DocketNumber: C.A. No. A.A. 06-2889
Judges: GIBNEY, J.
Filed Date: 8/13/2008
Status: Precedential
Modified Date: 7/6/2016
At the outset of the hearing, counsel and Giocastro each introduced several exhibits into evidence. Id.2 Giocastro then testified that in January of 2004, he approached Lei Loungxay ("Lei"), the son of the owner of Loungxay, Inc., about investing in the business. Hr'g Tr., April 11, 2006 at 13. The two men subsequently entered into an agreement wherein Giocastro executed a promissory note in the amount of ten thousand dollars in exchange for stock in the *Page 3 business. Id. Giocastro further testified that he informed Lei of his need to be paid weekly in order to fulfill his obligation to pay child support. Id. Thereafter, Giocastro claimed that Lei orally agreed to pay him a salary of four hundred dollars a week. Id. From the period of January 1, 2004 to November 25, 2004, Giocastro testified that he worked as a manager at Loungxay, Inc., and was responsible for hiring and firing staff, ordering alcohol, and booking live entertainment.Id. at 13. It is undisputed that Giocastro was paid four hundred dollars a week from the period of January 1, 2004 to July 1, 2004. Id.
During the hearing Giocastro admitted that, in July of 2004, Lei, who served as his supervisor, informed him that he could no longer afford to pay himself or Giocastro, due to financial constraints. Id. at 13. Nonetheless, Giocastro testified that he continued to work for twenty-one weeks without pay. Id. at 13-16, 44. Throughout this twenty-one week period, however, Giocastro claimed that he continuously asked Lei for his salary, but was told by Lei that he would eventually be paid. Id. at 14. The following exchange took place during the hearing:
The Hearing Officer: So you worked without a paycheck for 21 weeks?
Mr. Caldarone: * * * *
The Witness: I fell behind in my child support. At the time that I went into the agreement and I gave him the money up front, I told him I needed to get a salary. That was part of what I needed.
The Hearing Officer: No-strings-attached salary?
The Witness: A salary.
The Hearing Officer: That wasn't depended upon company profits?
The Witness: Not, at all.
The Hearing Officer: Well, okay. That's your testimony. I understand that, but it's kind of unusual for — to me anyway, for somebody to *Page 4 work for — well, 21 weeks. That's about five months. For anybody to work — I know I wouldn't work here for five months if I didn't get a paycheck. I would be out the door, unless I were an owner or joint venturer. Go ahead.
The Witness: Did you ever see a horse with a carrot in front of them?
The Hearing Officer: Your business arrangement here. You were waiting for that pot of gold at the end of the rainbow?
The Witness: That was the whole intention. The whole intention was, at some point, this was going to be part my business. Id. at 44-45.
On November 25, 2004, Loungxay, Inc., discharged Giocastro. Loungxay, Inc., did not pay Giocastro a weekly salary from the period of July 1, 2004 to November 25, 2004.3
Throughout cross examination, Counsel sought to establish that Loungxay, Inc., and Giocastro formed a joint venture type relationship wherein they each were paid a four hundred dollar draw so long as profits permitted.4 Loungxay, Inc., agreed that Giocastro could simultaneously be both an investor and employee of Loungxay, Inc., but contended that Giocastro's actions — such as continuing to work for 21 weeks without pay, requesting to lease *Page 5 the business's premises, working a ninety-eight hour week, publicly advertising himself as the owner of Loungxay, Inc., and registering the business' name for his exclusive use — supported the existence of a partnership or joint venture type relationship, not an employee/employer relationship. Id. at 20-23, 36-44, 51-55. Assuming arguendo that an employee/employer relationship had existed, Loungxay, Inc., maintained that such relationship terminated on July 1, 2004, when Giocastro agreed to work for twenty-one weeks without pay despite having been told by Loungxay, Inc., that the company was insolvent and could no longer afford to pay him.
In a decision dated April 17, 2006, the hearing officer awarded Giocastro back wages in the amount of eight thousand dollars. Decision, April 11, 2006 at 1-2. In doing so, the hearing officer made the following finds of fact:
From the evidence presented, it is clear that the petitioner was employed by respondent from 1/1/04 to 11/24/04. He was also an investor in his employer's business. The status of employee and investor are not mutually exclusive. The petitioner testified that his agreement with his employer was to be paid a salary of $400./week for work. He testified that the $400./week was no-strings-attached salary, which was not dependent upon the profitability of the business. He testified that he explained to his employer, Lei Loungxay that he had child support obligations and had to be paid a steady salary of $400./week. Despite aggressive cross-examination by counsel for the respondent, the petitioner's testimony was left in tack, and was not rendered inherently improbable. The lack of live testimony from the respondent left the petitioner's testimony uncontradicted. Id. (Emphasis added).
