The appellants herein and defendants below, AJR, Inc., and John M. Rhodes
(hereinafter collectively referred to as “AJR”), appeal from an order entered July 18, 2008,
by the Circuit Court of Wood County. By that order, the circuit court entered judgment
in favor of the appellee herein and plaintiff below, Danny L. Benson (hereinafter referred
to as “Mr. Benson”), in the amount of $94,910.25, following a jury trial of Mr. Benson's
claims against AJR to enforce the terms of his employment contract subsequent to his
termination. On appeal to this Court, AJR contends that the circuit court did not follow
the mandate issued by this Court in the earlier appeal of this case in Benson v. AJR, Inc.,
215 W. Va. 324, 599 S.E.2d 747 (2004) (per curiam) (Benson I), and that the circuit court
improperly entered judgment in favor of and awarded damages to Mr. Benson. Upon a
review of the parties' arguments, the record designated for appellate consideration, and
the pertinent authorities, we affirm the decision of the Wood County Circuit Court.
Benson I, 215 W. Va. at 326, 599 S.E.2d at 749 (footnotes omitted). Mr. Benson, who
claims to have first used cocaine on the Saturday before the Monday morning when the
test was administered, ultimately had a positive test result for cocaine. His test result was
more than three times the limit established by the United States Department of
Transportation to indicate drug use and impairment. Id.
Thereafter, AJR terminated Mr. Benson on March 6, 1998. (See footnote 4) On Mr.
Benson's “Employment Termination” form, the “Reason for Termination” is listed as
“Controlled Substance Testing” . . . “Tested Positive for Cocaine.” Mr. Benson's “Job
Function” at the time of his termination was “Supervisor, Special Projects, Steel &
Safety.” (See footnote 5) Nearly one year later, on March 4, 1999, Mr. Benson filed a complaint in the
Circuit Court of Wood County, West Virginia, asserting two causes of action against AJR
and Mr. Rhodes: breach of contract and false light invasion of privacy. By order entered
July 23, 2002, the circuit court granted summary judgment in favor of AJR and Mr.
Rhodes, and against Mr. Benson, on both of Mr. Benson's claims. Specifically, the circuit
court found that
[Mr. Benson's] actions show that he was dishonest. [Mr. Benson] knowingly engaged in an illegal activity. [Mr. Benson] knowingly arrived at work with cocaine in his system. [Mr. Benson] knowingly violated AJR's drug-free workplace policy _ which he knew would result in his immediate discharge. [Mr. Benson's] demonstrated dishonesty relieved AJR of its obligation to continue to pay [Mr. Benson] under the employment agreement.
The circuit court also found in favor of AJR on Mr. Benson's claim that AJR's disclosure
of his positive drug test results to three individuals, all of whom were employees,
managers, or creditors of the corporation, constituted false light invasion of privacy. In
short, the circuit court determined that AJR had not acted with bad intent in disclosing Mr.
Benson's test results and that Mr. Benson had failed to satisfy the requisite elements of
this claim. As for AJR's contentions that “[Mr. Benson] may not recover for breach of
contract because he materially breached his employment contract” and that such a
determination requires resolution by a jury, the circuit court ruled that “[b]ecause this
Court's other holdings render this issue moot, the Court does not address [AJR's] breach
of contract defense to [Mr. Benson's] Motion for Summary Judgment.”
