Aita, M. v. NCB Mngmt, Ser.
Pa. Super. Ct.
Opinion
J-E01005-24
2024 PA Super 223
MARCELO AITA : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
NCB MANAGEMENT SERVICES, INC. :
:
Appellant : No. 510 EDA 2022
Appeal from the Order Entered January 21, 2022
In the Court of Common Pleas of Bucks County
Civil Division at No(s): 2019-00981
MARCELO AITA : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
NCB MANAGEMENT SERVICES, INC. : No. 615 EDA 2022
Appeal from the Order Entered January 21, 2022
In the Court of Common Pleas of Bucks County
Civil Division at No(s): 2019-00981
BEFORE: LAZARUS, P.J., BOWES, J., STABILE, J., DUBOW, J., KUNSELMAN,
J., NICHOLS, J., KING, J., SULLIVAN, J., and LANE, J.
OPINION BY KING, J.: FILED SEPTEMBER 26, 2024
Appellant, NCB Management Services, Inc. (“NCB”), and Cross-
Appellant, Marcelo Aita (“Aita”), appeal from the order entered in the Bucks
County Court of Common Pleas, which denied NCB’s motion for summary
judgment, granted Aita’s cross-motion for summary judgment, and awarded
Aita $60,000.00 in liquidated damages under the Wage Payment and
J-E01005-24
Collection Law (“WPCL”).1 We affirm.
The relevant facts and procedural history of this case are as follows.
From June 9, 2008, until July 18, 2017, Aita was employed by NCB as its Chief
Executive Officer. On December 29, 2014, the parties entered into a Private
Sale Bonus Agreement (“Agreement”). Per the Agreement, NCB would
provide Aita bonuses, including a retention bonus of $60,000.00 per month
beginning on the first regular payroll date of January 2015 and continuing for
seventeen (17) months thereafter, totaling $1,080,000.00 (“Retention
Bonus”), so long as Aita remained with and provided services to NCB during
each month preceding each installment payment. NCB timely paid Aita the
monthly Retention Bonus installments under the terms of the Agreement from
January 2015 to July 2015. Nevertheless, NCB failed to pay the remaining
Retention Bonus installments in a timely manner due to cash flow problems.
In July 2017, NCB paid Aita all but one of the unpaid Retention Bonus
installments per the Agreement in one lump sum, totaling $660,000.00, plus
6% interest.2 In October 2017, NCB paid Aita the final Retention Bonus
installment of $60,000.00, plus 6% interest.
____________________________________________
1 See 43 P.S. §§ 260.1-260.45.
2 The Agreement did not provide for a specific rate of interest. Thus, NCB
applied the general legal rate of interest defined in 41 P.S. § 202 (providing
that reference in legal document “to an obligation to pay a sum of money ‘with
interest’ without specification of the applicable rate shall be construed to refer
to the rate of interest of six per cent per annum”).
-2-
J-E01005-24
On February 13, 2019, Aita filed a complaint against NCB for breach of
employment contract and a violation of the WPCL, seeking compensatory
damages, liquidated damages, and attorneys’ fees. NCB filed preliminary
objections on March 5, 2019, which the trial court sustained as to Aita’s breach
of contract claim. The trial court overruled NCB’s preliminary objections with
respect to Aita’s WPCL claim.
On March 8, 2021, NCB filed a motion for summary judgment, claiming
that because it ultimately made all bonus payments before Aita had filed the
complaint, Aita could not recover under the WPCL. According to NCB, Aita
could not maintain a cause of action under the WPCL because Aita no longer
had wages3 that were “payable” at the time he filed suit. Aita responded and
filed a cross-motion for summary judgment on April 7, 2021, seeking
$180,000.00 in liquidated damages under the WPCL.4
The court heard argument on August 4, 2021 and took the matter under
advisement. By order filed on January 21, 2022, the court denied NCB’s
motion for summary judgment. The court granted Aita’s cross-motion for
summary judgment for liquidated damages, but in the amount of $60,000.00
____________________________________________
3 The parties do not dispute that bonuses constitute wages for purposes of the
WPCL. See 43 P.S. § 260.2a.
4 This amount represented 25% of the total of the bonus payments made to
Aita in July and October 2017 ($720,000.00), in accordance with the WPCL,
which provides for liquidated damages in the amount of 25% of wages that
are not paid over 30 days past the regular pay date. See 43 P.S. § 260.10.
