Karl Kersteter, V. Concrete School District

• Court: Court of Appeals of Washington
• Decided: March 14, 2022
• Docket: 82511-9
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

KARL KERSTETER, No. 82511-9-I Appellant, DIVISION ONE v. UNPUBLISHED OPINION CONCRETE SCHOOL DISTRICT, a governmental entity,

Respondent.

APPELWICK, J. — Kersteter appeals from summary judgment dismissal of

his statutory claim that he was misclassified as a part-time employee to avoid

payment of employment benefits and his common law claim that his employer was

unjustly enriched by the excess hours he worked. We affirm.

FACTS

Karl Kersteter worked for the Concrete School District as the transportation

supervisor from 2006 to 2017. Every year Kersteter signed a new contract with

Concrete. Each of these contracts indicated his job was less than full-time. But,

his written statement indicated that he arrived at work before the buses left, around

5:00 a.m., and he stayed until the last bus returned around 5:00 p.m. He

sometimes took a break from 9:15 a.m. to 12:30 p.m., but often missed this break

when issues arose requiring his assistance. In this role, Kersteter estimates he

worked about 8.75 hours a day, translating to about 43 hours per week, which was

more than the hours in his contract. No. 82511-9-I/2

When meeting about his new contract each year he asked for more time to

be included in his contract. He asserted that these were always oral requests, not

written. Kersteter’s hours were gradually increased from .5 FTE1 to .71 FTE. 2

Kersteter’s highest salary in this position was $34,540 a year. He was enrolled in

Washington Public Employment Retirement System (PERS) Plan 3. He asserted

that his benefit entitlements were affected by his part-time status, because they

were determined based on his part-time classification: at .5 FTE he received 50

percent of his benefits, and at .71 FTE, he received 71 percent of his benefits.

Although Kersteter believed he was working more than a part-time position,

he stated that he continued to sign the part-time contracts because he needed to

work and there was no place nearby offering similar positions. According to

Barbara Hawkings, the former Concrete superintendent, Kersteter requested

revisions related to his pay, hours, and FTE, but he never requested full-time hours

and never told her that he was working full-time or over the hours in his contract.

Kersteter provided his notice of retirement to Concrete in 2017, with his last

day as December 31, 2017. To fill the position mid-year, Concrete reclassified the

position as full time and increased the salary to $54,000 per year. Concrete hired

Kathy Lafreniere to succeed him as the transportation supervisor.

1 “Full-time equivalency” ratios. 2 The record does not include Kersteter’s contracts with Concrete for the period from 2006-2007 to 2009-2010. The record includes his contracts from 2010-2011 through 2017-2018. Beginning in the 2010-2011 contract his hours were compensated at .5 FTE. That remained the same until the 2013-2014 contract when it increased to .625 FTE. His hours were again increased in the 2016-2017 contract, to .71 FTE. In the 2017-2018 contract, his hours remained at .71 FTE.

2 No. 82511-9-I/3

Kersteter filed a complaint for unpaid wages under chapter 49.46 RCW, the

minimum wage statute, and chapter 49.48 RCW, a statute covering wage

payments and collections.3 Kersteter amended his complaint, removing those

claims and instead alleging causes of action for: (1) unjust enrichment and/or in

the alternative, quantum meruit; (2) misclassification as a part-time worker under

RCW 49.44.170; and (3) attorney fees under the Washington wage payment act,

chapter 49.48 RCW.

Concrete filed an answer with affirmative defenses including failure to make

a claim of relief and lack of jurisdiction over the claim. Additionally, Concrete

asserted that the claims were barred by waiver, laches, res judicata, and failure to

mitigate, among other claims. Concrete then moved for summary judgment,

arguing that unjust enrichment and quantum meruit do not apply to written

contracts. Kersteter followed with a motion for partial summary judgment on

Concrete’s affirmative defenses.

