Kessler v. First Community Bank

Filing 130

MEMORANDUM OPINION AND ORDER: granting Defendant's 99 MOTION for Summary Judgment as to Count Five and denying the 99 MOTION as to all remaining counts; directing parties to engage in an additional mediation session prior to the pretrial conference. Signed by Judge Irene C. Berger on 6/26/2018. (cc: attys; any unrepresented party) (slr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BECKLEY DIVISION

JERRY S. KESSLER and
JARRELL’S EXXON,
Plaintiffs,
v.

CIVIL ACTION NO. 5:16-cv-06067

FIRST COMMUNITY BANK and
FIRST COMMUNITY BANCSHARES, INC.,
Defendants.

MEMORANDUM OPINION AND ORDER

The Court has reviewed the Defendants’ Motion for Summary Judgment (Document 99),
the supporting memorandum (Document 100), the Plaintiffs’ Response in Opposition to
Defendants’ Motion for Summary Judgment (Document 104), 1 and the Defendants’ Reply to
Plaintiffs’ Response in Opposition to Defendants’ Motion for Summary Judgment (Document
109). The Court has also reviewed all attached exhibits. For the reasons stated herein, the Court
finds that the motion should be granted in part and denied in part.
FACTS
The Plaintiffs in this matter are Jerry Kessler and Jarrell’s Exxon. Jerry Kessler is the sole
owner of Jarrell’s Exxon, a gas and service station in Hinton, West Virginia. He took the business
over from his father, Billy Joe Kessler (Joe), in 2008. Joe Kessler began working at Jarrell’s as a

1 The Defendant moves for the Plaintiffs’ response to be stricken as untimely because it was filed fifteen (15) days
after the motion, while the local rules require responses within fourteen (14) days. The Court finds that striking the
response is not an appropriate sanction for the asserted untimeliness under the circumstances.

college student, and soon took on a management role, which he maintained even after completing
college and taking a full-time job for the county board of education. The original owners left the
station to Joe Kessler in 1994, after they both passed away. Jarrell’s Exxon is a full-service gas
station and garage. It employees two gas attendants and two mechanics, as well as Jerry Kessler.
Joe Kessler continues to assist with bookkeeping, management, and customer service at least one
day per week, although he does not draw a salary.
The Kesslers report that gas sales had been declining somewhat in 2012 and 2013, but the
station’s profits were up by 11% in the first half of 2015. Gas profits tend to fluctuate, and more
than half of the station’s profits come from the garage, which does vehicle maintenance and repair
and also sells tires. Jarrell’s is one of four gas stations in Hinton, although the fourth, a Kroger
fuel station, opened several months after the events at issue in this suit. It is the only full-service
gas station in town. During the hours the station is open, an attendant will pump gas, clean
customers’ windshields, top off fluids, and check air pressure in tires. The gas pumps remain
open for customers to purchase gas with a credit card during nights and weekends, when the station
is unattended. The Kesslers both testified that the station had enjoyed a strong reputation in the
community and a loyal customer base, which they attribute to decades of good customer service.
The Defendant, First Community Bank, is one of three banks in Hinton. At the end of
July 2015, bank employees began receiving an unusually high number of customer complaints of
unauthorized transactions posting on accounts associated with debit cards. First Community
Bank’s procedure for handling such complaints is to deactivate the card, review the account with
the customer to identify all unauthorized transactions, have the customer call the merchants
associated with the transactions to seek refunds, encourage the customer to file a police report, and

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have the customer complete a “Reg E” form.

