James Taylor, Appellant-Plaintiff v. LLC (2025)

MEMORANDUM DECISION

Case Summary

[1] After James Taylor's employment with Hope Public Adjusters, LLC (Hope) was terminated, he brought suit in Putnam Circuit Court asserting, among other things, a claim under the Indiana Wage Claims Statute. A jury trial was held, and after the close of Taylor's evidence, Hope moved for a directed verdict, asserting Taylor did not exhaust his administrative remedies under the Wage Claims Statute and thus the trial court did not have subject-matter jurisdiction over that claim. The court agreed and entered judgment in favor of Hope as to that claim. Taylor now appeals.

[2] We agree the trial court lacked jurisdiction over Taylor's claim under the Wage Claims Statute. But rather than entering a judgment, the court should have dismissed the claim. Accordingly, we reverse and remand.

Facts and Procedural History

[3] Hope Public Adjusters, LLC is a public-adjusting firm, of which Cole Kline is the sole owner. Taylor began working for Hope in 2019, receiving “a mixed compensation schedule consisting of regular salary and commission.” App. Vol. II p. 17. On February 18, 2022, Kline terminated Taylor. Kline thereafter provided Taylor his final paycheck with his “regular salary draw, but no commissions[.]” Id. at 18.

[4] On October 4, 2022, Taylor filed suit in Putnam County Court against Hope and Kline, alleging a variety of claims including Count I—a claim under Indiana Code chapter 22-2-9, also known as the Wage Claims Statute. On November 14, 2022, Hope and Kline filed their answer and counterclaim. The answer did not contain an affirmative defense of lack of subject-matter jurisdiction.

[5] A jury trial began on February 26, 2025. Following Taylor's presentation of evidence, Hope moved for a directed verdict on all three counts. Regarding Count I, the Wage Claims Statute claim, Hope argued, “part of the Plaintiff's prima facie case for a wage claim in this case is to show with the evidence that he presented his claim to the Indiana Department of Labor before coming to this Court and that he received a letter authorizing him to proceed with this lawsuit. He did not present any [ ] such evidence.” Tr. Vol. II p. 144. Taylor responded,

[The Wage Claims Statute] specifies that the Commissioner of Labor is authorized to take assignments of wage claims of less than $6,000.00 (Six Thousand Dollars). Judge, if you go to the Indiana Department of Labor website to file a wage claim the first question or second question it asks you [is,] is this below $6,000.00 (Six Thousand Dollars)? If you then select no it is above $6,000.00 (Six Thousand Dollars) it say[s] the Indiana Department of Labor cannot accept claims less than $30.00 (Thirty Dollars) and more than 6,000 (Six Thousand). If ․ your claim amount is less than 30 (Thirty) or greater than 6,000 (Six Thousand) you may need to consult a private attorney. There is not a way for Mr. Taylor to submit his claim to the Indiana Department of Labor because they are not authorized to handle claims above $6,000.00 (Six Thousand Dollars).

Id. at 146.

[6] The trial court initially denied Hope's motion for a directed verdict. However, the following day, the court indicated it “made an error ․ by not granting” the motion and granted Hope's motion as to Count I. Tr. Vol. III p. 4. The parties thereafter both dismissed their remaining claims without prejudice. Taylor now appeals.

Discussion and Decision

[7] As an initial matter, both parties style this as an appeal of a motion for judgment on the evidence, also known as a directed verdict. Although brought through a motion for a directed verdict, Hope's argument to the trial court was that Taylor failed to exhaust his administrative remedies, and thus the trial court did not have subject-matter jurisdiction over his claim. “Subject matter jurisdiction is the power of the court to hear and decide a particular class of cases.” Wayne Twp. v. Ind. Dep't of Local Gov't Fin., 865 N.E.2d 625, 627 (Ind. Ct. App. 2007), on reh'g, 869 N.E.2d 531 (2007), trans. denied. “A trial court must possess subject matter jurisdiction in order to enter a valid judgment in a case. The absence of subject matter jurisdiction cannot be waived, and it renders a judgment void.” Id. (citation omitted). Failure to exhaust administrative remedies deprives a trial court of subject-matter jurisdiction. Johnson v. Celebration Fireworks, Inc., 829 N.E.2d 979, 984 (Ind. 2005).

