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NICOLE JEANSONNE VERSUS DARREN SCHMOLKE AND SCHMOLKE CONSTRUCTION, INC.

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NO. 2009-CA-1467

COURT OF APPEAL * FOURTH CIRCUIT * STATE OF LOUISIANA ******* CONSOLIDATED WITH: NICOLE JEANSONNE VERSUS DARREN SCHMOLKE AND SCHMOLKE CONSTRUCTION, INC. CONSOLIDATED WITH: NO. 2009-CA-1468 CONSOLIDATED WITH: NO: 2010-CA-0437

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NOS. 2007-3168 C/W 2008-639, DIVISION L-6 Honorable Kern A. Reese, Judge ****** Judge Patricia Rivet Murray ****** (Court composed of Judge Patricia Rivet Murray, Judge James F. McKay, III, Judge Edwin A. Lombard) Edward Robert McGowan EDWARD ROBERT MCGOWAN, L.L.C. 650 Poydras Street, Suite 2105 New Orleans, LA 70130 COUNSEL FOR PLAINTIFF/APPELLEE Marc L. Frischhertz Lloyd N. Frischhertz, Jr. FRISCHHERTZ & ASSOCIATES, L.L.C. 1130 St. Charles Avenue New Orleans, LA 70130 COUNSEL FOR DEFENDANTS/APPELLANTS AMENDED AND AFFIRMED AS AMENDED

In these consolidated cases, the defendants, Darren Schmolke and Schmolke Construction, Inc., appeal two judgments. In the first judgment, the trial court awarded past due wages and penalties pursuant to La. R.S. 23: 631 and 23:632 to the plaintiff, Nicole Jeansonne, and determined that she was also entitled to reasonable attorney's fees and costs. In the second judgment, the trial court determined the amount of the attorney's fees and costs to be awarded. For the reasons that follow, we amend both judgments and affirm as amended. FACTS AND PROCEEDINGS BELOW Darren Schmolke is the sole owner and operator of Schmolke Construction, Inc. [hereinafter SC], which is in the business of general contracting/ home reconstruction. In the aftermath of the August 29, 2005 landfall of Hurricane Katrina, Ms. Jeansonne and Mr. Schmolke entered into a verbal agreement whereby Ms. Jeansonne would manage reconstruction projects she brought to SC in exchange for fifty percent of the profits generated by those projects. In January, 2007, Mr. Schmolke terminated the agreement. On April 5, 2007, Ms. Jeansonne

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filed suit against Mr. Schmolke and SC alleging that Mr. Schmolke had terminated her employment and had withheld wages due to her in violation of La. R.S. 23:631. The plaintiff also alleged that Mr. Schmolke had engaged in behavior that should result in the disregard of the corporate form of SC, therefore making any judgment in her favor executable against both SC and Mr. Schmolke personally. Finally, the plaintiff alleged that, pursuant to La. R.S. 23:631 (B), she was entitled to have her claim for unpaid wages, penalties and attorney's fees handled as a summary proceeding in accordance with Louisiana Code of Civil Procedure article 2592. Defendants filed a dilatory exception of unauthorized use of summary proceedings on the basis that Ms. Jeansonne was not an employee but an independent contractor, and as such was not entitled to make a claim pursuant to La. R.S. 23:631. The exception and the issue of the plaintiff's employee status were tried by means of a contradictory hearing held October 4, 2007. On October 15, 2007, the trial court rendered judgment declaring the plaintiff to be an employee of defendants and denying the exception. Trial on the remaining issues was held June 23-24, 2008. On August 25, 2009, the trial court rendered judgment awarding Ms. Jeansonne past due wages in the amount of $29, 977.03, a statutory penalty in the amount of $20, 885.40, reasonable attorney's fees, and costs against both SC and Mr. Schmolke. In accompanying written reasons for judgment, the trial court stated that Ms. Jeansonne was owed wages equivalent to twenty-five percent of the profits on eight projects, two of which were completed and six of which were ongoing at the

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time of Ms. Jeansonne's termination.1 In addition, the trial court noted that it had imposed a statutory penalty under La. R.S. 23:632 because Mr. Schmolke had failed to provide any good faith basis for his withholding of the wages due Ms. Jeansonne. Finally, the trial court explained the factual basis for its piercing of the corporate veil to hold Mr. Schmolke personally liable. The defendants appealed the August 25, 2009 judgment. During the pendency of the appeal, the trial court rendered a second judgment in response to plaintiff's motion to set attorney's fees and costs. In this judgment, rendered October 26, 2009, the trial court awarded $22, 888.09 in attorney's fees and $4,392.79 in costs. The defendants also appealed the second judgment, and we have consolidated the two appeals in this court. Plaintiff filed an answer to the appeal seeking judicial interest from the date of demand and additional attorney's fees. ISSUES Defendants first contend that the trial court erred by finding that Ms. Jeansonne was an employee of defendants rather than an independent contractor. Alternatively, defendants argue that the trial court erred in: determining the amount owed to Ms. Jeansonne at the time of her termination pursuant to La. R.S. 23:631; assessing penalties under La. R.S. 23:632; calculating the amount of penalties owed; piercing the corporate veil; calculating the amount of attorney's fees
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Although the original agreement between Ms. Jeansonne and Mr. Schmolke called for a 50/50 split of the profits and/or losses on each of her jobs, the undisputed testimony at trial showed that Ms. Jeansonne had later brought Martha Huckaby to SC, and at that time, the two women had agreed to split the fifty-percent project manager's commission on all projects assigned to either of them. Therefore, Mr. Schmolke was paying each of them a twentyfive percent commission, and after Ms. Jeansonne's termination, he continued to pay Ms. Huckaby only a twentyfive percent commission.

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awarded; and calculating the amount of costs awarded. Conversely, in answer to the appeal Ms. Jeansonne argues the trial court erred by awarding insufficient attorney's fees and by failing to award judicial interest. For purposes of discussion, we have divided these issues into seven subject areas, namely: (1) Employee status, (2) Wages, (3) Penalties, (4) Attorney's fees, (5) Piercing the corporate veil, (6) Costs, and (7) Interest. (1) Employee Status The trial court determined, both in a pretrial ruling denying defendants' exception and again after trial, that Ms. Jeansonne was an employee of defendants within the terms of La. R.S. 23:631, thereby entitling her to have her claims adjudicated by means of summary proceedings. The statute provides, in pertinent part: Discharge or resignation of employee; payment after termination of employment A. (1)(a) Upon the discharge of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday or no later than fifteen days following the date of discharge, whichever occurs first. * * * * *

B. In the event of a dispute as to the amount due under this Section, the employer shall pay the undisputed portion of the amount due as provided for in Subsection A of this Section. The employee shall have the right to file an action to enforce such a wage claim and proceed pursuant to Code of Civil Procedure Article 2592.2

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La. C.C. P. art. 2592 provides that summary proceedings may be used for trial of certain matters.

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Defendants argue that the trial court erred by finding that Ms. Jeansonne was an employee rather than an independent contactor. The above

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