On the first appeal of this case to this Court, Mr. Benson complained that the
circuit court had erred by ruling in favor of AJR on both of his causes of action. In Benson
I, 215 W. Va. 324, 599 S.E.2d 747, we determined that whether drug use constituted
dishonesty so as to preclude Mr. Benson from recovering under his Employment
Agreement upon his termination by AJR was a question of fact that should be decided by
a jury and, thus, reversed the circuit court's ruling on this issue and remanded the same
for jury determination:
The record in this case is unclear as to whether AJR dismissed Mr. Benson from its employ for drug use or for dishonesty. As [Mr. Benson] emphasizes in his argument, nowhere on either of the two termination forms that were introduced below is there any indication that he was dismissed for dishonesty.[ (See footnote 6) ] We are unwilling to make the leap that the trial court did to broadly encompass testing positive for drug use within the meaning of the term “dishonesty.” Consequently, we conclude that [Mr. Benson] is entitled to have a jury determine the basis for AJR's decision to terminate [him] from its employ. If the jury determines that drug use, rather than dishonesty, was the basis for the dismissal, then the provisions of the employment contract with regard to continued payment of [Mr. Benson's] salary for the duration of the contract term are applicable. If, however, the jury determines that Mr. Benson was in fact terminated for being dishonest, then AJR is not required to pay his salary under the terms of the employment contract.
Benson I, 215 W. Va. at 328, 599 S.E.2d at 751 (original footnote omitted; new footnote
added). However, we affirmed the circuit court's conclusion that Mr. Benson was not
entitled to recover on his false light invasion of privacy claim. Id., 215 W. Va. at 329, 599
S.E.2d at 752.
On remand to the Circuit Court of Wood County, a jury trial was held. The
jury rendered its verdict on October 20, 2005, by answering two general verdict questions
and two special interrogatory queries. The general verdict questions, and the jury's
responses thereto, stated:
In addition to the general verdict, two special interrogatories requested the jury to
determine the specific reason relied upon by AJR in terminating Mr. Benson. The special
interrogatories, and the jury's responses thereto, provided:
judgment should be ordered in favor of the Defendants [AJR,
Inc., and John M. Rhodes] and against the Plaintiff [Danny L.
Benson] on the issue of material breach submitted to the jury
on the general verdict form. Further, judgment should be
entered in favor of the Plaintiff [Danny L. Benson] and against
the Defendants [AJR, Inc., and John M. Rhodes] on whether
dishonesty was the basis for the Plaintiff's [Danny L.
Benson's] termination versus drug testing.
AJR objected to the circuit court's entry of judgment contending that,
because the jury had determined that Mr. Benson had materially breached his employment
contract with AJR, AJR had been relieved of performance under the contract, and, thus,
Mr. Benson was not entitled to recover thereunder. In support of its position, AJR filed
a petition for writ of mandamus with this Court on January 18, 2008, requesting this Court
to compel the circuit court to enter judgment in favor of AJR based upon the jury's finding
that Mr. Benson had materially breached his employment contract. Although this Court
issued a rule to show cause, we dismissed the proceeding when the circuit court entered
its “Stipulation and Order” on July 18, 2008. By its order, the circuit court found that Mr.
Benson and AJR and Mr. Rhodes
have agreed and hereby stipulate that the amount of damages
[Mr. Benson] has allegedly suffered is in the amount of
$94,910.25. These damages are calculated as follows:
1998 $41,210 - $7,967 in earned wages - $8,310.75
(25% offset for [Mr. Benson's] failure to
mitigate his damages) = $24,932.25
1999 $41,210 - $19,431 in earned wages = $21,779.00
2000 $41,210 - $27,695 in earned wages = $13,515.00
2001 $41,210 - $32,042 in earned wages = $ 9,168.00
2002 $41,210 - $32,387 in earned wages = $ 8,823.00
2003 $41,210 - $31,204 in earned wages = $10,006.00
2004 $41,210 - $34,523 in earned wages = $ 6,687.00
2005 (through 8/28/05) = $27,473.87 - $36,188 in
earned wages = $0.00
[AJR and Mr. Rhodes] object that the entry of judgment
in favor of [Mr. Benson] on the issue of liability is contrary to
the law and the verdict rendered by the jury at the trial of this
matter.
Being informed of the stipulation of the parties and
noting [AJR and Mr. Rhodes'] objections, the Court hereby ORDERS that [Mr. Benson] has suffered damages in the
amount of $94,910.25.
From this order, AJR and Mr. Rhodes appeal to this Court.
