Remsburg v. Docupak
Filing
90
MEMORANDUM AND OPINION and ORDER denying 37 Motion for Summary Judgment; denying 38 Motion for Summary Judgment. Signed by District Judge Gina M. Groh on 2/27/13. (njz)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG
DAVID REMSBERG,
Plaintiff,
v.
CIVIL ACTION NO. 3:12-CV-41
(JUDGE GROH)
DOCUPAK, a foreign
corporation,
Defendant.
MEMORANDUM OPINION AND ORDER
I. Introduction
Plaintiff David Remsburg brings a claim under the West Virginia Wage Payment and
Collection Act. This matter is currently before the Court on Defendant Docupak’s Motion
for Summary Judgment [Doc. 37], filed on December 11, 2012. Plaintiff filed his Response
to Defendant’s Motion for Summary Judgment [Doc. 43] on January 3, 2013. Defendant
filed its Reply [Doc. 63] on January 16, 2013. For the following reasons, this Court DENIES
Defendant’s Motion for Summary Judgment [Doc. 37].
Also pending before this Court is the Plaintiff’s Motion for Partial Summary Judgment
on Count I and Count II of the Defendant’s Counterclaims [Doc. 38], filed on December 11,
2012. Defendant filed its Response to Plaintiff’s Motion for Partial Summary Judgment
[Doc. 41] on January 2, 2013. Plaintiff filed his Reply [Doc. 62] on January 16, 2013. For
the following reasons, this Court DENIES the Plaintiff’s Motion for Partial Summary
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Judgment [Doc. 38].
II. Factual Background
Plaintiff is a resident of Berkeley County, West Virginia. Defendant, Document &
Packaging Brokers, Inc. (“Docupak”), is a corporation with its main office located at 100
Gilbert Drive, Alabaster, Alabama. Defendant contracted with the National Guard
Bureau to manage a recruitment program known as the Guard Recruiting Assistant
Program (G-RAP). In managing G-RAP, Defendant contracted with individuals, known
as recruiting assistants, to identify recruits. Defendant had an online application for
individuals interested in becoming recruiting assistants. ([Doc. 37-4], p. 15) The online
application required applicants to agree or disagree to be bound by an Independent
Contractor Agreement (“Agreement”). ([Doc. 37-4], p. 15). Applicants were required to
select either the agree or disagree button. ([Doc. 37-4], p. 15). If an applicant agreed to
the Agreement, the application process continued. ([Doc. 37-4], p. 15) If an applicant
did not agree to the Agreement, then the process stopped. (Doc. 37-4, p. 15). Plaintiff
completed the online application process. ([Doc. 37-5], p. 8). However, Plaintiff states
he cannot remember whether he clicked a button in the online application process
agreeing or disagreeing with the Agreement. ([Doc. 37-5], p. 9).
Plaintiff started the G-RAP program in January 2009. ([Doc 37-5], p. 8).
Defendant and Plaintiff admitted that they were parties to a valid contract. ([Doc. 37-2],
p. 8). The contract provided that Plaintiff would identify and pre-qualify potential airmen
for the regular Air National Guard recruiters and then arrange an initial meeting between
the potential recruit and the recruiter. As a recruiting assistant, Plaintiff identified
individuals within their sphere of influence to join the Air National Guard. ([Doc. 37-4], p.
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6). Once individuals were identified, Plaintiff mentored prospects and maintained
contact with them through the Air National Guard process. ([Doc. 37-4], p. 6). The GRAP provided that “[u]pon verified enlistment, the R[ecruiting] A[ssistant] will receive an
initial payment of $1,000, with a second $1,000 payment upon verification of the new
recruit’s successful shipment to Basic Training or AMS.” ([Doc. 37-4], p. 24).
As a recruiting assistant, Plaintiff did not receive any regular wages or employee
benefits. ([Doc. 37-5], p. 12). He did not receive an employee handbook from
Defendant. Id. Also, Plaintiff did not have a supervisor, and he never received any
performance evaluations from Defendant. Plaintiff also identified himself, for tax
purposes, as self-employed. Id. at 13. Plaintiff documented his pay from Defendant on
a Form 1099, not a W-2. Id. at 8-12. Also, Defendant did not withhold any income tax
on Plaintiff’s compensation. Id. When Plaintiff received payment for his recruits, he
received an e-mail that stated in bold print, “The tax implications of a self-employed
individual are different from those of an ordinary wage earner. Docupak is required to
send a Form 1099-MISC to the IRS and to each Recruiting Assistant that receives a
payment of $600 or more.” Id.
