Melissa Rotruck v. Janice Smith, Doing Business as Insurance Queen

STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
FILED
February 10, 2016
MELISSA ROTRUCK, released at 3:00 p.m.
Petitioner RORY L. PERRY, II CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
vs.) No. 14-1284 (Mineral County Civil Action No. 12-C-135)
JANICE SMITH,
DOING BUSINESS AS INSURANCE QUEEN,
Respondent
MEMORANDUM DECISION
Petitioner, Melissa Rotruck (“Ms. Rotruck”), by counsel Harley O. Staggers,
Jr., appeals for the second time1 the circuit court’s denial of her motion for a new trial in this
action brought under the West Virginia Wage Payment and Collection Act (“WPCA”). In
the instant appeal, Ms. Rotruck asserts two errors. She first claims that the trial court failed
to find that her employment contract with the respondent Janice Smith, dba Insurance Queen
(“Insurance Queen”), defendant below, was illegal. In addition, Ms. Rotruck argues that
Insurance Queen assigned wages without complying with W. Va. Code § 21-5-3(e) (2015)
(Supp. 2015).2 Insurance Queen, appearing Pro Se, filed a timely response.
This Court has considered the parties’ briefs, the appendix record designated
for our review, the pertinent authorities, and oral argument. We find no new or significant
questions of law, and, upon application of the standard for our review, we find no prejudicial
1
Ms. Rotuck’s prior appeal, designated number 14-0104, resulted in this Court
issuing an order dated October 15, 2014, that vacated the January 15, 2014, order of the
circuit court, which had denied her motion for a new trial. This Court’s order additionally
remanded the case with instructions to the circuit court to enter a final order with findings
and conclusions to address all of the issues that had been raised in Ms. Rotuck’s petition for
a new trial.
2
The 2008 version of W. Va. Code § 21-5-3(e) was in effect at the time relevant
to the instant matter. However, because the 2015 amendments to W. Va. Code § 21-5-3 did
not alter subsection (e), we refer to the most current statute.
1
error. For these reasons, a memorandum decision affirming the order of the circuit court is
appropriate under Rule 21 of the Rules of Appellate Procedure.
Neither party’s appellate brief sets out a complete statement of relevant facts.3
The basic facts ascertained from the record are that, on July 21, 2011, Ms. Rotruck was hired
as a sales associate by Insurance Queen. In connection with her hiring, Ms. Rotruck signed
a document setting out her job description. The document she signed expressly stated that
she “[m]ust be licensed to sell insurance in the States determined by the [sic] management
within 2 months of date of hire.” With regard to Ms. Rotruck’s compensation, the document
stated that “Sales Associates are compensated by commissions or a small salary plus
commission at a lower rate.” During the trial, Ms. Rotruck acknowledged that she was to be
compensated by commission only. She testified as follows:
Q Were you advised, during the interview, that you
will be working as a commission only sales associate?
A Yes, ma’am.
Q So you were not expecting a salary?
A When I was first hired, when we discussed, when
I [was] first hired, at that point, no I was not, it was commission
only.
Q So just to clarify, you knew that it was
commission only, no salary, when you were hired?
A That’s what I was told.
It is undisputed that, prior to her discharge from employment, Ms. Rotruck never obtained
a license as required by her hiring document, and she repeatedly misled Insurance Queen
about her attempts to take the licensing test. Due to her failure to obtain a license to sell
3
Pursuant to Rule 10(c)(4) of the West Virginia Rules of Appellate Procedure,
the Petitioner’s brief shall contain a “Statement of the Case. – Supported by appropriate and
specific references to the appendix or designated record, the statement of the case must
contain a concise account of the procedural history of the case and a statement of the facts
of the case that are relevant to the assignments of error.” (Emphasis added). Likewise,
under Rule 10(d), “[t]he respondent’s brief must conform to the requirements in subsection
(c) of this Rule, except that no statement of the case need be made beyond what may be
deemed necessary in correcting any inaccuracy or omission in the petitioner’s brief. . . .”
2
insurance, Ms. Rotruck could not earn a commission pursuant to W. Va. Code § 33-44-4(a)
(2001) (Repl. Vol. 2011).4
Although Ms. Rotruck could not lawfully earn a commission as a result of her
own failure to obtain the necessary license,5 she nevertheless received some compensation
for her services from Insurance Queen during the course of her employment. In 2011, Ms.
Rotruck received wages totaling $4,309.39, and she was paid a total of $3,079.00 in 2012.
