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Luborsky v. Carroll

Supreme Court of West Virginia

April 5, 2017

BRIAN LUBORSKY, Defendant Below, Petitioner

         Wood County Civil Action No. 09-C-407


         Petitioner, a defendant below, Mr. Brian Luborsky("Mr. Luborsky), bycounsel Samuel M. Brock, III and David A. Bosak, separately appeals two circuit court orders rendered in the underlying case, which alleged, inter alia, causes of action for wrongful discharge and violations of the West Virginia Wage Payment and Collection Act ("WPCA"), W.Va. Code § 21-5-1 et seq. We have consolidated the two appeals for purposes of our review. Both challenged orders denied Mr. Luborsky's motion to alter or amend judgment or, in the alternative, for a new trial. In the first order, the circuit court found that Mr. Luborsky waived any challenge to the manner and sufficiency of service of the complaint, and to personal jurisdiction. The second order found that Mr. Luborsky had waived each of his assigned errors challenging the circuit court's findings of fact and conclusions of law. On appeal, Mr. Luborsky contends that the circuit court erred in finding he waived his challenges to the various rulings of that court and further argues that he should have prevailed on the merits of his claimed errors and been granted judgment in his favor or, in the alternative, a new trial. Respondents, plaintiffs below, Kimberly S. Carroll, James C. Brown, Carrie Shook, Ginger R. Riggins, Amanda R. Malone, and Cordia S. Little ("Plaintiff Beauticians"), by counsel Walt Auvil and Robert M. Bastress, Jr., filed timely responses.

         This Court has considered the parties' briefs, the appendix record designated for our review, the pertinent authorities, and oral argument. We find no new or significant questions of law, and, upon application of the standard for our review, we find no prejudicial error. For these reasons, a memorandum decision affirming the order of the circuit court is appropriate under Rule 21 of the Rules of Appellate Procedure.

         At the time relevant to the action underlying the present appeal, Plaintiff Beauticians worked in a beauty salon ("the Vienna Salon") at the Grand Central Mall in Vienna, West Virginia, and were employed by Trade Secret Beauty Stores, Inc., a subsidiary of Trade Secrets, Inc. Trade Secrets, Inc., had been owned by Regis Corp. and/or Regis Corporation. On or around February 16, 2009, Premier Salons Beauty, Inc. ("Beauty, Inc."), purchased the Trade Secret entities from Regis Corp., [1] which included the Vienna Salon where Plaintiff Beauticians worked. Shortly after acquiring the Trade Secret entities, Beauty, Inc., provided the Plaintiff Beauticians with its "Employee Policies and Agreements" ("Employment Agreements") that included, inter alia, a non-compete agreement, a non-solicitation of customers agreement, and an arbitration agreement. Each agreement was accompanied by a space for the employee's signature. Plaintiff Beauticians declined to sign any of the agreements.

         Thereafter, on March 11, 2009, Cindy Walton, the regional manager for Beauty, Inc., visited the Vienna Salon and advised the Plaintiff Beauticians that, if they refused to sign the agreements, their employment would be terminated.[2] The Plaintiff Beauticians all declined to sign, and, as a result, the Plaintiff Beauticians' employment was terminated. After the Plaintiff Beauticians refused to leave the premises, they were escorted from the Vienna Salon by local police officers and mall security officers.

         On August 18, 2009, Plaintiff Beauticians filed a complaint in the Circuit Court of Wood County against Beauty, Inc.; Premier Salons, Inc.; Premier Salons International, Inc.; Regis Corp.; Regis Corporation; and Cindy Walton alleging they had been wrongfully discharged in violation of public policy and for untimely payment of wages under the WPCA. During the course of the proceedings below, the case was held in abeyance when, on July 6, 2010, Beauty, Inc., filed a petition for bankruptcy in the United States Bankruptcy Court for the District of Delaware.

         Counsel for Plaintiff Beauticians conducted a telephonic deposition of Mr. Luborsky on November 29, 2011. Mr. Luborsky, a citizen and resident of Canada, had been designated by corporate defendants Beauty, Inc., and Premier Salons, Inc., [3] pursuant to Rule 30(b)(7) of the West Virginia Rules of Civil Procedure. During his Rule 30(b)(7) deposition, Mr. Luborsky testified that he had been President of Beauty, Inc., the corporate owner of the Vienna Salon, which was dissolved in January 2010. He further testified that he currently served as CEO and President of Premier Salons, Inc., a Delaware corporation.

         On July 13, 2012, Plaintiff Beauticians filed their "Second Amended Complaint" in the Circuit Court of Wood County adding Mr. Luborsky as a named defendant. Plaintiff Beauticians alleged that Mr. Luborsky should be held liable for the acts and omissions of the various corporate defendants under a theory of piercing the corporate veil. Service of the Second Amended Complaint was attempted by mailing the same to Mr. Luborsky at an address in Markham, Ontario, Canada. However, the mailing was addressed to Markham, Ohio, with an Ontario zip code. Mr. Luborsky claims he never received a copy of the summons and Second Amended Complaint.