The Reg E form details the unauthorized

transaction. Branch employees then send the Reg E form to the bank’s Electronic Funds Transfer
(EFT) department, which credits the customer’s account in the amount of the fraudulent
transactions and issues a new card. In some cases, the EFT department flags transactions that
appear inconsistent with the customer’s usual card usage, and essentially the same steps are taken.
First Community Bank has no official policy regarding whether and how to investigate the
source of bankcard fraud, beyond the actions intended to reimburse consumers and reissue cards.
Some of the tellers at the Hinton branch stated that they recalled a computer training session that
explained how to review impacted customer accounts to search for a merchant patronized by all
of the customers within a certain time frame to find a common denominator that could be the
source of the fraud. The corporate employees indicated that there was no policy either requiring
or prohibiting employees from undertaking such an investigation.
The Hinton branch manager was on vacation in the summer of 2015 when the bank
experienced an influx of fraud reports. The bank tellers decided to conduct an investigation to
determine the source of the fraud. The documentation of that investigation was destroyed, and
the details are a bit hazy. However, deposition testimony indicates that they reviewed account
activity for the past several weeks for at least ten accounts. They determined that Jarrell’s Exxon
was a common denominator, although testimony is inconsistent with respect to whether all
reviewed accounts had transactions at Jarrell’s, or only 75-90% of accounts had transactions at
Jarrell’s. In addition to re-issuing cards for customers who actually had fraudulent transactions,
the Hinton branch identified Jarrell’s Exxon to the main bank office and obtained a list of accounts

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that had transactions at Jarrell’s within a certain time period.2 The bank then re-issued cards to
all of those customers, as well.
The bank employees deny informing any customers of the results of their investigation.
They assert that they simply advised customers to use cash or checks, particularly at gas stations,
until the issue was resolved. They also deny calling the police and naming Jarrell’s as the source
of the fraud, although they admit to cooperating with the investigation conducted by Sergeant
McMillan of the West Virginia State Police. Sergeant McMillan testified that he received several
reports of unauthorized transactions from individuals, but initiated his investigation into Jarrell’s
after a call from an employee at First Community Bank. Jerry Kessler testified that he learned of
the potential issue when Heidi Richmond, the head teller at First Community Bank, called to
inform him of the card fraud and the bank’s conclusion that his station was the source. He
inspected the pumps, but found nothing. Not long thereafter, Sgt. McMillan and another officer
visited Jarrell’s. They also inspected the pumps and found nothing. Sgt. McMillan believed the
fraud might be connected to a series of skimming incidents throughout the state. He relied on
First Community Bank’s assessment of Jarrell’s as the source, and explained, as did the bank
employees, that fraudulent transactions often begin appearing weeks or months after the skimming
devices have been removed. No one was ever arrested or charged in relation to the alleged
skimmers or the fraudulent transactions.
Rumors began spreading that Jarrell’s Exxon was skimming card information, and
customers at Jarrell’s mentioned their concerns to the Kesslers and to the gas attendants. Jerry

2 The bank employees do not clearly recall the time period they reviewed and considered in reaching their conclusions
and in identifying potentially compromised accounts. No one had a clear recollection, and estimates ranged from
several weeks to several months of accounts records prior to late July, when the unauthorized transactions began.

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Kessler called Heidi Richmond and asked that she refrain from telling people that Jarrell’s was
skimming cards. He testified that she refused and suggested doing so would require lying to her
customers. She does not recall the telephone conversation with Jerry Kessler, but does recall Joe
Kessler coming to the bank to demand that employees stop accusing Jarrell’s of skimming cards.
She testified that it was an angry conversation, with customers in the lobby. Joe Kessler testified
that he was calm and polite, and no customers were present. The bank employees suggest that
customers themselves came to the conclusion that Jarrell’s Exxon was the source of the skimming,
pointing to certain customers who use their cards only to purchase gas at Jarrell’s. One witness
testified that she had unauthorized transactions on an Exxon credit card that she used exclusively
at Jarrell’s. Other customers of both Jarrell’s and First Community Bank testified that bank
employees told them that there were skimmers on the pumps at Jarrell’s and advised them
specifically not to use their cards at Jarrell’s. Those customers also testified that they did not view
the bank employees’ statements as an accusation against Jarrell’s or its employees, but as an effort
to protect the bank and its customers from fraud. One customer testified that his card was
cancelled without notice, although there were no unauthorized transactions, and a bank employee
told him that it was cancelled because he had used it at Jarrell’s.
Gas station attendants showed the Kesslers social media posts from community members
who assumed that employees at Jarrell’s were themselves stealing the card information. Joe
Kessler wrote a letter to the editor in an effort to defend the business’ reputation. The local paper
in Hinton declined to publish the letter, and the Beckley Register Herald opted to write a full story,
rather than publishing the letter. The story notes that no skimmers were found at Jarrell’s, and

