FOSTER v. W-TRANSFER, INC. et al
Filing
22
ORDER GRANTING 13 DEFENDANTS' MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS - Count I is dismissed with prejudice as to Unruh and the Unknown Defendants and dismissed without prejudice as to Ace and MAC. Count II is dismissed with prejudice as to all Defendants. Plaintiff is granted 30 days from the date of this entry to file an amended complaint that addresses the pleading deficiencies described herein, if it so chooses to reassert Count I claims against Ace and MAC. Failure to file an amended complaint within the specified period of time will likely result in a dismissal with prejudice of Count I as to all Defendants, except W-Transfer. Signed by Judge Sarah Evans Barker on 6/22/2012. (JLM)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
NEW ALBANY DIVISION
BRIAN FOSTER,
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)
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Plaintiff,
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vs.
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W-TRANSFER, INC., ACE
MANAGEMENT SERVICES, INC., MAC )
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CONSTRUCTION & EXCAVATING,
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INC., CHAD M. UNRUH, UNKNOWN
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DEFENDANTS,
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Defendants.
4:11-cv-118-SEB-WGH
ORDER GRANTING DEFENDANTS’ MOTION FOR PARTIAL JUDGMENT ON
THE PLEADINGS
This cause is before the Court on Defendants’ Motion for Partial Judgment on the
Pleadings [Docket No. 13], filed on November 23, 2011, pursuant to Rule 12(c) of the
Federal Rules of Civil Procedure. Plaintiff Brian Foster brings this claim against
Defendants W-Transfer, Inc. (“W-Transfer”), Ace Management Services, Inc. (“Ace”),
Mac Construction & Excavating, Inc. (“MAC”), Chad M. Unruh (“Unruh”), and
Unknown Defendants, alleging that they violated Indiana’s Wage Payment Statute
(“WPS”), IND. CODE § 22-2-5-1, by withholding wages and fringe benefits to which he
was entitled by Indiana’s Common Construction Wage Act (“CCWA”), IND. CODE § 516-7 et seq., and the Davis-Bacon Act (“DBA”), 40 U.S.C.§ 3141 et seq., and also
converted those wages and benefits in violation of Indiana Code § 35-43-4-3. Plaintiff
seeks relief under Indiana’s Crime Victim Relief Act (“CVRA”), IND. CODE § 34-24-3-1.
For the reasons detailed in this entry, we GRANT Defendants’ motion for
judgment on the pleadings.
Factual Background
Plaintiff is a teamster and resident of Pekin, Indiana. Compl. ¶ 1. W-Transfer is a
private trucking corporation based in Jeffersonville, Indiana. Ans. ¶ 2. Ace and MAC are
privately held corporations based in New Albany, Indiana. W-Transfer, Ace, and MAC
are all wholly owned subsidiaries of Unruh Unlimited, Inc. [Docket No. 4]. Defendant
Chad Unruh is an officer of W-Transfer. Ans. at 13.
From January 1, 2009 to August 31, 2011, Plaintiff was an at-will employee of WTransfer. Compl. ¶ 11. Plaintiff alleges that W-Transfer occasionally leases its
employees to Ace and MAC to work on various public works contracts, some of which
are governed by the CCWA and the DBA. Id. ¶ 9. For contracts covered by the CCWA,
the Wage Committee (the “Committee”)1 determines the wages and fringe benefits for
skilled teamsters. Id. ¶¶ 12-15. Likewise, for contracts covered by the DBA, the United
States Department of Labor (“DOL”) determines the wages and fringe benefits for Group
9 Teamsters. Id. ¶¶ 16-19. Employers who engage in these contracts are required to
1
The Committee is a five member body appointed by the local legislature of the county
for “[t]he purpose of ascertaining what the common construction wage is in the county.” IND.
CODE § 5-16-7-1(b). This wage determination then “applies to any contract for which the
awarding government agency lets not later than three (3) months after the date the committee
determines the rate of wages.” Id. § 5-16-7-1(d).
adhere to the Wage Determinations set for payment of employees. IND. CODE § 5-16-7-1
et seq.
