Blanch v. Chubb & Sons, Inc.

Filing 10

MEMORANDUM. Signed by Judge Catherine C. Blake on 11/8/12. (hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

David Blanch

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v.
Chubb & Son, Inc.

Civil No. CCB-12-1965

MEMORANDUM
Now pending before this court is a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6) brought by defendant Chubb & Son, Inc., a division of Federal Insurance
Company, a wholly owned subsidiary of The Chubb Corporation (“Chubb”). Plaintiff David
Blanch filed a five-count complaint against his former employer, Chubb, in the Circuit Court for
Baltimore City, asserting claims for breach of implied contract, abusive discharge, breach of the
covenant of good faith and fair dealing, violation of the Maryland Wage Payment and Collection
Law, and quantum meruit. Chubb removed the case to the United States District Court for the
District of Maryland and filed a motion to dismiss all counts. Blanch opposed that motion. This
matter has been fully briefed and no hearing is necessary. See Local Rule 105.6. For the reasons
stated below, Chubb’s motion to dismiss all claims will be granted, but Blanch will be given time
to amend as to Counts One, Four, and Five.
I.

Background
The suit arises from plaintiff Blanch’s termination from his position as an insurance

adjuster at Chubb’s Baltimore office where he had been employed since November 1999.

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(Compl. ¶¶ 4, 7, 11, ECF No. 2.) During his twelve years of employment, Blanch regularly
received above national average performance review scores and “annual incentives, performance
bonus(es), and/or profit sharing check(s) earned for services rendered during the previous
calendar year.” (Id. ¶¶ 8-9.) According to Blanch’s complaint, he earned “incentives,
performance bonus(es), and/or profit sharing check(s)” for the year 2010, the calendar year
ending prior to his termination. (Id. ¶ 16.)
On February 9, 2011, Blanch was called to a meeting to discuss an on-going company
investigation regarding a Chubb preferred services provider. (Id. ¶ 20.) Blanch “cooperated
fully with the investigation” in compliance with Chubb’s Code of Business Conduct. (Id. ¶ 22.)
The Code of Business Conduct states, “Chubb strictly prohibits any retaliation against an
employee . . . who assists in a company investigation.” (Id. ¶¶ 23; Def’s Mot. to Dismiss, Ex. 2
at 2, ECF No. 7-2.)
On February 16, 2011, Blanch was terminated without notice “for cause” of an
“undisclosed policy violation.” (Compl. ¶ 11.) According to Blanch, Chubb has failed to pay
him “incentives, performance bonus(es), severance packages, and/or profit sharing” earned
before his termination. (Id. ¶ 17.) Blanch “protested Chubb’s withholding of his wages by way
of email communications and telephone calls.” (Id. ¶ 37.)
On or about February 23, 2012, Blanch filed a five-count complaint against Chubb in the
Circuit Court for Baltimore City. (Id. at 7.) On July 2, 2012, Chubb timely removed the case to
the United States District Court for the District of Maryland pursuant to 28 U.S.C. § 1441
asserting diversity jurisdiction. (Notice of Removal, ECF No. 1.) On July 9, 2012, Chubb filed
a motion to dismiss all five counts. (Def.’s Mot. to Dismiss, ECF No. 7.)

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II.

Chubb’s Motion to Dismiss

A. Standard of Review
Chubb moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure
12(b)(6). To survive a motion to dismiss, “a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When
ruling on a 12(b)(6) motion, the court assumes the facts alleged in the complaint are true and
draws all reasonable factual inferences in favor of the nonmoving party. Edwards v. City of
Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999); Ibarra v. United States, 120 F.3d 472, 474 (4th
Cir. 1997).
A court decides whether this standard is met by separating the legal conclusions from the
factual allegations, assuming the truth of only the factual allegations, and then
determining whether those allegations allow the court to reasonably infer that the
defendant is liable for the misconduct alleged. . . . Facts pled that are merely consistent
with liability are not sufficient. Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, [similarly] do not suffice, because we are not
bound to accept as true a legal conclusion couched as a factual allegation.
A Soc’y Without A Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011) cert. denied, 132 S. Ct.
1960 (2012) (quoting Iqbal, 556 U.S. at 678) (internal quotations omitted).
In considering the sufficiency of the claim as stated in the complaint, a court may
consider documents referenced in and relied on by the complaint on a 12(b)(6) motion without
converting it into a motion for summary judgment. Md. Minority Contractor’s Ass’n, Inc. v. Md.
Stadium Auth., 70 F. Supp. 2d 580, 592 n.5 (D. Md. 1998), aff’d 198 F.3d 237 (4th Cir. 1999)
(unpublished table decision).

