Pinnacle Grp., LLC v. Kelly

Panel: Meredith, Leahy, James P. Salmon, Senior Judge, Specially Assigned, JJ. Leahy, J. ⁴⁴⁵ The underlying attorneys' fees litigation springs from the lawsuit filed in June 2013 by Victoria Kelly ("Appellee" "Ms. Kelly"), a home-health employee, in the Circuit Court for Wicomico County against her employer, Pinnacle Group, LLC ("Pinnacle"), and its sole owner, Anthony D'Antonio (collectively, "Appellants"). Ms. Kelly sued to recover, inter alia , unpaid overtime wages, treble damages, and attorneys' fees under the Maryland Wage Payment & Collection Law, Md. Code (2008 ⁵⁸⁷ Repl. Vol., 2012 Supp.), Labor & Employment Article ("LE"), §§ 3-501 et seq.

("MWPCL") and the Maryland Wage & Hour Law, LE §§ 3-401 et seq. ("MWHL"). 1 After a series of settlement negotiations, litigation in two state trial courts, and a decision from this Court applying a Court of Appeals' ruling on the scope of the MWPCL, the parties settled Ms. Kelly's claim for $15,500. She then petitioned the circuit court for $146,987.66 in attorneys' fees and $2,851.40 in costs. After the circuit court awarded $49,250.00 in fees against Appellants, they appealed to this Court.

Ms. Kelly also filed a cross-appeal, contesting the court's reduction of her claimed attorneys' fees. We have rephrased and consolidated the ten issues presented by the parties into the following six: 2 ⁴⁴⁶ 1. Did the Settlement Agreement preclude Ms. Kelly from seeking an award of attorneys' fees against Appellants? ⁵⁸⁸ 2. Did res judicata bar Ms. Kelly's petition for attorneys' fees and costs associated with her MWHL claim, given the dismissal of Ms. Kelly's suit on that claim in district court? ⁴⁴⁷ 3.

Did the circuit court err in awarding attorneys' fees associated with her MWHL claim without making the predicate finding that Appellants violated the MWPCL? 4. Did the circuit court err in finding there was no bona fide dispute in Appellants' failure to pay Ms. Kelly overtime wages? 5. Did Mr. D'Antonio qualify as Ms. Kelly's employer under the economic reality test so that he could be held jointly and severally liable for attorneys' fees? 6. Using the lodestar analysis, did the circuit court correctly determine that Ms. Kelly was entitled to attorneys' fees and adequately calculate the fee award?

On the first issue, we hold that the circuit court did not err in finding that the plain language of the parties' settlement agreement did not preclude Ms. Kelly from petitioning for attorneys' fees. Because the circuit court did not award any attorneys' fees for Ms. Kelly's MWHL claim or the district court action, we need not decide whether res judicata barred attorneys' fees for those claims. In regard to the third and fourth issues on appeal, the record reflects that the circuit court already made the predicate finding that there was no bona fide dispute when it granted partial summary judgment on July 24, 2015, and determined, properly, that Appellants withheld Ms. Kelly's earned wages without a good faith basis for doing so. We also conclude, in regard to the fifth issue raised, that the trial court applied the economic reality test properly in determining whether Mr. D'Antonio was Ms. Kelly's employer and in deciding that he is jointly and severally liable for any judgment against Appellants.

Finally, while the circuit court did not abuse its discretion in deciding to award fees, we hold that the court erred in failing to satisfactorily articulate its reasoning for the amount awarded. Thus, we affirm all of the trial court's decisions that are properly before us on appeal, except that we remand for further proceedings on the amount of attorneys' fees awarded for the reasons explained below. ⁴⁴⁸ BACKGROUND A. Ms. Kelly's Employment Ms. Kelly worked as a companion care employee, a/k/a home healthcare worker, for LifeMatters, an entity providing care for senior citizens and the disabled on Maryland's Eastern Shore and in Sussex County, Delaware. LifeMatters is owned by Pinnacle Group, an umbrella company that has its principal place of business in Salisbury, Maryland. Mr. D'Antonio wholly owns Pinnacle Group.

For approximately eighteen months preceding Ms. Kelly's suit, her work schedule consistently pendulated between 97 hours of work one week and 88 hours the following week. For those weekly hours worked in excess of 40 hours during this period, Appellants did not pay Ms. Kelly an overtime rate of "time and a half" but instead paid only her standard hourly wage. On at least two occasions, Ms. Kelly inquired about overtime pay and was informed that Pinnacle's policy was that it did not pay overtime. Mr. D'Antonio later claimed in his deposition that he believed Ms. Kelly was exempt from overtime regulations given the application of federal law ⁵⁸⁹ exempting home companion workers, 3 and he did not consider that Ms. Kelly may be entitled to overtime wages under Maryland law because of his belief that federal law superseded Maryland's law.

