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Hallam v Holland America Line, Inc. (08/03/2001) sp-5444
Hallam v Holland America Line, Inc. (08/03/2001) sp-5444
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
STUART HALLAM, )
) Supreme Court No. S-9144
Petitioner, )
) Superior Court No.
) 1JU-96-1734 CI
v. )
) O P I N I O N
HOLLAND AMERICA LINE, INC., )
d/b/a WESTOURS MOTOR COACHES, ) [No. 5444 - August 3, 2001]
INC., )
)
Respondent. )
______________________________)
Petition for Hearing from the Superior Court
of the State of Alaska, First Judicial District, Juneau,
Larry R. Weeks, Judge.
Appearances: Stuart Aaron Hallam, pro se,
Juneau. Robert P. Blasco and Amy S. Gurton, Robertson, Monagle &
Eastaugh, Juneau, for Respondent.
Before: Fabe, Chief Justice, Eastaugh, and
Bryner, Justices. [Matthews and Carpeneti,
Justices, not participating.]
EASTAUGH, Justice.
I. INTRODUCTION
We consider here various procedural issues arising from
a former employee's contract and Alaska Wage and Hour Act claims.
We affirm the denial of class certification to Stuart Hallam as a
pro se representative of the class, but remand for consideration of
his undecided motion for class certification conditioned on
obtaining counsel. Because there are genuine issues of material
fact, we reverse the grant of summary judgment and remand for
further proceedings. We also conclude that it was error to deny
the motions to amend the complaint.
II. FACTS AND PROCEEDINGS
Stuart Hallam was employed as a bus driver for Holland
America Line, Inc. between May 10 and August 20, 1994. Hallam's
employment agreement included an incentive program that provided a
bonus based on the employee's safety record, job performance, and
customer service. Although his last day of work was August 20,
1994, Hallam did not receive his final pay check until September 1,
[Fn. 1] and did not receive his incentive bonus until October 27.
As Holland America concedes, Hallam did not receive his final
paycheck from Holland America within the three-day time period
prescribed by AS 23.05.140(b). [Fn. 2]
Hallam filed a pro se complaint against Holland America
in superior court on August 19, 1996 alleging (1) failure to pay
overtime; (2) failure to pay for every hour worked; (3) failure to
pay the final paycheck within three days of termination; (4) breach
of contract for failure to pay overtime wages; and (5) breach of
contract for failure to pay an incentive bonus as contracted.
Hallam filed a motion to amend his complaint to allege four new
claims on April 25, 1997. [Fn. 3] Superior Court Judge Walter L.
Carpeneti denied that motion, holding that the four new claims were
barred by the statute of limitations because they did not relate
back. Hallam also filed a motion for class certification. The
court denied that motion because Hallam was not represented by
counsel; the court then transferred jurisdiction to the district
court.
Hallam filed a motion for reconsideration, arguing that
AS 23.10.110(b) specifically allows pro se litigants to bring class
actions. This motion was denied. Hallam then filed a motion with
the district court seeking conditional certification of the class,
with certification contingent on Hallam hiring an attorney. The
court never decided Hallam's conditional class certification
motion.
Holland America moved for summary judgment on Hallam's
first, second, and fourth claims for relief, arguing that they were
barred by the two-year statute of limitations. District Court
Judge Peter B. Froehlich granted Holland America's motion for
summary judgment over Hallam's opposition, and denied Hallam's
motion for reconsideration. Superior Court Judge Larry R. Weeks
denied Hallam's petition for review. Hallam then filed a motion
for summary judgment on all of his claims for relief -- including
those which had been dismissed -- reserving only his fifth claim.
Holland America filed a motion for summary judgment on
Hallam's third and fifth claims, arguing that its failure to pay
Hallam within three days of termination did not warrant a penalty.
Hallam's opposition argued that Holland America's willful failure
to pay wages within three days of termination justified a penalty.
Holland America also moved for attorney's fees and costs. Hallam
argued in opposition that the Alaska Wage and Hour Act did not
allow defendants to collect attorney's fees and costs. Judge
Froehlich granted Holland America's summary judgment motion, and
awarded Holland America attorney's fees and costs.
Hallam then filed superior court petitions for review of
the summary judgment issues. On November 9 Hallam sought
reconsideration of the fees and costs award. Superior Court Judge
Weeks issued an order advising Hallam that his petitions for review
would be "consolidated and viewed by this Court as a timely appeal
under Appellate Rule 602." On December 18 Hallam sought
clarification of the court's December 11 order, inquiring whether
the order made his motion for reconsideration of fees and costs
part of the appeal. Judge Weeks denied the motion for
clarification, and noted that "[t]he petitions for review are to be
treated as an appeal and the appellee must file a responsive brief
and appellant may reply." Judge Weeks later issued a memorandum
and order addressing the claims raised by Hallam in his various
motions. Hallam unsuccessfully moved for reconsideration on the
issue of attorney's fees and costs. Hallam then filed the present
petition for hearing. We granted his petition and ordered full
briefing.
