                                                                               FILED
                                                                           Mar 19 2019, 9:27 am

                                                                               CLERK
                                                                           Indiana Supreme Court
                                                                              Court of Appeals
                                                                                and Tax Court




ATTORNEY FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
Mark J. Crandley                                          Ryan P. Sink
Barnes & Thornburg, LLP                                   Indianapolis, Indiana
Indianapolis, Indisana
                                                          AMICUS CURIAE
                                                          Probation Officers Professional
                                                          Association
                                                          Fred Anthony Paganelli
                                                          Stephanie L. Grass
                                                          Thomas D. Perkins
                                                          Indianapolis, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

Hendricks County, Indiana, et                             March 19, 2019
al.,                                                      Court of Appeals Case No.
Appellants-Defendants,                                    18A-PL-2528
                                                          Appeal from the Boone Superior
        v.                                                Court
                                                          The Honorable Matthew C.
Gwyn L. Green,                                            Kincaid, Judge
Appellee-Plaintiff.                                       Trial Court Cause No.
                                                          06D01-1711-PL-1416



Riley, Judge.




Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019                            Page 1 of 13
                                      STATEMENT OF THE CASE
[1]   Appellants-Defendants, Hendricks County, Indiana (County) and Hendricks

      County Courts, 1 appeal the trial court’s decision on Appellee-Plaintiff’s, Gwyn

      L. Green (Green), motion for judgment on the pleadings, concluding that

      Green was entitled to a cash payout of her paid-time-off (PTO) as a form or

      earned wages under Indiana’s Wage Payment Statute at the time of her

      resignation as a probation officer from the Hendricks County Courts. 2


[2]   We affirm.


                                                     ISSUES
[3]   The County presents us with two issues on appeal, which we restate as:


          (1) Whether the County may decline to pay cash for unused PTO pursuant

              to Indiana’s Wage Payment Statute and in accordance with the County’s

              employee manual; and

          (2) Whether the Wage Payment Statute waives sovereign immunity even

              though the Statute is silent as to whether it applies to government

              entities.




      1
        Appellant-Defendant, Hendricks County Courts, filed a notice of non-involvement with this court as it does
      not have an interest in this appeal. We accepted the notice on January 31, 2018. However, facts with respect
      to Hendricks County Courts will be included in so far as they are relevant to this appeal.
      2
       We acknowledge that the Probation Officers Professional Association of Indiana, Inc. filed an Amicus Curiae
      Brief with this court in support of Green.

      Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019                              Page 2 of 13
                      FACTS AND PROCEDURAL HISTORY
[4]   Green worked as a probation officer for the Hendricks County Courts from

      October 1993 until her voluntary resignation on September 29, 2017. At the

      time of her resignation, Green had accrued 331 hours of unused PTO. Instead

      of taking the time off, she sought to recover the accumulated hours as a cash

      payment pursuant to the provisions of the employee manual for the Hendricks

      County Probation Department, which stated that “[r]egardless of notice given,

      upon resignation, the Department shall pay for personal time which has

      accrued not exceeding 420 hours.” (Appellant’s App. Vol. II, p. 17).


[5]   The County maintains that its own employee manual which sets the policies

      applicable to all County employees is applicable to probation officers. Pursuant

      to the County’s manual, employees are not granted a cash payout for PTO

      when they resign. Instead, “[a]ccrued PTO will only be paid out upon

      retirement or disability retirement to eligible employees.” (Appellant’s App.

      Vol. II, p. 87). This policy was sent to all County employees and it is

      undisputed that Green received a copy.


[6]   On or about October 6, 2017, the Hendricks County Courts sought an

      appropriation from the County to pay Green’s accrued and unused PTO. The

      County Council rejected the request, voting 7-0 to deny because “if this payout

      was awarded, contrary to [the County] Policy Manual, there would be a good

      argument for other employees to receive the same standing.” (Appellant’s App.

      Vol. II, p. 28).


      Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019        Page 3 of 13
[7]   On November 21, 2017, Green filed a Complaint against the County and the

      Hendricks County Courts, seeking a cash payment of her accumulated PTO

      pursuant to the Indiana Wage Payment Statute. The County answered the

      Complaint and moved for summary judgment on February 22, 2018. Green

      opposed the motion for summary judgment and, on March 9, 2018, moved for

      judgment on the pleadings, claiming a right to her PTO payment as a matter of

      law. On June 11, 2018, the trial court denied the County’s motion for summary

      judgment. On September 28, 2018, following a hearing, the trial court entered

      an Order concluding that Green is “adjudged to be employed by the Hendricks

      County Courts and entitled to compensation in the principal amount of

      $11,075.26.” (Appellant’s App. Vol. II, p. 11). The trial court reached this

      conclusion holding that “The Hendricks County Courts, and not [the County]

      (fiscal body), sets the salary and controls the terms, condition, and privileges of

      Probation Officers. See Ind. Code § 11-13-1-1 []; Ind. Code § 11-13-1-8 []; Ind.

      Code § 36-2-16.5-3[.]” (Appellant’s App. Vol. II, p. 9).


[8]   The County now appeals. Additional facts will be provided as necessary.


                               DISCUSSION AND DECISION
                                             I. Standard of Review


[9]   On appeal, the County contends that the trial court erred by granting Green’s

      motion for judgment on the pleadings. A judgment on the pleadings pursuant

      to Indiana Trial Rule 12(C) attacks the legal sufficiency of the pleadings.

      Shepherd v. Truex, 823 N.E.2d 320, 324 (Ind. Ct. App. 2005). In reviewing a

      Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019        Page 4 of 13
       trial court’s decision on a motion for judgment on the pleadings, this court

       conducts a de novo review. Id. We will affirm the trial court’s grant of a Trial

       Rule 12(C) motion for judgment on the pleadings when it is clear from the face

       of the pleadings that one of the parties cannot in any way succeed under the

       operative facts and allegations made therein. Id. In addition, when we

       consider a motion for judgment on the pleadings, we deem the moving party to

       have admitted “all facts well pleaded, and the untruth of his own allegations

       which have been denied.” Id. (quoting New Trend Beauty Sch., Inc. v. Indiana

       State Bd. of Beauty Culturist Examiners, 518 N.E.2d 1101, 1103 (Ind. Ct. App.

       1988)). All reasonable inferences are drawn in favor of the nonmoving party

       and against the movant. Id.


[10]   When reviewing a Trial Rule 12(C) motion, we may look only at the pleadings

       and any facts of which we may take judicial notice, with all well-pleaded

       material facts alleged in the Complaint taken as admitted. Consol. Ins. Co. v.

       Nat’l Weather Servs., LLC, 994 N.E.2d 1192, 1196 (Ind. Ct. App. 2013). “The

       ‘pleadings’ consist of a complaint and an answer, a reply to any counterclaim,

       an answer to a cross-claim, a third-party complaint, and an answer to a third-

       party complaint.” Id. “Pleadings” also consist of any written instruments

       attached to a pleading, pursuant to Ind. Trial Rule 9.2. Id.


                                                 II. Unused PTO


[11]   Indiana has established a system of governmental checks and balances that

       divides the authority over the courts’ administration between the judiciary and


       Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019       Page 5 of 13
       the executive branches. The judiciary is an independent branch of the

       government and is constitutionally obligated to keep the courts open for the

       administration of justice. Ind. Const. art. 1 § 12. The power of the judiciary is,

       therefore of necessity, coequal to its duties. Knox Co. Council v. State ex. Rel.

       McCormick, 29 N.E.2d 405, 408 (Ind. 1940). Because courts are constitutionally

       obligated to be open and because the operation of a probation office is a court-

       related function, the courts have the corresponding constitutional power to pay

       probation officers at a level sufficient to attract and maintain qualified

       personnel. Noble Co. Council v. State ex rel. Fifer, 125 N.E.2d 709,714-17 (Ind.