-3-
J-E01005-24
rather than the $180,000.00 that Aita sought. The court reasoned that some
of the late payments fell outside of the WPCL’s three-year statute of
limitations.
NCB timely filed a notice of appeal on February 18, 2022, and Aita timely
filed a cross-appeal. On March 2, 2022, the court ordered the parties to file
concise statements of errors complained of on appeal per Pa.R.A.P. 1925(b).
Both NCB and Aita filed their respective Rule 1925(b) statements on March
18, 2022.
On May 15, 2023, a three-judge panel of this Court affirmed the trial
court’s order, with one dissent. The parties subsequently filed applications for
reargument. On July 21, 2023, this Court granted en banc reargument and
withdrew the three-judge panel decision. Thereafter, the parties filed
substituted briefs for this Court’s en banc review.
NCB raises the following issues on appeal:
Whether the trial court correctly found that an employee can
maintain a cause of action under the Pennsylvania [WPCL]
for liquidated damages when no wages were owed to him
by his employer at the time that he filed his Complaint.
Whether the trial court correctly found than an employee
can maintain an action under the WPCL when he has no
contractual right to wages.
Whether the trial court correctly found than an employee
who is owed no wages by his employer is in the class of
persons protected by the civil remedies and penalties
section of the WPCL?
(NCB’s Substituted Brief at 3).
-4-
J-E01005-24
Aita raises the following issue in his cross-appeal:
Whether the acknowledgement doctrine resets the statute
of limitations under the WPCL where NCB made a partial
payment of bonuses due under the WPCL and where NCB
admits that the payment represented unpaid bonuses.
(Aita’s Substituted Brief at 14).
Our standard of review of an order granting summary judgment is well-
settled:
We view the record in the light most favorable to the
nonmoving party, and all doubts as to the existence of a
genuine issue of material fact must be resolved against the
moving party. Only where there is no material fact and it is
clear that the moving party is entitled to judgment as a
matter of law will summary judgment be entered. Our
scope of review of a trial court’s order granting or denying
summary judgment is plenary, and our standard of review
is clear: the trial court’s order will be reversed only where it
is established that the court committed an error of law or
abused its discretion.
Shellenberger v. Kreider Farms, 288 A.3d 898, 905 (Pa.Super. 2023)
(internal citations and quotation marks omitted). Further:
Where the non-moving party bears the burden of proof on
an issue, he may not merely rely on his pleadings or
answers in order to survive summary judgment. Further,
failure of a nonmoving party to adduce sufficient evidence
on an issue essential to his case and on which he bears the
burden of proof establishes the entitlement of the moving
party to judgment as a matter of law.
Thus, our responsibility as an appellate court is to determine
whether the record either establishes that the material facts
are undisputed or contains insufficient evidence of facts to
make out a prima facie cause of action, such that there is
no issue to be decided by the fact-finder. If there is
evidence that would allow a fact-finder to render a verdict
in favor of the non-moving party, then summary judgment
-5-
J-E01005-24
should be denied.
Id. at 905-06 (internal citations and quotation marks omitted).
For purposes of disposition, we combine NCB’s issues. NCB argues that
the WPCL only provides a cause of action to an aggrieved party who is owed
wages. NCB asserts that the statutory language is clear and unambiguous
that an aggrieved employee must be owed wages to avail himself of the
remedies provided by the WPCL. NCB maintains that the purpose of the WPCL
is to provide aggrieved employees a vehicle to collect unpaid wages from their
employer and to make such employees whole. Because NCB ultimately paid
all outstanding wages before Aita filed suit, NCB contends that he was already
made whole. NCB insists that the court’s liquidated damages award of
$60,000.00 provided a windfall to Aita. In other words, NCB posits that Aita
was allowed to recover liquidated damages when he could not and did not
allege that he suffered any wage loss at the time he filed his complaint. NCB
concludes that the court erred by granting Aita summary judgment, and this
Court must reverse and remand for entry of summary judgment in NCB’s
favor. We disagree.
To begin, the Pennsylvania legislature’s purpose in passing the WPCL
was, inter alia, “to provide an employee with a statutory remedy for an
employer’s breach of its contractual obligation to remit wages.”
