Hamilton v. Water Whole International Corp.

302 F. App'x 789
CourtCourt of Appeals for the Tenth Circuit
DecidedDecember 10, 2008
Docket07-6153, 07-6157
StatusUnpublished
Cited by26 cases

This text of 302 F. App'x 789 (Hamilton v. Water Whole International Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hamilton v. Water Whole International Corp., 302 F. App'x 789 (10th Cir. 2008).

Opinion

ORDER AND JUDGMENT *

MICHAEL R. MURPHY, Circuit Judge.

I. INTRODUCTION

This case involves common law and statutory claims for back wages and other relief stemming from plaintiffs’ employment with Water Whole International Corporation (“Water Whole”). Defendants Water Whole and Wolfgang Zwanziger challenge the jury verdicts in favor of plaintiffs Richard Kus and James Hamilton. Defendants allege the district court improperly admitted evidence of emotional suffering and past Water Whole settlements; improperly excluded evidence of Kus’s and Hamilton’s status as employees; erred in its jury instructions regarding alter ego and statutory wage claims; and improperly exercised jurisdiction over wage claims of non-residents under the Oklahoma Protection of Labor Act (“Wage Act”), Okla. Stat. Ann. tit. 40, §§ 165.1-165.11. Kus and Hamilton appeal the district court’s denial of leave to amend their motion for attorney’s fees and the subsequent denial of attorney’s fees. They also appeal the entry of summary judgment for defendants Floran U.S., Floran Barbados, and Floran Canada (the “Floran companies”). Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm in part and reverse in part.

II. BACKGROUND

A. Factual History

Water Whole manufactured products for water treatment, water storage, and water distribution systems. Water Whole stopped salary payments to Kus and Hamilton, who were employed as Sales Managers for Water Whole, in March, 2003. Plaintiffs claimed Zwanziger, president of Water Whole, represented that new investor money was expected and they would receive back pay if they continued working.

Kus and Hamilton further alleged that during one meeting, Zwanziger also promised them each an additional 1000 shares of stock if they would continue working for *792 Water Whole. Hamilton claimed that during his employment he suffered financial injury when Water Whole terminated his health insurance without first informing him. Hamilton alleged he did not learn of the termination of his health insurance until he had an outpatient procedure and attempted to file a claim with his insurance company.

Kus’s employment with Water Whole ended in December, 2003. Hamilton asserted he continued to work for Water Whole until June, 2004. Neither Kus nor Hamilton ever received any wages or salary for work performed after March 1, 2003.

In March, 2004, Water Whole and Flo-ran Canada entered into a written contract providing for the purchase of Water Whole assets by Floran Canada. Water Whole’s stockholders approved the asset sale on March 23, 2004. Pursuant to the asset purchase agreement, Floran Canada assumed $2,098,827 of Water Whole’s debt. The transfer of assets from Water Whole to Floran Canada occurred in July, 2004. Floran Canada subsequently conveyed the assets to its subsidiaries, Floran U.S. and Floran Barbados.

B. Procedural History

Hamilton and Kus filed suit against Water Whole, Zwanziger, and the Floran companies. The district court granted the Floran companies’ motion for summary judgment, concluding Hamilton and Kus failed to present a genuine issue of material fact as to whether the Floran companies were the alter egos of Water Whole.

The claims against Water Whole and Zwanziger were tried before a jury. Hamilton and Kus asserted claims under the Wage Act seeking their respective unpaid wages and expenses, stock, and liquidated damages. They also asserted claims of fraud against Water Whole and Zwanziger premised on repeated promises to pay for past and future work that constituted material misrepresentations or reckless falsehoods. Hamilton and Kus contended the representations were made to fraudulently induce their continued employment with Water Whole.

During trial, evidence of plaintiffs’ emotional distress and Water Whole’s settlements with other employees was introduced over objection. In addition, the district court rejected defense evidence of plaintiffs’ work for other companies during the time period when they were purportedly Water Whole employees.

On the Wage Act claims, the jury awarded both Kus and Hamilton wages, compensation for the promised stock, and liquidated damages. On the fraud claims, Kus and Hamilton each received actual and punitive damages. Kus and Hamilton filed a motion for attorney’s fees based on the wrong statute. The district court denied their request for leave to amend the motion and denied the motion for fees.

III. Discussion

A. The Floran Defendants

This court reviews orders granting summary judgment de novo. Salehpoor v. Shahinpoor, 358 F.3d 782, 785 (10th Cir.2004). Summary judgment is appropriate only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). In making this determination, courts are to view the factual record and draw all reasonable inferences in the light most favorable to the nonmoving party. Curtis v. Okla. City Pub. Sch. Bd. of Educ., 147 F.3d 1200, 1214 (10th Cir.1998). This court reviews de novo a district court’s interpretation of state law. Salve Regina Coll. v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991).

*793 Kus and Hamilton alleged the Floran companies were alter egos of Water Whole. The Oklahoma Supreme Court has held if a “corporation is so organized and controlled and its affairs so conducted that it is merely an instrumentality or adjunct of another corporation” the two corporations will.no longer be considered distinct legal entities. Wallace v. Tulsa Yellow Cab Taxi & Baggage Co., 178 Okla. 15, 61 P.2d 645, 648 (1986). The factors to be considered in making this determination are:

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302 F. App'x 789, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hamilton-v-water-whole-international-corp-ca10-2008.