         Nevertheless, an answer to the Second Amended Complaint was filed on behalf of the defendants, including Mr. Luborsky, on August 3, 2012. The answer set forth, in relevant part, the following affirmative defenses:

43. Defendant Luborsky respectfully states that he is not subject to personal jurisdiction in West Virginia.
44. The Second Amended Complaint fails because of insufficient service of process.
45. The Second Amended Complaint fails because of lack of service of process.

         The circuit court thereafter entered a Scheduling Order, by agreement of the parties, providing that any dispositive motions were to be filed on or before April 19, 2013, and set the case for trial on July 9, 2013.[4] No motions to dismiss for failure of service of process or lack of jurisdiction were submitted either before or after the April 19, 2013, agreed deadline.

         By order entered on December 7, 2012, the circuit court denied a motion for partial summary judgment filed by the Plaintiff Beauticians. The order notes that "Defendants" had filed a joint memorandum in opposition thereto. The order is signed by counsel who represented Mr. Luborsky and other defendants. In addition, the order dismissed Beauty, Inc.; Premier Salons International, Inc.; and Regis Corp., noting that the dismissals were by agreement of the parties.

         On April 8, 2013, the lawyers/law firms representing Premier Salons, Inc.; Regis Corporation; Cindy Walton; and Brian Luborsky filed a joint motion to withdraw as counsel citing non-payment of substantial attorney's fees as their grounds. The record contains a letter from counsel to Premier Salons, Inc., that also was copied to Mr. Luborsky, advising of counsel's withdrawal. The letter contained an express warning that "Defendants have the burden of keeping the Court informed where notice, pleadings, or other papers may be served. Defendants have the obligation of hiring other counsel to prepare for trial. If Defendants fail or refuse to meet these burdens, they may suffer possible default." Nevertheless, neither Premier Salons, Inc., nor Mr. Luborsky communicated with the circuit court or retained new counsel. However, on June 14, 2013, a pre-trial conference memorandum was filed on behalf of Mr. Luborsky by his withdrawing counsel.

         By order entered July 29, 2013, the circuit court granted a motion seeking a continuance filed on behalf of defendant Regis Corporation and continued the trial to October 7, 2013. The circuit court further ruled that, in the event the case could not be tried at that time, it also would be placed on the civil case docket for April 8, 2014.

         On October 4, 2013, the circuit court entered an order explaining, inter alia, that

[a] hearing was held on [defense counsel's] Motion [to Withdraw], and while the Court stated on the record that it was granting the Motion, no Order has been entered to this effect. As the Court speaks only through its Orders, [defendants' counsel] are still considered to be counsel of record in this case, with all the duties and responsibilities attendant thereto.

         (Emphasis added).

         Defense counsels' joint motion to withdraw as counsel was subsequently granted by order entered on November 12, 2013. Pursuant to the order, service as to all defendants was to be mailed to the Premier Salons, Inc., corporate offices in Golden Valley, Minnesota, which was the address provided by former defense counsel. Plaintiff Beauticians aver that, after the entry of this order, they mailed all their court filings to the Golden Valley, Minnesota, address.[5] It appears that, after his counsel's withdrawal, Mr. Luborsky did not participate further in the proceedings below, either in person or by counsel, prior to judgment being entered.

         The trial was not had on October 8, 2013, so the matter was carried forth for trial on April 8, 2014. On March 27, 2014, defendant Cindy Walton filed a motion seeking a continuance and to vacate the previously entered scheduling order. The circuit court granted the motion. Thereafter, on July 8, 2014, a scheduling order was entered setting the trial for January 27, 2015, and scheduling a pretrial conference for January 5, 2015. The order directed that "[a]ny and all pretrial motions (including motions in limine and dispositive motions) shall be filed and properly noticed for hearing at the pretrial conference, or such earlier date as set by counsel." (Emphasis added). Regis subsequently was granted summary judgment, [6] and a joint motion by the Plaintiff Beauticians and Cindy Walton to dismiss the claims against Cindy Walton based upon the parties' compromise and settlement of those claims was granted by the circuit court.[7]

         A bench trial was had on January 27, 2015, without the participation of Mr. Luborsky or Premier Salons, Inc. At the time of trial, Premier Salons, Inc., and Mr. Luborsky were the only remaining defendants due to voluntary dismissals, the award of summary judgment, and the compromise and settlement. After the presentation of evidence by the Plaintiff Beauticians, the circuit court entered a Judgment Order on April 27, 2015, finding the Plaintiff Beauticians had been wrongfully discharged in violation of substantial public policies of this State.[8] The court found defendants liable for a total of $179, 707.16 in economic losses; $195, 000 for emotional distress damages; and $23, 177.82 in damages under the WPCA for failing to timely pay Plaintiff Beauticians their wages following the termination of their employment. The circuit court also awarded prejudgment interest on the back pay and WPCA claims. Finally, the circuit court found it ...

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