Ensley et al v. Turnage et al

Filing 523

MEMORANDUM OPINION - VOLUME VII. Signed by Judge Madeline Hughes Haikala on 2/28/2022. Associated Cases: 5:15-cv-02207-MHH, 5:15-cv-01179-MHH(KEK)

FILED
2022 Feb-28 PM 04:19
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
GEMSTONE FOODS, LLC et al.,

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Plaintiffs,
v.
AAA FOODS ENTERPRISES, INC.
et al.,
Defendants.

Case No.: 5:15-cv-02207-MHH

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
MICHAEL ENSLEY et al.,

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Plaintiffs,
v.
BEN O. TURNAGE et al.,
Defendants.

Case No.: 5:15-cv-01179-MHH

MEMORANDUM OPINION – VOLUME VII
IV.
Analysis of the Plaintiffs’ Motions for Summary Judgment

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Mr. Ensley/A&M’s Direct Claims in Case 15-1179
In case 15-1179, Mr. Ensley and A&M assert claims against Gemstone,
RCF, and Gemstone Holdings, LLC under theories of breach of contract, quantum
meruit, unjust enrichment, and civil conspiracy. (See 15-1179, Doc. 1).1 For each
claim, Mr. Ensley alleges that Gemstone refused to pay him his salary for
November 15–30, 2014, his monthly bonus payments for October and November
2014, and the full amount of his executive savings plan. (See 15-1179, Doc. 1,
pp. 13–14, ¶¶ 70, 76, 78).

Gemstone contends that it paid Mr. Ensley all

compensation due. (Doc. 429, p. 2). Gemstone, RCF, and Gemstone Holdings
have moved for judgment in their favor on Mr. Ensley/A&M’s claims. (Doc. 424;
Doc. 428).
Mr. Ensley’s compensation agreement for 2014 included a $325,000 salary
and monthly bonuses.2 In addition, Mr. Ensley allegedly was entitled to “10% of
the consolidated net (after tax) annualized profit [] to be allocated via Employment
Contract for the Executive Saving Plan on an annual basis . . . .” (Doc. 428-3, p.

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Initially, in case 15-1179, Mr. Ensley and A&M asserted a host of claims against several
defendants, including a claim for breach of the covenant of good faith and fair dealing. (151179, Doc. 1). Mr. Ensley and A&M have voluntarily dismissed their claims against all
defendants other than Gemstone, RCF, and Gemstone Holdings, and Mr. Ensley and A&M have
voluntarily dismissed their breach of the covenant of good faith and fair dealing claim against
all defendants. (Doc. 446, p. 2).
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Initially, Mr. Ensley and Mr. Turnage agreed to 6% bonuses, but in April 2014, they agreed to
increase the bonuses to 10%. (Doc. 428-27, p. 3; Doc. 429, p. 11).
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3). The parties agree that Mr. Ensley was entitled to 11 months’ worth of his
salary in 2014 because he worked through the end of November 2014. (Doc. 429,
p. 8; Doc. 446, p. 4). Mr. Ensley’s final paycheck covers his work through
November 15, 2014. (Doc. 428-15, p. 2). A jury must decide whether Gemstone
should have paid Mr. Ensley through the end of November 2014.3
A jury also must decide whether Gemstone owes Mr. Ensley bonus
payments. Gemstone paid Mr. Ensley bonuses through October 2014 but did not
pay him a bonus in November 2014. (Doc. 429, p. 10; Doc. 446, pp. 7, 10; see
Doc. 428-26). A jury must decide whether Mr. Ensley may receive a bonus for
November 2014 and, if so, how much the bonus should be.
With respect to the Executive Savings Plan, Mr. Ensley acknowledges that
the parties discussed formalizing the memorandum which states that Gemstone
agreed to allocate “10% of the consolidated net (after tax) annualized profit” for
the Executive Savings Plan, but Mr. Ensley contends that the parties’ failure to
follow through is irrelevant because the memorandum describing the Savings Plan
suffices to bind Gemstone. (Doc. 446, pp. 11–13). A jury must decide whether
there was a meeting of the minds with respect to the Savings Plan, and, if so, how

