David L. Henzler v. Turnoutz, LLC and Larry Markham ( 2020 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2020 Term
_______________
FILED
No. 18-0507
June 12, 2020
released at 3:00 p.m.
_______________ EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
DAVID L. HENZLER,
Petitioner
v.
TURNOUTZ, LLC and LARRY MARKHAM,
Respondents
____________________________________________________________
Appeal from the Circuit Court of Kanawha County
The Honorable James C. Stucky, Judge
No. 16-C-1580
REVERSED AND REMANDED
____________________________________________________________
Submitted: February 18, 2020
Filed: June 12, 2020
Paul L. Frampton, Jr., Esq. W. Jesse Forbes, Esq.
ATKINSON & POLAK, PLLC FORBES LAW OFFICES, PLLC
Charleston, West Virginia Charleston, West Virginia
Counsel for Petitioner Counsel for Respondents
JUSTICE WALKER delivered the Opinion of the Court.
JUSTICE WORKMAN dissents and reserves the right to file a separate opinion.
JUSTICE HUTCHISON concurs in part and dissents in part and reserves the right to file
a separate opinion.
SYLLABUS BY THE COURT
1. “If the moving party makes a properly supported motion for summary
judgment and can show by affirmative evidence that there is no genuine issue of a material
fact, the burden of production shifts to the nonmoving party who must either (1) rehabilitate
the evidence attacked by the moving party, (2) produce additional evidence showing the
existence of a genuine issue for trial, or (3) submit an affidavit explaining why further
discovery is necessary as provided in Rule 56(f) of the West Virginia Rules of Civil
Procedure.” Syllabus Point 3, Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d
329 (1995).
2. “‘‘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.’ Syllabus Point 3, Aetna Casualty & Surety
Co. v. Federal Insurance Co. of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963).’
Syllabus Point 1, Andrick v. Town of Buckhannon, 187 W. Va. 706, 421 S.E.2d 247 (1992).”
Syllabus Point 2, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994).
3. “A circuit court’s entry of summary judgment is reviewed de novo.”
Syllabus Point 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994).
i
WALKER, Justice:
David Henzler (Mr. Henzler) worked as an area supervisor of One Stop
convenience stores for nineteen years. He lost that job after Turnoutz, LLC (Turnoutz)
leased approximately forty-one of those stores. Mr. Henzler applied for a job with
Turnoutz but was not hired. Claiming that he was rejected in favor of younger, less-
qualified candidates, Mr. Henzler filed suit against Turnoutz1 alleging age discrimination
in violation of the West Virginia Human Rights Act. Turnoutz moved for summary
judgment after approximately eight months of discovery. Turnoutz argued that Mr.
Henzler had released any employment-related claims against Turnoutz when he executed
a severance agreement and general release with his former employer and its corporate
affiliates. The circuit court granted the motion and dismissed Mr. Henzler’s age
discrimination claim against Turnoutz. But, Mr. Henzler argued then and now argues on
appeal that genuine issues of material fact remain as to whether Turnoutz is entitled to the
benefit of the severance agreement and general release. We agree with Mr. Henzler:
genuine issues of material fact remain as to the applicability of the release agreement to his
claim against Turnoutz. So, we find that the circuit court erred in granting summary
1
Mr. Henzler also sued Turnoutz’s principal, Larry Markham. We refer to Turnoutz
and Mr. Markham collectively as “Turnoutz” throughout this opinion. Our reasoning and
conclusion that the circuit court erroneously granted summary judgment to Turnoutz also
applies to Mr. Markham. The shortened reference is for the sake of clarity only.
1
judgment to Turnoutz. We reverse the circuit court’s order and remand this matter to the
Circuit Court of Kanawha County.
I. FACTUAL AND PROCEDURAL BACKGROUND
CrossAmerica Partners, LP (CAP)2 employed Mr. Henzler as an area
supervisor at a chain of One Stop convenience stores for approximately nineteen years.