In addition, Insurance Queen provided Ms. Rotruck with financial assistance on occasion by
filling her car with gas, paying for some of her medication, making her car payment on two
occasions, and advancing her cash to cover emergencies ($100 in one instance and $500 in
another). Ms. Rotruck was expected to reimburse these expenditures from her future
earnings, and the amounts advanced were, in fact, deducted therefrom.
Ms. Rotruck’s employment with Insurance Queen was terminated on April 6,
2012. The reasons for her discharge were set out in a termination letter as follows:
1. Not obtaining licenses in a timely manner as previously
agreed in July 2011.
2. Unable to perform job duties including the completion of
your insurance exam as per our agreement when you began your
position. I will remind you that we attempted to work with you
by modifying the requirement many times to accommodate your
situation.
4
Pursuant to W. Va. Code § 33-44-4(a) (2001) (Repl. Vol. 2011),
[i]t is unlawful for any person to engage in any act which
constitutes the transaction of insurance under the provisions of
this article unless authorized by a license in force pursuant to the
laws of this state, or unless exempted by the insurance laws of
this state. Any person or insurer engaged in any act which
constitutes the unauthorized transaction of insurance shall be
subject to the provisions contained in chapter thirty-three [§§
33-1-1 et seq.] of the code and the provisions and penalties set
forth in this article.
5
See id.
3
3. Misleading your employer in regards to taking the P&C
license exam [(Property and Casualty licensing examination)] on
several occasions as confirmed by ExamFX.[6]
(Footnote added).
Following her termination, Ms. Rotruck filed a complaint under the WPCA
against Insurance Queen. After conducting a bench trial, the circuit court found that Ms.
Rotruck had failed to prove her claim and granted judgment as a matter of law7 to Insurance
Queen. Ms. Rotruck then filed a motion for a new trial, which the circuit court denied by
order dated January 15, 2014. An appeal to this Court followed. By order dated October 15,
6
According to the circuit court’s December 18, 2013, order granting judgment
as a matter of law in favor of Insurance Queen and dismissing the case with prejudice,
Mrs. Rotruck repeatedly assured [Insurance Queen] that she was
trying to obtain her license. She told [Insurance Queen] that she
had failed the exam and had to take it over. . . . In early 2012
[Insurance Queen] learned that Mrs. Rotruck had missed
multiple opportunities to take the test, which is given almost
weekly. . . . As a result, on March 5, 2012, [Insurance Queen]
suspended Mrs. Rotruck with the opportunity to keep her job if
she passed the test within 30 days. When she still failed to take
the test, she was terminated on April 6, 2012.
7
The circuit court actually stated that it “directed a verdict” for Insurance
Queen. We pause briefly to note that use of the term “directed verdict” was abandoned in
favor of the phrase “judgment as a matter of law” in 1998 when the West Virginia Rules of
Civil Procedure were amended. Under our current rules,
[i]f during a trial without a jury a party has been fully
heard on an issue and the court finds against the party on that
issue, the court may enter judgment as a matter of law against
that party with respect to a claim or defense that cannot under
the controlling law be maintained or defeated without a
favorable finding on that issue, or the court may decline to
render any judgment until the close of all the evidence. . . .
W. Va. R. Civ. P. 52(c) (emphasis added). See also W. Va. R. Civ. P. 50 (addressing
judgment as a matter of law in jury trials).
4
2014, this Court vacated the January 15, 2014, order of the circuit court and remanded the
case with instructions to the circuit court to enter a final order with findings of fact and
conclusions of law to address each of the issues that had been raised in Ms. Rotruck’s
petition for a new trial.8 In response, the circuit court entered an order on November 14,
2014, titled “Amended Order Denying Plaintiff’s Motion for a New Trial” (hereinafter
“Amended Order”). This appeal followed.
With regard to this Court’s review of a circuit court’s order denying a motion
for a new trial, it has been established that,
[i]n reviewing challenges to findings and rulings made by
a circuit court, we apply a two-pronged deferential standard of
review. We review the rulings of the circuit court concerning a
new trial and its conclusion as to the existence of reversible
error under an abuse of discretion standard, and we review the
circuit court’s underlying factual findings under a clearly
erroneous standard. Questions of law are subject to a de novo
review.
Syl. pt. 3, State v. Vance, 207 W. Va. 640, 535 S.E.2d 484 (2000). Bearing in mind the
forgoing standard, we address Ms. Rotruck’s two assignments of error in turn.
Ms. Rotruck’s appellate brief is far from a model of clarity. Her first
assignment of error could fairly be stated as asserting that the circuit court erred by denying
her a new trial based upon the court’s conclusion that she failed to establish her claim that
her employment contract was an illegal contract. In a very befuddled manner, Ms. Rotruck
appears to assert that, because she was hired on a commission-only basis for a sales position
that required a license she did not posses, her employment contract was illegal insofar as she
could obtain no earnings thereunder. Insurance Queen, responding pro se, merely asserts
that, had Ms. Rotruck taken the licensing examination as the parties had agreed at the time
of her hiring, she could have earned commissions.
