Citynet, LLC v. Toney

• Decision Date: 06 February 2015
• Docket Number: No. 14–0058.,14–0058.
• Citation: 772 S.E.2d 36,235 W.Va. 79
• Court: West Virginia Supreme Court
• Parties: CITYNET, LLC, Defendant Below, Petitioner v. Ray TONEY, Plaintiff Below, Respondent.

235 W.Va. 79

772 S.E.2d 36

CITYNET, LLC, Defendant Below, Petitioner

v.Ray TONEY, Plaintiff Below, Respondent.

No. 14–0058.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 14, 2015.

Decided Feb. 6, 2015.

Ancil G. Ramey, Bryan C. Cokeley, Russell D. Jessee, Steptoe & Johnson PLLC, Charleston, WV, for Petitioner.

J. Michael Ranson, Cynthia M. Ranson, Ranson Law Offices, Charleston, WV, for Respondent.

Opinion

DAVIS, Justice:

Petitioner Citynet, LLC (“Citynet”), herein appeals two orders issued by the Circuit Court of Kanawha County in an action filed by a former Citynet employee, Ray Toney (“Mr. Toney”), respondent herein, seeking to redeem the vested balance of his Employee Incentive Plan account. One order granted partial summary judgment to Mr. Toney, and the other denied Citynet's subsequent motion under Rules 59(e) and 60(b) of the West Virginia Rules of Civil Procedure. Citynet claims that the circuit court erred by failing to adopt Citynet's interpretation of its Employee Incentive Plan; by applying the West Virginia Wage Payment and Collection Act; and by sustaining its award of $87,000.48 to Mr. Toney without offsetting that amount by $17,400.10 Mr. Toney already had received from his Employee Incentive Plan account. We have considered the parties' briefs and oral arguments and reviewed the relevant law. We conclude that the circuit court did not err in granting partial summary judgment to Mr. Toney, or in applying the West Virginia Wage Payment and Collection Act. We, therefore, affirm the circuit court's orders on these grounds. However, we find that the circuit court did err in setting the date from which prejudgment interest would accrue and in failing to offset its award by $17,400.10 that Mr. Toney previously had received from his Employee Incentive Plan account. Therefore, these portions of the circuit court's orders are reversed.

I.FACTUAL AND PROCEDURAL HISTORY

On January 1, 2008, Citynet established an Employee Incentive Plan (“Plan”). The stated purpose of the Plan is “to create incentives which are designed to motivate Participants ... to put forth maximum effort toward the success and growth of the Company and to enable the Company to attract and retain experienced individuals who by their position, ability and diligence are able to make important contributions to the Company's success.” By letter dated January 22, 2008, Mr. Toney was advised that he was 100% vested in the Plan because he had been employed by Citynet for more than five years. His vested balance in the Plan as of January 1, 2008, was $ 42,933.73. The letter provided details of how the Plan worked¹ and expressly stated that “[w]hen an employee leaves Citynet, the employee is then entitled to ‘cash out’ his or her entire vested balance subject to certain provisions contained in the plan document with respect to termination for cause.” Mr. Toney received a Plan update by letter dated August 4, 2010, wherein he was advised that his vested balance as of January 1, 2010, was $87,000.48.²

On October 12, 2011, Mr. Toney voluntarily terminated his employment with Citynet and requested to redeem his $87,000.48 vested balance in the Plan. Citynet refused Mr. Toney's request to redeem his vested balance. Citynet advised Mr. Toney that he could redeem no more than twenty percent of his vested balance annually, and that his request could be made only during a specific four-month period. In reaching this conclusion, Citynet applied section 5.7(b) of the Plan, which states:

(b) Annual Voluntary Redemptions. The Company has established an annual Voluntary Redemption Period during each calendar year, defined as the period of May 1st through August 31st, in which the Participants may redeem up to a maximum of 20% of their vested Performance Units during each calendar year. Voluntary redemption requests that exceed the 20% maximum or are received by the Company outside of the Voluntary Redemption Period shall be considered null and void....

Thereafter, on March 23, 2012, Mr. Toney filed a complaint in the Circuit Court of Kanawha County seeking to recover his vested balance in the Plan of $87,000.48. In his complaint, Mr. Toney asserted three counts: (1) violation of the Plan; (2) willful violation of the Plan; and (3) a Wage Payment and Collection Act violation. Mr. Toney claimed, inter alia, that he was entitled to full payment of his vested benefits pursuant to section 5.7(a) of the Plan, which states:

(a) Termination of Employment. In the event the participant's employment is terminated without Cause, the Participant shall be eligible to redeem the vested portion of their [sic] Performance Units as of the effective date of the Participant's termination....