The hearing officer elaborated stating as follows:
The issue for the hearing officer was whether or not the payment of $400./week was intended to be a salary, or a draw conditional upon profitability of the business. On that issue there was only the live testimony of the petitioner, who stated unequivocally that the payment of $400./week was intended as a flat salary, payable regardless of the profitability of the business. Petitioner and respondent agreed that he was also an investor in the employer's business. Id.
Citing G.L. 1956 §
Loungxay, Inc., subsequently filed a Motion to Reopen, contesting the hearing officer's reliance on Giocastro's uncontradicted testimony. Loungxay, Inc., also argued that it would have presented live testimony at the April 11, 2006 hearing, but for the Department's failure to provide it with adequate notice of the hearing date and its misimpression about the adjudicatory nature of that hearing. The hearing officer denied the Motion to Reopen. On May 26, 2006, Loungxay, Inc., filed a timely appeal to the Superior Court.
On appeal, Loungxay, Inc., argues that the hearing officer's decision to award Giocastro back wages was clearly erroneous in view of the reliable, probative and substantial evidence on the whole record because the evidence established that from at least July 1, 2004, until November 23, 2004, Giocastro agreed to work for 21 weeks without pay, not as a salaried employee, but as a joint venturer who hoped to protect his financial investment. Loungxay, Inc., argues that the Department provided it with inadequate notice of the April 11, 2006, hearing date. Loungxay, Inc., also argues that its misimpression about the adjudicatory nature of the April 11, 2006, hearing was justified. Specifically, Loungxay, Inc., claims that because Giocastro failed to appear at the March 30, 2006, Pre-Hearing Conference, it was under the impression that the scheduled April 11, 2006, hearing date would be a continuation of the Pre-Hearing Conference, and not a hearing on the merits. Loungxay, Inc., further maintains that the hearing officer erred when he based his decision solely upon Giocastro's uncontradicted testimony, without assessing Giocastro's credibility or considering its full exhibit evidence.6 In *Page 7 response, Giocastro asserts that the Department provided Loungxay, Inc., with adequate notice of the April 11, 2006, hearing date and that his positive, uncontroverted testimony established that he was both an investor and employee of Loungxay, Inc., who was not paid for twenty-one weeks of work.
The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inference, conclusions, or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion
In reviewing an agency decision, this Court is limited to an examination of the certified record in deciding whether the agency's decision is supported by substantial evidence. Center for Behavioral Health, R.I.,Inc. v. Barros,
Loungxay, Inc.'s, misimpression about the adjudicatory nature of the April 11, 2006 hearing was not justified. Here, counsel did not request a continuance when Giocastro failed to appear at the March 30, 2006 Pre-Hearing Conference. Counsel instead assumed that the Pre-Hearing Conference had been rescheduled and would be heard on the scheduled April 11, 2006 hearing date. Only after the hearing officer issued the decision did counsel file a Motion to Reopen based upon this alleged misimpression. Moreover, Loungxay, Inc.'s, contention that the Department may have perpetuated its misimpression when it failed to confirm the adjudicatory nature of the April 11, 2006 hearing, is without merit. In a letter dated December 13, 2005, the Department specifically notified Loungxay, Inc., that a hearing would be held on April 11, 2006. Petitioner's Ex. 2. Having provided Loungxay Inc., with an initial notice of the April 11, 2006 hearing date, the Department was not duty-bound to reconfirm the adjudicatory nature of that hearing after Giocastro failed to appear at the scheduled Pre-Hearing Conference. Therefore, this Court finds that the record in this case does not support a genuine miscommunication between the Department and Loungxay, Inc., about the adjudicatory nature of the April 11, 2006 hearing. *Page 10
Nonetheless, the record does reveal that the Department provided Loungxay, Inc., with inadequate notice of the April 11, 2006 hearing date. Section
In this case, the Department sent Loungxay, Inc., a letter dated December 13, 2005, which identified the time, place, and nature of the March 27, 2006 Pre-Hearing Conference and April 11, 2006 hearing, but failed to include the additional information required under §
An administrative hearing officer's decision must be supported by substantial evidence, not by a fair preponderance of the evidence.Center for Behavioral Health,
In this case, Giocastro was the only witness, and his testimony that the payment of four hundred dollars a week was intended to be a salary, not a draw conditional upon the profitability of the business, was not discredited by other positive testimony. Contrary to Loungxay Inc.'s, assertion that the hearing officer failed to assess Giocastro's credibility, the hearing officer actually found Giocastro credible when he determined that his testimony was "left in tack, and was not rendered inherently improbable." Decision, April 11, 2006 at 2.8 When an administrative agency is the trier of fact, "[a] court must not substitute its judgment for that of the agency in regard to the credibility of the witnesses or the weight of the evidence concerning questions of fact." Costa v. Registrar of Motor Vehicles,
Nonetheless, Loungxay, Inc., argues that the hearing officer was clearly wrong in finding that Giocastro's testimony was "left in tack, and was not rendered inherently improbable" because Giocastro's testimony was self-contradictory. Specifically, Loungxay, Inc., points to Giocastro's admission during the hearing that he continued to work for twenty-one weeks without pay, despite having been told by Loungxay, Inc., that the business was insolvent and could no longer afford to pay him. Given this admission, Loungxay, Inc., contends that Giocastro could not have continued to work with the expectation that he would be paid, but only with the hope to protect his financial investment. In his defense, Giocastro maintains that over the course of the disputed twenty-one week period, he continually asked to be paid and that Loungxay, Inc., had reassured him that he would eventually be paid.