The court considered both Concrete’s summary judgment motion and

Kersteter’s partial summary judgment motion. It granted Concrete’s summary

judgment on unjust enrichment and quantum meruit, but denied summary

judgment on misclassification. The court granted Kersteter’s motion for partial

summary judgment and dismissed Concrete’s affirmative defenses of lack of

jurisdiction, failure to state a claim, exhaustion, and res judicata. It did not dismiss

Concrete’s affirmative defense of waiver and/or estoppel.

3 Prior to filing this lawsuit, Kersteter had filed a pro se wage claim with the Department of Labor and Industries and an administrative appeal with the Office of Administrative Hearings. Both were dismissed before filing his complaint.

3 No. 82511-9-I/4

Concrete filed a second motion for partial summary judgment asking the

court to dismiss all Kersteter’s salary and pension claims.4 In support of this

summary judgment, Concrete provided former superintendent Hawkings’s

declaration. Hawkings stated that she classified this role as part-time based on

information that other school districts of comparable size, demographics, and

location had part-time transportation supervisors.

Kersteter filed a second motion for partial summary judgment. He asked

the court to find that RCW 49.44.170 does not require that the employer knowingly

misclassified the employee and that the only facts in dispute were whether he was

incorrectly classified and the amount of damages. In support of this, Kersteter filed

declarations stating that he regularly worked over 40 hours in a week, and that

Hawkings verbally agreed that it was unfair that his contracts were for part-time

work.

The court granted Concrete’s motion. It said the parties stipulated that

Kersteter would not receive additional pension benefits if he was classified as full-

time. It found that “the only issue was should [Kersteter] have received more

money, a higher salary, for the job he agreed to do at the agreed salary.” It denied

Kersteter’s motion in its entirety, and found that his claims of increased salary and

pension did not fall under benefits within the scope of RCW 49.44.170. Kersteter

4 Concrete also raised a statute of limitations defense to all wages before 2015. The court found that Kersteter’s claims were subject to the three year statute of limitations under RCW 4.16.080, and all claims arising before June 5, 2015 were dismissed with prejudice. This issue is not raised on appeal.

4 No. 82511-9-I/5

voluntarily dismissed all remaining claims. The parties agreed to a stipulation and

order of dismissal that granted Concrete a final judgment and attorney fees.

Kersteter appeals the orders on competing motions for summary judgment,

the order granting the defendant partial summary judgment, and the stipulation and

order of dismissal.

DISCUSSION

I. Misclassification of Employees

We review summary judgment de novo, performing the same inquiry as the

trial court. Lybbert v. Grant County, 141 Wn.2d 29, 34, 1 P.3d 1124 (2000). “When

ruling on a summary judgment motion, the court is to view all facts and reasonable

inferences therefrom most favorably toward the nonmoving party.” Id. “A court

may grant summary judgment if the pleadings, affidavits, and depositions establish

that there is no genuine issue as to any material fact and the moving party is

entitled to judgment as a matter of law.” Id.

Kersteter argues the trial court erred in dismissing his damages claims

under RCW 49.44.170. He argues that Concrete deliberately took advantage of

him by paying a part-time salary for full-time work. He argues he is entitled to

damages in the amount of the difference between his actual salary and what he

should have been paid as a full-time employee and associated lost pension

benefits. He asserts that these damages are based on his lost wages and are

“squarely within the scope of damages that were contemplated by the Legislature”

when it enacted RCW 49.44.170.

5 No. 82511-9-I/6

Concrete argues that RCW 49.44.170 does not apply to wages and

Kersteter received the pension benefits he was entitled to receive. The pension

benefit is based on a formula of wages and service years. It is not disputed that

Kersteter was awarded a full service credit for each month worked. He was paid

the full amount of the salary stated in his written contracts. So, any loss of pension

benefits necessarily depends on having not been paid the proper amount of

wages.

We review questions of statutory interpretation de novo. Associated Press

v. Wash. State Legislature, 194 Wn.2d 915, 920, 454 P.3d 93 (2019). Under the

rules of statutory interpretation, we must ascertain and carry out the legislature’s

intent. Id. If the statute’s meaning is plain on its face, the court must give effect to

that plain meaning as an expression of the legislature’s intent. Id. If the statute is

ambiguous, or susceptible to more than one reasonable meaning, it is appropriate

to review the legislative history to glean intent. Id.

