Citynet, LLC v. Ray Toney

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2015 Term
FILED
February 6, 2015
No. 14-0058 released at 3:00 p.m.
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
CITYNET, LLC,
Defendant Below, Petitioner
V.
RAY TONEY,
Plaintiff Below, Respondent
Appeal from the Circuit Court of Kanawha County
Honorable James C. Stucky, Judge
Civil Action No. 12-C-527
AFFIRMED, IN PART, AND, REVERSED, IN PART
Submitted: January 14, 2015
Filed: February 6, 2015
Ancil G. Ramey J. Michael Ranson
Bryan C. Cokeley Cynthia M. Ranson
Russell D. Jessee Ranson Law Offices
Steptoe & Johnson PLLC Charleston, West Virginia
Charleston, West Virginia Attorneys for the Respondent
Attorneys for the Petitioner
JUSTICE DAVIS delivered the Opinion of the Court.
JUSTICE KETCHUM dissents and reserves the right to file a dissenting opinion.
SYLLABUS BY THE COURT
1. “The mere fact that parties do not agree to the construction of a contract
does not render it ambiguous. The question as to whether a contract is ambiguous is a
question of law to be determined by the court.” Syllabus point 1, Berkeley County Public
Service District v. Vitro Corporation of America, 152 W. Va. 252, 162 S.E.2d 189 (1968).
2. “Where the terms of a contract are clear and unambiguous, they must
be applied and not construed.” Syllabus point 2, Bethlehem Mines Corp. v. Haden, 153
W. Va. 721, 172 S.E.2d 126 (1969).
3. “‘“It is not the right or province of a court to alter, pervert or destroy the
clear meaning and intent of the parties as expressed in unambiguous language in their written
contract or to make a new or different contract for them.” Syllabus Point 3, Cotiga
Development Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962).’ Syllabus
point 1, Hatfield v. Health Management Associates of West Virginia, 223 W. Va. 259, 672
S.E.2d 395 (2008).” Syllabus point, 5, Dan’s Carworld, LLC v. Serian, 223 W. Va. 478, 677
S.E.2d 914 (2009).
i
4. “The primary object in construing a statute is to ascertain and give effect
to the intent of the Legislature.” Syllabus point 1, Smith v. State Workmen’s Compensation
Commissioner, 159 W. Va. 108, 219 S.E.2d 361 (1975).
5. “When a statute is clear and unambiguous and the legislative intent is
plain, the statute should not be interpreted by the courts, and in such case it is the duty of the
courts not to construe but to apply the statute.” Syllabus point 5, State v. General Daniel
Morgan Post No. 548, Veterans of Foreign Wars, 144 W. Va. 137, 107 S.E.2d 353 (1959).
6. “‘“The West Virginia Wage Payment and Collection Act is remedial
legislation designed to protect working people and assist them in the collection of
compensation wrongly withheld.” Syllabus, Mullins v. Venable, 171 W. Va. 92, 297 S.E.2d
866 (1982).’ [Syllabus point] 3, Jones v. Tri-County Growers, Inc., 179 W. Va. 218, 366
S.E.2d 726 (1988).” Syllabus point 7, Grim v. Eastern Electric, LLC, No. 13-1133, ___
W. Va. ___, ___ S.E.2d ___, 2014 WL 5800677 (Nov. 3, 2014).
7. “‘“It is well established that the word ‘shall,’ in the absence of language
in the statute showing a contrary intent on the part of the Legislature, should be afforded a
mandatory connotation.” Syllabus Point 1, Nelson v. West Virginia Public Employees
Insurance Board, 171 W. Va. 445, 300 S.E.2d 86 (1982).’ Syllabus point 1, E.H. v. Matin,
ii
201 W. Va. 463, 498 S.E.2d 35 (1997).” Syllabus point 7, J.A. Street & Associates, Inc. v.
Thundering Herd Development, LLC, 228 W. Va. 695, 724 S.E.2d 299 (2011).
iii
Davis, Justice:
Petitioner Citynet, LLC (“Citynet”), herein appeals two orders issued by the
Circuit Court of Kanawha County in an action filed by a former Citynet employee, Ray
Toney (“Mr. Toney”), respondent herein, seeking to redeem the vested balance of his
Employee Incentive Plan account. One order granted partial summary judgment to Mr.
Toney, and the other denied Citynet’s subsequent motion under Rules 59(e) and 60(b) of the
West Virginia Rules of Civil Procedure. Citynet claims that the circuit court erred by failing
to adopt Citynet’s interpretation of its Employee Incentive Plan; by applying the West
Virginia Wage Payment and Collection Act; and by sustaining its award of $87,000.48 to Mr.
Toney without offsetting that amount by $17,400.10 Mr. Toney already had received from
his Employee Incentive Plan account. We have considered the parties’ briefs and oral
arguments and reviewed the relevant law. We conclude that the circuit court did not err in
granting partial summary judgment to Mr. Toney, or in applying the West Virginia Wage
Payment and Collection Act. We, therefore, affirm the circuit court’s orders on these
grounds. However, we find that the circuit court did err in setting the date from which
prejudgment interest would accrue and in failing to offset its award by $17,400.10 that Mr.
Toney previously had received from his Employee Incentive Plan account. Therefore, these
portions of the circuit court’s orders are reversed.
1
I.
FACTUAL AND PROCEDURAL HISTORY
On January 1, 2008, Citynet established an Employee Incentive Plan (“Plan”).
The stated purpose of the Plan is “to create incentives which are designed to motivate
Participants . . . to put forth maximum effort toward the success and growth of the Company
and to enable the Company to attract and retain experienced individuals who by their
position, ability and diligence are able to make important contributions to the Company’s
success.” By letter dated January 22, 2008, Mr. Toney was advised that he was 100% vested
in the Plan because he had been employed by Citynet for more than five years. His vested
balance in the Plan as of January 1, 2008, was $ 42,933.73. The letter provided details of
how the Plan worked1 and expressly stated that “[w]hen an employee leaves Citynet, the
1
The letter stated, in part, that
Employee Performance Units – granted annually in January of
each year and are determined by the formula of “employee’s
total gross compensation from the previous year / 1,000 X Grade
Multiplier.” The grade multiplier is based on your level of
responsibility in the company (Executive,
Management/Engineer, Supervisor/Technician, and Staff). In
addition, at the owners’ discretion, bonus performance units may
be awarded annually.
....
Annual Valuations and Performance Unit Allocations: As soon
as administratively possible during the first quarter of each year,
new performance units will be awarded to every employee. The
(continued...)
2
employee is then entitled to ‘cash out’ his or her entire vested balance subject to certain
provisions contained in the plan document with respect to termination for cause.” Mr. Toney
received a Plan update by letter dated August 4, 2010, wherein he was advised that his vested
balance as of January 1, 2010, was $87,000.48.2
On October 12, 2011, Mr. Toney voluntarily terminated his employment with
Citynet and requested to redeem his $87,000.48 vested balance in the Plan. Citynet refused
Mr. Toney’s request to redeem his vested balance. Citynet advised Mr. Toney that he could
redeem no more than twenty percent of his vested balance annually, and that his request
could be made only during a specific four-month period. In reaching this conclusion, Citynet
1
(...continued)
new performance units awarded will have their own value that
is unique and different from other years. The value of each unit
in successive years will be based on the increase in equity value
of the company, if any, from the year before.
Thus, the monetary value of each Citynet employee’s Employee Incentive Account was to
be calculated annually based upon the number of performance units granted to a particular
employee and the value assigned to those performance units.
2
The August 4, 2010, letter also clarified that the Employee Incentive Plan is
not a retirement plan:
[T]he Citynet Employee Incentive Plan is a non-qualified plan
under the Internal Revenue Code. This means that the plan does
not qualify to be a retirement plan like the Citynet 401K Plan.
As such, payouts from the Employee Incentive Plan are
considered to be taxable income to the employee when received
and direct rollovers to other retirement plans are not allowed.
3
applied section 5.7(b) of the Plan, which states:
(b) Annual Voluntary Redemptions. The Company has
established an annual Voluntary Redemption Period during each
calendar year, defined as the period of May 1st through August
31st, in which the Participants may redeem up to a maximum of
20% of their vested Performance Units during each calendar
year. Voluntary redemption requests that exceed the 20%
maximum or are received by the Company outside of the
Voluntary Redemption Period shall be considered null and
void. . . .
Thereafter, on March 23, 2012, Mr. Toney filed a complaint in the Circuit
Court of Kanawha County seeking to recover his vested balance in the Plan of $87,000.48.
In his complaint, Mr. Toney asserted three counts: (1) violation of the Plan; (2) willful
violation of the Plan; and (3) a Wage Payment and Collection Act violation. Mr. Toney
claimed, inter alia, that he was entitled to full payment of his vested benefits pursuant to
section 5.7(a) of the Plan, which states:
(a) Termination of Employment. In the event the
participant’s employment is terminated without Cause, the
Participant shall be eligible to redeem the vested portion of their
[sic] Performance Units as of the effective date of the
Participant’s termination. . . .