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Sandra Cozort Presley is quoted saying that businesses are also victims of skimmers, and she
would continue to purchase gas from Jarrell’s.
Joe and Jerry Kessler both testified that the business suffered a significant decline as soon
as the rumors began. Other employees at Jarrell’s also noticed a reduction in gas sales. The
Kesslers testified that the business has never fully recovered. Jerry Kessler also testified about
damage to his personal reputation. Given the small community in Hinton, he felt that people
viewed him differently and he suffered from the stigma of his community believing he was not
honest or trustworthy.
STANDARD OF REVIEW
The well-established standard in consideration of a motion for summary judgment is that
“[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a)–(c); see also Hunt v. Cromartie, 526 U.S. 541, 549 (1999); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Hoschar v.
Appalachian Power Co., 739 F.3d 163, 169 (4th Cir. 2014). A “material fact” is a fact that could
affect the outcome of the case. Anderson, 477 U.S. at 248; News & Observer Publ’g Co. v.
Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010). A “genuine issue” concerning
a material fact exists when the evidence is sufficient to allow a reasonable jury to return a verdict
in the nonmoving party’s favor. FDIC v. Cashion, 720 F.3d 169, 180 (4th Cir. 2013); News &
Observer, 597 F.3d at 576.
The moving party bears the burden of showing that there is no genuine issue of material
fact, and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp.,

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477 U.S. at 322–23. When determining whether summary judgment is appropriate, a court must
view all of the factual evidence, and any reasonable inferences to be drawn therefrom, in the light
most favorable to the nonmoving party. Hoschar, 739 F.3d at 169. However, the non-moving
party must offer some “concrete evidence from which a reasonable juror could return a verdict in
his favor.” Anderson, 477 U.S. at 256. “At the summary judgment stage, the non-moving party
must come forward with more than ‘mere speculation or the building of one inference upon
another’ to resist dismissal of the action.” Perry v. Kappos, No.11-1476, 2012 WL 2130908, at
*3 (4th Cir. June 13, 2012) (unpublished decision) (quoting Beale v. Hardy, 769 F.2d 213, 214
(4th Cir. 1985)).
In considering a motion for summary judgment, the court will not “weigh the evidence and
determine the truth of the matter,” Anderson, 477 U.S. at 249, nor will it make determinations of
credibility. N. Am. Precast, Inc. v. Gen. Cas. Co. of Wis., 2008 WL 906334, *3 (S.D. W. Va. Mar.
31, 2008) (Copenhaver, J.) (citing Sosebee v. Murphy, 797 F.2d 179, 182 (4th Cir. 1986). If
disputes over a material fact exist that “can be resolved only by a finder of fact because they may
reasonably be resolved in favor of either party,” summary judgment is inappropriate. Anderson,
477 U.S. at 250. If, however, the nonmoving party “fails to make a showing sufficient to establish
the existence of an element essential to that party’s case,” then summary judgment should be
granted because “a complete failure of proof concerning an essential element . . . necessarily
renders all other facts immaterial.” Celotex, 477 U.S. at 322–23.

DISCUSSION
First Community Bank moves for summary judgment as to each count of the Plaintiffs’
complaint. The Plaintiffs alleged the following causes of action: (1) tortious interference with
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business interests; (2) defamation and slander; (3) defamation per se; (4) tort of false light invasion of
privacy; (5) tort of outrage; and (6) negligence.
A. Tortious Interference

First Community Bank argues that it made no false, derogatory allegations against Jarrell’s.
It asserts that all of its contact with customers regarding the credit card fraud was designed to
protect both the bank and the customers from fraud, not to harm Jarrell’s or interfere with its
business.

