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Richards v. Octane Environmental, LLC

United States District Court, N.D. West Virginia

December 4, 2019

RICK RICHARDS and ERNEST RICHARDS, II, Plaintiffs/ Counter Defendants,
v.
OCTANE ENVIRONMENTAL, LLC, an Ohio limited liability company, TERENCE SEIKEL, CRAIG STACY, and JOSEPH SEIKEL, Defendants/Counter Claimants/ Third-Party Plaintiff/Counter Defendant,
v.
JASON RICHARDS, AMANDA HUNT, AARON GILES, and JACOB RICHARDS, Third-Party Defendants/Counter Claimants against Octane Environmental, LLC.

          MEMORANDUM OPINION AND ORDER DENYING MOTION TO DISMISS WITH PREJUDICE AND DENYING MOTION FOR SUMMARY JUDGMENT WITHOUT PREJUDICE [ECF NO. 145]

          THOMAS S. KLEEH UNITED STATES DISTRICT JUDGE.

         Pending before the Court is a Motion to Dismiss/Motion for Summary Judgment filed by the Defendants and Third-Party Plaintiffs, Octane Environmental, LLC (“Octane”), Terence Seikel (“T. Seikel”), Craig Stacy (“Stacy”), and Joseph Seikel (“J. Seikel”) (together, “Defendants”).[1] For the reasons discussed below, the Court denies the Motion to Dismiss with prejudice and denies the Motion for Summary Judgment without prejudice.

         I. PROCEDURAL HISTORY

         On August 13, 2019, the Plaintiff, Rick Richards (“Plaintiff”), filed an Amended Complaint in this action. ECF No. 142. In the Amended Complaint, Plaintiff brings the following legal claims: (I) Declaratory Judgment Against Defendants, (II) Breach of Contract, (III) Unjust Enrichment, (IV) Promissory Estoppel, (V) Defamation, (VI) Conversion, and (VII) Violation of the West Virginia Wage Payment and Collection Act. On August 27, 2019, Defendants filed a Motion to Dismiss/Motion for Summary Judgment (the “Motion”), which is now fully briefed and ripe for review. ECF No. 145.

         II. FACTUAL BACKGROUND

         In the Amended Complaint, Plaintiff avers the following set of facts, which the Court regards as true for purposes of the Motion. Plaintiff worked for Extreme Plastics Plus, Inc. (“Extreme Plastics”) from October 2012 to July 2016. Am. Compl., ECF No. 142, at ¶ 9. While working there, and in his prior work in the oil and gas services industry, he provided environmental containment products and services and “developed a substantial book of customer business” while doing so. Id.

         In July 2016, Stacy, T. Seikel, and others approached Plaintiff. Id. ¶ 10. They were looking to start a new business (Octane) to provide environmental containment products and services in the oil and gas industry. Id. Stacy and T. Seikel offered Plaintiff:

(1) an initial 2.5% equity partner ownership in Octane with the potential to receive up to 5% equity partner ownership based on performance, to be paid out upon the sale of Octane; (2) at-will employment by Octane as its General Manager; (3) an annual salary; (4) participation in a profit-sharing program under which Plaintiff would receive a certain percentage of Octane's profits, to be paid on a monthly basis; and (5) other fringe benefits such as insurance and vacation time.

Id. ¶ 11.

         In exchange for these promises, Plaintiff promised to:

(1) leave his employment with Extreme Plastics and begin serving as General Manager of Octane; (2) solicit or attempt to solicit his existing customers from Extreme Plastics to become customers of Octane and otherwise be responsible for developing Octane's oil and gas business; and (3) recruit other employees in the industry to become employed by Octane.

Id. Plaintiff began working to develop Octane as its General Manager. Id. ¶ 12. He received a paid salary, was an at-will employee during his employment, and was involved in the formation and establishment of Octane. Id. ¶¶ 12, 13. Plaintiff never entered into a non-solicitation or non-compete agreement at Octane. Id. ¶ 14. Octane relied on Plaintiff to solicit his previous customers and develop “almost all of Octane's business and customer base.” Id. ¶ 15. Plaintiff brought his own personal equipment to Octane to be used by its employees, including “trailers, a saw, water pumps, welders, and several other items valued at approximately $30, 000.00.” Id. ¶ 16. Plaintiff recruited several employees to work at Octane. Id. ¶ 18. Plaintiff never received any verbal or written discipline or reprimand by his immediate supervisors at Octane. Id. ¶ 24.

         Still, T. Seikel notified Plaintiff on May 7, 2018, without explanation, that Plaintiff would be demoted to a Business Development position. Id. ¶ 25. He was replaced by Johnny Goff (“Goff”). Id. On May 11, 2018, Goff informed Plaintiff that he was suspended from employment with Octane, effective immediately, for “illegal activity.” Id. ¶ 28. Plaintiff was informed during this conversation “that his computer and company vehicle had been confiscated by management, that his suspension would last for one week, and that [he] was not permitted on the Octane premises during the suspension period.” Id. ¶ 30. Plaintiff was “instructed and made to leave . . . in the plain view of his fellow employees and former subordinates.” Id. ¶ 31.

         On May 12, 2018, Plaintiff submitted his resignation to T. Seikel. Id. ¶ 32. Since he left, Plaintiff has been informed that Defendants have made and continue to make false and defamatory statements about him to Octane employees and customers. Id. ¶ 33. These include:

that Plaintiff engaged in illegal activity; that Plaintiff stole money from Octane during his employment and used said money to start a new company; that plaintiff allowed his brother(s) to work there while simultaneously working for a competitor; and that Plaintiff was working for a competing company while at Octane.

Id.

         Plaintiff has made a request for the return of the personal property described above, which remain in Octane's possession, and Octane has ignored the request. Id. ¶ 34. Octane has not compensated or offered to compensate Plaintiff for this property. Id. Plaintiff never received the promised ownership in or profit-sharing of Octane. Id. ¶ 35. Plaintiff never did any of the following during his employment with Octane:

(1) turn any customers away from Octane; (2) independently perform work for any customer for his own personal benefit or to the detriment of Octane; (3) use Octane's property or business for any personal advantage or to derive any personal benefit other than his promised salary as an Octane employee; (4) derive any secret profits by virtue of the employment ...

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