Plaintiff alleges that during the period of his employment at W-Transfer, he
worked on various contracts covered by both the CCWA and the DBA and was paid
between $15.50 and $17.00 per hour by W-Transfer. He further alleges that Corporate
Defendants paid him substantially less in wages and fringe benefits than the mandatory
rate set by either the Committee or the DOL in violation of the WPS (Count 1). Compl. ¶¶
21-25. Additionally, Plaintiff asserts that this retention of wages constitutes a criminal
conversion by W-Transfer, Ace, MAC, Unruh, and Unknown Defendants (Count 2). Id. ¶
29.
Plaintiff filed his suit in Clark Circuit Court on October 12, 2011. On the same
date, Defendants removed the action to this court. Defendants’ filed their Answer to
Plaintiff’s Complaint on October 19, 2011. Defendants filed this motion for Partial
Judgment on the Pleadings on November 23, 2011.
Legal Analysis
I. Standard of Review
Federal Rule of Civil Procedure 12(c) allows a party to move for judgment after
the pleadings are closed but early enough not to delay trial. Remy, Inc. v. Tecnomatic,
S.p.A., 2010 WL 4174594, at *2 (S.D. Ind. Oct. 18, 2010). A motion for judgment on the
pleadings is subject to the same standard of review as a motion to dismiss under Rule
12(b)(6). Id. (citing Cuatle v. Torres, 2010 WL 2545627, at *1 (S.D. Ind. June 15,
2010)). This analysis necessarily implicates Rule 8(a), which prescribes the contents of
pleadings. Fed. R. Civ. P. 8(a); see Killingsworth v. HSBC Bank Nev., N.A., 507 F.3d
614, 618 (7th Cir. 2007) (requiring a “short and plain statement” to demonstrate the
pleader’s entitlement to relief).
“[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’
requires more than labels and conclusions, and a formulaic recitation of a cause of
action’s elements will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Similarly, a claim is facially
plausible “when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Greater
Indianapolis Chapter of N.A.A.C.P. v. Ballard, 741 F. Supp. 2d 925, 930 (S.D. Ind.
2010). But where the properly pled facts do not permit the court to infer “more than the
mere possibility of misconduct,” the pleader has not satisfied his burden. Id. at 931
(citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009)).
If, on a motion for judgment on the pleadings, the parties present matters outside
the pleadings, the motion will be treated as one for summary judgment under Rule 56.
Fed. R. Civ. P. 12(d). However, judicially noticed documents such as “historical
documents, documents contained in the public record, and reports of administrative
bodies” may be considered by the court at this stage of litigation without converting the
motion into a motion for summary judgment. Menominee Indian Tribe of Wis. v.
Thompson, 161 F.3d 449, 456 (7th Cir. 1998). All uncontested allegations to which the
parties had an opportunity to respond must be accepted as true. United States v. Wood,
925 F.2d 1580, 1581 (7th Cir. 1991).
II. Claim for Withheld Wages and Fringe Benefits
Under Indiana’s Wage Payment Statute, an employer-employee relationship is a
prerequisite for any claim for unpaid wages. Black v. Employee Solutions, Inc., 725
N.E.2d 138, 141 (Ind. Ct. App. 2000). There is no dispute that W-Transfer was Plaintiff’s
employer; however, Defendants contend that at no time did Ace, MAC, Unruh, or
Unknown Defendants employ plaintiff for projects covered by the CCWA or DBA. The
WPS does not define the term “employer”; therefore, its meaning must be found as a term
of art at common law. Mortgage Consultants, Inc. v. Mahoney, 655 N.E.2d 493, 495 (Ind.
1995). The employer’s “right to control” a hired party is the primary consideration in
determining the existence of an employment relationship. Black, 725 N.E.2d at 143. In
order for a claim under the WPS to rise to a level of plausibility, a plaintiff must plead
sufficient facts to “allow the Court to draw the reasonable inference that [the Defendants]
had the right to control a variety of aspects relating to the Plaintiff[’s] job[] and that [they]
denied the Plaintiff[] the right to receive [his] wages in a timely fashion.” Puma v. Hall,