B. Ms. Kelly Sues to Recover Wages After learning that she was, in fact, entitled to overtime wages under Maryland law, Ms. Kelly commenced the underlying suit in the Circuit Court for Wicomico County on June 10, 2013, claiming violations of the MWHL and the MWPCL ⁴⁴⁹ "stemming from [Appellants'] willful failure to pay her all earned wages, including overtime wages[.]" 4 Ms. Kelly sought return of the wages and overtime owed, plus treble damages. She also asserted a claim of quantum meruit, seeking restitution or appropriate disgorgement of Pinnacle's profits. Finally, she requested an award of attorneys' fees and costs. After receiving notice of Ms. Kelly's suit, Mr. D'Antonio contacted counsel who informed him that federal law did not preempt Ms. Kelly, and other companion care workers employed by his companies, from Maryland's overtime wage requirements.

Nevertheless, Appellants filed their joint Answer on August 9, 2013, in which they asserted a general denial to all of Ms. Kelly's allegations along with the affirmative defenses of payment and statute of limitations. Roughly six weeks later, on September 26, 2013, the parties met in Baltimore for a settlement conference. At the meeting, Appellants agreed to furnish certain documents, including Pinnacle's financial statements and tax returns. Ms. Kelly's counsel sent a letter to Appellants on October 9, informing them that Ms. Kelly had not yet received the documents (which were also responsive to Ms. Kelly's discovery requests) and informing Appellants that Ms. Kelly's counsel now represented Rhonda Russell, another LifeMatters employee who also did not receive overtime compensation.

On October 16, 2013, Appellants' counsel unilaterally tendered two checks, enclosed in a letter to counsel for Ms. Kelly and Ms. Russell. The letter stated, "I also enclose a check from Mr. D'Antonio to Ms. Kelly, in the amount of $15,067.21, which is the amount of overtime Mr. D'Antonio has determined to have been uncompensated." The letter also contained ⁴⁵⁰ the explanation that "[t]he gross amount of overtime compensation due ... would be ... $21,413.25 in the case of Ms. Kelly. I have enclosed a statement detailing the withholdings taken from both checks." Included along with the checks was a draft stipulation to dismiss the claims with prejudice. Ms. Russell accepted the check, but counsel returned Ms. Kelly's check, asserting that payment did not make her whole and that damages and attorneys' fees remained viable claims.

On ⁵⁹⁰ November 7, 2013, after receiving verification from Appellants' counsel that accepting the check would not release her claims, Ms. Kelly accepted her check. Appellants then filed an Amended Answer on the same day, in which they added the affirmative defense of accord and satisfaction. C. Attorneys' Fees Still not in receipt of the requested financial documents, on November 8, Ms. Kelly's counsel sent another letter, stating that "[i]t is necessary to know the health and profitability of our clients' employers, in order to assure that damages are awarded in [sic] amount that actually would have some deterrent effect." On the same day, Appellants filed discovery requests that included an interrogatory seeking information regarding the fee agreement between Ms. Kelly and her counsel. Ms. Kelly's counsel objected because "it seeks information that is irrelevant ... at this stage[.]" On December 17, 2013, Ms. Kelly's attorneys were set to begin depositions when they transmitted a "time-limited settlement demand" on her behalf because they were at a tipping point of putting "significant attorney time" into the litigation and noted that a "trial will increase the amount of fees exponentially." After not receiving a response, Ms. Kelly amended her complaint to include Ms. Russell's claims.

Subsequently, Ms. Kelly's attorneys deposed several parties, including Mr. D'Antonio's accountant, Sherry Sadler, who testified that while learning payroll, she was informed by an outside accountant that home healthcare workers were exempt from overtime requirements. ⁴⁵¹ On January 2, 2014, Appellants' counsel requested the hourly rates, total hours, and total billings of Ms. Kelly's attorneys with whom they had been dealing in exchange for not filing a motion compelling production of those documents. One of Ms. Kelly's attorneys responded that her rate is $240 an hour, that she had spent roughly 69.25 hours, and that she had yet to bill; further, she responded that the other attorney's rate was $250 an hour, but she could only approximate his hours because he was out of the country. D. Prior Appeal and State District Court Action On January 16, 2014, Appellants moved for summary judgment in the circuit court, arguing that the MWPCL did not concern the amount of wages payable, but rather, the duty to pay wages due on a regular basis. They claimed that Ms. Kelly failed to state a claim upon which relief could be granted because the MWPCL did not provide for the recovery of unpaid overtime wages.