III. DISCUSSION
A. Standard of Review
We review a grant of summary judgment de novo. [Fn. 4]
To succeed on summary judgment, the movant must establish that
there "are no genuine issues of material fact and that it is
entitled to judgment as a matter of law." [Fn. 5] We draw all
reasonable inferences in favor of the nonmoving party. [Fn. 6]
When there has been an appeal to the superior court as an
intermediate court of appeal, we "approach the issues
independently." [Fn. 7] We review a denial of leave to amend for
abuse of discretion, [Fn. 8] reversing only if we are left with a
definite and firm conviction that the lower court erred in its
ruling. [Fn. 9]
B. Although It Was Not Error to Deny Class Certification
Where the Would-Be Class Representative Is Unrepresented, We Remand
for Consideration of Hallam's Unresolved Motion for Conditional
Class Certification.
Judge Carpeneti denied Hallam's motion for class
certification, reasoning that "the lack of qualified legal counsel
could jeopardize the rights and interests of other class members."
In reviewing the class certification question, Judge Weeks affirmed
the denial of class certification, [Fn. 10] reasoning that "[w]hile
Hallam may adequately represent his own interests pro se he cannot
adequately represent the interests of others without an attorney."
Hallam argues that this was error.
In affirming the denial of class certification, Judge
Weeks relied on Hertz v. Cleary, [Fn. 11] where we noted that a pro
se plaintiff may not serve as a class representative because "'[a]
basic requirement of all class actions is that the named plaintiff
can fairly and adequately represent the class.'" [Fn. 12] Because
a class action may close off other avenues of redress for class
members, counsel is necessary to provide the "'qualifications and
expertise'" necessary when a litigant takes on the important duty
of representing a class. [Fn. 13]
In an argument that fails to address the concerns
identified in Hertz, Hallam asserts that AS 23.10.110 allows a pro
se claimant to represent a class. Hallam relies on AS
23.10.110(b), which provides that "[a]n action to recover from the
employer the wages and damages for which the employer is liable may
be maintained in a competent court by an employee personally and
for other employees similarly situated, or an employee may
individually designate in writing an agent . . . to maintain an
action." (Emphasis added.) He asserts that the emphasized
language reveals a legislative intent to allow for pro se
representation in Alaska Wage and Hour Act class action suits.
We disagree. Although Hallam's literal reading of the
emphasized language is not completely implausible, it is at least
equally plausible to read the statute as not even addressing the
issue of pro se class representation. The words are consistent
with a legislative assumption that employees suing "personally"
would be represented by counsel. We think that it is highly
improbable that the legislature meant to permit a pro se employee
to act as the representative for a class of other employees, given
the possibility that inadequate representation by the pro se
representative would prejudice all class members' potentially
meritorious claims. Given the legislature's silence about pro se
class representation, and the strong public policy reasons noted in
Hertz why pro se class representation is undesirable, we conclude
that Judge Carpeneti correctly reasoned that an unrepresented
litigant may not represent similarly situated employees under the
Alaska Wage and Hour Act.
But Hallam also argues here, as he did below, that the
court should have granted his July 31, 1998 motion for conditional
class certification, giving him reasonable time to retain counsel
to represent the class. If he were correct, the concerns we
discussed in Hertz would not apply.
The district court did not rule on this motion, which
Hallam filed on the same day the district court granted summary
judgment to Holland America. Judge Weeks reviewed the conditional
certification motion, but apparently treated it as part of the
original motion for class certification. It therefore appears that
the motion for conditional class certification has never been given
independent consideration. Because we remand this case for other
reasons, it is not necessary to decide whether it was error to fail
to resolve Hallam's motion for conditional class certification.
But if Hallam renews this motion on remand, it must be considered.
On remand, the court may, in its discretion, grant conditional
class certification. [Fn. 14]
C. It Was Error to Deny Leave to Amend.
Hallam argues that it was an abuse of discretion to deny
his first and second motions for leave to amend his complaint.
Leave to amend complaints under Alaska Civil Rule 15(a)
is to be freely given. [Fn. 15] The "court should first 'consider
the request for leave to amend under [Civil Rule 15(a)]
uninfluenced by whether, under Rule 15(c), the amendment would or
would not relate back . . . .'" [Fn. 16] The defendant may then
plead the statute of limitations, and the court may assess the plea
in light of Rule 15(c). [Fn. 17]
In light of the liberal policy allowing amendment, we
hold that it was error to deny Hallam's motions to amend his
complaint. We express no opinion as to whether the new claims will
relate back.