Citynet responded to Mr. Toney's complaint by filing a motion to dismiss. Mr. Toney then filed a motion for partial summary judgment seeking judgment in his favor as to counts one and three of his complaint. Citynet filed its response to Mr. Toney's motion for partial summary judgment and asserted a cross-motion for summary judgment claiming that, under Section 5.7(b) of the Plan, Citynet was not required to pay Mr. Toney any of his vested benefits insofar as his request had been improperly made and was, therefore, null and void.

By order entered September 18, 2012, the circuit court granted partial summary judgment to Mr. Toney and denied Citynet's motion to dismiss and its cross-motion for summary judgment. Agreeing with Mr. Toney, the circuit court concluded that, pursuant to Section 5.7(a) of the Plan, Mr. Toney was entitled to payment of his entire vested balance in the Plan. In addition, the circuit court concluded that Citynet's failure to timely pay Mr. Toney his vested balance violated the West Virginia Wage Payment and Collection Act (hereinafter “WPCA”). Based upon the WPCA violation, the circuit court ruled that Citynet was liable to Mr. Toney for liquidated damages, the costs of the action, and reasonable attorney's fees. Accordingly, the circuit court awarded Mr. Toney his vested Plan balance of $87,000.48, and liquidated damages in the amount of $261,001.44, and further ordered Citynet to pay Mr. Toney's reasonable attorney's fees and costs.

Citynet then filed its “MOTION FOR RECONSIDERATION AND MOTION UNDER RULES 59(E) AND 60(B) OF THE WEST VIRGINIA RULES OF CIVIL PROCEDURE.” In this motion, Citynet argued that it had not breached the Plan, that the WPCA did not apply, and that Mr. Toney had misrepresented his vested balance in the Plan. With regard to Mr. Toney's vested balance, Citynet asserted that Mr. Toney had properly requested and was paid $17,400.00 of his vested balance. Therefore, the true amount of his vested balance in the Plan was $69,600.38. By order entered November 20, 2012, the circuit court denied Citynet's motion. Citynet appealed the circuit court's September 18, 2012, order granting partial summary judgment in favor of Mr. Toney and the circuit court's November 20, 2012, order denying Citynet's motions under Rules 59(e) and 60(b). This Court dismissed the appeal as interlocutory by Order entered April 18, 2013. Mr. Toney then filed a motion to voluntarily dismiss the one remaining unresolved count of his complaint, which alleged willful violation of the Plan by Citynet. By order entered December 30, 2013, the circuit court granted Mr. Toney's motion to dismiss. Entry of this order rendered the circuit court's earlier orders of September 18, 2012, and November 20, 2012, final and appealable. Thus, Citynet herein appeals the circuit court's orders of September 18, 2012, and November 20, 2012.

II.STANDARD OF REVIEW

Citynet herein appeals the circuit court's order granting summary judgment in favor of Mr. Toney. Therefore, our review is de novo. “A circuit court's entry of summary judgment is reviewed de novo. ” Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). Because our review is de novo, we are mindful that “[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syl. pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).

Citynet additionally appeals the circuit court's order denying its motion for relief, under Rule 59(e) of the West Virginia Rules of Civil Procedure, from the circuit court's partial summary judgment order. This Court previously has held that “[t]he standard of review applicable to an appeal from a motion to alter or amend a judgment, made pursuant to W. Va. R. Civ. P. 59(e), is the same standard that would apply to the underlying judgment upon which the motion is based and from which the appeal to this Court is filed.” Syl. pt. 1, Wickland v. American Travellers Life Ins. Co.,

204 W.Va. 430, 513 S.E.2d 657 (1998). Thus, we review de novo the circuit court's ruling on this motion. See Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

Having reviewed the proper standards for our review of the instant matter, we proceed to our discussion.

III.DISCUSSION

Citynet raises three errors. First, Citynet argues that the circuit court erred by ruling that the Plan required Citynet to pay Mr. Toney's vested Plan balance. Citynet next argues that the circuit court erred by applying the WPCA. Finally, Citynet argues that the circuit court erred by failing to offset its award of Mr. Toney's vested Plan balance by an amount he previously had withdrawn from the account. We will address each of these errors in turn.

A. Payment of Mr. Toney's Vested Plan Balance

The circuit court interpreted the language of the Plan as requiring Citynet to pay Mr. Toney the full amount of his vested balance in the Plan upon his voluntary termination of his employment with Citynet. Citynet essentially challenges the circuit court's conclusion on three grounds: (1) the circuit court erred by construing the Plan as if it were a contract; (2) the...