Appellants further argued that Ms. Kelly could not recover damages under LE § 3-507.2(b), infra , which allows for the recovery of up to three times the wages owed if the wages were not withheld as a result of a bona fide dispute. They claimed that such a dispute did exist since they had a good faith basis for withholding Ms. Kelly's overtime wages-their belief that federal law, which exempted home healthcare workers from overtime pay requirements, preempted Maryland law, which did not exempt those workers. Mr. D'Antonio "honestly never looked into" whether that belief was correct; instead, he simply relied on that interpretation from "someone else". Finally, Appellants claimed that Ms. Kelly's MWHL claim was satisfied since they paid her in full for all unpaid overtime wages.

Ms. Kelly filed her motion for partial summary judgment the next day, arguing that Appellants' ignorance of the law did not create a bona fide dispute. She claimed that judicial recognition of "willful ignorance" as constituting a bona fide dispute would "incentivize employers to wear ⁵⁹¹ blinders rather than comply with their legal obligations." ⁴⁵² On February 26, 2014, the circuit court granted summary judgment to Appellants on the MWPCL claim. The circuit court found that, under the Court of Appeals' holding in Friolo v. Frankel , 373 Md. 501 , 513, 819 A.2d 354 (2003), Ms. Kelly's claim was not viable because the MWPCL only "concerns the duty to pay whatever wages are due on a regular basis and to pay all that is due following termination of the employment." As a result of the dismissal of her MWPCL claim, the circuit court dismissed her MWHL claim because it was "at most, $4,000.00 at issue[ ]" and thus did not satisfy the amount in controversy required for the circuit court's jurisdiction. 5 The court then denied Ms. Kelly's motion for partial summary judgment. On February 28, 2014, Ms. Kelly filed suit in the District Court of Maryland for Wicomico County on the MWHL claim that was dismissed by the circuit court.

(Civil Action No. 020300015252014). Ms. Kelly alleged that the check she received in October 2013 did not fully compensate her for her unpaid regular and overtime wages and that Appellants still owed her $2,500.00 in unpaid wages and $1,700.00 in interest plus attorneys' fees and costs. Ms. Kelly contended that these unpaid wages included "pre and post scheduled shift work and compensable travel time." In addition, Ms. Kelly alleged that Appellants breached their employment contract, resulting in economic injury, and again alleged quantum meruit. On the same day that she filed suit in district court, Ms. Kelly challenged the circuit court's decision on the MWPCL in an appeal to this Court. 6 The same MWPCL issues were ⁴⁵³ pending in the Court of Appeals, which then decided Peters v. Early Healthcare Giver, Inc. , 439 Md. 646 , 97 A.3d 621 (2014) and Marshall v. Safeway Inc. , 437 Md. 542 , 88 A.3d 735 (2014).

In Marshall , the Court of Appeals held that the MWPCL provides a cause of action for wrongfully withheld wages, including overtime, 437 Md. at 560 , 88 A.3d 735 , and subsequently, in Peters , the Court reiterated, "Without a doubt, [Plaintiff] has a right to bring a private cause of action under the WPCL to recover any unlawfully withheld overtime wages." 439 Md. at 654 -55 , 97 A.3d 621 . Consistent with those decisions, we held in Kelly v. Pinnacle Group, LLC, No. 2641, September Term 2013, slip op. at 10-12 (filed Jan. 26, 2015) (unreported), that Ms. Kelly had a cause of action under the MWPCL and reversed the circuit court's grant of summary judgment to Appellants. We did not decide, however, whether a bona fide dispute existed for Appellants' failure to pay Ms. Kelly overtime wages. The circuit court had dismissed Ms. Kelly's motion for partial summary judgment as moot, and therefore, did not make any factual findings.

Because we could not review the issue of whether a bona fide dispute existed, we allowed Ms. Kelly's claim to proceed, giving instructions to the circuit court that the determination of ⁵⁹² whether a dispute existed "may require specific factual findings" and that if the factfinder found there was no dispute, the parties could proceed to damages. E. Partial Summary Judgment, Settlement, and Petition for Fees and Costs On remand in the circuit court, Ms. Kelly renewed her motion for partial summary judgment, in which she alleged that Appellants' failure to pay her overtime wages was not the result of a bona fide dispute. On June 4, 2015, the court heard arguments as to whether there was a bona fide dispute and held the matter sub curia . In a written opinion dated July 24, ⁴⁵⁴ 2015, the circuit court found that, in light of Peters , Appellants did not have a "good faith basis" for refusing to compensate Ms. Kelly for overtime wages.

Instead, the circuit court found that Appellants did not exercise due diligence as they failed to consult counsel or research whether Maryland law would still apply in light of conflicting federal law. The court stated the following: This is not a case where [Appellants] exercised due diligence to ascertain the obligations imposed by Maryland law. To the contrary, [Appellants] neither researched, nor sought legal advice, as to Maryland law governing overtime wages for [Ms. Kelly] or her co-workers. Nor did [Appellants] research, or seek legal advice, as to the relationship between State and Federal law on the issue of payment of overtime wages to home healthcare workers.