The agreement between Ms. Rotruck and Insurance Queen stated in plain
language that Ms. Rotruck, who was hired as a Sales Associate, would be “compensated by
commissions or a small salary plus commission at a lower rate.” In equally clear language,
the contract specified that Ms. Rotruck “[m]ust be licensed to sell insurance in the States
determined by the [sic] management within 2 months of date of hire.” It is well established
8
See note 1, supra, for additional details regarding Ms. Rotruck’s prior appeal.
5
that “[i]f language in a contract is found to be plain and unambiguous, such language should
be applied according to such meaning.” Fraternal Order of Police, Lodge No. 69 v. City of
Fairmont, 196 W. Va. 97, 101, 468 S.E.2d 712, 716 (1996). We find nothing illegal in the
foregoing terms. Essentially, Ms. Rotruck was hired as a sales associate with a prerequisite
that she obtain a license to sell insurance. Ms. Rotruck testified that she understood she was
being hired on a commission-only basis9 and that she expected no salary at the time of her
hiring. She contends, nevertheless, that it was improper to hire her without compensation
pending her procurement of the necessary license. In other words, she argues that it is
unlawful to hire someone under a “commission only agreement if [the person] could not
receive a commission.” Ms. Rotruck has cited no authority from this Court or any other court
in support of this argument. Indeed, there is no legal impediment to this type of hiring
9
Before this Court, Ms. Rotruck additionally asserts, without developing any
argument, that commission-only contracts are, in general, illegal. We decline to address this
issue as it has been waived. See State v. LaRock, 196 W. Va. 294, 302, 470 S.E.2d 613, 621
(1996) (“Although we liberally construe briefs in determining issues presented for review,
issues which are . . . mentioned only in passing but are not supported with pertinent
authority . . . are not considered on appeal.”); State v. Lilly, 194 W. Va. 595, 605 n.16, 461
S.E.2d 101, 111 n.16 (1995) (“[C]asual mention of an issue in a brief is cursory treatment
insufficient to preserve the issue on appeal.”); State, Dep’t of Health & Human Res. v. Robert
Morris N., 195 W. Va. 759, 765, 466 S.E.2d 827, 833 (1995) (“‘A skeletal “argument,” really
nothing more than an assertion, does not preserve a claim. . . . Judges are not like pigs,
hunting for truffles buried in briefs.’” (quoting United States v. Dunkel, 927 F.2d 955, 956
(7th Cir.1991))).
Moreover, this issue was not properly raised below. The circuit court expressly
noted in its Amended Order that “Plaintiff did not raise this argument at trial and does not
cite any legal authority in support of this proposition.” It is axiomatic that, “[i]n the exercise
of its appellate jurisdiction, this Court will not decide nonjurisdictional questions which were
not considered and decided by the court from which the appeal has been taken.” Syl. pt. 1,
Mowery v. Hitt, 155 W. Va. 103, 181 S.E.2d 334 (1971). See also W. Va. R. App. P.
10(c)(7) (“The argument must contain appropriate and specific citations to the record on
appeal, including citations that pinpoint when and how the issues in the assignments of error
were presented to the lower tribunal.”).
6
arrangement.10 Within professions that require licensure, it is a common practice to hire
individuals pending their acquisition of the necessary license.
The only reason Ms. Rotruck was not paid a commission was her own failure
to secure the necessary license. Indeed, in its order entered following the trial of this matter,
the circuit court found that
[a] key point in this case was that Mrs. Rotruck was
informed that she had to pass the test in order to be able to be
paid a commission and to be a significant asset to the business.
Mrs. Rotruck promised to prepare for the exam and take it as
soon as possible. The job description signed by Mrs. Rotruck on
July 21, 2011, contained a provision stating that she must obtain
a license “within two months of the date of hire.”
Thus, the evidence presented indicates that Ms. Rotruck, who apparently had no prior
experience in the insurance industry, worked for Insurance Queen in advance of obtaining
her license to sell insurance in order to learn the insurance business. Insurance Queen
anticipated that Ms. Rotruck would promptly obtain her license to sell insurance and become
a productive employee of the company. This scenario is no different from an internship
where an individual volunteers to work for little or no compensation in order to gain valuable
10
Assuming, arguendo, that Ms. Rotruck’s employment contract was illegal,
then the contract simply is unenforceable. See Syl. Ben Lomond Co. v. McNabb, 109 W. Va.