2009 WL 5068629, at *3 (S.D. Ind. Dec. 17, 2009) (citations omitted).
Here, we find that Plaintiff has omitted from his complaint certain factual
allegations that are necessary to allow us to know or to draw a reasonable inference that
Ace and MAC were his employers. First, although the Complaint alleges that W-Transfer
at times leased employees to Ace and MAC, it fails to allege that the Plaintiff himself was
leased to either Ace or MAC by W-Transfer. Simply because W-Transfer has a practice
of leasing employees to Ace and MAC does not give rise to the reasonable assumption
that Plaintiff numbered among them. Second, Plaintiff has no facts to support the claim
that the projects on which he worked involved Corporate Defendants other than WTransfer. Plaintiff must not only assert that he himself was leased, but also that the
company to whom he was leased was contracting for a project covered by the CCWA or
DBA. Accordingly, we find that Plaintiff has failed to properly allege a necessary
element of his wage claims against Ace and MAC, but because these defects are factual,
they are curable. Iqbal, 129 S.Ct.at 1949. Thus, Plaintiff’s claims against Ace and MAC
brought pursuant to the Wage Payment Statue shall be DISMISSED WITHOUT
PREJUDICE.2
We next address the plausibility of Plaintiff’s claims against Unruh as an officer of
W-Transfer. Under Indiana law, the liability of corporate officers is determined by the
common law rules of agency. Indiana Dept. of Transp. v. McEmery, 737 N.E.2d 799, 802
(Ind. Ct. App. 2000) (citing Winkler v. V. G. Reed & Sons, Inc., 638 N.E.2d 1228, 1231
(Ind. 1994)). A corporation is a distinct legal entity from its shareholders and officers;
accordingly, it is the corporate entity that retains responsibility even though it may act
through its agents, officers, employees and shareholders. Id. at 803 (citing Winkler, 638
N.E.2d at 1231-32).
2
Here, Defendants’ motion for judgment on the pleadings attacks the sufficiency of the
complaint, and thus is “subject to the same standard as a motion for dismissal for failure to state
a claim.” G4S Justice Servs., Inc. v. Corr. Program Servs., Inc., 2009 WL 3200592, at *1 (S.D.
Ind. Sept. 25, 2009) (quoting Thomason v. Nachtrieb, 888 F.2d 1202, 1204 (7th Cir. 1989)).
Here, Plaintiff argues that because Unruh retained the “power or right to command
the act and to direct or control the means, manner or method of performance” of the
Plaintiff, Unruh is subject to liability as his employer. Jackson Trucking Co. v. Interstate
Motor Sys., 104 N.E.2d 575, 578 (Ind. Ct. App. 1954) (quoting Uland v. Little, 82 N.E.2d
536, 538 (Ind. Ct. App. 1948)) (emphasis omitted). However, Plaintiff’s theory does not
properly take into account the rules of agency; even though Unruh may have been able to
personally direct or control Plaintiff’s performance, he did so as an agent of W-Transfer
and was not an independent employer subject to liability simply because of his position.
Additionally, Plaintiff has alleged no injury caused by Unruh; rather, he merely requests
that Unruh be held jointly and severally liable. Relief may only be accorded on the basis
of a showing of injury; here, no such injury has been alleged. For these reasons, we shall
GRANT Defendant Unruh’s motion and DISMISS WITH PREJUDICE the claims
against him as to Count I.
With regard to Count I claims against “Unknown Defendants,” similar defects
appear in Plaintiff’s complaint as those discussed above. Unascertained persons, by their
very nature, cannot be proven to have identifiable qualities without first resolving the
question of identity. Here, the fatal defect is the impossibility of proving the Unknown
Defendants as Plaintiff’s employer without identifying these defendants. As such,
Plaintiff’s claims are futile under the Wage Payment Statute and must be disregarded.
Further, Plaintiff does not allege that these Unknown Defendants actually injured him; it
is alleged only that they employed him. As previously stated, relief may not be accorded
without injury. Thus, we shall GRANT the Defendants’ motion and DISMISS WITH
PREJUDICE the claims against Unknown Defendants as to Count I.
III. Claim for Criminal Conversion
Under Indiana Law, a person commits criminal conversion when he “knowingly or
intentionally exerts unauthorized control over the property of another....” IND. CODE § 3543-4-3(a). Money may only serve as the basis for a conversion claim when it qualifies as
a “special chattel,”wherein it must be a “a determinant sum with which the defendant was
entrusted to apply to a certain purpose.” Tobin v. Ruman, 819 N.E.2d 78, 89 (Ind. Ct.
