VINSON v. INTERNATIONAL BUSINESS MACHINES CORPORATION
Filing
22
MEMORANDUM OPINION AND ORDER, ORDER signed by CHIEF JUDGE THOMAS D. SCHROEDER on 09/25/2018. For the reasons stated, therefore, IT IS ORDERED that Defendant's motion to dismis s (Doc. 10 ) is GRANTED IN PART AND DENIED IN PART as follows: 1. As to the first cause of action alleging breach of contract, the motion is GRANTED and the claim is DISMISSED; 2. As to the seventh cause of action alleging punitive damages, the mo tion is GRANTED and the claim is DISMISSED, provided that Vinson's prayer for punitive damages remains; 3. As to the remaining causes of action, the motion to dismiss is DENIED, except as to the portions of the fifth and sixth causes of action alleging fraudulent misrepresentation and negligent misrepresentation based on alleged statements of Messrs. Mitchell and Preston, as to which the motion to dismiss is GRANTED. (Taylor, Abby)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
PAUL VINSON,
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
Defendant.
1:17-cv-00798
MEMORANDUM OPINION AND ORDER
THOMAS D. SCHROEDER, Chief District Judge.
Plaintiff
Paul
Vinson,
a
former
salesman
for
Defendant
International Business Machines Corporation (“IBM”), alleges that
IBM improperly capped his commissionable sales in 2015.
¶¶ 28–29.)
(Doc. 9
Vinson seeks $177,720 in compensatory damages under
seven causes of action denominated as follows: (1) breach of an
oral and/or implied contract, (2) quantum meruit, (3) unjust
enrichment, (4) violation of the North Carolina Wage and Hour Act
(“NCWHA”), N.C. Gen. Stat. § 95-25.1 et seq., (5) fraudulent
misrepresentation,
punitive damages.
(6)
negligent
misrepresentation,
and
(7)
Before the court is IBM’s motion to dismiss the
amended complaint pursuant to Federal Rule of Civil Procedure
12(b)(6).
(Doc. 10.)
For the reasons set forth below, the motion
will be granted in part and denied in part.
I.
BACKGROUND
The allegations of the amended complaint, which are accepted
as true and viewed in the light most favorable to Vinson for
purposes of the present motion, show the following:
Vinson was a salesman for IBM’s QRadar network security
software and services from January 1, 2012, to July 31, 2015.
(Doc. 9 ¶¶ 8–10.)
Given the option of receiving a larger salary
with less opportunity to earn commissions or a smaller salary with
the opportunity to earn larger commissions, Vinson chose the
latter.
(Id. ¶ 12.)
He signed an Incentive Plan Letter (“IPL” or
“Plan”) on February 19, 2015.
(Id. ¶ 14; Doc. 9–1.)
The IPL
contained Vinson’s commission plan for the first half of 2015,
from January 1, 2015, through June 30, 2015 (Doc. 9 ¶ 14), setting
forth the details of his Plan (including his base pay percentage,
target incentive percentage, and total quota of $2.1 million), and
contained the following disclaimers:
Right to Modify or Cancel: The Plan does not constitute
an express or implied contract or a promise by IBM to
make any distributions under it. IBM reserves the right
to adjust the Plan terms, including, but not limited to,
changes to sales performance objectives (including
management-assessment objectives), changes to assigned
customers, territories, or account opportunities, or
changes to applicable incentive payment rates or quotas,
target incentives or similar earnings opportunities, or
to modify or cancel the Plan, for any individual or group
of individuals, at any time during the Plan period up
until any related payments have been earned under the
Plan terms. Managers below the highest levels of
management do not know whether IBM will or will not
change or adopt any particular compensation plan; they
do not have the ability to change the Plan terms for any
employee; nor are they in a position to advise any
employee on, or speculate about, future plans. Employees
should make no assumptions about the impact potential
2
Plan changes may have on their personal situations
unless and until any such changes are formally announced
by IBM.
Adjustments for Errors: IBM reserves the right to review
and, in its sole discretion, adjust or require repayment
of
incorrect
incentive
payments
resulting
from
incomplete incentives processes or other errors in the
measurement of achievement or the calculation of
payments,
including
errors
in
the
creation
or
communication of sales objectives. Depending on when an
error is identified, corrections may be made before or
after the last day of the full-Plan period, and before
or after the affected payment has been released.
*
*
*
Significant Transactions: IBM reserves the right to
review and, in its sole discretion, adjust incentive
achievement and/or related payments associated with a
transaction which (1) is disproportionate when compared
with the territory opportunity anticipated during
account planning and used for the setting of any sales
objectives; or for which (2) the incentive payments are
disproportionate when compared with your performance
contribution towards the transaction.
(Doc. 9–1).
Both before and after Vinson accepted the IPL, IBM
presented to him and others in the sales force a PowerPoint
describing the terms of its commission plans for employees.
9
¶ 15.)
The
PowerPoint
was
titled
“Our
Purpose,
(Doc.
Values
&
Practices” relating to “Your 2015 Incentive Plan” and stated that
“[e]arnings opportunity remains uncapped.”
(Id. ¶ 16; Doc. 9–2).
Vinson alleges that, both before and after he accepted the IPL,
his supervisor, Joseph Mitchell, told him that his commission
opportunities would not be capped.
(Doc. 9 ¶ 17.)
Vinson made $19,012,545 in sales for the first half of 2015,
with “just over $11 million” of that amount coming from a deal
3
with Delta Air Lines.
(Id. ¶¶ 20–21.)
had
with
a
conversation
Tom
In mid-June of 2015, Vinson
Preston,
Vinson’s
second-line
supervisor, informing him that he was likely going to leave IBM
for work-life balance and reduced stress reasons.
(Id. ¶¶ 22–23.)
During this conversation, Vinson told Preston that he wanted to
stay on with IBM for “some period” to monitor the sales closure
for the Delta Air Lines deal and a deal with the State of South
Carolina, and to monitor the sales/commission tracking dashboard
to make sure he received his full commission on both deals.
¶ 23.)
(Id.
Vinson further told Preston that he could help train his
replacement if he stayed on, but that he would only remain at IBM
if he would be allowed to work for both IBM and his new employer
during the month of July.
(Id.)
Preston agreed to the proposal,
stating that Vinson would receive his full commission on those two
deals if they closed, that Vinson could work for both employers
during July, and that Vinson could help train his replacement.
(Id.)
