CHOPLIN v. INTERNATIONAL BUSINESS MACHINES CORPORATION

Filing 30

MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE JOI ELIZABETH PEAKE on 08/30/2017, that Defendant IBM's Motion for Judgment on the Pleadings [Doc. # 13 ] be granted as to Plaintiff's claim for unfair and deceptive trade practices, but denied as to Plaintiff's remaining claims, without prejudice to Defendant raising its contentions for further consideration on dispositive motions after the close of discovery. (Garland, Leah)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

BOBBY J. CHOPLIN,
Plaintiff,
v.
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
Defendant.

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1:16CV1412

MEMORANDUM OPINION AND RECOMMENDATION OF
UNITED STATES MAGISTRATE JUDGE
This matter is before the Court on Defendant’s Motion for Judgment on the Pleadings
[Doc. #13]. In this case, Plaintiff Bobby Choplin alleges that he was a sales representative for
Defendant International Business Machines Corporation (“IBM”) from 2012 until 2016 and that
Defendant IBM improperly failed to pay him the commissions due on a deal he closed for
Defendant worth over $6,649,000.00. Defendant removed this case from North Carolina state
court based on diversity of citizenship pursuant to 28 U.S.C. § 1332(a), and subsequently filed
the present Motion for Judgment on the Pleadings pursuant to Federal Rule of Civil Procedure
12(c). Plaintiff has filed a Response in opposition to the Motion, and Defendant has filed a
Reply brief. The Motion is therefore ready for ruling. For the reasons set out below, the Court
recommends that Defendant’s Motion be granted as to Plaintiff’s Fourth Claim for Relief
alleging Unfair and Deceptive Trade Practices under N.C. Gen. Stat. § 75-1.1. However, as to
the remaining claims, the Court concludes that the contentions require consideration of matters

outside the pleadings, and therefore should instead be considered on dispositive motions after
discovery, which is set to close on October 16, 2017.
I.

FACTS, CLAIMS, AND PROCEDURAL HISTORY
Plaintiff Bobby Choplin alleges that in July 2015 he closed a sales deal on behalf of

Defendant IBM with BB&T Bank worth over $6,649,000.00. (Complaint [Doc. #5] ¶ 44.) He
claims that his commission on this deal was over $800,000.00. (Id. ¶ 45.) Plaintiff further claims
that he worked on this deal from January 2015 through July 2015, while traveling all over the
state to “beat out significant competition” from other companies. (Id. ¶ 46.) Plaintiff says that
he did this based upon “IBM’s representations that his commission earnings would not be
capped or limited in any way.” (Id. ¶ 47.) He claims that he was the only IBM sales
representative entitled to commissions for this entire sale. (Id. ¶ 48.)
Plaintiff further alleges that after the sale closed and his commissions for the sales period
were calculated, Defendant IBM refused to pay him the commission he earned. According to
Plaintiff, this was the first sales period for which Defendant IBM did not honor the formula for
calculating his commissions. He says that Defendant IBM lowered the amount of commission
he received by: (1) lowering the total amount of sales credit he received for the BB&T deal from
$6,649,000.00 to $3,879,938.00; and (2) capping the commission payment it was willing to make
to Plaintiff to $348,847.00. (Id. ¶ 53-56.) Plaintiff says that he disputed the commission
calculation with Defendant but that Defendant refused to reconsider its decisions. He states that
he has since learned that Defendant has a pattern and practice of misleading its sales

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representatives to entice them to work extraordinarily hard to make sales and then refusing to
pay commissions after the deal is closed. (Id. ¶ 64.)
In support of his contentions, Plaintiff relies upon alleged statements made by
Defendant’s representatives at sales meetings, as well as a statement allegedly made by Plaintiff’s
manager. Plaintiff alleges that in January 2013, Defendant IBM held a “Sales Kick-Off Meeting”
in Atlanta, Georgia. (Id. ¶ 24.) Plaintiff alleges that during this conference, Mark Dorsey, VicePresident of Software Sales, spoke and gave “specific representations that each sales
representative’s earning potential was unlimited because IBM does not limit or cap
commissions.” (Id. ¶ 28.) According to Plaintiff, Mr. Dorsey also told sales representatives that
they had “unlimited potential to earn commissions at IBM.” (Id. ¶ 29.) Plaintiff also alleges that
Defendant had a sales representative, Lori Sockowitz, give a presentation at this meeting about
the sales representatives’ ability to earn unlimited commissions. (Id. ¶ 33.)
Plaintiff also relies upon a February 2015 “InterConnect Conference & 2015 Sales KickOff Meeting” in Las Vegas, Nevada. Plaintiff claims that at this conference, Janet Butler, Vice
President of WorldWide Sales, and Ronnie Rohr, sales representative, both gave presentations
and said that “sales representatives have the ability to make as much money as they want to.”
(Id. ¶ 37.)