Although it has been held that "[t]he testimony of a witness may be contradicted by the facts to which he testifies as completely as by direct adverse testimony," Giocastro's testimony that he continued to work for twenty-one weeks without pay, taken alone, is insufficient for this Court to conclusively conclude that he worked at his peril for twenty-one weeks. Correia,
In the case at bar, counsel for Loungxay, Inc., submitted several exhibits, which the hearing officer marked in full. Among these exhibits, were a newspaper article printed just two days after Giocastro was discharged, wherein he described himself as the owner of Loungxay, Inc., as well as financial records, which further established Giocastro's knowledge of the business's insolvency. Undoubtedly, Counsel for Loungxay, Inc., introduced these exhibits in order to refute Giocastro's testimony by establishing his status as a joint venturer and not an employee, as he had insisted. "It should be noted that [sic], where evidence has been admitted without objection, the evidence must be accorded its natural probative effect." Stein, Mitchell,Administrative Law, Section 30.01 (2007); see also Sye v. Wood Dale FireProtection District No. 1,
This Court will retain jurisdiction. Counsel shall submit the appropriate order for entry.
Was told by Lei company needed money to survive I would be made partner[.] In Sept[ember] Lei told me he was not going to be able to keep me at which time I demanded back pay monies I loaned Him. He changed his mind said He still needed me. By Nov[ember] no stocks were given to me no partnership was given to me I was asked to leave Nov[ember] 23 at which Time I demanded back pay loaned money[.] Petitioner's Ex. 1, Non-Payment of Wages Complaint Form, April 4, 2005.
Novosad v. Mitchell , 251 Ill. App. 3d 166 ( 1993 )
Sye v. Wood Dale Fire Protection District No. 1 , 43 Ill. App. 3d 48 ( 1976 )
Fireman's Fund Insurance v. E.W. Burman, Inc. , 120 R.I. 841 ( 1978 )
Center for Behavioral Health, Rhode Island, Inc. v. Barros , 710 A.2d 680 ( 1998 )
Little v. NC State Bd. of Dental Examiners , 64 N.C. App. 67 ( 1983 )
Stevinson v. Labor & Industrial Relations Commission , 654 S.W.2d 373 ( 1983 )
Interstate Navigation Co. v. Division of Public Utilities & ... , 824 A.2d 1282 ( 2003 )
Costa v. Registrar of Motor Vehicles , 543 A.2d 1307 ( 1988 )
Narragansett Wire Co. v. Norberg , 118 R.I. 596 ( 1977 )
Lemoine v. DEPARTMENT OF MENTAL HEALTH, R. & HOSP. , 320 A.2d 611 ( 1974 )
Graff v. Motta , 695 A.2d 486 ( 1997 )
Correia v. Norberg , 120 R.I. 793 ( 1978 )
Laganiere v. Bonte Spinning Co. , 103 R.I. 191 ( 1967 )
Milardo v. Coastal Resources Management Council , 434 A.2d 266 ( 1981 )
Electric Lightwave, Inc. v. Utilities & Transportation ... , 123 Wash. 2d 530 ( 1994 )
Millett v. HOISTING ENGINEERS'LICENSING DIV. , 377 A.2d 229 ( 1977 )
Bunch v. Board of Review, Rhode Island Department of ... , 690 A.2d 335 ( 1997 )
Foster-Glocester Regional School Committee v. Board of ... , 854 A.2d 1008 ( 2004 )
Birchwood Realty, Inc. v. Grant , 627 A.2d 827 ( 1993 )
DeCosta v. Viacom International, Inc. , 758 F. Supp. 807 ( 1991 )