Vinson agreed to continue to work at IBM through July,
despite the fact that he knew he would not receive any commission
for sales occurring during the month of July.
(Id. ¶ 24.)
Vinson
finished the Delta Air Lines and South Carolina deals, trained his
replacement, and worked for both employers during the month of
July.
(Id. ¶ 23.)
Around July 28, 2015, Vinson learned that IBM was putting his
commissions
through
a
process
4
“where
exceptional
sales
achievements were reviewed for accuracy and to make sure that the
salesperson
(Id. ¶ 25.)
actually
substantially
contributed
to
the
deals.”
Around September 25, 2015, Vinson learned that IBM
“was going to cap his commissionable sales,” though he was not
told by how much.
(Id. ¶ 27.)
IBM eventually capped Vinson’s
commissionable sales at 400% of his quota, which was less than
half of what Vinson would have been paid without any cap.
¶ 28.)
Vinson
commissions,
but
alleges
that
that
under
IBM
the
only
Plan
paid
he
him
should
$311,731, leaving him underpaid by $177,720.
(Id.
$134,011
have
in
earned
(Id. ¶ 29.)
He
calculates that the amount he should have been paid was only 1.64%
of his total sales, which is less than the industry standard of 2%
of commissionable sales until quota is met and 5% of commissionable
sales after that; following the industry standard would have
resulted in higher pay by IBM.
(Id. ¶¶ 30–31.)
Vinson charges
that “IBM has a history of capping the commissions on large sales,
despite constantly telling its salespeople that their commissions
will not be capped.”
(Id. ¶ 33.)
He further alleges that IBM has
commission budgets where the company internally decides that it
will not pay more than a certain amount in commissions for a given
deal, and that “when the commission plan requires more commissions
than the budget allows for, IBM caps the commissions.”
1
(Id.) 1
The amended complaint relies on portions of depositions of IBM
employees in a similar action, Choplin v. Int’l Bus. Machs. Corp.,
5
IBM’s motion to dismiss the amended complaint has been fully
briefed, and the court heard argument on September 5, 2018.
The
motion is therefore ready for resolution.
II.
ANALYSIS
A.
Standard of Review
To survive a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), 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)).
In considering a Rule 12(b)(6) motion, a court first
“separates factual allegations from allegations not entitled to
the assumption of truth.”
Sauers v. Winston-Salem/Forsyth Cty.
Bd. of Educ., 179 F. Supp. 3d 544, 550 (M.D.N.C. 2016).
Conclusory
allegations
“formulaic
and
allegations
that
are
simply
a
recitation of the elements” are not entitled to the assumption of
truth.
Id. (quoting Iqbal, 556 U.S. at 681).
The court then
determines “whether the factual allegations, which are accepted as
No. 1:16-cv-01412 (M.D.N.C. filed Dec. 16, 2016), which was pending at
the time the present action was filed.
(Doc. 9 ¶¶ 36–39.)
Vinson
alleges that these depositions make clear that IBM had an obligation not
to cap commissions, that salespeople were entitled to rely on the
statements in IBM PowerPoint presentations that their commissions would
not be capped, and that IBM’s reduction of commissions for Choplin and
Vinson constituted “capping.” (Id. ¶ 38.) Because the portions of these
deposition excerpts Vinson cites are not fully contextualized and further
do not alter the outcome of the court’s decision, they will not be
addressed at this time.
6
true, ‘plausibly suggest an entitlement to relief.’”
Iqbal, 556 U.S. at 681).
Id. (quoting
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,”
demonstrating “more than a sheer possibility that a defendant has
acted unlawfully.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550
U.S. at 556)).
The purpose of a motion under Rule 12(b)(6) is to “test[] the
sufficiency
of
a
complaint”
and
not
to
“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).
In considering a Rule 12(b)(6) motion, a
court “must accept as true all of the factual allegations contained
in the complaint,” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per
curiam),
and
all
reasonable
inferences
must
be
drawn
in
the
plaintiff’s favor, Ibarra v. United States, 120 F.3d 472, 474 (4th
Cir. 1997).
B.
Breach of Oral and/or Implied Contract
Vinson alleges in his first claim for relief that “[b]y the
words and actions of IBM and its agents both before and after
February 19, 2015, IBM and Mr. Vinson entered into an express oral
contract, and/or an implied contract, that IBM would pay Mr. Vinson
the full amount of his commission without capping the amount of
commissionable sales.”
(Doc. 9 ¶ 42.)
7
Vinson alleges that the
oral and/or implied contract is comprised of the contents of the
PowerPoint, “the statements of Mr. Mitchell that Mr. Vinson’s
commission would not be capped,” “the statements of Mr. Preston
that Mr. Vinson’s commission would not be capped, as part of the
agreement that Mr. Vinson would stay on for another month,” and
“the fact that IBM had never before capped a commission to Mr.
Vinson’s knowledge, as reported to him by several IBM employees
and managers.”
(Id.)
The parties agree that North Carolina law applies to all of
Vinson’s claims in this diversity action. 2
Tompkins, 304 U.S. 65 (1938).
See Erie R.R. v.
To state a claim for breach of
contract under North Carolina law, a plaintiff must allege the
existence of a valid contract and breach.
McCabe v. Abbott Labs.,
Inc., 47 F. Supp. 3d 339, 345 (E.D.N.C. 2014) (citing Poor v. Hill,
530 S.E.2d 838, 843 (N.C. Ct. App. 2000); Jackson v. Carolina
Hardwood Co., 463 S.E.2d 571, 572 (N.C. Ct. App. 1995)).
A valid
contract consists of an offer, acceptance, consideration, and
mutuality
of
assent
to
the
contract’s
essential
terms.
Se.
Caissons, LLC v. Choate Const. Co., 784 S.E.2d 650, 654 (N.C. Ct.
App. 2016) (citing Snyder v. Freeman, 266 S.E.2d 593, 602 (N.C.
2
While the parties do not analyze why North Carolina law applies, it
is apparent that Plaintiff is a North Carolina citizen whose sales
territory included North Carolina. (Doc. 9 ¶ 1; Doc. 9–1 at 2.) In any
event, there is no indication that even if North Carolina law did not
apply, the applicable law would be materially different for purposes of
this motion.
8
1980) (“The essence of any contract is the mutual assent of both
parties to the terms of the agreement so as to establish a meeting
of the minds.”)).
Mutual assent requires the parties to “assent to the same
thing, in the same sense.”
