Tyson v. BB&T Corporation

Filing 24

MEMORANDUM OPINION. It is so ORDERED. Signed by District Judge Robert E. Payne on 02/21/2017. (walk, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

FEB 2 220l7
Cl.ERK. U.S. DISTRICT COURT
RICHMOND VA

WILLIAM L. TYSON,
Plaintiff,

v.

Civil Case No. 3:16-cv-814

BB&T CORPORATION,
Defendant.

MEMORANDUM OPINION
This

matter

is

before

the

Court

on

BB&T

CORPORATION'S

MOTION TO DISMISS (ECF No. 7). For the reasons set forth below,
the motion will be denied.

BACKGROUND
In the Complaint

(ECF No.

1) ,

William L.

Tyson

("Tyson")

alleges a breach of contract in connection with two restricted
stock

award

Defendant,
Complaint

agreements
BB&T

seeks

("RSAs")

Corporation
damages,

made

between

("BB&T") .

declaratory,

Tyson

(Compl.
and

,

and
1) •

injunctive

based on three separate but alternatively pled claims.
~,

1,

27,

34) .

BB&T

CORPORATION'S

MOTION

TO

DISMISS

the
The

relief
(Compl.
("Def.

Mot.") challenges the legal sufficiency of Counts II and III of
the Complaint, and requests dismissal of both.

(Def. Mot. 1-2).

In evaluating the Defendant's Motion,

the Court accepts as true

all

Complaint,

well-pleaded allegations

in the

and views

the

facts in the light most favorable to Tyson. Mylan Labs., Inc. v.
Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993).
A.

Relevant Facts
As alleged in the Complaint,

Securities,

a

wholly-owned

Tyson was

subsidiary

of

employed by BB&T

BB&T,

Manager of Capital Markets from 1997 until 2016.

as

a

Senior

(Compl.

, S) .

Towards the end of his employement, Tyson and BB&T entered into
two "substantially identical" RSAs. 1 (Compl. , 6). The first RSA
was dated February 24,
BB&T common stock;

2014,

and awarded Tyson 981 shares of

the second RSA was dated February 24,

and awarded Tyson 3, 188

shares of BB&T common stock.

first

RSA provided that

the

equal

portions

on

February

stock award would vest
24

of

2015,

2016,

and

2015,

Id.

The

in three
2017;

the

second RSA provided that its award would vest in three equal
portions

on February 24 of 2016, 2017, and 2018. Id.

The RSAs purportedly provided that,

if Tyson were to quit

or resign from his position, the stock awards would continue to
vest pursuant to their original vesting schedule unless Tyson

1

BB&T attached the RSAs to its motion to dismiss; however, in
response to Tyson's conclusory objections based on authenticity,
BB&T conceded that the Court could rule "without any reference
to the RSA Agreements, because all of the pertinent provisions
of the RSA Agreements are included among the allegations in the
Complaint." (Def. Reply 5-6). The Court will therefore refrain
from deciding the issues of authenticity raised in the parties'
briefs, and limit its inquiry to the four corners of the
Complaint.

2

gained new employment with a
Affiliates."

(Compl.

"competitor of BB&T or any of its

, 8) . The determination of whether any of

Tyson's subsequent employers constituted a

"competitor" was to

be made in the sole and unreviewable discretion of

the

Administrator, " defined as the BB&T Board of Directors,
so designated, the Board's Compensation Committee.
In

the

event

that

without cause,"
fully

and

Tyson's

was

vest.

twice

(Comp!.

if

(Compl. ,

9).

"involuntary

was

alleges

, 7).

terminated

"involuntarily and without cause."
Tyson

or,

and

the RSAs provided that the stock awards would

immediately

employment

termination

"Plan

that

he

in

Tyson

alleges

his

February

Of

2016

Id.

received

without cause on or about December 20,

notice
2015.

of

termination

(Compl.

, 10). He

further alleges that he entered into a separation agreement with
BB&T

Securities

January

25,

that

2016.

was

fully

That

executed

agreement

by

all

provided

parties

that

on

Tyson's

employment would effectively terminate no later than February 5,
2016.

