Smith v. Harr

• Decision Date: 25 April 2022
• Docket Number: Civil Action 2:21-03989-RMG
• Parties: Dorsey Hayden Smith, Plaintiff, v. Patrick Britton Harr, G. Ellsworth Harris V, Coastal Laboratories, Inc., AMS Onsite, Inc., Both Individually and as Liquidating Shareholders of any lapsed above named entities, Defendants.
• Court: U.S. District Court — District of South Carolina

Dorsey Hayden Smith, Plaintiff, v. Patrick Britton Harr, G. Ellsworth Harris V, Coastal Laboratories, Inc., AMS Onsite, Inc., Both Individually and as Liquidating Shareholders of any lapsed above named entities, Defendants.

Civil Action No. 2:21-03989-RMG

United States District Court, D. South Carolina, Charleston Division

April 25, 2022

ORDER AND OPINION

RICHARD M. GERGEL, UNITED STATES DISTRICT JUDGE.

The matter before the Court is Defendants' 12(b)(6) motion to dismiss Plaintiff's amended complaint for failure to state a claim. (Dkt. No. 22). For the reasons stated below the motion is granted in part and denied in part.

I. Background

Dorsey Hayden Smith (“Plaintiff”) brings the instant lawsuit against Patrick Britton Harr, G. Elsworth Harris V, Coastal Laboratories, Inc., and AMS Onsite, Inc. (referred to as “PBH Defendants”) premised on Plaintiff's employment with Defendants to sell contracts for medical testing to various facilities for Defendants' business venture. (Dkt. No. 18 at ¶¶ 2, 6). Plaintiff filed an amended complaint on January 7, 2022. (Dkt. No. 18). Plaintiff alleges the PBH Defendants failed to pay him commissions owed to him for contracts he sold. (Id. at ¶¶ 2-3). Plaintiff asserts claims against the PBH Defendants for: (1) violation of the South Carolina Payment of Wages Act, SC Code Annotated. § 41-10-10; (2) breach of contract; and (3) breach of contract accompanied by a fraudulent act. On January 21, 2022, Defendants filed a 12(b)(6) motion to dismiss the amended complaint for failure to state a claim. (Dkt. No. 18). Plaintiff filed a response in opposition. (Dkt. No. 24). Defendants filed a reply. (Dkt. No. 26). The matter is ripe for the Court's review.

II. Legal Standard

A Rule 12(b)(6) motion for failure to state a claim upon which relief can be granted "challenges the legal sufficiency of a complaint." Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) ("A motion to dismiss under Rule 12(b)(6) . . . does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses."). To be legally sufficient a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A Rule 12(b)(6) motion should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support her claim and would entitle her to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule 12(b)(6) motion, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan Labs., Inc., 7 F.3d at 1134. "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.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "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." Id.

III. Discussion

1. Extrinsic Documents

The parties attach extrinsic evidence to the amended complaint, Defendants' motion to dismiss, and Plaintiff's response in opposition to Defendants' motion to dismiss. The parties do not address whether the Court may consider matters outside of the pleadings when ruling on a Rule 12(b)(6) motion to dismiss and neither party moves for the Court to convert the motion into one for summary judgment. The Court will first address this issue and determine which documents it may consider when ruling on Defendants' 12(b)(6) motion to dismiss.

Ordinarily, in resolving a motion to dismiss under Rule 12(b)(6), if a court considers material outside of the pleadings, “the motion must be treated as one for summary judgment under Rule 56, ” in which case “[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Fed.R.Civ.P. 12(d). However, a court may properly consider documents “attached to the complaint, as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic.” Philips v. Pitt Cnty. Mem'l. Hosp., 572 F.3d 176, 180 (4th Cir. 2009); Loftus v. F.D.I.C., 989 F.Supp.2d 483, 489 (D.S.C. 2013). A document is “integral” to the complaint “where the complaint relies heavily upon its terms and effect.” Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016) (citing Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)).

