BELL v. SHINSEKI
Filing
15
MEMORANDUM OPINION AND ORDER signed by CHIEF JUDGE WILLIAM L. OSTEEN JR. on 6/1/2015. ORDERED that Defendant's Motion to Dismiss Plaintiff's Third and Fourth Cause of Action (Doc. 6 ) is GRANTED and these claims will be DISMISSED WITHOUT PREJUDICE. FURTHER ORDERED that Plaintiff shall have ten (10) days from the entry of this Memorandum Opinion and Order to file an amended complaint. Plaintiff's complaint (Doc. 11 ) may be amended for the lim ited purpose of waiving all damages in excess of $10,000 in Plaintiff's third cause of action, her breach of contract claim. If Plaintiff chooses not to file an amended Complaint, the third cause of action will be dismissed without prejudice in accordance with this Opinion. (Butler, Carol)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
TEMPIE ANN BELL,
)
)
Plaintiff,
)
)
v.
)
)
ROBERT A. MCDONALD, Secretary,
)
Department of Veterans Affairs, )
)
Defendant.
)
1:14CV188
MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Plaintiff Tempie Ann Bell (“Plaintiff”) commenced this
action by filing a Complaint (Doc. 1) with this court on
March 4, 2014 against the Secretary of Veteran Affairs
(“Defendant”).1 Plaintiff moved to amend her complaint on
June 10, 2014 (Doc. 5), and this court granted Plaintiff’s
motion on September 29, 2014. (Doc. 10.)
While Plaintiff’s motion to amend was pending, Defendant
filed a Motion to Dismiss Plaintiff’s Third and Fourth Cause of
Action and supporting Memorandum (Docs. 6, 7). Plaintiff filed a
1
Eric K. Shinseki was the named defendant at the outset of
this case, due to his role as Secretary of Veterans Affairs at
the time Plaintiff originally filed her complaint. This court
substituted Robert A. McDonald, the current Secretary of
Veterans Affairs, as Defendant on September 29, 2014. (Doc. 10.)
Response (Doc. 8) opposing Defendant’s Motion to Dismiss, and
Defendant filed a Reply (Doc. 9). Plaintiff filed her Amended
Complaint (Doc. 11) on October 11, 2014. Per this court’s
September 29, 2014 Order, Defendant filed a Notice (Doc. 13),
requesting that this court rule on Defendant’s Motion to Dismiss
(Doc. 6) as if it has been filed subsequent to the Amended
Complaint.
This court has carefully reviewed Defendant’s Motion and
Memorandum, Plaintiff’s Response, and Defendant’s Reply. For the
reasons stated below, this court will grant Defendant’s Motion
to Dismiss.
However, this court will allow Plaintiff leave to
file an amended complaint to waive all damages in excess of
$10,000 in her third cause of action, the breach of contract
claim.
I.
BACKGROUND
The present action stems from allegations of disability
discrimination and breach of a settlement contract. (Amended
Complaint (“Am. Compl.”) (Doc. 11).)
Plaintiff, a resident of
Orange County, North Carolina, was an employee of the Department
of Veteran Affairs (“VA”), with her primary place of employment
being the VA Medical Center in Durham, North Carolina. (Id.
¶¶ 1-2.)
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As a result of previous litigation in this district,
Plaintiff and Defendant entered into a Settlement Agreement
(“Agreement”) in 2005.2 (Id. ¶ 4.) Plaintiff asserts that the
Agreement provided that Defendant would provide Plaintiff with
“employment in diabetes education, which would not involve
significant lifting.” (Id. ¶ 5.) In addition to other
stipulations, the Agreement also called for Plaintiff to obtain
certification as a diabetes educator. (Id. ¶ 6.) However,
Plaintiff asserts that, as an alternative to this certification,
Plaintiff and Defendant agreed that Plaintiff would obtain her
Master’s Degree with financial assistance from Defendant. (Id.)
Plaintiff further alleges that when she completed her Master’s
Degree in September 2009, Plaintiff was informed by her
supervisor that she had a deadline of December 20, 2009, to
obtain her diabetes educator certification, despite being told
that the Master’s Degree would supersede this requirement. (Id.
¶ 8.) Plaintiff did not obtain said certification by the
deadline date. (Id.)
Plaintiff suffers from chronic back pain that limits her
ability to work. (Id. ¶ 7.) On or about February 1, 2010,
2
The prior action was captioned as Case Number 1:03CV538.
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Plaintiff was assigned to ward nursing duties. (Id. ¶ 9.)
Plaintiff complained to senior management that she was unable to
perform the ward nursing duties, because of her back pain. (Id.)