It emphasizes that there is no evidence that the bank or its employees had any

motivation to interfere with or harm Jarrell’s Exxon or Jerry Kessler, and there is no evidence of
specific customers refusing to shop at Jarrell’s because of statements made by bank employees.
The Plaintiffs respond that they have produced evidence of damages, and that there is sufficient
evidence to permit a jury to find that the bank’s allegations against Jarrell’s were not necessary to
protect its interests or the interests of its customers. Given that bank employees testified that
skimmers would typically be removed by the time fraudulent charges began, Jarrell’s argues that
the bank had no reason to identify a possible source of the compromised cards.
The West Virginia Supreme Court of Appeals has established the following elements of a
prima facie case of tortious interference:
(1) existence of a contractual or business relationship or expectancy;
(2) an intentional act of interference by a party outside that relationship or
expectancy;
(3) proof that the interference caused the harm sustained; and
(4) damages.
Syl. Pt. 2, Torbett v. Wheeling Dollar Sav. & Tr. Co., 314 S.E.2d 166, 167 (W. Va. 1983). The
Court further held that “[i]f a plaintiff makes a prima facie case, a defendant may prove
justification or privilege” as affirmative defenses. Id.
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Defendants are not liable for interference that is negligent rather
than intentional, or if they show defenses of legitimate competition
between plaintiff and themselves, their financial interest in the
induced party's business, their responsibility for another's welfare,
their intention to influence another's business policies in which they
have an interest, their giving of honest, truthful requested advice, or
other factors that show the interference was proper.
Id.
The Plaintiffs have put forth evidence that they suffered a reduction in expected ongoing
business as a result of the rumors that credit and debit card information was being compromised
at Jarrell’s Exxon. They have also presented evidence that employees at First Community Bank
informed customers that cards were compromised at Jarrell’s, advised them not to use cards at
Jarrell’s, cancelled cards that had been used at Jarrell’s and told customers that cards were
cancelled because of use at Jarrell’s. The Kesslers, Jarrell’s employees, and the Plaintiffs’ expert
all agree that Jarrell’s experienced a reduction in business that coincided with First Community
Bank’s actions and continued thereafter. Thus, the Court finds that Jarrell’s has put forth facts
that would permit a jury to find that it has established a prima facie case of tortious interference.
First Community Bank asserts that its communications and actions were privileged because
it believed that Jarrell’s was, in fact, the source of the card compromises, and it was necessary to
warn customers in order to protect both customers and the bank from fraudulent transactions.
However, the bank appears to argue both that it did not identify Jarrell’s to customers, and that
identifying Jarrell’s to customers was necessary to prevent ongoing fraud.

Clearly, those

arguments cannot be easily reconciled. The parties and witnesses appear to be in agreement that
card skimmers would ordinarily be removed before fraudulent transactions begin to take place.
There is evidence that both Jerry Kessler and Sgt. McMillan informed the bank employees that
there were no skimmers on the pumps at Jarrell’s when the bank was receiving the fraud
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complaints. Thus, a jury could reasonably reject a privilege defense. Therefore, the Court finds
that the Defendant’s motion for summary judgment as to Count One should be denied.
B. Defamation, Defamation per se, and Slander

First Community Bank next asserts that it is entitled to summary judgment as to the
Plaintiffs’ claims in Counts Two and Three, brought on behalf of Jarrell’s Exxon and Jerry Kessler
personally. It asserts that there is no evidence that it made false or defamatory statements. It
further asserts that “the conversations FCB had with its customers were conversations with third
parties who had the right to know how they had been victimized and how to protect themselves from
further fraud in the future.” (Def.’s Mem. at 11.) The Plaintiffs argue that both truth and privilege
are elements of a defense for which the Defendant bears the burden of proof. The Plaintiffs assert that
“[t]here is conflicting evidence regarding what statements were made, the bases for the statements, the
truth or falsity of the statements, the extent of investigation undertaken to determine the truth or falsity
of the statements, the knowledge of potential falsity possessed by the bank, and the validity of any
argued privilege or justification for the statements.” (Pl.s’ Resp. at 12.)
In West Virginia, the elements of a defamation claim are: “(1) defamatory statements; (2) a
nonprivileged communication to a third party; (3) falsity; (4) reference to the plaintiff; (5) at least
negligence on the part of the publisher; and (6) resulting injury.” Syl. Pt. 1, Crump v. Beckley
Newspapers, Inc., 320 S.E.2d 70, 74 (W. Va. 1983). “[I]n the absence of a privileged communication,
the standard is one of negligence, and the conduct of the defendant is to be measured against what a
reasonably prudent person would have done under the same or similar circumstances.” Id., Syl. Pt. 2.
“Defamation may be accomplished through inference, implication, innuendo or insinuation, as well as
through direct reference.” Id., Syl. Pt. 4. “At common law, defamation per se includes only