Volumetrics Med. Imaging, Inc. v. ATL
Ultrasound, Inc., 243 F. Supp. 2d 386, 400 (M.D.N.C. 2003) (quoting
Horton v. Humble Oil & Ref. Co., 122 S.E.2d 716, 719 (N.C. 1961)
(internal quotation marks omitted)).
Where the parties’ intent is
not clear from a writing, it may be inferred from the parties’
actions.
Se. Caissons, 784 S.E.2d at 655 (quoting Branch Banking
& Tr. Co. v. Kenyon Inv. Corp., 332 S.E.2d 186, 192 (1985)); see
also Arndt v. First Union Nat'l Bank, 613 S.E.2d 274, 278 (N.C.
Ct.
App.
2005)
(noting
that
the
parties’
intentions
control
construction of a contract, and their writings and actions can
indicate their intentions).
“When an employer retains total discretion concerning whether
to pay a bonus, there is no mutual agreement and no contract.”
McCabe, 47 F. Supp. 3d at 345 (citing Schoenberg v. E.I. DuPont
DeNemours & Co., No. 1:97CV109, 1997 U.S. DIST. LEXIS 18331, at
*11–12 (W.D.N.C. Oct. 9, 1997) (applying North Carolina law),
aff'd, 155 F.3d 561, 1998 WL 390613, at *2–3 (4th Cir.1998) (per
curiam) (unpublished table decision); Moore v. Associated Brokers,
Inc., 176 S.E.2d 355, 355–56 (N.C. Ct. App. 1970) (applying North
9
Carolina law); accord Jensen v. Int'l Bus. Machs. Corp., 454 F.3d
382, 388 (4th Cir. 2006) (applying Virginia law)).
The
parties
agree
enforceable contract.
at 6.)
that
the
IPL
does
not
constitute
an
(Doc. 11 at 9; Doc. 12 at 13, 17; Doc. 14
However, IBM argues that the IPL governs payment of
Vinson’s commissions and that the disclaimers contained within it
precluded the formation of any enforceable contract.
6.) 3
(Doc. 14 at
Similarly, IBM maintains that the IPL therefore precluded
3
In support of this position, IBM relies on a host of cases from several
jurisdictions interpreting various versions of its IPL. (Doc. 11 at 11–
12.)
These cases are largely distinguishable because they addressed
whether the IPL itself was a binding contract, involved versions of the
IPL with language reserving greater discretion to IBM to modify or cancel
its plan terms, or the surrounding circumstances were factually
distinguishable. See Jensen, 454 F.3d at 388–89 (finding that the IPL
did not constitute an enforceable contract because IBM reserved the right
to modify or cancel the Plan terms “up until actual payment has been
made”); Wilson v. Int’l Bus. Machs. Corp., 610 F. App’x 886, 888–89 (11th
Cir. 2015) (finding that IBM did not breach the IPL when it modified an
employee’s quota for a significant transaction based on IBM’s authority
under the significant transactions clause); Kavitz v. Int’l Bus. Machs.
Corp., 458 F. App’x 18, 20 (2d Cir. 2012) (finding that both the
plaintiff’s claim that the Plan constituted an enforceable contract and
the plaintiff’s implied contract claim, based on the Plan and IBM’s prior
actions, failed as a matter of law because the Plan’s express language
indicated that IBM did not intend to create a binding contract governing
incentive compensation); Geras v. Int’l Bus. Machs. Corp., 638 F.3d 1311,
1316–17, 1317 n.1 (10th Cir. 2011) (finding that IBM’s IPL made clear
IBM’s intent not to form a contract); Pfeister v. Int’l Bus. Machs.
Corp., No. 17-CV-03573-DMR, 2017 WL 4642436, at *3–4 (N.D. Cal. Oct. 16,
2017) (holding that the language in the IPL’s “Right to Modify or Cancel”
provision indicated that the parties lacked mutual assent to enter a
contract and that the IPL lacked sufficiently definite terms to form a
contract); Kemp v. Int’l Bus. Machs. Corp., No. C-09-4683 MHP, 2010 WL
4698490, at *5–6 (N.D. Cal. Nov. 8, 2010) (granting IBM’s motion to
dismiss on the grounds that the IPL’s language did not create a contract
and that at the time IBM modified the payment amount the employee had
not earned the disputed commissions under the Plan terms); Schwarzkopf
v. Int’l Bus. Machs. Corp., No. C08–2715 JF, 2010 WL 1929625, at *9–10
(N.D. Cal. May 12, 2010) (finding that IBM’s reduction of an employee’s
commission payment for a significant transaction was within IBM’s
10
Vinson
from
relying
on
any
statements
regarding
commissions
outside the IPL - such as in the PowerPoint presentation — to
create a “side contract” that supersedes the IPL.
(Id. at 4–6.)
Vinson’s IPL, attached to the amended complaint as Exhibit A,
requires that IBM employees accept it to become eligible to receive
any incentive payments.
(Doc. 9–1 at 2.)
Vinson concedes he
accepted his IPL, which contained an acknowledgement that he “read
and understood the contents of [the] letter and the official Plan
terms.”
(Id.; Doc. 9 ¶ 14.)
The IPL further contained the
disclaimer that
[m]anagers below the highest levels of management do not
know whether IBM will or will not change or adopt any
particular compensation plan; they do not have the
ability to change the Plan terms for any employee; nor
are they in a position to advise any employee on, or
speculate about, future plans. Employees should make no
assumptions about the impact potential Plan changes may
have on their personal situations unless and until any
such changes are formally announced by IBM.
(Doc. 9–1 at 3.)
Vinson alleges that he entered into an oral and/or implied
contract based on Mr. Mitchell’s and Mr. Preston’s representations
discretion per the IPL’s significant transactions clause); Rudolph v.
Int’l Bus. Machs. Corp., No. 09C428, 2009 WL 2632195, at *3–4 (N.D. Ill.
Aug. 21, 2009) (finding that the employee’s breach of contract claim
failed as a matter of law because the language in the IPL allowed IBM
to modify or cancel the plan “at any time for any reason”); Gilmour v.
Int’l Bus. Machs. Corp., No. CV 09-04155 SJO, 2009 WL 8712153, at *1–2
(C.D. Cal. Dec. 16, 2009) (holding that there was no enforceable
employment contract because the terms of the offer letter stated that
IBM reserved the right to modify or cancel the incentive plan at any
time).