On May 20, 2010, Plaintiff filed a complaint in state court3
challenging the transfer from diabetes educator to ward nurse.
(Id. ¶ 10.) This action was dismissed. (Id.) During this period,
Plaintiff sought assistance from her union and senior
management, but remained assigned to ward nursing. (Id. ¶ 11.)
Plaintiff asserts that between February and August 2010,
Plaintiff was followed, stalked, and had numerous confrontations
with her managers. (Id.)
During this period, the hospital still
provided diabetes education, but that work was assigned to
others. (Id. ¶ 12.) In addition, Plaintiff requested transfers
to work that would accommodate her back pain, but those
transfers were refused. (Id.)
On or about August 10, 2010, a manager confronted Plaintiff
and threated to initiate the revocation of her nursing license.
(Id. ¶ 14.) Plaintiff asserts that, as a result of this
confrontation, she became so distraught that she fell, hit her
head, and suffered major injuries. (Id. ¶ 15.) Plaintiff filed a
3
This action was removed to the Middle District and
assigned Case Number 1:10CV475. (Am. Compl. (Doc. 11) ¶ 10.)
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worker’s compensation claim. (Id. ¶ 16.) Plaintiff alleges that
as a result of her fall and inability to work due to the
injuries sustained from the fall, Defendant “continued its
pattern of unjustified actions against Plaintiff.”4 (Id. ¶ 17.)
On or about September 16, 2010, Defendant insisted Plaintiff
return to work as a ward nurse or be terminated. (Id. ¶ 18.)
Defendant terminated Plaintiff in March 2011.5 (Id.) Plaintiff
filed two EEOC claims regarding this matter and the agency
issued its final decision on December 9, 2013. (Id. ¶ 19.)
Subsequently, Defendant billed Plaintiff for financial
assistance advanced to Plaintiff to help pay for her Master’s
Degree. (Id. ¶ 21.)
Plaintiff asserts four causes of action: (1) wrongful
discrimination based on disability, (2) retaliation, (3) breach
of contract based on Defendant’s alleged violation of the
Settlement Agreement, and (4) asking this court to enjoin
Defendant from collecting any tuition assistance money from
4
Plaintiff asserts several actions by Defendant including
not paying her, not recognizing her leave, refusing leave
requests, and refusing other jobs that were not as physically
demanding as ward nursing. (Am. Compl. (Doc. 11) ¶ 17.)
5
Plaintiff’s termination was the subject of a separate
lawsuit in the Middle District of North Carolina, assigned case
number 1:12CV57. This court ruled in favor of Defendant, which
was subsequently affirmed on appeal by the Fourth Circuit.
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Plaintiff. Presently, Defendant asks this court to dismiss the
third and fourth causes of action.
II.
LEGAL STANDARD
Defendant’s Motion to Dismiss requests that this court
dismiss Plaintiff’s third and fourth causes of action for lack
of subject matter jurisdiction pursuant to Rule 12(b)(1) and for
failure to state a claim pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure. (Def.’s Mot. to Dismiss (Doc.
6) at 1.)
A.
Fed. R. Civ. P. 12(b)(1)
Rule 12(b)(1) of the Federal Rules of Civil Procedure
provides for the dismissal of an action when the court lacks
subject matter jurisdiction. When determining whether
jurisdiction exists, the district court may consider evidence
outside the pleadings without converting the motion to one for
summary judgment. Richmond, Fredericksburg & Potomac R.R. Co. v.
United States, 945 F.2d 765, 768 (4th Cir. 1991). The burden of
proving subject matter jurisdiction is on the party asserting
jurisdiction. Id. (citing Adams v. Bain, 697 F.2d 1213, 1219
(4th Cir. 1982)).
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B.
Fed. R. Civ. P. 12(b)(6)
“A motion to dismiss under Rule 12(b)(6) tests the
sufficiency of a complaint; importantly, it does not resolve
contests surrounding the facts, the merits of a claim, or the
applicability of defenses.” Republican Party of N.C. v. Martin,
980 F.2d 943, 952 (4th Cir. 1992). “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)).
A claim is facially plausible provided the plaintiff provides
enough factual content to enable the court to reasonably infer
that the defendant is liable for the misconduct alleged.
Id.
III. ANALYSIS
Defendant moves this court to dismiss Plaintiff’s third and
fourth causes of action. In these causes of action, Plaintiff
asserts (1) Defendant breached the Agreement as modified by
insisting that Plaintiff either become certified as a diabetes
educator or return to ward nursing, and (2) Defendant should be
enjoined from collecting or attempting to collect any debt that
incurred as a result of Defendant providing tuition assistance
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to Plaintiff. (Am. Compl. (Doc. 11) ¶¶ 28-31.) This court will
address each claim in turn.
