COA splits over liquidated damages award in breach of contract suit

A dentist who was fired from her job just weeks after starting because she refused to lower her compensation could not convince the Court of Appeals of Indiana that she should get to keep more than $45,000 in liquidated damages from her breach of contract suit.

Within weeks of beginning her employment at Family Dental Care P.C., Dr. Christine Mousa was confronted by its principal, Dr. Chanbo Sim, about her paycheck.

Before joining Family Dental, Mousa signed an employment agreement that she would be given 30% of her net collections and that she must be provided with a 30-day notice if she were to be terminated from the position.

When Sim believed that Mousa was being overcompensated for her work, he gave her three options of how to reduce the amount she should be paid. Refusing to change any terms of her employment, Mousa requested a 30-day written notice if Family Dental intended to terminate her current employment contract.

Rather than abiding by the contract, the following week Sim handed Mousa a check for $825.97, from which no employment taxes were withheld, and refused to provide the notice of termination. Family Dental also did not forward any additional sums to her despite subsequent collections for dental services she performed.

Mousa sued both Family Dental and Sim — the latter of whom was later dismissed as a defendant — for breach of contract, conversion and violation of wage law.

The Lake Superior Court ruled partially for Family Dental on the conversion claim and partially for Mousa on Family Dental’s counterclaim for an alleged breach of the employment agreement’s noncompete clause.

After a bench trial, the trial court in March 2021 found Family Dental acted in bad faith through its failure to pay the wages due and awarded Mousa $94,465.82 in damages, with $45,995.24 of that being liquidated damages.

The Court of Appeals of Indiana split Wednesday in partially affirming and reversing in Family Dental Care, P.C. v. Christine Mousa, 21A-PL-670.

It concluded that while the trial court was correct in denying Mousa her requested attorney fees, it erred in granting her the liquidated damages.

“Because Dr. Mousa was terminated by Family Dental, her wage claim, filed after her involuntary separation, clearly fell under the (Wage Claim Act), and her suggestion to the contrary is without merit,” Judge Robert Altice wrote for the majority. “Further, Dr. Mousa stipulated below that she failed to file a claim with the (Department of Labor) prior to filing her complaint with the trial court.

“Dr. Mousa claims that she was entitled to take her wage claim straight to court and seek attorney fees and liquidated damages under the Wage Payment Statute,” Altice continued. “We cannot agree.”

The COA pointed out the fact that Mousa’s claim, which exceeded $6,000, did not negate the need for a letter of referral for her counsel to seek redress for her under the Wage Payment Statute.

While the majority agreed with dissenting Judge L. Mark Bailey’s concern regarding the imprecise language used by the DOL on its online wage claim form, the majority concluded that the statutory language is clear: “in the context of the WCA, only the attorney general or the designee of the attorney general may proceed under the Wage Payment Statute.”

“Thus, we conclude that the trial court erred in awarding liquidated damages to Dr. Mousa but that it properly denied her request for attorney fees. On remand, the trial court is directed to reduce the damages award accordingly,” it wrote.

In dissent, Bailey argued he would reverse the trial court decision regarding attorney fees and costs.

“Of course, here, neither the AG nor a private lawyer designated by the AG could initiate a lawsuit on Mousa’s behalf because the DOL refuses to process, investigate, and refer to the AG any claim such as Mousa’s that exceeds $6,000,” he wrote. “Again, Mousa should not suffer a loss of her claims simply because the DOL fails to comply with the law.”

Editor’s note: This article has been updated and corrected.