RCW 49.44.170 provides,

(1) It is an unfair practice for any public employer to: (a) Misclassify any employee to avoid providing or continuing to provide employment-based benefits; or (b) Include any other language in a contract with an employee that requires the employee to forgo employment-based benefits. (2) The definitions in this subsection apply throughout chapter 155, Laws of 2002 unless the context clearly requires otherwise. (a) “Employee” means a person who is providing services for compensation to an employer, unless the person is free from the employer’s direction and control over the performance of work. This definition shall be interpreted consistent with common law. (b) “Employment-based benefits” means any benefits to which employees are entitled under state law or employer policies or collective bargaining agreements applicable to the employee’s correct classification.

6 No. 82511-9-I/7

(c) “Public employer” means: (i) Any unit of local government including, but not limited to, a county, city, town, municipal corporation, quasi-municipal corporation, or political subdivision; and (ii) the state, state institutions, and state agencies. This definition shall be interpreted consistent with common law. (d) “Misclassify” and “misclassification” means to incorrectly classify or label a long-term public employee as “temporary,” “leased,” “contract,” “seasonal,” “intermittent,” or “part-time,” or to use a similar label that does not objectively describe the employee’s actual work circumstances. (3) An employee deeming himself or herself harmed in violation of subsection (1) of this section may bring a civil action in a court of competent jurisdiction.

Neither the term “benefit” nor “wage” is defined in the statute. “[W]e may

discern the plain meaning of nontechnical statutory terms from their dictionary

definitions.” State v. Kintz, 169 Wn.2d 537, 547, 238 P.3d 470 (2010) (alteration

in original). Webster’s defines “benefit” as, “a payment or service provided for

under an annuity, pension plan, or insurance policy, or government subsidized

program.” WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 204 (2002). It defines

“wage” as, “a pledge or payment of usually monetary remuneration by an employer

especially for labor or services usually according to contract and on an hourly,

daily, or piecework basis and often including bonuses, commission, and amounts

paid by the employer for insurance, pension, hospitalization, and other benefits.”

Id. at 2568. These definitions suggest that “wages” can be read to include benefits,

but “benefit” is not read to include wages.

Wages are not mentioned in RCW 49.44.170. Only one section in chapter

49.44 RCW—which covers violations and prohibited practices for employers—

mentions wages. In RCW 49.44.050, an employment agent who misstates any

material matter relating to wages paid to an employee is guilty of a misdemeanor.

7 No. 82511-9-I/8

But, even this section does not provide a remedy for unpaid wages. Remedies for

wage claims are established elsewhere in Title 49, in chapter 49.46 RCW, chapter

49.48 RCW, chapter 49.52 RCW, and chapter 49.56 RCW.

“Wage” is defined elsewhere in Title 49 to mean “compensation due to an

employee by reason of employment, payable in legal tender of the United States

or checks on banks convertible into cash on demand at full face value, subject to

such deductions, charges, or allowances as may be permitted by rules of the

director.” RCW 49.46.010(7). This definition is also applied in RCW

49.48.082(10). The plain language does not include benefits as part of wages.

We conclude the statute is not ambiguous. The plain meaning of

employment-based benefits does not include wages.

Even if we assume the definition of employment based benefits is

ambiguous, we would turn to the legislative history and reach the same result. The

bill reports confirm the legislative concern about benefits rather than wages in the

bill that became this law. In the final bill report, the background section states,

“Public employers sometimes provide a lower level of health insurance coverage,

retirement plan coverage, sick or annual leave, or other employment-based

benefits to persons who are employed on a part-time, temporary, leased, contract,

or other contingent basis.” FINAL B. REP. ON ENGROSSED SUBSTITUTE S.B. 5264, at

1, 57th Leg., Reg. Sess. 144 (Wash. 2002). Wages are not included in this list.

