Cahey v. Int'l Bus. Machs. Corp.

• Decision Date: 01 September 2020
• Docket Number: Civil Action No. 20-cv-00781-NYW
• Parties: NANCY CAHEY, and KEVIN WILLIAMS, Plaintiffs, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant.
• Court: U.S. District Court — District of Colorado

NANCY CAHEY, and KEVIN WILLIAMS, Plaintiffs, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant.

Civil Action No. 20-cv-00781-NYW

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

September 1, 2020

MEMORANDUM OPINION AND ORDER

Magistrate Judge Nina Y. Wang

This matter comes before the court on Defendant International Business Machines Corporation's ("IBM" or "Defendant") Motion to Dismiss Plaintiffs' Complaint or, in the Alternative, to Dismiss or Transfer Plaintiff Williams's Claims (the "Motion" or "Motion to Dismiss"), filed May 26, 2020. [#8]. The undersigned Magistrate Judge considers the Motion pursuant to 28 U.S.C. § 636(c) and the Order of Reference dated June 11, 2020, [#13], and concludes that oral argument will not materially assist in the resolution of this matter. Accordingly, having reviewed the Motion, the Parties' briefing, and the applicable case law, I GRANT IN PART and DENY IN PART the Motion to Dismiss for the reasons stated herein.

BACKGROUND

The court draws the following facts from the Complaint and the documents attached to the Motion to Dismiss and presumes they are true for purposes of the instant Motion.¹ Plaintiffs NancyCahey ("Ms. Cahey") and Kevin Williams ("Mr. Williams") (collectively, "Plaintiffs") initiated this civil action against their employer IBM on March 23, 2020. See [#1]. Plaintiffs are each first-line managers for IBM, with Ms. Cahey located in Castle Pines, Colorado and Mr. Williams located in Alpharetta, Georgia. [Id. at ¶¶ 4-5]. As IBM employees, Plaintiffs are subject to IBM's sales commissions compensation structure, which includes a base salary and a sales commission based on certain criteria. See [id. at ¶¶ 11-32, 37-38, 74, 86, 127]. According to Plaintiffs, IBM informed them orally and in writing that their sales commissions were uncapped. See, e.g., [id. at ¶¶ 19-32].

Relevant here, Plaintiffs' commissions structure was contained in their respective Incentive Plan Letters ("IPLs"), which set forth when commissions are deemed earned. See [#8-1 at 4, 9]. Further, the IPLs read, in pertinent part:

Right to Modify or Cancel: IBM reserves the right to adjust the Plan terms, including, but not limited to, changes to sales performance objectives, assigned territories or account opportunities, applicable incentive payment rates or similar earnings opportunities, or to modify or cancel the Plan, for any individual or group of individuals, including withdrawing an offered or accepted Incentive Plan Letter.

Earnings: Incentive payments you may receive for Plan-to-Date achievement are a form of advance payment based on incomplete business results. Your incentive payments are earned under the Plan terms, and are no longer considered Plan-to-Date advance payments, only after the measurement of complete business results following the end of the full-Plan period. . . .

Progress Reports: Any periodic information regarding Plan-to-Date achievement that may be made available to you before the completion of the full-Plan period and final calculation of payments is provided for informational purposes only, and does not constitute a promise by IBM to make any specific distributions to you or to any other employee.

. . .

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 orcommunication 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.

Review of a Specific Transaction: If a specific customer transaction has a disproportionate effect on an incentive payment when compared with the opportunity anticipated during account planning and used for the setting of sales objectives, or is disproportionate compared with your performance contribution towards the transaction, IBM reserves the right to review and, in its sole discretion, adjust the incentive achievement and/or related payments.

[Id. at 4-5, 9-10]. An accepted IPLs is a prerequisite to receiving commissions, and IBM retains the authority to recoup any commissions paid to employees that exceed their "subsequently calculated earnings." [Id.]. By accepting the IPLs, Plaintiffs "acknowledge[d] that [they] have read and understood the terms of the [IPL]." [Id. at 4, 9].²

