Intelligent Mortgage and Consulting Services LLC v. Arbor Lending Group, L.L.C., Paul Leblanc, Kevin Morgan, Angele Mixson, and Jelena Bryant
La. Ct. App.
Opinion
STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
DOCKET NUMBER
2023 CA 1183
INTELLIGENT MORTGAGE AND
CONSULTING SERVICES, LLC
VERSUS
ARBOR LENDING GROUP, L. L. C., PAUL LEBLANC,
KEVIN MORGAN, ANGELE MIXSON AND ] ELENA BRYANT
Judgment Rendered:
ON APPEAL FROM THE
NINETEENTH JUDICIAL DISTRICT COURT, DIVISION 21
IN AND FOR THE PARISH OF EAST BATON ROUGE
STATE OF LOUISIANA
DOCKET NUMBER 689083
Kyle M. Keegan
Attorneys for Plaintiff -Appellant
J. Brian Juban
Baton Rouge, Louisiana
Intelligent Mortgage and Consulting
Services, LLC
Kenneth C. Bordes '
Attorneys for Defendant -Appellee
New Orleans, Louisiana Angele Mixson
BEFORE:
McCLENDON, THERIOT, AND GREENE, 33.
niC6u
J
J CGn Gm..S
GREENE, J.
This is an appeal from a judgment in favor of the plaintiff, Angele Mixson, on claims
asserted pursuant to the Louisiana Wage Payment Act ( LWPA), La. R. S. 23: 631, against
her former employer, Intelligent Mortgage and Consulting Services, LLC ( IMC) and its
owner, Brandon Abidin.
After review, the attorney fees award is vacated and we remand
the matter for a hearing on attorney fees. In all other respects, the judgment is amended
to provide that it is awarded against IMC only, and the judgment is affirmed as amended.
IMC is a residential mortgage broker. Arbor Lending Group, LLC is a competing
residential mortgage broker.
Ms. Mixson was formerly employed with IMC as a loan
originator and had an employment agreement with IMC.
Beginning around March 2019, while employed at IMC but secretly working for
Arbor, Ms.
Mixson and another loan originator allegedly began emailing themselves
electronic data files accessed from IMC's computer system. IMC contended that Ms.
Mixson and the other loan originator "stole" the loan files by attaching the electronic data
files to emails sent from IMCs computer systems to the employees' personal and Arbor -
provided email addresses. IMC terminated Ms. Mixson on April 29, 2019.
IMC filed a petition for damages on October 10, 2019, against Ms. Mixson and
ther defendants, alleging that the defendants used its stolen loan files to broker loaa.,%
through Arbor for IMUS customers. IMC asserted claims of conversion, violations of
Louisiana' s Uniform Trade Secrets Act (" LUTSA"),' violations of Louisiana' s Unfair Trade
Practices and Consumer Protection Law (" LUTPA"), 2 tortious interference with business,
breach of contract, fraud, negligence, and unjust enrichment.
Tis. Mixson filed a reconventional demand against IMC and Mr. Abidin personally,
asserting the LWPA claims at issue in this appeal. These claims arose from a single loan
the Lewis loan)
that closed at IMC shortly after Ms. Mixson' s termination. Had Ms.
Mixson remained at IMC at the time the loan closed, she would have received a
commission of $ 1, 542. 56.
I See La. R. S. 51: 1431, et seq.
2 See La. R. S. 51: 1401, etseq
4
The case proceeded to trial on Ms. Mixson*s wage claims on November 8, 2021f
and afterward the trial court took the matter under advisement.3 Thereafter, the trial
court awarded Ms. Mixson $ 1, 542. 56 in unpaid wages, $
32, 860. 80 in penalty wages, and
26, 700. 00 in attorney fees, for a total of $ 61, 103. 36, plus interest and costs. The
judgment was signed on May 11, 2022. The award was issued against IMC and Mr.
Abidin in solido. IMC and Mr. Abidin appealed the judgment.4
2.
The [ trial court] erred by declaring IMC' s employment agreement null
and void in its entirety based on a California choice of law provision ( that
no party sought to enforce).