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B. Analysis
Under Maryland law, “an employment contract of indefinite duration, that is, at will, can
be legally terminated at the pleasure of either party at any time.” Adler v. Am. Standard Corp.,
432 A.2d 464, 467 (Md. 1981). In an at-will relationship, an employer may fire an employee
“for any reason, even a reason that is arbitrary, capricious, or fundamentally unfair.” Towson
Univ. v. Conte, 862 A.2d 941, 949 (Md. 2004) (citing Porterfield v. Mascari II, Inc., 823 A.2d
590, 602 (Md. 2003); Suburban Hosp. v. Dwiggins, 596 A.2d 1069, 1077 (Md. 1991); Adler, 432
A.2d at 467). There are certain exceptions, which are discussed below as relevant to Blanch’s
claims.
1. Count One—Breach of Implied Contract
Blanch claims that Chubb’s written employee policies constitute an offer in implied
contract to “pay incentives, performance bonuses, severance packages, and/or profit sharing
annually” and that he accepted Chubb’s offer by continuing his employment with Chubb.
Blanch also claims that he fulfilled all of his obligations under the implied contract for the year
2010 before his termination and that Chubb, therefore, breached its obligations under the implied
contract by failing to pay Blanch “incentives, performance bonus(es), and/or profit sharing
check(s)” amounting to more than $65,000 in damages.1
In Maryland an at-will employee may maintain an action for breach of an implied
employment contract if existing general personnel policies or procedures limit the employeremployee relationship. Staggs v. Blue Cross of Md., Inc., 486 A.2d 798, 803-04 (Md. App.
1985); see also Dahl v. Brunswick, 356 A.2d 221, 224-25 (Md. 1976) (finding employer’s
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Blanch claims Chubb is obligated to pay “incentives, performance bonus(es), severance
packages, and/or profit sharing check(s).” (Compl. 2, ¶¶ 15, 17 (emphasis added).) He does not
claim to have earned a severance package during the year 2010, however, so the court does not
consider that item in Blanch’s breach of contract claim.
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policies may create contractual obligations when employees start or continue to work for
employer with knowledge of policy). Maryland courts have refused to find employment
contracts, however, where an employer’s publications contained only general policy statements,
MacGill v. Blue Cross of Md., Inc., 551 A.2d 501, 504 (Md. App. 1989), or included an express
disclaimer, Conkwright v. Westinghouse Elec. Corp., 739 F. Supp. 1006, 1020 (D. Md. 1990),
aff’d, 933 F.2d 231 (4th Cir.1991); see also King v. Marriott Int’l, Inc., 520 F. Supp. 2d 748, 753
(D.S.C. 2007), aff’d, 267 Fed. App’x 301 (4th Cir. 2008), cert. denied, 555 U.S. 1044 (4th Cir.
2008).
To meet the requirements for an implied contract, the benefits promised must be definite,
specific, and capable of objective application in discrete cases. See MacGill, 551 A.2d at 50304. Maryland courts have found handbook provisions likely enforceable in Dwiggins, 596 A.2d
at 1075-76 (specific grievance procedure before termination); Haselrig v. Public Storage, Inc.,
585 A.2d 294, 302 (Md. App. 1991) (“you will be counseled by your Supervisor and given a
reasonable opportunity to improve” before termination); Staggs, 486 A.2d at 799, 803 (two
counseling sessions prior to termination); cf. Dahl, 356 A.2d at 223-24 (general practice of
giving two weeks’ severance instead of two weeks’ notice). Courts have refused to recognize
formation of an implied contract, however, in Ayers v. ARA Health Svcs., Inc., 918 F.Supp. 143,
148 (D. Md. 1995) (policy to “behave in an ethical manner”); MacGill, 551 A.2d at 504
(commitment to fill vacancies with most qualified applicant consistent with law, fairness, and
affirmative action); and Conkwright, 739 F. Supp. at 1021 (fair treatment and equal employment
opportunity).
In this case, Blanch does not state specific, concrete terms of Chubb’s employment
documents that create the implied contract Chubb allegedly violated. His references to