Citynet responded to Mr. Toney’s complaint by filing a motion to dismiss. Mr.
Toney then filed a motion for partial summary judgment seeking judgment in his favor as to
counts one and three of his complaint. Citynet filed its response to Mr. Toney’s motion for
4
partial summary judgment and asserted a cross-motion for summary judgment claiming that,
under Section 5.7(b) of the Plan, Citynet was not required to pay Mr. Toney any of his vested
benefits insofar as his request had been improperly made and was, therefore, null and void.
By order entered September 18, 2012, the circuit court granted partial summary
judgment to Mr. Toney and denied Citynet’s motion to dismiss and its cross-motion for
summary judgment. Agreeing with Mr. Toney, the circuit court concluded that, pursuant to
Section 5.7(a) of the Plan, Mr. Toney was entitled to payment of his entire vested balance in
the Plan. In addition, the circuit court concluded that Citynet’s failure to timely pay Mr.
Toney his vested balance violated the West Virginia Wage Payment and Collection Act
(hereinafter “WPCA”). Based upon the WPCA violation, the circuit court ruled that Citynet
was liable to Mr. Toney for liquidated damages, the costs of the action, and reasonable
attorney’s fees. Accordingly, the circuit court awarded Mr. Toney his vested Plan balance
of $87,000.48, and liquidated damages in the amount of $261,001.44, and further ordered
Citynet to pay Mr. Toney’s reasonable attorney’s fees and costs.
Citynet then filed its “MOTION FOR RECONSIDERATION AND MOTION
UNDER RULES 59(E) AND 60(B) OF THE WEST VIRGINIA RULES OF CIVIL
PROCEDURE.” In this motion, Citynet argued that it had not breached the Plan, that the
WPCA did not apply, and that Mr. Toney had misrepresented his vested balance in the Plan.
5
With regard to Mr. Toney’s vested balance, Citynet asserted that Mr. Toney had properly
requested and was paid $17,400.00 of his vested balance. Therefore, the true amount of his
vested balance in the Plan was $69,600.38. By order entered November 20, 2012, the circuit
court denied Citynet’s motion. Citynet appealed the circuit court’s September 18, 2012,
order granting partial summary judgment in favor of Mr. Toney and the circuit court’s
November 20, 2012, order denying Citynet’s motions under Rules 59(e) and 60(b). This
Court dismissed the appeal as interlocutory by Order entered April 18, 2013. Mr. Toney then
filed a motion to voluntarily dismiss the one remaining unresolved count of his complaint,
which alleged willful violation of the Plan by Citynet. By order entered December 30, 2013,
the circuit court granted Mr. Toney’s motion to dismiss. Entry of this order rendered the
circuit court’s earlier orders of September 18, 2012, and November 20, 2012, final and
appealable. Thus, Citynet herein appeals the circuit court’s orders of September 18, 2012,
and November 20, 2012.
II.
STANDARD OF REVIEW
Citynet herein appeals the circuit court’s order granting summary judgment in
favor of Mr. Toney. Therefore, our review is de novo. “A circuit court’s entry of summary
judgment is reviewed de novo.” Syl. pt. 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755
(1994). Because our review is de novo, we are mindful that “[a] motion for summary
6
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.”
Syl. pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York, 148 W. Va. 160, 133
S.E.2d 770 (1963).
Citynet additionally appeals the circuit court’s order denying its motion for
relief, under Rule 59(e) of the West Virginia Rules of Civil Procedure, from the circuit
court’s partial summary judgment order. This Court previously has held that “[t]he standard
of review applicable to an appeal from a motion to alter or amend a judgment, made pursuant
to W. Va. R. Civ. P. 59(e), is the same standard that would apply to the underlying judgment
upon which the motion is based and from which the appeal to this Court is filed.” Syl. pt.
1, Wickland v. American Travelers Life Ins. Co., 204 W. Va. 430, 513 S.E.2d 657 (1998).
Thus, we review de novo the circuit court’s ruling on this motion. See Syl. pt. 1, Painter v.
Peavy, 192 W. Va. 189, 451 S.E.2d 755.
Having reviewed the proper standards for our review of the instant matter, we
proceed to our discussion.
7
III.
DISCUSSION
Citynet raises three errors. First, Citynet argues that the circuit court erred by
ruling that the Plan required Citynet to pay Mr. Toney’s vested Plan balance. Citynet next
argues that the circuit court erred by applying the WPCA. Finally, Citynet argues that the
circuit court erred by failing to offset its award of Mr. Toney’s vested Plan balance by an
amount he previously had withdrawn from the account. We will address each of these errors
in turn.
A. Payment of Mr. Toney’s Vested Plan Balance
The circuit court interpreted the language of the Plan as requiring Citynet to
pay Mr. Toney the full amount of his vested balance in the Plan upon his voluntary
termination of his employment with Citynet. Citynet essentially challenges the circuit court’s
conclusion on three grounds: (1) the circuit court erred by construing the Plan as if it were
a contract; (2) the circuit court erred by interpreting the language of the Plan as requiring
Citynet to pay Mr. Toney the full amount of his vested balance in the Plan upon his voluntary
termination of his employment with Citynet; and, (3) the circuit court erred by interpreting
the Plan without first allowing Citynet to conduct discovery. We separately will address each
of these issues.
8
1. Whether the circuit court had the authority to construe the Plan as a
contract. Citynet argues that the circuit court should not have substituted its judgment for
the judgment of Citynet, which has complete authority to interpret its own Plan. According
to Citynet, the Plan is not a contract but, instead, should be treated as a discretionary bonus
over which Citynet has sole discretion. In support of its contention that the Plan is not a
contract, Citynet asserts that the Plan was not negotiated with Mr. Toney. According to
Citynet, Mr. Toney was entitled to a bonus only by “conclusively . . . accept[ing] and
consent[ing] to all the terms of [the Plan] and to all actions and decisions of the Company
and/or Board.”3 Citynet further argues that it was completely free to set the terms of the Plan
and had exclusive authority to interpret the Plan.4
3
The language quoted above appears in paragraph 6.14 of the Plan, which states
in relevant part:
6.14 Consent to Plan Terms. By electing to participate
in this Plan, a Participant shall be deemed conclusively to accept
and consent to all the terms of this Plan and to all actions and
decisions of the Company and/or Board. . . .
4
Citynet notes that paragraphs 3.2 and 3.3 of the Plan provide as follows:
3.2 Board to Make Rules and Interpret Plan. The Board in
its sole discretion shall have the authority, subject to the
provisions of the Plan, to make all such determinations
relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Board’s
interpretation of the Plan or any Awards and all decisions
and determinations by the Board with respect to the Plan
shall be final, binding, and conclusive on all parties.
(continued...)
9
Mr. Toney responds that the Plan is certainly a contract, and the circuit court
correctly interpreted its language. Mr. Toney reasons that incentive plans are unilateral
contracts that define the obligations and promises contained therein. We agree.
This Court has long recognized and enforced unilateral contracts:
The concept of unilateral contract, where one party makes a
promissory offer and the other accepts by performing an act
rather than by making a return promise, has . . . been recognized:
“That an acceptance may be effected by silence accompanied by
an act of the offeree which constitutes a performance of that
requested by the offeror is well established.” First National
Bank [of Gallipolis] v. Marietta Manufacturing Co., 151 W. Va.
636, 641-42, 153 S.E.2d 172, 176 (1967).
Cook v. Heck’s Inc., 176 W. Va. 368, 373, 342 S.E.2d 453, 458-59 (1986). It has been
further explained that,
[i]n order for an agreement to be enforceable under contract law,
the parties must manifest their objective intent to be bound.
UXB Sand & Gravel, Inc. v. Rosenfeld Concrete Corp., 641
A.2d 75, 79 (R.I. 1994) (applying R.I. law). Such intent is
manifested through one party’s offer and the other party’s
acceptance of the offer. Smith v. Boyd, 553 A.2d 131, 133 (R.I.
1989). When the offeror seeks acceptance though an act of
performance on the part of the offeree, the offeror proposes a
unilateral contract. Flanders + Medeiros, Inc. v. Bogosian, 868
4
(...continued)
3.3 Appointment of Administrator(s). The Board may
appoint an Administrator of the Plan to administer,
construe, and interpret the Plan. The construction and
interpretation by the Administrator of any provision of
this Plan shall be final and conclusive.
10
F. Supp. 412 (D.R.I. 1994). A unilateral contract consists of a
promise made by one party in exchange for the performance of
another party, and the promisor becomes bound in contract when
the promisee performs the bargained for act. B & D Appraisals
v. Gaudette Machinery Movers, Inc., 733 F. Supp. 505, 508
(D.R.I. 1990).
