Bonham v. Wolf Creek Acad., Civil Case No. 1:10cv190.

• Decision Date: 09 February 2011
• Docket Number: Civil Case No. 1:10cv190.
• Citation: 767 F.Supp.2d 558
• Court: U.S. District Court — Western District of North Carolina
• Parties: John BONHAM and Charlynn Bonham, on behalf of themselves and others similarly situated, Plaintiffs,v.WOLF CREEK ACADEMY; About Face Ministries; Patricia A. Jones; James E. Jones; and Jeremy C. Jones, Defendants.

767 F.Supp.2d 558

John BONHAM and Charlynn Bonham, on behalf of themselves and others similarly situated, Plaintiffs,

v.WOLF CREEK ACADEMY; About Face Ministries; Patricia A. Jones; James E. Jones; and Jeremy C. Jones, Defendants.

Civil Case No. 1:10cv190.

United States District Court, W.D. North Carolina,Asheville Division.

Feb. 9, 2011.

Robert Charles Carpenter, Asheville, NC, for Plaintiffs.Jonathan W. Yarbrough, William J. McMahon, IV, Constangy, Brooks & Smith, LLC, Asheville, NC, for Defendants.

ORDER

MARTIN REIDINGER, District Judge.

THIS MATTER is before the Court on the Defendants' Partial Motion to Dismiss [Doc. 12] and the Magistrate Judge's Memorandum and Recommendation [Doc. 19] regarding the disposition of that motion.

Pursuant to 28 U.S.C. § 636(b) and the standing Orders of Designation of this Court, the Honorable Dennis L. Howell, United States Magistrate Judge, was designated to consider the motion to dismiss and to submit recommendations for its disposition.

On December 29, 2010, the Magistrate Judge filed a Memorandum and Recommendation [Doc. 19] in this case containing proposed conclusions of law in support of a recommendation regarding the Defendants' motion [Doc. 18]. The parties were advised that any objections to the Magistrate Judge's Memorandum and Recommendation were to be filed in writing within fourteen (14) days of service. The period within which to file objections has expired, and no written objections to the Memorandum and Recommendation have been filed.

After a careful review of the Magistrate Judge's Recommendation [Doc. 19], the Court finds that the proposed conclusions of law are consistent with current case law. Accordingly, the Court hereby ACCEPTS the Magistrate Judge's Recommendation that the Defendants' Partial Motion to Dismiss be allowed, that the Second through Twelfth Causes of Action be dismissed, and that the demand for punitive damages under state law be either dismissed or stricken.

IT IS, THEREFORE, ORDERED that the Defendants' Partial Motion to Dismiss [Doc. 12] is ALLOWED; the Second through Twelfth Causes of Action stated in the Plaintiffs' Complaint are DISMISSED; and the Plaintiffs' demand for punitive damages under state law is hereby DISMISSED.

IT IS SO ORDERED.

MEMORANDUM AND RECOMMENDATION

DENNIS L. HOWELL, United States Magistrate Judge.

THIS MATTER is before the court on defendants' Partial Motion to Dismiss. In such motion, defendants seek dismissal of all eleven supplemental claims asserted by plaintiff, as well as the demand for punitive damages. Defendants do not seek dismissal of plaintiffs' claim under the Fair Labor Standards Act (hereinafter “FLSA”), 29 U.S.C. § 207. Plaintiffs filed their timely Response to Defendants' Partial motion to Dismiss (# 17) on November 24, 2010, and defendants timely filed their timely Reply Brief in Support of Defendants' Partial Motion to Dismiss (# 18) on December 6, 2010. Having considered defendants' motion and brief, the Complaint, and the briefs in response and reply, the undersigned enters the following findings, conclusions, and recommendation that the Partial Motion to Dismiss be allowed.

FINDINGS AND CONCLUSIONS

I. Background

Primarily, this action concerns allegedly unpaid wages which plaintiffs contend they earned at a boarding school for troubled teens located in Madison County, North Carolina, run by defendants. Complaint (hereinafter “Compl.”), at ¶¶ 1 & 11. In particular, plaintiffs contend that defendants failed to pay them and other persons similarly situated overtime pay for their work as house parents. Id., at ¶¶ 1, 3, & 81.

In addition to such federal claim, plaintiffs have also asserted 11 additional claims under North Carolina law. As will be discussed, many of these claims are based on the FLSA claim and all of plaintiffs' supplemental claims concern their 18 months working as house parents at defendants' boarding school for troubled teens. Plaintiffs' supplemental claims are:

(1) Second Cause of Action: North Carolina Wage and Hour Act, N.C.Gen.Stat. § 95–25.4;

(2) Third Cause of Action: Breach of Fiduciary Duty; (3) Fourth Cause of Action: Constructive Fraud;

(4) Fifth Cause of Action: Conversion;

(5) Sixth Cause of Action: Fraud;

(6) Seventh Cause of Action: Negligent Misrepresentation;

(7) Eighth Cause of Action: Negligence;

(8) Ninth Cause of Action: Piercing the Corporate Veil;

(9) Tenth Cause of Action: Intentional Infliction of Emotional Distress;

(10) Eleventh Cause of Action: Negligent Infliction of Emotional Distress; and

(11) Twelfth Cause of Action: Unfair and Deceptive Trade Practices.

