Meyers v. Heffernan
| Decision Date | 24 September 2010 |
| Docket Number | C.A. No. 10-212-MPT |
| Citation | 740 F.Supp.2d 637 |
| Parties | Michael MEYERS, David Rundella, David Bosefski, Scott Kerico, Marc Ambrose, Lisa Macone, Johanna Curley and Jeffrey DePalma, Plaintiffs, v. Mitchell HEFFERNAN and James E. Pedrick, Defendants. |
| Court | U.S. District Court — District of Delaware |
Herbert Weiswasser Mondros, Margolis Edelstein, Wilmington, DE, for Plaintiffs.
James Edward Drnec, Balick & Balick, LLC, Wilmington, DE, Judith P. Rodden, Pro Hac Vice, for Defendants.
On February 18, 2010, Michael Meyers ("Meyers"), David Rundella ("Rundella"), David Bosefski ("Bosefski"), Scott Kerico ("Kerico"), Marc Ambrose ("Ambrose"), Lisa Macone ("Macone"), Johanna Curley ("Curley"), and Jeffrey DePalma ("DePalma") (collectively, "plaintiffs") filed suit in the United States District Court for the District of New Jersey against Mitchell L. Heffernan ("Heffernan") and James E. Pedrick ("Pedrick") (collectively, "defendants") alleging defendants failed to pay plaintiffs earned commissions in violation of the New Jersey Wage Payment Law, N.J.S.A. 34:11-4.1 et seq. ("WPL") and the Sales Representatives' Rights Act, N.J.S.A. 2A:61A-1 et seq. ("SRA") and that defendants are also liable to plaintiffs under claims of quantum meruit and unjust enrichment.1 Currently before the court is defendants' motion to dismiss the plaintiffs' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).2
Defendants Heffernan and Pedrick were Chief Executive Officer and Executive Vice President, respectively, of Mortgage Lenders Network USA, Inc. ("MLN"). MLN was a full-service mortgage banking company doing business in the State of New Jersey. Plaintiffs worked for MLN as commissioned salespersons until on or about February 2007. Plaintiffs' job responsibilities included soliciting New Jersey State licensed mortgage brokers to use the mortgage products proffered by MLN. Each plaintiff was assigned territories by MLN throughout New Jersey and worked within those territories on a daily basis. Plaintiffs were entitled to and received commissions every time a mortgage broker closed a loan through MLN as a result of plaintiffs' solicitations.
On February 5, 2007, MLN filed a voluntary petition for relief from its creditors under Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 1101 et seq., in the United States Bankruptcy Court for the District of Delaware (the "MLN Bankruptcy Case").4 Defendants aver that plaintiffssubmitted their claims for the same alleged unpaid commissions and/or wages they seek in this case to the United States Bankruptcy Court by: (1) filing proof of claims in the MLN Bankruptcy Case and agreeing to MLN's Plan of Liquidation; and (2) proceeding as claimants in the Workers Adjustment and Retraining Act, 29 U.S.C. § 2101, et seq. (the "WARN Act") against MLN and litigating the action to settlement.5
On March 15, 2010, the New Jersey district court, sua sponte, issued an Opinion and Order transferring this matter to the United States District Court for the District of Delaware because: MLN "has petitioned for bankruptcy relief in the United States Bankruptcy Court for the District of Delaware"; "Heffernan and Pedrick filed appearances therein"; and "[t]he issues in the action before this Court appear to be intertwined with the bankruptcy proceedings in Delaware." 6 On March 26, 2010, plaintiffs filed a motion for reconsideration of the New Jersey court's decision to transfer their action to this court.7 In that motion, plaintiffs requested reconsideration of the court's March 15, 2010 opinion on the grounds that the WPL imposes personal liability on managing officers of a corporation by deeming them employers, individually. Consequently, plaintiffs maintained that they were entitled to pursue an action against Heffernan and Pedrick individually, without regard to the MLN Bankruptcy Case.8 On May 28, 2010, the New Jersey court denied plaintiffs' motion noting, inter alia: that plaintiffs did not argue that their case was unrelated to the MLN Bankruptcy Case; that their only argument in support of their motion was that the WPL imposes personal liability; and that plaintiffs were aware of the MLN Bankruptcy Case, despite their failure to inform the court of that proceeding, and admitted they sought relief therein.9
Fed.R.Civ.P. 12(b)(6) permits a party to move to dismiss a complaint for failure to state a claim upon which relief can be granted. The purpose of a motion under Rule 12(b)(6) is to test the sufficiency of the complaint, not to resolve disputed facts or decide the merits of the case. 10 "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." 11 A motion to dismiss may be granted only if, after "accepting all well-pleaded allegations in the complaint as true, and viewing them in the light most favorable to the plaintiff, plaintiff is notentitled to relief." 12 While the court draws all reasonable factual inferences in the light most favorable to plaintiff, it rejects unsupported allegations, "bald assertions," and "legal conclusions." 13