National Educ. Ass’n-Rhode Island by Scigulinsky v. Retirement Bd. of Rhode Island
Employees’ Ret. Sys., 890 F. Supp. 1143, 1157 (D.R.I. 1995). Accord Verizon West Virginia,
Inc. v. West Virginia Bureau of Emp’t Programs, Workers’ Comp. Div., 214 W. Va. 95, 129,
586 S.E.2d 170, 204 (2003) (Davis, J., dissenting).
This Court’s opinion in Cook v. Heck’s addressed the question of whether an
employee handbook could constitute a unilateral contract creating job security. Thus, Cook
is not directly on point with the instant matter. Nevertheless, the Cook holding is instructive
insofar as it stands for the principle that an employer’s written promise to its employees
constitutes an offer for a unilateral contract that can be accepted by an employee continuing
to work while under no obligation to do so:
A promise of job security contained in an employee
handbook distributed by an employer to its employees
constitutes an offer for a unilateral contract; and an employee’s
continuing to work, while under no obligation to do so,
constitutes an acceptance and sufficient consideration to make
the employer’s promise binding and enforceable.
Syl. pt. 5, Cook, 176 W. Va. 368, 342 S.E.2d 453 (emphasis added). In Cook, this Court
elaborated on the concept of “consideration,” and explained that
11
[c]onsideration is . . . an essential element of a contract.
First National Bank [of Gallipolis] v. Marietta Manufacturing
Co., supra, 151 W. Va. at 642, 153 S.E.2d at 177; North
American Royal Coal Co. v. Mountaineer Developers, Inc., 161
W. Va. 37, 39, 239 S.E.2d 673, 675 (1977).
Consideration has been defined as “some right,
interest, profit, or benefit accruing to one party, or
some forbearance, detriment, loss, or
responsibility given, suffered, or undertaken by
another.” 17 Am. Jur. 2d, Contracts, Section 85.
A benefit to the promisor or a detriment to the
promisee is sufficient consideration for a contract.
17 Am. Jur. 2d, Contracts, Section 96.
First National Bank [of Gallipolis] v. Marietta Manufacturing
Co., supra, 151 W. Va. at 642, 153 S.E.2d at 177.
Cook, 176 W. Va. at 373, 342 S.E.2d at 458-59.
Applying the Cook principles to the plan at issue in this case, Citynet’s Plan
offers to certain eligible employees the opportunity to participate in the Plan, i.e., to be
awarded Performance Units that would be assigned a monetary value.5 To become eligible,
an employee “must first complete one (1) year of full time employment with the Company
[Citynet].” In addition, an eligible employee can redeem only awards that are vested.
Vesting requires additional years of service by an employee. Thus, the Plan constitutes an
offer for a unilateral contract to provide vested Performance Units with a monetary value to
employees who remain employed by Citynet for a specific period of time. An employee who
5
See supra note 1 for an explanation of the valuation of Performance Units.
12
remains so employed by Citynet while under no obligation to do so has accepted Citynet’s
offer and has provided sufficient consideration to make Citynet’s promise binding and
enforceable.
Stated another way, Citynet benefitted by attracting and retaining employees
who desired to participate in the Plan, which is Citynet’s expressed purpose for establishing
the Plan. Indeed, the opening paragraph of the Plan states its purpose “to create incentives
which are designed to motivate Participants . . . to put forth maximum effort toward the
success and growth of the Company and to enable the Company to attract and retain
experienced individuals who by their position, ability and diligence are able to make
important contributions to the company’s success. . . .” (Emphasis added). Likewise, Citynet
employees who remain employed with the company long enough to participate in the Plan
and become vested in the benefits offered, when they are under no obligation to do so, have
provided sufficient consideration for the formation of a unilateral contract.
As one treatise has explained:
The . . . unilateral contract analysis is applicable to the
employer’s promise to pay a bonus . . . to an employee in case
the latter continues to serve for a stated period. It is now
recognized that these are not pure gratuities but compensation
for services rendered. The employer’s promise is not
enforceable when made, but the employee can accept the offer
by continuing to serve as requested, even though the employee
makes no promise. There is no mutuality of obligation, but
13
there is consideration in the form of service rendered. The
employee’s one consideration, rendition of services, supports all
of the employer’s promises, to pay . . . the bonus. Indeed,
although the bonus is not fully earned until the service has
continued for the full time, after a substantial part of the service
has been rendered the offer of the bonus cannot be withdrawn
without a breach of contract.
2 Joseph M. Perillo & Helen Hadjiyannakis Bender, Corbin on Contracts § 6.2, at 214 (rev.
ed.1995) (footnotes omitted). Other courts have similarly found bonus or incentive plans to
be unilateral contracts. See Talent Tree, Inc. v. Madlock, No. 4:07-CV-03735, 2008 WL
4104163, at *7 (S.D. Tex. Sept. 2, 2008) (unreported decision) (finding an incentive plan to
be “an enforceable unilateral contract under Texas law”); Holland v. Earl G. Graves Pub.
Co., 46 F. Supp. 2d 681, 686 (E.D. Mich.), on reconsideration, 33 F. Supp. 2d 581 (E.D.
Mich. 1998) (treating compensation package including a “fiscal year end volume incentive
award” as unilateral contract and commenting that “Michigan courts have applied the theory
of ‘unilateral contracts’ in a number of cases involving job benefits”); Morse v. J. Ray
McDermott & Co., 344 So. 2d 1353, 1357 (La. 1976) (“A majority of American
jurisdictions . . . reject the contention that . . . profit-sharing benefits are merely gratuities
payable at the will of the employer. They instead characterize an
employer-financed . . . profit-sharing plan as a contractual inducement by the employer for
the employee to remain in the employer’s service, the benefits from which are in the nature
of delayed compensation for the employee’s services on behalf of the employer.”); Walker
v. American Optical Corp., 265 Or. 327, 330, 509 P.2d 439, 441 (1973) (commenting that
14
“the bonus plan offered by the employer normally becomes binding as a unilateral contract
when the employee begins performance of the terms of the proposed plan, in the sense that
the plan cannot then be revoked by the employer”); Garner v. Girard Trust Bank, 442 Pa.
166, 169, 275 A.2d 359, 361 (1971) (observing that “[t]he law is clear with regard to
profit-sharing . . . plans. Even when the employee does not contribute to the plan, when he
renders service to an employer who has such a plan in effect, he has a contractual right to
enforce the plan according to its terms”).
Thus, for the reasons stated above, we conclude that the circuit court made no
error in concluding that the Plan is a unilateral contract and by interpreting the same for
purposes of summary judgment in the absence of a factual dispute. See Syl. pt. 1, in part,
Orteza v. Monongalia Cnty. Gen. Hosp., 173 W. Va. 461, 318 S.E.2d 40 (1984) (“It is the
province of the Court . . . to interpret a written contract.” (internal quotations and citation
omitted)); Syl. pt. 1, in part, Stephens v. Bartlett, 118 W. Va. 421, 191 S.E. 550 (1937)
(same). See also Syl. pt. 1, Berkeley Cnty. Pub. Serv. Dist. v. Vitro Corp. of Am., 152 W. Va.
252, 162 S.E.2d 189 (1968) (“The question as to whether a contract is ambiguous is a
question of law to be determined by the court.”).
2. Mr. Toney’s entitlement to benefits under the Plan. Citynet also argues
that the circuit court erred in applying section 5.7(a) of the Plan. Citynet instead reasons that,
15
under section 5.7(b) of the Plan, Mr. Toney was permitted to request only twenty percent of
his vested balance in the Plan and such request had to be made during the “Voluntary
Redemption Period” between May 1st and August 31st.6 Because Mr. Toney’s request was
not made during this time frame and exceeded twenty percent of his vested balance, Citynet
claims his request was null and void. Mr. Toney responds that, under section 5.7(a) of the
Plan, he was entitled to redeem his entire vested balance upon his voluntary termination of
his employment.
This issue is resolved by examining the contract language. Prior to doing so,
we note that “[t]he mere fact that parties do not agree to the construction of a contract does
not render it ambiguous. The question as to whether a contract is ambiguous is a question
of law to be determined by the court.” Syl. pt. 1, Berkeley County Public Service District v.
Vitro Corp. of America, 152 W. Va. 252, 162 S.E.2d 189 (1968). Accord Syl. pt. 3, Energy
Dev. Corp. v. Moss, 214 W. Va. 577, 591 S.E.2d 135 (2003). Moreover, “[w]here the terms
6
Section 5.7(b) of the Plan states in relevant part,
(b) Annual Voluntary Redemptions. The Company has
established an annual Voluntary Redemption period during each
calendar year, defined as the period of May 1st through August
31st, in which the Participants may redeem up to a maximum of
20% of their vested Performance Units during each calendar
year. Voluntary redemption requests that exceed the 20%
maximum or are received by the company outside of the
Voluntary Redemption period shall be considered null and
void. . . .
16
of a contract are clear and unambiguous, they must be applied and not construed.” Syl. pt.
