WEST VIRGINIA RECORD

MARTINSBURG – A lawsuit alleging a Long John Silver’s employee tripped and scalded himself with a bucket of hot water will be heard in federal court, though a recent state Supreme Court decision could be a factor.

On Nov. 8, U.S. District Judge Gina Groh, of the Northern District of West Virginia, denied Joshua Shepherd’s motion to remand his lawsuit to Jefferson County Circuit Court.

Shepherd is seeking more than $1 million. He sued Little Giant Enterprises, the operator of the Long John Silver’s in Charles Town, and its four individual members – Hollis, Sidney, Gregory and Cheryl Wormsby.

It was Cheryl Wormsby’s residence that was at issue in Groh’s order. She was ruled to be a resident of Alabama – and not West Virginia – creating a diversity of citizenship among the parties.

Little Giant Enterprises’ registration with the Secretary of State states that Wormsby has a West Virginia address. However, Groh ruled that she lives in Mobile, Ala.

“She is registered to vote in Alabama and has an Alabama driver’s license,” Groh wrote.

“She owns a car that is registered in Alabama and pays Alabama income taxes. The Plaintiff’s attempt to rebut this evidence with the document from the West Virginia Secretary of State that lists Cheryl Wormsby as having a West Virginia address fails because evidence of residency in a state alone does not render an individual a citizen of that state.”

The complaint says in early June 2011, a water leak had developed in the walk-in freezer and was causing ice to form on the floor. Instead of repairing the leak, supervisors had employees fill large pots with hot water to pour on the ice that had formed, the complaint says.

The water being used was taken from the Rethermalizer, which kept water at a heat of approximately 197 degrees, Shepherd says.

On June 11, he was told to pour the water on the ice, he says.

“The icy floor made Plaintiff Joshua Shepherd slip and fall while holding the large pot of scalding water,” the complaint says.

“As a result, the scalding water poured over Plaintiff Joshua Shepherd’s stomach and legs, causing first-, second- and third-degree burns on 12% of his body.”

Shepherd says he suffered from blisters, open wounds and inflamed skin in the aftermath. He adds that the pain was excruciating despite medication.

The burns affected all of his activities of daily living, including sleep, caring for his child, showering, using the restroom and getting dressed, he says.

The complaint also raises the issue of piercing the corporate veil – that is, holding individuals responsible for the corporation they own instead of treating the corporation as a single entity.

The complaint, filed June 3, says the corporate charter of Little Giant Enterprises has been revoked, and as a result, the “corporate veil should be pierced” and the Wormsbys should be held individually responsible for the acts occurring at the restaurant.

On Nov. 18, Shepherd’s attorneys filed a supplement to its response in opposition to the defendants’ motion to dismiss.

It points to a Nov. 6 decision by the state Supreme Court that answered a certified question from Harrison County Circuit Court Judge Thomas A. Bedell.

The question is whether the state’s version of the Uniformed Limited Liability Company Act afford complete protection to members of a limited liability company against a plaintiff seeking to pierce the corporate veil.

In an opinion authored by Justice Robin Davis, the court ruled that it does not.

“To pierce the veil of a limited liability company in order to impose personal liability on its member(s) or manger(s), it must be established that (1) there exists such unity of interest and ownership that the separate personalities of the business and of the individual member(s) or manager(s) no longer exist and (2) fraud, injustice, or an inequitable result would occur if the veil is not pierced,” Davis wrote.

“This is a fact driven analysis that must be applied on a case-by-case basis, and, pursuant to W.Va. Code §31B-c-303(b) (1996) (Repl. Vol. 2009), the failure of a limited liability company to observe the usual company formalities relating to the exercise of its company powers or management of its business may not be a ground for imposing personal liability on the member(s) or manager(s) of the company.”

Little Giant Enterprises argues the case has no application to Shepherd’s case because Alabama’s veil-piercing principles must be applied because the company is an Alabama LLC.

Shepherd is represented by Peter A. Pentony of the Law Office of F. Samuel Byrer in Charles Town. The defendants are represented by Brian M. Peterson and Tracey A. Rohrbaugh of Bowles Rice in Martinsburg.

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.