(Comp!.

, 10) .

In the

agreement

and

in exchange

for

a

lump-sum severance payment, Tyson agreed to, among other things,
a

"release of all

Securities

and

Nevertheless,
termination,

claims

the
Tyson

related to his employment with BB&T

termination
alleges

of

that,

that
at

employment."
the

time

of

Id.
his

he was "assured" by BB&T Securities that his RSAs

would be vested in full without any restrictions.

3

(Compl. , 11).

At that time, he had received only the first one-third portion
of the stock award set out in the first RSA. Id.
On

or

about

February

16,

2016

(eleven

days

after

the

initially provided "effective termination" date), BB&T presented
Tyson with an amended separation agreement,
employment to February 29,

2016.

(Compl.

which extended his

, 12). Then, on March

1, 2016, Tyson received an offer of employment by BB&T Scott &
Stringfellow,
(Compl.

a

, 13).

As

signed another
separation

different
a

division

condition of

document

agreement,

that
as

within

accepting

purported

amended,

to

in

BB&T
the
void

its

Securities.
offer,
the

Tyson

previous

entirety.

Id.

Nevertheless, Tyson received the severance called for under the
purportedly voided agreement. Id.
Sometime after his

employment

began with BB&T Scott and

Stringfellow,

Tyson became aware that "BB&T had reneged on its

promise

fully

to

vest

his

shares

upon

his

involuntary

termination," and had instead vested only the portions due under
the RSAs as if he had remained continuously employed by BB&T.
(Compl.

, 14) .

Effective May 1,

2016,

Tyson resigned from his

employment, and took a new position with Fifth Third Bank as a
Senior Managing Director.
Although
compete

with

Tyson
BB&T

(Compl.

alleges
Scott

1

that
&

15).
Fifth

Third

Stringfellow,"

Bank
BB&T

"does

not

Securities

notified Tyson that he had forfeited the outstanding portions of

4

the

stock awards

(Compl.

by joining a

, 16-17).

Tyson

competitor of BB&T Securities.

alleges

that

the

determination

that

Fifth Third Bank was a competitor was made by someone other than
the Board of Directors or Compensation Committee.
alleges

that,

at

the

time

of

his

Id.

original

He also

involuntary

termination, the unvested shares promised in the RSAs were worth
in excess of

$120,000.00.

market prices,

(Compl.

Tyson states

that

,

19).

In terms of current

the value of

the wrongfully

forfeited stock still exceeds $90,000.00. Id.
B.

Procedural Posture
Based on the facts alleged in the Complaint, Tyson asserts

three alternative claims for relief. Count I seeks in excess of
$100, 000

for breach of

contract on the

required

to

both RSAs

fully

vest

terminated on February 5,

2016,

when

the

same

award,

on

Tyson was

BB&T was

effectively

and that BB&T' s obligation was

unaffected by the severance agreements.
seeks

theory that

the

(Compl.

alternative

~

23). Count II

theory

that

BB&T

breached the RSAs when it wrongfully declared the forfeiture of
the outstanding stock awards in response to Tyson's employment
with Fifth Third Bank.

,~

(Compl.

30-33).

Finally,

and in the

alternative to Counts I and II, Count III seeks both declaratory
and injunctive relief.

(Compl. ,, 34-43). Specifically, it seeks

an order that the provisions of the RSAs restricting employment

5

are overbroad and unenforceable as against public policy,
as

an

alternative

to

an

award

of

money

damages,

an

and,
order

granting specific performance of the RSAs-i.e, an order granting
Tyson 2,453 shares of unrestricted BB&T common stock. Id.
In response to these allegations, BB&T CORPORATION'S MOTION
TO DISMISS

(ECF No.

7)

("Def. Mot.")

II and III under Fed.

R.

Civ.

P.

supporting memoranda (ECF No. 8)

seeks dismissal of Counts

12(b) (6).

Id.

at 1.

