Farley v. Family Dollar Stores, Inc. et al

Filing 36

ORDER. It is ORDERED that the Recommendation of the United States Magistrate Judge 24 is AFFIRMED and ADOPTED. It is further ORDERED that defendant's Motion to Dismiss 8 is GRANTED. By Judge R. Brooke Jackson on 02/11/13. (alvsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Honorable R. Brooke Jackson
Civil Action No. 12-cv-00325-RBJ-MJW
JULIE FARLEY, on behalf of herself and all similarly situated persons,
Plaintiff,
v.
FAMILY DOLLAR STORES, INC., and
FAMILY DOLLAR STORES OF COLORADO, INC.,
Defendants.

ORDER

This case comes before the Court on defendants’ motion to dismiss [docket #8]. This
matter was referred to Magistrate Judge Watanabe who issued a Recommendation on October 3,
2012 [#24] and the plaintiff timely objected.
Facts
Plaintiff Julie Farley was a salaried manager at a Family Dollar Store in Fruita, Colorado
from October 2009 until March 2011. Ms. Farley alleges that during that time her primary duties
as a store manager were non-managerial tasks that were also performed by hourly employees
including cleaning the store, unloading trucks, working the cash register, assisting customers and
completing basic paperwork. However, as a salaried manager, Ms. Farley did not receive
overtime pay when she worked more than twelve hours per day or forty hours per week. Ms.
Farley alleges that this violated the Colorado Wage Claim Act, § 8-4-101, et seq (“CWCA”) and
was also a breach of an implied unilateral contract between her and the defendants that required
the defendants to pay her in accordance with state wage and hour laws.

Ms. Farley now seeks to bring a class action suit on behalf of all store managers
employed at defendants’ Colorado stores since February 7, 2007. Defendants filed a motion to
dismiss all of the claims for the period prior to February 7, 2009 because the plaintiff’s claims
are subject to a three year statute of limitations period. Magistrate Judge Watanabe agreed and
granted defendants’ motion to dismiss. Ms. Farley filed a timely objection.
Standard
Following the issuance of a magistrate judge’s recommendation on a dispositive matter
the district court judge must “determine de novo any part of the magistrate judge’s disposition
that has been properly objected to.” Fed. R. Civ. P. 72(b)(3). The district judge is permitted to
“accept, reject, or modify the recommended disposition; receive further instruction; or return the
matter to the magistrate with instructions.” Id.
In reviewing a motion to dismiss, the Court views the motion in the light most favorable
to the nonmoving party and accepts all well-pleaded facts as true. Teigen v. Reffrow, 511 F.3d
1072, 1079 (10th Cir. 2007). However, the facts alleged must be enough to state a claim for
relief that is plausible, not merely speculative. Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
555, 570 (2007). A plausible claim is a claim that “allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). Pleadings that offer only “labels and conclusions or a formulaic recitation of
the elements of a cause of action will not do.” Id. at 678 (quoting Twombly, 550 U.S. at 555).
Conclusions
CWCA Claim
The CWCA has a two year statute of limitations for all actions unless the violation was
willful, and then the limitations period is extended to three years. C.R.S. § 8-4-122. The two

year or three year period begins after the cause of action accrues. Ms. Farley relies on Farris v.
ITT Cannon, 834 F. Supp. 1260 (D. Colo. 1993) to support her assertion that a claim cannot
accrue until employment ends. However, defendants argue that the cause of action accrues at the
time of the violation. Magistrate Judge Watanabe determined that under the CWCA a cause of
action accrues at the time of the violation. This Court agrees.
“A cause of action generally accrues ‘when a suit may be maintained thereon.’” Hannon
Law Firm, LLC v. Melat, Pressman & Higbie, LLP, No. 009CA0788, 2011 WL 724742 (Colo.
App. March 3, 2011) aff’d Melat, Pressman & Higbie, L.L.P. v. Hannon Law Firm, L.L.C., 287
P.3d 842 (Colo. 2012). In Farris, the court held that the plaintiff’s claims under the CWCA
were not barred by the statute of limitations because the limitations period did not begin to run
until the plaintiff’s employment was terminated. The court explained that the CWCA “clearly
and unambiguously provides that it only applies to employees whose wages are withheld after
their employment terminates. . . . Consequently, [plaintiff] had no alternative but to wait until he
left ITT in February, 1992 before bringing his § 8–4–104 wage claim.” 834 F. Supp. at 1265.
The court’s analysis in Farris is no longer instructive. The CWCA has been amended,
allowing employees to bring suits against their employers for unpaid wages before the
employment relationship ends. See C.R.S. § 8-4-103(1); see also Summers v. Texas de Brazil
(Denver) Corp., No. 09CV3147, 2011 WL 1832334 (D. Colo. May 11, 2011); Pinkstaff v. Black
& Decker (U.S.) Inc., 211 P.3d 698, 706 (Colo. 2009). Thus, unlike in Farris, the managers at
Family Dollar Stores could have brought suit immediately to collect any unpaid wages. They did
not need to wait until their employment terminated. Therefore, the cause of action against the
Family Dollar Stores accrued at the time any wages were withheld, and a lawsuit must have been

