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Cunningham v. Feinberg

Court of Appeals of Maryland

January 27, 2015


Argued November 12, 2014

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[Copyrighted Material Omitted]

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Circuit Court for Montgomery County. Case No. 8778 D.

For Petitioners: James S. Williford, Jr., James S. Williford, Jr., P.C., of Rockville, MD.

For Resondent: Matthew E. Feinberg, Nathan I. Finkelstein, The Finkelstein Group, P.C. of Bethesda, MD, on brief.

Barbera, C.J., Harrell, Battaglia, Greene, Adkins, McDonald, Watts, JJ. Adkins, J., concurs.


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[441 Md. 315] Harrell, J.

In this relatively contentious dispute between a young lawyer associate and his former law firm employer over a small amount of allegedly unpaid wages, a medium amount of treble damages, and a large amount of attorney's fees, we are called on to consider the intersection between a fairly complex choice of law doctrine and a fairly straightforward portion of Maryland's Labor and Employment statute. We hold that unpaid wage claims arising from employment entered into in states other than Maryland are not excluded, for that reason alone, from being litigated under the Maryland Wage Payment and Collection Law (" MWPCL" ), Labor & Employment, § § 3-501 et. seq. The choice of law doctrine lex loci contractus is not implicated, in the absence of an express choice of law selection in the contract, when such claims do not involve the validity, enforceability, interpretation, or construction of the employment contract. We suggest further that the MWPCL represents

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[441 Md. 316] Maryland's strong public policy. Final resolution of the parties' dispute must await, however, another day in court.

I. Statement of the Case, Numerous Allegations, and One Fact

Matthew Feinberg, Esq. (" Feinberg" ), filed on 4 October 2012 a Complaint in the District Court of Maryland, sitting in Montgomery County, against Cunningham & Associates, P.L.C. (" C& A" ), a Virginia-based law firm, and its principal, Joseph F. Cunningham (" Cunningham" ).[1] Although the Complaint set out four counts, only one survives here: Feinberg's claimed violation by C& A and Cunningham of the Maryland Wage Payment and Collection Law (" MWPCL" ), Maryland Code (1999, 2008 Repl. Vol.), Labor & Employment, § § 3-501 et. seq.,[2] for which he seeks $1,974.20 in unpaid wages, treble damages, attorney's fees, and costs.[3][4]

Feinberg was the only witness to testify at the 17 April 2013 trial in the District Court. He told the Court of his application for an attorney position with C& A, the interview process, and his initial understanding of the terms of his employment. Feinberg suggested that he was hired by C& A to serve as a Maryland attorney, handle Maryland cases, appear before Maryland courts, and advise Maryland clients. He recounted signing a written agreement (" Agreement" ) with Cunningham wherein his position was described as that of an " independent contractor," although he could not recall specifically [441 Md. 317] where geographically he signed the agreement. He spoke about his day-to-day practice, work environment, and responsibilities, including Cunningham's requirement that he spend the vast majority of his time in C& A's Virginia office. Feinberg testified that his work for Petitioners included representing clients at trial and motions hearings, attending depositions, meeting with clients, and gaining admission to the U.S. District Court, all in Maryland. As might be expected in a wage claim case, a substantial portion of Feinberg's testimony was devoted to the manner in which he was paid by C& A and monies that he claimed were withheld improperly from his paychecks on various occasions. The Agreement that Feinberg signed with Cunningham was produced. The portions of the contract relevant potentially to the payment of wages are as follows:

That in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, it is hereby mutually agreed . . . :
. . .
5. Contractor invoices will be submitted bi-weekly.
. . .
7. The Contractor will determine the amount of hourly time expended on work assigned to be undertaken.

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8. The Contractor's earnings will depend solely on his/her own production.[5]

Feinberg also discussed several instances when he disputed with Cunningham particular withholdings.

At the close of Feinberg's case-in-chief, Petitioners moved to dismiss the remaining wage claims on two grounds: first, no claim could lie on an implied contract theory, such as quantum meruit or unjust enrichment, as there was an express contract between the parties; and, second, the parties' contract was governed, under Maryland's choice of law principles, by Virginia's law, and, as such, the MWPCL did not [441 Md. 318] apply.[6] After hearing arguments from both sides, the District Court granted Petitioners' motion. Ruling from the bench, the judge found the following facts in support of his ruling:

[T]he testimony in this case began by Mr. Feinberg describing his applying for this job, seeing this ad and applying with [C& A]. And he submitted his resume[; ] he then goes to Virginia where he meets with [Cunningham].
. . . They signed this contract. I think it's a Virginia contract.
. . . I understand Mr. Feinberg has an office in Bethesda. . . . And he was living in D.C. . . . [A]fter he left [C& A] he moved to Gaithersburg where he got a couple checks. And then he moved back to D.C.

