DORSEY v. SHIRE REGENERATIVE MEDICINE, INC.

Filing 19

ENTRY ON DEFENDANT'S MOTION TO DISMISS: For the reasons set forth above, Shire's motion to dismiss (dkt. no. 8) is GRANTED and Dorsey's Complaint is dismissed in its entirety; however, Dorsey is entitled to replead his claims. See Barry Aviation, Inc. v. Land O'Lakes Mun. Airport Comm'n, 377 F.3d 682, 687 (7th Cir. 2004) ("The better practice is to allow at least one amendment regardless of how unpromising the initial pleading appears because except in unusual c ircumstances it is unlikely that the court will be able to determine conclusively on the face of a defective pleading whether plaintiff actually can state a claim.") (quotation marks and citation omitted). If Dorsey believes there is a good fait h factual basis for any of his claims in light of this Entry, he shall file an amended complaint that sets forth the factual basis for them by Wednesday, May 14, 2014. If Dorsey fails to file an amended complaint within the required time frame, this case will be dismissed with prejudice without further notice. Signed by Judge William T. Lawrence on 4/30/2014. ***SEE ENTRY FOR ADDITIONAL INFORMATION*** (DW)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
JON DORSEY,
Plaintiff,
vs.
SHIRE REGENERATIVE MEDICINE, INC.,
Defendant.

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) CAUSE NO. 1:13-cv-1583-WTL-DKL
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ENTRY ON DEFENDANT’S MOTION TO DISMISS
This cause is before the Court on Defendant Shire Regenerative Medicine, Inc.’s
(“Shire”) motion to dismiss (dkt. no. 9). This motion is fully briefed, and the Court, being duly
advised, GRANTS the motion for the reasons set forth below.
I.

APPLICABLE STANDARD

Shire moves to dismiss Dorsey’s Complaint pursuant to Federal Rule of Civil Procedure
12(b)(6), arguing that the Complaint fails to state a claim for which relief can be granted. In
reviewing a Rule 12(b)(6) motion, the Court “must accept all well pled facts as true and draw all
permissible inferences in favor of the plaintiff.” Agnew v. National Collegiate Athletic Ass’n, 683
F.3d 328, 334 (7th Cir. 2012). For a claim to survive a motion to dismiss for failure to state a
claim, it must provide the defendant with “fair notice of what the . . . claim is and the grounds
upon which it rests.” Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009) (quoting Erickson v.
Pardus, 551 U.S. 89, 93 (2007)) (omission in original). A complaint must “contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Agnew, 683
F.3d at 334 (citations omitted). A complaint’s factual allegations are plausible if they “raise the

right to relief above the speculative level.” Bell Atlantic Corp v. Twombly, 550 U.S. 544, 556
(2007).
II.

BACKGROUND

Jon Dorsey was hired by Advanced BioHealing (“ABH”) in April 2011. Later that year,
ABH was acquired by Shire. In order to encourage ABH’s former employees to remain with
Shire though the transition period, Shire offered retention bonuses in the amount of $30,000.
The Retention Agreement (the “Agreement”) provided, in relevant part:
You will be eligible to receive a retention bonus in the lump sum amount of
$30,000 for remaining employed “in good standing” with Shire through
December 28, 2012. This means that you can have no active discipline on file for
performance or conduct related matters and must remain in full compliance with
all Company policies and procedures. The retention bonus is payable as soon as
reasonably possible following that date[.]
If you resign or are terminated for performance or conduct reasons, you will not
be eligible to receive the termination bonus.
Dkt. No. 1-1. Dorsey signed the Agreement on September 5, 2011, deciding to remain employed
by Shire through the transition period.
On October 25, 2012, however, Dorsey was terminated for submitting credit forms that
were not properly signed by Southside Food Clinic, P.C. (“Southside”), a customer of Shire.
Because of time constraints, Southside’s representative directed Dorsey to copy her signature
from one form onto the other four forms so they could all be submitted in a timely fashion. At
the time Dorsey did so, there was no written or verbal policy that required the forms to contain
an original customer signature. Further, at least one other Shire employee had previously copied
a customer’s signature onto the forms, but was not terminated for doing so. As a result of
Dorsey’s termination, he did not receive the $30,000 retention bonus. He filed suit against Shire

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in September 2013, in Hamilton County Superior Court. The case was removed to this Court on
October 3, 2013.
III.

