Timothy J. Goddard, Appellant/cross-respondent v. Csk Auto, Inc., Respondent/cross-appellant

CourtCourt of Appeals of Washington
DecidedOctober 14, 2013
Docket68336-5
StatusUnpublished

This text of Timothy J. Goddard, Appellant/cross-respondent v. Csk Auto, Inc., Respondent/cross-appellant (Timothy J. Goddard, Appellant/cross-respondent v. Csk Auto, Inc., Respondent/cross-appellant) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Timothy J. Goddard, Appellant/cross-respondent v. Csk Auto, Inc., Respondent/cross-appellant, (Wash. Ct. App. 2013).

Opinion

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

TIMOTHY J. GODDARD, an individual, No. 68336-5-1 Appellant/ Cross-Respondent, DIVISION ONE

CSK AUTO, Inc., an Arizona UNPUBLISHED OPINION Corporation, Respondent/ Cross-Appellant. FILED: October 14. 2013

Spearman, A.C.J. — The central issue in this appeal is whether Timothy

Goddard, after voluntarily resigning from CSK Auto, Inc., was obligated to repay

the company for relocation costs. Goddard sued CSK after CSK, citing a

promissory note relating to relocation expenses, withheld a portion of his last

paycheck. CSK counterclaimed, seeking recovery of additional relocation

expenses under various theories, including breach of the promissory note, and

alleging Goddard had violated a restrictive covenant by soliciting CSK employees

after he resigned. The trial court ruled that CSK was entitled to recover some of

the relocation expenses, dismissed CSK's counterclaim for breach of a non

solicitation agreement, and entered judgment on CSK's breach of contract

counterclaim and its request for attorney's fees. Goddard appeals, contending

the trial court erred in dismissing his claims and granting summary judgment on No. 68336-5-1/2

CSK's counterclaim for breach of the promissory note. He also contends the

amount of the award of attorney's fees to CSK was unreasonable. CSK cross

appeals, contending the trial court erred in ruling that CSK was not entitled to

recover all of the relocation expenses and dismissing CSK's counterclaim for

breach of the non-solicitation agreement. We affirm in all respects.

FACTS

Goddard began working for CSK, an Arizona-based auto parts retailer, in

1984. In early 2008, when his position was eliminated, he agreed to accept a

demotion to regional vice-president and move from Arizona to the Seattle area.

The effective date of his transfer was January 28, 2008. Under CSK's Relocation

Policy, Goddard was required to repay relocation expenses if he voluntarily

resigned within 12 months "following the acceptance of a relocation.. .." Clerk's

Papers (CP) at 581. CSK also presented him with an Interim Promissory Note

("Promissory Note"), which was executed on February 15, 2008.1 Under the

1The note states, in part: FOR VALUE RECEIVED, the undersigned Maker [Goddard] promises to pay to the order of CSK AUTO, INC.... the estimated relocation sum of Two Hundred Thirty Seven Thousand seven hundred fifty dollars and fifty cents, ($237750.50 adjusted for actual relocation payments made to or for the Maker, without interest, on or before thirty days of the first to occur of the maker: 1.) terminating employment with the company within two years from the effective date of transfer....

Maker hereby authorizes CSK Auto, Inc. to withhold such sum as may be necessary to repay this note from Maker's final paycheck and/or any other payment due Maker as a result of Maker's employment at CSK Auto, Inc. subject to final audit and final promissory note.

CP at 84. No. 68336-5-1/3

Promissory Note, Goddard promised to repay relocation expenses if he

terminated his employment "within two years from the effective date of transfer

.. .." ]d The relocation process apparently took several months. CSK ultimately

paid $360,982.10 to relocate Goddard and his family.

During Goddard's relocation, CSK was in merger discussions with O'Reilly

Automotive, Inc. (O'Reilly). On March 31, 2008, CSK presented Goddard with a

Severance Agreement, whose purpose was to "foster the continuous

employment of key management personnel" given a possible change of company

control. CP at 86. Under the agreement, Goddard would be entitled to severance

benefits for six months if his employment were terminated by CSK without cause

or by Goddard for good reason.2 His annual salary at the time was $177,000. The agreement also contained restrictive covenants, including a non-solicitation

agreement. On May 16, CSK presented Goddard with a Letter Agreement

assuring him he would continue to receive relocation benefits notwithstanding

any change in company control. The Letter Agreement stated that "from and after

the consummation of the Change in Control and until the completion of your

permanent relocation," CSK would reimburse relocation expenses on terms, in

any event, no less favorable than the Relocation Policy. CSK was acquired by

O'Reilly on July 11 and became its subsidiary.

2 Severance benefits included accrued vacation and basesalary continuation in accordance with normal payroll practices for six months after termination, with continuation of benefits. No. 68336-5-1/4

In August 2008, Goddard participated in a meeting with other regional vice

presidents. At the meeting, O'Reilly's management acknowledged the Severance

Agreement and gave the regional vice presidents the option to resign and be

compensated under that agreement. Ted Wise, O'Reilly's co-president, then

offered Goddard a regional manager position, with a starting pay of $145,000.

Wise informed Goddard that if he stayed, he would have to sign a Voluntary

Rescission of Severance Agreement ("Rescission Agreement"). CP at 59.

Goddard accepted the position, as reflected in an Offer of Employment signed on

August 25, 2008, and signed the Rescission Agreement.3 Under the Rescission Agreement, CSK agreed, in consideration for

Goddard's continued employment after the merger, to accelerate the payment of

the severance benefits described in the Severance Agreement despite the fact

that his employment would continue. Goddard would receive the payment on July

1, 2009 only if he was employed on that date or, if not employed, had not

voluntarily resigned. The Rescission Agreement generally rescinded the

Severance Agreement but retained the latter's restrictive covenants. It also

contained release provisions: Section 5(b) ("release provision") released

Goddard and Section 5(a) released CSK.

CSK remitted to Goddard the payment described in the Rescission

Agreement several weeks early, on June 12, 2009.4 Goddard voluntarily resigned

3Goddard believes he signed the Rescission Agreement around the same time he signed the Offer of Employment in August 2008.

4The payment amounted to $88,500.

4 No. 68336-5-1/5

on July 2 and began working as a regional manager for AutoZone, CSK's

competitor, on July 6. On July 8, Jack Morefield, director of human

resources/payroll for CSK, informed Goddard by letter:

On February 15, 2008 you signed an Interim Promissory Note for the estimated relocation expenses related to your move to the Seattle area. .. . Due to your voluntary resignation before completing 2 years of employment after the effective date of your transfer, the note is now due and payable.

CP at 111. CSK offset most of Goddard's final paycheck under the terms of the

Promissory Note, paying him $615.60 in salary to comply with minimum wage

obligations.5 Over the next few months, three district managers left CSK to work for

AutoZone. Goddard was involved in recruiting them. CSK employee Derek Reid

met with Goddard. CSK offered Reid a $5,000 annual salary increase and

persuaded him to stay.

On August 28, 2009, Goddard filed a complaint against CSK, seeking

recovery ofthe amounts it deducted from his final paycheck.6 CSK counterclaimed, seeking recovery of additional relocation expenses and an

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