Plaintiffs have also included a demand for punitive damages under North Carolina law. Compl., ¶¶ 142–144.

In their Motion to Dismiss, defendants contend that all supplemental claims as well as the demand for punitive damages should be dismissed in accordance with Rule 12(b)(6), Federal Rules of Civil Procedure, arguing that plaintiffs have failed to state claims upon which relief can be granted.

II. Rule 12(b)(6): Applicable Standard

Until recently, a complaint could not be dismissed under Rule 12(b)(6) unless it appeared certain that plaintiff could prove no set of facts which would support its claim and entitle it to relief. Neitzke v. Williams, 490 U.S. 319, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989); Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). This “no set of facts” standard has been specifically abrogated by the Supreme Court in recent decisions.

First, in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Court held that the “no set of facts” standard first espoused in Conley, supra, only describes the “breadth of opportunity to prove what an adequate complaint claims, not the minimum adequate pleading to govern a complaint's survival.” Id., at 563, 127 S.Ct. 1955. The Court specifically rejected use of the “no set of facts” standard because such standard would improperly allow a “wholly conclusory statement of claim” to “survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some ‘set of [undisclosed] facts' to support recovery.” Id., at 561, 127 S.Ct. 1955 (alteration in original).

Post Twombly, to survive a Rule 12(b)(6) motion to dismiss, a plaintiff must allege facts in the complaint that “raise a right to relief above the speculative level.” Id., at 555, 127 S.Ct. 1955.

[A] plaintiff's obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do....

Id. (second alteration in original; citation omitted). Further, a complaint will not survive Rule 12(b)(6) review where it contains “naked assertion[s] devoid of further factual enhancement.” Id., at 557. Instead, a plaintiff must now plead sufficient facts to state a claim for relief that is “ plausible on its face.” Id., at 570, 127 S.Ct. 1955 (emphasis added).

While the Court was clear in Twombly that Conley was no longer controlling, see Twombly, 550 U.S. at 563, 127 S.Ct. 1955, and Felman Production Inc. v. Bannai, 2007 WL 3244638, at *4 (S.D.W.Va.2007), it again visited the Rule 12(b)(6) pleading standard in Ashcroft v. Iqbal, –––U.S. ––––, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In Ashcroft, the Court determined that Rule 8 “demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Id., S.Ct., at 1949. The Court explained that, “to survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. (citing Twombly, supra; emphasis added). What is plausible is defined by the Court:

[a] claim has facial plausibility when the plaintiff pleads sufficient factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.

Id. This “plausibility standard” requires “more than a sheer possibility that a defendant has acted unlawfully.” Id. Thus, a complaint falls short of the plausibility standard where a plaintiff pleads “facts that are ‘merely consistent with’ a defendant's liability....” Id. While the court accepts plausible factual allegations made in a complaint as true and considers those facts in the light most favorable to a plaintiff in ruling on a motion to dismiss, a court “need not accept as true unwarranted inferences, unreasonable conclusions, or arguments.” Eastern Shore Mkt.'s Inc. v. J.D. Assoc.'s, LLP, 213 F.3d 175, 180 (4th Cir.2000).

In sum, when ruling on a Rule 12(b)(6) motion, “a judge must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) ( per curiam ) (citations omitted). A complaint “need only give the defendant fair notice of what the claim is and the grounds upon which it rests.” Id., at 93, 127 S.Ct. 2197 (alteration and internal quotation marks omitted). However, to survive a motion to dismiss, the complaint must “state [ ] a plausible claim for relief” that “permit[s] the court to infer more than the mere possibility of misconduct” based upon “its judicial experience and common sense.” Iqbal, 129 S.Ct. at 1950. While a plaintiff is not required to plead facts that constitute a prima facie case in order to survive a motion to dismiss, see Swierkiewicz v. Sorema N.A., 534 U.S. 506, 510–15, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002), “[f]actual allegations must be enough to raise a right to relief above the speculative level,” Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

III. DiscussionA. Second Cause of Action: a claim under the overtime provision of the North Carolina Wage and Hour Act, N.C.Gen.Stat. § 95–25.4

In plaintiffs' Second Cause of Action, they assert a claim for unpaid overtime wages under the North Carolina Wage and Hour Act (hereinafter “the NCWHA”). Plaintiffs have,...