Cannon v. Wal-Mart Assocs.

• Decision Date: 10 September 2021
• Docket Number: 5:19-CV-373-D
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: KENNETH S. CANNON, Plaintiff, v. WAL-MART ASSOCIATES, INC., and WAL-MART STORES EAST, L.P., Defendants.

KENNETH S. CANNON, Plaintiff, v. WAL-MART ASSOCIATES, INC., and WAL-MART STORES EAST, L.P., Defendants.

No. 5:19-CV-373-D

United States District Court, E.D. North Carolina, Western Division

September 10, 2021

ORDER

JAMES C. DEVER III United States District Judge

On August 27, 2019, Kenneth S. Cannon ("Cannon" or "plaintiff') filed a complaint against "Wal-Mart Associates, Inc. and Wal-Mart Stores East L.P. (collectively, "Wal-Mart" or "defendants") alleging claims under the Family and Medical Leave Act, 29 U.S.C. §§ 2601 et seq. ("FMLA"), the Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq. ("ADA"), and the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq ("ERISA"). See Compl. [D.E. 1]. On September 14, 2020, Wal-Mart moved to dismiss the complaint and to disqualify Emanuel & Dunn from representing the bankruptcy estate and trustee, [D.E. 27], and filed a memorandum and exhibits in support [D;E. 28], On the same date, Cannon moved for extension of time to complete discovery and for additional depositions, [D.E. 29], and the next day filed a memorandum in support [D.E. 30]. On September 29, 2020, Wal-Mart moved to dismiss the action for failure to join the real party in interest [D.E. 31]. The same day, Wal-Mart filed a combined memorandum in support and response in opposition to Cannon's motion for extension of time to complete discovery and for additional depositions [D.E. 32]. On October 5, 2020, Cannon responded in opposition to Wal-Mart's motion to dismiss and to disqualify [D.E 33]. On October 15, 2020, Wal-Mart moved for summary judgment [D.E. 34] and filed a memorandum in support [D.E. 35], a statement of material facts [D.E. 36], and an appendix [D.E 37-43]. On October 19, 2020, Wal-Mart replied to Cannon's response in opposition to Wal-Mart's motion to dismiss and to disqualify [D.E. 45]. On October 20, 2020, Cannon responded in opposition to the motion to dismiss for failure to join the real party in interest [D.E. 46]. On November 3, 2020, Wal-Mart replied [D.E. 47]. On November 5, 2020, Cannon responded in opposition to Wal-Mart's motion for summary judgment [D.E. 48] and filed a statement of material facts and exhibits [D.E. 49]. On December 3, 2020, Wal-Mart replied [D.E. 51] and responded to Cannon's statement of material facts [D.E. 52] and filed an appendix [D.E. 53]. On the same date, Wal-Mart moved to exclude the expert testimony of Laura Juel [D.E. 54] and filed an exhibit [D.E. 54-1] and a memorandum in support [D.E. 55]. On December 23, 2020, Cannon responded in opposition [D.E. 56]. On January 14, 2021, Wal-Mart replied [D.E. 59].

As explained below, the court grants in part Wal-Mart's motion to dismiss for lack of subject-matter jurisdiction and failure to state a claim, grants Wal-Mart's motion to dismiss for failure to join the real party in interest, grants in part Wal-Mart's motion for summary judgment on the issue of judicial estoppel and denies as moot the remainder of the motion, denies as moot Wal-Mart's motions to disqualify Emanuel & Dunn and to exclude Laura Juel's expert testimony, and denies as moot Cannon's motion for extension of time for discovery and for additional depositions.

I.

Cannon's claims concern Wal-Mart's termination of Cannon's employment as a yard driver the day before Cannon planned to take leave for carpal tunnel release surgery. See Compl. ¶¶ 7-49. Wal-Mart employed Cannon at its distribution facility in Hope Mills, North Carolina. See Id. ¶¶ 4-6. Cannon is a resident of Cumberland County, North Carolina. See id. ¶4. Wal-Mart Associates, Inc. is a Delaware corporation with its principal place of business in Arkansas. See Id. ¶ 5. Wal-Mart Stores East, L.P. is a Delaware corporation with its principal place of business in Arkansas. See Id. ¶6.

Cannon alleges that Wal-Mart interfered with his FMLA rights when it terminated his employment the day before he planned to take medical leave (count one). See id. ¶¶ 53-59. Cannon alleges that Wal-Mart retaliated against Cannon for taking FMLA leave (count two). See Id. ¶¶ 60-66. Cannon alleges that Wal-Mart violated the ADA through it terminated Cannon's employment for taking leave to correct a disability, namely, carpal tunnel syndrome (count three). See Id. ¶¶ 61-79. Cannon alleges that Wal-Mart violated ERISA when it terminated his employment so as to deny him employee health benefits and short-term disability benefits for medical leave (count four). See Id. ¶¶ 80-91. Cannon also claims attorney's fees under the FMLA, ERISA, and ADA (count five). See id ¶¶ 92-94. Cannon seeks declaratory relief, equitable relief, compensatory, liquidated, and punitive damages, and attorney's fees. See Id. at 13-14.

On June 4, 2020, Cannon filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Eastern District of North Carolina (the "bankruptcy court"). See Voluntary Petition for Individuals Filing for Bankruptcy, In re Cannon, No. 20-02148-5-JNC (Bankr. E.D. N.C. June 4, 2020); [D.E. 28-2]. Cannon did not disclose this civil action on his initial bankruptcy schedule. See [D.E. 28-2] 11, 21.