Plaintiff says that Ms. Butler “presented Ms. Rohr as evidence of a sales

representative who was able to make significant, unlimited commissions.” (Id. ¶ 38.)
Plaintiff further alleges that during his job interviews, Bruce Kopkin and other managers
of Defendant told him that he “could make as much money as he wanted to.” (Id. ¶ 14.)

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Plaintiff says that based upon all of these representations, he believed that his
commissions would never be capped or limited by Defendant. (Id. ¶ 41.)
Finally, Plaintiff also alleges that his manager confirmed that Plaintiff should be credited
with the entire revenue of $6,649,000.00 for the BB&T deal. (Id. ¶ 55.)
In light of these allegations, Plaintiff raises claims of: (1) violation of the North Carolina
Wage and Hour Act for unpaid wages; (2) unjust enrichment; (3) fraud; (4) unfair and deceptive
trade practices; and (5) negligent misrepresentation. Plaintiff also seeks punitive damages.
Defendant IBM opposes Plaintiff’s claims based in large part on the language of its
incentive plans, which it claims governed the payment of Plaintiff’s commission. Defendant
contends that these plans do not constitute an enforceable contract requiring Defendant to pay
any specific amount of commissions. Defendant has attached to its Answer copies of what it
contends are the two incentive plans applicable to the year 2015.
II.

DISCUSSION
A.

Standard

Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed-but
early enough not to delay trial-a party may move for judgment on the pleadings.” The standard
for granting judgment on the pleadings under Federal Rule of Civil Procedure 12(c) is the same
as for granting a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
Burbach Broad. Co. v. Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir. 2002). Under Rule
12(b)(6), a plaintiff fails to state a claim upon which relief may be granted when the complaint
does not “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is

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plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 570 (2007)).
In deciding a Rule 12(c) motion, the court assumes the facts alleged in the Complaint are
true and draws all reasonable inferences in the non-moving party’s favor. Mendenhall v.
Hanesbrands, Inc., 856 F. Supp. 2d 717, 723 (M.D.N.C. 2012). Unlike on a Rule 12(b)(6)
motion however, the court may consider the Answer as well as the Complaint, and the factual
allegations in the Answer are taken as true to the extent they have not been denied or do not
conflict with the Complaint. Id. at 724. However, “Defendant cannot rely on allegations of
fact contained only in the Answer, including affirmative defenses, which contradict the
Complaint because Plaintiff was not required to reply to Defendant’s Answer, and all allegations
in the Answer are deemed denied.” Id. (internal quotations omitted).
With respect to documents attached to the Answer, Federal Rule of Civil Procedure 12(d)
provides that:
If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are
presented to and not excluded by the court, the motion must be treated as one
for summary judgment under Rule 56. All parties must be given a reasonable
opportunity to present all the material that is pertinent to the motion.

Fed. R. Civ. P. 12(d). Documents attached to the Answer are part of the pleadings for Rule
12(c) purposes and “may be considered without converting a motion for judgment on the
pleadings into a motion for summary judgment, only if the documents are central to the
Plaintiff’s claim and the authenticity is not challenged.” Mendenhall v. Hanesbrands, Inc., 856
F. Supp. 2d at 724.

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In considering Defendant’s present Motion for Judgment on the Pleadings, the Court will
first consider Defendant’s Motion with respect to Plaintiff’s Fourth Claim for Relief alleging
Unfair and Deceptive Trade Practices under N.C. Gen. Stat. § 75-1.1, since that claim can be
addressed without consideration of any of the materials attached to the Answer. The Court will
then consider Defendant’s Motion with respect to Plaintiff’s remaining claims.
B.

