TIMOTHY G. KORNEGAY, Plaintiff v. ASPEN ASSET GROUP, LLC, C. STEVE CLARDY, MICHAEL H. CLARDY, CARLTON S. CLARDY, JR., ROCKING B. FARMS, LLC, BASIC ELECTRIC COMPANY, INC., and EARTH PRODUCTS COMPANY, LLC, Defendants
Case Details
- Citation
- 204 N.C. App. 213
- Judge(s)
- Judges ROBERT C. HUNTER and STEELMAN concur.
- Procedural Posture — the stage the case had reached
- appeal
- State
- North Carolina
- Circuit
- 4th Circuit
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
Plaintiff Timothy Kornegay prevailed on his breach of contract claim against Aspen Asset Group and the Clardy defendants for failure to pay promised bonuses. The trial court awarded damages of $825,070.40 after remittitur, and the appellate court affirmed the denial of defendants' motion for judgment notwithstanding the verdict and their motion for a new trial.
Excerpt
TIMOTHY G. KORNEGAY, Plaintiff v. ASPEN ASSET GROUP, LLC, C. STEVE CLARDY, MICHAEL H. CLARDY, CARLTON S. CLARDY, JR., ROCKING B. FARMS, LLC, BASIC ELECTRIC COMPANY, INC., and EARTH PRODUCTS COMPANY, LLC, Defendants No. COA09-71 (Filed 1 June 2010) 1. Employer and Employee— compensation — existence of agreement — offer and acceptance In a contract action over disputed employment compensation, there was sufficient evidence of an offer and acceptance to warrant denial of defendant’s motion for JNOV where plaintiff testified that he was offered the job in a conversation with defendant Steve Clardy, with the written agreement to follow. 2. Employer and Employee— existence of contract — reference to profits — not unduly vague The trial court did not err in denying the defendant’s motion for a JNOV in an employment contract action that concerned the division of profits. Plaintiff’s evidence was sufficient to require that a jury decide whether a contract existed; no case was found suggesting that a reference to “profits” in an alleged contract is not sufficiently specific or certain to give rise to a contract. 3. Employer and Employee— contract — compensation provisions — divisible Two portions of a disputed employment contract concerning compensation were divisible where two promises by defendant Steve Clardy were in exchange for two distinct return promises by plaintiff. The promises were not interdependent in any way. 4. Employer and Employee— wage and hour claim — bonus— notice of forfeiture In a wage and hour claim, there was nothing to suggest that a bonus was not due plaintiff under N.C.G.S. § 95-25.7 where defendants contended that plaintiff was notified that defendants were forfeiting the bonuses before plaintiff earned them. The General Assembly did not intend to allow a bonus or commission to be cancelled or forfeited with the use of a notice as vague as the memo in question here. 5. Employer and Employee— compensation — bonuses for real estate investments — reasonable time for resale The trial court did not err by allowing plaintiff to proceed under the “reasonable time for resale” rule in an action involving bonuses for real estate investments. 6. Employer and Employee— wage and hour claim — failure to pay bonuses — statute of limitations The trial court properly rejected defendant’s statute of limitations defense to a wage and hour claim concerning the failure to pay bonuses. 7. Discovery— sanction — additional time offered — witness made available for deposition The trial court did not abuse its discretion in choosing as a discovery sanction an order that plaintiff make the witness available for a deposition and that defendants could have additional time. The trial court prepared a well-reasoned order of 14 pages and included a careful discussion of why the trial court had reached its decision. 8. Damages and Remedies— new trial denied — remittitur The trial court did not abuse its discretion by denying defendants’ motion for a new trial on both liability and damages in an employment compensation action. The judgment was based on competent evidence, including both the jury’s finding of a breach of contract and the amount of damages ultimately awarded as a result of the remittitur. 9. Damages and Remedies— remittitur accepted — appeal on separate damages claim not barred A plaintiff who accepted remittitur of the jury damages on a contract claim was not barred from bringing a cross-appeal on liquidated damages and attorney fees on a wage and hour claim, which is a separate claim for relief with separate remedies. 10.Employer and Employee— wage and hour claim — liquidated damages — decided by court rather than jury The trial court did not err in a wage and hour claim by deciding the issue of liquidated damages rather than submitting it to the jury. Plain statutory language requires the employer to show “to the satisfaction of the court” that its actions were in good faith and based on reasonable grounds. 11. Constitutional Law— right to trial by jury — liquidated damages — property rights not involved A liquidated damages issue in a wage and hour claim was properly decided by the trial court where defendant asserted that the failure to submit the claim to the jury violated his constitutional right to a jury trial in actions respecting property. There is no basis for distinguishing between liquidated damages under the Wage and Hour Act and punitive damages and Rule 11 sanctions, which do not involve property rights and a constitutional right to a jury trial. 