UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1208
VERONA SMITH; JULIUS K. CALDWELL; GEORGANN S.
CALDWELL,
Plaintiffs - Appellants,
versus
UNITED RECOVERY, INCORPORATED; UNITED LEASING,
INCORPORATED, a Virginia Corporation; EDWARD
H. SHIELD, an individual,
Defendants - Appellees.
Appeal from the United States District Court for the Southern
District of West Virginia, at Beckley. David A. Faber, Chief
District Judge. (5:03-cv-00036)
Submitted: January 11, 2007 Decided: March 21, 2007
Before WILLIAMS, MICHAEL, and GREGORY, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Lawrence A. Melfa, Samuel M. Grant, BUTLER, MELFA & TAYLOR, P.A.,
Towson, Maryland, for Appellants. Robert B. Allen, Pamela C. Deem,
Teresa K. Thompson, ALLEN, GUTHRIE, MCHUGH & THOMAS, P.L.L.C.,
Charleston, West Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
This case arises out of allegations of unauthorized
removal of coal and timber from a 2,134-acre tract of land owned by
the plaintiffs in Raleigh County, West Virginia. The plaintiffs
appeal the district court’s grant of judgment as a matter of law to
defendants United Recovery, Inc. and Edward Shield following a jury
verdict in favor of the plaintiffs. The plaintiffs also appeal the
district court’s grant of summary judgment to the defendants on the
claim that United Recovery’s corporate veil should be pierced to
impose liability on defendants United Leasing, Inc. and Shield.
Finding no error, we affirm.
I.
In January 2002 United Recovery entered into an option
agreement with the plaintiffs to buy the tract of land that is the
subject of this dispute. United Recovery later agreed to a coal
lease on the property with RAR Construction Company. RAR obtained
a leasehold interest in any rights United Recovery possessed in the
property, and the lease obligated RAR to pay royalties on any coal
mined. Although United Recovery had not exercised its option to
purchase, RAR moved onto the property to resume reclamation work
abandoned by a prior mining company. Plaintiff Julius Caldwell
witnessed RAR’s activities and objected to the company’s presence.
After conversations with United Recovery and RAR officials,
2
Caldwell agreed to allow RAR to continue its work if RAR paid
royalties for any coal removed. RAR consented to this arrangement.
United Recovery ultimately decided not to exercise its option to
purchase the property.
The plaintiffs sued United Recovery, its sister company,
United Leasing, and Shield for trespass and conversion allegedly
committed by RAR. The plaintiffs contended that RAR was an agent
of the defendants, making them liable for RAR’s actions. The
district court granted summary judgment to United Leasing and
Shield on the plaintiffs’ claim that United Recovery was a mere
instrumentality of United Leasing and Shield. The district court
allowed the conversion and trespass claims to proceed to trial
against United Recovery and Shield, and the jury returned a
$197,891.99 verdict in favor of the plaintiffs. The district court
subsequently granted United Recovery and Shield’s motion for
judgment as a matter of law, concluding that the evidence was
insufficient to support the verdict. The plaintiffs appeal both
the summary judgment and the judgment as a matter of law.
II.
The plaintiffs’ main argument is that the district court
erred in granting the defendants’ motion for judgment as a matter
of law. We review de novo a trial court’s decision to grant such
a motion. See Konkel v. Bob Evans Farms, Inc., 165 F.3d 275, 279
3
(4th Cir. 1999). Judgment as a matter of law is warranted when “a
reasonable jury would not have a legally sufficient evidentiary
basis to find for the party” presenting an issue at trial. Fed. R.
Civ. P. 50(a). The evidence is considered in the light most
favorable to the non-moving party. Conner v. Schrader-Bridgeport
Int’l, Inc., 227 F.3d 179, 192 (4th Cir. 2000).
The plaintiffs did not sue RAR, the entity that actually
conducted the reclamation work on their property. The plaintiffs
thus sought to recover from United Recovery and Shield on an agency
theory. An agency relationship exists when a contract or conduct
establishes that an entity or individual is controlled by a
principal and works for the benefit of the principal. 1 Michie’s
Jurisprudence, Agency § 2. An agent has no individual interest in
the subject of the agency and does not profit from the relationship
beyond any compensation offered by the principal. Central Trust
Co. v. Virginia Trust Co., 197 S.E. 12, 19 (W. Va. 1938).
The district court correctly concluded that there was
insufficient evidence of an agency relationship between United
Recovery and Shield, on the one hand, and RAR, on the other, to
sustain a jury verdict in the plaintiffs’ favor. The plaintiffs’
evidence failed to establish (1) the requisite control by United
Recovery and Shield over RAR’s actions or (2) the absence of a
profit motive for RAR in the relationship. The coal lease relied
upon by the plaintiffs sets forth a typical lessor-lessee
4
relationship and does not contain any directions of the sort that
would show an intent to establish an agency relationship.
Moreover, the events following plaintiff Caldwell’s discovery of
RAR on the property do not support a finding that RAR was subject
to the control and direction of United Recovery or Shield. Shield,
as an officer of United Recovery, told RAR and Caldwell to resolve
the problem themselves. This evidence reveals that United Recovery
and Shield were not exercising control over RAR’s actions. The
plaintiffs also failed to prove that RAR was acting for the benefit
of United Recovery or Shield. If the lease had taken effect, RAR
would have profited from its mining activities independent of any
compensation from United Recovery or Shield. RAR was obligated
only to pay a royalty as rent; it could retain any profit.
The plaintiffs also failed to produce evidence to support
their alternative theory that United Recovery and Shield were joint
tortfeasors with RAR. An entity or person will be held liable for
the tort of another if it or he acted at the same time for a
similar purpose or engaged in some form of concerted action. See
Harless v. First Nat’l Bank, 289 S.E. 2d 692, 699 (W. Va. 1982).
The evidence in this case shows only a potential landlord-tenant or
lender-borrower relationship between United Recovery and RAR.
United Recovery and Shield did not participate in or direct any of
the activities asserted to be tortious.
5
Because the plaintiffs did not prove (1) that RAR was
acting as the agent of United Recovery or Shield or (2) that United
Recovery or Shield participated in a joint tortious act with RAR,
the district court did not err in granting United Recovery and
Shield’s motion for judgment as a matter of law.
III.
Our determination that there is no liability on the part
of United Recovery and Shield moots the plaintiffs’ claim that
United Recovery’s corporate veil should be pierced to impose
liability on United Leasing and Shield.
* * *
The district court’s order of summary judgment and the
judgment as a matter of law are
AFFIRMED.
6