[8] An attack of subject-matter jurisdiction “can be raised at any time, and either the trial court or this Court is required to consider the issue sua sponte if it is not properly raised by the party challenging jurisdiction.” Stewart v. Kingsley Terrace Church of Christ, Inc., 767 N.E.2d 542, 544 (Ind. Ct. App. 2002). The appropriate vehicle for a subject-matter jurisdiction challenge, when not pled in the answer, is a motion to dismiss under Indiana Trial Rule 12(B)(1). Perry v. Stitzer Buick GMC, Inc., 637 N.E.2d 1282, 1286 (Ind. 1994). A directed verdict is a decision on the merits, which cannot be rendered by a court that lacks subject-matter jurisdiction. Id.; see also Foshee v. Shoney's, Inc., 637 N.E.2d 1277, 1280 (Ind. 1994) (it is “inappropriate” to use a motion for judgment on the pleadings to challenge subject-matter jurisdiction). We will therefore treat Hope's motion for a directed verdict as a motion to dismiss for lack of subject-matter jurisdiction under T.R. 12(B)(1). See Brazauskas v. Fort Wayne-S. Bend Diocese, Inc., 714 N.E.2d 253, 259 (Ind. Ct. App. 1999) (treating challenged motion for summary judgment as a motion to dismiss for lack of subject-matter jurisdiction); see also Williams v. R.H. Marlin, Inc., 656 N.E.2d 1145, 1149 (Ind. Ct. App. 1995) (same). Where, as here, the facts before the court are undisputed, we review de novo a trial court's ruling on a motion to dismiss. Reel v. Clarian Health Partners, Inc., 917 N.E.2d 714, 717-18 (Ind. Ct. App. 2009), reh'g denied, trans. denied.

[9] Taylor brought his claim under Indiana Code chapter 22-2-9, also known as the Indiana Wage Claims Statute, which “concerns disputes over the amount of wages due and provides for the recovery of liquidated damages and attorney fees.” Hollis v. Defender Sec. Co., 941 N.E.2d 536, 538 (Ind. Ct. App. 2011), trans. denied. The Wage Claims Statute applies to employees who, like Taylor, have been involuntarily separated from their employment. Ind. Code § 22-2-9-2(a) (1969).¹ It is well-established that claimants proceeding under the Wage Claims Statute may not file their complaint directly with the trial court; rather, the claim must first be submitted to the Indiana Department of Labor (DOL). See Walczak v. Labor Works-Ft. Wayne LLC, 983 N.E.2d 1146, 1149 (Ind. 2013) (noting claimants proceeding under the Wage Claims Statute cannot bring their case directly to the court but “must first exhaust the administrative process available to [them] through the Department of Labor”).

[10] Specifically, the Statute provides:

(a) It shall be the duty of the commissioner of labor to enforce and to insure compliance with the provisions of this chapter, to investigate any violations of any of the provisions of this chapter, and to institute or cause to be instituted actions for penalties and forfeitures provided under this chapter. The commissioner of labor may hold hearings to satisfy himself as to the justice of any claim, and he shall cooperate with any employee in the enforcement of any claim against his employer in any case whenever, in his opinion, the claim is just and valid.

(b) The commissioner of labor may refer claims for wages under this chapter to the attorney general, and the attorney general may initiate civil actions on behalf of the claimant or may refer the claim to any attorney admitted to the practice of law in Indiana. The provisions of [Ind. Code § 22-2-5-2] apply to civil actions initiated under this subsection by the attorney general or his designee.

Ind. Code § 22-2-9-4 (1984). In short, the Wage Claims Statute includes “a barrier to claims to be filed in court” as “a claim must work its way through the proper channels—the DOL and, if need be, the Attorney General—before it may be brought into court.” Lemon v. Wishard Health Servs., 902 N.E.2d 297, 301 (Ind. Ct. App. 2009), reh'g denied, trans. denied. Failure to exhaust this administrative remedy deprives the court of subject-matter jurisdiction. Reel, 917 N.E.2d at 720.

[11] Here, Taylor does not dispute that he failed to submit his claim to the DOL before filing suit in the trial court. However, he argues that he was not required to because his claim exceeded $6,000. In support of this contention, he cites Indiana Code section 22-2-9-5(a) (2007), which provides,

The commissioner of labor is hereby authorized to take assignments of wage claims of less than six thousand dollars ($6,000), rights of action for penalties, mechanics and other liens of workers, without being bound by any of the technical rules with reference to the validity of such assignments, and shall have power and authority to prosecute actions for the collection of such claims of persons who, in the judgment of the commissioner:

(1) are entitled to the services of the commissioner; and

(2) have claims which are valid and enforceable in the court.

Taylor further argues he “was in fact unable to complete a claim through the Indiana Department of Labor” because when he attempted to submit his claim on the DOL website, he was told it was “unable to accept [his] claim” because the DOL “cannot accept claims less than $30 or more than $6,000.” Appellant's Br. p. 10.