In its

("Def. Memo"), BB&T argues that

Tyson has failed to demonstrate an entitlement to the $100, 000
in damages alleged in Count II, and otherwise failed to satisfy
the

elements

required

of

Count III.

Id.

at 6-9,

OPPOSITION

TO

DEFENDANT'S

Resp.")

(ECF No.

11),

declaratory

9-11.

judgment

actions

under

Tyson has filed a MEMORANDUM IN
PARTIAL

MOTION

TO

DISMISS

and BB&T has filed a reply

(ECF No.

("Pl.
12)

("Def. Reply"). The motion is now ripe.

LEGAL STANDARD
A motion to dismiss under to Fed. R. Civ. P. 12(b) (6) tests
the legal sufficiency of the complaint, assuming that the facts
alleged are true.

Francis v. Giacomelli, 588 F.3d 186, 192 (4th

Cir. 2009). To survive such a motion, the Complaint must provide
"only a short and plain statement of the claim showing that the
pleader is entitled to relief,
fair

notice

of

what

in order to give the defendant

the . . . claim

6

is

and

the

grounds

upon

sso U.S. S44, SSS

which it rests." Bell Atl. Corp. v. Twombly,
(2007)

(internal

Nevertheless,
conclusions,

quotation

this
and a

rule

marks

and

"requires

formulaic

citation

more

than

recitation of

omitted) .
labels

and

the elements of a

cause of action will not do." Twombly, SSO U.S. at SSS. Instead,
a complaint must contain "sufficient factual matter, accepted as
true,

to

face, '"

'state a

claim

to

relief

that

is

plausible

on its

such that it allows the "court to draw the reasonable

inference

that

the

defendant

alleged." Ashcroft v.

Iqbal,

is

liable

SS6 U.S.

for

the

678

(2009)

662,

misconduct
(quoting

Twombly, sso U.S. at S70).
Notwithstanding
likelihood of

the

requirements

recovery is not

legal

sufficiency

of

the

plausibility,

required to avoid dismissal.

motion to dismiss under Rule 12 (b) (6)
the

of

a

A

"invites an inquiry into

complaint,

not

an

analysis

of

potential defenses to the claims set forth therein." Brooks v.
City of Winston-Salem, N.C.,

8S F.3d 178,

181

(4th Cir. 1996).

Indeed, a "well-pleaded complaint may proceed even if it strikes
a savvy judge that actual proof of those facts is improbable,
and that a recovery is very remote and unlikely." Twombly,
U.S. at SS6 (internal quotation omitted).

7

SSO

DISCUSSION

BB&T CORPORATION'S

MOTION TO

DISMISS

seeks

dismissal

of

Counts II and III of Tyson's Complaint on the grounds that those
counts fail to state a claim upon which relief can be granted.
For the reasons set forth below, BB&T's Motion will be denied.
A.

Count II: Breach of Contract
Count II of the Complaint is pled in the alternative to

Count I.

1 27) . In the event that the Court does not

(Compl.

find that Tyson was entitled to the full stock award due upon
his alleged involuntary termination, Tyson alleges that the RSAs
were

nonetheless

portion of the

breached

law,

BB&T

stock award forfeit

with Fifth Third Bank.
contract

when

which

(Compl.

both

granted. Therefore,

the

to Tyson's

unvested
employment

11 29-31). Under North Carolina

parties

Tyson has plausibly stated a

due

declared

agree

governs

this

claim upon which relief

action,
can be

BB&T' s motion to dismiss will be denied as

to Count II of the Complaint.
BB&T argues that Count II fails to state a claim because,
even if the facts were true,

Tyson "would be entitled only to

have his Awards continue to vest"
schedule in the RSAs.
date

has

"seek [ ing]

not

yet

(Def. Memo. 8-9). Because the next vesting

occurred,

monetary

as provided by the vesting

BB&T

damages

to

8

characterizes
which

Count

Plaintiff

II
has

as
no

contractual entitlement,
This

argument

recognizes

is

[and so] musts be dismissed." Id. at 9.

contrary

to

North

Carolina

law,

the doctrine of anticipatory repudiation,

which

and thus

provides a cause of action for breach of contract when one party
to a contract unequivocally repudiates any further obligations
under the contract. 2 Pappas v. Crist, 223 N.C. 265, 268 (1943).
Accepting the facts alleged in the Complaint as true,

it

is clear that Tyson has pled a claim for anticipatory breach of
contract sufficient to withstand a motion to dismiss under Rule
12(b) (6).

