stores, Inc., 24 A.3d 875, 957

(Pa. Super. 2011) (per curiam), aff'd, 106 A.3d 656 (Pa. 2014).

     Wages include “all earnings of an employe[e], regardless of whether

determined    on   time,   task,   piece,   commission   or   other   method   of

calculation.” 43 P.S. § 260.2a. The WPCL requires employers to pay wages

“on regular paydays designated in advance by the employer.”             43 P.S.


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J-S47037-18

§ 260.3(a). “All wages … earned in any pay period shall be due and payable

within the number of days after the expiration of said pay period as provided

in a written contract of employment or, if not so specified, within the

standard time lapse customary in the trade or within 15 days from the end

of such pay period.” Id. The WPCL authorizes an employee to bring a civil

action to recover unpaid wages. 43 P.S. § 260.9. In addition to permitting

recovery of the unpaid wages, the WPCL authorizes the employee to recover

liquidated damages in certain situations, discussed in more detail infra. 43

P.S. § 260.10.

      “It is the contract between the parties that governs the determination

of whether specific ‘wages’ or benefits were ‘earned.’” Braun, 24 A.3d at

956. “[T]he interpretation of the terms of a contract is a question of law for

which our standard of review is de novo, and our scope of review is plenary.”

Id. at 957.

      In the instant case, the parties agree that the relevant contract is a

letter setting forth the terms of KWBH’s offer of employment, which

Yablonski signed.3     KWBH’s Brief at 6, 10; Yablonski’s Brief at 3; N.T.,




3
 Despite notes of testimony indicating their admission, none of the exhibits
admitted at trial appears in the certified record.

      All involved in the appellate process have a duty to take steps
      necessary to assure that the appellate court has a complete
      record on appeal, so that the appellate court has the materials
      necessary to review the issues raised on appeal. Ultimate
(Footnote Continued Next Page)


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J-S47037-18

11/8/2017, at 12-13; Yablonski’s Exhibit 1/Reproduced Record at R152a. In

the offer letter, KWBH offered employment to Yablonski as a “Non-Equity

Member, subject to the terms and conditions outlined below.”                   Yablonski’s

Exhibit 1/Reproduced Record at R152a. The letter indicates that Yablonski’s

“compensation will be $125,000.00 per year, which will be paid to [him] at

the rate of $10,416.66 per month, subject to normal withholding.” Id. The

letter also specifies that Yablonski’s employment was “at will, and as such,

either [Yablonski] or [KWBH] may terminate the employment relationship at

any time for any reason.”             Id.        Yablonski indicated his acceptance to the

terms of the offer of employment by signing the letter. Id.

      We turn first to KWBH’s argument that the trial court’s award was in

error because Yablonski did not earn a salary for May, June, July, and

August 2016.       Boiled down to its essence, KWBH’s argument is that

Yablonski’s employment performance was subpar during this period, and due

to such subpar performance, he did not earn wages during May, June, July,

and August 2016. KWBH’s Brief at 29-32. Without elaborating as to where

such duties were derived, KWBH argues that Yablonski violated “duties of
(Footnote Continued)   _______________________

      responsibility for a complete record rests with the party raising
      an issue that requires appellate court access to record materials.

Pa.R.A.P. 1921, Official Note.

  However, because the trial court admitted the exhibits at trial, KWBH has
included copies of the exhibits in the reproduced record, and Yablonski does
not dispute their accuracy, we may consider the exhibits.                Id.;
Commmonwealth v. Brown, 52 A.3d 1139, 1145 (Pa. 2012).



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J-S47037-18

loyalty, diligence, good faith[,] and promptness.”    Id.   Further, due to his

days out of the office and low client billings, KWBH argues that Yablonski

“constructively terminated his employment.” Id.

      The trial court offered the following analysis supporting its award of

wages for May, June, July, and August 2016.

      Yablonski … credibly testified that KWBH did not have enough
      work for him to do to keep him busy. In addition, Yablonski
      billed for similar time on the days KWBH says he failed to report
      for work as he did on some of the days KWBH says he reported
      to work. Hence, there is no proof that any failure to report to
      work by Yablonski impacted KWBH’s revenue.           KWBH also
      produced no written policy prohibiting work from home and no
      testimony that it informed Yablonski he could not do so.
      Yablonski was an “at will” employee, hence KWBH could have
      terminated his employment at any time. However, it did not do
      so until August 31, 2016, and efforts at trial to show Yablonski
      constructively terminated his employment earlier were not
      credible. Since it is clear that Yablonski’s employment with
      KWBH was unaffected by any work he performed from home and
      did not end until September 1, 2016, [the] award to him of
      salary to that date was correct.

Trial Court Opinion, 4/2/2018, at 5 (titles and record citations omitted).