Mr. Henzler lost that job due to a business transaction between Turnoutz and CAP’s alleged
affiliates, Lehigh Gas Wholesale Services, Inc., and Lehigh Gas Wholesale LLC
(collectively, Lehigh), memorialized in a document entitled “Master Lease Agreement,”
dated September 9, 2015 (eff. September 22, 2015), and its amendments (dated September
22, 2015; February 24, 2016; and April 2016).3 Mr. Henzler applied for an equivalent job
with Turnoutz, but he did not get it. Believing that Turnoutz rejected him in favor of
younger, less-qualified candidates, Mr. Henzler filed suit against Turnoutz in the Circuit
Court of Kanawha County in October 2016 for age discrimination in violation of the West
2
Mr. Henzler alleges that CrossAmerica Partners, LP (CAP) employed him and, in
his brief, that M&J Operations LLC (M&J) is the parent corporation of CAP. The
severance agreement and general release at issue in this case identifies both CAP, M&J,
and another alleged affiliate, CST Brands, Inc. (CST), as parties to the agreement. For the
sake of clarity, we will refer to these three alleged affiliates as “CAP.”
3
Turnoutz offers the Master Lease Agreement and its amendments as evidence of
its relationship with CAP. Notably, CAP is not a party to the lease or its amendments.
Instead, Turnoutz and Lehigh are the parties to the Master Lease Agreement and its
amendments.
2
Virginia Human Rights Act. Turnoutz answered and the parties exchanged interrogatories
and requests for production.4
After approximately eight months of discovery, Turnoutz moved for
dismissal or summary judgment of Mr. Henzler’s age discrimination complaint. According
to Turnoutz, Mr. Henzler executed a severance agreement and general release on April 13,
2016, with CAP5 (CAP Release) following his unsuccessful application to Turnoutz for
employment. Turnoutz asserted that, in exchange for a severance payment of
approximately $13,721.63, Mr. Henzler agreed in the CAP Release to “irrevocably and
unconditionally release[] and forever discharge[]” CAP and certain “Company Released
Parties”
from any and all claims, demands, causes of action, and
liabilities of any nature, both past and present, known and
unknown, resulting from any act or omission of any kind
occurring on or before the date of execution of [the CAP
Release] which arise under contract or common law, or any
federal, state or local law, regulation or ordinance.
The CAP Release defines those “Company Released Parties” as CAP’s
Affiliates . . ., parents, partners, subsidiaries, divisions, assigns,
predecessors, and successors (by merger acquisition or
otherwise), and the past, present and future officers, directors,
trustees, partners, shareholders, managers, employees, agents,
representatives, volunteers, consultants, insurers and attorneys
4
Based on our review of the docket contained in the appendix record, neither party
conducted a deposition before Turnoutz moved for summary judgment in October 2017.
The docket reflects that subpoenas were issued to CAP and Lehigh in late May or early
June 2017.
5
See supra, note 2.
3
of and for each of the foregoing, and their respective heirs,
executors, administrators, legal representatives and assigns . . .
.[6]
Indisputably, the CAP Release does not name Turnoutz as a “Company
Released Party.” But, Turnoutz argued that the CAP Release still applied to Mr. Henzler’s
age discrimination claim because it was CAP’s successor (by merger, acquisition, or
otherwise) or affiliate. Turnoutz reasoned that it was CAP’s successor or affiliate because
under the terms of the Master Lease Agreement, its amendments, and various proprietary
mark, franchise and fuel agreements (tertiary agreements),7 Turnoutz “continued, without
interruption, the same business operations of [CAP] in the same facilities offering the same
services and products with the same equipment and inventory under the same names and
brands while employing the same work force who had the same responsibilities as they did
under [CAP].” Turnoutz also argued that it was an affiliate of CAP because the Master
6
The CAP Release also defines the term “Affiliate” as “a person or entity that
directly, or indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person or entity specified.” The CAP Release defines
the term “control” as “the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of another person or entity, whether through the
ownership of voting securities, by contract, or otherwise.”
7
Specifically, the Master Lease Agreement states that “[Turnoutz] and an affiliate
of [Lehigh Gas Wholesale Services, Inc.], Lehigh Gas Wholesale LLC, have entered into
a PMPA Franchise Agreement [sic] Fuel Supply Agreement, Proprietary Marks Agreement
and Related Agreements with [Lehigh Gas Wholesale Services, Inc.] and/or its Affiliates .
. . applicable to each of the Leased Premises . . . .” The record does not contain these
tertiary agreements.
4
Lease Agreement, its amendments, and the tertiary agreements empowered CAP to control
Turnoutz’s management and policies.