[12] But this Court has stated that those with claims over $6,000 are still required under Section 22-2-9-4 to submit their claim to the DOL. In Reel v. Clarian Health Partners, Inc., we held,

Under Section 22-2-9-5 wage claims ․ under $6000 (July 1, 2007, and after) may be referred to the Attorney General or a private attorney or the DOL may prosecute such wage claims on its own by taking assignment of them from the claimants. This, however, does not absolve the claimants from submitting their wage claims to the DOL in the first instance. Ultimately, it is duty of the Commissioner of Labor to enforce and insure compliance with Indiana Code chapter 22-2-9, to investigate any violations of any of the provisions of the chapter, and to institute or cause to be instituted actions for penalties and forfeitures provided under the chapter. I.C. § 22-2-9-4(a). And Section 22-2-9-5 gives the Commissioner the authority to take assignment of certain wage claims without referring them to the Attorney General. This limited authority, however, has no bearing on the claimants’ duty to first submit their claims to the DOL.

917 N.E.2d at 721 (emphasis added); see also Family Dental Care, P.C. v. Mousa, 180 N.E.3d 383, 388 (Ind. Ct. App. 2021) (“We agree with the position consistently taken by the Indiana federal district courts rejecting claims of futility and holding that a claimant under the [Wage Claims Statute] seeking redress for unpaid wages greater than $6,000 must still pursue administrative exhaustion before filing in court.”), trans. denied.

[13] As for Taylor's contention that he was unable to submit a claim through the DOL website, we note this issue was also addressed in Family Dental Care, P.C. v. Mousa. Id. There, the plaintiff designated evidence “related to the DOL's online wage claim portal, which indicated that claims over $6,000 could not be processed by the DOL and directed such a claimant to consult a private attorney.” Id. at 385. We acknowledged this was “imprecise” and “misleading” language. Id. at 388. Nonetheless, we noted the DOL website directed such claimants to “consult a private attorney” and “[a] private attorney, presumably aware of the statutory requirements, can then seek a referral letter” in line with the statute. Id.

[14] Notably here, Taylor did not designate any evidence showing he was unable to submit a claim. In his Appellant's Brief, he merely directs us to the DOL website.² Even assuming the website did inform Taylor that his claim could not be submitted, as explained above this does not absolve him from following the statutory requirements.

Conclusion

[15] Because Taylor failed to exhaust his administrative remedies by submitting his claim under the Indiana Wage Claims Statute to the DOL prior to filing suit in the trial court, the court lacked subject-matter jurisdiction to hear this claim. We therefore reverse the judgment in favor of Hope and remand to the trial court with instructions to dismiss this claim for lack of subject-matter jurisdiction.³ See Johnson, 829 N.E.2d at 984 (remanding for trial court to dismiss complaint for lack of subject-matter jurisdiction where claimant failed to exhaust administrative remedies).

[16] Reversed and remanded with instructions.⁴

FOOTNOTES

1.   Indiana Code chapter 22-2-5, known as the Indiana Wage Payment Statute, also concerns wage disputes and allows for liquidated damages and attorney fees, but applies to employees who left their employment voluntarily. See Ind. Code § 22-2-5-1(b) (2007). And unlike the Wage Claims Statute, under the Wage Payment Statute claimants may file directly with the trial court. See Hollis, 941 N.E.2d at 537-38 (explaining the differences between the Wage Payment Statute and Wage Claims Statute).

2.   Our own review of the DOL website showed two wage claim forms. The first did indicate, as Taylor asserted to the trial court, that the DOL is unable to accept a claim above $6,000 and advised such claimants to consult a private attorney. See Indiana Department of Labor, Online Wage Claim Form, https://www.in.gov/dol/wage-and-hour/online-wage-claim-form2/ [https://perma.cc/Q7KB-6UDB] (last visited December 1, 2025). The second did not preclude such claims from being filed. See Indiana Department of Labor, Online Wage Claim Form, https://www.in.gov/dol/wage-and-hour/online-wage-claim-form/ [https://perma.cc/PE8W-TLDM] (last visited December 1, 2025).

3.   Taylor's remaining claims, and Hope's counterclaim, were previously dismissed without prejudice.

4.   Taylor also argues we should allow his claim to go forward on equitable grounds, citing both the doctrine of laches and lack of notice. However, “until a party has exhausted administrative channels, a court is without jurisdiction to bestow equitable relief[.]” S. Bend Fed'n of Teachers v. Nat'l Ed. Ass'n -S. Bend, 389 N.E.2d 23, 30 (Ind. Ct. App. 1979). While this rule may be relaxed in “exceptional circumstances,” we do not believe such relief is warranted here. Id.

Scheele, Judge.

Foley, J., and Kenworthy, J., concur.