imputations of a crime of moral turpitude, imputations of a loathsome disease, imputations of
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sexual misconduct by a woman, and imputations which affect a business, trade, profession or
office.” Mauck v. City of Martinsburg, 280 S.E.2d 216, 220, f.n. 3 (W. Va. 1981) (citing
Restatement (Second) of Torts ss 571-74 (1977)). Further, “slander and libel are treated together
as a claim for defamation under West Virginia law.” Workman v. Kroger Ltd. P'ship I, No.
CIV.A. 5:06-CV-00446, 2007 WL 2984698, at *4 (S.D.W. Va. Oct. 11, 2007) (Johnston, J.)
The parties appear to have assumed that the defamation claims as to Jerry Kessler and
Jarrell’s Exxon should be evaluated under the standard applicable to private figures, and the Court
will likewise apply that standard. The Plaintiffs have presented evidence that employees of First
Community Bank told its customers that there were skimmers on the gas pumps at Jarrell’s Exxon
and/or that Jarrell’s Exxon was the source of card compromises that led to fraudulent transactions.
Those statements clearly reference Jarrell’s Exxon. A jury could find those statements to be
defamatory as to both Jarrell’s Exxon and as to Jerry Kessler as the sole owner of Jarrell’s, and
those statements may be considered per-se defamation. As discussed above, a jury could reject
the claim of privilege, given the evidence that no skimmers were on the pumps at the time of the
defamatory statements. The Court finds that factual disputes remain regarding whether the
statements were true or false. 3 In addition to those factual disputes, a jury could find the
statements misleading in that they imply that skimmers remained on the pumps, that cards may

3 The Court notes that there is a motion in limine regarding the admissibility of any testimony related to the bank’s
purported investigation, given that the tellers’ testimony was not entirely consistent and the documents and
information underlying the conclusions is not available. The Court will not rule on that motion at this time, as factual
disputes exist whether that evidence is admitted or not. A witness testified that she had unauthorized transactions on
Exxon credit cards used exclusively at Jarrell’s, which tends to support the conclusion that there were skimmers on
the pumps at Jarrell’s at some point. Employees at Jarrell’s testified that they did not see anything unusual on the
pumps, and Jerry Kessler testified that he inspected the pumps regularly and had never seen skimmers, which would
tend to support the conclusion that there were not skimmers on the pumps.

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continue to be compromised if used at Jarrell’s, or that someone at Jarrell’s was responsible for
the fraud.
Viewed in the light most favorable to the Plaintiffs, and resolving factual conflicts in the
Plaintiffs’ favor, the bank tellers conducted their own investigation with little, if any, training in
isolating a source of compromised cards. On the basis of that investigation, they decided that card
information was obtained by a third party via skimmers on gas pumps at Jarrell’s Exxon.
Although employees and executives at First Community Bank testified that skimmers are generally
removed before fraudulent transactions begin, employees in the Hinton branch began telling
customers that card compromises were caused by skimmers at Jarrell’s Exxon and advising people
not to use their cards at Jarrell’s. A jury could conclude that First Community Bank was negligent
in disseminating those statements and rumors. Finally, as found above, the Plaintiffs have
produced evidence of a decline in business. Jerry Kessler also testified that he personally
experienced significant stress as a result of both the financial difficulty and the harm to his own
reputation.

Therefore, a jury that credits the Plaintiffs’ evidence could conclude that First

Community Bank made defamatory statements. Thus, the motion for summary judgment should
be denied as to Counts Two and Three.
C. Tort of False Light Invasion of Privacy

First Community Bank argues that it did not publicize false information about Jarrell’s
Exxon or Jerry Kessler, and certainly did not know any information it shared was false. It further
argues that any statements made by its employees were not widely publicized, with the exception
of Sandra Cozort Presley’s statement to the Beckley Register Herald, which was generally

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supportive of Jarrell’s. The Plaintiffs argue that there is sufficient evidence to support a jury
verdict in their favor.
The West Virginia Supreme Court of Appeals has established that “[p]ublicity which
unreasonably places another in a false light before the public is an actionable invasion of privacy.”
Syl. Pt. 12, Crump v. Beckley Newspapers, Inc., 320 S.E.2d 70, 74 (W. Va. 1983). A plaintiff
must show that “the false light in which [he] was placed would be highly offensive to a reasonable
person” and “the actor had knowledge of or acted in reckless disregard as to the falsity of the
publicized matter and the false light in which the other would be placed.” Giles v. Kanawha Cty.
Bd. of Educ., No. 17-0139, 2018 WL 300605, at *4 (W. Va. Jan. 5, 2018) (unpublished) (citing
Restatement (Second) of Torts § 652E (1977).