Tyson

alleges

that

BB&T

notified

him

that

he

had

"forfeited" any remaining rights in the unvested portions of the
stock awards,

and further alleges that such a declaration was

wrongful

contrary

,, 30-32).

and

Assuming

to

the

the

language

truth

of

of

these

the

RSAs.

allegations,

(Compl.
BB&T's

statements amount to anticipatory repudiation of the contracts.
See Edwards v.

Proctor, 173 N.C.

41,

44

(1917);

see also Pl.

Resp. at 5-7. Under North Carolina law, Tyson was thus entitled
to sue for breach,

notwithstanding the fact that the time for

2

BB&T' s
argument
also appears
to assume
that specific
performance is the only possible remedy available to Tyson if he
were to prevail on Count II. To the contrary, in North Carolina,
"[s] pecif ic performance is available to a party only if that
party has alleged and proven that he has performed his
obligations
under the contract and that his remedy at law is
inadequate." Cavenaugh v. Cavenaugh, 317 N.C. 652, 656-57(1986)
9

performance (i.e., vesting of the stock award) has yet to occur. 3
Id.

BB&T' s motion to dismiss will therefore be denied as to

Count II.
B.

Count III: Declaratory Judgment
Count III of the complaint is pled in the alternative to

Counts I and II.

(Compl.

~

34). It seeks a declaratory judgment

invalidating the provisions in the RSAs that trigger forfeiture
of

the

unvested

competitor of
ground that
reasonable

stock

BB&T.

Tyson

awards

in

BB&T seeks
"has

apprehension

not
of

the

event

to dismiss

pled that
future

Tyson

this

there

litigation

is

Because

BB&T's

argument

relies

on

a

a

claim on the
any real

related

provision in the Restricted Stock Award Agreements.a
9).

joins

to

and
this

(Def. Memo.

mistaken

view

of

alternative pleading, BB&T's motion will be denied.
The Federal Rules of Civil Procedure specifically provide
for alternative and even inconsistent pleading:
Alternative Statements of a Claim or Defense. A party
may set out two or more statements of a claim or
defense alternatively or hypothetically, either in a
single count or defense or in separate ones. If a

3

Rather than exposing a defect in Tyson's claim, BB&T's
arguments merely highlight the potential difficulty in assessing
damages for the alleged breach at trial. See Restatement (First)
of Contracts § 338 (1932) ("If trial is reached before the time
fixed for performance has arrived, it may be a little harder to
apply the rules of damages to the case, for the value of the
promised performance and the extent of future harm must be
reached by prediction.")
10

party makes alternative statements, the pleading
sufficient if any one of them is sufficient.

is

Inconsistent Claims or Defenses. A party may state as
many separate claims or defenses as it has, regardless
of consistency.
Fed.

R.

Civ.

P.

S(d) (2)-(3).

In

this

case,

Tyson

seeks

a

declaratory judgment in the alternative to his claims for breach
of contract.

In doing so,

he has plausibly stated a claim upon

which relief could be granted.

(Compl.

~~

34-43)

(Pl. Resp.

9-

12) .
BB&T

argues that the fact that Count III has been plead "in

the alternative"

to Counts I

and II does not change the fact

that Plaintiff "is truly seeking only a remedy for alleged past
misconduct."

(Def.

Reply

This

9).

misunderstands

alternative

pleading. Although it is true that a declaratory judgment under
Count III would be inappropriate if Tyson were to prevail under
Count I, the Court does not analyze the sufficiency of Count III
assuming that the allegations supporting the alternative counts
will

be

proven.