Plaintiff’s Fourth Claim for Relief – Unfair and Deceptive Trade Practice

To state a claim for unfair and deceptive trade practice under North Carolina General
Statute § 75-1.1, a plaintiff must allege: (1) that the defendant committed an unfair or deceptive
act or practice; (2) in or affecting commerce; and (3) that the plaintiff was injured thereby. TSC
Research, LLC v. Bayer Chem. Corp., 552 F. Supp. 2d 534, 546 (M.D.N.C. 2008). A “simple
breach of contract, even if intentional, does not amount to a violation of the Act; a plaintiff must
show substantial aggravating circumstances attending the breach to recover under the Act.”
Bartolomeo v. S.B. Thomas, Inc., 889 F.2d 530, 535 (4th Cir. 1989).
To satisfy the “in or affecting commerce” element of the statute, the plaintiff must allege
more than an unfair or deceptive practice between an employee and his employer. North
Carolina courts “hold consistently that absent conduct affecting commerce beyond the
employment relationship, employer-employee disputes are not sufficiently ‘in or affecting
commerce’ to satisfy the second element of a UDTPA claim.” Irwin v. Fed’l Express Corp., No.
1:14CV557, 2016 WL 7053383, at *11 (M.D.N.C. Dec. 5, 2016) (citing cases). In this case,
Plaintiff’s claim concerns allegedly unfair and deceptive practices solely within his employment

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relationship with Defendant IBM. He has therefore failed to state a claim for relief as to this
count.
Plaintiff contends, however, that absent the allegedly unfair practices, Defendant’s
competitors may have seized opportunities like the IBM deal. Plaintiff also contends that
because of the allegedly unfair practices, “competitors and consumers [were denied] the benefits
of [his] alternative labors.” (Response [Doc. #15] at 14.) However, the Supreme Court of
North Carolina has found that such attenuated effects on commerce are not sufficient to satisfy
the statute. In White v. Thompson, 691 S.E.2d 676, 680 (N.C. 2010), the plaintiffs argued that
the defendant co-partner’s unfair practices potentially led to reduced competition and higher
prices in the market. The court found that such an argument “overlooks that the unfairness of
[defendant’s] conduct did not occur in his dealings with” another company. Id. Rather, his
conduct occurred within the partnership. Id. Similarly, in this case, Plaintiff’s arguments about
possible effects on competitors and consumers overlooks that the unfairness he complains of
occurred within his employment relationship with Defendant IBM. Here, as in White, “[t]he
General Assembly simply did not intend for such conduct to fall within the Act’s coverage.” Id.
For these reasons, Defendant’s Motion for Judgment on the Pleadings as to Plaintiff’s
Fourth Claim for Relief for Unfair or Deceptive Trade Practices should be granted, and this
claim should be dismissed.

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C.

Plaintiff’s First Claim for Relief – North Carolina Wage and Hour Act

With respect to Plaintiff’s first claim for relief under the North Carolina Wage and Hour
Act, Plaintiff alleges that his commission payment constitutes “wages” under the North Carolina
Wage and Hour Act, N.C. Gen. Stat. § 95-25.1 – 95-25.25 (the “Act”), that he earned those
wages, and that Defendant is refusing to pay his wages in violation of the Act. (Compl. at 8-9.)
The Act “prevents employers from denying their employees earned wages.” Irwin, 2016 WL
7053383, at *8. A “wage” is defined under the Act to include bonuses and commissions. N.C.
Gen. Stat. § 95-25.2(16).
Defendant IBM argues that the Act requires an enforceable contract to pay specific wages
and that the language of the incentive plans attached to its Answer shows that the incentive plans
do not constitute an enforceable contract. Plaintiff argues however, that at this stage of the
proceeding it is improper to consider the incentive plans because they are not described in the
Complaint or relied upon by Plaintiff. Plaintiff further contends that any of Defendant’s
allegations about the incentive plans, including Defendant’s contentions that the incentive plans
control the distribution of commission payments, must be deemed denied given Plaintiff’s
allegations of oral representations controlling that distribution as well as Defendant’s past history
of paying the full amount of commissions. (Response [Doc. #15] at 5-8.)
Having considered the parties’ contentions, the Court concludes that it would be
improper at this stage of the case to credit Defendant’s allegations about its incentive plans over
the objections of Plaintiff. In Jadoff v. Gleason, 140 F.R.D. 330, 331-32 (M.D.N.C. 1991), the
Court faced a similar situation. On a motion for judgment on the pleadings, the Court found