However, Defendant offered training to Plaintiff regarding how to speak with
potential recruits, an overview of the G-RAP program, and a review of G-RAP’s
guidelines. ([Doc. 37-5], p. 13). Also, Plaintiff received a “New Hire Kit” from Defendant.
([Doc. 37-5], p. 13-14). The New Hire Kit contained two polo shirts that said “Guard
Recruiting Assistant” and 200 starter business cards. Id.
In July 2009, Defendant began investigating Plaintiff’s recruiting activities
because it believed Plaintiff was not following the G-RAP guidelines. ([Doc. 37-4], p. 4).
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On July 14, 2009, the West Virginia Air National Guard also investigated suspicious
recruiting activities involving the G-RAP program and Plaintiff. ([Doc. 37-3], p.11). As a
result of the investigation, Plaintiff was barred from his G-RAP online account in August
2009 after Defendant suspected that Plaintiff was not complying with the program’s
rules and procedures. ([Doc. 37-4], p. 4).
III. Procedural Background
Plaintiff filed this action in the Circuit Court of Berkeley County, West Virginia on
March 20, 2012. Plaintiff alleged in his Complaint that Defendant violated the West Virginia
Wage Payment & Collection Act by failing to pay him certain wages in excess of $26,000
within the statutory period required when an employee is involuntary terminated. Plaintiff
seeks payment of the unpaid wages plus liquidated damages.
On April 30, 2012, Defendant removed to this Court pursuant to diversity jurisdiction
as Plaintiff is a citizen of the State of West Virginia, Defendant is a citizen of the State of
Alabama, and more than $75,000 is in controversy. On May 21, Defendant filed its Answer
to Plaintiff’s Complaint and filed counterclaims. Defendant’s counterclaims allege that
Plaintiff breached his contract with Defendant by failing to comply with G-RAP’s rules and
that Defendant made certain contractual payments relating to the recruiting process despite
Plaintiff’s failure to comply with the rules of G-RAP, which resulted in unjust enrichment.
On December 11, 2012, Defendant Docupak filed its Motion for Summary Judgment.
Plaintiff filed his Response to the Defendant’s Motion for Summary Judgment on January
3, 2013. Defendant filed its Reply on January 16, 2013. Also on December 11, 2012,
Plaintiff filed his Motion for Partial Summary Judgment on both counts of the Defendant’s
Counterclaims. Defendant filed its Response to Plaintiff’s Motion for Partial Summary
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Judgment on January 2, 2013. Plaintiff filed his Reply on January 16, 2013.
IV. Legal Standard
Rule 56 of the Federal Rules of Civil Procedure governs summary judgment. See
FED. R. CIV. P. 56. Summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A genuine issue exists “if the evidence is such that a reasonable jury could return a verdict
for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Thus, the Court must conduct “the threshold inquiry of determining whether there is the
need for a trial- whether, in other words, there are any genuine factual issues that properly
can be resolved only by a finder of fact because they may reasonably be resolved in favor
of either party.” Anderson, 477 U.S. at 250.
The party opposing summary judgment “must do more than simply show that there
is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). That is, once the movant has met its
burden to show absence of material fact, the party opposing summary judgment must then
come forward with affidavits or other evidence demonstrating there is indeed a genuine
issue for trial. FED. R. CIV. P. 56(c); Celotex Corp., 477 U.S. at 323-25; Anderson, 477
U.S. at 248. “If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted.” Anderson, 477 U.S. at 249 (citations omitted).
When both parties file motions for summary judgment, as here, the court applies the
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same standards of review. ITCO Corp. v. Michelin Tire Corp., 722 F.2d 42, 45 n. 3 (4th
Cir. 1983) (“The court is not permitted to resolve issues of material facts on a motion for
summary judgment–even where . . . both parties have filed cross motions for summary
judgment.”) (emphasis omitted), cert. denied, 469 U.S. 1215 (1985). A motion for summary
judgment should be denied “if the evidence is such that conflicting inferences may be
drawn therefrom, or if reasonable men might reach different conclusions.” Phoenix Sav.