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“incentives, performance bonuses, severance packages, and/or profit sharing” do not present
sufficiently specific contract terms under which the court can analyze Chubb’s alleged breach.
Further, Blanch’s complaint is not sufficiently particularized to constitute appropriate notice to
Chubb of the claims against it.
Even if Blanch’s allegations were sufficiently specific to state a claim, the disclaimers in
Chubb’s employment documents state explicitly that they do not form a binding contract.
(Def.’s Mot. to Dismiss Ex. 1 at 2, ECF No. 7-1.)2 The Maryland Court of Special Appeals has
held that an employee cannot justifiably rely upon an employer’s policy statement if it expressly
disclaims contractual intent, Castiglione v. Johns Hopkins Hosp., 517 A.2d 786, 794 (Md. App.
1986), but has also warned that a disclaimer provision must be “clear and unequivocal” to
effectively disclaim contractual liability, Elliott v. Bd. of Tr. of Montgomery Cnty. Cmty. Coll.,
655 A.2d 46, 50 (Md. App. 1995) (quoting Haselrig, 585 A.2d at 300.). Whether the employee
could have justifiably relied upon the handbook as modifying his employment relationship
depends on the position and language of a disclaimer in the employment documents. Haselrig,
585 A.2d at 301. The disclaimer’s position must indicate that it applies to the employment
manual or policies as a whole, and its language must unambiguously disclaim contract liability.
Elliott, 655 A.2d at 51.
Chubb’s policy document entitled “Employment-at-will Statement (Disclaimer)”
(“Statement”) clearly explains the at-will employment relationship, the non-contractual nature of
any employment policies, and the specific process required for making any alteration to the atwill nature of the employment contract. (Def’s Mot. to Dismiss, Ex. 1, at 2.) Additionally,

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The court can rely on the employment documents Chubb submitted to evaluate the disclaimers
because those documents were listed in Blanch’s complaint. See Md. Minority Contractor’s
Ass’n, Inc., 70 F. Supp. 2d at 592 n.5.
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should Blanch argue that this Statement was not readily available to employees, Chubb’s Code
of Business Conduct, mentioned by Blanch’s complaint, also clearly disclaims that the
employment relationship between Chubb and its employees in the United States is at-will and
states that the “code, like Chubb’s policies and procedures generally, . . . is not a contract of
employment.” (Def’s Mot. to Dismiss, Ex. 2, at 3.) Accordingly, this court finds Chubb’s
disclaimer sufficient to preclude an implied employment contract, at least on the limited facts
stated in the present complaint.
2. Count Two—Abusive Discharge
Blanch claims his discharge by Chubb “for cause” of an “undisclosed policy violation”
was actually in retaliation for his participation in a company investigation. He claims his
termination was an abusive discharge because Chubb violated the public policy of the State of
Maryland and its own Code of Business Conduct or employment policies that prohibit discharge
in retaliation for participation in a company investigation.
As noted above, in Maryland an at-will employment contract may be legally terminated
“for any reason by any party.” Adler, 432 A.2d at 467. The tort of abusive, or wrongful,
discharge for a violation of public policy not specifically delineated by the legislature is a narrow
exception to this broad principle of the at-will contract and should form the basis for a judicial
determination, “if at all, only with the utmost circumspection.” Thompson v. Mem’l Hosp., 925
F. Supp. 400, 405 (D. Md. 1996) (quoting Adler, 432 A.2d at 472).
To establish a wrongful discharge claim, the plaintiff employee must show that: (1) he
was discharged; (2) the basis for his discharge violated a clear mandate of public policy; and (3)
there was a nexus between his conduct and the employer’s decision to fire him. Wholey v. Sears
Roebuck, 803 A.2d 482, 489 (Md. 2002). Further, a plaintiff must “specifically identify” the