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that it could not consider documents attached as exhibits to defendant’s Answer to foreclose
recovery on the plaintiffs’ claims because their existence was deemed disputed. The Court found
that “Defendant cannot rely on the acknowledgments to support his motion because their
existence is deemed disputed. Although the existence of the acknowledgments is not disputed
by Plaintiffs in their brief in response to Defendant’s motion, and is essentially admitted, their
existence is not admitted on the face of the complaint and cannot be considered on a motion
for judgment on the pleadings.” Id. at 332 (footnote omitted).1
In the present case, Defendant has not shown that Plaintiff has described, admitted the
existence of, or even mentioned the incentive plan documents in the Complaint. Rather,
Plaintiff states in his Complaint that “Defendant has no policy or practice that would allow for
the forfeiture of any such commissions by Plaintiff.” (Compl. ¶ 71.) In addition, Plaintiff
contests the application of the incentive plan documents, and further contends that
consideration of the “limited documents” attached to the Answer would “create[ ] substantial
risk of misinterpretation without a more fully developed record.” (Resp. Br. at 5-6.)2 In this

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The court in Jadoff went on to find that it could convert the motion into a motion for partial summary
judgment and consider the documents. However, no party has advocated for such conversion here, and Plaintiff
specifically requests the opportunity to make a full presentation on the record after an opportunity for discovery.
In this case, discovery closes in a few weeks, and the issues can be properly presented on dispositive motions
after the close of discovery.
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The Court notes that in his Response Brief, Plaintiff contends that the documents provided by
Defendant and the description of the documents in the Answer must be deemed denied and may not be
considered for purposes of the Rule 12(c) Motion. (Resp. Br. at 5.) Plaintiff then states that, “The court must
instead read the document to evidence what it incontestably shows once one assumes it is what it appears to be.
At the very least, this task creates substantial risk of misinterpretation without a more fully developed record.”
(Resp. Br. at 5.) In its Reply Brief, Defendant reads a portion of this statement to mean that Plaintiff concedes
that the documents attached to the Answer may be considered by the Court and that the Court should “read the
document to evidence what it incontestably shows.” (Reply Br. at 2.) However, based on the remainder of
Plaintiff’s sentence and the full discussion in the Response Brief, it appears that Plaintiff actually contends that
consideration of the documents as evidence at this stage would require the Court to make various assumptions

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case, as in Jadoff, consideration of Defendant’s incentive plan documents on a Rule 12(c)
Motion would run a substantial risk of violating Rule 12(d). See Mendenhall, 856 F. Supp. 2d
at 724 (on a Rule 12(c) motion, defendant cannot rely on allegations of fact contained only in
the answer which contradict the complaint); Blake v. Berman, 598 F. Supp. 1081, 1083 (D. Mass.
1984) (the place of plaintiff’s present confinement did not appear on the face of the complaint,
and therefore could not serve as basis for a judgment on the pleadings). Because the incentive
plan documents form the basis for Defendant’s argument against Plaintiff’s Wage and Hour Act
claim, this claim should not be dismissed at this stage of the proceeding. Therefore, Defendant’s
Motion for Judgment on the Pleadings as to this claim should be denied at this time.
D.

Plaintiff’s Second Claim for Relief – Unjust Enrichment

Plaintiff’s second claim for relief is for unjust enrichment. Unjust enrichment is “a claim
in quasi contract or a contract implied in law. . . . If there is a contract between the parties[,] the
contract governs the claim and the law will not imply a contract.” Rev O, Inc. v. Woo, 725
S.E.2d 45, 49 (N.C. Ct. App. 2012) (quoting Booe v. Shadrick, 369 S.E.2d 554, 556 (N.C. 1988).)
To state a claim for unjust enrichment, Plaintiff must allege that he conferred a benefit on
another, the other party consciously accepted the benefit, and the benefit was not conferred
gratuitously. Madison River Mgmt. Co. v. Bus. Mgmt. Software Corp., 351 F. Supp. 2d 436, 446
(M.D.N.C. 2005).

not set out in the Complaint, and would create a substantial risk of misinterpretation if Plaintiff is not given the
opportunity to present other documents or evidence on a more fully developed record. Thus, in light of the
fuller context set out in the Response Brief, the Court does not read the portion of the sentence cited by
Defendant as a concession that the documents attached to the Answer were not contested and should be
considered by the Court on the present Motion under Rule 12(c).

