Oral Argument December 2, 2013.
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Appeal from Pierce County Superior Court. Docket No: 10-2-14125-7. Date filed: 06/08/2012. Judge signing: Honorable John Russell Hickman.
Stephanie L. Bloomfield and Eric D. Gilman (of Gordon Thomas Honeywell LLP ), for appellant.
Thomas F. Gallagher (of Law Offices of Watson & Gallagher PS ) and Michael E. McAleenan Jr. (of Smith Alling PS ), for respondents.
AUTHOR: Joel Penoyar, J.P.T. We concur: J. Robin Hunt, J., Lisa Worswick, C.J.
[179 Wn.App. 671] ¶ 1 Ruby Jumamil appeals the trial court's summary dismissal of defendant Noel Coon from her wage withholding and wage rebating claims and dismissal of defendant Doug West from her wage rebating claim under RCW 49.52.050 and RCW 49.52.070. Jumamil initially filed various wage claims against Lakeside Casino LLC, d/b/a Freddie's Club Casino of Fife (Casino), her former place of employment; Coon, the Casino's sole limited liability company (LLC) manager; and West, one of the Casino's poker room floor supervisors. After the summary dismissal of Coon and West, a jury found the Casino liable for willful wage withholding and rebating. Shortly after the trial court entered judgment against the Casino, the Casino filed for bankruptcy.
¶ 2 Jumamil now argues that the trial court improperly dismissed Coon from her wage withholding claim because he willfully withheld her wages after learning about the Casino's dealer support policy, which required that poker dealers gamble an average of six hours a week to retain their seniority and which policy ultimately led to the withholding of Jumamil's wages. Jumamil also argues the trial court improperly dismissed Coon and West from her wage rebating claim because Coon received and West collected a rebate of her wages by requiring her to gamble back her wages to the Casino under the dealer support policy.
¶ 3 We hold a manager of an LLC is liable for improper wage withholding only where he knowingly participated in [179 Wn.App. 672] the wrongful withholding. Because Coon failed to release Jumamil's withheld wages after learning about the dealer support policy, he knowingly and willfully withheld her wages in violation of RCW 49.52.070. Accordingly, we reverse summary judgment as to Coon, hold Coon liable for willful wage withholding, and remand for an entry of costs and reasonable attorney fees against Coon under RCW 49.52.070. We also reverse the summary dismissal of Coon and West from Jumamil's wage rebating claim and remand for further proceedings because there are genuine issues of material fact regarding whether Coon and West collected or received a rebate of Jumamil's wages.
¶ 4 We reverse and remand for further proceedings consistent with this opinion.
¶ 5 The Casino was initially owned by Susan Mudarri and her husband, Eugene Mudarri Jr. At that time, Noel Coon had only a two percent membership interest in the Casino. After Mr. Mudarri's passing, Coon increased his ownership interest to 51 percent, with Ms. Mudarri retaining a 49 percent interest. Coon became the sole Casino manager with the " sole authority to decide whether and when to sell the Company, its assets and/or business." Clerk's Papers (CP) at 364; see also CP at 359 (Washington Secretary of State listing Coon as the managing member of the Casino). Coon also agreed to " oversee the Company's business with the goal of making it profitable and attractive for sale" and to loan up to $200,000 to the Casino as needed to enable it to become profitable. CP at 364. Coon listed himself as the " highest-ranking" individual on the license renewal applications to the Washington State Gambling Commission,
which he signed as the Casino's managing member. CP at 368. Coon also identified himself as managing member on promissory notes for payment to [179 Wn.App. 673] Hana Hou Wailea LLC from the Noel T. Coon Living Trust. Coon and Ms. Mudarri shared the Casino profits equally; however, neither was entitled to receive a salary for their services performed. Upon the sale of the Casino, Coon was entitled to receive the first $5,000,000 of net proceeds.