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The plaintiffs contend that Gemstone paid Mr. Ensley’s salary through the end of November
2014 because he received $297,916.23 in payroll checks in 2014. (Doc. 429, pp. 5–8). Eleven
twelfths of $325,000 is $297.916.67. The final paycheck Gemstone issued to Mr. Ensley on
December 30, 2014, (Doc. 428-16), covered unused vacation time. (Doc. 429, p. 8).
Reasonable jurors, therefore, could find that Gemstone still owes Mr. Ensley part of his salary.
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much Mr. Ensley may recover under the plan. Alternatively, Mr. Ensley seeks to
recover under the Savings Plan via the equitable principles of quantum meruit and
unjust enrichment.
Therefore, Mr. Ensley/A&M’s direct claims for compensation in case 151179 survive the motion for summary judgment filed by Gemstone, RCF, and
Gemstone Holdings.
2. Ms. Carr/AAA’s Counterclaims in Case 15-2207
In their answer to the plaintiffs’ third amended complaint, Ms. Carr and
AAA assert counterclaims against Gemstone and RCF for breach of contract,
unjust enrichment, quantum meruit, and violation of the Alabama Sales
Representative’s Commission Contract Act. (Doc. 521, p. 33; Doc. 394, pp. 36–
42). Each claim concerns Ms. Carr’s and AAA’s contention that Gemstone
refused to pay her fully in late 2014 and early 2015 for services she rendered under
the $0.005/$0.02 brokerage agreement.
Gemstone and RCF contend that they are entitled to judgment as a matter
of law on these claims because the $0.005/$0.02 agreement was either
unenforceable under the statute of frauds or did not provide compensation for
sales. (Doc. 427, p. 3). The arguments are not persuasive. The UCC statute of
frauds does not bar Ms. Carr/AAA’s counterclaims. Ms. Carr’s $0.005/$0.02
agreement with Gemstone was for brokerage services, and, as the Court has
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explained, the evidence supports a reasonable inference that a contract for Ms.
Carr’s brokerage services is a contract for services with goods incidentally
involved and therefore is not governed by the UCC. (See Memorandum Opinion
– Volume II, Doc. 540, pp. 6–9).
Viewed in the light most favorable to Ms. Carr and AAA, the evidence
would support a jury finding that Gemstone agreed to pay Ms. Carr $0.02 per
pound of portioned chicken that she sold for Gemstone.

Ms. Carr’s sworn

declaration to that effect, (Doc. 238-2, p. 6, ¶ 21), creates a genuine issue for trial.
See Sconiers, 946 F.3d at 1263; Feliciano, 707 F.3d at 1252–53. Additionally, on
December 11, 2014, Gary Hill sent Ms. Carr and Kevin Wilson, Gemstone’s
senior accountant, an email with the subject line “.02 / Lb Commission for Direct
Purchases to AAA Foods.” (Doc. 422-67, p. 3). In the email, Gary Hill calculated
a $43,683.71 commission by multiplying $0.02 with 2,184,185.37 pounds of
chicken received “[s]ince [Gemstone] started direct purchases.” (Doc. 422-67, p.
3). On December 12, 2014, Gary Hill sent Ms. Carr a message in which he stated:
“I think it is only suppose[d] to be .005 per pound.” (Doc. 422-68, p. 2). Ms. Carr
responded, “.02 on sales side and .005 purchasing.” (Doc. 422-68, p. 2).4

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Gemstone and RCF have cited evidence that, according to them, contradicts an agreement to
pay Ms. Carr/AAA for sales. (Doc. 427, pp. 24–26) (citing Doc. 422-1, pp. 48–49, tpp. 181–
83; Doc. 426-2, p. 2; Doc. 426-4; Doc. 426-5). A jury will weigh the evidence.
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Therefore, the Court will deny the plaintiffs’ motion for summary judgment
as to Ms. Carr/AAA’s counterclaims.
DONE and ORDERED this February 28, 2022.

_________________________________
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE

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