Rather, [Appellants], without making any reasonable effort to know and abide by Maryland law, simply denied the wage claim of [Ms. Kelly].... [Appellants] chose deliberate ignorance over due diligence. Given those facts, this Court cannot find a good faith basis for denying the claim for overtime wages. The court also noted Mr. D'Antonio's deposition testimony, in which he stated that he "honestly never looked into it." As a result, the court concluded, deliberate ignorance of Maryland law could not constitute a bona fide dispute and granted Ms. Kelly's motion for partial summary judgment. The circuit court's ruling appears to have been the impetus for renewed settlement negotiations.

The parties informed the court on November 19, 2015 that they settled Ms. Kelly's claims, and on November 23, 2015, the court removed the pre-trial conference and trial dates. In the preamble of the Settlement Agreement, the parties noted that Ms. Kelly's suit in the circuit court sought unpaid wages and damages resulting from violations of the MWPCL and MWHL and that they agreed to settle that suit. Ms. Kelly received $15,500, in addition to the $15,067.21 paid in October 2013. Out of the $15,500, $2,200 was for wages while $13,300 was for non-wage damages.

The parties noted several times throughout the Agreement that Ms. Kelly maintained her right to petition the court for ⁴⁵⁵ attorneys' fees and costs. Ms. Kelly exercised that right two months later, on January 22, 2016, by filing her Petition for Fees and Costs. Her petition, inclusive of both her MWPCL and MWHL claims, requested attorneys' fees for $146,987.66, representing a deduction from fees incurred in the amount of $194,142.85, and also sought costs of $2,851.40. This request included the fees and costs for her protective action in the district court as well as her appeal on the scope of the MWPCL.

The circuit court issued its decision on July 21, 2016. Since the parties settled prior to the court's consideration of whether Appellants violated the MWHL, the court found that it could only award attorneys' fees pursuant to the MWPCL. As a result, the ⁵⁹³ court found that Ms. Kelly was entitled to $49,250.00 in attorneys' fees under the MWPCL and also found that Mr. D'Antonio was Ms. Kelly's employer for individual liability purposes. Appellants filed a timely appeal to this Court on August 19, 2016.

One week later, Ms. Kelly noted her cross-appeal. DISCUSSION I. THE SETTLEMENT AGREEMENT Appellants' first contention on appeal is that the Settlement Agreement prohibited Ms. Kelly from seeking attorneys' fees. Appellants acknowledge that Section 2.1 of the Agreement allows Ms. Kelly to petition the court for attorneys' fees and costs but argue that Section 4 releases them "from those claims arising out of, or in any way relating or pertaining to, wages claimed to be or actually owed for work performed." They claim that Ms. Kelly cannot get attorneys' fees because LE § 3-507.2(b) first requires a finding by the court that an employer withheld wages in violation of the statute and that cannot occur because the terms of the Agreement denied all liability. Ms. Kelly responds that no such waiver occurred because the Agreement's language in Sections 2.1, 2.4, and 2.5 is clear ⁴⁵⁶ and unambiguous in preserving her right to petition for attorneys' fees, and thus, we must presume the parties meant what they expressed.

Ms. Kelly maintains that Section 4 is a general waiver that does not limit her ability to seek attorneys' fees and notes that Appellants further assented to her right to petition when they submitted a letter to the court agreeing to submit the question of attorneys' fees and costs to the court. Settlement agreements are subject to the same general rules of construction that apply to other contracts. O'Brien & Gere Eng'rs, Inc. v. City of Salisbury , 447 Md. 394 , 421, 135 A.3d 473 (2016). The basic precept of contract interpretation is to contemplate and effectuate the parties' intentions.

Id. (citation omitted). We will not displace an objective reading of the contract with one party's subjective understanding. Auction & Estate Representatives, Inc. v. Ashton , 354 Md. 333 , 341, 731 A.2d 441 (1999) (citations omitted).

We construe the contract in its entirety, Maslow v. Vanguri , 168 Md. App. 298 , 318, 896 A.2d 408 (2006) (citation omitted), but when a general provision seemingly conflicts with a specific provision, we will give effect to the specific provision. Heist v. Eastern Sav. Bank, FSB , 165 Md. App. 144 , 151, 884 A.2d 1224 (2005) (citation omitted). The Agreement contains three provisions, all located in Section 2, that specifically address Ms. Kelly's ability to petition the Court for attorneys' fees: 2.1 In consideration for the mutual promises contained in this Agreement, Defendants agree to pay Plaintiff a total of $15,500.00 to settle all claims alleged in the Lawsuit, except Plaintiff's claims for attorneys' fees and costs. * * * 2.4 The Parties have agreed that Plaintiff will petition the Court for an award of attorneys' fees and costs [.] 2.5 Plaintiff accepts the Settlement Payments made and to be made hereunder and the right to petition the court for fees and costs , provided herein, as consideration in full and ⁴⁵⁷ complete satisfaction and release of claims alleged in the Lawsuit and/or covered in this Agreement.