11
that his commissions would not be capped.
(Doc. 9 ¶ 42.)
Vinson
does not allege that either Mr. Mitchell or Mr. Preston was a
manager at “the highest level of management,” and at the hearing
on IBM’s motion Vinson’s counsel admitted that Vinson was not
contending that either supervisor was part of the “highest levels
of
management.”
Accordingly,
the
plain
language
of
the
IPL
informed Vinson that neither supervisor, as a manager below the
highest levels of management, could change or advise him on his
commission payment plan.
Therefore, Vinson’s claim that the
statements of Messrs. Mitchell and Preston constituted an oral
and/or implied contract with IBM not to cap commissions fails as
a matter of law.
Vinson also alleges that an oral and/or implied contract was
created by the PowerPoint and IBM’s alleged practice of having
never before capped a commission.
(Doc. 9 ¶ 42.)
The plain
language of the IPL disclaims any intent on behalf of IBM to be
bound to pay a particular amount for commissions.
(Doc. 9-1 at 3
(“The Plan does not constitute an express or implied contract or
a promise by IBM to make any distributions under it.”)
Rather,
the IPL reserves to IBM the right to cancel or modify any payment
at any time before it is “earned,” as well as reserving the right
to adjust payment amounts for errors and significant transactions.
(Doc. 9–1 at 3, 4.)
The Second Circuit considered an implied-in-
fact contract claim brought by an IBM employee governed by an IPL
12
with substantially similar language in the “Right to Modify or
Cancel” provision and concluded that the claim failed as a matter
of law because the IPL disclaimers made clear that “IBM never
intended
to
compensation.”
create
a
binding
contract
governing
incentive
Kavitz, 458 F. App’x at 19–20 (noting that the
Plan stated it “does not constitute an express or implied contract
or a promise by IBM to make any distributions under it,” and “IBM
reserves the right to adjust the Plan terms, including but not
limited to, any quota and target incentives, or to cancel the Plan,
for any individual or group of individuals, at any time during the
Plan period up until any related incentive payments have been
earned under its terms”).
Regardless of the statements in the
PowerPoint and the alleged practice of not capping commissions,
therefore, the plain language of the IPL clearly disclaimed any
intent on behalf of IBM to be committed to any commission payment
requirement, including not capping. 4
4
At the hearing, Vinson’s counsel relied on Irwin v. Fed. Express Corp.,
No. 1:14cv557, 2016 WL 7053383 (M.D.N.C. Dec. 5, 2016), to argue that
whether an oral contract is formed is a question of fact that should be
decided by a jury. Vinson’s counsel also argued that Vinson’s situation
is similar to that in Irwin, where the court held that a factfinder could
conclude that the employer’s offer of severance benefits constituted a
supplementary contract to the employee’s at-will employment. Id. at *5–
6. This is a new argument that the court need not consider, as it was
not included in Vinson’s brief in opposition to the motion to dismiss.
N.C. All. for Transp. Reform, Inc. v. United States DOT, 713 F. Supp.
2d 491, 510 (M.D.N.C. 2010) (“Raising such new arguments for the first
time at oral argument undermines the purpose of orderly briefing and
risks subjecting an opponent to an unfair disadvantage.”). Nevertheless,
the arguments do not save Vinson’s claim. First, whether a contract was
formed presents a jury question only where the parties’ intent is not
clear from a writing. Se. Caissons, 784 S.E.2d at 655. Here, IBM’s IPL
13
Vinson’s counsel argued at the hearing that the IPL cannot be
incorporated into the alleged oral and/or implied contract because
the PowerPoint, which was presented both before and after the IPL
was executed, did not contain any provision incorporating the IPL. 5
This does not save the claim.
payment
of
commissions
will
The IPL clearly states that no
be
made
without
an
employee’s
acceptance of its terms, incorporates the PowerPoint and all
materials about IBM’s incentives program by reference via an
internet link (Doc. 9-1 at 2), and was executed early in the
employment period.
See Jensen, 454 F.3d at 389 (finding that the
disclaimer in an incentive plan brochure directing employees to
expressed a clear intent not to enter into a contract concerning
commission
payments.
Second,
Vinson’s
claim
is
factually
distinguishable. Irwin involved whether FedEx’s alleged agreement to
pay severance benefits in exchange for the employee’s continued
performance constituted either a bilateral contract or unilateral offer
to contract.
2016 WL 7053383, at *3–6.
Here, in contrast, the
disclaimers in the IPL leave no question that IBM did not assent to enter
into a bilateral contract concerning commission payments.
As to the
unilateral contract claim, Irwin involved a payment the employee would
not have otherwise received pursuant to his at-will employment. Id. at
*5. In contrast, the commissions Vinson alleges arise by virtue of his
IPL, since he could not receive incentive payments without accepting its
terms. (Doc. 9–1 at 2.) The PowerPoint that Vinson alleges created a
contract was a document that explained the terms of the company’s various
IPL options for sales employees. (Doc. 9 ¶ 15; Doc. 9–2 generally and
at 17 (setting out schedule for issuance of IPL letters and acceptance
of IPL)). This situation therefore differs from the employee’s situation
in Irwin, where no document clearly disclaimed the employer’s intent to
form a contract concerning the payments at issue.
5
At the hearing, Vinson’s counsel emphasized that the brochure in
Jensen included a disclaimer directing employees to consult their IPL
for further details. 454 F.3d at 389 (the brochure stated that “the
employee should consult the IBM intranet as well as local arrangements
authorized under the plan, such as the ‘Playbook’ and his quota letter,
for further details”).
14
consult the IBM intranet and other plan documents for further
details “amount[ed] to an incorporation by reference to intranet
materials that . . . are all terms of the ‘offer’ on which [the
plaintiff] relies”); see also Booker v. Everhart, 240 S.E.2d 360,
363 (N.C. 1978) (“To incorporate a separate document by reference
is to declare that the former document shall be taken as part of
the document in which the declaration is made, as much as if it
were set out at length therein.”).
Because Vinson has failed to allege facts sufficient to permit
a plausible inference that a contract existed, the first cause of
action for breach of contract fails as a matter of law.
C.
Quantum Meruit/Unjust Enrichment 6
In his second and third causes of action, Vinson alleges that
he conferred a benefit on IBM by selling its software and services,
that he did not receive the value of the work he performed because
he did not receive the commissions to which he was entitled as a
6
Though Vinson pleads these as separate causes of action, he conceded
at the September 5 hearing that they are the same claim for purposes of
this case. Compare TSC Research, LLC v. Bayer Chems. Corp., 552 F. Supp.