Laborers Combined Funds of Western Pa. v. Mattei, 518 A.2d 1296, 1298
(Pa.Super. 1986) (emphasis in original). “The policy of the statute is to aid
-6-
J-E01005-24
an employe[e] in the prompt collection of compensation due him and to
discourage an employer from using a position of economic superiority as a
lever to dissuade an employe[e] from promptly collecting his agreed
compensation…[.]” Ressler v. Jones Motor Co., 487 A.2d 424, 429(Pa.Super. 1985) (internal citation omitted). Consistent with this purpose, the WPCL provides a statutory remedy to ensure that employees are paid on their regular payday and, if not timely paid, to make them whole by penalizing employers who fail to pay regular wages without good cause. 5 “The question of liability under the [WPCL] is to be gleaned from a perusal of the [statute] as whole, and, in this effort, we seek to effectuate the intention and purpose of the Legislature by its passage….”Mattei, supra.
As such, the civil provisions of the WPCL must be liberally construed to effectuate their remedial purpose and to “promote justice.” See 1 Pa.C.S.A. § 1928(c). See also Braun v. Wal-Mart Stores, Inc.,24 A.3d 875, 960
(Pa.Super. 2011), cert. denied,578 U.S. 905
,136 S.Ct. 1512
,194 L.Ed.2d 602
(2016)
(acknowledging our mandate to construe WPCL liberally).
Against this backdrop, the statutory language reinforces the WPCL’s
purpose. First, the WPCL requires that all wages be paid on an employee’s
____________________________________________
5 “[T]he right to recover wages ‘earned’ by employees upon separation from
employment under the WPCL is a statutory remedy which supplements
rather than supplants a common law action for breach of contract.”
Andrews v. Cross Atl. Cap. Partners, Inc., 158 A.3d 123, 133-34(Pa.Super. 2017) (en banc), appeal denied,643 Pa. 99
,172 A.3d 584
(2017)
(emphasis in original).
-7-
J-E01005-24
“[r]egular payday,” stating:
§ 260.3. Regular payday
(a) … Every employer shall pay all wages, other than fringe
benefits and wage supplements, due to his employe[e]s on
regular paydays designated in advance by the employer.
… All wages, other than fringe benefits and wage
supplements, earned in any pay period shall be due and
payable within the number of days after the expiration of
said pay period as provided in a written contract of
employment or, if not so specified, within the standard time
lapse customary in the trade or within 15 days from the end
of such pay period. …
43 P.S. § 260.3(a) (emphasis added). Although the WPCL does not define the
term “payable” (see 43 P.S. § 260.2a), “payable” as used in this section
plainly refers to when wages are “due.” See Black’s Law Dictionary (11th
ed. 2019) (defining “due and payable” (of a debt) as “owed and subject to
immediate collection because a specified date has arrived or time has elapsed,
or some other condition for collectability has been met”).
Second, the WPCL entitles an employee to collect liquidated damages
when the employer fails to make payment on an employee’s regular payday,
i.e., when wages are payable and not paid within the grace paid. See 43 P.S.
§ 260.10 (stating: “Where wages remain unpaid for thirty days beyond the
regularly scheduled payday, or, in the case where no regularly scheduled
payday is applicable, for sixty days beyond the filing by the employe[e] of a
proper claim … and no good faith contest or dispute of any wage claim … exists
accounting for such non-payment, the employe[e] shall be entitled to claim,
in addition, as liquidated damages an amount equal to twenty-five percent
-8-
J-E01005-24
(25%) of the total amount of wages due, or five hundred dollars ($500),
whichever is greater”). Thus, if an employer fails to pay wages within the
applicable period, an amount equal to 25% of total wages due or $500.00,
whichever is greater, is automatically added to the wages that were payable
at the regularly scheduled payday, unless an employer has a good-faith
defense. “Section 260.10 is intended to be a disincentive or penalty for
employers to withhold wages in bad faith.” Andrews, supra at 136. This
section applies regardless of whether the employer ultimately pays the wages
owed to the employee, because the liquidated damages are statutorily
imposed once wages remain unpaid for thirty days beyond the scheduled
payday, and no good faith dispute exists over the claim.
Third, the General Assembly considered the failure to pay an employee
on the regular payday so egregious, that it also provided for a criminal
penalty:
§ 260.11a. Criminal penalties
(a) The secretary or any employe[e], group of employe[e]s,
labor organization or party to whom any type of wages is
payable may institute prosecutions under this act.
