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Vance v. Johnson

Court of Appeals of Missouri, Western District, Fourth Division

December 17, 2019

WILLIE VANCE, Appellant,
DON JOHNSON, Respondent.

          Appeal from the Circuit Court of Johnson County, Missouri The Honorable R. Michael Wagner, Judge

          Before: Karen King Mitchell, Chief Judge, Presiding, Anthony Rex Gabbert, Judge, and W. Ann Hansbrough, Special Judge


         Appellant Willie Vance ("Vance") appeals the circuit court's entry of Final Judgment in favor of Respondent Don Johnson ("Johnson"). He asserts one point on appeal, claiming the circuit erred in dismissing Johnson as a party. We reverse and remand for further proceedings.


         Respondent Don Johnson started A-1 Cabling LLC in 2009. He was, and remains, the only member of the LLC. For his first few years in business, he worked alone without any employees. In 2013, Appellant Willie Vance began working with Johnson part-time before being hired fulltime beginning in 2014. Around the same time, Johnson hired Hailey Woods to handle invoicing and payroll tasks in the office. Woods worked for Johnson until December of 2014. In January of 2015, Johnson hired Marty Junkins who took over Woods' tasks and also began managing client relationships.

         Woods and Junkins both had authority to make management decisions including financial decisions, and they also had check-writing authority. However, Johnson retained the power to make hiring and firing decisions, set work schedules, and otherwise veto any decisions made by Woods or Junkins to the extent he chose to do so. Employees reported their hours with timesheets. Johnson reviewed these timesheets himself most of the time.

         Cable installers including Vance were initially trained by Johnson, though over time he sent employees to independent trainers, and he also trained supervisors who then trained those working under them. Johnson and A-1 Cabling provided employees with most of the equipment necessary for their work including a "fiber splicer" and "cable certifier" worth $10, 000 and $25, 000 respectively. Employees also used vehicles provided by Johnson or A-1. Johnson initially purchased vehicles under his own name and leased them to A-1 Cabling, but as the business grew it was eventually able to buy its own equipment as needed, though the original vehicles owned by Johnson individually continued to be used by the business throughout its operation. When employees traveled as part of their work, A-1 paid for hotels for workers or reimbursed them for hotel expenses they personally incurred. A-1 Cabling provided employees with T-shirts to wear as uniforms. At the end of the working day, employees would email Johnson the details of the work they completed including photographs.

         At some point during A-1 Cabling's operation, A-1 Cabling and Johnson were investigated by the State of Missouri for failing to comply with applicable labor laws. Prior to the investigation, A-1 Cabling's employees were treated as independent contractors, but the State determined - and Johnson later testified that he agreed with this determination - that A-1 Cabling's workers were, in fact, employees. As a result of the investigation, A-1 Cabling paid fines to the State of Missouri, the Attorney General, and the IRS.

         After litigation commenced, Johnson started a second company called Johnson Technologies. Johnson owns 49% of Johnson Technologies, and his wife holds the remaining 51%. Johnson Technologies was engaged in similar work to that undertaken by A-1 Cabling, LLC, and many of A-1 Cabling's customers began doing business with Johnson Technologies. At the time of the evidentiary hearing discussed below, Johnson testified that A-1 Cabling had a few hundred dollars in the bank, but otherwise held no assets. Vance argued that this was an attempt to shield assets from the pending litigation, but Johnson claimed that he had been considering the shift for some time because he did not like the name "A-1 Cabling," and by having his wife as part-owner of Johnson Technologies he could qualify for government contracts as a minority-owned business.

         In June of 2015, Vance filed suit for unpaid wages. On July 1, 2017, with leave of the circuit court, Vance filed his Second Amended Petition "on behalf of himself and all [other] similarly situated" employees for unpaid wages under the Fair Labor Standards Act, 29 U.S.C. § 216(b) ("FLSA"), Missouri's minimum wage laws, Section 290.500 et seq., RSMo 2016 ("MMWL"), and for Wage-related Class Claims under Mo. Sup. Ct. R. 52.08.[1] His Second Amended Petition named Don Johnson as a defendant alongside A-1 Cabling, who had been a party to the suit from the initial petition.

         Johnson filed a Motion to Strike Don Johnson from the petition pursuant to Rule 55.27(e). The motion - which was a brief, two pages including the certificate of service - claimed that Vance had added a third party defendant "without leave, reason, or proof that [Johnson was] an indispensable party." Johnson also stated that Vance's actions were related to A-1 Cabling as a business entity, and that Johnson, who owned and managed A-1 Cabling, was shielded from liability.

         In response, Vance argued that Johnson was permissively joined as an individual liable under the relevant statutes through Rule 52.05(a), and that he was not joined as a third-party defendant under Rules 52.11 or 52.04(a) as Johnson implied. He also suggested that the court should view the motion to strike as a motion for judgment on the pleadings pursuant to Rule 55.27(b) because Johnson was arguing that he was shielded from liability by A-1 Cabling's status as an LLC, and he was distinctly not arguing that the Second Amended Petition was "redundant, immaterial, impertinent, or scandalous" as required for a motion to strike under Rule 55.27(e). Finally, he presented arguments as to why Johnson was individually liable under the statutes, and he included excerpts from Johnson's deposition. Because, he argued, both he and Johnson incorporated evidence outside of the pleadings in their motions and suggestions, the court should view Johnson's motion to strike as one for summary judgment.

         A hearing was held in October of 2017 where Johnson testified about his ownership and operation of the business, and counsel for the parties argued their positions. The court subsequently granted Johnson's motion to strike in a docket entry, stating: "On Respondent's Motion to Strike: Court, after hearing evidence, and oral argument, and taking the credibility of the witness into consideration, ...

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