(Emphasis added). The parties also stipulated to one provision that provides a general waiver of liability ⁵⁹⁴ and a release of claims. That section, Section 4.1, states the following: Plaintiff ... fully, finally, and forever, settles, waives, releases, and discharges Defendants ... from those claims arising out of, or in any way relating or pertaining to, wages claimed to be or actually owed for work performed for Defendants that Plaintiff had, now has, or may have from the beginning of time up through the effective date of this Agreement, including, but not limited to, claims under the Federal Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), the MWHL, and the MWPCL.

Based on a plain reading of the Agreement, the only interpretation that effects the parties' intent without rendering the specific provisions surplusage is that the parties agreed Ms. Kelly would retain the right to petition for attorneys' fees and costs. Such a construction was not only contemplated by the parties, as evidenced by the multiple sections, but also aligns with the principle of ejusdem generis . That canon provides that, where specific words are followed by a general term, the general term will be read narrowly because of the specific items enumerated. See Ejusdem Generis , Black's Law Dictionary (10th ed. 2014).

Here, the provisions in Section 2 of the Agreement state unambiguously that the right of Ms. Kelly to petition for costs and fees is not waived, and those sections therefore have priority over the general language found in Section 4.1. See Heist , 165 Md. App. at 151 , 884 A.2d 1224 . We conclude that Ms. Kelly did not waive her right to petition for costs and fees, and the general waiver in Section 4.1 must be read subordinate to those preceding sections that permitted her to do so. Section 4.1 neither states expressly nor contemplates implicitly a subversion of the objective reading of the Agreement that allows Ms. Kelly to seek attorneys' fees and costs.

A contrary interpretation would render superfluous ⁴⁵⁸ the specific sections and would clearly contravene the parties' intent. We presume that the parties meant what they agreed to and will enforce the Agreement as such. See Ashton , 354 Md. at 340 -41 , 731 A.2d 441 .

II

RES JUDICATA Appellants next argue that the doctrine of res judicata precludes Ms. Kelly from receiving attorneys' fees for her MWHL claim in district court because she voluntarily dismissed, with prejudice, that suit three days before the hearing in circuit court on her Petition for Attorneys' Fees. Appellants assert that this dismissal constituted a final judgment on Ms. Kelly's claim in the district court and therefore, precluded her from re-litigating any claim that was or could have been asserted in the district court proceeding-including her claim for attorneys' fees in that suit. Ms. Kelly refutes Appellants' res judicata argument, contending that the doctrine does not apply to bar her claim for attorneys' fees from her district court suit because she filed that suit to protect her MWHL claim in the event that her appeal on the MWPCL claim failed. Ms. Kelly further notes that she only dismissed that district court action after she succeeded on her appeal, obtained summary judgment on the bona fide dispute issue, and settled the merits of her case, "explicitly reserv[ing] the issues of attorneys' fees." Appellants' argument is cut short-full stop-by the fact that the circuit court did not award any attorneys' fees for the MWHL claim or the district court action.

In the court's July 21, 2016 opinion and order, from which Appellants filed the instant ⁵⁹⁵ appeal, the court explained as follows: As discussed above, this Court has made a finding that Defendants withheld the wages of Plaintiff in violation of the [MWPCL], which triggers the granting of an award in favor of Plaintiff under the [MWPCL, LE § 3-507.2(b) ]. However, the Wages and Hour Law provides that, 'if a ⁴⁵⁹ court determines that an employee is entitled to recovery, under the statute, the court shall award to the employee reasonable counsel fees and other costs.' [MWHL, LE § 3-427(d)(1)(iii) ]. This case is unique in that it settled before the Court had an opportunity to make a finding that Plaintiff was entitled to recovery under the [MWHL]. Therefore, the Court has made the requisite finding required under the [MWPCL], which gives the Court discretion in determining whether counsel fees are to be awarded.

However, the Court has not made the requisite finding to grant relief sought under the [MWHL] . (Emphasis added). Apparently recognizing, among other things, that the action filed by Ms. Kelly in the district court in 2014 concerned only her MWHL claim, the court below did not include attorneys' fees for that action in its award. After careful consideration of all of the facts and evidence provided, the Court finds that Plaintiff's counsel shall be compensated for all fees incurred by all attorneys during the period of February 22, 2013 through October 25, 2013 , during which time, the initial client intake interview was completed and the first settlement check was tendered by the Defendants.

