Tri-State Petroleum Corp. v. Coyne, No. 17-0009

CourtSupreme Court of West Virginia
Writing for the CourtWALKER, Justice
Citation814 S.E.2d 205
Parties TRI-STATE PETROLEUM CORP., a West Virginia corporation; EJC Legacy, Inc., a West Virginia corporation; Interstate Service Stations Holdings, Inc., a West Virginia corporation; Convenience Realty, LP, a West Virginia limited partnership; Colleen C. McGlinn, an individual; Edward J. Coyne II, an individual; Erin C. Merrick, an individual; and Sheila C. Romanek, an individual, Defendants Below, Petitioners v. Kevin P. COYNE, Plaintiff Below, Respondent
Decision Date12 April 2018
Docket NumberNo. 17-0009

814 S.E.2d 205

TRI-STATE PETROLEUM CORP., a West Virginia corporation; EJC Legacy, Inc., a West Virginia corporation; Interstate Service Stations Holdings, Inc., a West Virginia corporation; Convenience Realty, LP, a West Virginia limited partnership; Colleen C. McGlinn, an individual; Edward J. Coyne II, an individual; Erin C. Merrick, an individual; and Sheila C. Romanek, an individual, Defendants Below, Petitioners
v.
Kevin P. COYNE, Plaintiff Below, Respondent

No. 17-0009

Supreme Court of Appeals of West Virginia.

Submitted: February 13, 2018
Filed: April 12, 2018


Benjamin L. Bailey, Esq., Isaac Forman, Esq., J. Zak Ritchie, Esq., Bailey & Glasser LLP, Charleston, West Virginia, Counsel for Petitioners, Convenience Realty LP; EJC Legacy, Inc.; and Tri-State Petroleum Corp.

James J. Sellitti, Esq., Sellitti, Nogay & McCune, Weirton, West Virginia, Jeffrey P. Ward, Esq., (admitted pro hac vice), Cohen & Grigsby, P.C., Pittsburgh, Pennsylvania, Counsel for Petitioners, Colleen C. McGlinn; Edward J. Coyne, II ; Eric C. Merrick; and Sheila C. Romanek

W. Howard Klatt, Esq., Klatt Law Offices, Wheeling, West Virginia, Traci S. Rea, Aleksandra V. (Sasha) Williams, Esq., James C. Martin, Esq., (admitted pro hac vice), David B. Fawcett, Esq., (admitted pro hac vice), Reed Smith LLP, Pittsburgh, Pennsylvania, Counsel for Respondent, Kevin P. Coyne

WALKER, Justice:

814 S.E.2d 210

Kevin P. Coyne and his brothers and sisters owned three corporations and one limited partnership—Interstate Service Stations Holdings, Inc. (ISSH); EJC Legacy, Inc. (Legacy), which is the sole stockholder of Tri-State Petroleum Corp. (Tri-State); and Convenience Realty, LP (Convenience Realty). After an extended period of conflict with his siblings—Colleen C. McGlinn; Edward J. Coyne, II; Erin C. Merrick; and Sheila C. Romanek—Kevin’s employment with Tri-State was terminated in 2012 and his shares and interest in Legacy, Convenience Realty, and ISSH were redeemed. Kevin sued his four siblings and the four entities (collectively, Petitioners) claiming breach of contract, breach of fiduciary duty, and fraud. After an eleven-day trial in the summer of 2016, a

814 S.E.2d 211

jury awarded Kevin $5,053,111 on his breach of contract and fiduciary duty claims. Later, the circuit court awarded Kevin attorneys’ fees in the amount of $1,517,996.40 and prejudgment interest (at the rate of seven percent per year) in the amount of $959,452.46.

On appeal, Petitioners argue that they were entitled to judgment as a matter of law on Kevin’s breach of contract and fiduciary duty claims. They also challenge various rulings made during the trial and the award of attorneys’ fees and prejudgment interest. We find merit only in the assignments of error regarding attorneys’ fees and prejudgment interest. We find that the circuit court abused its discretion in awarding attorneys’ fees without making sufficient findings of fact and conclusions of law regarding Kevin’s entitlement to the sum awarded, or its reasonableness.1 Because Kevin’s tort damages were not certain or capable of being rendered certain by reasonable calculation at the time of trial, we also find that the circuit court erred by finding that the entire jury verdict in this case, net of offsets, constituted "special damages" subject to West Virginia Code § 56-3-31 (2012) and awarding Kevin prejudgment interest.