2, Bethlehem Mines Corp. v. Haden, 153 W. Va. 721, 172 S.E.2d 126 (1969). In other
words,
“‘[i]t is not the right or province of a court to alter, pervert or
destroy the clear meaning and intent of the parties as expressed
in unambiguous language in their written contract or to make a
new or different contract for them.’ Syllabus Point 3, Cotiga
Development Co. v. United Fuel Gas Co., 147 W. Va. 484, 128
S.E.2d 626 (1962).” Syllabus point 1, Hatfield v. Health
Management Associates of West Virginia, 223 W. Va. 259, 672
S.E.2d 395 (2008).
Syl. pt. 5, Dan’s Carworld, LLC v. Serian, 223 W. Va. 478, 677 S.E.2d 914 (2009).
The circuit court concluded that Mr. Toney was entitled to payment of his
entire vested balance pursuant to section 5.7(a) of the Plan, which states:
(a) Termination of Employment. In the event
the participant’s employment is terminated
without cause, the Participant shall be eligible to
redeem the vested portion of their [sic]
performance units as of the effective date of the
Participant’s termination. . . .
The foregoing language plainly entitles a Plan participant to redeem the vested portion of his
or her performance units, or vested balance, in the event the participant’s employment is
terminated without cause. It is undisputed that Mr. Toney was vested in 100% of his
performance units. Therefore, he was eligible to redeem the same under section 5.7(a) so
long as his employment was terminated “without cause.”
17
Citynet urges the conclusion that the language “terminated without cause”
means terminated by Citynet without cause. Thus, Citynet contends, because Mr. Toney
voluntarily terminated his own employment and was not terminated by Citynet, he was not
eligible to redeem his performance units under section 5.7(a). Not only is this argument
contrary to the plain language of section 5.7(a), which requires only that employment be
“terminated without cause,” but it also is unsupported by other plainly worded provisions of
the Plan contract.
Termination events are expressly set out in section 5.6 of the Plan. Section 5.6
specifies four separate termination events and describes how a participant’s performance
units will be handled under each type of termination event.7 Notably, subsection 5.6(b)
7
The four termination events set out in section 5.6 of the Plan are: (a)
Termination of Employment for Cause; (b) Voluntary Termination of Employment by
Participant; (c) Termination of Employment without Cause; and (d) Termination of
Employment due to Retirement. Subsections (a) and (d) plainly to not apply to Mr. Toney,
because he was not terminated for cause, and he did not retire. Subsection (c) provides, in
part,
(c) Termination of Employment without Cause. In the event
the Participant’s employment with the company is terminated
under any one of the following conditions: (i) the Company
terminates the Participant’s employment without Cause, or (ii)
the Company terminates the Participant’s employment due to the
death of the participant, or (iii) the Company terminates the
Participant’s employment due to the Disability of the
Participant, then all Performance Units granted to the Participant
which have vested prior to the effective date of such termination
shall be available for redemption. . . .
(continued...)
18
addresses voluntary termination of employment by a participant and, consistent with 5.7(a),
provides that vested performance units shall be available for redemption by a participant, like
Mr. Toney, who voluntarily terminates his own employment:
5.6 Termination Events. In the event a Participant’s
employment with the Company is terminated the Participant’s
Performance units will be handled as follows:
....
(b) Voluntary Termination of Employment by Participant.
In the event that a Participant voluntarily terminates employment
with the Company after the 18 month anniversary of the
Effective Date, all of the outstanding Performance Units granted
to the Participant which have not vested as of the effective date
of such termination shall be cancelled and forfeited without
compensation to the Participant. All Performance Units granted
to the Participant which have vested prior to the effective date
of such termination shall be available for redemption. . . .
(Emphasis added).
Language found in section 5.12 of the Plan further supports the circuit court’s
conclusion that, upon voluntarily terminating his own employment, Mr. Toney was entitled
to redeem his vested performance units. Section 5.12 of the Plan provides an “example of
how the Plan works.” In the example,
John, a Participant of the Plan, voluntarily terminated his
employment with the Company on June 1, 2012. John had a
total of 1,000 Performance Units granted to him by the
7
(...continued)
None of the conditions set out in subsection (c) apply to Mr. Toney.
19
Company as of the effective date of his termination. John has
been employed by the Company for 5 years and has not
redeemed any of his Performance Units.
(a) Units available for redemption.
John’s Performance Units are vested at 100% since he
has over 4 years of continuous employment with the
Company since becoming a Participant. Therefore, all
1,000 of John’s Performance Units are available for
redemption.
After demonstrating how the value of “John’s” performance units would be established, the
example explains, “[g]iven that John had 1,000 vested Performance Units, the value of his
redemption is equal to $96.00 x 1,000 = $96,000. John would be due a total amount of
$96,000 (less applicable withholding) from the Company payable under the Payout
provisions of the Plan.” (Emphasis added).
Under the plain language of the Plan, including the example provided therein,
it is clear that, upon Mr. Toney’s voluntary termination of his employment, he was entitled
to redeem the entirety of his vested performance units. Because Mr. Toney was clearly
entitled to redeem his vested performance units under section 5.7(a) of the Plan, Citynet’s
argument that Mr. Toney’s request had to comply with section 5.7(b) is simply unavailing.
Our conclusion finds further support in a letter dated January 22, 2008, from Citynet
President and CEO Jim Martin to Mr. Toney. The letter announced the Plan and included
a “summary of the important details of how the plan works.” Included in the letter is the
statement that “[w]hen an employee leaves Citynet, the employee is then entitled to ‘cash
20
out’ his or her entire vested balance subject to certain provisions contained in the plan
document with respect to termination for cause.”8 Accordingly, we find no error in the
circuit court’s conclusion that Mr. Toney was entitled to redeem the entire vested balance of
his performance units, or with the court’s order granting him partial summary judgment
based upon this conclusion.
3. Lack of discovery. Citynet additionally argues that the circuit court
8
We do not use this letter to interpret the language of the Plan, which we have
found to be clear and unambiguous.
When a written contract is clear and unambiguous its
meaning and legal effect must be determined solely from its
contents and it will be given full force and effect according to its
plain terms and provisions. Extrinsic evidence of the parties to
such contract, or of other persons, as to its meaning and effect
will not be considered.
Syl. pt. 3, Kanawha Banking & Trust Co. v. Gilbert, 131 W. Va. 88, 46 S.E.2d 225 (1947).
Instead, we quote from the letter merely to demonstrate that, contrary to its court arguments,
Citynet has recognized that, under the plain language of the Plan, Mr. Toney and other plan
participants who voluntarily terminate their employment are entitled to redeem the vested
balance of their performance units. Citynet has asserted that it was improper for the circuit
court to review this letter in ruling on Mr. Toney’s motion for partial summary judgment.
We disagree. The letter constitutes an admission that was properly considered by the trial
court. “Rule 56(c) [of the West Virginia Rules of Civil Procedure] expressly authorizes a
trial court to consider . . . admissions . . . .” Franklin D. Cleckley, Robin J. Davis, & Louis
J. Palmer, Jr., Litigation Handbook on West Virginia Rules of Civil Procedure, § 56(c)[d],
at 1224 (4th ed. 2012). In this regard, Rule 56(c) states, in relevant part, “[t]he judgment
sought shall be rendered forthwith if the . . . admissions on file, . . . if any, show that there
is no genuine issue as to any material fact and that the moving party is entitled to a judgment
as a matter of law.” See also W. Va. R. E. 801(d)(2) (providing that an opposing party’s
statement is not heresay).
21
impermissibly entered summary judgment against it before any discovery was conducted.
Citynet submits that, in granting partial summary judgment to Mr. Toney, the circuit court
considered the Plan without the benefit of deposition testimony by Citynet’s Board regarding
their interpretation of the Plan. Similarly, contends Citynet, its Board was not deposed
regarding the significance of additional documents considered by the circuit court in granting
partial summary judgment to Mr. Toney. Citynet’s arguments fail on two grounds.
First, as noted above, the language of the Plan is plain and unambiguous. See
Syl. pt. 3, Kanawha Banking and Trust Co. v. Gilbert, 131 W. Va. 88, 46 S.E.2d 225 (1947)
(“When a written contract is clear and unambiguous its meaning and legal effect must be
determined solely from its contents and it will be given full force and effect according to its
plain terms and provisions. Extrinsic evidence of the parties to such contract, or of other
persons, as to its meaning and effect will not be considered.”). Because the Plan contract
language is plain and unambiguous, the circuit court was bound to apply, not construe, its
terms. Therefore, it would have been improper for the circuit court to consider extrinsic
evidence presented by Citynet for the purposes of interpreting the Plan.9
9
The circuit court stated in its order granting partial summary judgment to Mr.
Toney:
5. The plain and unambiguous language of subsection
5.7(a) of the Incentive Plan states that it applies to
employment terminations without cause, and the
provision contains no language whatsoever stating that
(continued...)