D. Genuine, Material Fact Disputes Require that Holland
America's Summary Judgment Be Set Aside.
Hallam argues that it was error to grant summary judgment
given genuine issues of material fact. The superior court reversed
the district court's grant of summary judgment to Holland America
on Hallam's overtime and bonus claims. The superior court, rather
than remanding to determine damages, calculated the amount of
overtime and the bonus that Hallam was entitled to and remanded to
the district court with instructions to enter judgment for Hallam
for $21.00 on the overtime claim and $68.53 on the bonus claim.
Thus the superior court resolved, as a matter of law, the amount of
overtime and incentive damages due to Hallam on remand. The
superior court also affirmed the district court's grant of summary
judgment on Hallam's remaining claims.
Hallam has demonstrated that there are genuine issues of
material fact about Holland America's good faith and the amount of
his performance bonus. Hallam's first claim is that Holland
America incorrectly calculated his overtime by failing to include
all hours worked over eight in a day and forty in a week. Thus an
employee who worked nine hours on Monday, nine hours on Tuesday,
ten hours on Wednesday, ten hours on Thursday, and six hours on
Friday would receive overtime pay for one hour on Monday, one hour
on Tuesday, two hours on Wednesday, two hours on Thursday, and
would also receive overtime for four hours for the week, for a
total of ten hours of overtime paid for a forty-four-hour work
week. The superior court held that the "clear and unambiguous
language" of the Alaska Wage and Hour Act requires this
"pyramiding" of hours.
Holland America has asked the Alaska Department of Labor
to issue a regulatory clarification excluding this interpretation
of the statute. Holland America attached an internal memorandum
from its legal department to a letter it sent to Ed Flanagan, the
Deputy Commissioner of Labor. This memorandum acknowledged that
"Judge Carpene[]ti in Juneau has ruled in an earlier case not
involving HAL that our and the Department's interpretation is
wrong. The statute is so poorly worded that one can easily see how
this result could be achieved. . . . One alternative would be to
rewrite (b) . . . ." Hallam argues that this correspondence, when
viewed in the light most favorable to him, allows an inference of
bad faith because it demonstrates that Holland America knew that
the statute had been interpreted to require pyramiding, but chose
to ignore the requirement. We agree that such an inference is
permissible, and hold that it was error to grant summary judgment
given this issue of material fact.
Hallam has also demonstrated that there are genuine,
material fact disputes concerning the amount of his incentive
bonus. The superior court's calculation of Hallam's bonus presumes
that Hallam had committed an infraction and had received a written
warning. Hallam relies on the Gray Line Juneau Dispatch log for
the day cited in the infraction notice to support his assertion
that he was not assigned the pick-up that the notice cites him for
missing. Drawing permissible inferences in Hallam's favor, there
is a material issue of fact whether Hallam's infraction notice was
accurate.
Hallam also challenges Holland America's calculation of
his customer service rating, which is based on comment cards that
Holland America has not provided to Hallam. If Hallam on remand
produces evidence that Holland America, for the purpose of
defeating Hallam's claims, failed to produce or destroyed Hallam's
comment cards, their absence would permit another inference in
Hallam's favor.
Summary judgment was granted before discovery had closed,
so other issues of material fact may develop before trial. We
reverse the grant of summary judgment on these claims and remand
for further proceedings.
Because the issue of Holland America's good faith bears
on the penalty issue, we also vacate the denial of a penalty. The
court may revisit the penalty issue on remand if it finds a
violation. We note that penalties under AS 23.05.140 [Fn. 18] are
not mandatory and that refusal to apply a penalty is within the
trial court's discretion. [Fn. 19] We also vacate the awards of
attorney's fees and costs, because the remand moots this issue. We
note that Grimes v. Kinney Shoe Corp. [Fn. 20] and Schorr v.
Frontier Transportation Co. [Fn. 21] control recalculation of fees
and costs for Alaska Wage and Hour Act claims involving work Hallam
performed before August 20, 1995, his last day of employment with
Holland America. [Fn. 22]
E. Hallam Did Not Preserve His Argument that AS 23.10.060 Is
Unconstitutional.
Hallam argues that amended AS 23.10.060 is
unconstitutional because its application is retroactive. Hallam
did not preserve this argument below, so we do not consider it.
[Fn. 23] Moreover, the sparse treatment of this argument in the
briefs makes it unlikely that we would have considered it even had
it been preserved. [Fn. 24]
IV. CONCLUSION
For these reasons, we REVERSE the grant of summary
judgment, REVERSE the denial of the motion for leave to amend, and
REMAND to the superior court with instructions to remand to the
district court for further proceedings. On remand the district
court should consider the motion for conditional class
certification.
