Staples v. H. Walker Enters., LLC

• Decision Date: 24 July 2019
• Docket Number: 7:18-cv-00160-LSC
• Parties: KIMBERLY STAPLES, et al., Plaintiffs, v. H. WALKER ENTERPRISES, LLC, et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

KIMBERLY STAPLES, et al., Plaintiffs, v. H. WALKER ENTERPRISES, LLC, et al., Defendants.

7:18-cv-00160-LSC

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA WESTERN DIVISION

July 24, 2019

Memorandum of Opinion

I. Introduction

Plaintiffs, John and Kimberly Staples (collectively "Plaintiffs"), bring this action against Defendants, H. Walker Enterprises, LLC ("HWE"), Renaissance Man Food Services, LLC ("RMFS"), and Simmons Food, Inc. ("Simmons") (collectively "Defendants"). Presently before the Court are cross motions for summary judgment filed by all parties. Specifically, Plaintiffs have each filed a motion for summary judgment asking the Court to grant summary judgment on liability for all claims asserted in their Second Amended Complaint. (See Docs. 69 & 71.) Defendants have filed motions for summary judgment seeking dismissal of all of Plaintiffs' claims against them. (See Docs. 72 & 76.) Additionally, Defendant RMFS moves for summary judgment in its favor on two of the three counterclaims it has filed against Plaintiffs. (See Doc. 76.) Defendants HWE and RMFS also ask that this Court strike an affidavit submitted as part of Plaintiffs' evidentiary submissions. (Doc. 106.) Finally, the parties have filed a Joint Status Report requesting that the Court schedule an oral argument to consider these pending motions. (Doc. 103.)

These motions have been fully briefed and are ripe for decision.¹ For the reasons that follow, Plaintiff John Staples's ("Mr. Staples's") motion (doc. 69) is due to be DENIED, and Plaintiff Kimberly Staples's ("Mrs. Staples's") motion (doc. 71) is also due to be DENIED. Defendant Simmons's motion (doc. 72) is due to be GRANTED in PART and DENIED in PART, and Defendants HWE and RMFS's motion (doc. 76) is also due to be GRANTED in PART and DENIED in PART. Defendants HWE and RMFS's motion to strike (doc. 106) is due to be DENIED. The parties' request for oral argument (doc. 103) is due to be DENIED.

II. Background²

This case involves claims surrounding the termination of John Staples ("Mr. Staples") as well as Defendants' alleged interference with the relationship between his wife, Kimberly Staples ("Mrs. Staples"), and her employer DSM Sales and Marketing, LLC ("DSM3"). In 2009, Mr. Staples began his employment with Defendant Simmons, a food services industry business. During Mr. Staples's employment, Simmons provided him with written employment rules related to job performance, progressive discipline, and fair treatment. However, the parties dispute whether Simmons ever made any representations to Mr. Staples that his employment would only be terminated for cause. Although Simmons was Mr. Staples's direct employer, his job duties included serving as the general manager of Defendant RMFS, an entity that buys chicken from Simmons. RMFS would refund Simmons for Mr. Staples's compensation. Defendant HWE, which is owned by Herschel Walker ("Walker"), is the sole owner of RMFS. Under a profit-sharing agreement between HWE and Simmons, Simmons receives 35% of the profits generated by RMFS. Additionally, Simmons provides the back-office accounting functions for RMFS.

DSM3 is a company owned by Mrs. Staples and Julie Blanchard ("Blanchard"), who is also employed by HWE. DSM3 had a brokerage agreement with RMFS to broker the sale of RMFS's product. Mr. Staples signed the brokerage agreement on behalf of RMFS, and Mrs. Staples signed the agreement on behalf of DSM3. As part of its performance of administrative functions for RMFS, Simmons would send DSM3 commission checks representing the amount of commissions RMFS owed DSM3 under the brokerage agreement. These checks would be mailed to Mrs. Staples who would then deposit them in a DSM3 bank account. In addition to her ownership interest in DSM3, Mrs. Staples received an $85,000 annual salary from the company. DSM3 paid Mr. Staples $40,000 per year to work as a consultant for it.

On December 27, 2017, Mr. Staples lost his position as general manager of RMFS. The next day, on December 28, 2017, Mr. Staples's employment with Simmons was terminated. Around the same time period, on December 30, 2017, RMFS terminated its brokerage agreement with DSM3. Additionally, in either December 2017 or January 2018, Simmons withheld commission payments RMFS owed DSM3. Plaintiffs contend that these actions were taken in a concerted effort to sever their relationships with HWE, RMFS, Simmons, and DSM3. As evidence of this, Plaintiffs point to a memo sent to Walker on December 21, 2017. In the memo,Ronald Eisenman ("Eisenman"), an attorney who represented Walker and prepared the paperwork necessary to form DSM3, detailed two proposals concerning Plaintiffs' future with these business entities. According to the memo, the proposals were discussed during a meeting held between Simmons's President and Walker on December 12, 2017.