App. 2004) (quoting Huff v. Biomet, 654 N.E.2d 830, 836 (Ind. Ct. App. 1995)). It is well
established that refusal to pay a debt will not support a conversion claim. Newland
Resources, LLC v. Branham Corp., 918 N.E.2d 763, 776 (Ind. Ct. App. 2009) (quoting
Huff, 654 N.E.2d at 836).
In the instant case, Plaintiff alleges that the wages and fringe benefits that
Defendants failed to pay him constitute a special chattel, as defined in Huff, that will
support a claim of conversion under Indiana Code § 35-43-4-3. 654 N.E.2d at 836.
Plaintiff argues that State agencies pay funds to contractors with the specific purpose of
paying workers, and that, by withholding portions of these funds instead of paying
Plaintiff, Defendants are liable for conversion. Under his theory, the State’s disbursement
of these specifically purposed funds to Defendants satisfies the “entrustment” element.
Further Plaintiff maintains that the “determinable sum” requirement is satisfied because
the exact amount that the Plaintiff is owed can be calculated based on the rate of wages as
determined by Committee or DOL and the number of hours Plaintiff worked. Plaintiff’s
theory is at least original, but unfortunately for him has little support in precedent. The
case law is clear that a plaintiff must allege sufficient facts to “allow the Court to draw
the reasonable inference that the Plaintiff[] entrusted determinable sums of money to the
Defendants to apply for a certain purpose.” Puma, 2009 WL 5068629 at *4 (emphasis
added). In order to satisfy the “entrustment” element, the money at issue must be the
plaintiff’s own, whereas here, the funds of a third party, namely, the State’s, are those
being entrusted to reimburse contractors for wages to be paid to their employees.
Compare Roake, 528 N.E.2d at 791 (finding conversion where an employer allowed a
health care insurance policy to lapse while continuing to accept checks to pay for it from
an employee), with Tobin, 819 N.E.2d at 89 (holding that failure of an employer to pay
employee retained earnings is at most failure to pay a debt). As to the “determinant sum”
element, State funds for public works projects are not earmarked for payment of each
employee, but are part of a larger heterogenous pool that can be held until the contractor
pays his debts. See IND. CODE §§ 5-16-5-1, 36-1-12-12(a) (stating that government shall
withhold final payment to the contractor until it has paid his employees and workmen).3
Because these funds are co-mingled they cannot be considered a determinant sum,
thereby precluding the classification of money as a special chattel under these facts. See
Stevens v. Butler, 639 N.E.2d 662, 666-67 (Ind. Ct. App. 1994) (citing Kopis v. Savage,
498 N.E.2d 1266, 1270 (Ind. Ct. App. 1986)) (“[C]omingled funds...cease[] to be a
separate, specifically identifiable chattel....”). For these reasons, any amendment to the
3
Both provisions have been amended by 2012 Ind. Acts 1053 (effective July 1, 2012).
complaint would be futile. Thus we shall GRANT Defendants’ motion and DISMISS
WITH PREJUDICE Count II.
IV. Conclusion
For the reasons described above, we GRANT Defendants’ motion for judgment on
the pleadings. Count I is DISMISSED WITH PREJUDICE as to Unruh and the Unknown
Defendants and DISMISSED WITHOUT PREJUDICE as to Ace and MAC. Count II is
DISMISSED WITH PREJUDICE as to all Defendants. Plaintiff is granted thirty (30)
days from the date of this entry to file an amended complaint that addresses the pleading
deficiencies described herein, if it so chooses to reassert Count I claims against Ace and
MAC. Failure to file an amended complaint within the specified period of time will
likely result in a dismissal with prejudice of Count I as to all Defendants, except WTransfer.
IT IS SO ORDERED.
06/22/2012
Date: ____________________________
_______________________________
SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana
Copies to:
George D. Adams
FISHER & PHILLIPS LLP
gadams@laborlawyers.com
Elijah D. Baccus
ALLOTTA FARLEY WICHMAN CO. LPA
ebaccus@afwlaw.com
Marilyn Lee Widman
ALLOTTA FARLEY & WIDMAN CO., LPA
mwidman@afwlaw.com
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