This totaled 52.3 hours.... The Court further finds that the Plaintiff shall also be compensated for additional settlement efforts , which totaled 33.4 hours and appellate services provided , which totaled 111.3 hours. (Emphasis added). Appellants' res judicata argument is a non sequitur to the foregoing fee award.

Indeed, the fees ultimately awarded included attorney hours incurred before filing either complaint, as well as time spent on appellate services and settlement efforts related to the circuit court action, which, as the court explained, decided only the MWPCL claim. Accordingly, because the circuit court determined that it would not award counsel fees under the MWHL and because it did not award any attorneys' fees for the district court action, we need not examine whether Ms. Kelly's dismissal of the district court action barred the attorneys' fees awarded in this case. ⁴⁶⁰ III. PREDICATE FINDING Appellants next contend that the circuit court was required to make the "predicate finding" that they had violated the MWPCL. Appellants continue that, because the circuit court failed to make the requisite finding that Ms. Kelly was entitled to recovery under the MWPCL, the trial court erred in awarding attorneys' fees to Ms. Kelly under the MWPCL.

The decision on the merits of Ms. Kelly's MWPCL claim was made on July 23, 2015. In its written opinion of that date, the circuit court found that "the undisputed material facts establish that (1) [Ms. Kelly] was entitled to overtime wages, (2) [Appellants] deliberately failed to pay those wages, (3) [Appellants] lacked a good faith basis for denying the wage claims of [Ms. Kelly], and (4) there was no bona fide dispute between the parties as to whether the overtime wages were due and owing." The court made the requisite finding under LE § 3-507.2 for purposes of a violation of ⁵⁹⁶ LE § 3-502 or LE § 3-505, 7 and concluded that "there was no bona fide dispute between the parties, and [Ms. Kelly] is entitled to partial summary judgment as a matter of law." In the circuit court's July 21, 2016 opinion and order on the Petition for Attorneys' fees, the court reiterated that the only issue it was deciding was the award of attorneys' fees under the MWPCL based on the fact that "the Court has made the requisite finding required under the [MWPCL], which gives the Court discretion in determining whether counsel fees are to be awarded." We conclude that Appellants' contention that ⁴⁶¹ the circuit court failed to make the predicate finding to support the award of attorneys' fees under the MWPCL is without merit.

IV

BONA FIDE DISPUTE After asserting that the circuit court failed to make the predicate finding that there was no bona fide dispute under LE § 3-507.2(b), Appellants, alternatively, cite to the circuit court's July 23, 2015 decision and contend that the court ignored evidence and misinterpreted case law in determining that the failure to pay overtime wages did not result from a bona fide dispute. Ms. Kelly maintains, however, that the issue is precluded because it was resolved when Appellants " 'agreed to settle the Lawsuit on the terms and conditions set forth in' " the Agreement. The parties accepted the circuit court's ruling by stating in the Agreement that negotiations were based on " 'the Court's prior rulings[.]' " Ms. Kelly argues that, notwithstanding preclusion of this issue, Appellants' argument would still fail because the circuit court found that Appellants acted in deliberate ignorance of the law without a genuine basis for doing so, and such a basis is required to constitute a bona fide dispute. Ms. Kelly concludes that upon making this finding, the circuit court appropriately exercised its discretion that Ms. Kelly is entitled to attorneys' fees.

A. Incorporation into the Settlement Agreement We first address Ms. Kelly's argument that the terms of the Settlement Agreement prevent Appellants from challenging the circuit court's grant of partial summary judgment. Appellants, in their reply, declare that the Agreement merely highlights that the parties relied on all of the prior proceedings when negotiating, and therefore, they are not precluded from challenging the circuit court's decision. To determine whether the court's decision is part of the Agreement, we must determine whether the Agreement incorporated that decision by reference. As explained in Section ⁴⁶² I, supra , our goal in interpreting a contract is to understand and effectuate the intention of the parties.

Kasten Constr. Co. v. Rod Enterprises, Inc. , 268 Md. 318 , 328, 301 A.2d 12 (1973). One way to accomplish this is to interpret the contract's language as a reasonable person would have interpreted the contract at the time of its effectuation. ⁵⁹⁷ General Motors Acceptance Corp. v. Daniels , 303 Md. 254 , 261, 492 A.2d 1306 (1985). Maryland courts generally recognize the doctrine of integration.

Hovnanian Land Inv. Grp., LLC v. Annapolis Towne Ctr. at Parole, LLC , 421 Md. 94 , 126, 25 A.3d 967 (2011). Courts should refrain from considering outside evidence of prior statements or understandings when interpreting a contract that contains an integration clause because the clause indicates that the contract is the complete iteration of the parties' agreement. See id.

(citations omitted). Under the integration doctrine, then, when an agreement purports to be the final agreement between the parties, only those terms control and preclude consideration of extrinsic evidence. Incorporation by reference is a method of contract drafting such that where a subsequent document references a previous document, it incorporates that previous document into the subsequent. "[I]t simply means that the earlier document is made a part of the second document, as if the earlier document were fully set forth therein." Hartford Acc. & Indem.