22
A second and more significant reason for rejecting Citynet’s argument that the
circuit court should have allowed it to conduct discovery before granting partial summary
judgment to Mr. Toney is that Citynet failed to request discovery. Citynet correctly notes that
[s]ummary judgment is appropriate only after the
non-moving party has enjoyed “adequate time for discovery.”
Celotex Corp.[ v. Catrett], 477 U.S. [317,] 322, 106 S. Ct.
[2548,] 2552[, 91 L. Ed. 2d 265 (1986)]; Anderson[ v. Liberty
Lobby, Inc.], 477 U.S. [242,] 250 n.5, 106 S. Ct. [2505,] 2511
n.5[, 91 L. Ed. 2d 202 (1986)]. As this Court has recognized,
summary judgment prior to the completion of discovery is
“precipitous.” Williams[ v. Precision Coil, Inc.], 194 W. Va.
[52,] 61, 459 S.E.2d [329,] 338 [(1995)], quoting Board of
Educ. of the County of Ohio v. Van Buren and Firestone, Arch.,
Inc., 165 W. Va. 140, 144, 267 S.E.2d 440, 443 (1980).
Payne’s Hardware & Bldg. Supply, Inc. v. Apple Valley Trading Co. of W. Va., 200 W. Va.
685, 690, 490 S.E.2d 772, 777 (1997). However, Citynet has failed to recognize that,
[w]here a party is unable to resist a motion for summary
judgment because of an inadequate opportunity to conduct
discovery, that party should file an affidavit pursuant to
W. Va. R. Civ. P. 56(f) and obtain a ruling thereon by the trial
court. Such affidavit and ruling thereon, or other evidence that
the question of a premature summary judgment motion was
presented to and decided by the trial court, must be included in
9
(...continued)
its application is limited to terminations by the employer
only.
6. The plain and unambiguous language of subsection
5.7(a) of the Incentive Plan applies equally to
terminations without cause by the employee and the
employer, and neither the parties nor this Court can now
interject additional restrictive language into subsection
5.7(a).
23
the appellate record to preserve the error for review by this
Court.
Crain v. Lightner, 178 W. Va. 765, 364 S.E.2d 778 (1987) (emphasis added). Accord Syl.
pt. 3, Payne’s Hardware, 200 W. Va. 685, 490 S.E.2d 772. Moreover, this court has
explained that,
[i]n Williams, we stated that “subject to the conditions of Rule
56(g), we believe a continuance of a summary judgment motion
is mandatory upon a good faith showing by an affidavit that the
continuance is needed to obtain facts essential to justify
opposition to the motion.” 194 W. Va. at 61-62, 459 S.E.2d at
338-39, footnote added. In syllabus point three of Williams, we
stated as follows:
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.
Where a party fails to avail himself of the relief granted
through Rule 56(f), “it is generally not an abuse of discretion for
a circuit court to rule on a motion for summary judgment.” Id.
at 62, 459 S.E.2d at 339. See Nguyen v. CNA Corp., 44 F.3d
234, 241-42 (4th Cir.1995), quoting Paddington Partners v.
Bouchard, 34 F.3d 1132, 1137 (2nd Cir.1994) (“failure to file an
affidavit under Rule 56(f) is itself sufficient grounds to reject a
claim that the opportunity for discovery was inadequate”). In
Evans v. Technologies Applications & Service Co., 80 F.3d 954
(4th Cir.1996), the Fourth Circuit held that “the nonmoving
24
party cannot complain that summary judgment was granted
without discovery unless that party made an attempt to oppose
the motion on the grounds that more time was needed for
discovery or moved for a continuance to permit discovery before
the [trial] court ruled.” Id. at 961. As we have often explained,
“[t]he law ministers to the vigilant, not those who slumber on
their rights.” Powderidge [Unit Owners Ass’n v. Highland
Properties, Ltd.], 196 W. Va. [692,] 703, 474 S.E.2d [872,] 883
[(1996)], quoting Banker v. Banker, 196 W. Va. 535, 547, 474
S.E.2d 465, 477 (1996), citing Puleio v. Vose, 830 F.2d 1197,
1203 (1st Cir.1987).
Payne’s Hardware, 200 W. Va. at 690-91, 490 S.E.2d at 777-78 (footnote omitted). Because
Citynet failed to request discovery and submit an affidavit explaining the need for further
discovery, the circuit court committed no error in granting partial summary judgment to Mr.
Toney without discovery.
C. Timely Payment Provision of the
Wage Payment and Collection Act
Under section 5.7(a) of the Plan, which we have found to be applicable to Mr.
Toney, “[a]ny amounts due will be paid in accordance with the Payout Schedule of the Plan.”
The “Payout Schedule” is found in paragraph 5.8, which provides:
Payout Schedule. For all valid redemption requests, as
defined in the Plan, the Company shall use commercially
reasonable efforts to pay any amounts due, less normal
withholdings, to the Participant within ninety (90) days of such
redemption request. If the Company fails to pay the amounts
due to a Participant within the ninety (90) day period, the
remaining balance shall be converted to an unsecured debt of the
Company, the Company shall record the Participant as a lender
to the Company, and the Company shall accrue interest at a rate
25
of five percent (5%) per annum. Provided, however, in the
event of a redemption request when the Company Equity Value
is negative, the Company shall have ninety (90) days after the
Company Equity Value is positive to pay any amounts due.
Citynet failed to pay any amount to Mr. Toney in response to the request he made in
connection with his voluntary termination of his employment.
The circuit court applied the WPCA and ruled that, due to Citynet’s failure to
pay Mr. Toney in compliance with W. Va. Code § 21-5-4(c), Citynet was liable to Mr. Toney
for three times the amount of his vested performance units as liquidated damages and that
Citynet also was liable for reasonable attorney’s fees and costs. See W. Va. Code § 21-5-4(e)
(2006) (Repl. Vol. 2008)10 & W. Va. Code § 21-5-12(b) (1975) (Repl. Vol. 2013).11
10
Pursuant to W. Va. Code § 21-5-4(e) (2006) (Repl. Vol. 2008),
[i]f a person, firm or corporation fails to pay an employee
wages as required under this section, the person, firm or
corporation, in addition to the amount which was unpaid when
due, is liable to the employee for three times that unpaid amount
as liquidated damages. Every employee shall have a lien and all
other rights and remedies for the protection and enforcement of
his or her salary or wages, as he or she would have been entitled
to had he or she rendered service therefor in the manner as last
employed; except that, for the purpose of liquidated damages,
the failure shall not be deemed to continue after the date of the
filing of a petition in bankruptcy with respect to the employer if
he or she is adjudicated bankrupt upon the petition.
(Emphasis added).
11
W. Va. Code § 21-5-12(b) (1975) (Repl. Vol. 2013) provides that
(continued...)
26
Citynet argues that the timely payment provisions of the WPCA cannot be
applied to payments under the Plan; therefore, the circuit court erred by concluding that Mr.
Toney was entitled to treble damages and attorney’s fees. Reasoning that Mr. Toney had no
right to a payment under the Plan that “accrued” immediately upon his quitting, Citynet
contends that it is entitled to specify the terms upon which it would pay Mr. Toney’s bonus,
such as within ninety days after he made a valid request if the Board chose to do so. Quoting
from Meadows v. Wal-Mart Stores, Inc., 207 W. Va. 203, 215-17, 530 S.E.2d 676, 688-90
(1999), Citynet observes that “when fringe benefits are part of a compensation package, they
are governed by the terms of employment,” not the WPCA.
Mr. Toney responds that the timely payment provisions of the WPCA should
be applied to payments under the Plan, and he is, therefore, entitled to treble damages and
attorney’s fees. Mr. Toney notes that it is undisputed that his performance units were 100%
vested. He asserts that, because the WPCA protects, as “wages,” fringe benefits that have
accumulated, vested, and are capable of calculation, and because his benefits meet these
qualifications, Citynet was obligated to pay the same upon the termination of his
employment. Therefore, Mr. Toney argues, Citynet’s failure to pay his vested benefits
11
(...continued)
[t]he court in any action brought under this article may,
in the event that any judgment is awarded to the plaintiff or
plaintiffs, assess costs of the action, including reasonable
attorney fees against the defendant.
27
entitled him to liquidated damages under the WPCA.
We begin our analysis by examining the WPCA. Thus, we note at the outset
that “[t]he primary object in construing a statute is to ascertain and give effect to the intent
of the Legislature.” Syl. pt. 1, Smith v. State Workmen’s Comp. Comm’r, 159 W. Va. 108,
219 S.E.2d 361 (1975). However, it is not always within this Court’s province to construe
a statute: “[w]hen a statute is clear and unambiguous and the legislative intent is plain, the
statute should not be interpreted by the courts, and in such case it is the duty of the courts not
to construe but to apply the statute.” Syl. pt. 5, State v. General Daniel Morgan Post No.