12. Employer and Employee— wage and hour claim — waiver of defenses The issue of waiver of defenses to a wage and hour claim was not addressed where plaintiff impliedly consented to trial of the issue. 13. Damages and Remedies— liquidated damages — denied The trial court did not err by denying plaintiff liquidated damages on an employment compensation claim where plaintiffs arguments required the adoption of his construction of the evidence concerning the existence of a contract. The trial court had denied plaintiff’s motions for a directed verdict and a JNOV oh that issue. 14. Employer and Employee— compensation claim — findings — sufficiently specific Findings of fact were sufficiently specific where they were adequate to set out the factual basis for the trial court’s conclusions and to explain its rationale. 15. Attorney Fees— denial of motion — employment compensation action The trial court did not abuse its discretion by denying plaintiff’s motion for attorney fees in an action involving employment compensation. Appeal by defendants and cross-appeal by plaintiff from judgment entered 5 February 2008 and order and modified judgment entered 4 June 2008 by Judge Albert Diaz in Mecklenburg County Superior Court. Heard in the Court of Appeals 10 June 2009. Bishop, Capitano & Moss, P.A., by J. Daniel Bishop and Joseph W. Moss, Jr., for plaintiff. James, McElroy & Diehl, P.A., by Gary S. Hemric, John S. Arrowood, John R. Buric, and Preston O. Odom, III, for defendants. GEER, Judge. This appeal arises out of a dispute over an alleged bonus compensation scheme between plaintiff Timothy G. Kornegay and his employer, defendant Aspen Asset Group, LLC (“Aspen”), which is owned by defendants C. Steve Clardy (“Steve Clardy”), Michael H. Clardy (“Mike Clardy”), and Carlton S. Clardy, Jr. (“Chip Clardy”). Defendants have appealed from the trial court’s denial of their motion for judgment notwithstanding the verdict (“JNOV”), contending plaintiff presented insufficient evidence of an enforceable oral contract. Because we believe the evidence, taken in the light most favorable to plaintiff, was sufficient to allow the jury to determine the existence of an énforceable oral contract, we affirm the trial court’s denial of defendants’ motion for JNOV. Defendants also argue the trial court erred in remitting the jury’s damages award rather than granting defendants’ request for a new trial on both liability and damages. Based upon our review of the jury’s verdict, the evidence, and the issues in dispute, we hold that the trial court did not abuse its discretion in denying a new trial on all issues. Plaintiff has cross-appealed from the trial court’s denial of his motion for attorneys’ fees and liquidated damages under the North Carolina Wage and Hour Act (“NCWHA”). We hold that the trial court’s findings of fact, which are supported by competent evidence, are sufficient to support its denial of liquidated damages and attorneys’ fees. Facts Plaintiff met the Clardys in the early 1970s when he attended high school with Mike and Chip Clardy. Steve Clardy, the father of Mike and Chip, was the boys’ scoutmaster in their Boy Scouts troop. The Clardys own Aspen (an investment holding company that buys, sells, and manages real estate investments), as well as defendants Rocking B. Farms, LLC, Basic Electric Company, Inc., and Earth Products Company, LLC. The parties kept in touch over the years, and when plaintiff left another job in May 1996, he sent the Clardys his resume and told them he was looking for work. After receiving plaintiffs resume, Chip Clardy contacted plaintiff and indicated that Steve Clardy wanted to speak with him about a possible job opportunity. Plaintiff and Steve Clardy met approximately eight times between July and September 1996, discussing various ways that plaintiff might work for the Clardys. The content of those discussions is at the heart of the dispute in this case. Plaintiff contends that in the course of those discussions, he and Steve Clardy entered into an oral employment contract. According to plaintiff, his duties under the contract were to identify and present to the Clardys attractive real estate investment opportunities and, if given approval, to acquire, modify, and resell or lease those properties for profit. In exchange, plaintiff would receive an annual salary of $72,000.00 and bonuses under a compensation scheme based on a system of “origination” and “implementation.” “Origination” included scouting out available properties and determining which properties might be a good investment. “Implementation” involved plaintiff’s performing required due diligence, closing the sale, and handling the improvements and leasing of the property. Plaintiff contends that he was supposed to receive 20% of the profits from investment projects he originated and implemented and would receive “fair” compensation for implementing investment projects that he did not originate. Defendants, on the other hand, argue that the conversations between plaintiff and Steve