       1955). As such, the Indiana Legislature has determined that “probation officers

       serve at the pleasure of the courts that appoint them.” I.C § 11-13-1-1(c).


[12]   The task of adopting rules and regulations prescribing minimum standards

       applicable to probation officers was assigned by the Legislature to the Board of

       Directors of the Judicial Conference of Indiana. I.C. § 11-13-1-8(b)(2). Using a

       central judicial entity with special expertise to establish minimum salary levels

       for probation officers, rather than having separate determinations in each

       county, is more efficient and insures fairness and some degree of uniformity in

       the setting of salaries by trial courts statewide. Matter of Madison Co. Probation

       Officers’ Salaries, 682 N.E.2d 498, 501 (Ind. 1997).


[13]   However, while the power of appointment and establishment of minimum

       salary levels fall squarely within the province of the judiciary, our Legislature

       has also determined that “the salary of a probation officer shall be paid out of

       the county, city, or town treasury by the county auditor or city controller.” I.C.

       Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019           Page 6 of 13
       § 11-13-1-1(c). “In consultation with (1) at least one (1) judge of a court or

       division of a court authorized to impose probation; and (2) at least one (1)

       probation officer; the county, city or town fiscal body shall adopt a salary

       schedule setting the compensation of a probation officer. The salary schedule

       must comply with the minimum compensation requirements for probation

       officers adopted by the judicial conference of Indiana under I.C. § 11-13-1-8.”

       I.C. § 36-2-16.5-3. As such, the county, city, or town fiscal body shall fix the

       salary of a probation officer based on the salary schedule adopted under this

       chapter. I.C. § 36-2-16.5-4. “Unless otherwise specified in the salary schedule,

       a probation officer is entitled to the same benefits, holidays, and hours as other

       county, city, or town employees.” I.C. § 36-2-16.5-5.


[14]   Focusing on I.C. § 36-2-16.5-5’s promulgation that “a probation officer is

       entitled to the same benefits” as other county employees, the County contends

       that the trial court’s Order to require the County to make a cash payment of

       Green’s PTO violates the County’s policy for its employees, as the County’s

       own employee manual unequivocally prohibits the use of County funds to pay

       unused PTO when—as in the case before us—an employee resigns. On the

       other hand, Green characterizes the PTO as a deferred compensation which,

       pursuant to I.C. § 36-2-16.5-5, is not regulated by the County’s employee

       manual.


[15]   “Deferred payment of compensation that accrued during an employee’s tenure

       is a wage.” Swift v. Speedway Superamerica, LLC, 861 N.E.2d 1212, 1215 (Ind.

       Ct. App. 2007). “Common forms of deferred compensation include various

       Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019        Page 7 of 13
forms of PTO, pension benefits, retirement savings plans, stock options,

healthcare plans, annuities, etc.” Id. Unlike present compensation, which is

generally provided for by contract, deferred compensation may be provided for

by contract, by policy, or a combination of the two. Id. In Die & Mold, Inc. v.

Western, 448 N.E.2d 44, 46-47 (Ind. Ct. App. 1983) (internal quotations

omitted), which involved a dispute about vacation time, we concluded, as an

issue of first impression, that


        [v]acation pay is in the nature of deferred compensation in lieu of
        wages earned each week the employee works, and is payable at
        some later time. An agreement to give vacation pay to
        employees made before they perform their service, and based
        upon the length of service and time worked is not a gratuity but
        rather is in the form of compensation services. And when the
        services are rendered, the right to receive the promised
        compensation is vested, as much as the right to receive wages or
        other forms of compensation.


See also McCausland v. Walter USA, Inc., 918 N.E.2d 420, 427 (Ind. Ct. App.

2009) (“compensated vacation pay is considered a wage and is subject to the

provisions of the Wage Payment Statute.”) As such, employment

compensation and wages are contingent on working, whereas an employment

benefit is independent and exclusive of an employee’s actual work schedule.