[a]n appellant must carry the burden of showing error in the judgment of which he complains. This Court will not reverse the judgment of a trial court unless error affirmatively appears from the record. Error will not be presumed, all presumptions being in favor of the correctness of the judgment.
Syl. pt. 5, Morgan v. Price, 151 W. Va. 158, 150 S.E.2d 897 (1966). Accord Syl. pt. 2, Perdue v. Coiner, 156 W. Va. 467, 194 S.E.2d 657 (1973) (“On an appeal to this Court the
appellant bears the burden of showing that there was error in the proceedings below
resulting in the judgment of which he complains, all presumptions being in favor of the
correctness of the proceedings and judgment in and of the trial court.”); Syl. pt. 4, Pozzie
v. Prather, 151 W. Va. 880, 157 S.E.2d 625 (1967) (“An appellant or plaintiff in error
must carry the burden of showing error in the judgment of which he complains. This
Court will not reverse the judgment of a trial court unless error affirmatively appears from
the record. Error will not be presumed, all presumptions being in favor of the correctness
of the judgment.”); Syl. pt. 2, Shrewsbury v. Miller, 10 W. Va. 115, 1877 WL 3452 (1877)
(“An Appellate Court will not reverse the judgment of an inferior court unless error
affirmatively appear upon the face of the record, and such error will not be presumed, all
the presumptions being in favor of the correctness of the judgment.”). Mindful of these
standards, we proceed to consider the errors assigned by AJR.
we conclude[d] that [Mr. Benson] is entitled to have a jury
determine the basis for AJR's decision to terminate [him] from
its employ. If the jury determines that drug use, rather than
dishonesty, was the basis for the dismissal, then the provisions
of the employment contract with regard to continued payment
of [Mr. Benson's] salary for the duration of the contractual
term are applicable. If, however, the jury determines that Mr.
Benson was in fact terminated for being dishonest, then AJR
is not required to pay his salary under the terms of the
employment contract.
215 W. Va. at 328, 599 S.E.2d at 751 (footnote omitted).
Once the case had been remanded to the circuit court for further proceedings,
the circuit court was bound to follow the parameters of this Court's mandate:
Upon remand of a case for further proceedings after a
decision by this Court, the circuit court must proceed in
accordance with the mandate and the law of the case as
established on appeal. The trial court must implement both
the letter and the spirit of the mandate, taking into account the
appellate court's opinion and the circumstances it embraces.
Syl. pt. 3, State ex rel. Frazier & Oxley, L.C. v. Cummings, 214 W. Va. 802, 591 S.E.2d
728. From the language quoted above, it is clear that this Court's intent in Benson I was
to remand the matter for a factual determination, by a jury, of the reason relied upon by
AJR in terminating Mr. Benson. Given the language of the parties' Employment
Agreement, the determination of this fact is critical to deciding whether Mr. Benson is
entitled to receive his salary from AJR for the remainder of his contractual term.
While a solitary issue was identified for purposes of remand, this Court did
not specify how such an issue should be tried or decided. Cf. Syl. pt. 2, Frazier & Oxley,
L.C., 214 W. Va. 802, 591 S.E.2d 728 (“When this Court remands a case to the circuit
court, the remand can be either general or limited in scope. Limited remands explicitly
outline the issues to be addressed by the circuit court and create a narrow framework
within which the circuit court must operate. General remands, in contrast, give circuit
courts authority to address all matters as long as remaining consistent with the remand.”).
