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David Wagner v. Blue Sky Classic Cars

November 5, 2012

DAVID WAGNER, PLAINTIFF-RESPONDENT,
v.
BLUE SKY CLASSIC CARS, L.L.C., AND ALAN FOX, IN HIS PROFESSIONAL AND PERSONAL CAPACITY, DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3211-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted February 16, 2012

Before Judges Axelrad, Sapp-Peterson and Ostrer.

Defendants, Blue Sky Classic Cars, LLC (Blue Sky) and Alan Fox, appeal from a judgment awarding unpaid overtime wages, liquidated damages, and counsel fees to plaintiff, David Wagner, as a result of defendants' failure to pay Wagner overtime wages. We affirm.

Blue Sky restores, repairs, sells, buys, and consigns classic, antique, collector, vintage, street rod and muscle cars. Wagner was employed by Blue Sky as a mechanic between April 2007 and June 2008. Fox is the owner and operator of Blue Sky and served as Wagner's supervisor throughout his employment. Wagner was paid at an hourly rate and was never compensated at an overtime rate, despite often working more than forty hours per week.

On November 1, 2007, the New Jersey Department of Labor (DOL) conducted an audit of Blue Sky, in response to employee complaints. The DOL investigator, Victoria Mulligan, reviewed all of Blue Sky's relevant records and determined the company committed no overtime violation because she believed it was DOL practice and policy that all auto mechanics were exempt from overtime wages. Fox later testified he had discussed the situation with Mulligan at the time, and Mulligan told him he "did not have to pay mechanics overtime and that [he] did have to pay tow truck operators overtime." Following this audit, Blue Sky paid three towing operators unpaid overtime wages, but based upon Mulligan's representation, it did not pay overtime wages to any mechanics. A second audit occurred on November 6, 2008, as a result of another complaint from a Blue Sky mechanic. This audit, conducted by Shirley Schwenke, included all employees who worked for Blue Sky from November 6, 2006 to November 6, 2008. Defendants claim they were never notified that any monies were due to any employees as a result of this second audit. Specifically, Fox testified "there was no overtime to anybody[,]" and "[the reports] confirmed I was doing things properly. . . . I didn't change anything, because nobody told me I was doing it wrong."

On April 6, 2009, Wagner filed his complaint. He alleged he should have been paid overtime wages under the Fair Labor Standards Act (FLSA), 29 U.S.C.A. § 201 to -219, and the New Jersey Wage and Hour Laws, N.J.S.A. 34:11-1 to -68. Defendants filed an answer to the complaint and, among other defenses, argued they were exempt from liability for overtime wages based upon the fifty-percent sales provision of the FLSA and the good faith defenses under N.J.S.A. 34:11-56a25.2 and 29 U.S.C.A. §259(a).

The parties thereafter exchanged discovery, and when the discovery period ended on February 26, 2010, the matter was scheduled for trial on May 24, 2010. Defendants unsuccessfully sought to amend answers to interrogatories in order to serve certain documents. Later, after additional trial adjournments, the court granted Wagner's in limine motion to bar the introduction, at trial, of the very same documents defendants had attempted to provide to Wagner after discovery ended.

Shortly before the jury charge conference, Judge Robert J. Brennan made a determination that the good faith defenses under both state and federal law did not apply as a matter of law. Based upon this finding, the judge excluded Schwenke's testimony, finding it would be more prejudicial than probative. Wagner's attorney stipulated $9400 as the amount of overtime due, and defendants agreed to that amount. Judge Brennan then entered judgment in the amount of $9400 on the New Jersey wage and hour law claim. Despite entering the $9400 judgment in favor of plaintiff based upon the New Jersey Wage and Hour Law, the judge recognized that defendants had a further defense to plaintiff's unpaid overtime wages claim. Judge Brennan stated, "[t]he reason we have an issue that remains to go to the jury is we have a claim under the [FLSA] which would, if the [fifty] percent defense is not established by the jury, [then] there is a liquidated damages provision there."

In other words, notwithstanding the court's rejection of defendants' good faith defenses, under both federal and state law, if the jury found that defendants prevailed on the fifty percent sales defense, defendants would be exempt from paying plaintiff overtime wages. Thus, while the parties were free to stipulate as to the amount of unpaid overtime wages, the court should not have entered judgment in favor of plaintiff at that point. The error in doing so, however, was harmless because the fifty percent sales defense was nonetheless submitted to the jury for determination.

The jury found defendants failed to prove that the fifty percent sales defense applied. The court subsequently entered judgment awarding Wagner $9400 in unpaid overtime wages and $9400 in liquidated damages. In addition, the court awarded Wagner $66,933.56 in counsel fees, for a total award of $85,733.56. The present appeal followed.

On appeal, defendants present the following arguments:

POINT I

THE TRIAL COURT ERRED IN GRANTING WAGNER'S IN LIMINE MOTIONS BARRING VARIOUS DOCUMENTS AT TRIAL.*fn1

B. THE TRIAL COURT ERRED BY EXCLUDING DOCUMENTS RECEIVED BY BLUE SKY FROM THE [DOL] DESPITE THE FACT THAT THERE WAS AN ONGOING INVESTIGATION.

C. THE TRIAL COURT ERRED IN EXCLUDING ALAN FOX'S ACCOUNTING RECORDS THAT WERE OFFERED TO SUPPORT HIS DEFENSE THAT OVER [FIFTY

PERCENT] OF BLUE SKY CLASSIC CAR[S'] BUSINESS WAS DERIVED FROM THE SALE OF AUTOMOBILES DESPITE THE FACT THAT MR. FOX PRODUCED THE DOCUMENTS AS SOON AS THEY WERE READILY AVAILABLE.

POINT II

THE TRIAL COURT ERRED WITH RESPECT TO ITS INTERPRETATION OF THE "GOOD FAITH DEFENSE."

A. THE TRIAL COURT ERRED IN RULING THAT DOCUMENTS AND ORDERS RECEIVED FROM THE [DOL] WERE NOT A "WRITTEN ADMINISTRATIVE REGULATION, ORDER, RULING, APPROVAL OR INTERPRETATION," PURSUANT TO N.J.S.A. 34:11-56A25.2 AND 29 U.S.C. §259(A).

B. THE TRIAL COURT ERRED IN BARRING THE TESTIMONY OF THE [DOL] INVESTIGATORS ON GROUNDS OF RELEVANCY.

POINT III

THE TRIAL COURT ERRED IN PERMITTING [WAGNER] TO TESTIFY REGARDING SALES OF BLUE SKY CLASSIC CARS.

POINT IV

THE TRIAL COURT ERRED IN ALLOWING LIQUIDATED DAMAGES TO BE ...


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