Attached to the amended complaint is a complaint and two orders from Coastal Laboratories, Inc., et al. v. Tarun Jolly, M.D., et al., Civil No. 1:20-cv-02227-RBD (D. Md.). (Dkt. Nos. 18-1; 18-2; 18-3). The amended complaint references these filings when Plaintiff alleges Defendants were acting as a single business enterprise and are amalgamated for liability purposes. (Dkt. No. 18 at ¶¶ 9-12) (citing Dkt. Nos. 18-1; 18-2; 18-3). Attached to the amended complaint are text messages purportedly between Plaintiff and Defendant Patrick Britton Harr. (Dkt. Nos. 18-4; 185). The amended complaint references the text messages when Plaintiff alleges Defendants promised to pay him based on commissions and promised to provide him with a 1099 form. (Dkt. No. 18 at ¶¶ 13, 16) (citing Dkt. Nos. 18-4; 18-5). Last, Plaintiff attaches a “Laboratory Service Agreement” executed between Patrick Britton Harr, CEO and Founder of Coastal Laboratories and Trupti Marshall, SVP Supply Chain Management for PruittHealth, Inc. (Dkt. No. 18-6). The amended complaint references this agreement when Plaintiff alleges, he sold contracts to PruittHealth, Inc. for the use of Defendants' facilities. (Dkt. No. 18 at ¶ 17) (citing Dkt. No. 186). The Court finds that the exhibits attached to Plaintiff's amended complaint are referenced throughout the amended complaint and appear to be integral to Plaintiff's allegations. Defendants do not challenge the authenticity of these exhibits. The Court will consider these documents when ruling on Defendants' 12(b)(6) motion to dismiss.

Attached to Defendants' 12(b)(6) motion to dismiss is an order filed in Coastal Laboratories, Inc., et al. v. Tarun Jolly, M.D., et al., Civil No. 1:20-cv-02227-RBD (D. Md. Oct. 21, 2021). (Dkt. No. 22-2). This order is not referenced in the amended complaint and is not integral to the amended complaint. Therefore, the Court will decline to consider this document when ruling on Defendants' 12(b)(6) motion to dismiss.

Attached to Plaintiff's response in opposition to Defendants' motion to dismiss are several documents. Several attachments include printed information about defendants (Dkt. Nos. 24-1; 24-2; 24-3) and corporate filings (Dkt. Nos. 24-4; 24-5). One attachment is an email communication between Steven Leitess and Mike Ellis. (Dkt. No. 24-6). One attachment is a W-4 Form that appears to have been filled out by Plaintiff. (Dkt. No. 24-7). These documents are not referenced throughout Plaintiff's amended complaint and are not integral to the amended complaint. The Court declines to consider these documents when ruling on Defendants' 12(b)(6) motion to dismiss and declines to convert the motion into one for summary judgment. The role of the Court when ruling on a 12(b)(6) motion to dismiss is to test the legal feasibility of the complaint without weighing evidence that might be offered to support or contradict it. Loftus, 989 F.Supp. at 489 (D.S.C. 2013).

2. Grouping Defendants Together

Defendants move to dismiss Plaintiff's amended complaint for failure to state a claim arguing that Plaintiff's allegations lump the “PBH Defendants” together in an “undifferentiated mass” in violation of the facial plausibility pleading standard of Fed.R.Civ.P. 8(a). (Dkt. No. 221 at 3-4). Defendants argue the amended complaint must “state with specificity the acts allegedly performed by each defendant” about which the plaintiff complaints. (Id.) (citing Reaves v. Ocwen Loan Servicing, LLC, No. 5:16-cv-186-FL, 2016 WL 3248298, at *1 (E.D. N.C. June 10, 2016); Bagwell v. Dimon, No. 1:14-cv-495, 2015 WL 2374614, at *7 (M.D. N.C. may 18, 2015) (“Under Rule 8(a), grouping multiple defendants together in a broad allegation is insufficient to provide the defendants with fair notice of the claims against them and the grounds for relief.”)).

Plaintiff contends that he was employed by all four Defendants. (Dkt. No. 24 at 7). The amended complaint alleges Plaintiff was employed by the PBH Defendants who were acting in concert and/or as a single business enterprise. (Dkt. No. 18 at ¶ 6). The amended complaint alleges that the PBH Defendants promised to pay certain commissions for Plaintiff's sale of those contracts but did not fully compensate Plaintiff for those commissions. Taken in a light most favorable to Plaintiff, the amended complaint is adequately pled at this stage in the litigation. Defendants will have the opportunity to seek clarification of these issues in discovery or on summary judgment.

3. Violation of South Carolina Payment of Lost Wages Act

Defendants move to dismiss Plaintiff's claim of lost wages claim asserted pursuant to the South Carolina Payment of Wages Act (“SCPWA”), SC Code Annotated § 41-10-10 et seq. for failure to state a claim. The SCPWA “governs payment of employee wages” but not “the earnings of independent contractors.” Adamson v. Marianne Fabrics, Inc., 391 S.E.2d 249, 250 (S...