548, Veterans of Foreign Wars, 144 W. Va. 137, 107 S.E.2d 353 (1959). “A statute is open
to construction only where the language used requires interpretation because of ambiguity
which renders it susceptible of two or more constructions or of such doubtful or obscure
meaning that reasonable minds might be uncertain or disagree as to its meaning.” Hereford
v. Meek, 132 W. Va. 373, 386, 52 S.E.2d 740, 747 (1949). Clearly, “[a] statute that is
ambiguous must be construed before it can be applied.” Syl. pt. 1, Farley v. Buckalew, 186
W. Va. 693, 414 S.E.2d 454 (1992).
Having set out some basic standards for our analysis of the WPCA, we turn our
attention to the Act itself. The legislative purpose for the WPCA is well established:
“‘The West Virginia Wage Payment and Collection Act
is remedial legislation designed to protect working people and
28
assist them in the collection of compensation wrongly withheld.’
Syllabus, Mullins v. Venable, 171 W. Va. 92, 297 S.E.2d 866
(1982).” Syl. Pt. 3, Jones v. Tri-County Growers, Inc., 179
W. Va. 218, 366 S.E.2d 726 (1988).
Syl. pt. 7, Grim v. Eastern Elec., LLC, No. 13-1133, ___ W. Va. ___, ___ S.E.2d ___, 2014
WL 5800677 (Nov. 3, 2014). Because it is remedial legislation, the WPCA must be
construed liberally in order to accomplish the purposes for which it was intended. See State
ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W. Va. 770, 777, 461 S.E.2d 516,
523 (1995) (“Where an act is clearly remedial in nature, we must construe the statute liberally
so as to furnish and accomplish all the purposes intended.” (citations omitted)). Accord
Adkins v. American Mine Research, Inc., ___ W. Va. ___, ___, 765 S.E.2d 217, 220 (2014);
Meadows v. Wal-Mart Stores, Inc., 207 W. Va. at 215, 530 S.E.2d at 688.
To determine whether the circuit court correctly applied the WPCA under the
circumstances presented in this case, we first note that the WPCA provides a time frame for
payment of wages to an employee who quits or resigns:
Whenever an employee quits or resigns, the person, firm
or corporation shall pay the employee’s wages no later than the
next regular payday, either through the regular pay channels or
by mail if requested by the employee, except that if the
employee gives at least one pay period’s notice of intention to
quit the person, firm or corporation shall pay all wages earned
by the employee at the time of quitting.
29
W. Va. Code § 21-5-4(c) (2006) (Repl. Vol. 2008).12 The foregoing language is
straightforward in setting the time frame for an employer13 to pay wages to an employee who
quits or resigns. Plainly, where an employee like Mr. Toney resigns without a lengthy notice,
wages must be paid “no later than the next regular payday.” W. Va. Code § 21-5-4(c). The
question, then, is whether Mr. Toney’s vested performance units are “wages” subject to
W. Va. Code § 21-5-4(c).
Notably, the WPCA includes certain fringe benefits within the meaning of the
term “wages”:
the term “wages” shall. . . include then accrued fringe benefits
capable of calculation and payable directly to an employee:
Provided, That nothing herein contained shall require fringe
benefits to be calculated contrary to any agreement between an
employer and his employees which does not contradict the
12
This quote is from the 2006 version of the statute, which is the version that
applies to this case. W. Va. Code § 21-5-4(c) was amended in 2013. The amendments
appear to clarify the statutory language and make no substantive change:
Whenever an employee quits or resigns, the person, firm
or corporation shall pay the employee’s wages in full no later
than the next regular payday. Payment shall be made through the
regular pay channels or, if requested by the employee, by mail.
However, if the employee gives at least one pay period’s written
notice of intention to quit, the person, firm or corporation shall
pay all wages earned by the employee at the time of quitting.
W. Va. Code § 21-5-4(c) (2013) (Repl. Vol. 2013).
13
Pursuant to W. Va. Code § 21-5-1(m) (1987) (Repl. Vol. 2013), “[t]he term
‘employer’ means any person, firm or corporation employing any employee.”
30
provisions of this article.
W. Va. Code § 21-5-1(c) (emphasis added). The term “fringe benefit” is defined in the
WPCA to mean
any benefit provided an employee or group of employees by an
employer, or which is required by law, and includes regular
vacation, graduated vacation, floating vacation, holidays, sick
leave, personal leave, production incentive bonuses, sickness
and accident benefits and benefits relating to medical and
pension coverage.
W. Va. Code § 21-5-1(l) (emphasis added).
Based upon these statutory definitions, we find that Mr. Toney’s vested
performance units granted under the Plan are a type of “wages” contemplated by the WPCA.
The vested performance units clearly are a benefit provided to Mr. Toney and other Citynet
employees by Citynet, and, therefore, they fall within the statutory definition of a “fringe
benefit” set out in W. Va. Code § 21-5-1(l). Moreover, W. Va. Code § 21-5-1(l) presents a
nonexclusive list of examples of the types of benefits that are contemplated by the
Legislature to be “fringe benefits.” In this regard, the statute provides that the term “‘fringe
benefits’ . . . includes . . . production incentive bonuses.” The Legislature’s use of the word
“includes” to introduce the list of fringe benefits in W. Va. Code § 21-5-1(l) reveals that the
list is not intended to be an exclusive list. This Court has recognized that
[i]t is obvious that the Legislature . . . meant for the word
“includes” to be given its common, ordinary and accepted
meaning, which is that of a word of enlargement. Davis
31
Memorial Hospital[ v. West Virginia State Tax Comm’r], 222
W. Va. [667,] 684, 671 S.E.2d [682,] 689 [(2008)] (“[t]he term
‘includ[es]’ in a statute is to be dealt with as a word of
enlargement”).
Shepherdstown Observer, Inc. v. Maghan, 226 W. Va. 353, 359, 700 S.E.2d 805, 811 (2010).
Thus, to the extent that the Plan is similar to a “production incentive bonus[],” it is among
those types of fringe benefits contemplated by the Legislature in W. Va. Code § 21-5-1(l).
We find the Plan is, indeed, similar to a production incentive bonus. The Plan certainly is
an incentive bonus. The title of the Plan is “Employee Incentive Plan.” The expressly stated
purpose of the Plan, delineated in paragraph 1.1, is “to create incentives which are designed
to motivate Participants . . . to put forth maximum effort toward the success and growth of
the Company and to enable the Company to attract and retain experienced individuals who
by their position, ability and diligence are able to make important contributions to the
company’s success.” This language demonstrates that the Plan is similar to a production
incentive bonus insofar as it is plainly intended to motivate employees to work toward the
growth and success of the company, and to remain employed by Citynet. Thus, the Plan is
a “fringe benefit” as defined in W. Va. Code § 21-5-1(l).
We next must determine whether the Plan’s performance units are a fringe
benefit that qualify as a “wage” under W. Va. Code § 21-5-1(c). This Court previously has
discussed at length the language of W. Va. Code § 21-5-1(c) as it relates to fringe benefits.
The definitive case on this issue is Meadows v. Wal-Mart Stores, Inc., 207 W. Va. 203, 530
32
S.E.2d 676. The Meadows opinion addressed five consolidated cases involving employees
who were seeking to collect payment for unused sick leave or vacation pay upon separation
from their employment. The issue addressed in Meadows was “whether the [WPCA]
requires employers to pay employees unused sick leave or vacation pay in the same manner
as wages, regardless of the terms of the applicable employment policy, upon separation from
employment.” In deciding this issue, the Meadows Court first observed an ambiguity in the
concept of “then accrued fringe benefits” as used in W. Va. Code § 21-5-1(c). Meadows, 207
W. Va. at 214, 530 S.E.2d at 687. After observing that, “[a]ccording to W. Va. Code
§ 21–5–1(c), only fringe benefits which are ‘then accrued,’ ‘capable of calculation,’ and
‘payable directly to an employee’ are included in the term ‘wages,’” the Meadows Court
concluded that “the proper definition of the word ‘accrued’ in W. Va. Code § 21–5–1(c) is
‘vested.’” Meadows, 207 W. Va. at 215, 530 S.E.2d at 688. The Court then explained that
[t]he concept of vesting is concerned with expressly
enumerated conditions or requirements all of which must be
fulfilled or satisfied before a benefit becomes a presently
enforceable right. Because the WPCA contains no such
conditions or requirements, the payment of fringe benefits can
only be governed by the terms of employment found in
employment policies promulgated by employers and agreed to
by employees.
Meadows, 207 W. Va. at 215-16, 530 S.E.2d at 688-89. Based upon this analysis, the
Meadows Court held that,
[p]ursuant to W. Va. Code § 21-5-1(c) (1987), whether
fringe benefits have then accrued, are capable of calculation and
payable directly to an employee so as to be included in the term
33
“wages” are determined by the terms of employment and not by
the provisions of W. Va. Code § 21-5-1(c). Further, the terms
of employment may condition the vesting of a fringe benefit
right on eligibility requirements in addition to the performance
of services, and these terms may provide that unused fringe
benefits will not be paid to employees upon separation from
employment.