& Loan, Inc. v. Aetna Cas. & Sur. Co., 381 F.3d 245 (4th Cir. 1967); see also Anderson,
477 U.S. at 253 (noting that “[c]redibility determinations, the weighing of the evidence, and
the drawing of legitimate inferences from the facts are jury functions, not those of a
judge.”).
V. Discussion
A. Defendant’s Motion for Summary Judgment
Defendant argues that Plaintiff’s WPCA claim fails for two reasons: (1) Plaintiff
was an independent contractor, not an employee, and (2) Plaintiff did not perform the
services for which Defendant contracted him. Defendant contends that summary
judgment is appropriate as there are no genuine issues of material fact, and Defendant
is entitled to judgment as a matter of law.
West Virginia’s WPCA provides that “[w]henever a person, firm or corporation
discharges an employee, such person, firm or corporation shall pay the employee’s
wages in full within seventy-two hours.” W. VA. CODE § 21-5-4(b). The WPCA also
provides that “[i]f a person, firm or corporation fails to pay an employee wages as
required . . . such person, firm or corporation shall, in addition to the amount which was
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unpaid when due, be liable to the employee for three times that unpaid amount as
liquidated damages.”
1. Defendant’s Argument that Plaintiff was an Independent Contractor
Defendant argues that Plaintiff’s WPCA claim must fail as a matter of law
because the undisputed evidence shows that Plaintiff was an independent contractor
and not an employee. Plaintiff argues that he was an “employee” under the WPCA and
that genuine issues as to material facts exist, precluding summary judgment. Because
Defendant argues that Plaintiff was an independent contractor, the Court must first
analyze whether Plaintiff was, in fact, an independent contractor. Under West Virginia
law, an independent contractor is determined by four factors: selection and engagement
of the servant, the method of compensation, the right to fire, and the power of control,
but the power of control is “determinative.” Burless v. W. Va. Univ. Hosps., Inc., 601
S.E.2d 85, 91 (W. Va. 2004); see also Shaffer v. Acme Limestone Co., Inc., 524
S.E.2d 688, 695 (W. Va. 1999). “The power of control ‘factor refers to control over the
means and method of performing the work.’” Shaffer, 524 S.E.2d at 696 (quoting
McDonald v. Hampton Training Sch. for Nurses, 486 S.E.2d 299, 301 (Va. 1997)).
The West Virginia Supreme Court of Appeals also held that “‘an owner who engages an
independent contractor to perform a job for him or her may retain broad general power
of supervision and control as to the results of the work so as to insure satisfactory
performance of the contract-including the right to inspect, to stop the work, to make
suggestions or recommendations as to the details of the work, or to prescribe
alterations or deviations in the work-without changing the relationship from that of owner
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and independent contractor, or [changing] the duties arising from that relationship.’”
Shaffer, 524 S.E.2d at 896 (collecting cases of numerous courts that have held the
same) (citations omitted).
In this case, Defendant contracted with Plaintiff solely to provide recruiting
services for the Air National Guard. Defendant has made a prima facie showing that
Plaintiff was an independent contractor. Defendant provided evidence showing that it
did not dictate the days of the week or the hours per day Plaintiff was required to work.
([Doc. 37-5], p. 12, 19). Plaintiff determined his own work hours, the days he would
work, the location he would work from, and the style and method he would use to
recruit. ([Doc. 37-5], p. 12-14). Plaintiff filed tax returns as an independent contractor
as well, and he received a 1099 instead of a W-2 ([Doc. 37-5], p. 11). Plaintiff did not
have a supervisor, a set work schedule, or an employee handbook, and Plaintiff did not
receive performance evaluations. ([Doc. 37-5], p. 12-13). Plaintiff also admits that
Defendant did not control his day-to-day activities. ([Doc. 37-5], p. 13). Therefore,
Defendant has presented a prima facie case that Plaintiff was an independent
contractor and Defendant did not retain control to determine the means and methods of
Plaintiff’s performance of the contract.