In or around June 2019, Plaintiffs and their respective sales teams closed a deal with HCL Technologies (the "HCL deal") and received sales commissions according to their compensation plans. See [#1 at ¶¶ 33-47]. Yet, in or about October 2019, IBM reversed course and informed Plaintiffs that, pursuant to a "hidden" criterion known only to IBM, Plaintiffs were not entitled to any commissions from the HCL deal. See [id. at ¶¶ 48-62]. IBM allegedly withheld future commissions earned by Plaintiffs to correct the commissions improperly paid from the HCL deal, see [id. at ¶¶ 62-67], prompting Plaintiffs to file the instant civil suit, see generally [#1]. Pursuant to their Complaint, Plaintiffs asserts claims under Colorado and Georgia law for: (1) fraudulent misrepresentations and omissions/concealment ("Claim 1"); (2) negligent misrepresentation("Claim 2"); (3) quantum meruit ("Claim 3"); (4) unjust enrichment ("Claim 4"); (5) violation of the Colorado Wage Act, asserted by Ms. Cahey only ("Claim 5"); (6) declaratory judgment ("Claim 6"); (7) breach of contract, asserted in the alternative ("Claim 7"); and (8) though styled as a claim, punitive/exemplary damages ("Claim 8"). See generally [id.].

On May 26, 2020, IBM filed its Motion to Dismiss, arguing that the court should dismiss Plaintiffs' Complaint for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, or that the court should dismiss Mr. Williams's claims for improper venue or, as an alternative to dismissal, sever and transfer Mr. Williams's claims to the United States District Court for the Northern District of Georgia ("Northern District of Georgia"). [#8]. Plaintiffs have since responded in opposition to the Motion to Dismiss and Defendant has since replied. See [#16; #20]. Because the Motion is ripe for disposition, I consider the Parties' arguments below, beginning first with Defendant's arguments regarding transfer of Mr. Williams's claims, followed by Defendant's Rule 12(b)(6) arguments.

LEGAL STANDARDS

I. Rule 12(b)(3) - Improper Venue

Rule 12(b)(3) of the Federal Rules of Civil Procedure allows for dismissal of a plaintiff's complaint "only when venue is improper in the forum in which a case was brought." Weathers v. Circle K Stores, Inc., 434 F. Supp. 3d 1195, 1205 (D.N.M. 2020) (ellipsis, brackets, and internal quotation marks omitted)). In considering a Rule 12(b)(3) motion to dismiss, the court may examine facts outside of the complaint but must accept all well-pleaded allegations as true if uncontroverted by the defendant's evidence and must draw all reasonable inferences and resolve all factual ambiguities in the plaintiff's favor. Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248, 1260 (10th Cir. 2012). Once a defendant challenges venue, the burden lies with the plaintiff todemonstrate the appropriateness of her chosen forum—a choice rarely disturbed by the court unless it is clear that the facts giving rise to the lawsuit have no material relation or connection to the chosen forum. Scott v. Buckner Co., 388 F. Supp. 3d 1320, 1324 (D. Colo. 2019).

II. Rule 12(b)(6) - Failure to State a Claim

"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." Walker v. Mohiuddin, 947 F.3d 1244, 1248-49 (10th Cir. 2020) (internal quotation marks omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Cummings v. Dean, 913 F.3d 1227, 1238 (10th Cir. 2019) (internal quotation marks omitted). "The complaint does not need detailed factual allegations, but the factual allegations must be enough to raise a right to relief above the speculative level." Barnett v. Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., 956 F.3d 1228, 1234 (10th Cir. 2020) (internal quotation marks omitted). In making this determination, the "court accepts as true all well-pleaded factual allegations in [the] complaint and views those allegations in the light most favorable to the plaintiff." Straub v. BNSF Ry. Co., 909 F.3d 1280, 1287 (10th Cir. 2018). But, in some instances, the court may consider materials beyond the complaint if the documents are central to the plaintiff's claims, referred to in the complaint, and the parties do not dispute their authenticity. See Waller v. City & Cty. of Denver, 932 F.3d 1277, 1282 (10th Cir. 2019).

ANALYSIS

I. Venue - Mr. Williams

IBM argues the court should dismiss Mr. Williams's claims for improper venue or sever and transfer Mr. Williams's claims to the Northern District of Georgia in the alternative todismissal. See [#8 at 17-20; #20 at 13-15]. According to IBM, venue in this District is improper because IBM does not reside in this District, Mr. Williams's claims have no material or significant connection to this District, and Mr. Williams lives and works in Georgia where a district exists to maintain this civil action. See [#8 at 18; #20 at 14]. In the alternative, IBM asks the court to transfer this matter to the Northern District of Georgia under 28 U.S.C. § 1404(a). For the following reasons, I respectfully agree with IBM that transfer of Mr. Williams's claims to the Northern District of Georgia is appropriate under 28 U.S.C. § 1404(a).

A. Venue

The federal venue statute "govern[s] the venue of all civil actions...