DISCUSSION

In his Complaint, Dorsey brings five counts against Shire: 1) breach of contract; 2)
unjust enrichment; 3) breach of duty of good faith and fair dealing; 4) a claim under the Indiana
Wage Claims Statute (“WCS”); and 5) promissory estoppel. Shire moves to dismiss all counts.
Its arguments will be addressed, in turn, below.
A. Breach of Contract
Count I of Dorsey’s Complaint is a claim for breach of contract. “The elements of a
breach of contract action are the existence of a contract, the defendant’s breach thereof, and
damages.” Murat Temple Ass’n, Inc. v. Live Nation Worldwide, Inc., 953 N.E.2d 1125, 1128-29
(Ind. Ct. App. 2011). At issue is whether Shire breached the Agreement, as it acknowledges the
existence of a contract and Dorsey’s damages.
Shire argues that the Agreement unambiguously stated that Dorsey would receive the
bonus if he remained “employed ‘in good standing’ with Shire through December 28, 2012.”
Dkt. No. 1-1. Because Dorsey’s employment was terminated in October 2012, he was not
entitled to the bonus as he was no longer “in good standing” with the company. As such, Shire
argues it did not breach the express terms of the Agreement when it failed to pay Dorsey the
$30,000 retention bonus. The Court agrees.
While Dorsey’s Complaint alleges that his termination was wrongful, Indiana is an atwill employment state, which bars him from bringing a wrongful termination claim against
Shire. See Whinery v. Roberson, 819 N.E.2d 465, 472 (Ind. Ct. App. 2004) (“An at-will
employee may not sue in contract for wrongful termination.”). While Dorsey argues that “[t]his

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case is not about whether Dorsey was an employee at-will who could be terminated by Shire at
any time,” Pl.’s Response at 9, because the receipt of his bonus was contingent on remaining
employed in good standing, his at-will status is relevant. Unfortunately for Dorsey, it does not
matter why Shire terminated his employment—whether it be for performance or conduct reasons
or any other reason. As long as the termination was not unlawful, i.e., discriminatory, Dorsey
has no recourse. Taking as true the factual allegations in his Complaint,1 Dorsey, at most, has
shown that his termination was unreasonable, unfair, or mistaken; he has not alleged, however,
that it was unlawful. Simply put, Dorsey had to remain employed in good standing with Shire to
receive his bonus, and no matter the reason, he did not because he was fired in October 2012.
Even accepting all the facts alleged in his Complaint as true, Dorsey has failed to state a breach
of contract claim. Accordingly, Count I of Dorsey’s Complaint is DISMISSED.
B. Unjust Enrichment and Promissory Estoppel
Dorsey’s Complaint also includes claims for unjust enrichment and promissory estoppel.
“Both claims of promissory estoppel and unjust enrichment permit recovery where no express
contract or contract in fact exists.” Fiederlein v. Boutselis, 952 N.E.2d 847, 857 (Ind. Ct. App.
2011). Shire argues that because there is “a valid, enforceable contract that controlled the
relationship between Dorsey and Shire regarding when and if the retention bonus should be