Clardy were nothing more than negotiations and that the parties intended to enter into a written agreement at a later date. It is undisputed by the parties that no written agreement exists. Although plaintiff and Steve Clardy exchanged several drafts of an agreement, none of the drafts was ever agreed upon or signed. Plaintiff worked for Aspen from 1 October 1996 through 25 June 2004. During his employment, Aspen paid plaintiff $72,000.00 annually, but never paid any bonuses. The parties agree that plaintiff originated eight properties for the Clardys. Plaintiff claims, however, that he also originated one more property, the Love property. After all of these properties had been acquired by Aspen, plaintiff, in one of his paychecks, received a handwritten note dated 27 June 2002 that stated: Sal[ary] same as now 72,000.00 annual. No Bonuses No Commissions No Nothing Until Aspen sees fit & confident we are making money. Subsequently, on 11 September 2003, Aspen sold three of the properties. The other six properties remained unsold as of the trial. On 14 December 2004, plaintiff brought suit against defendants in Mecklenburg County Superior Court. Plaintiff alleged that Aspen breached their contract by failing to pay him bonuses of 20% of the profits of investments he originated and implemented and bonuses of a “fair” percentage of the profits of investments he implemented but did not originate. Plaintiff also asserted claims against all defendants for (1) violation of the NCWHA, (2) quantum meruit, and (3) fraud. The case was ultimately assigned to the Business Court. Defendants moved for summary judgment on 5 April 2006, while plaintiff moved for partial summary judgment on 11 May 2006. On 27 September 2006, the trial court entered an order denying summary judgment on plaintiffs breach of contract claim for the 20% bonus on investments he originated and implemented, but granting summary judgment to defendants on plaintiffs breach of contract claim for the “fair” bonuses on investments he implemented but did not originate. The trial court permitted plaintiff to proceed against (1) all defendants under the NCWHA; (2) only Aspen, Rocking B. Farms, Basic Electric, and Earth Products in quantum meruit; and (3) only Aspen and Steve Clardy for fraud. At the close of plaintiffs case at trial, the trial court directed a verdict in favor of Rocking B. Farms, Basic Electric, and Earth Products.on all claims and in favor of all defendants on the fraud claim. The court further concluded that plaintiff was entitled only to nominal damages on the quantum meruit claim asserted against all defendants. The trial court denied renewed directed verdict motions at the close of all the evidence and submitted the surviving claims to the jury. On 12 December 2007, the jury rendered its verdict, making special findings of fact. It found that plaintiff and Aspen had entered into a contract and that Aspen had breached that contract. It further found that Steve and Mike Clardy, but not Chip Clardy, were statutory employers of plaintiff under the NCWHA. The jury next found that plaintiff had originated and implemented the Love property and that defendants could have sold the six unsold properties for a profit in the exercise of reasonable care and judgment. The jury concluded that plaintiff was entitled to damages in the amount of $996,147.60. Plaintiff moved for entry of judgment on the jury’s verdict and for an award of liquidated damages under the NCWHA in the amount of the verdict, for attorneys’ fees in the amount of $315,802.21, and costs of $9,869.45. At the hearing on plaintiffs motion, plaintiff also submitted a request for prejudgment interest in the amount of $124,518.00. On 5 February 2008, the trial court entered judgment on the jury’s breach of contract verdict in the amount of $996,147.60. The court concluded that the breach of contract amount should also be considered wages under the NCWHA and that Aspen, Steve Clardy, and Mike Clardy were liable jointly and severally for the unpaid wages. With respect to the request for liquidated damages, the trial court found that defendants had acted in good faith in discharging their obligations and had a reasonable basis for believing that their refusal to pay bonuses was not in violation of the NCWHA. The trial court, therefore, exercised its discretion not to award liquidated damages. The court also declined to award attorneys’ fees although it did grant the request for costs. The trial court awarded prejudgment interest as to the three properties that had actually been sold, but declined to award prejudgment interest as to the remaining six properties because the court could not determine when the bonuses on those properties became due. Finally, the court dismissed the claim for quantum meruit since the jury had awarded damages for breach of an express contract. Defendants moved for JNOV or, in the alternative, for (a) a new trial on both liability and damages; (b) a new trial on damages; or (c) remittitur of the damage award. In an order entered 28 April 2008, the trial court concluded that it could not reconcile the jury’s award of $996,147.60 with the evidence admitted at trial and plaintiff’s request