Mr. Henzler responded that the CAP Release did not apply to his claim
against Turnoutz because the parties to the CAP Release did not name Turnoutz as an entity
released in exchange for the $13,721.63 severance payment. He rejected Turnoutz’s claim
to be CAP’s successor or affiliate, reasoning that Turnoutz merely agreed to lease some
One Stop stores from Lehigh, and not CAP, under the Master Lease Agreement and its
amendments. He asserted that Turnoutz was, at best, the “tenant” of Lehigh under those
agreements. According to Mr. Henzler, even if CAP was a party to the Master Lease
Agreement, the landlord-tenant relationship it created did not make Turnoutz a successor
of CAP by merger, acquisition, or otherwise. Mr. Henzler likewise rejected Turnoutz’s
theory that it was CAP’s successor due to the resemblance of its operations of the leased
One Stop stores to those of CAP because any similarity was the result of Turnoutz’s own
independent business decisions. Finally, Mr. Henzler argued that Turnoutz had not offered
any evidence to support its assertion that it was CAP’s affiliate.
The circuit court granted Turnoutz’s motion for summary judgment at a
December 2017 hearing.8 Approximately five months later, on May 7, 2018, the circuit
8
The circuit court explained its oral ruling as follows: “the release executed by Mr.
Henzler does apply to this case [and] that he has waived his right to make an age
discrimination claim against the defendants.”
5
court entered an order granting Turnoutz’s motion for summary judgment, which Turnoutz
had prepared for the court’s endorsement. The circuit court found that Mr. Henzler had
discharged Turnoutz from liability for his age discrimination claim when he executed the
CAP Release, even though Turnoutz was not a party to that agreement. Specifically, the
circuit court found that Turnoutz and
Larry Markham are successors in interest to and/or assigns,
affiliates, and/or “Company Released Parties” and/or heirs of
[CAP] by virtue of the aforesaid contractual franchise
agreements and/or contractual lease agreements and the
amendments thereto, entered between [Turnoutz, Lehigh, and
CAP], and such contractual agreements as are of record in this
Court.
The court also found that the CAP Release “clearly contemplated that the
claims made by [Mr. Henzler] in the case at bar were forever released and discharged
against [Turnoutz] as successors, affiliates, and/or otherwise as ‘Company Released
Parties’ as defined therein.” The court concluded that “no genuine issue of material fact
exists related to the application of the [CAP Release] to [Mr. Henzler’s] claims against
[Turnoutz], and the terms and conditions of the release agreement constitute undisputed
facts upon which [Turnoutz is] entitled to summary judgment as a matter of law.” Mr.
Henzler appeals from that order.
II. STANDARD OF REVIEW
West Virginia Rule of Civil Procedure 56(c) states that a court shall render
“judgment . . . forthwith if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue
6
as to any material fact and that the moving party is entitled to a judgment as a matter of
law.” We explained the relative burdens of the moving and non-moving parties at summary
judgment in Syllabus Point 3 of Williams v. Precision Coil, Inc., when we said that:
If the moving party makes a properly supported motion
for summary judgment and can show by affirmative evidence
that there is no genuine issue of a material fact, the burden of
production shifts to the nonmoving party who must either (1)
rehabilitate the evidence attacked by the moving party, (2)
produce additional evidence showing the existence of a
genuine issue for trial, or (3) submit an affidavit explaining
why further discovery is necessary as provided in Rule 56(f) of
the West Virginia Rules of Civil Procedure.[9]
At summary judgment, a court may not peremptorily “weigh the evidence
and determine the truth of the matter . . . .”10 Instead, it must “grant the nonmoving party
the benefit of inferences, as credibility determinations, the weighing of the evidence, and
the drawing of legitimate inferences from the facts are jury functions, not those of a
judge.”11 A court should grant “[a] motion for summary judgment . . . 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.”12 Alternatively stated, “[s]ummary
9
194 W. Va. 52, 459 S.E.2d 329 (1995).
10
Pritt v. Republican Nat.’l Comm., 210 W. Va. 446, 453, 557 S.E.2d 853, 860
(2001) (internal quotation omitted).
11
Id. (internal quotation omitted).
12
Syl. Pt. 2, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994) (internal
quotations and citations omitted).
7
judgment is appropriate where the record taken as a whole could not lead a rational trier of
fact to find for the nonmoving party . . . .”13
Turnoutz relies on the CAP Release for its affirmative defense, meaning that
it will bear the burden of proving that defense at trial. Therefore, it is “entitled to summary
judgment on this affirmative defense only if the evidence is so strong that it would be
entitled to a directed verdict at trial.”14 “This burden is very heavy and summary judgment
rarely is granted in favor of the party having the burden of proof.”15 “A circuit court’s
entry of summary judgment is reviewed de novo.”16
III. DISCUSSION
The parties’ arguments on appeal mirror those presented to the circuit court.17
Turnoutz argues that Mr. Henzler released his age discrimination claim against it when he
13
Id. at Syl. Pt. 4 (in part).