Meadows, 207 W. Va. at 206, 530 S.E.2d at 679.14
Relying on the language in Meadows that recognizes an employer may
condition the vesting of a fringe benefit right on some eligibility requirement in addition to
the performance of services and may provide that unused fringe benefits will not be paid to
employees upon separation from employment, Citynet contends that “in order to prevail on
his claim of immediate entitlement to the value of his Performance Units, Mr. Toney would
have to show entitlement to that amount under the express terms of the Plan.” Citing Wolfe
v. Adkins, 229 W. Va. 31, 38, 725 S.E.2d 200, 207 (2011) (“[T]here must be an ‘express
14
A similar issue was recently addressed in Adkins v. American Mine Research,
Inc., ___ W. Va. ___, 765 S.E.2d 217 (2014). The Adkins Court addressed whether an
unwritten policy on the payment of commissions that was based upon custom and practice
could be used to determine whether a fringe benefit was a “wage” pursuant to W. Va. Code
§ 21–5–1(c). Based, in part, on this Court’s holding in Meadows, the Adkins Court held that
[t]he determination as to whether “wages,” as defined in
West Virginia Code § 21–5–1(c) (2013 Repl. Vol.), are payable
pursuant to the requirements of West Virginia Code § 21–5–1 et
seq. (2013 Repl. Vol.) is governed by the terms of the
employment agreement, whether written or in the form of a
consistently applied unwritten policy.
Syl. pt. 5, Adkins, ___ W. Va. ___, 765 S.E.2d 217.
34
agreement’ between employer and employee that the employee is entitled to payment of a
fringe benefit upon separation from employment.”).
Citynet fails to appreciate that the ability of an employer to “condition the
vesting of a fringe benefit right on eligibility requirements,” or to decline to pay unused
fringe benefits “to employees upon separation from employment,” does not allow an
employer to fail to pay vested fringe benefits to an employee upon separation from
employment. In this regard, the Meadows Court observed that “W. Va. Code § 21-5-1(c)
simply means that if under the terms of employment an employee is entitled to the payment
of fringe benefits, the payment of these benefits has the same status as unpaid wages.”
Meadows, 207 W. Va. at 216, 530 S.E.2d at 689 (emphasis added; footnote omitted). Cf.
Robertson v. Opequon Motors, Inc., 205 W. Va. 560, 568, 519 S.E.2d 843, 851 (1999) (per
curiam) (“The Act does not demand that an employer offer vacation pay. However, if an
employer offers paid vacation, the Act requires an employer to pay it when an employee has
earned it under the terms of the employment agreement.” (Emphasis added)).
As explained above in Section III.A.2. of this opinion, upon voluntarily
terminating his employment, Mr. Toney became entitled to redeem the entirety of his vested
performance units under section 5.7(a) of the Plan. In other words, under the terms of the
Plan, Mr. Toney’s vested performance units were accrued, capable of calculation, and
35
payable directly to him. Accordingly, Mr. Toney’s vested performance units are “wages”
pursuant to W. Va. Code § 21-5-1(c).
Citynet argues, however, that the payout provision of the Plan, which allows
Citynet ninety days in which to comply with a Plan participant’s valid redemption request
made under section 5.7(a),15 removes the Plan from the WPCA because, under the terms of
the Plan, payment of the vested performance units is not due at the time of separation.
Citynet misunderstands the proper application of the WPCA. While an employee’s
entitlement to wages is determined by the terms of employment, the timeliness of the payment
of such wages upon an employee’s separation from employment is firmly within the purview
of the WPCA.
15
The Plans’ payout schedule states:
5.8 Payout Schedule. For all valid redemption requests, as
defined in the Plan, the Company shall use commercially
reasonable efforts to pay any amounts due, less normal
withholdings, to the Participant within ninety (90) days of such
redemption request. If the Company fails to pay the amounts
due to a Participant within the ninety (90) day period, the
remaining balance shall be converted to an unsecured debt of the
Company, the Company shall record the Participant as a lender
to the Company, and the Company shall accrue interest at a rate
of five percent (5%) per annum. Provided, however, in the
event of a redemption request when the Company Equity Value
is negative, the Company shall have (90) days after the
Company Equity Value is positive to pay any amounts due.
36
With respect to the voluntary separation of an employee from his or her
employment, the version of the WCPA in effect at the time relevant to Mr. Toney16 provides:
(c) Whenever an employee quits or resigns, the person,
firm or corporation shall pay the employee’s wages no later than
the next regular payday, either through the regular pay channels
or by mail if requested by the employee, except that if the
employee gives at least one pay period’s notice of intention to
quit the person, firm or corporation shall pay all wages earned
by the employee at the time of quitting.
W. Va. Code § 21-5-4(c) (emphasis added). The Legislature’s use of the term “shall”
demonstrates that this provision is mandatory.
“‘It is well established that the word “shall,” in the
absence of language in the statute showing a contrary intent on
the part of the Legislature, should be afforded a mandatory
connotation.’ Syllabus Point 1, Nelson v. West Virginia Public
Employees Insurance Board, 171 W. Va. 445, 300 S.E.2d 86
(1982).” Syllabus point 1, E.H. v. Matin, 201 W. Va. 463, 498
S.E.2d 35 (1997).
Syl. pt. 7, J.A. St. & Assocs., Inc. v. Thundering Herd Dev., LLC, 228 W. Va. 695, 724 S.E.2d
299 (2011). Accordingly, when Mr. Toney resigned from his employment without giving
one pay period’s notice, W. Va. Code § 21-5-4(c) placed upon Citynet a mandatory duty to
pay Mr. Toney’s vested performance units “no later than the next regular payday.”
Citynet’s attempt to circumvent the WPCA by implementing its payout
schedule of ninety days is of no avail. The WPCA expressly directs that,
16
See supra note 12.
37
[e]xcept as provided in section thirteen [§ 21-5-13], no
provision of this article may in any way be contravened or set
aside by private agreement, and the acceptance by an employee
of a partial payment of wages shall not constitute a release as to
the balance of his claim and any release required as a condition
of such payment shall be null and void.
W. Va. Code § 21-5-10 (1975) (Repl. Vol. 2013) (emphasis added).17 Thus, to the extent that
the payout provision of the Plan contravenes the WPCA as it applies to employees who are
separating from their employment, the WPCA governs. This Court previously has refused
to enforce an agreement between an employer and an employee to pay wages outside the time
frame set forth in the WPCA.
In the case of Britner v. Medical Security Card, Inc., 200 W. Va. 352, 489
S.E.2d 734 (1997) (per curiam), three employees were hired by the defendant employer in
1990 under a contract that entitled them to an annual fifteen percent raise. The company
never paid the employees their raises. In 1995, the employees voluntarily ended their
employment and sued the employer to recover their unpaid annual raises. The employer
argued that the employment contracts had been modified by the employees’ agreement to
defer the raises until the company was profitable. Accordingly, the employer argued that the
employees’ suit was barred by the doctrine of estoppel. The circuit court rejected the
employer’s argument and granted summary judgment to the employees. The employer
17
W. Va. Code § 21-5-13 (1975) (Repl. Vol. 2013) authorizes the commissioner
to make rules and regulations.
38
appealed. This Court affirmed the circuit court’s ruling based upon W. Va. Code § 21-5-10.
After concluding that the unpaid raises were “wages,” this Court reasoned that
estoppel is not a defense which can be successfully asserted to
bar an action pursuant to W. Va. Code § 21-5-10 (1996).
....
The legislature has attempted to prevent employers from
abusing their positions by compromising the wages of
employees. The language in W. Va. Code § 21–5–10 is
mandatory. An employer must pay earned wages to its
employees. Any other reading would seriously compromise and
undermine the legislative intent of W. Va. Code § 21–5–10.
Therefore, we affirm the circuit court’s summary judgment
ruling.
Britner, 200 W. Va. at 354-55, 489 S.E.2d at 736-37. By finding that the doctrine of estoppel
could not be utilized to bar the plaintiffs’ action under the WPCA, this Court necessarily
found that an employment agreement may not adopt a payment schedule for earned wages
that violates the WPCA.
The United States Court of Appeals for the Fourth Circuit also has interpreted
the West Virginia WPCA and concluded that “the WPCA regulates the timing of payment
of wages.” Gregory v. Forest River, Inc., 369 F. App’x 464, 469 (4th Cir. 2010)
(unpublished decision). The Gregory opinion involved the timeliness of an employer’s
payment of earned commissions to an employee whose employment had been terminated by
the employer. According to the Gregory Court, the employer terminated Mr. Gregory’s
39
employment on July 13, 2007, and issued his commission payments in accordance with its
policy, which did not fully comply with the timing of the WPCA. Under its policy, FRI, the
employer,
paid Gregory his June commission as scheduled on July 20,
2007. Thereafter, FRI paid Gregory commissions for the
months of July-November (“the post-discharge commissions”)
on the dates scheduled . . .; thus, FRI paid Gregory commissions
on August 17 (July commission), September 21 (August
commission), October 19 (September commission), November
16 (October commission), and December 21 (November
commission).