I. FACTUAL BACKGROUND

Edward Coyne, Sr., and his wife, Betty, started Tri-State in 1974. The business distributed petroleum products to customers in West Virginia, Ohio and Pennsylvania. The Coynes had five children: Colleen C. McGlinn (Colleen); Edward J. Coyne, II (Ed), Erin C. Merrick (Erin); Sheila C. Romanek (Sheila); and Kevin Coyne (Kevin). Over time, each of the siblings joined their parents as employees of Tri-State. Ed and Erin joined in 1984, followed by Kevin and Sheila in 1987. Colleen earned a law degree in 1983, then moved to Dallas, Texas, to practice law. In 1997, Colleen joined Tri-State as in-house general counsel, although she continued to live outside the Wheeling, West Virginia–Pittsburgh, Pennsylvania area until approximately 2015. Ed served as CEO from approximately 1995 to 2005, when he was succeeded by Colleen.

In the 1990s, Tri-State expanded beyond its initial petroleum distribution business. Tri-State’s affiliate at the time, Interstate Petroleum,2 purchased several BP gas stations in Ohio and West Virginia, pushing the companies’ sales to $45 million by 1998. In 2002, Tri-State purchased approximately eighteen Exxon stations in the Pittsburgh area. Prior to the Exxon acquisition, there were hopes that the company could attain annual revenues of $100 million. The Exxon acquisition actually spurred the company to realize annual revenues of more than $200 million.

The 2002 Exxon acquisition represented a leap forward for Tri-State and the Coyne siblings. Over the years, Ed and Betty Coyne ceded control and ownership of the various entities to their children, and by February 1995, each sibling owned an equal one-fifth share of the businesses. Following a corporate restructuring in 2002, each of the siblings was employed by Tri-State, and owned twenty percent of the shares of Legacy, a newly-formed holding corporation that was the sole stockholder of Tri-State. The siblings also held equal limited partnership interests in Convenience Realty, a limited partnership3 formed in 2002 to hold the family’s convenience store properties.

The Coynes adopted various agreements to govern Legacy, Tri-State, and Convenience Realty as those entities and their operations grew more sophisticated and lucrative. At times relevant to Kevin’s breach of contract claim, the stockholders in Legacy—Ed, Colleen, Sheila, Erin, and Kevin—were subject to one such agreement, dated December 1, 2008 (2008 Stockholders Agreement). That agreement provided that, if a stockholder’s employment was terminated for "just cause,"4 then Legacy could redeem the

814 S.E.2d 212

stockholder’s entire interest for eighty percent of its "fair market value ... as determined by the Board of Directors considering, among other factors, the guidelines set forth in Internal Revenue Service Ruling 59-60." The 2008 Stockholders Agreement was signed by Colleen (as a stockholder, and in her capacity as President of Legacy), and Ed, Erin, Kevin, and Sheila as stockholders. Convenience Realty’s Limited Partnership Agreement, dated February 1, 2002 (2002 Partnership Agreement), contained a similar provision. As with the 2008 Stockholders Agreement, the 2002 Partnership Agreement was signed by Ed (as a limited partner, and in his then-capacity as President of Tri-State), and Colleen, Erin, Kevin, and Sheila as limited partners.

A. Kevin’s Role in Tri-State and Employment History

Kevin worked as Tri-State’s Vice President of Marketing following his hire in 1987. Early on, Kevin solicited retail gas stations on rural routes to contract with Tri-State. After 2002, Kevin became heavily involved in renovating and rebranding Convenience Realty’s new Exxon stations. Kevin held the title of Vice President of Marketing and worked as part of the management team until 2005, when he became Vice President of Real Estate. In March 2006, his title changed to Vice President (dropping the real estate designation) and, in March 2007, he was demoted to Project and Construction Manager.

Kevin worked for Tri-State from approximately 1987 to 1997 without incurring written discipline. However, beginning in 1997—the year that Colleen joined Tri-State as in-house general counsel—disciplinary memos and other documentation of behavioral problems began to fill Kevin’s personnel file. Kevin received written discipline in 1998, 1999, 2002, 2003, 2005, and 2006. Kevin was faulted for outbursts, rudeness, throwing a project file and an ink pen at an employee, directing obscene language at a convenience store clerk within earshot of a customer, exceeding his authority, failing to work well with other members of the management team, and allegedly backing Colleen up against a conference room wall when she was four months pregnant.

Tri-State responded to Kevin’s infractions at various times by suggesting that he seek mental health counseling, suspending him without pay, and demoting him. In 2002, Tri-State gave Kevin what it called a "final warning," and informed him that if "another violation of the terms of your continued employment ... occur[ed] ... we consider this letter formal notice that we have determined that we will be forced to consider termination of your employment." Despite this final warning, and disciplinary memos in 2003, 2005, and 2006, Kevin continued in Tri-State’s employ until 2013.