Rather, insofar as Benson I had been appealed to this Court from the circuit court's entry
of summary judgment in favor of AJR, neither party had been afforded the opportunity to
present its various theories of the case or any defenses upon which it may have relied to
avoid liability under the contract. Thus, our remand of the case permitted the parties to
start anew with their arguments on Mr. Benson's breach of contract claim, which enabled
them to assert any theories of the case and any defenses thereto during the jury trial of this
matter. See Syl. pt. 2, Morris v. Parris, 110 W. Va. 102, 157 S.E. 40 (1931) (“'Where
conflicting theories of a case are presented by the evidence, each party is entitled to have
his view of the case presented to the jury by proper instruction.' Whitmore v. Rodes, 103
W. Va. 301[, 137 S.E. 747 (1927)].”).
Our review of the record in this case suggests that, on remand, the circuit
court precisely followed this Court's mandate in Benson I. Because the issue to be
determined by the jury involved the reason for AJR's termination of Mr. Benson and
because this issue had not previously been litigated, both parties were afforded the
opportunity to present their theories of the case and both parties were permitted to assert
any defenses that would relieve them of liability under the parties' Employment
Agreement. While AJR complains that it was not permitted to assert its affirmative
defense that Mr. Benson materially breached his employment contract with AJR, we reject
such a contention because the record does not support AJR's argument. Rather than being
denied its opportunity to assert this affirmative defense, the jury verdict form specifically
asked the jury to decide this question, and it did so in AJR's favor. As will be explained
more fully in Sections III.B. and III.C., infra, though, merely because AJR successfully
asserted an affirmative defense does not automatically relieve it of its obligation to pay
damages under the subject contract. Therefore, because the circuit court properly
followed the mandate of this Court upon the remand of Benson I and tried the case before
the jury consistently with this Court's instructions, we find no error and, accordingly,
affirm the circuit court's rulings in this regard.
In summary, the jury returned its general verdict in favor of AJR, having found that Mr.
Benson materially breached his contract of employment with AJR.
Despite AJR's successful assertion of its material breach of contract defense,
and the circuit court's entry of judgment in favor of AJR thereon, the pivotal issue
determinative of contract damages was not answered by this general verdict form. Thus,
in submitting the case to the jury, the circuit court posed two additional questions, via
special interrogatories, to obtain the jury's findings on the factual issues determinative of
Mr. Benson's claim for damages under his Employment Agreement with AJR. The two
special interrogatories asked the jury to determine the reason relied upon by AJR in
deciding to terminate Mr. Benson's employment:
The significance of the jury's responses to the special interrogatories is governed by the
Employment Agreement, which contract defines the employment relationship between
AJR and Mr. Benson.
Pursuant to the Employment Agreement entered into “by and between
AJR,
INC., a corporation,. . . hereinafter referred to as the 'Company,' . . . DANNY BENSON,
hereinafter referred to as the 'Employee,' . . . and JOHN M. RHODES, hereinafter
referred to as 'Guarantor'” on August 29, 1997, AJR agreed to continue Mr. Benson's
employment for a period of eight years:
1. TERM OF EMPLOYMENT: The Company agrees
to employ the Employee on a full-time basis for a period of
eight (8) years, commencing with the date of this Agreement
and terminating on the 28th day of August 2005, subject to the
terms and conditions set forth below, to perform and discharge
the duties and responsibilities hereinafter described.
After recounting the details of Mr. Benson's job duties (See footnote 8) and the salary and
benefits to which he was entitled, the Employment Agreement explained the consequences
befalling the parties upon the Agreement's termination:
5. TERMINATION OF THE AGREEMENT:
A. Company may terminate the Employee's
employment without cause on one calendar days' [sic]
written notice during the term of this agreement.
B. In the event of a substantial reduction in the
Employee's present level of responsibility, the Employee may
elect to treat the reduction as a termination by the Company
under Paragraph 5A. The acceptance of such a reduction for
a period of time up to three months shall not be deemed to be
a waiver of the Employee's right to claim the reduction as a
termination under Paragraph 5A.
C. Any termination pursuant to Paragraph 5A or
Paragraph 5B shall obligate the Company to continue to pay
the Employee the salary described in Paragraph 3 for the
balance of the term of this agreement. Notwithstanding any
termination pursuant to Paragraph 5A or Paragraph 5B, the
Employee will remain as an employee for the purposes of the
benefits set forth in Paragraph 4 for the remaining term of this
agreement.