(b) In addition to any other penalty or punishment otherwise
prescribed by law, any employer who violates any provisions
of this act shall be guilty of a summary offense and, upon
conviction thereof, shall be punished by a fine of not more
than three hundred dollar ($300), or by imprisonment up to
90 days, or by both, for each offense. The good faith contest
or dispute by any employer of any wage claim or the good
faith assertion of a right of set-off or counter-claim shall not
be considered a violation of this act: Provided, That the
employer has paid all wages due in excess of the amount in
-9-
J-E01005-24
dispute or asserted to be subject to a right of set-off or
counter-claim. Nonpayment of wages to, on account of, or
for the benefit of each individual employe[e] shall constitute
a separate offense.
(c) Where such employer is a corporation, the president,
secretary, treasurer or officers exercising corresponding
functions shall each by guilty of such summary offense.
(d) All fines or penalties collected under this act shall be paid
into the State Treasury through the Department of Revenue
to the credit of the General Fund.
43 P.S. § 260.11a.
Fourth, the WPCL allows for the imposition of counsel fees to an
employee who prevails on a claim. See 43 P.S. § 260.9a(f) (stating: “The
court in any action brought under this section shall, in addition to any
judgment awarded to the plaintiff or plaintiffs, allow costs for reasonable
attorneys’ fees of any nature to be paid by the defendant”). The “award of
attorneys’ fees to a prevailing employee in an action brought under the
[WPCL] is mandatory,” because it “promotes the statute’s purpose to protect
employees when employers breach a contractual obligation to pay wages.”
Oberneder v. Link Computer Corp., 548 Pa. 201, 206,696 A.2d 148, 151
(1997).
We further note that the WPCL provides that “[a]n employe[e] or group
of employe[e]s, labor organization or party to whom any type of wages is
payable may institute actions provided under the act.” 43 P.S. § 260.9a(a).
To summarize, the WPCL requires that an employer pay wages on an
employee’s regular payday, subjects an employer who fails to pay on that date
- 10 -
J-E01005-24
to criminal penalties, and if not paid within the grace period provided by
statute absent a good-faith defense, imposes liquidated damages against the
employer as well as reasonable attorneys’ fees expended in pursuing the
claim. See 43 P.S. §§ 260.3(a); 260.11a; 260.10; and 260.9a(f).
Instantly, in ruling on the parties’ cross-motions for summary judgment,
the trial court explained:
The untimely payments well exceeded both the expiration
of the pay period as provided in the Agreement for payment
of wages and the ten (10) day requirement of the employer
to pay wage supplements under the WPCL. Therefore, the
withholding and nonpayment of said payments beyond the
WPCL’s allowable time frames is a proper basis for Aita to
assert a cause of action under the WPCL.
Once a contractual basis to compensation is established, a
Plaintiff has a right to assert a cause of action for liquidated
damages if said wages or wage supplements remain unpaid
for a period of time.
* * *
This [c]ourt did not err in allowing Aita’s liquidated damages
claim without a claim for unpaid wages. As discussed above,
Aita did have a claim for unpaid wages immediately
following the WPCL’s allowable period of time of delayed
Bonus Retention installment payments. Still, said payments
were at least thirteen months late, and well exceeded any
thirty- or sixty-day allowable delay.
(Trial Court Opinion, filed 5/19/22, at 8-9, 12-13).
We agree with the court’s ruling. We reiterate that an employee “to
whom any type of wages is payable may institute” an action under the WPCL.
See 43 P.S. § 260.9a(a). Thus, “payable” as used in this section and
consistent with the statute’s purpose, means when a monetary obligation
- 11 -
J-E01005-24
becomes due or is required to be paid. Such an interpretation is consistent
with other definitions of “payable” in Black’s Law Dictionary. See Payable,
Black’s Law Dictionary (11th ed. 2019) (including, inter alia, definitions of
payable such as “[o]f a sum of money or a negotiable instrument that is to be
paid”). Consequently, within the meaning of Section 260.9a(a), an employee
“to whom any type of wages is payable” means that an employee is payable
on his or her regular payday, i.e., once the grace period has expired, and an
action can be maintained for liquidated damages thereafter. This
interpretation is in accord with the General Assembly’s intent to fix a date
when payment must be made and penalize employers for failure to do so.
Thus, the WPCL provides for liquidated damages even if the wages are paid
outside the grace period to further the statutory objective of ensuring that
employees are paid on their regular payday. See Andrews, supra.