A.
Third Cause of Action (Breach of Contract)
Plaintiff’s third cause of action is for breach of contract
regarding Defendant’s alleged breach of the Agreement. In North
Carolina, “[t]he elements of a claim for breach of contract are
(1) existence of a valid contract and (2) breach of the terms of
[the] contract.” Poor v. Hill, 138 N.C. App. 19, 26, 530 S.E.2d
838, 843 (2000). As stated supra, Plaintiff and Defendant
entered into the Agreement on March 9, 2005. (Def.’s Mem. in
Supp. of Mot. to Dismiss (“Def.’s Mem.”), Ex. A, Settlement
Agreement (Doc. 7-1).)6 “Settlement agreements are contracts and
are therefore governed by general principles of contract law.”
Webster v. Rumsfeld, 156 Fed. Appx. 571, 577 (4th Cir. 2005).
Plaintiff asserts that Defendant breached the Agreement
when Defendant “insist[ed] that Plaintiff either become
6
The Settlement Agreement was submitted to this court by
Defendants. “A court can . . . take into consideration at the
12(b)(6) stage documents attached to a motion to dismiss, as
long as they are integral to the complaint and authentic.”
Berry v. Gutierrez, 587 F. Supp. 2d 717, 723 (E.D. Va. 2008),
aff'd sub nom. Berry v. Locke, 331 Fed. Appx. 237 (4th Cir.
2009). The Settlement Agreement is integral to Plaintiff’s third
cause of action, which is at issue here. In addition, neither
party disputes its authenticity. This court will consider the
Settlement Agreement in deciding this motion.
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certified or return to ward nursing.” (Am. Compl. (Doc. 11)
¶ 29.) The Agreement specifically states that “Plaintiff is
currently assigned as a Glucometer Educator.” (Settlement
Agreement (Doc. 7-1) at 3.) The Agreement goes on to state that
Plaintiff will obtain certification as a Diabetes Educator. (Id.
at 4.) The Agreement allows for Defendant to expand Plaintiff’s
duties if Plaintiff “is medically able to work more hours.” (Id.
at 5.) In addition, the Agreement states that “[t]he expansion
of duties will be at the discretion of the Defendant and will
not be limited to Diabetes and/or patient education.” (Id. at
5-6.)
Defendant does not dispute these terms of the Settlement
Agreement.
Plaintiff asserts that Defendant consented to Plaintiff
obtaining her Master’s Degree in lieu of the Diabetes Educator
certification, and Plaintiff obtained her Master’s Degree
pursuant to the Agreement. (Am. Compl. (Doc. 11) ¶¶ 6, 8.)
Nowhere in the pleadings does Defendant deny the amended
requirement or any of Plaintiff’s allegations on this issue. The
Agreement is a contract and, with these facts as alleged, it
appears that Plaintiff has stated a claim for breach of that
contract. Defendant required Plaintiff to become certified
despite agreeing to allow her to obtain a Master’s Degree
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instead. In addition, Defendant moved Plaintiff to different
work, which they were allowed to do, but only if Plaintiff was
physically able to do that work. (See Settlement Agreement (Doc.
7-1) at 4.) These are both potential breaches of the Agreement
and are enough to survive a motion to dismiss.
However, this court must analyze whether or not this court
has jurisdiction over this breach of contract claim. Defendant
is an arm of the United States and, therefore, the present
action against Defendant is a lawsuit against the federal
government. See generally Irwin v. Dep't of Veterans Affairs,
498 U.S. 89 (1990) (analyzing statute of limitations in a
lawsuit against the government where VA was the defendant).
Generally, the federal government is “immune from suit unless it
consents to be sued, and in that case ‘the terms of its consent
to be sued in any court define that court's jurisdiction to
entertain the suit.’”
Berry, 587 F. Supp. 2d at 726 (quoting
United States v. Testan, 424 U.S. 392, 399 (1976)).
There are limited instances where federal district courts
have jurisdiction over contract disputes with the government.