D. The provisions of Paragraph 5C shall not apply if the
Employee is terminated for (a) dishonesty, (b) the conviction of
a felony, or (c) voluntary termination of this agreement by the
Employee.[ (See footnote 9) ]
(Emphasis and footnote added).
Essentially, then, the parties' Employment Agreement is simply an
employment contract that seeks to replace the typical at-will employment relationship with
a more formal arrangement to provide Mr. Benson with greater protection from discharge
by AJR. Nevertheless, in this assignment of error, the parties seemingly differ as to the
effect that the jury's finding of Mr. Benson's material breach of contract has on the
enforcement of the terms of their Employment Agreement.
When deciding a matter involving a contract between parties, this Court first
must determine whether the language employed by the contract is ambiguous. “'The
question as to whether a contract is ambiguous is a question of law to be determined by
the court.' Syllabus point 1, in part, Berkeley County Public Service District v. Vitro Corp.
of America, 152 W. Va. 252, 162 S.E.2d 189 (1968).” Syl. pt. 4, Dan's Carworld, LLC v.
Serian, 223 W. Va. 478, 677 S.E.2d 914 (2009). “The mere fact that parties do not agree
to the construction of a contract does not render it ambiguous.” Syl. pt. 1, in part, Berkeley
County Pub. Serv. Dist., 152 W. Va. 252, 162 S.E.2d 189. Rather, “[c]ontract language
is considered ambiguous where an agreement's terms are inconsistent on their face or
where the phraseology can support reasonable differences of opinion as to the meaning
of words employed and obligations undertaken.” Syl. pt. 6, State ex rel. Frazier & Oxley,
L.C. v. Cummings, 212 W. Va. 275, 569 S.E.2d 796 (2002). Accord Syl. pt. 4, Estate of
Tawney v. Columbia Natural Res., L.L.C., 219 W. Va. 266, 633 S.E.2d 22 (2006) (“The
term 'ambiguity' is defined as language reasonably susceptible of two different meanings
or language of such doubtful meaning that reasonable minds might be uncertain or
disagree as to its meaning.”).
If the contractual language is ambiguous, it must be construed before it can
be applied. See Estate of Tawney, 219 W. Va. at 272, 633 S.E.2d at 28 (“[W]hen a contract
is ambiguous, it is subject to construction.”). However,
“'[w]here the terms 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).” Syllabus point 2, Orteza v. Monongalia
County General Hospital, 173 W. Va. 461, 318 S.E.2d 40
(1984).Syl. pt. 3, Waddy v. Riggleman, 216 W. Va. 250, 606 S.E.2d 222 (2004). 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[,
Inc.], 223 W. Va. 259, 672 S.E.2d 395 (2008) (per curiam).
Syl. pt. 5, Dan's Carworld, LLC v. Serian, 223 W. Va. 478, 677 S.E.2d 914. Thus,
“'[a] valid written instrument which expresses the
intent of the parties in plain and unambiguous language is not
subject to judicial construction or interpretation but will be
applied and enforced according to such intent.' [Syllabus
point 1,] Cotiga Development Co. v. United Fuel Gas Co., 147
W. Va. 484, 128 S.E.2d 626 (1962)[.]” Syllabus point 1, Bennett v. Dove, 166 W. Va. 772, 277 S.E.2d 617 (1981).
Syl. pt. 6, Dan's Carworld, 223 W. Va. 478, 677 S.E.2d 914.
Having reviewed the concise Employment Agreement contract at issue
herein, we find the language employed to be plain and unambiguous. Pursuant to the plain
language of the Employment Agreement, which Mr. Benson and AJR, by Mr. Rhodes,
entered into on August 29, 1997, and which governs the terms of Mr. Benson's
employment, AJR is required to pay Mr. Benson the remainder of his salary upon the
termination of his employment unless the termination is attributable to Mr. Benson's
dishonesty, Mr. Benson's commission of a felony, or Mr. Benson's voluntary resignation.