Therefore, to defeat summary judgment, Plaintiff must present relevant evidence
involving Defendant’s control of Plaintiff’s recruiting efforts. Plaintiff offered evidence to
present a genuine issue of material fact regarding whether Plaintiff was an independent
contractor or an employee. First, Plaintiff offered evidence that Defendant maintained
an administrative site where Plaintiff, in order to receive compensation for his recruits,
had to enter information regarding the recruit, such as the recruit’s name and social
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security number. ([Doc. 37-4], p. 6-7). Then, Defendant used the information to verify
with the Air National Guard that the recruit had in fact enlisted. ([Doc. 37-4], p. 8).
Defendant validated the data to decide whether or not Plaintiff had complied with his
contractual obligation, thus justifying payment. Id. Second, Plaintiff also testified in his
deposition that Defendant offered training regarding how to speak with the potential
recruits, an overview of the G-RAP program, and a review of G-RAP’s guidelines.
([Doc. 37-5], p. 13). Last, Plaintiff testified in his deposition that Defendant exercised
control because it provided Plaintiff with a “New Hire Kit,” including two polo shirts that
said “Guard Recruiting Assistant” and 200 starter business cards. ([Doc. 37-5], p. 1314). Plaintiff argues that his proffered evidence creates a genuine issue of material fact
as to whether Plaintiff is an independent contractor or an employee. Defendant and
Plaintiff have presented evidence that creates conflicting inferences and “reasonable
men might reach different conclusions” as to Plaintiff’s alleged independent contractor
status. Phoenix Sav. & Loan, Inc., 381 F.3d 245. Accordingly, summary judgment is
not appropriate.
2. Defendant’s Argument that Plaintiff was not Entitled to Payment or Damages
Because He Violated G-RAP Rules
Defendant argues that Plaintiff is not entitled to any payment or damages
because he did not perform the duties that Defendant contracted with him to perform.
Defendant contends that Plaintiff admitted he would take credit for the potential airmen
even if they had already met with the recruiter prior to their first meeting with Plaintiff.
([Doc. 37-1], p. 14). Also, Defendant offered sworn declarations from five out of twentysix recruits that were allegedly initially recruited by a West Virginia Air National Guard
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recruiter, but then contacted by Plaintiff to G-RAP them. ([Doc. 37-5], 78-81, 94-95,
100-01, 106-10). Defendant argues this was in clear violation of G-RAP’s procedures.
In response, Plaintiff contends that a genuine issue of fact exists as to whether
he violated G-RAP’s guidelines in recruiting the twenty-six individuals at issue. In
Plaintiff’s deposition, he stated that he would not “take credit for someone that [he] had
no involvement with.” ([Doc. 37-5], p. 21). Plaintiff also stated that he recruited “within
the guidelines of Docupak.” Id. at 22. Thus, Plaintiff’s sworn deposition testimony
conflicts with the sworn statements of several recruits that he claimed credit for through
the G-RAP program.
In this case, a genuine issue of fact exists because the evidence is conflicting,
and a reasonable jury could return a verdict for the non-moving party. See Anderson,
477 U.S. at 248. In determining whether Plaintiff violated G-RAP’s guidelines, the court
would necessarily have to make credibility determinations, weigh the evidence, and
draw inferences from the facts. These are jury functions. Accordingly, the Court denies
Defendant’s Motion for Summary Judgment.
B. Plaintiff’s Motion for Partial Summary Judgment
Plaintiff moves for partial summary judgment upon Count I and Count II of the
Defendant’s Counterclaims.
1. Count I- Breach of Contract
To establish a breach of contract, a party must establish four elements: (1) that a
valid, enforceable contract exists; (2) that the plaintiff has performed under the contract;
(3) that the defendant has breached or violated its duties or obligations under the
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contract; and (4) that the plaintiff has been injured as a result of a breach. See
Executive Risk Indem., Inc. v. Charleston Area Med. Ctr., Inc., 681 F. Supp. 2d 694,
714 (S.D.W. Va. 2009) (stating the four elements to establish a breach of contract); see
also Wittenberg v. Wells Fargo Bank, N.A., 852 F. Supp. 2d 731, 749 (N.D.W. Va.
2012) (“In West Virginia, the elements of breach of contract are (1) a contract exists
between the parties; (2) a defendant failed to comply with a term in the contract; and (3)
damage arose from the breach.”). The Defendant and Plaintiff agree that they were
parties to a valid contract. ([Doc. 37-2], p. 8). Plaintiff also admits that a term of the
contract was Plaintiff’s compliance with the rules of the G-RAP program. ([Doc. 8], p. 5;
[Doc. 12], p. 1). However, the parties strongly disagree on whether Plaintiff breached
the contract and if so, whether Defendant suffered any damages.