Further, the matter must be the subject of

widespread publicity. Imagine Medispa, LLC v. Transformations, Inc., 999 F. Supp. 2d 873, 887
(S.D.W. Va. 2014) (Copenhaver, J.)
As discussed above, a jury could find the bank employees’ statements to be misleading,
false, and/or reckless, as well as highly offensive. Whether they were the subject of widespread
publicity is a closer question. At most, a jury could infer that the bank employees shared their
conclusion that there were skimmers at Jarrell’s with the impacted customers—in other words, all
customers that Jarrell’s and First Community Bank had in common. The exact number is not
clear, but there was testimony that more than 100 cards were cancelled as a result of the bank’s
decision to cancel cards that had been used at Jarrell’s. Although there was a newspaper article
about the subject, that article was instigated by Joe Kessler. The quote from Ms. Cozort Presley
did not directly address the allegation that there were skimmers at Jarrell’s, and was generally
supportive of Jarrell’s. There was discussion on social media of the accusations that Jarrell’s had

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skimmers or that card fraud could be traced back to Jarrell’s, but there is no evidence that bank
employees participated in those discussions. A jury might, however, infer that bank employees
were the original source of some of the content and allegations shared by others. Given the factual
disputes between the parties and the potential inferences that could be drawn, the Court finds that
the Defendant has not demonstrated that there is no material dispute of fact regarding Count Four.
Therefore, the motion for summary judgment on the claim for false light invasion of privacy should
also be denied.
D. Tort of Outrage

First Community Bank moves for summary judgment with respect to the Plaintiffs’ claim
for the tort of outrage. It emphasizes that even conduct that constitutes another tort does not
support an outrage claim unless it is particularly extreme and outrageous. The Plaintiffs argue
that a reasonable jury could conclude that the Defendants’ conduct was extreme and outrageous
based on their decision to publicize the results of an amateur investigation, conducted without
detailed training or an official policy, and the fact that the file of the investigation was subsequently
destroyed.
The West Virginia Supreme Court has established the following elements for outrage
claims, also called intentional infliction of emotional distress:
(1) that the defendant's conduct was atrocious, intolerable, and so
extreme and outrageous as to exceed the bounds of decency; (2) that
the defendant acted with the intent to inflict emotional distress, or
acted recklessly when it was certain or substantially certain
emotional distress would result from his conduct; (3) that the actions
of the defendant caused the plaintiff to suffer emotional distress;
and, (4) that the emotional distress suffered by the plaintiff was so
severe that no reasonable person could be expected to endure it.

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Syl. pt. 3, Travis v. Alcon Labs., Inc., 504 S.E.2d 419, 421 (W. Va. 1998) (reaffirmed in Hatfield
v. Health Mgmt. Associates of W. Virginia, 672 S.E.2d 395, 404 (W. Va. 2008).
Telling customers that Jarrell’s had skimmers on gas pumps, based on an insufficient
investigation and with the knowledge that any skimmers would likely be gone by the time the bank
and customers began noticing fraudulent transactions, is not conduct to be encouraged or excused.
However, an outrage claim demands more extreme conduct than that required to support an
underlying or related tort claim. The Court finds that the Plaintiffs have not produced evidence
to support a conclusion that the Defendant’s conduct was “so extreme and outrageous as to exceed
the bounds of decency.” Therefore, the motion for summary judgment as to Count Five should
be granted.
E. Negligence

The bank also seeks summary judgment as to the Plaintiffs’ negligence claim. It argues
that it did not owe Jarrell’s a duty, and that its actions were undertaken in an effort to appropriately
discharge the duty it did owe to its customers. The Plaintiffs argue that there was a duty because
the harm to Jarrell’s and Jerry Kessler was the foreseeable result of First Community Bank’s
actions. They emphasize that First Community Bank had no policies or training regarding
whether or how employees should conduct investigations of potential fraud and whether or how
to publicize any findings following any investigation.
“In order to establish a prima facie case of negligence in West Virginia, it must be shown
that the defendant has been guilty of some act or omission in violation of a duty owed to the
plaintiff. No action for negligence will lie without a duty broken.” Syl. Pt. 3, Aikens v. Debow,

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541 S.E.2d 576, 578 (W. Va. 2000) (internal quotation marks and citations omitted). The West
Virginia Supreme Court has held:
The ultimate test of the existence of a duty to use care is found in
the foreseeability that harm may result if it is not exercised. The
test is, would the ordinary man in the defendant's position, knowing
what he knew or should have known, anticipate that harm of the
general nature of that suffered was likely to result?