2d 534, 540 (M.D.N.C. 2007) (“To establish a claim for quantum meruit,
also known as unjust enrichment, a plaintiff must show three elements”)
with Elite Outsourcing Grp., Inc. v. Healthsouth Corp., 2006 WL 1666739
at *1–2 (“Under North Carolina law the elements of quantum meruit are:
‘(1) the services were rendered to defendants; (2) the services were
knowingly and voluntarily accepted, and (3) the services were not given
gratuitously.’ . . . Claims for unjust enrichment are similar. ‘[A]
plaintiff must allege that property or benefits were conferred on a
defendant under circumstances which give rise to a legal or equitable
obligation on the part of the defendant to account for the benefits
received.’” (citations omitted)).
15
result
of
the
benefit
conferred,
unjustly enriched by his work.
and
that
IBM
was
therefore
(Doc. 9 ¶ 53–58.)
To plead a claim for unjust enrichment, a plaintiff must
allege that he conferred a measurable 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) (citing
Se. Shelter Corp. v. BTU, Inc., 572 S.E.2d 200, 206 (2002)). 7
An
unjust enrichment claim is “a claim in quasi contract or a contract
implied
in
law,”
and
“[i]f
there
is
a
contract
between
the
parties[,] the contract governs the claim and the law will not
imply a contract.”
McCabe, 47 F. Supp. 3d at 348 (first quoting
Rev. O. Inc., v. Woo, 725 S.E.2d 45, 49 (N.C. Ct. App. 2012); then
quoting Booe v. Shadrick, 369 S.E.2d 554, 556 (N.C. 1988) (internal
quotation marks omitted)).
Where an employer retains total discretion concerning whether
to make bonus payments, courts have found that it is not unjustly
enriched when it decides to exercise discretion to pay employees
7
IBM argues that “the Fourth Circuit has held that recovery under a
theory of unjust enrichment ‘requires a showing of one of three elements:
(1) the payee had a reasonable expectation of payment; (2) the payer
should reasonably have expected to pay; or (3) society’s reasonable
expectations of person and property would be defeated by nonpayment.”
(Doc. 11 at 16) (citing Neal v. GMC, 266 F. Supp. 2d 449, 456 (W.D.N.C.
2003)). However, the case IBM cites involved a claim under the Employee
Retirement Income Security Act and applies the federal common law theory
of unjust enrichment. In this case, as the parties have agreed, North
Carolina’s state common law applies.
16
only their salary.
McCabe, 47 F. Supp. 3d at 349 (“McCabe
worked . . . in exchange for a base salary and the possibility, at
Abbott’s discretion, of bonus compensation.
Simply put, ‘[Abbott]
was not unjustly enriched by [McCabe] performing the job she was
paid to perform.” (citations omitted)).
Where an employer pays an
employee a base salary with the possibility of commissions, but
does not retain absolute discretion as to whether to pay the
commission, an employee who has not been paid the full amount of
commissions can state a claim for unjust enrichment.
See, e.g.,
Kornegay v. Aspen Asset Grp., LLC, No. 04-CVS-22242, 2006 WL
2787897,
at
*10
(N.C.
Super.
Ct.,
Sept.
26,
2006)
(denying
Defendants’ motion for summary judgment on quantum meruit claim,
event though plaintiff “received a substantial salary for his
services,” where plaintiff had evidence of generating profits
during his employment and “his incentive for doing so was the
expectation
of
receiving
additional
compensation
for
his
efforts”).
IBM argues that it could not have been unjustly enriched
because Vinson was paid a base salary separate from his incentive
payments.
(Doc. 11 at 15–16.)
Vinson responds that his salary
does not represent full compensation, because he has alleged that
he had a choice between receiving a larger salary with less
opportunity to earn commissions or a smaller salary with the
opportunity to earn larger commissions.
17
(Doc. 12 at 18.)
Because
he chose the smaller salary option, Vinson contends, the salary
alone does not represent full compensation for his work.
(Id.)
He also argues that his situation differs from those where unjust
enrichment claims for commissioned employees were rejected because
those cases involved employers who retained absolute discretion to
make commission payments while IBM did not.
(Id. at 17–18.)
When the facts are viewed in the light most favorable to
Vinson, as they must be at this stage, the court cannot say that
he has failed to state a plausible claim.
Although the IPL vests
IBM with discretion to modify or cancel commission payments, its
discretion is limited to any time before the commissions are
“earned.”
(Doc. 9–1 at 2); see Jensen, 454 F.3d at 389 (noting
that without the “until actual payment has been made” vesting
language
in
the
IBM
employee’s
“Right
to
Modify
or
Cancel”
provision, “a commission might be earned when the sale is made”);
see also Schwarzkopf, 2010 WL 1929625, at *9 (noting that the
identical “until any related payments have been earned under [the
Plan’s] terms” language in the IBM employee’s “Right to Modify or
Cancel” provision “may prevent IBM from modifying the terms of the
incentive plan once a salesperson ‘earns’ commission [sic] by
completing a sale”).
Thus, IBM’s discretion is not absolute.
In
this respect, Vinson’s case differs from those relied on by IBM to
urge dismissal because Vinson was paid a base salary.
See McCabe,
47 F. Supp. 3d at 348–349 (finding that the employer was not
18
unjustly enriched by the sales representative performing the job
she was paid a salary to perform where the criteria documents
governing
incentive
payments
for
sales
representatives
and
employer’s oral presentations at meetings summarizing the criteria
documents stated that all bonus awards were in the employer’s
“sole, absolute, and final discretion”); see also Dulaney v. Inmar,
Inc., 725 S.E.2d 473 (N.C. Ct. App. 2012) (unpublished table
opinion) (finding employer not unjustly enriched when it paid
plaintiff a base salary but not commissions because the employer
had made clear that an employee was only eligible for a bonus if
he was employed at the time of payout, which plaintiff was not.)
Vinson alleges that IBM capped his commissions payment at
400% of his quota on September 25, 2015 (Doc. 9 ¶ 28), and the
amended complaint does not indicate that IBM was operating pursuant
to
the
significant
transactions
provision
(indeed,
counsel argued at the hearing that IBM was not).
Vinson’s
The commission
period for the first half of 2015 closed on June 30, 2015.