142, 153 S.E. 905 (1930) (“A court of equity will not, at the instance of the original parties
or others claiming under them, enforce a contract entered into to accomplish a fraudulent or
illegal purpose.”); Dorr v. Chesapeake & O. Ry. Co., 78 W. Va. 150, 157, 88 S.E. 666, 668
(1916) (“An illegal contract is as a rule void–not merely voidable–and can be the basis of no
judicial proceeding. No action can be maintained upon it, either at law or in equity. This
impossibility of enforcement exists whether the grant is illegal in its inception or whether,
being valid when made, the illegality has been created by subsequent statute. . . . If a
contract is tainted with the vice of illegality, it is held to create no obligation, not from any
consideration of the individual rights of the parties, who may be equally in fault, but from
regard for the public. Generally, the illegality of a contract is a perfect defense to its
enforcement, because the law will not require one to do, or punish him for not doing, that
which it forbids him to do.” (internal quotations and citations omitted)).
7
knowledge and experience.11 Accordingly, we find no error in the circuit court’s ruling
denying Ms. Rotruck a new trial with respect to this issue.
Ms. Rotruck next argues that she is entitled to a new trial because the circuit
court “incorrectly interpreted the West Virginia Wage Payment and Collection Act’s
prohibition against wage assignments by employees to pertain to only consumer credit
transactions where the employer is a creditor.” Ms. Rotruck contends that advances made
to her by her employer,12 which were subsequently withheld from her pay, were wage
assignments. Insofar as the alleged wage assignments did not comply with the provisions of
W. Va. Code § 21-5-3(e), Ms. Rotruck claims the wage assignments are unenforceable.
In addressing this issue, the circuit court applied Clendenin Lumber & Supply
Co., Inc. v. Carpenter, 172 W. Va. 375, 305 S.E.2d 332 (1983), and concluded that there can
be an assignment to an employer only when the employer is a creditor under the West
Virginia Consumer Credit and Protection Act. The circuit court found that Ms. Rotruck
failed to establish that Insurance Queen was a creditor. We agree with the circuit court’s
analysis of this issue.
Addressing the question of whether there had been an assignment of wages
between an employer and an employee, the Court in Clendenin Lumber observed that the
wage assignment provisions of the WPCA and the Consumer Credit and Protection Act
(“CCPA”) must be read in pari materia: “[i]nasmuch as W. Va. Code, 46A-2-116 [(1996)],
and W. Va. Code, 21-5-3 [(2015)], relate to assignment of earnings, they are to be construed
together . . . .” 172 W. Va. at 379, 305 S.E.2d at 336. See also Farley v. Zapata Coal Corp.,
167 W. Va. 630, 636-37, 281 S.E.2d 238, 243 (1981) (“It is well established in West Virginia
that when two statutes relate to the same general subject and the two statutes are not in
conflict, they are to be read in pari materia.”); Syl. pt. 5, Fruehauf Corp. v. Huntington
Moving & Storage Co., 159 W. Va. 14, 217 S.E.2d 907 (1975) (“Statutes which relate to the
same persons or things, or to the same class of persons or things, or statutes which have a
common purpose will be regarded in pari materia to assure recognition and implementation
11
Although Ms. Rotruck was hired on a commission-only basis, she was
compensated for some services she provided to Insurance Queen. In 2011, Ms. Rotruck
worked approximately five months and received wages totaling $4,309.39. She was paid a
total of $3,079.00 for her three months of employment in 2012.
12
The advances to which Ms. Rotruck refers are the occasional instances where
Insurance Queen provided Ms. Rotruck financial assistance by filling her car with gas,
paying for some of her medication, making her car payment on two occasions and advancing
her cash to cover emergencies ($100 in one instance and $500 in another).
8
of the legislative intent. Accordingly, a court should not limit its consideration to any single
part, provision, section, sentence, phrase or word, but rather review the act or statute in its
entirety to ascertain legislative intent properly.”). Accord Syl. pt. 6, Community Antenna
Serv., Inc. v. Charter Commc’ns VI, LLC, 227 W. Va. 595, 712 S.E.2d 504 (2011).