This statute stemmed in part from the dispute about health care benefits in

Mader v. Health Care Auth., 149 Wn.2d 458, 475 n.8, 70 P.3d 931 (2003) (“The

2002 legislature was reacting, in part, to the case before us when it enacted RCW

8 No. 82511-9-I/9

49.44.160 and .170.”). In Mader, community college teachers were not eligible for

healthcare over the summer, when they were not teaching courses. Id. at 462.

The court grappled over whether the teacher’s classification as “part-time” should

affect their year-round healthcare coverage. Id. at 475. It wrote, “[T]he legislature

indicated that the [Health Care Authority] should not exclude employees from

eligibility for comprehensive health care coverage simply because they are labeled

“‘part-time.’” Id. The litigation addressed only the teachers’ health care benefits.

There was no consideration of their wages.

We hold that employee-based benefits as used in RCW 49.44.170 do not

include wages. Kersteter abandoned all the wage claims under chapters 49.46

and 49.48 RCW when he filed his amended complaint. Any loss of pension

benefits was dependent on the wage claim. The trial court properly dismissed his

claims under RCW 49.44.170.

II. Unjust Enrichment

Kersteter asks the appellate court to reinstate his unjust enrichment claims,

as “the trial court had no basis in law, equity, or fact” for dismissing the claim.5

First, he argues that his part-time work contracts do not address any claims that

would arise around full-time work, and allow for a claim of unjust enrichment. Next,

he argues that the trial court erred by concluding that Kersteter’s claim for unjust

enrichment was barred as a matter of law. Because Kersteter and Concrete had

an express contract, no unjust enrichment claim applies.

5 Below, Kersteter coupled unjust enrichment and quantum meruit claims. However, he does not argue quantum meruit before this court.

9 No. 82511-9-I/10

“Unjust enrichment is the method of recovery for the value of the benefit

retained absent any contractual relationship because notions of fairness and

justice require it.” Young v. Young, 164 Wn.2d 477, 484, 191 P.3d 1258 (2008).

If a valid express contract exists, the courts will not allow a claim for unjust

enrichment. MacDonald v. Hayner, 43 Wn. App. 81, 86, 715 P.2d 519 (1986).

In MacDonald, two attorneys contracted to produce a report within 60 days

for a sum not to exceed $10,000. Id. at 82. It took them over six months to

complete the work. Id. At one point, they were granted a 30 day extension, with

no change in compensation. Id. They claimed that they had a conversation where

the other party said they would negotiate the question of further compensation after

submission of the report. Id. at 82-83. The attorneys claimed this created an

implied contract beyond the express contract they had signed. Id. at 85. The court

noted, “A contract implied in law, or ‘quasi contract’, arises from an implied duty of

the parties not based on consent or agreement; it is based on the prevention of

unjust enrichment.” Id. (quoting Heaton v. Imus, 93 Wn.2d, 249, 252, 608 P.2d

631 (1980)). It held no unjust enrichment existed because “‘A party to a valid

express contract is bound by the provisions of that contract, and may not disregard

the same and bring an action on an implied contract relating to the same matter,

in contravention of the express contract.’” Id. at 85-86 (quoting Chandler v. Wash.

Toll Bridge Auth., 17 Wn.2d 591, 604, 137 P.2d 97 (1943)). Like in MacDonald,

Kersteter had an express contract with Concrete, and cannot raise an unjust

10 No. 82511-9-I/11

enrichment claim. The trial court properly granted summary judgment on

Kersteter’s unjust enrichment claims.6

III. Attorney Fees

Kersteter requests attorney fees under RCW 49.48.030. Under this statute,

“[i]n any action in which any person is successful in recovering judgment for wages

or salary owed to him or her, reasonable attorney’s fees, in an amount to be

determined by the court, shall be assessed against said employer or former

employer.” RCW 49.48.030. Because we affirm the dismissal on all of the claims,

Kersteter is not entitled to fees. Concrete does not request attorney fees on

appeal.

We affirm.

WE CONCUR:

6Because we affirm summary judgment on Concrete’s motions, we need not address the denial of Kersteter’s motions.