Under Proposal A, which contemplated Plaintiffs going along with the proposal, Mr. Staples would agree to terminate his employment as general manager of RMFS, and his role as paid consultant to DSM3 would end. He would then sign a one-year consultant agreement with RMFS. Mrs. Staples would resign from her position with DSM3 and sign over her ownership interest in the company to Blanchard. Under Proposal B, which contemplated Plaintiffs refusing to cooperate with Proposal A, Simmons would terminate Mr. Staples's employment and RMFS would end its brokerage agreement with DSM3. Plaintiffs did not accept Proposal A, which they argue led to the actions taken by Simmons and RMFS in late December 2017. Mr. Staples testified that he believes that Defendants took these actions against him and his wife because he raised ethical concerns as to whether Simmons should be paying an invoice on behalf of RMFS for waffle packaging that Mr. Staples asserts was being sold through HWE rather than RMFS.

RMFS contends that it was Mr. Staples who acted unethically during his tenure as RMFS's general manager. RMFS asserts that while it employed Mr. Staples he: (1) sent an email to a competitor which contained confidential information concerning RMFS's sales and volume revenue; (2) caused RMFS to enter into a broker arrangement with Diversified Sales & Marketing, an entity that Mrs. Staples had a 60% ownership interest in; (3) paid unauthorized commissions on behalf of RMFS to DSM3; (4) asked a prospective broker for RMFS to hire Mrs. Staples and his daughter as a quid pro quo for RMFS's business; and (5) approved reimbursement of his personal expenses by RMFS.

At some point, Walker contacted Kristin Caffey ("Caffey"), a professional within the food services industry, to complain about Mr. Staples. Mr. Staples contends that at the time this conversation took place Sysco Corporation ("Sysco") employed Caffey. HWE and RMFS assert that Caffey was employed by Radian, another food services industry business. According to Caffey, Walker made disparaging remarks about Mr. Staples and told her that Mr. Staples had "stolen money from him or his business." (See Doc. 70-8 at 4.) Caffey then began to hear from others in the food services industry who reported receiving similar calls from Walker about Mr. Staples.

The parties agree that Mr. Staples's employment relationship with Simmons arose in Arkansas. Around May 2015, Mrs. Staples moved from Arkansas to Alabama. Mr. Staples followed Mrs. Staples to Alabama in either August or September of 2015 and worked remotely for Simmons until his termination. Thus, at the time of the events giving rise to this lawsuit, Plaintiffs were full-time residents of Alabama.

III. Standard

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact³ and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A dispute is genuine if "the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th Cir. 2004). A genuine dispute as to a material fact exists "if the nonmoving party has produced evidence such that a reasonable factfinder could return a verdict in its favor." Greenberg v. BellSouth Telecomms., Inc., 498 F.3d 1258, 1263 (11th Cir. 2007) (quoting Waddell v. Valley Forge Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001)). The trial judge should not weigh the evidence, but determine whether there are any genuine issuesof fact that should be resolved at trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

In considering a motion for summary judgment, trial courts must give deference to the non-moving party by "view[ing] the materials presented and all factual inferences in the light most favorable to the nonmoving party." Animal Legal Def. Fund, 789 F.3d at 1213-14 (citing Adickes, 398 U.S. at 157. However, "unsubstantiated assertions alone are not enough to withstand a motion for summary judgment." Rollins v. TechSouth, Inc., 833 F.2d 1525, 1529 (11th Cir. 1987). Conclusory allegations and "mere scintilla of evidence in support of the nonmoving party will not suffice to overcome a motion for summary judgment." Melton v. Abston, 841 F.3d 1207, 1219 (11th Cir. 2016) (per curiam) (quoting Young v. City of Palm Bay, Fla., 358 F.3d 859, 860 (11th Cir. 2004)). In making a motion for summary judgment, "the moving party has the burden of either negating an essential element of the nonmoving party's case or showing that there is no evidence to prove a fact necessary to the nonmoving party's case." McGee v. Sentinel Offender Servs., LLC, 719 F.3d 1236, 1242 (11th Cir. 2013). Although the trial courts must use caution when granting motions for summary judgment, "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole." Celotex Corp. v. Catrett, 477 U.S. 317, 327(1986). This standard does not change when a court is presented with cross-motions for summary...