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Dorsey argues that Shire misconstrues the facts stated in his Complaint. For example,
Shire states that Dorsey’s Complaint alleges that he was fired because he submitted credit forms
that had not been properly authorized by the customer. Dorsey quibbles with this noting his
Complaint actually alleges, “According to Shire, Dorsey was terminated for submitting credit
forms that required a customer signature, and further claims that the customer signature
submitted on the credit forms was not authentic and had been manipulated by Dorsey.”
Complaint ¶ 16. As the Court noted above, it simply does not matter why Dorsey was fired,
even if his termination was the result of an inaccurate assumption or a poor investigation on
Shire’s part. Dorsey was an at-will employee and could be fired for any lawful reason. If Shire
believed the signatures were improperly authorized, as alleged in Dorsey’s Complaint, this is
clearly a lawful reason for termination.
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paid,” Def.’s Brief at 10, these claims must be dismissed. In other words, Shire concedes that
there is a valid, enforceable contract at issue in this case.
Dorsey notes in his brief that he pled these claims in the alternative in the event that
discovery proves or this Court finds that the Agreement is not valid and enforceable. See
Cromeens, Holloman, Sibert, Inc v. AB Volvo, 349 F.3d 376, 397 (7th Cir. 2003) (“Under that
doctrine [the doctrine of pleading in the alternative], a party is allowed to plead breach of
contract, or if the court finds no contract was formed, to plead for quasi-contractual relief in the
alternative.”). Nevertheless, Shire argues that Dorsey’s “at-will” status dooms these claims as
well, and ultimately, the Court agrees.
In order for Dorsey to recover under promissory estoppel, he “must assert and
demonstrate that the employer made a promise to the employee, that the employee relied on that
promise to his detriment, and that the promise otherwise fits within the Restatement test for
promissory estoppel.” Hinkel v. Sataria Distribution & Packaging, Inc., 920 N.E.2d 766, 771
(Ind. Ct. App. 2010). To the extent that Dorsey relied on the promise of the $30,000 retention
bonus, that promise was always contingent on his continued employment, which, as noted above,
could be terminated for any lawful reason, at any time by Shire. The damages Dorsey suffered
in relying on this promise—not receiving the $30,000— were a known possibility and something
Shire was always legally allowed to create.
Turning now to Dorsey’s unjust enrichment claim, in order to state a claim for unjust
enrichment, “a claimant must establish that a measurable benefit has been conferred on the
defendant under such circumstances that the defendant’s retention of the benefit without payment
would be unjust.” Zoeller v. E. Chicago Second Century, Inc., 904 N.E.2d 213, 220 (Ind. 2009).
To the extent that Dorsey conferred a benefit onto Shire by remaining employed, he did so

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knowing that the promised bonus was always contingent on his continued employment, which
again, was at-will. In other words, the Court does not believe that Shire was unjustly enriched in
failing to provide Dorsey the bonus when Dorsey knew from the outset that: 1) he had to remain
employed to be eligible for the bonus; and 2) he remained an at-will employee. Further, there is
no indication in Dorsey’s Complaint that Shire did not adequately compensate him for his
performance. Shire paid Dorsey a salary—the bonus was to be paid in addition to that salary.
Accordingly, Counts II and V are DISMISSED.
C. Breach of Duty of Good Faith and Fair Dealing
Count III of Dorsey’s Complaint alleges that “Shire had a duty to act in good faith with
respect to Dorsey’s employment2 and in carrying out the terms of the Retention Agreement.”
Complaint ¶ 35. Shire acknowledges that it had a duty to act in good faith with respect to the
Agreement; however, it argues that Dorsey’s Complaint “fails to set forth a plausible claim that
Shire acted in bad faith.” Reply at 5. Shire notes that Indiana has defined “bad faith” in the
contract context as follows:
[T]he absence of good faith is bad faith, but bad faith is not simply bad judgment
or negligence. Rather, it implies the conscious doing of a wrong because of
dishonest purpose or moral obliquity. It is different from the negative idea of
negligence in that it contemplates a state of mind affirmatively operating with
furtive design or ill will.