3. The [ trial court] erred by finding that IMC"s employment agreement
operated as an impermissible fine under La. R. S. 23: 635.
4.
The [ trial court] erred by awarding penalty wages.
5.
The [ trial court] erred by awarding [ attorney] fees. Even if [ attorney]
fees were due, the [ trial court's] award constituted an abuse of discretion
because it did not resolve ambiguities in the amount and basis of the fees
equested.
6.
The [ trial court] erred by finding [ Mr.] Abidin personally liable under the
LWPA.
In assignments of error numbers one, two, and three, IMC maintains that the trial
court erred in finding that Ms. Mixson was due unpaid wages of $ 1, 542. 56 as her
employment contract with IMC allowed IMC to withhold wages due to unlawful activity.
IMC maintains that Ms.
Mixson' s employment with IMC entitled her to commission
payments in accordance with the pay scale set forth in her employment contract. It
asserts that the employment contract provides that after termination, employees receive
full or partial commission payments in amounts that are proportional to how close a loan
I The record does not provide the disposition of IMCs claims against Ms. Mixson. However, at the start of
the trial, the parties agreed that the only matter before the court was Ms. Mixson' s claim against IMC.
4 In her brief, Ms. Mixson asked for an award of attorney fees for the defense of the appeal.
She did not
appeal or answer the appeal. We note that to be awarded attorney
tt fees and costs
cos for the work associated
ed
with answering and defending an appeal, an appellee must either file its own appeal or answer the appeal.
See Mollinere v. Lapeyrouse, 2016-0991 ( La. App. 1 Cir. 2/ 17/ 17), 214 So. 3d 887, 897- 98.
3
was to closing at the time of separation, but that the agreement does not provide for
these same payments for employees terminated for unlawful activity.
Louisiana Revised Statutes 23: 631 provides in part:
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)
Upon the resignation 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 for the pay cycle during which the employee was
working at the time of separation or no later than fifteen days following the
date of resignation, 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.
Louisiana Revised Statutes 23: 634 provides in part:
A. No person, acting either for himself or as agent or otherwise, shall require
any of his employees to sign contracts by which the employees shall forfeit
their wages if discharged before the contract is completed or if the
employees resign their employment before the contract is completed; but
in all such cases the employees shall be entitled to the wages actually
earned up to the time of their discharge or resignation.
Ms. Mixson testified that she was owed her commission on the Lewis loan, and Mr.
Abidin conceded that she had performed a substantial amount of work on the Lewis loan,
for which she sought her earned wages. Mr. Abidin testified that the Lewis loan closed
around a week after Ms. Mixson left IMC. Ms. Mixson put IMC on notice that the wages
were due in an April 30, 2019 email to Mr. Abidin noting that she had been working on
the Lewis loan for months, and that all that was left to be done was a " super simple"
matter regarding the appraisal report which had to be done by a third -party company
and should be completed in a few days.
In its defense against Ms. Mixson's wage claim, IMC maintained that Ms. Mixson
stole information from IMC by forwarding it to Arbor, her new employer. However, Ms.
19
Mixson testified that when she began working at IMC she was encouraged to bring files
with her from her former employer, Southwest, and that she did so in the same manner
that she forwarded files to Arbor when she was leaving IMC. Mr. Abidin agreed that files
were forwarded from Southwest, but maintained that was done with the permission of
Southwest after being denied because Southwest was not licensed in Texas and IMC was.
Notably, no police reports or criminal charges were ever filed against Ms. Mixson by IMC
for her actions.
Further, the employment agreement does not define " unlawful activity."
The trial court found that Ms. Mixson' s testimony was highly credible and rejected Mr.
Abidin's testimony due to conflicts in his testimony.
The trial court determined that IMC failed to establish that it met an exception to
the LWPA's wage payment provision. In awarding the full commission on the Lewis loan
as unpaid wages, the trial court disregarded the portion of the employment contract
providing for payment of a commission based on the status of the loan at the time of
termination.