On July 9, 2020, Wal-Mart's counsel discovered the bankruptcy petition and told Cannon's counsel, Emanuel & Dunn, that Cannon had filed for bankruptcy. See [D.E. 28-3] 3; [D.E. 36] ¶ 77. Emanuel & Dunn responded it was unaware of Cannon's bankruptcy filing. See [D.E. 28-3]. Emanuel & Dunn contacted Cannon's bankruptcy attorney, Jeremy Ham ("Harn"), about the Wal-Mart litigation. See [D.E. 33] 2. Harn was unaware of Cannon's civil action against Wal-Mart. See id. On July 10, 2020, Cannon amended his bankruptcy schedule to disclose the civil action against Wal-Mart. See Amended Voluntary Petition for Individuals Filing for Bankruptcy, In re Cannon, No. 20-02148-5-JNC (Bankr. E.D. N.C. July 10, 2020); [D.E. 33-1]; cf [D.E. 49] ¶ 77. Cannon listed the lawsuit as an exempt personal injury action. See [D.E. 33-1] 17.

On July 15, 2020, Cannon's counsel emailed the bankruptcy trustee, Richard D. Sparkman ("Sparkman," "bankruptcy trustee," or "trustee"), informing him of counsel's belief that counsel could not proceed with the present litigation absent Sparkman's request. See [D.E. 33-2] 4. Sparkman responded that Cannon's action was exempt as a personal injury action and that Cannon's amended petition properly and timely disclosed the claim. See Id. at 3. Sparkman cautioned that he or the creditors could object to the personal injury exemption. See id. Sparkman forwarded the correspondence to Wal-Mart's counsel. See Id. at 2-3. On July 27, 2020, Wal-Mart's counsel wrote to Sparkman arguing that exemption was improper. See Id. at 2, 6-7.

On August 11, 2020, Wal-Mart tendered a settlement offer. See [D.E. 28-4] 2. On September 4, 2020, three days after the response deadline, Cannon's counsel rejected the offer and informed Wal-Mart that he "expect[ed] [to] soon be employed as Special Counsel to continue pursuit" of Cannon's civil action. [D.E. 28-5] 2. The same date, me bankruptcy trustee applied to employ Emanuel & Dunn as special counsel. See Application to Employ Special Counsel, hire Cannon, No. 20-02148-5-JNC (Bankr. E.D. N.C. Sept. 4, 2020). On September 30, 2020, the bankruptcy court granted Sparkman's request to employ Emanuel & Dunn as special counsel. See Order to Employ Special Counsel, In re. Cannon No. 20-02148-5-JNC (Bankr. E.D. N.C. Sept. 30, 2020). On the same date, the bankruptcy court discharged Cannon's debts. See Order of Discharge. In re Cannon No. 20-02148-5-JNC (Bankr. E.D. N.C. Sept. 30, 2020).

On December 17, 2020, Sparkman filed a limited objection to Cannon's personal injury exemption. See Trustee's Limited Objection to Exemptions, In re Cannon, No. 20-02148-5-JNC (Bankr. E.D. N.C. Dec. 17, 2020). On December 23, 2020, the bankruptcy court authorized Cannon's exemption in the present case "save and except the sum of $ 10, 072.39 to be paid to the Trustee from the net recovery, if any." [D.E. 58] 2. The bankruptcy court noted that "[t]he Trustee has an interest in the Walmart litigation to the extent any recovery is determined not to be in the nature of personal injury or exceeds allowable exemptions." Id.

II.

A motion to dismiss under Rule 12(b)(6) tests the complaint's legal and factual sufficiency. See Ashcroft v. Iqbal. 556 U.S. 662, 677-80 (2009); Bell All. Corp. v. Twombly. 550 U.S. 544, 554-63 (2007); Coleman v Md. Court of Appeals. 626 F.3d 187, 190 (4th Cir. 2010), aff'd 566 U.S. 30 (2012); Giarratano v. Johnson. 521 F.3d 298, 302 (4th Cir. 2008). To withstand a Rule 12(b)(6) motion, a pleading "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal. 556 U.S. at 678 (quotation omitted); see Twombly. 550 U.S. at 570; Giarratano. 521 F.3d at 302. In considering the motion, the court must construe the facts and reasonable inferences "in the light most favorable to [the nonmoving party]." Massey v. Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014) (quotation omitted); see Clatterbuck v. City of Charlottesville. 708 F.3d 549, 557 (4th Cir. 2013), abrogated on other grounds by Reed v. Town of Gilbert. 576 U.S. 155 (2015). A court need not accept as true a complaint's legal conclusions, "unwarranted inferences, unreasonable conclusions, or arguments." Giarratano. 521 F.3d at 302 (quotation omitted); see Iqbal. 556 U.S. at 678-79. Rather, a plaintiffs factual allegations must "nudge[] [his] claims," Twombly. 550 U.S. at 570, beyond the realm of "mere possibility" into "plausibility." Iqbal. 556 U.S. at 678-79.

When evaluating a motion to dismiss, a court considers the pleadings and any materials "attached or incorporated into the complaint." E.I. du Pont de Nemours &amp Co. v. Kolon Indus.. Inc.. 637 F.3d 435, 448 (...