14
Grim v. E. Elec., LLC, 234 W. Va. 557, 567, 767 S.E.2d 267, 277 (2014). See
also Williams, 194 W. Va. at 62 n.17, 459 S.E.2d at 339 n.17 (1995) (when reviewing an
order on summary judgment, the Court “normally operate[s] under the assumption that a
plaintiff will have the burden of proof at the trial on the merits. Obviously, in these cases a
plaintiff only is entitled to summary judgment where his evidence is so strong that he would
be entitled to a directed verdict at trial. This burden is very heavy and summary judgment
rarely is granted in favor of the party having the burden of proof. The situation for a
defendant usually is different. Except as to affirmative defenses, a defendant does not bear
the burden of proof.”) (emphasis added).
15
Williams, 194 W. Va. at 62 n.17, 459 S.E.2d at 339 n.17.
16
Syl. Pt.1, Painter, 192 W. Va. at 189, 451 S.E.2d at 755.
17
Turnoutz asserts a new argument in response to Mr. Henzler’s appeal of the circuit
court’s order granting summary judgment to Turnoutz: that Mr. Henzler has not made a
8
executed the CAP Release even though that agreement does not name Turnoutz as a
released party. Turnoutz argues that the circuit court correctly found that the CAP Release
applies to CAP’s successors and affiliates and that it is, in fact, a successor to or affiliate
of that entity.18 On the other hand, Mr. Henzler contends that the CAP Release applies to
Turnoutz only if (1) the parties to the release had named Turnoutz as an entity released
from liability to Mr. Henzler, or (2) Turnoutz is an affiliate of or successor to CAP, and,
therefore a Company Released Party as the CAP Release defines that term. Turnoutz is
not named in the CAP Release, and, Mr. Henzler argues, it did not offer any evidence to
the circuit court to support its claim that it is CAP’s successor or affiliate. So, Mr. Henzler
concludes, the circuit court erred when it found that no genuine issues of material fact
remain as to the applicability of the CAP Release to Mr. Henzler’s claims against Turnoutz.
We agree with Mr. Henzler: on the record presented to the circuit court and
now to this Court, genuine issues of material fact remain as to the applicability of the CAP
prima facie case of age discrimination. “Our general rule is that nonjurisdictional questions
not raised at the circuit court level, but raised for the first time on appeal, will not be
considered.” Barney v. Auvil, 195 W. Va. 733, 741, 466 S.E.2d 801, 809 (1995). For that
reason, we do not consider Turnoutz’s argument that Mr. Henzler has not established a
prima facie case of age discrimination.
18
Turnoutz’s substantive arguments below focused on its status as a successor to or
affiliate of CAP, although it also made blanket assertions that it is otherwise a Company
Released Party, as the CAP Release defines that term. See supra. On appeal, Turnoutz’s
focus remains on its successor or affiliate status. For the same reasons discussed in the
body of this opinion, we conclude that genuine issues of material fact also remain as to
whether Turnoutz is a Company Released Party, as the CAP Release defines that term, by
means other than its status as CAP’s successor or affiliate.
9
Release to Mr. Henzler’s claim against Turnoutz. Indisputably, the parties to the CAP
Release — CAP and Mr. Henzler — did not identify Turnoutz as a party released by Mr.
Henzler in exchange for the $13,721.63 severance payment. Without additional,
affirmative evidence to support Turnoutz’s claim that the CAP Release applies to Mr.
Henzler’s claims against it, the omission of Turnoutz’s name from that agreement raises
genuine issues of material fact that have yet to be resolved, at least at the relatively early
stage of the proceeding at which Turnoutz moved for summary judgment.
We reach the same conclusion, and for the same reasons, as to Turnoutz’s
more narrow argument that it is CAP’s successor (by merger, acquisition, or otherwise).
