Legg v. Johnson, Simmerman & Broughton
| Decision Date | 03 December 2002 |
| Docket Number | No. 30591.,30591. |
| Citation | 213 W.Va. 53,576 S.E.2d 532 |
| Court | West Virginia Supreme Court |
| Parties | Basil R. LEGG, Jr., Plaintiff Below, Appellant, v. JOHNSON, SIMMERMAN & BROUGHTON, L.C., Defendant Below, Appellee. |
Mark D. Moreland, Esq., Mark D. Moreland, L.C., Charleston, West Virginia, Attorney for Appellant.
William J. Leon, Esq., Eckert Seamans Cherin & Mellott, PLLC, Morgantown, West Virginia, Attorney for Appellee.
The appellant in this proceeding, Basil R. Legg, Jr., an attorney who had a contractual relationship with the law firm of Johnson, Simmerman & Broughton, L.C., sued the law firm, the appellee here, after he terminated the relationship. In suing the firm, the appellant claimed that the contractual relationship was that of employer/employee, and that the firm had violated the Wage Payment and Collection Act, W. Va.Code 21-5-1, et seq., in failing to pay him, the employee, moneys which he claimed were due upon his termination. He also claimed that the firm had breached its contract with him and had committed fraud upon him. After discovery in the case, the Circuit Court of Harrison County concluded that the appellant was not entitled to the protections of the Wage Payment and Collection Act, and the circuit court granted the firm summary judgment on the Wage Payment and Collection Act claim. The circuit court also dismissed the appellant's breach of contract and fraud claims.
On appeal, the appellant claims that the circuit court erred in granting summary judgment on the Wage Payment and Collection Act claim since, he asserts, that the evidence demonstrates, or at least raises a question of fact as to whether, he was an employee. He also claims that the circuit court erred in dismissing his breach of contract and fraud claims since, he asserts, the facts relating to those claims had not been adequately developed or argued before the court.
On July 1, 1996, the appellant, an attorney, began working in the law office of the appellee, Johnson, Simmerman & Broughton, L.C., apparently under an oral agreement. On July 12, 1996, he wrote a letter to the members of the firm in which he attempted to memorialize the terms of his relationship with the firm. The letter commenced:
You asked that I set forth in writing the terms under which I have agreed to become associated with the law firm of Johnson, Simmerman & Broughton, L.C. In accordance with our discussion on June 18, 1996, it is my understanding that the terms of our arrangement are as follows:
He further stated that his initial status would be that of an "employee/associate of the firm."
In the next paragraph, the appellant stated that all net costs associated with the operation of "the office" from July 1, 1996, forward, would be shared on a one-fourth basis among each of the three "partners" of the firm and himself. The letter specifically stated: "All net costs associated with the operation of the office, from July 1, 1996 forward, shall be shared on a one-fourth (¼) basis, among each of you and myself." In a footnote, the appellant said: "Net costs are defined as gross expenditures of the corporation, less income from paralegal production, less net income from client costs, such as copies, etc." The appellant proceeded to state that his take from the operation would be determined by taking his gross income, less "my one-fourth (¼) share of expenses." He stressed:
Two other provisions of the letter are relevant to the present appeal. One capped the appellant's share of net office expenses at $25,000 for the first six months of his association with the firm. Specifically, the agreement said: "[U]nder no circumstances will my contribution to the expenses or overhead of the office exceed $25,000.00, total, for the remainder of calendar year 1996." The other provided that if he terminated his arrangement with the appellee: "I will not be entitled to any credit for revenue received from paralegal production after the date of termination, but will be credited with client costs advanced and client expenses advanced ..."
The letter concluded with the statement that the letter set forth the appellant's understanding of the terms of agreement "to govern my association with the firm." He asked the other members of the firm to review the letter and notify him immediately if he had misunderstood what the parties believed they had agreed to.