Co. v. Scarlett Harbor Assoc. Ltd. P'ship , 109 Md. App. 217 , 292, 674 A.2d 106 (1996) (citations omitted). " 'It is settled that where a writing refers to another document that other document, or so much of it as is referred to, is to be interpreted as part of the writing.' " Wells v. Chevy Chase Bank, F.S.B. , 377 Md. 197 , 229, 832 A.2d 812 (2003) (quoting Ray v. William G. Eurice & Bros., Inc. , 201 Md. 115 , 128, 93 A.2d 272 (1952) ). Section 5.3 of the Agreement states, " Entire Understanding .

This Agreement constitutes the entire understanding and agreement between the Parties and all prior and contemporaneous negotiations and understandings between the Par ⁴⁶³ ties shall be deemed merged into this Agreement. " (Emphasis added). This is an integration clause that precludes a factfinder from considering provisions not in the Agreement. We therefore consider only what the language of the document says.

The issue, then, is whether the Agreement incorporated the circuit court's grant of Ms. Kelly's motion for partial summary judgment that a bona fide dispute did not exist. To support her contention that the decision is incorporated, Ms. Kelly points to Section 1.2 of the Agreement, which states in part, "Relying on their fact investigations, discovery responses, legal analyses, and the Court's prior rulings, the Parties have engaged in significant arm's length settlement negotiations." Although this sentence hints at the circuit court's finding that there was no bona fide dispute, it simply informs us that the parties may have considered it when formulating strategy for negotiations. Such language is insufficient to incorporate that finding into the Agreement, especially since "all prior and contemporaneous negotiations and understandings between the Parties" were "merged into this Agreement." In light of this clause, a reasonable person would not read such indirect and broad language as incorporating the circuit court's specific ruling into the Agreement. See Hartford , 109 Md. App. at 291 -92 , 674 A.2d 106 .

Section 5.3 of the Agreement clearly indicates an intent to integrate all previous negotiations. Ms. Kelly's interpretation of Section 1.2 would effectively interpret the Agreement "in a manner in which a meaningful part of the [A]greement is disregarded." See id. at 293 , 674 A.2d 106 . We cannot contravene the "clear and unambiguous language" so as to interpret the Agreement based simply on what Ms. Kelly may have "thought the [A]greement meant or intended it to mean." See id. at 291 , 674 A.2d 106 (quoting ⁵⁹⁸ Bd. of Trs. of State Colls. v. Sherman , 280 Md. 373 , 380, 373 A.2d 626 (1977) ). Therefore, as the circuit court's judgment was not incorporated into the Agreement, we hold that the Agreement's integration clause does not preclude Appellants from challenging that judgment on appeal. ⁴⁶⁴ B. The Grant of Partial Summary Judgment Turning to the merits of Appellants' fourth issue, Appellants suggest that the onus was on Ms. Kelly to persuade her employer on the requirements of the overtime wage laws because "[i]f [she] sought to tax her employer with penalties and costs for having resisted her legitimate claims in a manner that is not 'bona fide,' then she should have informed Appellants of those claims sufficiently to expose to a reasoning mind, actuated by good will, the fallacy of resistance." Thus, "because Ms. Kelly never gave Appellants the chance to correct what she had learned was a mistake, she should not be awarded attorney's fees and costs on the theory Appellants had willfully adhered to a position they knew to be wrong." Appellants point to dicta in Peters that "[a]n incorrect legal belief, such as federal preemption, may form the basis of a legitimate bona fide dispute." 439 Md. at 659 n.12, 97 A.3d 621 .

Ms. Kelly focuses on the circuit court's reasoning for granting her partial summary judgment. Ms. Kelly reiterates that Appellants conducted an "ostrich-like approach" to the performance of their legal obligations and presses that the circuit court's decision was correct as a matter of law because "deliberate ignorance over due diligence" cannot constitute a bona fide dispute. A court must grant a motion for summary judgment in favor of the moving party when there is no genuine issue of material fact and the court determines that the party is entitled to judgment as a matter of law. Md. Rule 2-501(f).

"In determining whether a fact is material," the Court of Appeals "ha[s] said that 'a dispute as to facts relating to grounds upon which the decision is not rested is not a dispute with respect to a material fact and such dispute does not prevent the entry of summary judgment.' " Barclay v. Briscoe , 427 Md. 270 , 281, 47 A.3d 560 (2012) (quoting O'Connor v. Balt. Cty. , 382 Md. 102 , 111, 854 A.2d 1191 (2004) ; emphasis in original). Whether summary judgment was proper is a question of law, which we review de novo. ⁴⁶⁵ Poole v. Coakley & Williams Const., Inc. , 423 Md. 91 , 108, 31 A.3d 212 (2011) (citation omitted). In doing so, we construe the record in a light most favorable to the non-moving party and thereby interpret any inferences drawn from the record against the moving party.