Accordingly, as Green’s PTO is a deferred compensation which must be

considered as part of her wages, her PTO is not subject to the confines of I.C. §

36-2-16.5-5, which by its own explicit terms does not include deferred

compensation or wages, and therefore the PTO cannot be regulated by the

County’s employee manual.
Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019        Page 8 of 13
[16]   In an effort to bring PTO within the list of benefits regulated by I.C. § 36-2-16.5-

       5, the County points to the General Assembly’s mandate that probation officers

       must receive at least the minimum salary set by a schedule promulgated by the

       Judicial Center of Indiana. See I.C. §§ 36-2-16.5-3; 11-13-1-8. This minimum

       salary, as determined by the Judicial Center of Indiana, is “the gross salary paid

       to a probation officer and does not include the employer’s contributions to

       PERF/retirement program, disability, medical or other insurance programs, or

       deferred compensation.” (Appellant’s App. Vol. II, p. 113). The Judicial

       Center of Indiana categorizes gross salary and deferred compensation as two

       separate items; at the same time, the definition also distinguishes deferred

       compensation from an employer’s contributions to the employee’s benefits of

       PERF/retirement program, disability, and medical or other insurance

       programs. Therefore, it is clear that even the Judicial Center of Indiana does

       not view deferred compensation as an equivalent to employee’s benefits.


[17]   Moreover, the County’s own employee manual belies the fact that probation

       officers must be treated similar to other County employees. Page (i) of the

       County’s handbook states that:


               while these personnel policies apply to most County employees,
               they do not apply to all employees. Elected Officials, unless
               otherwise provided by law, are generally exempt from these
               policies. Likewise, employees of Hendricks County courts
               should confirm with their respective court whether they are
               covered by these policies.




       Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019        Page 9 of 13
       (Appellant’s App. Vol. II, p. 45). The Hendricks County Courts’ request,

       seeking an appropriation from the County to pay Green’s accrued and unused

       PTO, clearly signaled that the courts considered the County’s PTO policy

       inapplicable to probation officers, as they are employees of the courts.


[18]   As established court employees, probation officers’ salaries are fixed by the

       courts through the Judicial Conference of Indiana and are paid out of the

       county or city treasury. Because judicial precedents categorize deferred

       compensation as wages or salary, the determination as to whether deferred

       compensation can be cashed out falls statutorily within the ambit of the

       judiciary, as I.C. § 36-2-16.5-5 expressly mandates only benefits to be within the

       province of the executive branch, i.e., the County. Therefore, we affirm the trial

       court’s Order. 3


                                               III. Sovereign Immunity


[19]   Even though we find that Green has a viable claim and is entitled to a cash

       payment for PTO, the County now contends that its sovereign immunity under

       the Wage Payment Statute nevertheless bars Green’s claim.




       3
         The County also maintains that the trial court’s Order acts as a mandate of funds without applying the
       mandate protection of Indiana Trial Rule 60.5. The County is correct that, if the trial court had ordered
       Green to be paid and the County had refused to pay her, the Trial Rule 60.5 mandate procedure could be
       employed to order that the funds be paid to Green. However, this is not yet the dispute before us. Rather,
       here the parties’ argument revolves around the applicability of the County’s employee manual in light of I.C.
       § 36-2-16.5-5, and thus the trial court’s Order is more akin to a declaratory judgment. Moreover, a mandate
       ordering a county to release funds must be initiated by a court as there is no private cause of action to compel
       a mandate of funds. See T.R. 60.5; Knoebel v. Clark Co. Superior Court No. 1, 901 N.E.2d 529, 533 (Ind. Ct.
       App. 2009).

       Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019                                Page 10 of 13
[20]   A statutory claim against the government exists only when a statute “clearly

       evinces” the General Assembly’s intention to waive sovereign immunity.

