Debbie Orloff v. Jean-Paul Downs

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2021-0569, Debbie Orloff v. Jean-Paul Downs,
the court on September 21, 2023, issued the following order:

The court has reviewed the written arguments and the record submitted
on appeal, has considered the oral arguments of the parties, and has
determined to resolve the case by way of this order. See Sup. Ct. R. 20(2). The
defendant, Jean-Paul Downs, appeals an order of the Superior Court
(Wageling, J.) vacating a decision of the New Hampshire Department of Labor
(DOL) in favor of Downs on his claim for unpaid wages. We vacate and
remand.

The record before the DOL and the superior court supports the following
facts. Downs and Jennifer Saunders were hired to run plaintiff Debbie Orloff’s
hotel in North Conway. They began work on May 21, 2018 and agreed to be
paid, collectively, $1,600 a month to be shared between the pair. They received
housing in addition to their pay. This arrangement continued until Saunders
was terminated on August 3, 2018. Downs then began running the hotel on
his own, and Orloff agreed to pay the entire $1,600 to him individually. Downs
continued working until he was terminated on September 9, 2018.

Downs filed a wage claim with the DOL requesting $12,992 in unpaid
wages. Saunders filed her own wage claim, and the DOL held a consolidated
hearing in November 2018 at which it heard from both Downs and Saunders.
Orloff did not respond to the DOL’s notice or appear at the hearing. Downs
testified that he worked sixteen hours a day, seven days a week, from May 21
until September 9. At minimum wage, this amounted to $12,992. He testified
that Orloff had only paid them $1,200 each (or $2,400 collectively). He testified
that he also did side projects for Orloff, but that he had been paid separately
for this work. The hearing officer subtracted the $1,200 that Downs had been
paid for his hotel duties and awarded him $11,792. The DOL also ruled in
favor of Saunders on her wage claim.

After the DOL issued its rulings, Orloff sent a letter to the DOL
requesting that it vacate the decisions. She argued that she never received
notice of the wage claims and that “the claims made by Saunders and Downs
in this matter were false.” The DOL interpreted the letter as a motion to vacate
and denied the motion.
 Orloff then filed pro se complaints in the superior court against Downs
and Saunders, requesting that the court vacate the DOL decisions on the
grounds that: (1) she did not receive proper notice; and (2) Downs’ and
Saunders’ claims were false. In the Saunders action, the superior court ruled
that Orloff received adequate notice and that she failed to prove falsity. Orloff
appealed that decision to this court, arguing solely that she did not receive
proper notice. We affirmed the superior court’s decision in a 2020 order.
Orloff v. Saunders, No. 2019-0404 (non-precedential order), 2020 WL 1917477
(N.H. Mar. 11, 2020). Downs’ case in the superior court was stayed pending
that appeal. After the stay was lifted, and after a hearing, the court issued an
order stating that it would “allow discovery between the parties on the issue of
fraud.” The court held a further hearing in January and April 2021 at which it
received exhibits and heard testimony.

At the hearing, Orloff testified that she paid Downs and Saunders $400
for the couple’s first week of work in May, and submitted a $400 check paid to
Saunders. She also testified that she paid the couple $1,600 in June and
$1,600 in July. After Saunders was terminated in August, Orloff began to pay
Downs directly. She submitted several checks written out to Downs. She
testified that she paid Downs an additional $800 for July because he hadn’t
received his share from Saunders. She then paid Downs, in separate checks,
$800 for the first half of August and $800 for the second half of August. And
finally, she paid Downs $1,155 when he was terminated in early September.
When Downs was asked about these checks, he admitted that he had received
one $800 check as part of his August pay, but testified that the other checks
were not for his pay and were only intended to cover hotel expenses.

Downs maintained that he worked as an innkeeper for sixteen hours a
day, seven days a week. He acknowledged, however, that he also worked on
side projects, sometimes for up to nine hours per day. The parties agreed that
he had been paid $4,000 for the side work. When it was pointed out that the
side work was done during the same hours that Downs claimed to be working
on hotel duties, Downs answered that he “was still responsible as innkeeper”
and “was on call.” He also testified that he was on call most nights. When
further questioned, Downs also admitted that he was not always on site at the
hotel. Once, he left to buy a car and was arrested for driving with a suspended
license. He also left the hotel for a dentist appointment and occasionally for
food.