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In this case, Plaintiff claims that he conferred a benefit upon Defendant IBM by selling
its products and services, that he did not receive the commissions to which he was entitled as
a result of the benefit conferred, that the benefit was neither officious nor gratuitous, and that
it would be inequitable for Defendant IBM to retain the share of his commission that was not
distributed to him. (Compl. ¶¶ 75-81.)
In its Motion for Judgment on the Pleadings, Defendant contends that Plaintiff cannot
state a claim for unjust enrichment because he was receiving a base salary as Defendant’s
employee. Specifically, Defendant contends that where an employee is paid a base salary, the
employee does not unjustly enrich his employer by performing the duties that he receives a salary
to perform even if the employer withholds the employee’s discretionary or unearned bonus or
commission payments. See McCabe v. Abbott Labs., Inc., 47 F. Supp. 3d 339, 349 (E.D.N.C.
2014) (“Abbott was not unjustly enriched by McCabe performing the job she was paid a salary
to perform” where McCabe worked to persuade physicians to prescribe Humira in exchange for
a base salary and the possibility, at Abbott’s discretion, of bonus compensation.” (internal
quotations omitted)); Dulaney v. Inmar, Inc., 725 S.E.2d 473, 2012 WL 1514746, at *4 (N.C. Ct.
App. May 1, 2012) (“Plaintiff was paid a base salary separate from the incentive payments, and
Defendant was not unjustly enriched by Plaintiff performing the job she was paid a salary to
perform,” where Plaintiff failed to qualify for incentive payments under the terms of the Plan).
However, consideration of Defendant’s Motion as to this claim also requires
consideration of the terms of the incentive plans attached to the Answer, as well as other
disputed factual contentions. As noted above, consideration of the incentive plans, without

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allowing Plaintiff an opportunity to present evidence and be heard on a more complete record,
would raise a potential violation of Rule 12(d). Therefore, the Motion to Dismiss this claim
should be denied at this time, without prejudice to further consideration on dispositive motions
after discovery and a more complete presentation of the record.
E.

Plaintiff’s Third Claim for Relief – Fraud

In his Third Claim for relief, Plaintiff asserts a claim for fraud. Plaintiff claims that
Defendant IBM through its executives and leadership represented to him that his earning
potential was unlimited and that his commissions would not be capped or limited in any way.
He says that he relied on those representations in his sales duties, that Defendant knew its sales
representatives would rely on these representations, and that Defendant IBM knew such
statements were false when made because it intended to cap or limit Plaintiff’s commissions.
Plaintiff alleges that he was unaware of Defendant’s intention to limit his commissions. He says
that he was injured as a result because he pursued the BB&T contract when he could have
pursued other sales contracts.
Defendant argues first that Plaintiff’s fraud claim fails the particularity test of Federal
Rule of Civil Procedure 9(b). Rule 9(b) requires a party “to state with particularity the
circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). This has been construed to
mean that a plaintiff must allege the time, place, and contents of the false representations, in
addition to identifying the person making the misrepresentation and what he obtained thereby.
Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999). A court
should not dismiss a claim under Rule 9(b) if the defendant has been made aware of the

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particular circumstances that he will have to defend against at trial, and the plaintiff has
substantial prediscovery evidence of those facts. Id.
Plaintiff has alleged specific facts to support his fraud claim. He has alleged the specific
places and times that the allegedly fraudulent statements were made, and identified the speakers
and what Defendant gained from the alleged misrepresentations. Defendant contends that
Plaintiff has failed to state particular facts of a promise that he would receive full commissions
on the BB&T deal. However, this is not a particularity problem. Plaintiff has particularly
described the allegedly fraudulent statements. Whether those representations constitute fraud
as to the BB&T deal is a different question. Defendant knows the particular circumstances it
will have to defend against, and because Plaintiff witnessed the statements being made, he has
substantial prediscovery evidence of those statements. Therefore, Plaintiff’s fraud claim should
not be dismissed under Rule 9(b).
Defendant next argues that Plaintiff’s fraud claim fails because generally a mere
promissory representation will not support an action for fraud. However, a “promissory
misrepresentation may constitute actionable fraud when it is made with intent to deceive the
promisee, and the promisor, at the time of making it, has no intent to comply.” Johnson v.
Phoenix Mut. Life Ins. Co., 266 S.E.2d 610, 616 (N.C. 1980). Plaintiff alleges that at the time
Defendant’s representatives made the allegedly fraudulent statements, Defendant had no intent
to comply with them and intended to deceive Plaintiff and other sales representatives. (Compl.
¶¶ 88, 89.) In its Motion for Judgment on the Pleadings, Defendant contends that the language
of the incentive plans attached to the Answer shows that IBM reserved discretion to review and

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reduce commission payments, foreclosing Plaintiff’s argument that IBM made false
representations with an intent to deceive him. Defendant likewise contends that Plaintiff’s
reliance on any allegedly fraudulent statements was not reasonable in light of the plain terms of
the incentive plans. However, as previously discussed above, Defendant may not rely upon the
language of its incentive plans to attempt to defeat Plaintiff’s fraud claim at this stage of the
litigation. Therefore, Defendant has not shown that Plaintiff’s fraud claim should be dismissed
on a Motion under Rule 12(c).
F.