First, genuine issues of material fact exist regarding whether Plaintiff breached
the contract. Although Plaintiff admits that a term of the contract was Plaintiff’s
compliance with the rules of the G-RAP program, Plaintiff contends that he fully
complied with all of the rules of G-RAP and properly recruited potential airmen. ([Doc.
37-5], p. 21-22). However, Defendant contends that Plaintiff claimed credit for the
recruited individuals after they had already been recruited through other individuals in
the West Virginia Air National Guard. Thus, there are genuine issues of material fact,
and the Court cannot determine as a matter of law whether Plaintiff breached the
contract with Defendant. Additionally, credibility determinations and the drawing of
legitimate inferences from the facts will need to be made to determine whether there
was a breach of contract. These are jury functions, not those of a judge. See
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Anderson, 477 U.S. at 253.
Second, the parties also dispute whether Defendant has any damages. Plaintiff
primarily argues that he is entitled to summary judgment on Defendant’s breach of
contract claim because Defendant has failed to establish that it has suffered any
damages as a result of an alleged breach. In support of this argument, Plaintiff
contends that Defendant “received administrative fees as a consequence of Plaintiff’s
work and it has not notified the USA of any intention of returning those fees; [and] it was
completely reimbursed for every payment made to the Plaintiff . . . .” ([Doc. 38-1], p. 10).
Defendant argues that it suffered damages because it paid $30,000 to the
Plaintiff for recruits that were recruited by methods in breach of the contract. Although
Defendant admits that it was fully reimbursed the $30,000 from the United States
government and also received a $345 administration fee per recruit, Defendant argues it
will repay the government the aforementioned sums. However, Defendant has not
repaid any money to government at this point, and Defendant has not assigned any of
its claims to the government. Defendant argues that it is “not required to repay the
government until there is a decision that the government overpaid.” ([Doc. 41], p. 6).
Regardless of whether Defendant produced evidence of monetary losses or
damages, Defendant may still be entitled to nominal damages if proven. Harper v.
Consol. Bus Lines, 185 S.E.22d, 230 (W. Va. 1936 (citation omitted) (“Nominal
damages arise where there is a breach of a duty owed the plaintiff or an infraction of his
right, though the amount of actual damages is not shown.”). A plaintiff may recover
nominal damages in a contract action “[w]here an actionable wrong by the defendant is
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shown.” Harper, 185 S.E. at 231 (citing Watts v. Norfolk & W.R.Co., 19 S.E. 521 (W.
Va. 1894)). Therefore, genuine issues of fact exist regarding whether Defendant is
entitled to at least nominal damages. Accordingly, Plaintiff’s motion for partial summary
judgment on Count I of Defendant’s counterclaim is denied.
2. Count II- Unjust Enrichment
Under West Virginia law, “[i]t is generally recognized in the law of restitution that
if one party pays money to another party (the payee) because of a mistake of fact that a
contract or other obligation required such payment, the party making the payment is
entitled to repayment of the money from the payee.” Syl. Pt. 4, Prudential Ins. Co. of
Am. v. Couch, 376 S.E.2d 104 (W. Va. 2009). The Supreme Court of Appeals of West
Virginia also explained the theory’s underlying principle that “it would be unjust to allow
a person to retain money on which he had no valid claim. He would be unjustly
enriched thereby, when in equity and justice it should be returned to the payor.” Id. at
108.
As with Count I of Defendant’s counterclaim, genuine issues of fact exist that
preclude summary judgment. As discussed above, there are numerous factual issues
in dispute regarding whether Defendant paid money to Plaintiff “because of a mistake of
fact that a contract or other obligation required such payment.” See Syl. Pt. 4, Couch,
376 S.E.2d 104.
VI. Conclusion
For the foregoing reasons, this Court hereby DENIES the Plaintiff’s Motion for
Partial Summary Judgment and DENIES the Defendant’s Motion for Summary
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Judgment.
It is so ORDERED.
The Clerk is directed to transmit copies of this Order to all counsel of record
herein.
DATED: February 27, 2013
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