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clear mandate of public policy he alleges was violated. Terry v. Legato Sys., Inc., 241 F. Supp.
2d 566, 569 (D. Md. 2003) (quoting Szaller v. Am. Nat’l Red Cross, 293 F.3d 148, 151 (4th Cir.
2002)). A clear mandate of public policy is “a preexisting, unambiguous, and particularized
pronouncement, by constitution, enactment or prior judicial decision, directing, prohibiting, or
protecting the conduct in question so as to make the Maryland public policy on the topic not a
matter of conjecture or even interpretation.” King v. Marriott Int’l. Inc., 866 A.2d 895, 902-03
(Md. 2005) (quoting Sears, Roebuck & Co. v. Wholey, 779 A.2d 408, 419 (Md. App. 2001),
aff’d, 803 A.2d 482 (Md. 2002)). Accordingly, Maryland courts have limited wrongful
discharge claims to situations where the employee has been terminated for exercising a specific
legal right or duty or for refusing to violate the law or the legal rights of a third party. Milton v.
IIT Research Inst., 138 F.3d 519, 522 (4th Cir. 1998) (citing Thompson, 925 F. Supp. at 406).
In this case, Blanch identifies no provision of a constitution, statute, or other law
establishing a public policy recognized by the State of Maryland and allegedly violated by
Chubb. See King, 866 A.2d at 903. Even if Chubb did improperly retaliate against Blanch for
his participation in the company investigation, Chubb’s violation of the provisions of its own
Code of Business Conduct does not satisfy the standard required for a finding of abusive
discharge because a private company’s own employment policies do not constitute a clear
mandate of public policy.
3. Count Three—Breach of Covenant of Good Faith and Fair Dealing
Blanch claims Chubb violated the covenant of good faith and fair dealing because it
breached the terms of its own employment policies by failing to provide him with notice of any
performance deficiencies or conduct concerns prior to terminating his employment.

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Maryland courts have declined to infer a requirement of good faith and fair dealing in
employment contracts. Dwiggins, 596 A.2d at 1076-77 (“Specific modifications to the at-will
relationship should not be an indication that the employer intends to go beyond the specific
modifications and add an implied covenant of fair dealing to the at-will relationship.”). Since no
covenant of good faith and fair dealing can be implied and none is expressly agreed upon,
Blanch’s claim of violation of the implied covenant of good faith and fair dealing must fail.
4. Count Four—Maryland Wage Payment and Collection Law
Blanch alleges Chubb violated the Maryland Wage Payment and Collection Law
(“MWPCL”), Md. Code Ann., Lab. & Empl. Title 3 Subtitle 5, because it failed to pay him “all
wages due and/or earned” prior to his termination, even though no bona fide dispute existed to
allow the withholding of wages and Blanch protested the withholding of his wages.
Section 3-505 of the MWPCL requires employers to pay employees “all wages due for
work . . . performed before the termination of employment, on or before the day on which the
employee would have been paid had employment not been terminated.” Md. Code Ann., Lab. &
Empl. § 3-505; see also Friolo v. Frankel, 819 A.2d 354, 362 (Md. 2003). If an employer
violates Section 3-505, an employee may bring an action against the employer to recover an
amount not exceeding three times the unpaid wages plus reasonable attorney fees and other
costs. Md. Code Ann., Lab. & Empl. § 3-507.2.
Blanch’s claim must be dismissed, however, because he has failed to allege specific facts
in his complaint. See A Soc’y Without A Name, 655 F.3d at 346 (“Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, . . . do not suffice.”).

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5. Count Five—Quantum Meruit
In addition to his other claims, Blanch seeks recovery in quantum meruit or under the
quasi-contract theory of unjust enrichment. He asserts he rendered valuable services to Chubb
with the intention of receiving remuneration for his services, Chubb knew or should have known
that Blanch expected remuneration, and Chubb benefited from Blanch’s services.
In Maryland, a claim for quantum meruit, or unjust enrichment, has three elements. Hill
v. Cross Country Settlements, LLC, 936 A.2d 343, 351 (Md. 2007). The plaintiff must show
that: (1) the plaintiff conferred a benefit upon the defendant; (2) the defendant appreciated or
knew about the benefit; and (3) the defendant accepted the benefit under such circumstances as
to make it inequitable for the defendant to retain the benefit without payment of its value. Id.
Like Blanch’s MWPCL claim, his quantum meruit claim as pled must also fail because
he does not state any facts on which to base his claim; rather he merely recites elements of the
claim and conclusions of law.
III.

Blanch’s Request for Leave to File an Amended Complaint
As to Counts One, Four, and Five, Blanch may be able to state a claim if he can allege

specific facts regarding the compensation he earned or was promised but has not received. He
will be granted leave, as he requests, to seek to file an amended complaint as to those counts.
Counts Two and Three, however, fail as a matter of law, and any proposed amendment would be
futile.

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Conclusion
For the reasons stated above, the defendant’s motion to dismiss will be granted, but
Blanch will be allowed to file a proposed amended complaint as to Counts One, Four, and Five
within 21 days. A separate Order follows.

November 8, 2012
Date

/s/
Catherine C. Blake
United States District Judge

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