      Thus, it is clear from the trial court’s opinion that the trial court

credited Yablonski’s testimony over the testimony of KWBH’s witness, James

Bauerle, who is the Director of Legal and Business Services and a partner

with KWBH. In short, KWBH failed to convince the trial court that Yablonski

constructively terminated his employment or that his performance was as

problematic as KWBH now claims it to be. “As an appellate court, we cannot

disturb the finding of the trial court on the witnesses’ credibility.” Wallace

v. Pastore, 742 A.2d 1090, 1095 (Pa. Super. 1999).


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J-S47037-18

      Furthermore, the record belies KWBH’s claim that it viewed Yablonski

as having constructively terminated his employment.         As the trial court

points out, Yablonski was an at-will employee and neither party was bound

to a term of employment.       At no time did KWBH terminate Yablonski’s

employment due to his alleged refusals to perform work, lackluster

performance, failure to appear in the office, and low client billings. Instead,

despite these alleged shortcomings, KWBH attempted to renegotiate the

terms of Yablonski’s employment and offered him continued employment

with a new compensation arrangement.        Yablonski’s Exhibit 7/Reproduced

Record at R179a-R180a.

      Moreover, the June 4, 2013 letter agreement setting forth the terms

and conditions of Yablonski’s employment does not condition payment of

Yablonski’s salary upon Yablonski performing his duties in a certain manner,

working at the office instead of from home, or working or billing a certain

number of hours. The trial court credited Yablonski’s testimony that there

was insufficient work for him to bill any more than he did.         The letter

agreement sets forth an incentive for Yablonski to generate business on his

own, but does not condition Yablonski’s base salary on doing so. The plain

terms of the agreement required KWBH to pay Yablonski $10,416.66 in

salary each month. KWBH failed to do so for the four months in question.

Therefore, the trial court did not err by concluding that KWBH breached an




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agreement to pay Yablonski, thereby entitling Yablonski to recovery of his

wages pursuant to the WPCL.

      KWBH next argues that it proved the existence of a good faith dispute

regarding Yablonski’s claim for salary, thereby defeating Yablonski’s claim

for liquidated damages.   KWBH’s Brief at 21-29.     Similar to its arguments

regarding Yablonski’s failure to earn his salary, KWBH relies upon Yablonski’s

purported subpar performance as justifying its alleged honest belief that it

did not need to pay Yablonski. Id.

      The WPCL provides as follows regarding liquidated damages.

      Where wages remain unpaid for thirty days beyond the regularly
      scheduled payday, or, in the case where no regularly scheduled
      payday is applicable, for sixty days beyond the filing by the
      employe[e] of a proper claim or for sixty days beyond the date
      of the agreement, award or other act making wages payable, …
      and no good faith contest or dispute of any wage claim including
      the good faith assertion of a right of set-off or counter-claim
      exists accounting for such non-payment, the employe[e] shall be
      entitled to claim, in addition, as liquidated damages an amount
      equal to [25%] of the total amount of wages due, or [$500],
      whichever is greater.

43 P.S. § 260.10.

      “The proper interpretation of section 260.10 is a question of law for

which our standard of review is de novo and our scope of review is plenary.”

Andrews v. Cross Atlantic Capital Partners, Inc., 15 A.3d 123, 133 (Pa.

Super. 2017) (en banc). In Andrews, this Court held that

      the WPCL is intended to provide a vehicle for successful plaintiffs
      to be compensated for unpaid back wages based upon an
      existing contractual obligation; however, the statute’s liquidated
      damages provision is available to only a subset of those


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J-S47037-18

      prevailing plaintiffs who can also prove that they are entitled to
      damages as a result of an employer having no good faith
      defense to wages remaining unpaid for a set amount of time
      under the statute.       Section 260.10 is intended to be a
      disincentive or penalty for employers to withhold wages in bad
      faith.

Id. at 136.

      The employer has the burden of proving the existence of good faith by

clear and convincing evidence.         Id. at 134.   This Court has observed

previously that the WPCL does not define the term “good faith.” Braun, 24

A.3d at 963. Nevertheless, our case law establishes that bad faith is more

than bad judgment, but an employer cannot prove good faith by post-hoc

justifications for its failure to pay. Id.

      The trial court offered the following analysis regarding this issue.

      While Bauerle testified to withholding Yablonski’s wages due to
      his poor performance and failure to report for work, this
      testimony was not credible. Yablonski’s testimony that, during
      the September[] 2016 meeting, Keevican acknowledged “we
      owe you the money” was credible. KWBH did not cross examine
      Yablonski and produced no testimony rebutting this admission.
      The testimony about Yablonski’s poor performance and failure to
      report for work were excuses provided after suit was filed in an
      effort to mask the real reason KWBH did not pay Yablonski. It
      did not have the money available to pay him. In any event,
      Yablonski provided credible testimony and documentary
      evidence that rebutted the poor performance claim, established
      he did all work KWBH assigned him[,] and was not prohibited
      from doing some work from home. Since [the] determination
      that KWBH had no good faith dispute over Yablonski’s wages was
      based on credible evidence, [the] decision to award liquidated
      damages was correct.