¶ 6 Coon lives in Texas and visited the Casino occasionally to check in with the managers or to have lunch in the Casino restaurant. Coon stated that he did not write checks on the Casino's behalf, set employee wages, or make any decisions about the payment or nonpayment of wages; nor was he aware of any employee policies. Instead, he stated he relied on the Casino management to make personnel, wage, and employee policy decisions. Jumamil acknowledged that she only saw Coon eating lunch at the Casino once when another dealer pointed him out. Jack Newton is the Casino manager.
¶ 7 Jumamil began working at the Casino in November 2006 and became a poker dealer in May 2007. In May 2010, the Casino implemented a new dealer support  policy, which required dealers to gamble an average of six hours per week to retain their seniority. If the dealers failed to meet the six-hour-per-week average, they lost seniority, and on slow shifts would be the first dealers sent home. Doug West, a poker room floor supervisor who handles scheduling and hiring of poker dealers, stated dealer support was voluntary. In contrast, Daniel Carruthers, a poker dealer and poker room floor supervisor, testified:
Saying that dealer support was not " mandatory" gives the impression that dealers had a clear choice as to whether they gambled or not. In reality, that " choice" was forced upon dealers who needed to make a difficult financial calculation: will we make more money in the extra hours that we keep than we will lose gambling for six hours? ... I would not characterize my decision to gamble during that time as a " choice" of my own free will.
CP at 183.
[179 Wn.App. 674] ¶ 8 West was involved in developing, implementing, and enforcing the dealer support policy. West authored a memorandum on the policy in which he cautioned that dealers will find themselves " on the bottom instantly if they fail one week to maintain a 6 hour average" and that dealers " showing a commitment to the success of the room may also be rewarded with additional shifts as they become available." CP at 243. One dealer noted that the Casino referred to the gambling by dealers under the policy as " keeping [their] stars." CP at 272. The poker room floor supervisors recorded the dealer support hours in a " Dealer Tracking Log," which documented the dealers' gambling time to the quarter hour. CP at 190.
¶ 9 Under the policy, the dealers mostly played Texas Hold'em poker, which required all players to make forced bets known as blinds. Thus, the dealers could not sit at a table for six hours and not bet any money. The Casino took $3.00 in the form of the " rake" and a $0.20 jackpot administration fee from each hand played. CP at 111. Jumamil acknowledged that a small percentage of the money she was required to gamble under the dealer support policy went directly to the Casino, while the rest went to the other players. Jumamil stated that even though the majority of her money did not go directly to the Casino, the Casino considered dealers' gambling as " support[ing] the casino." CP at 256. Also, West noted that the spike in recent business at the Casino was due largely to dealers providing dealer support per the policy.
¶ 10 Jumamil did her weekly six hours of dealer support for a few weeks. But a month or so after the Casino instituted the dealer support policy, Jumamil spoke with West and told him she could no longer provide the minimum six hours of dealer support because she recently had [179 Wn.App. 675] a baby and could
not put in the extra hours. West responded, " Well, then you're not going to have a job" and that Jumamil was " not the only one that just had a baby." CP at 263. After Jumamil stopped providing the six-hour-per-week average of dealer support, she was sent home early three to four times because her seniority dropped. Jumamil's last day of providing any dealer support was August 6, 2010.
¶ 11 Other dealers noted the financial and time burdens the dealer support policy created. Tera Frydenlund, a poker dealer, stated it was difficult to find six hours a week extra to gamble and that it was almost like an extra shift, which was especially difficult because, as a single mom, she had to arrange for child care. Carruthers stated he had to stop providing dealer support because he was losing too much money. He also recently had a baby and did not have the extra time to provide dealer support.
¶ 12 On August 17, 2010, approximately two weeks after Jumamil stopped providing dealer support, West terminated Jumamil for " excessive dealer mistakes and inadequate hand speed." CP at 63. West stated that dealer support was not discussed with Jumamil and it was not contemplated as a reason for Jumamil's termination.
¶ 13 At the beginning of October 2010, Jumamil sent a letter to the Casino claiming wrongful termination, wage withholding, and wage rebating. After receiving Jumamil's letter, the Casino stopped the dealer support policy on October 15, 2010, which ...