Plaintiff’s Fifth Claim for Relief – Negligent Misrepresentation

In Plaintiff’s Fifth Claim, Plaintiff alleges that Defendant made negligent
misrepresentations to the extent that Defendant represented that its sales representatives have
unlimited earning potential without a cap on their commissions. “To survive a motion to dismiss,
the party raising the negligent misrepresentation claim must sufficiently allege (1) that it justifiably
relied, (2) to its detriment, (3) on information prepared without reasonable care, (4) by one who
owed the relying party a duty of care.” River’s Edge Pharm., LLC v. Gorbec Pharm. Servs., Inc.,
No. 1:10CV991, 2012 WL 1439133 at *20 (M.D.N.C. Apr. 25, 2012).
Defendant contends that Plaintiff’s Negligent Misrepresentation claim fails because
Plaintiff cannot show that he justifiably relied on any alleged misrepresentation. “The
reasonableness of a party’s reliance is a question for the jury, unless the facts are so clear that they
support only one conclusion.” Comer v. Person Auto Sales, Inc., 368 F. Supp. 2d 478, 486
(M.D.N.C. 2005); Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 513 S.E.2d 320, 327
(N.C. 1999). Here, Plaintiff has alleged that during his job interviews he was told that he “could

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make as much money as he wanted to.” (Compl. ¶ 14.) He also alleges that his sales position
included “an unlimited sales commission structure.” (Id. ¶ 15.) Plaintiff says that from when he
was hired in 2012 up until the BB&T deal in 2015, his commissions were always consistent with
the calculation from Defendant’s commission spreadsheet and were not limited. (Id. ¶¶ 50-52.)
Plaintiff also alleges that “Defendant has no policy or practice that would allow for the forfeiture
of any such commissions by Plaintiff.” (Id. ¶ 71.)
Defendant nevertheless contends that the Complaint fails to allege that Plaintiff was
denied the opportunity to investigate or learn the true facts by exercising reasonable diligence as
to the representations.

Defendant specifically argues that “any reasonable inquiry would

necessarily have involved Plaintiff referring directly to terms of the IPLs [incentive plans], which
he accepted on February 15, 2015 and July 30, 2015, and which were readily available to him on
IBM’s intranet.” (Def. Mem. at 19.) Defendant contends that the incentive plans clearly state
that IBM reserved discretion to review and reduce commission payments, and that these
disclaimers would preclude any justifiable reliance by Plaintiff on any alleged misrepresentations
regarding his commissions on the BB&T deal. However, as noted above, Defendant may not rely
upon the language of its incentive plans to attempt to defeat Plaintiff’s claim at this stage of the
litigation, given that the incentive plans were not addressed or included in any way in the
Complaint, and given that there appear to be further issues regarding the incentive plans which
would need to be considered on a more complete record.
Finally, Defendant argues that Plaintiff cannot show that any justified reliance was to his
detriment. However, Plaintiff alleges that he relied on Defendant’s alleged misrepresentation that

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his commissions would not be limited to focus on large deals such as the BB&T deal, while not
pursuing other potential sales contracts, and was thereby injured by losing those potential wages.
(Compl. ¶ 91-92.) Plaintiff has therefore sufficiently alleged that he was injured as a result of
Defendant’s alleged misrepresentations.
Accordingly, Defendant’s Motion for Judgment on the Pleadings as to Plaintiff’s claim for
negligent misrepresentation should be denied at this time.
G.

Punitive Damages

Finally, Defendant argues that Plaintiff’s request for punitive damages is derivative of his
fraud claim, and that because his fraud claim should be dismissed, his claim for punitive damages
should be dismissed. However, the Court recommends that the Motion for Judgment on the
Pleadings should be denied as to Plaintiff’s fraud claim at this time. Therefore, the Motion for
Judgment on the Pleadings as to the claim for punitive damages should likewise be denied.
III.

CONCLUSION
IT IS THEREFORE RECOMMENDED that Defendant IBM’s Motion for Judgment

on the Pleadings [Doc. #13] be granted as to Plaintiff’s claim for unfair and deceptive trade
practices, but denied as to Plaintiff’s remaining claims, without prejudice to Defendant raising its
contentions for further consideration on dispositive motions after the close of discovery.
This, the 30th day of August, 2017.
/s/ Joi Elizabeth Peake
United States Magistrate Judge

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