Mr. Benson's material breach of the Employment Agreement is not an enumerated reason
that would relieve AJR of the duty to pay him his salary under the remainder of the
contract period. Thus, while the circuit court correctly entered judgment for AJR upon the
jury's verdict finding that Mr. Benson had materially breached his employment contract,
such a judgment did not finally resolve the central issue of whether AJR remained
obligated to pay Mr. Benson contractual damages when it terminated his employment.
Accordingly, the circuit court properly posed these determinative factual inquiries to the
jury through special interrogatories.
In answering these special interrogatories, the jury found that Mr. Benson's
drug use, and not his dishonesty, was the reason relied upon by AJR in terminating his
employment. (See footnote 10) While drug use might be a valid reason for terminating Mr. Benson's
employment under the “AJR, Inc. Employee Manual” that governs all AJR employees,
Mr. Benson's employment was governed not by said Employee Manual but by the
separate Employment Agreement that he had entered into with AJR and Mr. Rhodes.
Insofar as Mr. Benson's drug use does not relieve AJR of its liability under this
contractual agreement, and insofar as the jury found that AJR did not fire Mr. Benson for
dishonesty, AJR is required to pay Mr. Benson his salary for the remainder of the contract
period. Accordingly, the circuit court correctly entered judgment in favor of Mr. Benson
upon the jury's responses to the court's special interrogatories.
Therefore, because AJR has failed to “carry the burden of showing error in
the judgment of which [it] complains,” Syl. pt. 5, in part, Morgan v. Price, 151 W. Va.
158, 150 S.E.2d 897, we affirm the circuit court's entry of judgment for AJR on the jury's
general verdict and the circuit court's entry of judgment for Mr. Benson on the jury's
special interrogatories.
[t]here is no evidence that, even according to the employer,
[Mr.] Benson did anything to defeat the essential purpose of
his employment contract. He performed well and without
incident on the job according to all involved. The individual
defendant corporate owner testified that he had no complaint
regarding [Mr.] Benson's job performance.
Appellee's Resp. Br. at p. 14 (footnote omitted). Moreover, Mr. Benson argues that AJR
agreed to the “basis for the damage calculation [and] mitigation offsets,” id., and, thus,
cannot complain about the amount of damages awarded to him.
In its final assignment of error, AJR contends that the circuit court erred by
awarding damages to Mr. Benson when the jury had determined that Mr. Benson had
materially breached his employment contract with AJR. As we explained in Section
III.B., supra, the jury's finding of material breach does not automatically relieve AJR of
its obligation to pay damages to Mr. Benson. Rather, whether Mr. Benson may recover
damages from AJR is governed solely by the parties' Employment Agreement. Under the
terms of this agreement, if AJR terminates Mr. Benson's employment, AJR is required to
pay Mr. Benson his salary for the remainder of the eight-year contract period unless Mr.
Benson was “terminated for (a) dishonesty, (b) the conviction of a felony, or (c) voluntary
termination of this agreement by [Mr. Benson].” Under the facts of this case, the jury
specifically found, through special interrogatory, that AJR terminated Mr. Benson for
“drug use rather than dishonesty.” Because drug use is not an enumerated exception to
AJR's obligation to pay Mr. Benson in accordance with the Employment Agreement's
terms, AJR is not relieved of its obligation to pay damages to Mr. Benson thereunder.
Given the plain language of the Employment Agreement, the circuit court was bound to
enforce its terms. See Syl. pt. 6, Dan's Carworld, LLC v. Serian, 223 W. Va. 478, 677
S.E.2d 914 (“'“A valid written instrument which expresses the intent of the parties in plain
and unambiguous language is not subject to judicial construction or interpretation but will
be applied and enforced according to such intent.” [Syllabus point 1,] Cotiga Development
Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962)[.]' Syllabus point 1, Bennett v. Dove, 166 W. Va. 772, 277 S.E.2d 617 (1981).”). Accordingly, the circuit court
correctly awarded contract damages to Mr. Benson consistent with the parties'
Employment Agreement, and we, therefore, affirm the circuit court's ruling in this regard.