       Essermann v. Ind. Dep’t of Envtl. Mgmt., 84 N.E.2d 1185, 1191-92 (Ind. 2017). A

       presumption exists that the General Assembly did not waive sovereign

       immunity, and our supreme court in Esserman has required a “high bar for

       overcoming the presumption.” Id. As such, a statute must contain “an

       affirmative ‘expression’ or ‘declaration’ of the legislature’s intention to waive

       the State’s immunity” and requires that there is a “waiver of sovereign

       immunity only when the statute at issue contains an unequivocal statement that

       clearly evinces the legislature’s intention to subject the State to suit for the

       specific statutory claims asserted.” Id. at 1192


[21]   Turning to the Wage Payment State, Indiana Code section 22-2-5-1 identifies

       “[e]very person, firm, corporation, limited liability company, or association,

       their trustees, lessees, or receivers appointed by any court, doing business in

       Indiana” as being subject to the provisions of the Statute. Although the Statute

       appears to be silent with respect to governmental entities or public employees,

       our supreme court extended in Naugle v. Beech Grove City Schools, 864 N.E.2d

       1058 (Ind. 2007), the definition of person in I.C. § 22-2-5-1 to encompass

       “bodies politic and corporate,” as defined in I.C. § 1-1-4-17(17). Specifically, in

       finding that public school entities are subject to claims under the Wage

       Payment Statute, the Naugle court held:


               The Wage Payment Statute applies to ‘[e]very person, firm,
               corporation, limited liability company, or association, their

       Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019          Page 11 of 13
                trustees, lessees, or receivers appointed by any court, doing
                business in Indiana . . ..’ Indiana Code section 1-1-4-5(17)
                extends the definition of a ‘person’ to include ‘bodies politic and
                corporate.’ Moreover, Indiana Code section 20-26-2-4 defines a
                school corporation as ‘a local public school corporation
                established under Indiana law . . .’ Thus, Beech Grove is a
                ‘person’ and a ‘corporation’ as these terms are used in the Wage
                Payment Statute[.]


       Id. (emphasis added). The Naugle holding is consistent with earlier opinions

       from the court of appeals that assumed, without specific discussions, that the

       Wage Payment Statute applied to governmental employers. See Abner v. Dep’t of

       Health of State of Ind. Ex rel. Ind. Soldiers’ and Sailors’ Children’s Home, 777 N.E.2d

       778, 784 (Ind. Ct. App. 2002), trans. denied; Cox v. Town of Rome City, 764

       N.E.2d 242, 249-50 (Ind. Ct. App. 2002); Schwartz v. Gary Cmty. Sch. Corp., 762

       N.E.2d 192, 198 (Ind. Ct. App. 2002), trans. denied; Hendershot v. Carey, 616

       N.E.2d 412 (Ind. Ct. App. 1993), overruled on other grounds by St. Vincent Hosp.

       and Health Care Ctr. v. Steele, 766 N.E.2d 699, 703 (Ind. 2002). The failure of the

       Legislature to change the Statute to exclude governmental employers in light of

       these decisions supports our supreme court’s extended interpretation of the

       Statute. See In re Adoption of Infant Child Baxter, 799 N.E.2d 1057, 1062 (Ind.

       2003).


[22]   The Wage Payment Statute clearly envisages employees, public or private, as

       the persons included in the Statute and there is no reason to believe it was the

       intent of the Legislature to exclude the County from liability under the Statute.

       County employees rely on their wages to the same extent as employees in the

       Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019           Page 12 of 13
       private sector, and nothing in the Wage Payment Statute supports excluding

       them from its protection. Accordingly, as it is undeniable that the County is a

       body politic, it is subject to the Wage Payment Statute and cannot claim

       sovereign immunity.


                                              CONCLUSION
[23]   Based on the foregoing, we hold that, as court employees, probation officers are

       entitled to a cash payout of unused PTO in accordance with the Court’s

       employee manual and the County is not entitled to sovereign immunity under

       the Wage Payment Statute.


[24]   Affirmed.


[25]   Kirsch, J. and Robb, J. concur




       Court of Appeals of Indiana | Opinion 18A-PL-2528 | March 19, 2019     Page 13 of 13