Trial Court Opinion, 4/2/2018, at 4-5 (titles and record citations omitted).




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J-S47037-18

      As was the case with its first issue, KWBH’s argument regarding good

faith attacks the trial court’s credibility findings, but as an appellate court,

we must defer to the trial court’s findings regarding credibility.    Wallace,

742 A.2d at 1095.      Further, the trial court’s findings are supported by

competent evidence, and we discern no error in the trial court’s application

of the law or abuse of its discretion in its determination that KWBH failed to

meet its burden of establishing a good faith dispute.

      KWBH’s final issue concerns the trial court’s calculation of liquidated

damages.      KWBH first argues that the trial court erred by awarding

liquidated damages based upon the amount claimed in the amended

complaint because after Yablonski filed the amended complaint, KWBH and

Yablonski entered into a settlement agreement reducing the amount of

claimed wages. KWBH’s Brief at 18-20. Second, KWBH argues that the trial

court should have calculated liquidated damages based upon the four

months’ salary Yablonski was awarded at trial, and basing the damages upon

the amount claimed is at odds with section 260.10, which requires liquidated

damages based upon the amount due. Id. at 20-21.

      The only testimony taken about the parties’ alleged settlement

agreement came from Yablonski, who stated in response to a relevance

objection that his claim at trial was “for the four months of unpaid salary.”

N.T., 11/8/2017, at 27. He also testified that after KWBH did not respond to

the amended complaint within the required timeframe and he sent out a ten-



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J-S47037-18

day default notice, he was contacted by Michael McShea, Esquire, a litigation

attorney then employed by KWBH,4 advising that Yablonski that KWBH had

asked Attorney McShea to respond formally on its behalf.          Id. at 30.

According to Yablonski, KWBH wanted a 30-day extension in which to

respond to the amended complaint, “and in exchange for that, [KWBH] was

willing to make a partial payment to [Yablonski] of the past due salary.” Id.

Yablonski agreed, and shortly thereafter, he received a short letter from

Attorney McShea enclosing five checks “totaling $7,336.13 with attached pay

stubs containing year to date withholding information” and memorializing

Yablonski’s agreement to an extension of time for KWBH to respond to the

amended complaint. Yablonski’s Exhibit 10/Reproduced Record R.182a. The

checks accounted for the missed month of salary in 2014, as well as the

shortfalls in salary for January, February, March, and April 2016, but did not

account for the unpaid salary from May, June, July, and August 2016. N.T.,

11/14/2017, at 31.

      Thus, the record reflects only that Yablonski agreed to a filing

extension in exchange for a partial payment of the wages Yablonski claimed

KWBH owed him.       Notably, nothing in the record indicates that Yablonski

agreed to reduce KWBH’s liability regarding liquidated damages. Moreover,



4
  Attorney McShea had entered his appearance in this matter, but later
served a motion to withdraw his appearance upon the parties, citing
cessation of his employment due to KWBH’s failure to pay Attorney McShea’s
salary. Yablonski Exhibit 13.



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although the WPCL permits an employee “to settle or adjust his claim for

unpaid wages,” 43 P.S. § 260.9a(b), the WPCL’s provisions may not be

waived by private agreement.     43 P.S. § 260.7 (“No provision of this act

shall in any way be contravened or set aside by a private agreement.”).

     Furthermore, because the WPCL provides for liquidated damages when

wages remain unpaid thirty days past payday, paying the May-August 2016

wages in December 2016 did not eliminate KWBH’s liability pursuant to

section 260.10.   KWBH’s argument ignores the trial court’s explicit finding

that at the time Yablonski filed his amended complaint, KWBH owed

Yablonski all of the wages he claimed, plus interest.   Trial Court Opinion,

4/2/2018, at 4 (determining that Yablonski was “owed [$63,949.91] thirty

days after payday and when the suit was filed”). The only reason Yablonski

was not awarded $63,949.91 at trial was because KWBH had already paid

him $7,336.13 prior to trial, but that payment does not change the fact that

$63,949.91 of wages plus interest were overdue pursuant to section 260.10.

Therefore, the trial court did not err in awarding Yablonski 25% of

$63,949.61 as liquidated damages.

     Judgment affirmed.

     Judge McLaughlin joins the opinion.

     Judge Olson concurs in the result.




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J-S47037-18

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 10/17/2018




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