The employment contract stated that a loan that was approved with
conditions would result in a 50 percent commission. In awarding the full commission,
the trial court presumably found that this provision was violative of La. R.S. 23: 634(A),
which provides that employees shall be entitled to the wages actually earned up to the
time of their discharge or resignation. We find no manifest error or legal error in that
determination.
In assignment of error number four, IMC maintains that the trial court manifestly
erred in finding IMC was not in good faith and in awarding penalty wages.5
Louisiana Revised Statutes 23: 632 provides:
A. Except as provided for in Subsection B of this Section, any employer who
fails or refuses to comply with the provisions of R.S. 23: 631 shall be liable
to the employee either for ninety days wages at the employee's daily rate
of pay, or else for full wages from the time the employee's demand for
payment is made until the employer shall pay or tender the amount of
unpaid wages due to such employee, whichever is the lesser amount of
penalty wages.
B. When the court finds that an employer's dispute over the amount of
wages due was in good faith, but the employer is subsequently found by
5 IMC does not maintain that the penalty wages were incorrectly calculated.
10
the court to owe the amount in dispute, the employer shall be liable only
for the amount of wages in dispute plus judicial interest incurred from the
date that the suit is filed. If the court determines that the employer's failure
or refusal to pay the amount of wages owed was not in good faith, then the
employer shall be subject to the penalty provided for in Subsection A of this
Section.
C. Reasonable attorney fees shall be allowed the laborer or employee by
the court which shall be taxed as costs to be paid by the employer, in the
event a well-founded suit for any unpaid wages whatsoever be filed by the
laborer or employee after three days shall have elapsed from time of making
the first demand following discharge or resignation.
Equitable defenses are available,
and penalty wages are not to be absolutely
imposed.
A good faith non -arbitrary defense to liability for unpaid wages, i. e., a
reasonable basis for resisting liability, permits the court to excuse the employer from the
imposition of penalty wages. However,
when an employer is arbitrary, sets out
procedural pitfalls for the employee, or is merely negligent in failing to pay past due
wages, penalty wages will be assessed. Scarbrough v. Lynmar Holdings,, LLC, 2021-
1566 ( La. App. 1 Cir. 8/ 31/ 22), 349 So. 3d 34, 37, writ denied, 2022- 01474 ( La 11/ 22/ 22),350 So. 3d 500
.
Reliance on an unlawful company policy does not constitute a good faith
non -arbitrary defense to liability for unpaid wages. Beard v. Summit Institute of
Pulmonary Medicine and Rehabilitation,, Inc., 707 So. 2d 1233, 1237 ( La. 1998)
Whether there exists a valid,
equitable defense to a claim of penalty wages
depends on the particular facts of each case. A trial court's determination of whether an
employer is arbitrary or in bad faith for purposes of imposing penalty wages is a question
of fact and is, therefore, subject to the manifest error standard of review. Scarbrough,
349 So. 3d at 38.
The trial court found that Ms. Mixson substantially completed the Lewis loan and
made demand for payment of her commission and that IMC was in bad faith in
withholding the payment. In so finding, the trial court presumably found that the
employment contract which provided for the payment of a commission based on the
status of the loan at the time of termination was violative of La. R. S. 23: 634( A), which
provides that employees shall be entitled to the wages actually earned up to the time of
their discharge or resignation, and thus there was no good faith dispute. The trial court
n.
determined that penalty wages of $ 32, 860. 80 were due. After review, we find no
manifest error in that determination.
In assignment of error number five, IMC asserts that the trial court erred in
awarding attorney fees, and that even if attorney fees were due, the trial court's award
constituted an abuse of discretion because it did not resolve ambiguities in the amount
and basis of the fees requested. During the trial, Ms. Mixson' s attorney moved to
introduce his attorney fee affidavit as his last exhibit. Counsel for IMC and Mr. Abidin
stated that he understood that, if an award was made to Ms. Mixson, the attorney fee
issue would be brought up post -hearing. The trial court stated "[ w] ell as long as the
rights to that issue [ are]
reserved, we can take it up later." No hearing was held;
however, the trial court awarded $ 26,700.00 in attorney fees, relying upon the affidavit
from Ms. Mixson' s attorney.
