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Labor Commission v. Price

Court of Appeals of Utah

December 12, 2019

Labor Commission, Appellant and Cross-appellee,
Derek Price, Appellee and Cross-appellant.

          Third District Court, Salt Lake Department The Honorable Su Chon No. 126918635

          Sean D. Reyes and Brent A. Burnett, Attorneys for Appellant and Cross-appellee

          Mark D. Tolman and Jessica P. Wilde, Attorneys for Appellee and Cross-appellant

          Judge David N. Mortensen authored this Opinion, in which Judges Michele M. Christiansen Forster and Jill M. Pohlman concurred.


         ¶1 As specifically provided for in Utah Code section 34-28-9(4)(a) (LexisNexis Supp. 2019), the Labor Commission (Commission) filed in the district court an abstract of judgment obtained in an administrative proceeding against Derek Price and others.[1] Some years later, when the Commission garnished his wages, Price filed a motion to vacate that judgment. Focusing on due process, specifically service by mail, Price claimed that the judgment was obtained without jurisdiction and was therefore void. He also argued that the judgment was unenforceable against him in light of Heaps v. Nuriche, LLC, 2015 UT 26, 345 P.3d 655, a decision from our supreme court that delineated the extent of personal liability of corporate officers and agents for unpaid wages. The district court agreed on both counts. However, rather than vacating the Commission's judgment, the district court quashed the garnishment and ordered Price to pursue a motion to set aside the judgment with the Commission. We reverse.


         ¶2 In May 2010, Marc Cummings filed a wage dispute claim with the Commission against Level 11 Mentoring (Level 11) and Mad Cow Productions (Mad Cow). In the articles of organization for the two companies, Price was listed as the sole member-manager and registered agent of Mad Cow and one of the four member-managers of Level 11. The Commission commenced a wage claim against these employers and several individuals associated with them, and it identified Price as a respondent in the wage claim action filed by Cummings. The other respondents also identified by the Commission included (1) Level 11, (2) Mad Cow, (3) Aaron Christner (a member-manager of Level 11), and (4) Ryan Jensen (the registered agent and a member-manager of Level 11).

         ¶3 In September 2010, the Commission issued and mailed notices of the wage claim. The notices advised the respondents that they could either pay the wages or submit a form detailing their disagreement with the allegation. In November 2010, having received no response from any of the respondents, the Commission issued and mailed a preliminary finding stating that respondents owed Cummings $4, 721 in unpaid wages. The respondents were advised that if they disagreed with the preliminary finding, they could request a review or informal hearing. On January 27, 2011, the Commission issued and mailed a default order (Default Order) directing the respondents to pay (1) $4, 721 in wages to Cummings, (2) a $4, 721 fine, and (3) $3, 148 in attorney fees, for a total award of $12, 590. The Default Order concluded with the following notice:

Both parties are advised that this [Default Order] is the final agency action, when mailed, unless a written request for agency reconsideration is received within 20 days of the date of this [Default Order]. . . . Additionally, the parties are advised that pursuant to Utah Code § 63G-4-401, they may appeal a final agency decision to the District Court. That appeal must be made within 30 days of the date of the final agency action.

         ¶4 Copies of these three documents (viz., the wage claim, the preliminary finding, and the Default Order) were sent via first-class mail to Price at the two addresses-one in Orem, Utah, and another in Salt Lake City, Utah-listed for him in the Utah Department of Commerce's records. None of these mailings were returned to the Commission as undeliverable by the U.S. Postal Service. The Commission also mailed the same documents to the other respondents at their recorded addresses.

         ¶5 Price claimed that he never received the mailings, explaining that he had not lived at the Orem address since the early 1990s and that he had never lived at and did not recognize the Salt Lake address, which the Commission also identified as the address of Mad Cow. Price also asserted that Christner and Jensen had listed him as the registered agent and a member-manager of Mad Cow without his knowledge or consent. Price further claimed that he had quit working for Mad Cow around September 2010 after his paychecks bounced and he lost confidence in the company's ability to pay him for his work. Price stated that he was living in Sandy, Utah, around the time he quit. He then moved to California for a few years, eventually returning to St. George, Utah, in 2015, and later moving to Midvale, Utah, in 2016.

         ¶6 In June 2012, the Commission sought to collect on the Default Order by filing an abstract of final award with the district court identifying the amount of unpaid wages, fines, and attorney fees detailed therein. In January 2017, an administrative writ of garnishment was issued and served on Price's employer. After learning of the garnishment from a coworker, Price filed a request for a hearing on the matter in district court. In response, the court, on February 17, 2017, stayed the writ of garnishment for thirty days to allow Price to try to resolve his concerns with the Commission. Price claimed that he "sent certified mail containing several papers" to the Commission explaining that he was never an owner of Mad Cow.[2] Having received no response, Price asserted that he attempted to make contact with the Commission through phone calls, personal visits, and email. On April 4, 2017, Price received an email from the Commission stating,

Proper notice of this claim, and its progression, was sent to numerous addresses of all principals of the business, including yourself, Mr. Christner, and Mr. Jensen. This includes the initial notice of claim, subsequent Preliminary Finding, and subsequent Order on Default and Order to Pay.
Numerous opportunities were given to appeal or dispute the claim, and the involvement or lack thereof as to the named Respondents therein. This claim was originally filed in May 2010, with a subsequent order to pay issued on January 27, 2011. The time to dispute this claim has long since passed.

         ¶7 Price, who up until this point had been acting pro se, retained counsel and filed in the district court a motion to vacate the Commission's judgment. The Commission filed a memorandum in opposition.

         ¶8 In August 2017, the district court issued a memorandum decision in which it ruled that (1) the res judicata doctrine did not bar Price from pursuing judicial review of the Commission's action; (2) service by first-class mail was insufficient to provide Price notice and afford him due process; and (3) Heaps v. Nuriche, LLC, 2015 UT 26, 345 P.3d 655, applied retroactively to shield Price from personal liability for the amounts owed pursuant to the Default Order because he was not an "employer" under the Utah Payment of Wages Act, see Utah Code Ann. ยง 34-28-2(1)(c) (LexisNexis Supp. 2017). However, the district court did not vacate the Commission's Default Order against Price. Instead, it quashed the writ of garnishment and ordered Price to "pursue ...

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