9 ¶ 14.)
to
(Doc.
Given this timeline, Vinson has alleged sufficient facts
permit
the
plausible
inference
that
IBM’s
change
to
his
commission payment was a cap imposed after the commissions had
been “earned” and thus outside IBM’s discretion to reduce the
commissions on that basis. 8
Since Vinson chose the smaller salary
8
Whether IBM relied on the significant transaction provision to reduce
Vinson’s commissions, as it contends (Doc. 14 at 8), is not apparent
19
with the opportunity to earn more commissions, and he alleges that
IBM capped his commissions in a manner beyond IBM’s discretion, he
has plausibly alleged a claim for unjust enrichment.
Vinson has
further sufficiently alleged that he conferred a benefit on IBM in
the form of his making significant sales of its software and
services, that IBM accepted this benefit, the benefit was not
conferred gratuitously because Vinson made the sales expecting to
be paid a salary and his full commissions, and that IBM was
unjustly enriched by capping his commissions after Vinson had
earned them after having accepted a compensation option of a lower
base salary. Because Vinson has alleged facts sufficient to permit
the plausible inference that IBM’s actions constituted unjust
enrichment, the motion to dismiss the second and third causes of
action will be denied.
D.
North Carolina Wage and Hour Act
The fourth cause of action alleges that IBM violated § 9525.6 of the NCWHA by failing to pay Vinson his wages as they became
due.
(Doc. 9 ¶ 61.)
Vinson contends he is an “employee,” IBM is
an “employer,” and the commission payments he should have received
constitute “wage[s]” under N.C. Gen. Stat. § 95–21.2.
¶ 60.)
He
seeks
unpaid
commissions,
interest,
(Doc. 9
additional
from the face of the amended complaint and must await a consideration
of the facts.
20
liquidated damages in the amount of the unpaid commission, plus
attorneys’ fees, per N.C. Gen. Stat. § 95–25.22.
(Doc. 9 ¶ 14.)
Section 95–25.6 of the NCWHA provides:
Every employer shall pay every employee all wages and
tips accruing to the employee on the regular payday.
Pay periods may be daily, weekly, bi-weekly, semimonthly, or monthly.
Wages based upon bonuses,
commissions, or other forms of calculation may be paid
as infrequently as annually if prescribed in advance.
N.C.
Gen.
Stat.
§ 95–25.6.
The
NCWHA
defines
“wage”
as
“compensation for labor or services rendered by an employee whether
determined on a time, task, piece, job, day, commission, or other
basis of calculation” and provides that “[f]or the purposes of
G.S. 95–25.6 through G.S. 95–25.13 ‘wage’ includes sick pay,
vacation
pay,
severance
pay,
commissions,
bonuses,
and
other
amounts promised when the employer has a policy or a practice of
making
such
payments.”
N.C.
Gen.
Stat.
§ 95–25.2(16).
For
purposes of the NCWHA, “earned wages” are “those wages and benefits
due when the employee has actually performed the work required to
earn them.”
Irwin, 2016 WL 7053383, at *8 (quoting Whitley v.
Horton, 608 S.E.2d 416, *5 (N.C. Ct. App. 2005) (unpublished table
opinion)) (citing Narron’s v. Hardee’s Food Sys., Inc., 331 S.E.2d
205, 207–08 (N.C. Ct. App. 1985), overruled on other grounds by J
& B Slurry Seal Co. v. Mid-S. Aviation Inc., 362 S.E.2d 812 (N.C.
Ct. App. 1987)).
IBM argues that Vinson’s NCWHA claim fails as a matter of law
21
because there is no enforceable agreement regarding the payment of
commissions.
(Doc. 11 at 12–13.) 9
alleged
there
that
commissions.
is
an
Vinson contends that he has
enforceable
agreement
not
to
cap
(Doc. 12 at 15–16.)
IBM misstates the requirements for an NCWHA claim.
To state
a claim under the act, there need not be an enforceable agreement,
provided the employer has a “policy or a practice of making such
payments.”
N.C. Gen. Stat. § 95–25.2(16).
While an employment
relationship is required to bring a claim under § 95–25.6, “the
statute contains no requirement of an express contract or agreement
to pay for particular work.”
Martinez-Hernandez v. Butterball,
LLC, 578 F. Supp. 2d 816, 821 (E.D.N.C. 2008).
Accordingly, a
NCWHA claim does not fail as a matter of law simply because the
plaintiff has failed to allege the existence of an enforceable
contract.
Buckner v. United Parcel Serv., Inc., No. 5:09-CV-411-
BR, 2010 WL 2889586, at *3 (E.D.N.C. July 21, 2010) (“[A] violation
of [N.C. Gen. Stat. § 95–25.6] need not be based upon an express
9
IBM also argues that even if the court does not dismiss Vinson’s NCWHA
claim in its entirety, it should dismiss his claim for liquidated damages
because it acted in good faith and had reasonable grounds for believing
that it could adjust commissions. (Doc. 11 at 14.) Liquidated damages
are a remedy available for a violation of the NCWHA. N.C. Gen. Stat.
§ 95-25.22. If an employer “shows to the satisfaction of the court that
the act or omission constituting the violation was in good faith and
that the employer had reasonable grounds for believing that the act or
omission was not a violation of this Article,” the court has the
discretion to decide whether to award liquidated damages. Id.; see also
Arndt, 613 S.E.2d at 283. Because liquidated damages is a remedy that
may be imposed for a violation of the NCWHA and depends on the facts,
it is premature to consider it at this pleading stage.
22
contract”), aff’d, 489 F. App’x 709 (4th Cir. 2012); See also
McCabe, 47 F. Supp. 3d at 346–47 (finding that no contract had
been formed, but then considering whether the employee had an NCWHA
claim); Cole v. Champion Enters., Inc. 496 F. Supp. 2d 613, 626
(M.D.N.C.
2007)
(finding
no
enforceable
contract
between
the
employee and employer, but then considering and rejecting the NCWHA
claim because
there
was
no
dispute
whether
the
company
ever
promised the employee the bonus at issue and the employee had not
performed
the
work
required
to
earn
it
by
the
does
not
time
of
his
termination).
Accordingly,
Vinson’s
NCWHA
claim
because of the absence of an enforceable agreement.
fail
simply
Vinson has
plausibly alleged an employment relationship with IBM, a written
commission policy for the first half of 2015 as set out in the
IPL, and IBM’s payment of a salary and commissions for his work.