Gregory, 369 F. App’x at 466-67. The Fourth Circuit found that some of these payments
violated the WPCA’s requirement that a discharged employee be paid “wages in full within
seventy-two hours.” W. Va. Code § 21-5-4(b) (2006) (Repl. Vol. 2008).18 Specifically, the
Gregory Court held that, notwithstanding FRI’s policy to the contrary,
FRI violated the WPCA by failing to pay Gregory his June
commissions (which were earned on units that shipped during
June) within 72 hours of his termination. Further, we hold that
FRI violated the WPCA by failing to pay Gregory his full July
commissions for units that shipped (and were thus earned) by
July 13, 2007, within 72 hours.
18
W. Va. Code § 21-5-4(b) was amended in 2013 and now provides that an
employer who discharges an employee “shall pay the employee’s wages in full no later than
the next regular payday or four business days, whichever comes first.” W. Va. Code § 21-5­
4(b) (2013) (Repl. Vol. 2013).
Although this particular provision of the WPCA is not applicable to Mr. Toney
insofar as he was not discharged by Citynet, the Fourth Circuit’s rationale regarding the
applicability of the time requirements of the WPCA are equally persuasive to our analysis
of the time requirements of W. Va. Code § 21-5-4(c).
40
Gregory, 369 F. App’x at 469. In reaching this conclusion, the Fourth Circuit explained that
[w]e do not agree with FRI that its commission payment
schedule (as reflected in [its policy]) relates to when
commissions are earned; rather, it simply establishes when they
are to be paid. Because the WPCA mandates payments of
earned wages within 72 hours of discharge, FRI’s reliance on
the payment schedule, and its consequential payment of the June
commissions and the early July commissions more than 72 hours
after termination, runs afoul of the WPCA.
Gregory, 369 F. App’x at 469-70.
The same reasoning applies to the instant case. The ninety-day time frame
established in the payout schedule of Citynet’s Plan pertains to when performance units are
paid, not when they are earned. Because the ninety-day time frame for payment set out in
the Plan exceeds that which is allowed by W. Va. Code § 21-5-4(c), it may not be enforced.
Citynet further asserts that the circuit court’s order applied the ninety-day
payout provision of the Plan and assessed liquidated damages under the WPCA because
Citynet failed to pay Mr. Toney’s vested performance units within ninety days of his request.
We do not interpret the circuit court’s order in this manner. The circuit court’s order plainly
states that “Citynet failed to pay Mr. Toney his wages as required by the WV-WPCA and
Citynet is therefore liable to Mr. Toney for liquidated damages as defined by Section 21-5­
41
4(e) of the WV-WPCA.”19 However, in reviewing the circuit court’s order, we do find that
it ordered that “Citynet shall be liable to Mr. Toney for statutory interest on the wages
beginning ninety (90) days after his written redemption request on October 12, 2011.” Based
upon our finding that the ninety-day payout provision of the Plan is unenforceable, we
conclude that the circuit court erred in ordering statutory interest to begin at the expiration
of that ninety-day period. Under W. Va. Code § 21-5-4(c), Citynet was mandated to pay Mr.
Toney’s vested performance units no later than the next regular payday following his
resignation. Therefore, statutory interest shall begin on that date, and the circuit court erred
in ruling otherwise.
To summarize our conclusions, because the payment of Mr. Toney’s fringe
benefit, that is, his vested performance units, has the same status as unpaid wages under the
WPCA, payment of the same was required to comply with the terms of the WPCA. In other
19
Even were we to agree with Citynet’s interpretation of the circuit court’s
order, we would, nevertheless, affirm the circuit court’s ruling that Citynet violated the
WPCA. We simply would do so on grounds different from those relied upon by the circuit
court. See Syl. pt. 3, Barnett v. Wolfolk, 149 W. Va. 246, 140 S.E.2d 466 (1965) (“This
Court may, on appeal, affirm the judgment of the lower court when it appears that such
judgment is correct on any legal ground disclosed by the record, regardless of the ground,
reason or theory assigned by the lower court as the basis for its judgment.”). See also State
v. Lockhart, 208 W. Va. 622, 636 n.15, 542 S.E.2d 443, 457 n.15 (2000) (“The fact that the
circuit court may have rejected Dr. Coffey’s testimony for reasons different than those
expressed in this opinion is of no consequence.”); State v. Boggess, 204 W. Va. 267, 276,
512 S.E.2d 189, 198 (1998) (“Consequently, it is apparent that the trial court made the right
ruling for the wrong reason . . . . Hence, even though, contrary to the trial court’s
reasoning, . . . the evidence still was properly excluded.”).
42
words, following Mr. Toney’s resignation, Citynet was required to pay Mr. Toney his vested
performance units “no later than the next regular payday” pursuant to W. Va. Code
§ 21-5-4(c). By failing to pay Mr. Toney his vested performance units in accordance with
W. Va. Code § 21-5-4(c), Citynet violated the WPCA. Therefore, we affirm the circuit
court’s ruling that Citynet violated the WPCA, its award of treble damages pursuant to
W. Va. Code § 21-5-4(e),20 and its award of attorney’s fees and costs under W. Va. Code
§ 21-5-12(b) (1975) (Repl. Vol. 2013).21 However, we reverse the circuit court’s award of
statutory interest beginning ninety days after Mr. Toney’s written redemption request.
Instead, interest shall accrue from the date of the next regular payday following Mr. Toney’s
resignation on October 12, 2011.
D. Amount of Mr. Toney’s Vested Benefits
Following the circuit court’s order granting summary judgment to Mr. Toney,
Citynet filed a motion seeking, inter alia, to have the circuit court’s award of $87,000.48 to
Mr. Toney reduced by $17,400.10, the amount Mr. Toney admittedly had received from his
vested balance of $87,000.48, and to have the liquidated damages award reduced
accordingly. The circuit court denied the motion on the ground that it was untimely
presented. We disagree.
20
See supra note 10 for relevant text of W. Va. Code § 21-5-4(e).
21
See supra note 11 for relevant text of W. Va. Code § 21-5-12(b).
43
Mr. Toney concedes that the evidence he presented to the circuit court to
establish the vested amount of his performance units was inaccurate. This evidence was
presented to the circuit court in the form of a letter stating that his vested balance as of
January 1, 2010, was $87,000.48. Nevertheless, he further concedes that it is undisputed that,
after January 1, 2010, he requested and received a payment from his vested balance in the
amount of $17,400.10. Mr. Toney asserts that his vested balance should exceed $87,000.48
due to performance units that would have been awarded in January 2011, prior to his
resignation. However, his attempt to assign a value to any performance units granted in
January 2011 is mere speculation. Mr. Toney has made no attempt to ascertain the true value
of his performance units and, instead, presented to the circuit court an amount he knew to be
incorrect.
Under these circumstances, particularly where the litigation before the circuit
court focused on whether or not summary judgment was proper, the circuit court erred in
refusing to allow Citynet to seek a reduction in the amount of the circuit court’s award. See,
e.g., Beasley v. Pelmore, 259 Ill. App. 3d 513, 522, 631 N.E.2d 749, 756 (1994) (“[A]fter
hearing defendant’s post-trial motion, the court granted a reduction in the damages for the
$22,000 received by plaintiff[.]”). Allowing Mr. Toney to recover $17,400.10 that he has
already received, and to allow treble damages to be calculated based upon an erroneous
amount, would amount to a windfall for Mr. Toney. Accordingly, the circuit court’s award
44
to Mr. Toney of $87,000.48, is reduced to $69,600.38. In addition, the circuit court’s
liquidated damages award to Mr. Toney in the amount of $261,001.44, is reduced to three
times $69,600.38, or $208,801.14.
IV.
CONCLUSION
Based upon the foregoing analysis, we conclude that the circuit court did not
err in granting partial summary judgment to Mr. Toney. The circuit court correctly found
that Mr. Toney was entitled to payment of his vested balance in the Plan. In addition, the
circuit court correctly applied the WPCA and awarded liquidated damages, costs, and
attorney’s fees in accordance therewith. We, therefore, affirm the circuit court’s orders on
these grounds. However, we find that the circuit court did err in setting the date from which
prejudgment interest would accrue. Therefore, we affirm, in part, and reverse, in part, the
Circuit Court of Kanawha County’s order of September 18, 2012. We further find that the
circuit court erred in failing to grant Citynet’s post-judgment motion to the extent that it
sought to offset the circuit court’s award by $17,400.10 that Mr. Toney had previously
received from his Employee Incentive Plan account. Accordingly, we reverse that portion
of the November 20, 2012, order of the Circuit Court of Kanawha County. Mr. Toney is
hereby awarded $69,600.38 as payment for his vested balance in the Plan. Additionally,
pursuant to W. Va. Code § 21-5-4(e), Mr. Toney is awarded three times that amount, which
45
is $208,801.14, as liquidated damages.
Affirmed, in part, and Reversed, in part.
46