to the jury for $825,070.40. The trial court noted that plaintiff had objected to remittitur and, therefore, granted a new trial as to damages only. Subsequently, in an order dated 29 May 2008, the trial court stated that plaintiff had clarified that he did not intend to object to remittitur. The trial court, therefore, denied the motion for a new trial on both liability and damages, and stated that it would be entering an amended judgment. The modified judgment was signed on 29 May 2008 and awarded plaintiff damages in the amount of $825,070.40 with prejudgment interest on only $58,424.00 of the judgment. Defendants timely appealed, and plaintiff cross-appealed. Defendants’ Appeal I. Motion for JNOV. Defendants contend that the trial court erred in denying their motion for JNOV. “When determining the correctness of the denial [of a motion] for directed verdict or judgment notwithstanding the verdict, the question is whether there is sufficient evidence to sustain a jury verdict in the non-moving party’s favor, or to present a question for the jury.” Davis v. Dennis Lilly Co., 330 N.C. 314, 323, 411 S.E.2d 133, 138 (1991) (internal citations omitted). “A motion for judgment notwithstanding the verdict should be denied if there is more than a scintilla of evidence to support the plaintiff’s prima facie case.” Scarborough v. Dillard’s Inc., 188 N.C. App. 430, 431, 655 S.E.2d 875, 876 (2008), rev’d on other grounds, 363 N.C. 715, 693 S.E.2d 640 (2009). A. Breach of Contract Claim. Defendants first argue that the trial court should have granted their motion for JNOV because plaintiff presented insufficient evidence to create a jury question as to the existence of an enforceable, divisible contract. As an initial matter, defendants’ arguments raise two questions: (1) whether there was an offer and acceptance of the terms of employment, and (2) “if so, were the terms agreed upon sufficiently definite and certain to give rise to a contract enforceable by a court of law?” Williams v. Jones, 322 N.C. 42, 48, 366 S.E.2d 433, 437 (1988) (upholding trial court’s denial of JNOV motion). We address each question separately. 1. Whether there was offer and acceptance. Defendants first assert that the discussions between Steve Clardy and plaintiff were merely negotiations to see if they could agree on terms and that the parties intended to enter into a written contract at a later date, which never happened. Our courts have held that when “it appears that the parties are merely negotiating to see if they can agree upon terms, and that the writing is to be the contract, then there is no contract until the writing is executed.” Elks v. North State Ins. Co., 159 N.C. 619, 624, 75 S.E. 808, 811 (1912). Defendants primarily rely upon Cole v. Champion Enters., Inc., 496 F. Supp. 2d 613 (M.D.N.C. 2007), aff’d, 305 Fed. Appx. 122 (4th Cir. 2008) (unpublished), in support of their position. In Cole, the employee sought to enforce an alleged oral agreement regarding conditions for his continued employment, while the defendant employer contended that no agreement had ever been reached. The district court acknowledged that, under North Carolina law, “where the evidence is sufficient to support plaintiffs contention that a definite oral agreement was made by the parties, the contract is complete even though the parties contemplated that they would ultimately reduce the agreement to writing.” Id. at 621. Nevertheless, “if it appears that the parties are merely negotiating to see if they can agree upon terms, and that the writing is to be a contract, then there is no contract until the writing is executed.” Id. at 622. On this point, the court observed: “ ‘If the parties intend to signal their agreement only by the execution of a written document and do not intend to be bound unless and until all parties sign, no amount of negotiation or oral agreement, no matter how specific, will result in the formation of a binding contract.’ ” Id. (quoting Dow Chem. Co. v. Gen. Elec. Co., 2005 WL 1862418, *32, 2005 U.S. Dist. LEXIS 40866, *88 (E.D.Mich. Aug. 4, 2005)). In deciding that no oral agreement was ever reached in Cole, the district court pointed out first that it was undisputed that the oral discussions could not constitute a verbal agreement because, given the nature of the employee’s position, all terms of his employment were subject to approval by the Board of Directors. Id. at 624-25. Although the Board ultimately did approve some of the terms and conditions of employment, the district court concluded that the approval, while necessary, was not sufficient for a contract since several of the terms were too indefinite to be enforceable without further negotiations and, in any event, “the alleged contract that [the employee sought] to enforce differed] in concept fundamentally from what the Board actually considered and approved.” Id. at 625. The court pointed out that, subsequently, the terms included within the Board approval (such as a salary increase) were not put into effect, but rather the parties exchanged draft agreements in which the employee sought revisions that were irreconcilable with the terms
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