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Kessler v. First Community Bank

United States District Court, S.D. West Virginia, Beckley Division

June 26, 2018




         The Court has reviewed the Defendants' Motion for Summary Judgment (Document 99), the supporting memorandum (Document 100), the Plaintiffs' Response in Opposition to Defendants' Motion for Summary Judgment (Document 104), [1] and the Defendants' Reply to Plaintiffs' Response in Opposition to Defendants' Motion for Summary Judgment (Document 109). The Court has also reviewed all attached exhibits. For the reasons stated herein, the Court finds that the motion should be granted in part and denied in part.


         The Plaintiffs in this matter are Jerry Kessler and Jarrell's Exxon. Jerry Kessler is the sole owner of Jarrell's Exxon, a gas and service station in Hinton, West Virginia. He took the business over from his father, Billy Joe Kessler (Joe), in 2008. Joe Kessler began working at Jarrell's as a college student, and soon took on a management role, which he maintained even after completing college and taking a full-time job for the county board of education. The original owners left the station to Joe Kessler in 1994, after they both passed away. Jarrell's Exxon is a full-service gas station and garage. It employees two gas attendants and two mechanics, as well as Jerry Kessler. Joe Kessler continues to assist with bookkeeping, management, and customer service at least one day per week, although he does not draw a salary.

         The Kesslers report that gas sales had been declining somewhat in 2012 and 2013, but the station's profits were up by 11% in the first half of 2015. Gas profits tend to fluctuate, and more than half of the station's profits come from the garage, which does vehicle maintenance and repair and also sells tires. Jarrell's is one of four gas stations in Hinton, although the fourth, a Kroger fuel station, opened several months after the events at issue in this suit. It is the only full-service gas station in town. During the hours the station is open, an attendant will pump gas, clean customers' windshields, top off fluids, and check air pressure in tires. The gas pumps remain open for customers to purchase gas with a credit card during nights and weekends, when the station is unattended. The Kesslers both testified that the station had enjoyed a strong reputation in the community and a loyal customer base, which they attribute to decades of good customer service.

         The Defendant, First Community Bank, is one of three banks in Hinton. At the end of July 2015, bank employees began receiving an unusually high number of customer complaints of unauthorized transactions posting on accounts associated with debit cards. First Community Bank's procedure for handling such complaints is to deactivate the card, review the account with the customer to identify all unauthorized transactions, have the customer call the merchants associated with the transactions to seek refunds, encourage the customer to file a police report, and have the customer complete a “Reg E” form. The Reg E form details the unauthorized transaction. Branch employees then send the Reg E form to the bank's Electronic Funds Transfer (EFT) department, which credits the customer's account in the amount of the fraudulent transactions and issues a new card. In some cases, the EFT department flags transactions that appear inconsistent with the customer's usual card usage, and essentially the same steps are taken.

         First Community Bank has no official policy regarding whether and how to investigate the source of bankcard fraud, beyond the actions intended to reimburse consumers and reissue cards. Some of the tellers at the Hinton branch stated that they recalled a computer training session that explained how to review impacted customer accounts to search for a merchant patronized by all of the customers within a certain time frame to find a common denominator that could be the source of the fraud. The corporate employees indicated that there was no policy either requiring or prohibiting employees from undertaking such an investigation.

         The Hinton branch manager was on vacation in the summer of 2015 when the bank experienced an influx of fraud reports. The bank tellers decided to conduct an investigation to determine the source of the fraud. The documentation of that investigation was destroyed, and the details are a bit hazy. However, deposition testimony indicates that they reviewed account activity for the past several weeks for at least ten accounts. They determined that Jarrell's Exxon was a common denominator, although testimony is inconsistent with respect to whether all reviewed accounts had transactions at Jarrell's, or only 75-90% of accounts had transactions at Jarrell's. In addition to re-issuing cards for customers who actually had fraudulent transactions, the Hinton branch identified Jarrell's Exxon to the main bank office and obtained a list of accounts that had transactions at Jarrell's within a certain time period.[2] The bank then re-issued cards to all of those customers, as well.

         The bank employees deny informing any customers of the results of their investigation. They assert that they simply advised customers to use cash or checks, particularly at gas stations, until the issue was resolved. They also deny calling the police and naming Jarrell's as the source of the fraud, although they admit to cooperating with the investigation conducted by Sergeant McMillan of the West Virginia State Police. Sergeant McMillan testified that he received several reports of unauthorized transactions from individuals, but initiated his investigation into Jarrell's after a call from an employee at First Community Bank. Jerry Kessler testified that he learned of the potential issue when Heidi Richmond, the head teller at First Community Bank, called to inform him of the card fraud and the bank's conclusion that his station was the source. He inspected the pumps, but found nothing. Not long thereafter, Sgt. McMillan and another officer visited Jarrell's. They also inspected the pumps and found nothing. Sgt. McMillan believed the fraud might be connected to a series of skimming incidents throughout the state. He relied on First Community Bank's assessment of Jarrell's as the source, and explained, as did the bank employees, that fraudulent transactions often begin appearing weeks or months after the skimming devices have been removed. No. one was ever arrested or charged in relation to the alleged skimmers or the fraudulent transactions.

