Court orders couple to pay $400,000 to nonresident workers

A group of nonresident workers has won a lawsuit they filed against their former employers for non-payment of back wages after the federal court awarded them over $400,000 in compensatory and punitive damages.

District Court Judge Alex R. Munson found John S. Pangelinan and wife Merced culpable in the fraud and racketeering charges filed by five Filipino nationals in the 1997 suit over their unpaid wages.

In his decision released yesterday, Judge Munson ordered the couple, who owned the family-run Papa’s Restaurant in Garapan, to pay the plaintiffs $58,595 representing the amount of an earlier judgment made by the Department of Labor and Immigration arising from a complaint for non-payment of their wages.

He also ordered them to pay Angelito Trinidad, $4,500; Antonio Alovera, $3,500; and Herman Tejada, $2,000 in compensatory damages after these three workers were forced to take out loans when the restaurant failed to pay their wages.

As punitive damages, the court pegged it to double of that amount., reaching to a total of $205,787 for awards under the charge of fraud, plus interests gained since Sept. 1996 when DOLI ruled in favor of the plaintiffs.

The Pangelinan couple will also pay another $205,787 to their former five employees for violations of the Racketeering Influenced and Corrupt Organizations Act or RICO after the accused engaged in a scheme to defraud the employees through promised payment of their wages and then transferring the restaurant’s last assets for their personal benefits.

The awards granted by the court have reached to more than $410,000, excluding attorney’s fees, litigation costs and other expenses which the plaintiffs must petition by Jan. 21.

“Each of the plaintiff remained working at their jobs with Papa, despite personal and financial hardships resulting from not being paid. However, it is clear that the Pangelinans, at best, intended to pay plaintiffs only if the restaurant at some point became profitable,” said the ruling.

The restaurant, which opened in 1992 after the defendants formed the corporation Papa’s Ltd., Inc. to manage it, hired the five employees in August that year. But they did not receive their wages up until December, forcing the three to borrow money.

Because of the substantial losses during the first four months of operations, their wages were not paid again from January until July 3, 1993 when the restaurant closed shop permanently.

Although each of the employee was given a note promising to settle their unpaid wages, the plaintiffs did not receive any payment totaling $28,097 despite numerous demands. 

In July 1995, they sought redress from DOLI which then ruled on Sept. 6, 1996 that the Pangelinan couple must pay $58,595 in back wages. Again they did not receive money.

But on Feb. 26 that year, the couple, along with their daughter Marji Ann, conspired to transfer Papa’s assets — the property where the restaurant was located — to keep to themselves the lease payment on the land, “clearly establishing a fraud upon plaintiffs as to any forthcoming payment to them for the sole remaining assets,” according to court documents.

“[T]hey did so in a manner that was known, intentional, calculated, and willful,” the ruling stated, adding that punitive damages are awarded because the Pangelinan’s actions were “so outrageous and callous.”