filed within three years of that time. Defendants’ motion to dismiss all claims under the CWCA
from the period prior to February 7, 2009 is granted.
Implied Contract Claim
The defendants also argue that Ms. Farley’s contract claim from the period prior to
February 7, 2009 must be dismissed because it is outside of the statue of limitations period for
contract actions. Under Colorado law the statute of limitations period for a contract action is
three years. C.R.S. § 13-80-101(1)(a). However, contract actions to collect “a liquidated debt or
an unliquidated, determinable amount of money” are subject to an extended six year statute of
limitations. C.R.S. §13-80-103.5(1)(a). The plaintiff argues that the longer six year period
applies to this suit because the damages were either liquidated or a determinable amount of
money.
In his opinion Magistrate Judge Watanabe explained that actions brought under implied
contracts — meaning contracts based on conduct rather than express terms — were not subject to
the longer statute of limitations period. As Magistrate Judge Watanabe acknowledged, the
Colorado Supreme Court granted certiorari on this issue, but Judge Watanabe’s recommendation
was filed before the Court’s decision. The supreme court issued a ruling this fall. Thus, in
reviewing Judge Watanabe’s recommendation, this Court has the benefit of the Colorado
Supreme Court’s opinion on this issue in Portercare Adventist Health Sys. v. Lego, 286 P.3d 525
(Colo. 2012).
In Portercare, the court held that the six year statute of limitations applies to implied in
fact contracts for liquidated medical expenses. Id. at 526. The court explained that “a contract
for hospital services contains a ‘liquidated debt’ for the purposes of section 13-80-103.5(1)(a) if
the amount owed is ascertainable either by reference to the agreement, or by simple computation

using extrinsic evidence if necessary.” Id. Under Colorado law hospitals must disclose to
patients average facility charges before providing medical care. Id. at 529. Thus, before the
hospital treated the defendant, it provided her with an itemized list of costs. The court held that
“[b]ecause these charges are pre-calculated by operation of law, a hospital bill is capable of
ascertainment by simple computation by adding pre-determined medical costs together to arrive
at a total amount due.” Id.
Under Portercare, it is not dispositive that the alleged contract between Ms. Farley and
the defendants was an implied contract. Rather, to determine the appropriate statute of
limitations period, the inquiry is whether “the amount owed is ascertainable either by reference
to the agreement, or by simple computation using extrinsic evidence.” See id. at 526. Ms. Farley
argues that the amount is ascertainable by simple computation by multiplying her overtime hours
by “time and one-half.” However, the defendants cite to Clements v. Serco, Inc., 530 F.3d 1224
(10th Cir. 2008) to support their argument that if any compensation is due, only “half time” pay
would be due.
Clements explains that there are different ways to calculate wages and overtime due to an
employee. Id. The “fluctuating work week method” is used when “there is a clear mutual
understanding of the parties that the fixed salary is compensation (apart from overtime
premiums) for the hours worked each workweek, whatever their number, rather than for working
40 hours of some other fixed weekly work period.” Id. at 1230 (quoting 29 C.F.R. § 778.114(a)).
In these situations, instead of one and one-half times hourly wages, the rate an employee is due
for overtime is reduced to “half time.” Id.
Unlike in Porterhouse where the hospital bill could be easily ascertained because an
itemized bill had been given to the patient before treatment was provided, in this case the

damages cannot be easily computed. Rather, there is a dispute as to the mutual understanding of
the parties and thus what overtime compensation, if any, the plaintiff is owed. Accordingly, the
damages are not liquidated or easily ascertainable and the applicable statute of limitations period
is three years. All claims from the period prior to February 7, 2009 are dismissed.
Order
Accordingly, it is ORDERED that the Recommendation of the United States Magistrate
Judge [#24] AFFIRMED and ADOPTED. It is further ORDERED that defendant’s Motion to
Dismiss [#8] is GRANTED.
DATED this 11th day of February, 2013.
BY THE COURT:

___________________________________
R. Brooke Jackson
United States District Judge