Strahin v. Cleavenger, 603 S.E.2d 197, 201 (W. Va. 2004). “The determination of whether a
defendant in a particular case owes a duty to the plaintiff is not a factual question for the jury;
rather the determination of whether a plaintiff is owed a duty of care by a defendant must be
rendered by the court as a matter of law.” Syl. Pt. 5, Aikens, 541 S.E.2d at 578.
In Aikens, the West Virginia Supreme Court found that a business could not recover for
economic losses resulting from a driver’s negligence that led to an accident that damaged a bridge
necessary to reach the business premises. The court provided a detailed analysis of the extent of
duty in cases with “an element of remoteness between the injury and the act of negligence.” Id.
at 584. Ultimately, the court found the such economic injuries are not recoverable unless there is
“physical harm to that individual’s person or property, a contractual relationship with the alleged
tortfeasor, or some other special relationship…sufficient to compel the conclusion that the
tortfeasor had a duty to the particular plaintiff and that the injury complained of was clearly
foreseeable to the tortfeasor.” Id. at 589. “The existence of a special relationship will be
determined largely by the extent to which the particular plaintiff is affected differently from society
in general.” Id. “Such special relationship may be proven through evidence of foreseeability of
the nature of the harm to be suffered by the particular plaintiff or an identifiable claim and can

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arise from contractual privity or other close nexus.” Id. The court approvingly cited cases
finding a special relationship or duty even absent any contractual relationship.
Unlike cases in which a plaintiff’s damages result from the ripple effects of a negligent act,
like a car accident that causes a road closure, the bank’s actions here directly targeted the Plaintiffs.
Viewing the evidence in the light most favorable to the Plaintiffs, the bank specifically informed
customers that Jarrell’s was the source of a breach of their card information. It was eminently
foreseeable that Jarrell’s would be harmed by those statements. Thus, the Court finds that the
bank owed Jarrell’s a duty of care under these circumstances.
The Court has previously addressed the Defendant’s arguments that it was appropriate and
necessary to tell customers that Jarrell’s was the source of the breach in order to protect against
future fraud. There are factual disputes regarding whether there was ever a skimmer at Jarrell’s,
and there is little evidence that there was any reason to believe that there was a risk to card security
at the time the bank employees told consumers that Jarrell’s was the source of the breach. A
reasonable jury could conclude that First Community Bank’s handling of the increase in fraud at
the Hinton branch, the investigation, and the communications with customers was negligent, and
that negligence damaged the Plaintiffs. Accordingly, the Court finds that summary judgment is
not appropriate as to Count Six.
F. Punitive Damages

Finally, the Defendant argues that it is entitled to judgment as a matter of law precluding
any punitive damages because there is no evidence that it acted with malice. The Plaintiffs argue
that the bank’s conduct was at least reckless.

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The Court finds that the Plaintiffs have produced sufficient facts to permit a jury, viewing
those facts and inferences in the light most favorable to the Plaintiffs, to impose punitive damages.
Therefore, the motion for summary judgment as to punitive damages is denied at this stage.

CONCLUSION
Wherefore, after thorough review and careful consideration, the Court ORDERS that the
Defendants’ Motion for Summary Judgment (Document 99) be GRANTED as to Count Five and
DENIED as to all remaining counts.
The Court observed that the parties conducted mediation on December 20, 2017. Given
the development of the case since that date, the Court ORDERS that the parties engage in an
additional mediation session prior to the pretrial conference. Should the parties wish to use the
services of a United States Magistrate Judge as a mediator, they may file a motion requesting such
a referral.
The Court DIRECTS the Clerk to send a certified copy of this Order to counsel of record
and to any unrepresented party.
ENTER:

18

June 26, 2018