(Doc. 9 ¶¶ 8–12, 14, 29; Doc. 9–1.)
Vinson’s allegations permit
the inference that his unpaid commission constitute “wages” under
the NCWHA, because they are compensation for his service as a
salesman made pursuant to IBM’s policy or practice of not capping
commissions.
Vinson further alleges that his unpaid commissions
constitute “earned wages,” as defined in the NCWHA, because he had
actually performed the work required to earn the commission by
making his commissionable sales for the first half of 2015.
9 ¶¶ 20, 29; Docs. 9–3, 9–4, 9–5, 9–6.)
23
(Doc.
IBM argues that its “obligation not to cap Plaintiff’s overall
earnings opportunity is not inconsistent with its right to adjust
Plaintiff’s commissions on significant transactions.”
6–7.)
This may be true.
unpaid
commissions
are
significant transaction.
(Doc. 14 at
But Vinson does not allege that the
the
result
of
an
adjustment
for
a
Rather, he alleges that they resulted
from IBM’s decision to cap his commissionable sales for the first
half of 2015 at 400% of his quota.
(Doc. 9 ¶ 28.)
Accordingly,
IBM’s argument that it could adjust Vinson’s commission depends on
facts not alleged, is not ripe for consideration at this pleading
stage, and is not relevant to whether the amended complaint alleges
that IBM had a policy or practice of paying uncapped commissions.
IBM’s motion to dismiss this claim is therefore denied.
E.
Fraudulent Misrepresentation
The fifth claim for relief alleges that IBM’s statements,
made through its agents, that Vinson’s commission would not be
capped constitute fraudulent misrepresentations.
67.)
(Doc. 9 ¶¶ 63–
Vinson alleges that the PowerPoint and the statements of
Messrs. Mitchell and Preston were false representations intended
to deceive him that could be reasonably and justifiably relied on.
(Doc. 9 ¶¶ 64–66.)
To
state
a
claim
for
fraudulent
misrepresentation,
a
complaint must plausibly allege: “(1) [a] false representation or
concealment of a material fact, (2) reasonably calculated to
24
deceive, (3) made with intent to deceive, (4) which does in fact
deceive, (5) resulting in damage to the injured party,” where “any
reliance
on
reasonable.”
the
allegedly
false
representations
must
Forbis v. Neal, 649 S.E.2d 382, 387 (2007).
be
A
plaintiff cannot establish reasonable reliance if he fails to make
reasonable inquiry regarding the alleged statement.
Caper Corp.
v. Wells Fargo Bank, N.A., 578 F. App’x 276, 281 (4th Cir. 2014)
(quoting Dallaire v. Bank of Am., N.A., 760 S.E.2d 263, 267 (N.C.
2014) (internal quotation marks omitted)).
“Where a plaintiff
‘could have discovered the truth [about the misrepresentation]
upon inquiry, the complaint must allege that [the plaintiff] was
denied the opportunity to investigate or . . . could not have
learned the true facts by exercise of reasonable diligence’ in
order to survive a motion to dismiss.”
Id. (quoting Pinney v.
State Farm Mut. Ins. Co., 552 S.E.2d 186, 192 (N.C. Ct. App. 2001)
(emphasis
supplied)
(internal
quotation
marks
omitted)).
Furthermore, “[a]s a corollary of this broader principle, ‘[a]
person who executes a written instrument is ordinarily charged
with knowledge of its contents and may not base an action for fraud
on ignorance of the legal effect of its provisions.’” Id. (quoting
Int’l Harvester Credit Corp. v. Bowman, 316 S.E.2d 619, 621 (N.C.
Ct. App. 1984)). However, the reasonableness of a party’s reliance
is “generally a question for the jury, except in instances in which
‘the facts are so clear as to permit only one conclusion.’”
25
Caper
Corp., 578 F. App’x at 284 (quoting Dallaire, 760 S.E.2d at 267).
IBM argues that Vinson’s fraud claim fails as a matter of law
because IBM reserved the discretion in the IPL to review and reduce
commission payments, which means that IBM did not make false
representations with an intent to deceive Vinson.
17.)
(Doc. 11 at
IBM also argues that the IPL informed Vinson that “he should
not rely on any statements made by anyone other than the ‘highest
level of management’ about whether there might be any changes to
his plan structure or how those changes might impact his commission
payments.”
(Id.)
IBM contends that because of these disclaimers
in the IPL, it was not reasonable for Vinson to rely on any alleged
misrepresentations about commissions being uncapped.
(Id. at 18.)
Additionally, IBM contends that Vinson’s claim fails as a matter
of law because the amended complaint does not allege that he was
denied the opportunity to investigate or that he could not have
learned the true facts of any alleged misrepresentation.
(Doc. 14
at 10.)
Vinson does not allege that he was denied the opportunity to
investigate or that he could not have learned the truth about the
alleged misrepresentations by IBM.
The IPL includes the clear
disclaimer that
[m]anagers below the highest levels of management do not
know whether IBM will or will not change or adopt any
particular compensation plan; they do not know whether
IBM will or will not change or adopt any particular
compensation plan; they do not have the ability to change
26
the Plan terms for any employee; nor are they in a
position to advise any employee on, or speculate about,
future plans.
Employees should make no assumptions
about the impact potential Plan changes may have on their
personal situations unless and until any such changes
are formally announced by IBM.
(Doc. 9–1 at 3.)
Vinson accepted the IPL and acknowledged that he
read and understood its terms.
(Doc. 9 ¶ 14; Doc. 9–1 at 2.)
He
does not allege that Messrs. Preston and Mitchell are at “the
highest levels of management” — indeed, at the hearing, his counsel
candidly conceded they are not.
Consequently, neither supervisor
could modify or advise Vinson as to the terms of his incentive
payment Plan.
(Doc. 9–1 at 3.)
Vinson also does not allege that
he “was denied the opportunity to investigate” or “could not have
learned the true facts by exercise of reasonable diligence.” Caper
Corp., 576 F. App’x at 281.
Had Vinson consulted his IPL, he would
have realized that neither supervisor had the authority to bind
IBM as to any statement regarding his commission plans, and thus
any reliance by him was not reasonable as a matter of law.
See
Schwarzkopf, 2010 WL 1929625, at *14 (holding that even if the
representations made by managers “were sufficient to support a
claim for fraud, [plaintiff] cannot show justifiable reliance”
because “managers referred [plaintiff] to the disclaimers in the
Quota
Letter”
(which
included
a
“Right
to
Modify
or
Cancel
provision” identical to that in Vinson’s IPL)).