As Mr. Henzler observes, Turnoutz has not highlighted any record evidence related to a
CAP merger or acquisition. And, genuine issues of material fact remain as to whether
Turnoutz is otherwise CAP’s successor. Turnoutz cites to the Master Lease Agreement
and its amendments, the tertiary agreements, and its own discovery responses to
substantiate its argument that it is a successor to CAP due to its continuance of CAP’s
operations of the One Stop stores. While Turnoutz posits that the Master Lease
Agreements render it CAP’s successor, it has not directed our attention to any particular
provision of that agreement to support that supposition.19 Plus, the record does not contain
the tertiary agreements. More fundamentally, Turnoutz has not pointed to anything in the
19
Similarly, Turnoutz makes a blanket reference to its responses and objections to
Mr. Henzler’s first set of interrogatories and requests for production of documents. It does
not, however, cite to a particular response in that document or explain how information in
the document supports its contention that it is CAP’s successor or affiliate.
10
current record that evidences the exact nature of the relationship between CAP and Lehigh
or affirmatively shows that Lehigh shares with CAP its obligations to Turnoutz under the
Master Lease Agreement.20
Turnoutz repeatedly cites paragraph 7 of Mr. Henzler’s complaint as
affirmative evidence that it is CAP’s successor. Mr. Henzler alleged in that paragraph that,
“[i]n 2016, [CAP] entered into an agreement whereby [Turnoutz] would lease the forty-
one convenience store locations previously operated by [CAP] and [Turnoutz] would
operate convenience stores out of those locations.” Relying on that allegation, Turnoutz
concludes that Mr. Henzler has admitted that it “is a successor, affiliate, and/or assign of
CAP . . . .” But that conclusion rests on two suppositions: that (1) the relationship between
CAP and Lehigh put CAP in the shoes of Lehigh for purposes of the Master Lease
Agreement and (2) the terms of the Master Lease Agreement make Turnoutz CAP’s
successor by means other than merger or acquisition. Again, Turnoutz has not pointed us
to any portion of the record that evidences the relationship between CAP and Lehigh. And,
20
Turnoutz states that the parties do not dispute that Lehigh and CAP are affiliates
and that they are part of the same corporate family. But, Mr. Henzler emphasized the
designation of Lehigh, and not CAP, as Turnoutz’s landlord in the Master Lease Agreement
in his response to Turnoutz’s motion for summary judgment. Mr. Henzler emphasized the
same discrepancy in his appeal, stating that “the parties to the Master Lease Agreement
and subsequent amendments are [Turnoutz] and a completely different entity, [Lehigh]. . .
. There is nothing in the Master Lease Agreement between [Turnoutz] and [Lehigh] that
can be construed to make [Turnoutz] a successor, assign, affiliate, or heir of [CAP].”
Further, that CAP may have been known formerly as Lehigh Gas Partners, LP, is not
affirmative evidence that CAP is a signatory to the Master Lease Agreement and its
amendments because Turnoutz made those agreements with different Lehigh entities
(Lehigh Gas Wholesale Services, Inc. and Lehigh Gas Wholesale, LLC).
11
Turnoutz has not directed our attention to any particular provision of the Master Lease
Agreement or its amendments that dispels all genuine issues of material fact as to its status
as CAP’s successor for purposes of the CAP Release.
And, while the Master Lease Agreement and two of its amendments refer
(without any description) to the tertiary agreements and identify Turnoutz as the
“franchisee” of Lehigh, the record does not contain any of those tertiary agreements.
Without those tertiary agreements or citations to particular portions of the record
evidencing how they empowered CAP to control the management and operations of
Turnoutz, genuine issues of material fact remain as to Turnoutz’s status as CAP’s affiliate
for purposes of the CAP Release.
We have observed that “[s]ummary judgment should be denied ‘even where
there is no dispute as to the evidentiary facts in the case but only as to the conclusions to
be drawn therefrom.’”21 There is no genuine issue of material fact as to the existence of
the CAP Release and the Master Lease Agreement and its amendments. But, as the record
has been developed so far, disputes remain as to the conclusions to be drawn from those
documents. So, we conclude that the circuit court erred when it found that no genuine
issues of material fact existed as to the application of the CAP Release to Mr. Henzler’s
21
Pritt, 210 W. Va. at 453, 557 S.E.2d at 860 (quoting Pierce v. Ford Motor Co.,
190 F.2d 910, 915 (4th Cir.), cert. denied, 342 U.S. 887 (1951)).
12
claims against Turnoutz, and that Turnoutz was entitled to summary judgment as a matter
of law.
IV. CONCLUSION
For the reasons stated above, we reverse the circuit court’s order granting
summary judgment to Turnoutz and remand this case to the Circuit Court of Kanawha
County for further proceedings.
Reversed and remanded.
13