FOOTNOTES
Footnote 1:
Holland America alleges that the funds were made available on
August 28, 1994, but concedes in its brief that "whether the funds
were available on August 28th or September 1st is of no
consequence, it being irrelevant to the legal questions before the
court."
Footnote 2:
AS 23.05.140(b) provides:
If the employment is terminated, all wages,
salaries, or other compensation for labor or services become due
immediately and shall be paid within the time required by this
subsection . . . . If the employment is terminated by the
employer, regardless of the cause for the termination, payment is
due within three working days after the termination.
Footnote 3:
Hallam filed the amended complaint without the required motion
for leave to amend on March 4, 1997.
Footnote 4:
See Reeves v. Alyeska Pipeline Serv. Co., 926 P.2d 1130,
1134 (Alaska 1996).
Footnote 5:
Id. (citing Zeman v. Lufthansa German Airlines, 699 P.2d
1274, 1280 (Alaska 1985)).
Footnote 6:
See id. (citations omitted).
Footnote 7:
Frontier Saloon, Inc. v. Short, 557 P.2d 779, 781 (Alaska
1976) (citing Jager v. State, 537 P.2d 1100, 1106 (Alaska 1975);
State v. Marathon Oil Co., 528 P.2d 293, 298 (Alaska 1974)).
Footnote 8:
See Betz v. Chena Hot Springs Group, 742 P.2d 1346, 1348
(Alaska 1987).
Footnote 9:
See id.
Footnote 10:
This case is procedurally unusual. It began in the superior
court, where Judge Carpeneti denied class certification. Because
the denial of class certification limited the potential recovery to
an amount below the jurisdictional limits for superior court, Judge
Carpeneti transferred the case to the district court. Hallam filed
a motion for conditional certification in the district court. The
district court did not rule on this motion, which Hallam filed the
same day the district court granted summary judgment to Holland
America. The superior court, Judge Weeks, reviewed the class
certification issue on appeal from the district court. This review
included a review of Judge Carpeneti's initial order denying class
certification. Because we have granted Hallam's petition for
hearing and will independently review Judge Carpeneti's denial of
class certification, we need not consider whether Judge Weeks had
appellate jurisdiction over Judge Carpeneti's ruling.
Footnote 11:
835 P.2d 438 (Alaska 1992).
Footnote 12:
Id. at 442 n.3 (quoting Shaffery v. Winters, 72 F.R.D. 191,
193 (S.D.N.Y. 1976)).
Footnote 13:
Id. (quoting Shaffery, 72 F.R.D. at 193).
Footnote 14:
Hallam alleges in his opening brief that Holland America's
counsel, for the purposes of discouraging representation,
communicated with an attorney willing to represent Hallam and the
proposed class. Hallam implies that this contributed to his pro se
status and should estop Holland America from opposing class
certification for lack of representation. Although the district
court may consider this alleged conduct in resolving the motion for
conditional class certification, the policy concerns noted in Part
III.B prevent the court from certifying a class if the would-be
class representative will not be represented by counsel.
Footnote 15:
See Magestro v. State, 785 P.2d 1211, 1212 (Alaska 1990).
Footnote 16:
Id. (quoting Estate of Thompson v. Mercedes-Benz, Inc., 514
P.2d 1269, 1271 (Alaska 1973)).
Footnote 17:
See id.
Footnote 18:
AS 23.05.140(d) provides:
If an employer violates (b) of this section by
failing to pay within [three working days after the termination],
the employer may be required to pay the employee a penalty in the
amount of the employee's regular wage, salary, or other
compensation from the time of demand to the time of payment, or for
90 working days, whichever is the lesser amount.
Footnote 19:
See Klondike Indus. Corp. v. Gibson, 741 P.2d 1161, 1171
(Alaska 1987) ("The award of a penalty under this section is within
the sound discretion of the trial court. The court found no
evidence that Beaux intentionally withheld wages due. Therefore,
the court denied the penalty claim. We see no abuse of discretion
here.").
Footnote 20:
938 P.2d 997 (Alaska 1997).
Footnote 21:
942 P.2d 418 (Alaska 1997).
Footnote 22:
See Grimes, 938 P.2d at 998-1001; Schorr, 942 P.2d at 419-23.
Footnote 23:
See Moran v. Holman, 501 P.2d 769, 769 n.1 (Alaska 1972).
Footnote 24:
See A.H. v. W.P., 896 P.2d 240, 243 (Alaska 1995) ("[Where] a
point is given only cursory statement in the argument portion of a
brief, the point will not be considered on appeal.") (citation
omitted)).