         Rumors began spreading that Jarrell's Exxon was skimming card information, and customers at Jarrell's mentioned their concerns to the Kesslers and to the gas attendants. Jerry Kessler called Heidi Richmond and asked that she refrain from telling people that Jarrell's was skimming cards. He testified that she refused and suggested doing so would require lying to her customers. She does not recall the telephone conversation with Jerry Kessler, but does recall Joe Kessler coming to the bank to demand that employees stop accusing Jarrell's of skimming cards. She testified that it was an angry conversation, with customers in the lobby. Joe Kessler testified that he was calm and polite, and no customers were present. The bank employees suggest that customers themselves came to the conclusion that Jarrell's Exxon was the source of the skimming, pointing to certain customers who use their cards only to purchase gas at Jarrell's. One witness testified that she had unauthorized transactions on an Exxon credit card that she used exclusively at Jarrell's. Other customers of both Jarrell's and First Community Bank testified that bank employees told them that there were skimmers on the pumps at Jarrell's and advised them specifically not to use their cards at Jarrell's. Those customers also testified that they did not view the bank employees' statements as an accusation against Jarrell's or its employees, but as an effort to protect the bank and its customers from fraud. One customer testified that his card was cancelled without notice, although there were no unauthorized transactions, and a bank employee told him that it was cancelled because he had used it at Jarrell's.

         Gas station attendants showed the Kesslers social media posts from community members who assumed that employees at Jarrell's were themselves stealing the card information. Joe Kessler wrote a letter to the editor in an effort to defend the business' reputation. The local paper in Hinton declined to publish the letter, and the Beckley Register Herald opted to write a full story, rather than publishing the letter. The story notes that no skimmers were found at Jarrell's, and Sandra Cozort Presley is quoted saying that businesses are also victims of skimmers, and she would continue to purchase gas from Jarrell's.

         Joe and Jerry Kessler both testified that the business suffered a significant decline as soon as the rumors began. Other employees at Jarrell's also noticed a reduction in gas sales. The Kesslers testified that the business has never fully recovered. Jerry Kessler also testified about damage to his personal reputation. Given the small community in Hinton, he felt that people viewed him differently and he suffered from the stigma of his community believing he was not honest or trustworthy.


         The well-established standard in consideration of a motion for summary judgment is that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a)-(c); see also Hunt v. Cromartie, 526 U.S. 541, 549 (1999); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Hoschar v. Appalachian Power Co., 739 F.3d 163, 169 (4th Cir. 2014). A “material fact” is a fact that could affect the outcome of the case. Anderson, 477 U.S. at 248; News & Observer Publ'g Co. v. Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010). A “genuine issue” concerning a material fact exists when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor. FDIC v. Cashion, 720 F.3d 169, 180 (4th Cir. 2013); News & Observer, 597 F.3d at 576.

         The moving party bears the burden of showing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp., 477 U.S. at 322-23. When determining whether summary judgment is appropriate, a court must view all of the factual evidence, and any reasonable inferences to be drawn therefrom, in the light most favorable to the nonmoving party. Hoschar, 739 F.3d at 169. However, the non-moving party must offer some “concrete evidence from which a reasonable juror could return a verdict in his favor.” Anderson, 477 U.S. at 256. “At the summary judgment stage, the non-moving party must come forward with more than ‘mere speculation or the building of one inference upon another' to resist dismissal of the action.” Perry v. Kappos, No.11-1476, 2012 WL 2130908, at *3 (4th Cir. June 13, 2012) (unpublished decision) (quoting Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985)).

         In considering a motion for summary judgment, the court will not “weigh the evidence and determine the truth of the matter, ” Anderson, 477 U.S. at 249, nor will it make determinations of credibility. N. Am. Precast, Inc. v. Gen. Cas. Co. of Wis., 2008 WL 906334, *3 (S.D. W.Va. Mar. 31, 2008) (Copenhaver, J.) (citing Sosebee v. Murphy, 797 F.2d 179, 182 (4th Cir. 1986). If disputes over a material fact exist that “can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party, ” summary judgment is inappropriate. Anderson, 477 U.S. at 250. If, however, the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, ” then summary judgment should be granted because “a complete failure of proof concerning an essential element . . . necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 322-23.


         First Community Bank moves for summary judgment as to each count of the Plaintiffs' complaint. The Plaintiffs alleged the following causes of action: (1) tortious interference with business interests; (2) defamation and slander; (3) defamation per se; (4) tort of false light invasion of privacy; (5) tort of outrage; and (6) negligence.

         A. ...

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