One potential avenue for this court to have jurisdiction is if
Plaintiff is asking this court to enforce the Settlement
Agreement and the government has consented to that. In the
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context of a settlement agreement, the Eastern District of North
Carolina explained:
The Fourth Circuit has held that a settlement
agreement may not be enforced by a court unless the
agreement has been “incorporated into an order of the
court, or, at the time the court is requested to
enforce the settlement agreement, there exists some
independent ground upon which to base federal
jurisdiction”’ Columbia–Amer. Disc. Grp. v. Atlantic
Mut. Ins., 203 F.3d 291, 299 (4th Cir. 2000) (quoting
Fairfax Countywide Citizen Assn. v. Fairfax Cnty., 571
F.2d 1299, 1303 (4th Cir. 1978)). If a settlement
agreement itself does not authorize money damages for
breach of the agreement, a court in the Fourth Circuit
does not have jurisdiction to grant such relief. See
Frahm v. United States, 492 F.3d 258, 261–62 (4th Cir.
2007) (affirming dismissal of a suit seeking money
damages for the government's breach of a settlement
agreement because — despite the waiver of sovereign
immunity for contract breaches in the Tucker Act —
neither the agreement nor any statute explicitly
authorized money damages for breach of a settlement
agreement).
Foxworth v. United States, Civil Action No. 3:13-CV-291, 2013 WL
5652496, at *3 (E.D. Va. Oct. 16, 2013). In the present action,
the Agreement itself does not contemplate any action in the
event of breach and the court did not incorporate the Agreement
in any order. There is no indication that Defendant consented to
this court’s jurisdiction to enforce the Agreement at any time.
Therefore, this court does not have jurisdiction to maintain
Plaintiff’s third cause of action as an action to enforce the
Agreement.
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In the alternative, this court may have jurisdiction over
Plaintiff’s third cause of action for damages stemming from a
breach of contract, if the lawsuit meets certain criteria.
The United States' waiver of sovereign immunity
with respect to contract claims is embodied in the
Tucker Act, 28 U.S.C. § 1491(a)(1), and the Little
Tucker Act, 28 U.S.C. § 1346(a)(2). The Tucker Act
confers jurisdiction only on the United States Court
of Federal Claims to hear cases involving express or
implied contracts with the United States. 28 U.S.C.
§ 1491(a)(1). The Little Tucker Act confers concurrent
jurisdiction on the district courts to hear contract
claims involving the United States that do not exceed
$10,000. 28 U.S.C. § 1346(a)(2).
Vill. of Bald Head Island v. U.S. Army Corps of Eng’rs, 833 F.
Supp. 2d 524, 534 (E.D.N.C. 2011), aff'd, 714 F.3d 186 (4th Cir.
2013). If construed as a simple breach of contract claim, the
present action is a suit for damages stemming from a breach of
an express contract with the government.
As stated earlier, Defendant does not contest the facts
surrounding the alleged breach as set forth by Plaintiff, but
Defendant does challenge this court’s jurisdiction pursuant to
the Little Tucker Act, because Defendant asserts the amount in
controversy exceeds $10,000. (Def.’s Mem. (Doc. 7) at 3.)
However, the case cited by Defendant in support of this
proposition is not persuasive to this court on the present
facts.
Unlike Renfro v. Shinseki, No. 3:13CV38/MCR/EMT, 2013 WL
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2292026, at *7 (N.D. Fla. May 24, 2013), the present Plaintiff
has not specified an amount that would allow this court to
estimate damages with any certainty.
As federal courts are courts of limited jurisdiction, the
Little Tucker Act’s bar on claims over $10,000 is a directive
this court must follow. Federal courts have held that district
courts may assert jurisdiction over Little Tucker Act claims so
long as the plaintiff waives any recovery of damages in excess
of $10,000. See, e.g., Roedler v. Dep't of Energy, 255 F.3d
1347, 1351 (Fed. Cir. 2001). Because Plaintiff has not
specifically addressed this issue, this court finds it must
dismiss Plaintiff’s breach of contract claim without prejudice.
Nonetheless, this court will allow Plaintiff leave to amend her
Complaint pursuant to this Memorandum Opinion and Order for the
limited purpose of waiving any damages in excess of $10,000 in
her breach of contract claim. If Plaintiff waives all damages in
excess of $10,000, this court may have jurisdiction over the
contract claim pursuant to the Little Tucker Act.
B.
Fourth Cause of Action (Injunctive Relief)
Plaintiff frames her fourth cause of action as a request
for injunctive relief. Plaintiff asserts that “Defendant should
be enjoined from collecting or attempting to collect any alleged
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debt and penalties owed as a result of providing assistance for
Plaintiff’s Masters Degree.” (Am. Compl. (Doc. 11) ¶ 31.)
Plaintiff contends that it is because of Defendant’s actions
that Plaintiff was “unable to fulfill her obligations” under the
tuition assistance agreement, and therefore, Defendant should be
enjoined from billing the Plaintiff for said assistance. (Id.)
