Smith v. Waverly Partners, LLC et al

Filing 136

ORDER denying 120 Motion for Judgment as a Matter of Law; denying 120 Motion for New Trial. Signed by District Judge Richard Voorhees on 10/17/2013. (blf)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CASE NO. 3:10-cv-00028-RLV-DSC
SHAWN SMITH,

)
)
Plaintiff,
)
)
v.
)
)
WAVERLY PARTNERS, LLC, and )
ALLIEDBARTON SECURITY
)
SERVICES, LLC, d/b/a HRPLUS, )
)
Defendants.
)
)

MEMORANDUM AND ORDER

THIS MATTER is before the Court on Defendant Waverly’s Motion for Judgment as a
Matter of Law. (Doc. 120.)
At issue is whether Plaintiff, during the course of the trial, presented evidence that would
permit a reasonable jury to find that Defendant Waverly breached the terms of their contract by
initiating a background investigation that was not limited to Plaintiff’s “past employment.” See
Dennis v. Columbia Colleton Med. Ctr., Inc., 290 F.3d 639, 645 (4th Cir. 2002) (“The question
[on a Rule 50(b) motion ]is whether a jury, viewing the evidence in the light most favorable to
[the nonmovant], could have properly reached the conclusion reached by this jury.”). In a prior
Order granting in part and denying in part Defendant Waverly’s Motion for Summary Judgment,
this Court determined that Plaintiff had established a genuine issue of material fact as to her
breach-of-contract claim in part because the language of the consent form, particularly the term
“past employment,” was susceptible to varying interpretations asserted by the parties. (Doc. 81 at
15–16.) Accordingly, consideration of extrinsic evidence regarding the term’s meaning was
permitted, and the interpretation of the term was a matter left for the jury. (Contra Doc. 132 at

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2.) Defendant’s efforts to resurrect arguments to the contrary, which had formerly been raised
within its Motion for Summary Judgment, thus fall short. (See Doc. 121 at 10–14; Doc. 132 at 2–
3.)
With regard to such extrinsic evidence, Plaintiff conceded in her trial testimony that the
parties’ agreement contemplated some contact with employees of The Cato Corporation, the
company with which she was employed at the time Waverly began its background investigation,
at least as personal references. (See, e.g., Doc. 121-1 at 31–32, 34–35.) However, the jury was
entitled to believe Plaintiff’s assertions regarding a mutuality of understanding as to the
confidentiality of the job-application process, vague though they were (id. at 29–30) (stating that
after “explaining that [John Cato’s discovery of her application] would not be a good career
move for [Plaintiff] . . . , Mr. Turnbull . . . said . . . don’t worry about it . . . [as] this is a
confidential process”), affirmed to some extent by Defendant Waverly’s instruction to Defendant
AlliedBarton “[to u]se discretion” in conducting Plaintiff’s background investigation (Doc. 1294 at 3–7) (explaining that this selection, pursuant to company policy, permits only a verbal phone
call to the current employer’s human-resources department to verify the dates and positions of
employment, and that it is not to be revealed that the call is for employment-related purposes).
Defendant Waverly further argues that AlliedBarton was not its agent but rather served
only as an independent contractor. While an employee’s commission of a tort while acting within
the scope of employment can be imputed to the employer per the doctrine of respondeat superior,
under North Carolina law, it is well settled that torts committed by an independent contractor are
not so imputed. Estate of Redding v. Welborn, 612 S.E.2d 664, 668 (N.C. Ct. App. 2005); see
also Wiswall v. Brinson, 32 N.C. (10 Ired.) 554, 564–68 (1849) (Ruffin, C.J., dissenting).
However, here at issue is a breach-of-contract claim, and Defendant cannot avoid contractual

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liability merely by utilizing an independent contractor in the course of performance where
Defendant owed to Plaintiff a contract right of proper performance. Cf. Restatement (Second) of
Contracts § 318 (“Unless the obligee agrees otherwise, neither delegation of performance nor a
contract to assume the duty made with the obligor by the person delegated discharges any duty or
liability of the delegating obligor.”).
Additionally, in regard to Defendant’s arguments that the damages were unforeseeable,
the jury was entitled to credit Plaintiff’s testimony that Defendant was provided with notice of
potentially detrimental consequences to Plaintiff’s career at The Cato Corporation and that
Defendant recognized John Cato, Plaintiff’s employer, “to be a very challenging personality.”
(Doc. 121-1 at 29.) It was therefore reasonable for the jury to find that Plaintiff’s termination and
loss of income were foreseeable consequences of Defendant’s breach.
As a final matter, for the various reasons articulated above, Defendant’s request for a new
trial shall be denied.
IT IS, THEREFORE, ORDERED that Defendant’s Motion Pursuant to Rules 50(b)
and 59 (Doc. 120) be DENIED.
Signed: October 17, 2013

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