To survive a motion to dismiss, plaintiffs' factual allegations must be sufficient to "raise a right to relief above the speculative level...." 14 Plaintiffs are thus required to provide the grounds of their entitlement to relief beyond mere labels and conclusions. 15 Although heightened fact pleading is not required, "enough facts to state a claim to relief that is plausible on its face" must be alleged. 16 A claim has facial plausibility when a plaintiff pleads factual content sufficient for the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.17 Once stated adequately, a claim may be supported by showing any set of facts consistent with the allegations in the complaint.18 Courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint, and matters of public record when reviewing a motion to dismiss. 19
The complaint alleges that each plaintiff "worked for MLN as commissioned salespersons until on or about February 2007" 20 and that "[p]rior to February 2007, and continuing thereafter, MLN stopped paying Plaintiff[s] ... earned commissions on loans that MLN closed through mortgage lenders solicited by [plaintiffs]." 21 They filed their complaint approximately three years later on February 18, 2010. Defendants contend that each of plaintiffs' claims—under the WPL and the SRA; and for quantum meruit and unjust enrichment—are governed by a two-year statute of limitations and are thus time-barred. Plaintiffs contend thattheir claims are timely as each claim is governed by a six-year statute of limitations.
Plaintiffs allege violations of the WPL and SRA as a result of MLN's failure to pay earned commissions on loans that MLN closed through mortgage lenders solicited by the individual plaintiffs prior to February 2007 and thereafter.22 The WPL and SRA are each silent on the applicable statute of limitations. "When the Legislature creates a statutory cause of action without including a limitations provision, a court will apply the general limitations provision which governs that category of claim." 23 "The determination of what statute of limitations applies does not 'turn on the complaint-specific legal theories that plaintiffs pled, but rather on the nature of the injuries generally identified with the specific cause of action.' " 24
Defendants contend that those claims are time barred for failure to bring an action within two years of the accrual of the claims pursuant to the general statute of limitations for injury to the person codified in N.J.S.A. § 24:14-2(a).25 Plaintiffs maintain that their claims are governed by the six-year limitation period provided by N.J.S.A. 2A:14-1 26 applicable to breach of contract and tortious injury other than injury to the person.
Defendants first argue that the two-year statute of limitations should govern claims under the WPL by pointing to that limitations period contained in New Jersey's Wage and Hour Law. Specifically, section 34:11-56a25.1 of the Wage and Hour Law, which addresses claims for unpaid wages and/or commissions, recites:
No claim for unpaid minimum wages, unpaid overtime compensation or other damages under this act shall be valid with respect to any claim which has arisen more than 2 years prior to the commencement of an action for the recovery thereof.
The Troise court rejected a similar argument. There, the plaintiffs filed a private cause of action for underpayment of the wages required by the Prevailing Wage Act, N.J.S.A. 34:11-56.25 to -56.46.27The Prevailing Wage Act is silent as to the applicable limitations period for the filing of a private action.28 The trial court dismissed the complaint as untimely for failure to file within two years after the plaintiffs' claims arose, noting in its order of dismissal that "the court had 'relied upon the provisions of N.J.S.A. 34:11-56a25.1.' " 29 The appeals court rejected the defendant's argument that, because the Wage and Hour Law and the Prevailing Wages Act have similar purposes, the explicit limitation period recited in the Wage and Hour Law should be read into the Prevailing Wages Act.30 After an examination of the legislative history and language of the Wage and Hour Law and Prevailing Wage Act, the appeals court stated "even though the language of the two laws is similar in many respects, they are separate and distinct legislative enactments." 31 The appeals court also rejected the defendant's argument that "because the Wage and Hour Law and Prevailing Wage Act are both designed to protect employees' economic well-being, the laws must be read in par[i] materia." 32 That rule " ...
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