Defendant asserts that “Plaintiff received tuition
assistance under the Department of Veterans Affairs (VA)
Employee Incentive Scholarship Program (EISP) as authorized by
38 U.S.C. §§ 7631 to 7636 and 7671 to 7675. Participants in the
EISP agree to a service obligation and may be subject to
monetary penalties if the service obligation is not met.”
(Def.’s Mem. (Doc. 7) at 4.) Plaintiff does not dispute this
allegation, and documentation provided by Defendant supports
this contention. (See Def.’s Mem., Supplement, Veterans Health
Administration (“VHA”) Directive 1020 (Doc. 7-4).)7 This court
construes Plaintiff’s fourth cause of action as not one for
7
VHA Directive 1020, which implements the Employee
Incentive Scholarship Program (“EISP”) was submitted to this
court by Defendant. As stated earlier, this court can take into
consideration documents attached to a motion to dismiss, as long
as they are integral to the complaint and authentic. See supra
note 6. The EISP is integral to Plaintiff’s fourth cause of
action, which is at issue here. In addition, neither party
disputes its authenticity. This court will consider Directive
1020 in deciding this motion.
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injunctive relief, but one based in contract. Plaintiff is
asking this court to relieve her of her obligation under the
EISP, because Defendant made it impossible for her to meet her
end of the bargain. Although Plaintiff asserts a potential
defense in contract, the Fourth Circuit, in addressing a similar
scholarship created by statute, stated “that the relationship
between the . . . scholar and the Government is statutory and
not contractual, and that ordinary contract principles do not
apply to the agreements governing that relationship.” United
States v. Vanhorn, 20 F.3d 104, 112 (4th Cir. 1994).
In Vanhorn, the Fourth Circuit addressed the issue of
whether a physician who defaulted on a loan through the National
Health Service Corps (“NHSC”) could assert contract defenses
when the physician did not fulfill her requirements for the
scholarship money and the government tried to get the money
back. Specifically, after surveying other circuit and district
court decisions on the same issue, the Fourth Circuit found that
[T]he NHSC scholarship program is an exercise by the
federal government of its authority under the
constitutionally-granted spending power to bring about
a public policy goal, namely, the provision of medical
services to underserved areas. . . . [A]greements
under this scheme are subject to statutory, not
contractual, interpretation.
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Vanhorn, 20 F.3d at 111-12. The court further found that “the
inapplicability of contract principles does not leave the
scholar without recourse; appeal may be made to the Secretary of
DHHS as the agency overseeing the program, who in proper
circumstances may cancel, waive, or suspend the scholar's
obligation.” Id. at 112.
Like the scholarship agreement in Vanhorn, Plaintiff’s
scholarship came from an exercise of the federal government to
address a public policy issue. “The purpose of the Educational
Assistance Program is to assist in providing an adequate supply
of trained health-care personnel for the [VA] and the Nation.”
38 U.S.C. § 7601. And like the agreement in Vanhorn, the EISP
specifies what will happen if there is a breach. 38 U.S.C.
§ 7624. VHA Directive 1020, which implements the EISP, specifies
that all requests for waivers from any payment obligation must
be directed to the VA’s Under Secretary for Health and/or the
Director of the Healthcare Recruitment and Retention Office and
are not appealable. (VHA Directive 1020 (Doc. 7-4)
§ 5(i)(10)(b).)
This court finds the reasoning in Vanhorn persuasive and
holds that Plaintiff’s fourth cause of action should be
dismissed for failure to state a claim. Plaintiff was terminated
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from her job before she fulfilled her EISP obligation. In doing
so, Plaintiff breached the EISP agreement. Per the analysis in
Vanhorn, statutory penalties exist and contract defenses are not
applicable. Therefore, Plaintiff has not pled an actionable
claim and this court will grant Defendant’s motion on this cause
of action.
IV.
CONCLUSION
For the reasons set forth herein, IT IS HEREBY ORDERED that
Defendant’s Motion to Dismiss Plaintiff’s Third and Fourth Cause
of Action (Doc. 6) is GRANTED and these claims will be DISMISSED
WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that Plaintiff shall have ten (10)
days from the entry of this Memorandum Opinion and Order to file
an amended complaint. Plaintiff’s complaint (Doc. 11) may be
amended for the limited purpose of waiving all damages in excess
of $10,000 in Plaintiff’s third cause of action, her breach of
contract claim. If Plaintiff chooses not to file an amended
Complaint, the third cause of action will be dismissed without
prejudice in accordance with this Opinion.
This the 1st day of June, 2015.
_____________________________________
United States District Judge
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