The trial judge's ruling turned on one fact: the employment contract was a " Virginia" contract. In his view, because the Agreement between Feinberg and C& A was an employment contract entered in Virginia, and not in Maryland, the court held that the MWPCL did not apply, and the contract was governed instead by Virginia law. Furthermore, the District Court did not identify a strong public policy basis to apply the MWPCL to Feinberg's claims.[7] Accordingly, the District Court did not find any facts in addition to the one that was--in [441 Md. 319] its view--dispositive.[8] The court noted that the dismissal was without prejudice, in order to preserve any potential causes of action that Feinberg may have in Virginia.

Feinberg filed a Motion to Alter or Amend Judgment and/or for Reconsideration regarding his MWPCL claim. He relied on Himes Associates, Ltd. v. Anderson, 178 Md.App. 504, 943 A.2d 30 (2008),

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which he suggested was controlling appellate precedent.[9] In that case, the plaintiff, employed by a Virginia company, worked primarily from a Virginia office, but performed certain work in Maryland. Himes, 178 Md.App. at 513-16, 943 A.2d at 35-36. The intermediate appellate court held that Anderson could bring a suit in Maryland under the MWPCL. Himes, 178 Md.App. at 535, 943 A.2d at 48. Feinberg argued that he was actually C& A's employee, not an independent contractor, and as such that he was entitled to the unpaid wages, treble damages, and attorney's fees and costs. His motion was denied.

Feinberg appealed, on the record, to the Circuit Court for Montgomery County. See Maryland Rule 7-102(b)(1). The parties submitted on memoranda. Feinberg reiterated his argument that Himes controlled, that the District Court erred in granting Petitioners' Motion to Dismiss Feinberg's MWPCL claim, and further argued that the evidence at trial indicated that there was a violation of the MWPCL. Petitioners, in their written response, argued that the doctrine of lex loci contractus required that Feinberg's claims be resolved under Virginia law. Petitioners relied on several federal cases for the proposition that the MWPCL did not reflect any fundamental public policy of Maryland so as to supersede traditional conflict of laws principles. Petitioners argued, in the alternative, that if the MWPCL claim was dismissed improperly below, the case should be remanded for further [441 Md. 320] fact-finding. Feinberg, in his reply, argued inter alia that lex loci contractus did not apply to his wage claims.

The Circuit Court reversed the dismissal of Feinberg's MWPCL claim and remanded the matter for further proceedings. That court did not disturb the District Court's factual finding that the employment contract was a " Virginia" contract, but reasoned that Himes controlled, suggesting that Feinberg could recover under the MWPCL. The Circuit Court declined to determine whether Feinberg was indeed an employee of C& A or whether there was a bona fide dispute as to the wages claimed, but instead left those issues to the District Court on remand.[10]

We granted C& A's and Cunningham's Petition for Writ of Certiorari. 437 Md. 66, 85 A.3d 156 (2014). Petitioners posed the following two questions:

1. Does application of the Md. choice of law principle of lex loci contractus preclude a claim under the Md. Wage Payment and Collection Law (MD. Code Ann. Lab. & Empl. § 3-501 et seq. (" MWPCL" ))?
2. Does proper application of lex loci contractus preclude respondent's MWPCL claim?

Petitioners urge us to address squarely the interface between the reach of the MWPCL and the common law choice of law principle lex loci contractus. They argue that choice of law principles require the parties' dispute over unpaid wages be

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settled under Virginia law in the appropriate forum, rather than under the MWPCL, because the contract was a " Virginia" contract. In support of their argument, Petitioners marshal several federal cases decided by the U.S. District Court for the District of Maryland and the U.S. Court of Appeals for [441 Md. 321] the Fourth Circuit to suggest that disputes in Maryland's courts over employment contracts entered into in other states should be resolved according to the law of those other states, unless the other state's law runs contrary to a strong Maryland public policy. Specifically, Petitioners argue that Virginia's relevant statutory law is a substantive part of the parties' contract, and therefore choice of law principles are implicated. Petitioners further assert that the MWPCL does not represent a strong public policy of Maryland, and that lex loci contractus should not be abandoned in favor of a more " modern" approach.

Feinberg reiterates the arguments made in the trial courts, and suggests further that the Circuit Court declined correctly to apply lex loci contractus to the present litigation because that doctrine only applies to questions of validity or interpretation of a contract. He argues also that, even if lex loci contractus does apply, the MWPCL represents a strong public policy which should override the application of that doctrine to the case at bar, and this Court should ignore selectively the doctrine in favor of a more modern approach favoring his position.

We hold that the matter before us does not implicate the choice of law doctrine of lex loci contractus. In a nifty bit of considered dicta, even if lex loci contractus applied, we think that it would not preclude a claim such as Respondent's under the ...

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