The WPCA contains certain requirements applicable to the assignment of
earnings, but it does not define the term.14 The term “assignment of earnings” is, however,
13
defined in the CCPA as follows:
“Assignment of earnings” includes all forms of
assignments, deductions, transfers, or sales of earnings to
another, either as payment or as security, and whether stated to
13
Under W. Va. Code § 21-5-3(e),
[n]o assignment of or order for future wages shall be
valid for a period exceeding one year from the date of the
assignment or order. An assignment or order shall be
acknowledged by the party making the same before a notary
public or other officer authorized to take acknowledgments, and
any order or assignment shall specify thereon the total amount
due and collectible by virtue of the same and three fourths of the
periodical earnings or wages of the assignor shall at all times be
exempt from such assignment or order and no assignment or
order shall be valid which does not so state upon its face:
Provided, That no such order or assignment shall be valid unless
the written acceptance of the employer of the assignor to the
making thereof, is endorsed thereon: Provided, however, That
nothing herein contained shall be construed as affecting the right
of employer and employees to agree between themselves as to
deductions to be made from the payroll of employees.
14
This lack of definition provides the necessary ambiguity to require that the
aforementioned statutes be read and construed together. See State ex rel. Morrisey v. West
Virginia Office of Disciplinary Counsel, 234 W. Va. 238, 249, 764 S.E.2d 769, 780 (2014)
(“The in pari materia rule of statutory construction applies only when a statute is
ambiguous.”); Syl. pt. 1, State v. Epperly, 135 W. Va. 877, 65 S.E.2d 488 (1951) (“The rule
that statutes which relate to the same subject should be read and construed together is a rule
of statutory construction and does not apply to a statutory provision which is clear and
unambiguous.”).
9
be revocable or nonrevocable, and includes any deductions
authorized under the provisions of section three [§ 21-5-3],
article five, chapter twenty-one of this code, except deductions
for union or club dues, pension plans, payroll savings plans,
charities, stock purchase plans and hospitalization and medical
insurance.
W. Va. Code § 46A-2-116(2)(b) (1996) (Repl. Vol. 2015) (emphasis added). Based upon
this definition, the Clendenin Lumber Court was tasked with deciding whether the phrase “to
another” includes an employer. The Clendenin Lumber Court observed generally that the
CCPA was enacted “to modernize and clarify the law regarding consumer sales and credit
transactions. Specifically, article 2 regulates, inter alia, the practice of creditors regarding
credit and debt collection practices in consumer credit transactions.” Clendenin Lumber, 172
W. Va. at 379, 305 S.E.2d at 336. In furtherance of this general purpose, and as a result of
its analysis of the relevant statutory provisions, the Court then held: “The phrase ‘to another’
as used in the definition of an assignment of earnings under W. Va. Code, 46A-2-116(2)(b)
[(1996)], includes an employer when that employer is also the creditor of the employee.”
Syl. pt. 1, Clendenin Lumber , 172 W. Va. 375, 305 S.E.2d 332 (emphasis added). Thus,
under Clendenin Lumber, an employer is subject to the wage assignment requirements of
W. Va. Code § 21-5-3(e) only when the employer also is a creditor of its own employee.
Applying Clendenin Lumber, the circuit court in the case sub judice correctly
determined that, unlike the employer in Clendenin Lumber who engaged in the sale of
commercial products to its own employees in consumer credit transactions, Insurance Queen
was not a creditor of Ms. Rotruck. We agree. Pursuant to the CCPA, a “consumer credit
sale” is defined in relevant part as “a sale of goods, services or an interest in land in which:
(i) Credit is granted either by a seller who regularly engages as a seller in credit transactions
of the same kind or pursuant to a seller credit card . . . .” W. Va. Code § 46A-1-102(13)(a)
(1996) (Repl. Vol. 2015) (emphasis added). There is nothing in the record to indicate that
Insurance Queen’s advances to Ms. Rotruck qualify as a consumer credit sale. Likewise, the
advances did not qualify as a “consumer loan” insofar as there is nothing in the record to
indicate that Insurance Queen “regularly engaged in the business of making loans.” W. Va.
Code § 46A-1-102(15) (defining “Consumer loan”).
Rather than being consumer credit transactions or consumer loans, the
advances to Ms. Rotruck by Insurance Queen appear to be more akin to salary advances
graciously provided in response to Ms. Rotruck’s financial need. Under these circumstances,
the circuit court correctly concluded that the advances by Ms. Rotruck’s employer, Insurance
Queen, were not wage assignments. Accordingly, we find that the circuit court did not err
in denying Ms. Rotruck a new trial on this issue.
10
Based upon the forgoing analysis, we affirm the November 14, 2014, order of
the Circuit Court of Mineral County denying Ms. Rotruck’s motion for a new trial.
Affirmed.
ISSUED: February 10, 2016
CONCURRED IN BY:
Chief Justice Menis E. Ketchum
Justice Robin Jean Davis
Justice Brent D. Benjamin
Justice Margaret L. Workman
Justice Allen H. Loughry II
11