NCB argues (and our colleagues in the dissent agree) that if the
employer ultimately pays the wages owed to an employee prior to the
employee filing a WPCL action, the employee loses the remedy of liquidated
damages regardless of the employer’s violation of the WPCL. Essentially, this
interpretation renders the grace period under the statute a mere suggestion
rather than a fixed date by which liquidated damages can be imposed.
Further, this interpretation effectively amends the statutory grace period by
extending it to the day before an employee files suit. In this scenario, an
employer could drag its feet for months and escape liability for liquidated
- 12 -
J-E01005-24
damages by finally paying the employee’s due and payable wages just before
the employee files suit. Such an outcome would be in direct contravention of
the purpose of the WPCL, which is to protect employees when employers
breach a contractual obligation to pay wages.6 See Oberneder, supra;Mattei, supra;
Ressler, supra.
Furthermore, the WPCL permits a separate claim for liquidated damages
independent of a claim for unpaid wages. The statute provides:
No administrative proceedings or legal action shall be
instituted under the provisions of this act for the collection
of unpaid wages or liquidated damages more than three
years after the day on which such wages were due and
payable as provided in [43 P.S. §§ 260.3 and 260.5].
43 P.S. § 260.9a(g) (emphasis added). The use of “or” in this provision carries
its ordinary disjunctive meaning, indicating that an employee may bring a
claim for liquidated damages without seeking unpaid wages, or vice versa.
See also Braun, supra at 960(explaining that word “or” is disjunctive and word “and” is conjunctive when interpreting Section 260.10 of WPCL ____________________________________________ 6 The parties each cite to Yablonski v. Keevican Weiss Bauerle & Hirsch LLC,197 A.3d 1234
(Pa.Super. 2018), appeal denied,654 Pa. 424
,215 A.3d 562
(2019), to support their respective positions on appeal. Nevertheless,
Yablonksi was concerned with only the calculation of liquidated
damages, where the employer had claimed on appeal that the amount of
liquidated damages entered in favor of the employee should be reduced based
on the employer’s partial payment of wages owed during the pendency of
litigation. The Yablonski Court was not tasked with analyzing, and did not
analyze, whether the employee could have brought a claim for liquidated
damages if the employer had made all belated wage payments owed prior to
commencement of the litigation. Thus, Yablonski does little to resolve the
issue in this appeal.
- 13 -
J-E01005-24
concerning liquidated damages).
Indeed, at least one federal district court in Pennsylvania has permitted
a standalone claim for liquidated damages to proceed to trial, where the
employer had paid all wages owed prior to the commencement of the action.
See Bair v. Purcell, No. 1:04-CV-1357, 2010 WL 3282653(M.D.Pa. Aug. 17, 2010). More recently, another federal district court in Pennsylvania permitted a standalone claim for liquidated damages under the WPCL to survive a motion to dismiss. See Endo Pharmaceuticals Inc. v. Fryer, No. 17-2245,2020 WL 4748296
at *4 (E.D.Pa. Aug. 17, 2020) (denying employer’s motion to dismiss employee’s counterclaim under WPCL for paid time off (“PTO”) wages; stating “[a]lthough [employer] did pay [employee’s] PTO ‘with interest,’ [employee] claims it did not do so until over nineteen months later—far after the 60-day period had passed. Therefore, [employee] may still be entitled to liquidated damages and [employer’s] Motion to Dismiss is DENIED with regards to the PTO payments in counterclaim count five”) (emphasis in original).7 ____________________________________________ 7 Although the employee in Endo had also asserted a counterclaim under the WPCL for severance pay (wages), the court granted the employer’s motion to dismiss that counterclaim. Seeid.
Thus, this case did not involve a scenario
where the employee was seeking another type of unpaid wages in addition to
liquidated damages. In other words, the court’s disposition in Endo supports
the notion that a standalone claim for liquidated damages is cognizable under
the WPCL. To be sure, the procedural history in Endo confirms that the
employee was terminated in January 2017, and she brought her counterclaims
under the WPCL against her employer on March 18, 2019, in which the
(Footnote Continued Next Page)
- 14 -
J-E01005-24
Reading the relevant provisions of the WPCL together as a whole and
with the purpose and liberal construction of the statute in mind (see Braun,
supra;Mattei, supra),
we hold that an employee can bring an action for
liquidated damages under the WPCL regardless of whether the employer has
paid all outstanding wages by the time legal action is commenced. Therefore,
the trial court properly denied NCB’s motion for summary judgment and
granted Aita’s cross-motion for summary judgment.