The superior court concluded that Downs “was not truthful during his
testimony at the DOL” and that he had “perpetrated a fraud on the DOL.” The
court credited Orloff’s testimony that she had paid Downs. The court also
reasoned that Downs could not have worked sixteen hours per day while
working on side projects for up to nine hours per day. The court further noted
that Downs was not always on site at the hotel. The court vacated the DOL

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decision and remanded for a new hearing. Downs filed a motion for
reconsideration which was denied. This appeal followed.

Downs argues, inter alia, that the superior court erred by invoking its
equitable powers to find that Downs committed fraud at the DOL. We agree.
First, we note that superior court review of a DOL wage claim is established by
RSA 275:51, V (2010). Pursuant to RSA 275:51, V, “[a]ny party aggrieved by [a
DOL wage claim] decision may appeal to the superior court . . . by petition,
setting forth that the decision is erroneous, in whole or in part, and specifying
the grounds upon which the decision is claimed to be in error.” “The scope of
review by the superior court shall be limited to questions of law.” RSA 275:51,
V. “After hearing and upon consideration of the record, the [superior] court
may affirm, vacate or modify in whole or in part the decision of the
commissioner, or may remand the matter to the commissioner for further
findings.” Id.

RSA 275:51, V does not empower the superior court to make an
independent finding of fraud. Here, however, the superior court did not rely on
RSA 275:51, V to make its fraud finding. Rather, the court invoked its
equitable powers. But we have explained that equitable jurisdiction will lie
only when there is no plain, adequate, and complete remedy at law. Gutbier v.
Hannaford Bros. Co., 150 N.H. 540, 545 (2004).

Equitable jurisdiction does not lie here because Orloff had a plain,
adequate, and complete remedy at law through the original DOL wage claim
proceedings. As Downs points out, the evidence that Orloff presented to the
superior court to support her claim of fraud was available at the time of the
DOL hearing. Indeed, Orloff could have presented this evidence to the DOL
had she attended the hearing. Nevertheless, the superior court stepped into
the role of the DOL, reviewed the merits of the case, credited Orloff’s testimony
over Downs’, and concluded that based on this evidence, Downs’ claims could
not be true. It was the DOL’s task, however, to determine Downs’ credibility
and the validity of his wage claim. If Orloff had appeared before the DOL, she
could have asserted that Downs’ wage claim was fraudulent and sought relief
in the first instance. From there, Orloff could have sought review of the DOL’s
fraud determination for errors of law pursuant to RSA 275:51, V. Thus, Orloff
had a readily available remedy but failed to take advantage of it. Moreover, in
New Hampshire, “[e]quitable relief will not be afforded when the party claiming
it has, by his own fault or negligence, or that of his attorney, brought upon
himself the injustice against which he seeks a remedy.” Carroll v. McCullough, 63 N.H. 95, 96 (1884). Given that Orloff had the opportunity to obtain relief
through the DOL but failed to appear, the superior court erred by granting
equitable relief.

We next address Downs’ argument that the court erred by not ruling on
his cross-appeal for overtime wages and request for liquidated damages.

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Because the superior court vacated the DOL decision on the basis of fraud and
did not review the DOL decision for legal error, it did not address Downs’ cross-
appeal. Absent a superior court ruling on Downs’ cross-appeal, this issue is
not properly before us. We remand to the superior court to address the parties’
unresolved claims. When reviewing the DOL’s decision, “[t]he scope of review
by the superior court shall be limited to questions of law.” RSA 275:51, V; see
also Demers Agency v. Widney, 155 N.H. 658, 661 (2007) (“In the trial court,
the sufficiency of the evidence supporting the DOL’s factual findings [is] a
question of law.”).

Lastly, Downs requests “his attorneys’ fees and costs for the appeal to
the [superior court] and this Court.” In light of our order vacating the superior
court’s ruling, the superior court may also address the request for attorney’s
fees on remand. As for his attorney’s fees on appeal, Downs may file a motion
setting forth his request no later than 30 days after the mandate is issued in
this case.

Vacated and remanded.

MACDONALD, C.J., and HICKS, BASSETT, HANTZ MARCONI, and
DONOVAN, JJ., concurred.

Timothy A. Gudas,
Clerk

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