It does not appear that the other parties disagreed with the letter, and the appellant proceeded to work in the law office until February 28, 1997.
While working in the firm, it appears that the appellant was responsible for acquiring his own clients. He had discretion as to the hours he worked. He retained control over the manner in which he provided professional services to his clients, and it appears that the firm exercised no control over the details of his work.
After leaving the office, the appellant did not receive, in what he considered a timely manner, the payments to which he believed that he was entitled. Specifically, he believed that the firm had failed to calculate and apply the cap on office expenses for the year 1996 properly. He also believed that he had not received proper credit for non-billed work in progress and client costs advanced by the appellant. As a consequence, the appellant filed the complaint instituting the present action.
In the first count of the complaint, as subsequently amended, he claimed that the failure of the appellee to pay him sums due constituted a violation of W. Va.Code 21-5-1, et seq., the West Virginia Wage Payment and Collection Act. In the second count of the complaint, the appellant alleged that by failing to pay him all sums due, the firm breached the parties' contract, and, in the third count of his amended complaint, he claimed that the firm had committed fraud. The first fraud allegation was:
The actions of Defendant [appellee] in this case constitute the tort of fraud. By inducing Plaintiff [appellant] to enter into a contract with the intent that Defendant would not fulfill its obligations thereunder and by providing Plaintiff with false and misleading financial information, the actions of the Defendant was intentional, malicious, willful, wanton, or reckless, and characterized by a complete and total disregard of the rights of the Plaintiff.
In his later fraud paragraphs he, without alleging that he had actually relied on such matters to his detriment, claimed that the making of false statements by the firm constituted fraud.1 During the subsequent development of the case, the appellant argued that under his contract with the firm, he became an employee of the firm. The firm, on the other hand, took the position that the appellant was not its employee, but that he became associated with the firm on a cost sharing basis and that, under the circumstances, the West Virginia Wage Payment and Collection Act did not apply.
After considerable development of the record, the appellant moved for summary judgment on the Wage Payment and Collection Act claim. The circuit court examined the various documents filed in the case, and on September 17, 2001, not only denied the appellant's motion, but granted the firm summary judgment and dismissed the firm from the case. In reaching its decision, the court noted that the appellant had failed to show that he was the firm's employee. The court stated:
[T]he Court is unconvinced that a master-servant relationship arose from this employment agreement. The facts presented show that the employment arrangement existed to allow the plaintiff [appellant] the opportunity to start his practice. The record also shows that he worked independently of the defendants. This arrangement allowed the defendants [appellee] to only benefit from sharing the daily office operating expenses with him. Thus, the Court concludes that the Act was not meant to protect the plaintiff because he is not seeking to collect money owed to him which arose from a master-servant relationship with the defendants [appellee].
The court also found that the money allegedly owed did not qualify as wages under the West Virginia Wage Payment and Collection Act. In conclusion, the court stated:
In essence, the plaintiff paid the defendants for his share of the overhead and is now claiming the excess from those payments in this suit. Therefore, the Court holds that the plaintiff is seeking reimbursement rather than compensation or benefits acquired for his services. Accordingly, this Court finds that the WPCA has not fashioned a remedy for the plaintiff's particular claim. Hence, the plaintiff's second contention is without merit.
As has previously been stated, the appellant argues that the circuit court erred in concluding that he was not an employee for the purposes of the Wage Payment and Collection Act. He also claims that the circuit court erred in dismissing his breach of contract and fraud claims when the case relating to those claims had not been developed and argued before the court.
In a summary judgment appeal, such as the present one, Syllabus Point 1 of Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994), indicates: "A circuit court's entry of summary judgment is reviewed de novo."
Additionally, in Syllabus Point 4 of Aetna Casualty & Surety Company v. Federal Insurance Company of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963), this Court has stated that: "If there is no genuine issue as to any material fact summary judgment should be granted but such judgment must be denied if there is a genuine issue as to a material fact."
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