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Shire notes that “[t]o the extent that Dorsey is alleging that Shire had a duty of good
faith and fair dealing with respect to his termination, this is incorrect under Indiana law.” Def.’s
Brief at 7. Shire is correct. See N. Indiana Pub. Serv. Co. v. Dabagia, 721 N.E.2d 294, 300 (Ind.
Ct. App. 1999) (noting that “Indiana does not recognize [an implied covenant of good faith and
fair dealing] in employment at will contexts.”) (quoting Mehling v. Dubois County Farm Bureau,
601 N.E.2d 5, 8 (Ind. Ct. App. 1992)). Dorsey argues that “this case is about whether the
obligation of good faith and fair dealing applies to Shire’s promise to pay Dorsey the $30,000
retention bonus.” Response at 10. The Court will thus only address the good faith and fair
dealing argument with respect to the Agreement.
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Turner v. Board of Aviation Comm’rs, 743 N.E.2d 1153, 1171 (Ind. Ct. App. 2001). Even
viewing the facts in the light most favorable to Dorsey, the Court agrees with Shire that the facts
do not rise to the level of “bad faith.” Essentially what Dorsey alleges is that he was unaware of
any policy requiring original signatures, and if Shire had properly investigated the matter before
terminating his employment, it would have learned that Southside directed Dorsey to copy its
signature so the credit forms could be submitted in a timely manner. Once again, these facts
suggest that Shire’s termination was unreasonable, mistaken, or unfair, but the Court agrees with
Shire that they fail to illustrate a “conscious doing of a wrong because of dishonest purpose of
moral obliquity.” Id. Accordingly, Shire’s motion to dismiss Count III of Dorsey’s Complaint is
GRANTED.
D. Wage Payment
Finally, Dorsey brings a claim under the WCS which applies to employees whose
employment has been terminated by their employer. See St. Vincent Hosp. & Health Care Ctr.,
Inc. v. Steele, 766 N.E.2d 699, 705 (Ind. 2002) (“The Wage Claims Statute references employees
who have been separated from work by their employer and employees whose work has been
suspended as a result of an industrial dispute.”). It states, “[w]henever any employer separates
any employee from the pay-roll, the unpaid wages or compensation of such employee shall
become due and payable at regular pay day for pay period in which separation occurred[.]” Ind.
Code § 22-2-9-2. The WCS defines a “wage” as follows: “all amounts at which the labor or
service rendered is recompensed, whether the amount is fixed or ascertained on a time, task,
piece, or commission basis, or in any other method of calculating such amount.” Ind. Code § 222-9-1(b). Dorsey’s Complaint thus alleges that in failing to pay him the promised bonus, Shire
has violated the WCS, and seeks liquidated damages and attorney fees. See Ind. Code § 22-2-5-2.

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Shire argues that this claim must be dismissed because a bonus is not a wage as defined
by Indiana law, noting that Indiana has held “a ‘bonus’ is a wage if it is compensation for time
worked and is not linked to a contingency such as the financial success of the company.” Pyle v.
Nat’l Wine & Spirits Corp., 637 N.E.2d 1298, 1300 (Ind. Ct. App. 1994). While Dorsey argues
that the $30,000 retention bonus was not based on “the financial success of Shire,” Response at
12, it is clear that it was contingent on him “remaining employed ‘in good standing’ with Shire
through December 28, 2012.” Dkt. No. 1-1. Accordingly, because the bonus was linked to this
contingency, it is not a “wage” under the WCS, and Count IV is also DISMISSED.
IV.

CONCLUSION

For the reasons set forth above, Shire’s motion to dismiss (dkt. no. 8) is GRANTED and
Dorsey’s Complaint is dismissed in its entirety; however, Dorsey is entitled to replead his claims.
See Barry Aviation, Inc. v. Land O’Lakes Mun. Airport Comm’n, 377 F.3d 682, 687 (7th Cir.
2004) (“The better practice is to allow at least one amendment regardless of how unpromising
the initial pleading appears because except in unusual circumstances it is unlikely that the court
will be able to determine conclusively on the face of a defective pleading whether plaintiff
actually can state a claim.”) (quotation marks and citation omitted). If Dorsey believes there is
a good faith factual basis for any of his claims in light of this Entry, he shall file an
amended complaint that sets forth the factual basis for them by Wednesday, May 14, 2014.
If Dorsey fails to file an amended complaint within the required time frame, this case will be
dismissed with prejudice without further notice.
SO ORDERED: 04/30/2014

_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana

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