However, as to the statements in the PowerPoint presentation
27
that payments and earnings opportunity are “uncapped,” Vinson has
plausibly alleged that the statements that his commissions would
not be capped was false, material, made with intent to deceive,
and one he could (and did) justifiably rely on to his detriment.
At this preliminary stage, it is not clear from the facts alleged
that Vinson could have discovered the truth about the alleged
misrepresentation upon reasonable inquiry.
While the IPL’s “Right
to Modify and Cancel” provision does grant IBM broad discretion to
modify or cancel Vinson’s incentive payment Plan, that discretion
is reserved to IBM “during the Plan period up until any related
payments have been earned under the Plan terms.”
(Doc. 9–1 at 3.)
IBM has not identified any provision of the IPL that permits
arbitrary capping of commissions at 400% of an employee’s quota
after
they
are
“earned.”
Thus,
whether
IBM
actually
capped
Vinson’s commissions and misrepresented its policy on capping
depends on facts not before the court. 10
Unlike the situation with
the supervisors’ alleged statements, IBM has not identified any
basis upon which to establish as a matter of law that resort to
the IPL would have demonstrated that Vinson’s reliance was not
reasonable.
See Caper Corp., 578 F. App’x at 284 (noting that in
the absence of a showing that “the facts are so clear as to permit
10
Here, too, IBM’s reference to its authority under the significant
transactions provision depends on whether the facts demonstrate that it
was actually invoked in Vinson’s case.
28
only one conclusion,” the reasonableness of reliance is a question
of fact for the jury).
IBM’s motion to dismiss Vinson’s fraudulent misrepresentation
claim will therefore be denied.
F.
Negligent Misrepresentation
Vinson’s sixth claim for relief alleges, in the alternative
to his fraudulent misrepresentation claim, that IBM’s statements,
through its agents, that his commissions would not be capped
constitute negligent misrepresentations.
(Doc. 9 ¶ 68–75.)
As
with the previous claim, Vinson relies on the same factual bases.
(Doc. 9 ¶¶ 70–75.)
To state a negligent misrepresentation claim, a plaintiff’s
complaint
must
plausibly
allege:
(1)
that
the
plaintiff
justifiably relied, (2) to his detriment, (3) on information
prepared without reasonable care, (4) by one who owed the relying
party a duty of care.
River’s Edge Pharms., LLC v. Gorbec Pharm.
Servs., Inc., No. 1:10cv991, 2012 WL 1439133, at *20 (M.D.N.C.
Apr. 25,
negligent
2012).
“The
question
misrepresentation
of
claims]
reasonable reliance in fraud actions.”
justifiable
is
reliance
analogous
to
[for
that
of
Caper Corp., 578 F. App’x
at 284 (quoting Marcus Bros. Textiles, Inc. v. Price Waterhouse,
LLP, 513 S.E.2d 320, 327 (N.C. 1999) (internal quotation marks
omitted)).
IBM repeats its same arguments here as it made for Vinson’s
29
claim for fraudulent misrepresentation – namely, that he cannot
show he justifiably relied on any alleged misrepresentation. (Doc.
11 at 19–20.)
IBM argues that any reasonable inquiry would have
led Vinson to read his IPL, whose disclaimers would have revealed
IBM’s discretion to review and reduce commission payments, and
that the amended complaint fails to allege that Vinson was denied
the opportunity to investigate or learn the true facts by the
exercise of reasonable diligence.
(Id.)
Vincent offers the same
responses as he did for the fraudulent misrepresentation claim.
(Doc. 12 at 23.)
The analysis for determining whether Vinson has sufficiently
alleged negligent misrepresentation is the same as that provided
for the fraudulent misrepresentation claim.
For the reasons set
forth above, IBM’s motion to dismiss will be granted to the extent
Vinson relies on the statements of Messrs. Mitchell and Preston,
but otherwise the motion is denied.
G.
Punitive Damages
Vinson’s seventh cause of action alleges that IBM facilitated
fraud and willful, wanton, and outrageous conduct, entitling him
to punitive damages.
(Doc. 9 ¶¶ 76–79.)
IBM argues that Vinson’s
claim for punitive damages fails as a matter of law because it is
derivative of his fraud claim, which IBM argues also fails.
11 at 20.)
(Doc.
Vinson responds by arguing that the claim for punitive
damages should not be dismissed because the fraud claim should not
30
be dismissed.
(Doc. 12 at 24.)
Under North Carolina law, punitive damages are a type of
relief, not an independent cause of action. Gauldin v. Honda Power
Equip. Mfg., 351 F. Supp. 2d 455, 458 (M.D.N.C. 2005); Bruton v.
FirstHealth of the Carolinas, Inc., No. 1:12CV253, 2012 WL 5986788,
at *2 (M.D.N.C., Nov. 28, 2012) (“The law does not recognize a
freestanding
cause
of
action
for . . . ‘punitive
damages.’”).
Because punitive damages cannot be pleaded as a free-standing cause
of action, and because Vinson also requested punitive damages in
his prayer for relief (Doc. 9 at 18), the seventh cause of action
will be considered a form of relief pleaded.
Therefore, IBM’s
motion to dismiss Vinson’s seventh cause of action is granted to
the extent it purports to state a separate cause of action.
It
will be denied to the extent Vinson seeks punitive damages for any
other cause of action that would properly support such a remedy.
III. CONCLUSION
For the reasons stated, therefore,
IT IS ORDERED that Defendant’s motion to dismiss (Doc. 10) is
GRANTED IN PART AND DENIED IN PART as follows:
1.
As to the first cause of action alleging breach of
contract, the motion is GRANTED and the claim is DISMISSED;
2.
damages,
As to the seventh cause of action alleging punitive
the
motion
is
GRANTED
and
the
claim
is
DISMISSED,
provided that Vinson’s prayer for punitive damages remains;
31
3.
As to the remaining causes of action, the motion to
dismiss is DENIED, except as to the portions of the fifth and sixth
causes
of
action
alleging
fraudulent
misrepresentation
and
negligent misrepresentation based on alleged statements of Messrs.
Mitchell and Preston, as to which the motion to dismiss is GRANTED.
/s/
Thomas D. Schroeder
United States District Judge
September 25, 2018
32
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?