Turning to Aita’s cross-appeal, Aita argues that the trial court erred in
applying the three-year statute of limitations to reduce his liquidated damages
from $180,000.00 to $60,000.00.8 Aita claims that because NCB’s July 2017
payment “acknowledged” the debt was owed, it reset the statute of limitations
clock. We disagree.9
____________________________________________
employee admitted that her employer had already paid the PTO with interest,
albeit 19 months late. See id. at *2, *4.
8 The $180,000.00 Aita sought represented 25% of the $720,000.00 that NCB
had belatedly paid after the grace period expired. Nevertheless, because Aita
filed his complaint on February 13, 2019, the trial court found that any claim
for liquidated damages related to bonus payments that became due and
payable before February 13, 2016 fell outside the three-year statute of
limitations. Thus, the court reduced the award of liquated damages to
$60,000.00, representing 25% of the $240,000.00 that became due and
payable after February 13, 2016 (reflecting the payments that became due
and payable on March 1, 2016, April 1, 2016, May 1, 2016, and June 1, 2016,
all of which were paid late).
9 In its opinion, the trial court notes that Aita failed to serve his Rule 1925(b)
statement on the trial judge in accordance with the court’s order. Although
the court’s Rule 1925(b) order directed Aita to “serve upon the undersigned”
(Footnote Continued Next Page)
- 15 -
J-E01005-24
As previously mentioned, the WPCL has a three-year statute of
limitations. See 43 P.S. § 260.9a(g). Nevertheless, “the ‘acknowledgement
doctrine’ provides that a statute of limitations may be tolled or its bar removed
by a promise to pay the debt.” S.T. Hudson Engineers, Inc. v. Camden
Hotel Development Associates, 747 A.2d 931, 934 (Pa.Super. 2000)
(holding appellee’s claim was not barred by statute of limitations where
appellants had acknowledged that debt was owed, promised to pay its debt to
appellee, and appellee relied on such; in reliance on appellants’ promise to
pay, appellee agreed to wait until appellants received certain settlement
funds; nevertheless, appellants failed to remit payment of amount due despite
receipt of funds from which it had promised to pay appellee; therefore,
appellee was not on notice of any breach of appellants’ promise until
appellants denied payment after receiving funds from its settlement).
Significantly, we must interpret the “acknowledgment doctrine” strictly.
Huntingdon Finance Corp. v. Newtown Artesian Water Co., 659 A.2d
1052, 1054 (Pa.Super. 1995). Thus:
A clear, distinct and unequivocal acknowledgment of a debt
as an existing obligation, such as is consistent with a
____________________________________________
his Rule 1925(b) statement no later than 21 days from date of order, the trial
court’s order also failed to comply with our Rules of Appellate Procedure by
specifying the place Aita could serve the statement in person and the address
to which Aita could mail the statement. See Pa.R.A.P. 1925(b)(3)(iii). Thus,
we decline to find waiver of Aita’s issue on this ground and address the merits
of Aita’s cross-appeal. See Commonwealth v. Jones, 193 A.3d 957
(Pa.Super. 2018) (declining to waive issue for failure to serve trial judge with
Rule 1925(b) statement where trial court’s Rule 1925(b) order was deficient).
- 16 -
J-E01005-24
promise to pay, is sufficient to toll the statute. There must,
however, be no uncertainty either in the acknowledgment
or in the identification of the debt; and the
acknowledgment must be plainly referable to the very
debt upon which the action is based; and also must be
consistent with a promise to pay on demand and not
accompanied by other expressions indicating a mere
willingness to pay at a future time. A simple declaration of
an intention to discharge an obligation is not the equivalent
of a promise to pay, but is more in the nature of a desire to
do so, from which there is no implication of a promise.
* * *
The acknowledgment doctrine serves a very useful purpose
to both parties in that the creditor receives payment on a
debt that would otherwise be unenforceable and the debtor
satisfies a moral obligation to make payments pursuant to
a contract where no legal obligation exists, thereby
bolstering the credibility of its business. To accept
appellant’s position, debtors would be discouraged from
acknowledging debts because of the corresponding interest
payments, which in some instances could exceed the
principal. The four-year statute of limitations [applicable in
this case] serves to protect individuals from suffering the
continuing anxiety over the possibility of the
commencement of an action against them in the future.
Because this acknowledgment doctrine removes the
protection of the statute of limitations, the acknowledgment
must be patently clear and distinct and free from ambiguity.