Instead,

the

Court

evaluates

Count

III

independently under the well-settled definitions of the "case or
controversy"
it

cannot

be

requirement.
dismissed

If Count III meets this requirement,
simply

because

it

is

brought

in

the

alternative to other, factually inconsistent claims. See Fed. R.
Civ. P. S(d).

11

A

"case

or

controversy"

definite and concrete,

exists

when

the

dispute

"is

touching the legal relations of parties

having adverse legal interests." Aetna Life Ins. Co. v. Haworth,
300 U.S . .227,

.240-41

(1937). The controversy must be "real and

substantial, 11 "admitting of specific relief through a decree of
a

conclusive character,"

advising what
facts. 11

Id.;

Pittsburgh,
question

the

and distinguishable

law would be upon a

see also White v.
Pa.,

913 F . .2d 165,

becomes

circumstances,

"whether

show

that

Nat 1 l
167

the

from

hypothetical

Union Fire

(4th Cir.

is

between parties having adverse

alleged,

substantial

a

legal

state

Ins.

Co.

1990). Thus,

facts

there

"an opinion

under

interests,

all

of
of
the
the

controversy,
of

sufficient

immediacy and realty to warrant the issuance of a declaratory
judgment." Maryland Casualty Co. v. Pacific Coal & Oil Co., 31.2
U.S. 270, .273 (1941).
Applying this

test to Count

III of

the Complaint,

it is

clear that Tyson has sufficiently pled his claim for declaratory
judgment.

Should

the

Court

find

that

BB&T's

actions

are

justified by the letter of the "competition" provisions in the
RSAs,
are

Tyson seeks a declaratory judgment that those provisions
overbroad,

contrary

unenforceable penalties.
actions

to

common,

and

to

public

and

represent

(Compl. 11 37-41). Declaratory judgment

clarify

contractual

the

that

fact

policy,

a

12

obligations

of

breach

already

has

this

sort

are

allegedly

occurred does not render it non-justiciable. See Medimmune, Inc.
v. Genentech, Inc., 549 U.S. 118 (2007).
In Medimmune,
question whether a

the

Supreme Court

found

it

to be

a

close

declaratory judgment action could lie in a

contract suit where one party continued to pay as required by
the

contract,

immediate

there

did

liability.

ruling that a
that

but

live

would

Id.

so

under
at

122.

protest
In

in

addition

controversy did exist,
have

been

"no

order
to

to

avoid

ultimately

the Court
that

dispute"

reasoned
case

the

or

controversy requirement was "satisfied if petitioner had taken
the final step of refusing to make [the contractually-obligated]
payments."

Id.

at

127.

The

circumstances

contemplated by the

Supreme Court in Medimmune mirror those alleged in this case.
The dispute in this case centers around the interpretation
and application of several provisions in a contract between BB&T
and Tyson.

And,

in contrast to Medimmune,

BB&T has

"taken the

final step" of repudiating the contract and declaring its intent
not to make any further payment to Tyson.

Id. at 127. Moreover,

BB&T has done so based on its belief that Tyson has violated the
anti-competition restrictions set forth in the RSAs. Under such
circumstances,

a

judgment declaring those same anti-competition

provisions invalid would conclusively resolve a live, immediate,
and substantial dispute between the parties. Moreover,
remedying

"alleged

past

misconduct, "

13

(Def.

Reply

9) ,

far from
such

a

decree would by its terms resolve a present,
of

public

controversy"

policy.

Thus,

requirement

Count

III

ongoing violation

satisfies

the

"case

for declaratory judgment actions,

or
and

it is not otherwise rendered non-justiciable simply because it
has been plead in the alternative to Counts I

and II.

BB&T' s

motion will therefore be denied.
CONCLUSION

For the reasons set forth above, BB&T CORPORATION'S MOTION
TO DISMISS (ECF No. 7) will be denied.
It is so ORDERED.

/s/
Robert E. Payne
Senior United States District Judge
Richmond, Virginia
Date: February~' 2017

14