Ms.
Mixson maintains that the attorney fees award should be upheld as the
attorney fees affidavit pertained " only to the time and costs spent on this wage claim
between Ms. Mixson and IMC." 6 However, as the trial court failed to hold the hearing on
attorney fees, we find that the trial court erred in awarding attorney fees. We thus vacate
the attorney fees award and remand for a hearing on this issue.
In assignment of error number six, IMC maintains that the trial court erred by
finding Mr. Abidin personally liable, as Ms. Mixson's employer was IMC, not Mr. Abidin.
IMC maintains that the issue of personal liability of Mr. Abidin was not raised by Ms.
Mixson at trial, nor was evidence of personal liability presented. It asserts that the Rule
9. 5( b) certificate' submitted by Ms. Mixson's counsel with the proposed judgment noted
that Mr. Abidin objected to being named personally and that the certificate raised the veil
6 We note that Ms. Mixson brought an LWPA claim against Arbor Lending Group, LLC that settled in principle
the morning of trial.
7 Rule 9.5( b) of the Rule for Louisiana District Courts provides in part:
When submitted, the proposed judgment, order, or ruling shall be accompanied by a Rule
9.5( b) certificate stating: the date of mailing; the method of delivery of the document to
other counsel of record and to self -represented parties; whether any opposition was
received; and the nature of the opposition.
7
piercing/ alter ego argument for the first time. In response, Ms. Mixson maintains that
she proved that Mr. Abidin was the sole owner and decision maker for IMC, and that he
benefitted from withholding her wages.
The record shows that Ms. Mixson was employed by IMC, not by Mr. Abidin.
Because of the beneficial role of the corporate concept, the limited liability attendant to
corporate ownership should be disregarded only in exceptional circumstances. Moreover,
if the plaintiffs do not allege shareholder fraud, they bear a heavy burden of proving that
the shareholders disregarded the corporate entity to such an extent that it ceased to
become distinguishable from themselves. Riggins v. Dixie Shoring Co., Inc., 590
So. 2d 1164, 1168 ( La. 1991).
There are limited exceptions to the rule of non -liability of
shareholders for the debts of a corporation, where the court may ignore the corporate
fiction and hold the individual shareholders liable. Generally, that is done where the
corporation is found to be simply the " alter ego" of the shareholder. It usually involves
situations where fraud or deceit has been practiced by the shareholder acting through
the corporation.
Another basis for piercing the corporate veil is when the shareholders
disregard the requisite corporate formalities to the extent that the corporation ceases to
be distinguishable from its shareholders. Riggins, 590 So. 2d at 1168.
Some of the factors courts consider when determining whether to apply the alter
ego doctrine include, but are not limited to: 1) commingling of corporate and shareholder
funds; 2) failure to follow statutory formalities for incorporating and transacting corporate
affairs; 3) undercapitalization; 4)
failure to provide separate bank accounts and
bookkeeping records; and 5) failure to hold regular shareholder and director meetings.
Riggins, 590 So. 2d at 1168.
Ms. Mixson did not present evidence at trial to show that the corporate entity of
IMC ceased to become distinguishable from Mr. Abidin. See Riggins, 590 So. 2d at 1168.
Thus, the trial court erred in finding Mr. Abidin personally liable, and we amend the
judgment to provide that it is only against IMC.
CONCLUSION
The attorney fees award is vacated and the matter is remanded for a hearing on
attorney fees.
In all other respects, the trial court judgment is amended to provide that
0
E-
it is solely against IMC, and it is affirmed as amended. Costs of this appeal are assessed
one- half against Intelligent Mortgage and Consulting Services, LLC and one- half against
Angele Mixson.
ATTORNEY FEES AWARD VACATED AND MATTER REMANDED FOR
NEARING ON ATTORNEY FEES; IN ALL OTHER RESPECTS JUDGMENT IS
AMENDED AND AFFIRMED AS AMENDED.
E