Jurgensen v. New Phoenix Atl. Condo. Council of Unit Owners , 380 Md. 106 , 114, 843 A.2d 865 (2004). If "a court finds that an employer withheld the wage of an employee in violation of [the MWPCL] and not as a result of a bona fide dispute," it may order an award "not exceeding 3 times the wage, and reasonable counsel fees and costs." LE § 3-507.2(b).

The Court of Appeals in Peters reiterated its definition of a bona fide dispute: " 'a legitimate dispute over the validity of the claim or the amount that is owing [ ]' where the employer has a good faith basis for refusing an employee's claim for unpaid wages." 439 Md. 646 , 657, 97 A.3d 621 (2014) (citing Admiral Mort., Inc. v. Cooper , 357 Md. 533 , 543, 745 A.2d 1026 (2000) ). In determining whether a bona fide dispute exists, a court considers "whether there was sufficient evidence adduced to permit a trier of fact to determine that [the employer] did not act in good faith when it refused to pay" the withheld wages. Admiral Mort. , 357 Md. at 543 , 745 A.2d 1026 . ⁵⁹⁹ The court's inquiry therefore focuses on "the employer's 'actual, subjective belief that the party's position is objectively and reasonably justified.' " Peters , 439 Md. at 657 , 97 A.3d 621 (quoting Barufaldi v. Ocean City, Md. Chamber of Commerce, Inc. , 206 Md. App. 282 , 293, 47 A.3d 1097 (2012) (" Barufaldi II ") ). As such, the employer has the initial burden to produce evidence of a subjective belief purporting to create a bona fide dispute.

Id. at 658-59, 97 A.3d 621 . The burden then shifts to the employee to refute the employer's evidence. Id. Ultimately, we must decide whether Appellants' mistaken belief that federal law preempted state law, making Ms. Kelly exempt from overtime requirements, constituted a bona fide dispute under the MWPCL.

We note that the parties do not contend that the fact that Appellants' had a mistaken belief of the law was a material fact genuinely in dispute. ⁴⁶⁶ In their memorandum opposing Ms. Kelly's motion for partial summary judgment, Appellants argued that they acted solely in good faith arising from their "reasonable belief" that federal law preempted Maryland law. For support, Appellants noted that they continued to use the previous owner's Employee Handbook and forms that stated workers were exempt under federal law and were advised by Mr. D'Antonio's accountant, who was informed by an outside accountant while learning payroll that companion care workers were exempt. Appellants stated that they had no reason to question their understanding because, prior to Ms. Kelly, no one had complained of not receiving overtime pay. In support of her motion for partial summary judgment, Ms. Kelly first noted that ignorance of the law cannot create a bona fide dispute.

She claimed that Appellants essentially remained deliberately ignorant by never looking into whether Maryland had an applicable law or whether such a law would apply despite contrary federal law. Further, Mr. D'Antonio admitted that he never investigated whether the Employee Handbook would conform to such a state law. Ms. Kelly then relied on a Supreme Court decision regarding the Fair Debt Collection Practices Act that "an act may be 'intentional' for purposes of civil liability, even if the actor lacked actual knowledge that [the] conduct violated the law." Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA , 559 U.S. 573 , 582-83, 130 S.Ct. 1605 , 176 L.Ed.2d 519 (2010). We find Roy v. County of Lexington, South Carolina , 141 F.3d 533 (4th Cir. 1998), the decision cited in the dicta of Peters , helpful in our analysis.

In that case, a county's top officials convened a meeting where the county's labor attorney informed them that they could pay EMS workers under a certain subsection of the FLSA, that they could increase the number of hours required before overtime pay applied, and that they could dock certain hours for meals and sleep from compensable hours. Id. at 537 . The county then implemented these suggestions into the overtime policy. Id.

The workers filed suit, and on appeal, the Fourth Circuit considered whether the district court erred in failing to award the EMS ⁴⁶⁷ workers liquidated damages under the FLSA. Id. at 548 . The two reasons upon which the Court upheld the district court's finding of good faith on the part of the county were that it relied on its attorney's counsel, even though that counsel was incorrect, and that it made "ongoing modification of its compensation structure to accommodate changes in the Act." Id. at 549 . Returning to the present case, we find that Appellants' reliance on an outside accountant's incorrect advice is easily distinguishable from the county's reliance on its attorney in Roy .

In that case, the county ⁶⁰⁰ proactively sought to comply with the FLSA by consulting its labor attorney on changes in employment laws. Roy , 141 F.3d at 549 . Here, however, Appellants