In May 2010, Tri-State insisted that Kevin take a paid sabbatical for up to one year. Erin (acting in her capacity as Tri-State’s Director of Corporate Services) explained in a letter to Kevin that the sabbatical was necessary to allow him to address his personal affairs, namely a protracted divorce. The letter stated that the sabbatical was "put in place with both [Kevin] and the Company’s best interests in mind," and Tri-State had "nothing but concern and best wishes for [Kevin]." By separate email, Erin assured her brother...

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12 practice notes
  • Miller v. WesBanco Bank, No. 20-0041
    • United States
    • Supreme Court of West Virginia
    • June 10, 2021
    ...to "any action founded on contract." W. Va. Code § 56-6-27. See, e.g., Tri-State Petroleum Corp. v. Coyne, 240 W. Va. 542, 566 n.87, 814 S.E.2d 205, 229 n.87 (2018) (addressing prejudgment interest in tort action, but nevertheless acknowledging that "West Virginia Code § 56-6-27 . . . contr......
  • Miller v. WesBanco Bank, Inc., No. 20-0041
    • United States
    • Supreme Court of West Virginia
    • June 11, 2021
    ...to "any action founded on contract." W. Va. Code § 56-6-27. See, e.g. , Tri-State Petroleum Corp. v. Coyne , 240 W. Va. 542, 566 n.87, 814 S.E.2d 205, 229 n.87 (2018) (addressing prejudgment interest in tort action, but nevertheless acknowledging that " West Virginia Code § 56-6-27 ... cont......
  • State v. James H., No. 19-0299
    • United States
    • Supreme Court of West Virginia
    • April 20, 2020
    ...and the same rule applies as to the weight and credibility of such testimony.Tri-State Petroleum Corp. v. Coyne, 240 W. Va. 542, 559, 814 S.E.2d 205, 222 (2018) (quoting Syl. Pt. 2, Papenhaus v. Combs, 170 W. Va. 211, 292 S.E.2d 621 (1982). The jury heard the testimony and considered the ev......
  • Dan's Car World, LLC v. Delaney, 20-0489
    • United States
    • Supreme Court of West Virginia
    • April 8, 2022
    ...[10] Beto v. Stewart, 213 W.Va. 355, 359, 582 S.E.2d 802, 806 (2003). [11] Tri-State Petroleum Corp. v. Coyne, 240 W.Va. 542, 561, 814 S.E.2d 205, 224 (2018) (holding that the petitioner's attempt to reargue the circuit court's denial of summary judgment after trial is "procedurally unsound......
  • Request a trial to view additional results
12 cases
  • Miller v. WesBanco Bank, No. 20-0041
    • United States
    • Supreme Court of West Virginia
    • June 10, 2021
    ...to "any action founded on contract." W. Va. Code § 56-6-27. See, e.g., Tri-State Petroleum Corp. v. Coyne, 240 W. Va. 542, 566 n.87, 814 S.E.2d 205, 229 n.87 (2018) (addressing prejudgment interest in tort action, but nevertheless acknowledging that "West Virginia Code § 56-6-27 . . . contr......
  • Miller v. WesBanco Bank, Inc., No. 20-0041
    • United States
    • Supreme Court of West Virginia
    • June 11, 2021
    ...to "any action founded on contract." W. Va. Code § 56-6-27. See, e.g. , Tri-State Petroleum Corp. v. Coyne , 240 W. Va. 542, 566 n.87, 814 S.E.2d 205, 229 n.87 (2018) (addressing prejudgment interest in tort action, but nevertheless acknowledging that " West Virginia Code § 56-6-27 ... cont......
  • State v. James H., No. 19-0299
    • United States
    • Supreme Court of West Virginia
    • April 20, 2020
    ...and the same rule applies as to the weight and credibility of such testimony.Tri-State Petroleum Corp. v. Coyne, 240 W. Va. 542, 559, 814 S.E.2d 205, 222 (2018) (quoting Syl. Pt. 2, Papenhaus v. Combs, 170 W. Va. 211, 292 S.E.2d 621 (1982). The jury heard the testimony and considered the ev......
  • Dan's Car World, LLC v. Delaney, 20-0489
    • United States
    • Supreme Court of West Virginia
    • April 8, 2022
    ...[10] Beto v. Stewart, 213 W.Va. 355, 359, 582 S.E.2d 802, 806 (2003). [11] Tri-State Petroleum Corp. v. Coyne, 240 W.Va. 542, 561, 814 S.E.2d 205, 224 (2018) (holding that the petitioner's attempt to reargue the circuit court's denial of summary judgment after trial is "procedurally unsound......
  • Request a trial to view additional results

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