Id. at 1054-55 (citation omitted) (emphasis added) (holding appellee
unquestionably acknowledged its obligation with respect to principal of debt;
there can be no more clear and unequivocal acknowledgment of debt than
actual payment, thus removing statute of limitations with respect to principal;
however, this acknowledgment does not extend to corresponding interest on
underlying debt; appellant does not cite to any place in record where appellee
acknowledged duty to pay contested interest; appellee’s payment was exact
- 17 -
J-E01005-24
amount of principal owed; thus, appellee’s payment of principal cannot be
construed as promise to also pay interest when appellee never acknowledged
such duty).
Instantly, the trial court explained its decision to award Aita $60,000.00
in liquidated damages instead of the amount Aita sought as follows:
[T]he three-year limit attached to each first regular payroll
date from January 2015 and each regular payroll date for
seventeen months thereafter. Aita filed the Complaint,
commencing legal action, on February 13, 2019. Any
Retention Bonus installment payment which became due
and payable before February 13, 2016, was therefore,
outside the statute of limitations.
* * *
NCB’s final payments did not constitute a partial payment
so as to infer a promise to pay liquidated damages. Aita
does not cite to any place in the record where NCB
acknowledged a duty to pay liquidated damages. Further,
Aita’s position is a contravention of public policy. The
acknowledgment doctrine serves a very useful purpose to
both parties in that the creditor receives payment on a debt
that would otherwise be unenforceable and the debtor
satisfies a moral obligation to make payments pursuant to
a contract where no legal obligation exists, thereby
bolstering the credibility of its business. To allow the tolling,
employer debtors would be discouraged from
acknowledging wages owed because of other corresponding
interest or, in this case, liquidated damages.
(Trial Court Opinion at 14-16) (internal citations omitted).
We agree with the trial court’s rationale. While there is no dispute that
NCB “acknowledged” the debt for the unpaid bonuses by virtue of the July
2017 payment, the trial court correctly found that Aita does not cite to any
place in the record where NCB “acknowledged” a duty to pay liquidated
- 18 -
J-E01005-24
damages under the WPCL. (See id.) To the contrary, NCB has consistently
contested any obligation to pay liquidated damages (see, e.g., Aita’s
Supplemental R.R. at 371b-376b) (providing July 2017 e-mail thread where
NCB acknowledged obligation to pay bonuses and interest but expressly stated
that it did not intend to pay 25% in liquidated damages), and as evidenced by
this appeal. Aita has simply failed to show that NCB acknowledged any
obligation to pay liquidated damages in a way that was “patently clear and
distinct and free from ambiguity.” See Huntingdon Finance Corp., supra.10
Because the trial court properly found that NCB did not acknowledge a debt
for liquidated damages under the WPCL, we see no error in the court’s denial
of liquidated damages in the amount sought. Accordingly, we affirm.
Order affirmed.
____________________________________________
10 Aita argues that Huntingdon Finance Corp. is distinguishable because
liquidated damages due under the WPCL are different from interest due in a
breach of contract claim. (See Aita’s Substituted Brief at 18). Aita claims
that, unlike interest, liquidated damages are not a separate component of the
underlying debt. Rather, liquidated damages are due as a result of the breach
of the WPCL. (See id. at 18-19). Although we agree with Aita, in general,
that interest and liquidated damages are not the same under the law and may
have distinct purposes, we disagree with Aita that those differences are
dispositive here. Just as the appellee in Huntingdon Finance Corp.
acknowledged the obligation to pay the principal but not the interest, here,
NCB acknowledged its obligation to pay Aita the unpaid bonuses and interest,
but not any liquidated damages due thereon. See Huntingdon Finance
Corp., supra. Additionally, as the trial court observed, and as expressed in
Huntingdon Finance Corp., Aita’s position contravenes public policy. If
plaintiffs are permitted to recover liquidated damages on claims otherwise
barred by the three-year statute of limitations, it would discourage employers
from acknowledging wages owed because of other corresponding payments of
liquidated damages. See id.
- 19 -
J-E01005-24
President Judge Lazarus, Judge Kunselman, Judge Nichols,
and Judge Lane join the Opinion.
Judge Bowes files a Dissenting Opinion in which Judge
Stabile, Judge Dubow and Judge Sullivan join.
Judge Sullivan files a Dissenting Opinion in which Judge Dubow joins.
Date: 9/26/2024
- 20 -