Skoda v. Lilly USA LLC

Filing 29

MEMORANDUM OF LAW & ORDER. IT IS HEREBY ORDERED: 1. The Court ADOPTS Magistrate Judge Leo I. Brisbois' Report and Recommendation dated April 11, 2011 24 , as modified above. 2. Defendant's Motion to Dismiss 4 is GRANTED. 3. Plaintiff's Counter Motion for Remand 11 is DENIED. LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion). Signed by Chief Judge Michael J. Davis on 7/22/2011. (GRR)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

FREDERICK SKODA,
Plaintiff,

v.

MEMORANDUM OF LAW & ORDER
Civil File No. 10-4865 (MJD/LIB)

LILLY USA LLC, a/k/a
Eli Lilly & Co.,
Defendant.
Alan J. Sheppard, Sheppard Law Office, Counsel for Plaintiff.
Amanda L. Asbury and Ellen E. Boshkoff, Baker & Daniels, LLP, and Jonathan P.
Schmidt and Molly B. Thornton, Briggs & Morgan, PA, Counsel for Defendant.
The above-entitled matter comes before the Court upon the Report and
Recommendation of United States Magistrate Judge Leo I. Brisbois dated April
11, 2011. [Docket No. 24] Plaintiff filed objections to the Report and
Recommendation.
Pursuant to statute, the Court has conducted a de novo review upon the
record of the portion of the Magistrate Judge’s disposition to which specific
written objection has been made. 28 U.S.C. § 636(b)(1); Local Rule 72.2(b). Based
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upon that review, the Court ADOPTS the Report and Recommendation of
United States Magistrate Judge Brisbois dated April 11, 2011 with the following
modifications.
First, the Court does not rely upon Kern v. Janson, No. A10-355, 2010 WL
3546867 (Minn. Ct. App. Sept. 14, 2010), which was recently overturned by the
Minnesota Supreme Court. The Court modifies the Report and Recommendation
to omit reference to the Minnesota Court of Appeals opinion and notes that this
omission does not alter the reasoning found in the Report and Recommendation.
Second, the Court provides the following further analysis to supplement
the Report and Recommendation’s discussion regarding whether Plaintiff could
have asserted his claim for commissions in the first conciliation court action:
Under Minnesota law, a plaintiff is not required to supplement his original
complaint to include claims arising during the pendency of the first lawsuit in
order to avoid res judicata. Drewitz v. Motorwerks, Inc., 728 N.W.2d 231, 240
(Minn. 2007). A claim that “‘could have been’ brought must be understood to be
limited to a claim that existed at the time the first complaint was served.” Id.
Therefore, the Court does not base its finding of res judicata upon a holding that
Plaintiff should have amended his first conciliation court complaint on June 11,

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2010, to include a new claim arising in the form of a commission claim under
Minn. Stat. § 181.13, based on Defendant’s failure to respond to Skoda’s June 10,
2010 letter. Rather, the claim for commission payments had already arisen at the
time the first conciliation court matter commenced, although the claim for
damages under § 181.13 was not yet mature.
Here, Plaintiff’s Complaint in the instant federal case seeks payment of
commissions under Minnesota Statute § 181.13. Thus, Plaintiff seeks
“commissions actually earned and unpaid at the time of the discharge.” If the
commissions were not actually earned and unpaid at the time that Plaintiff was
discharged, he does not have a claim under §181.13. Therefore, Plaintiff’s own
Complaint demonstrates that he is seeking commissions that were earned but
unpaid at the time of his discharge, which occurred before he initiated the first
conciliation court lawsuit.
Because Skoda had not sent the demand for commissions to Lilly until
June 10, he could not have recovered damages for a violation of § 181.13 for late
payment of commissions in his first conciliation court complaint. See Chatfield
v. Henderson, 90 N.W.2d 227, 232 (Minn. 1958) (“Until there is a demand as
required by the statute, after resignation or discharge, the statutory provisions

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have no application.”). However, “immaturity of the claim does not justify
ignoring the finality of the judgment whether the prior action be brought in
conciliation court or elsewhere.” Mattsen v. Packman, 358 N.W.2d 48, 51 (Minn.
1984). If Skoda seeks to avoid the preclusive effect of the prior judgment, the
appropriate avenue is to seek to vacate or set aside that judgment. Id. at 50. See
generally Kern v. Janson, -- N.W.2d --, 2011 WL 2848734 (Minn. July 20, 2011).
Here, Skoda’s first conciliation court lawsuit and this current case arise
from the same employment relationship with Lilly, the termination of that
employment relationship, and the employment contract-based remuneration
owed to Skoda that was earned and unpaid at the time of that discharge. Thus,
the instant claim for commissions arose from the same factual situation as the
suit for salary and could have been resolved in the first lawsuit. See Gasbarra v.
Park-Ohio Indus., Inc., 655 F.2d 119, 121-23 (7th Cir. 1981) (holding employee’s
new lawsuit seeking fringe benefits, which entitlements arose after the date of
the first lawsuit, was barred by res judicata from first lawsuit seeking salary and
bonuses because “[b]oth sets of claims arose from the employment relationship
between the parties, and from the defendant’s letter . . . terminating the plaintiff's
employment and all rights thereunder” and “[w]hile the individual items of

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damages may not have yet accrued at the filing of the first suit, the question of
the defendant’s liability for the fringe benefits had clearly accrued and was ripe
for decision [and] . . . could have been resolved either by declaratory and
injunctive relief or by a determination of liability”).

Accordingly, based upon the files, records, and proceedings herein, IT IS
HEREBY ORDERED:
1.

The Court ADOPTS Magistrate Judge Leo I. Brisbois’ Report and
Recommendation dated April 11, 2011 [Docket No. 24], as modified
above.

2.

Defendant’s Motion to Dismiss [Docket No. 4] is GRANTED.

3.

Plaintiff’s Counter Motion for Remand [Docket No. 11] is DENIED.

LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: July 22, 2011

s/ Michael J. Davis
Michael J. Davis
Chief Judge
United States District Court

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