Opinion
C. A. 6:23-cv-02152-DCC-JDA
12-07-2023
James Dale Ward, Plaintiff, v. Anderson Greenville LLC d/b/a Fred Anderson Honda LLC, Defendant.[1]
REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE
Jacquelyn D. Austin, United States Magistrate Judge.
This matter is before the Court on Defendant's motion to dismiss. [Doc.19.] Plaintiff alleges a claim of discrimination under the Age Discrimination in Employment Act (“ADEA”) and state-law claims for breach of contract and misrepresentation/negligent misrepresentation. [Doc. 11.] Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A), and Local Civil Rule 73.02(B)(2)(g), D.S.C., all pretrial matters in employment discrimination cases are referred to a United States Magistrate Judge for consideration.
Plaintiff brought suit in the Greenville County Court of Common Pleas on April 11, 2023, naming as Defendants Fred Anderson Honda, LLC and Anderson Automotive Enterprises, LLC (“Removing Defendants”) and alleging only state-law claims for breach of contract and misrepresentation/negligent misrepresentation. [Doc. 1-1.] Removing Defendants removed the action to this Court on May 19, 2023, on the basis of diversity jurisdiction. [Doc. 1.] On June 11, 2023, Plaintiff filed an Amended Complaint naming as the sole Defendant Anderson Greenville, LLC, d/b/a Fred Anderson Honda, LLC, and adding a discrimination claim under the ADEA. [Doc. 11.]
Defendant filed its motion to dismiss on June 30, 2023. [Doc. 19.] On July 13, Plaintiff filed a response, and on July 27, Defendant filed a reply. [Docs. 23; 26.] This motion is now ripe for review.
BACKGROUND
The Amended Complaint [Doc. 11], viewed in the light most favorable to Plaintiff, alleges the following facts.
Plaintiff worked for over 17 years as sales manager for Breakaway Honda (“Breakaway”), which was owned by Bradshaw Automotive. [Id. ¶ 9.] In the fall of 2022, Defendant held multiple meetings in which it informed Breakaway employees that Defendant would be taking ownership of Bradshaw Automotive dealerships and that Breakaway employees “would remain as employees of Defendant for at least six (6) months during a transition after Defendant took ownership.” [Id. ¶ 10.] Defendant further “represented that all of the employees['] pay would either remain the same or would [increase] for the first six months.” [Id.] “Defendant reiterated that employees were guaranteed their jobs and their compensation for six (6) months if they accepted employment.” [Id. ¶ 12.] Relying on Defendant's promises, Plaintiff did not undertake to seek other employment. [Id. ¶ 27.]
In November 2022, Plaintiff attended Defendant's orientation; registered on Defendant's employee portal; submitted information to qualify for Defendant's employee benefit plans; and received a medical benefits card, an employee handbook, and a letter from CEO Michael Anderson welcoming Plaintiff and other employees. [Id. ¶¶ 13-15.]
Plaintiff “was to begin providing services to Defendant upon the completion of the purchase of the Bradshaw Automotive dealerships.” [Id. ¶ 21.]
At some point near or in the month of January 2023, Defendant's purchase of Bradshaw Automotive was completed. [Id. ¶ 16.] On January 29, 2023, Plaintiff received call informing him that he was terminated. [Id. ¶ 17.] Plaintiff was 72 years on the date of his termination. [Id. ¶ 33.]
As stated, Plaintiff alleges causes of action for age discrimination in violation of the ADEA as well as state-law causes of action for breach of contract and misrepresentation/negligent misrepresentation. [Id. ¶¶ 19-40.] For his relief, Plaintiff seeks an unspecified amount of money damages as well as pre- and post-judgment interest. [Id. at 5.]
APPLICABLE LAW
Motion to Dismiss Standard
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a claim should be dismissed if it fails to state a claim upon which relief can be granted. When considering a motion to dismiss, the court should “accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff.” Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). However, the court “need not accept the legal conclusions drawn from the facts” nor “accept as true unwarranted inferences, unreasonable conclusions, or arguments.” E. Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000).
With respect to well pleaded allegations, the United States Supreme Court explained the interplay between Rule 8(a) and Rule 12(b)(6) in Bell Atlantic Corp. v. Twombly:
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, 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. Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).550 U.S. 544, 555 (2007) (footnote and citations omitted); see also 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216, at 235-36 (3d ed. 2004) (“[T]he pleading must contain something more . . . than a bare averment that the pleader wants compensation and is entitled to it or a statement of facts that merely creates a suspicion that the pleader might have a legally cognizable right of action.”).
“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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). The plausibility standard reflects the threshold requirement of Rule 8(a)(2)-the pleader must plead sufficient facts to show he is entitled to relief, not merely facts consistent with the defendant's liability. Twombly, 550 U.S. at 557; see also Iqbal, 556 U.S. at 678 (“Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” (internal quotation marks omitted)). Accordingly, the plausibility standard requires a plaintiff to articulate facts that, when accepted as true, demonstrate that the plaintiff has stated a claim that makes it plausible the plaintiff is entitled to relief. Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009).
DISCUSSION
Plaintiff's ADEA Claim
The ADEA makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment because of such individual's age.” 29 U.S.C. § 623(a)(1).
To survive a motion to dismiss for failure to state a claim, a plaintiff is not required to plead a prima facie case of age discrimination. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 515 (2002). However, he must “allege facts to satisfy the elements of a[n] [ADEA] cause of action.” McCleary-Evans v. Md. Dep't of Transp., 780 F.3d 582, 585 (4th Cir. 2015). Those elements are (1) the plaintiff is over 40 years of age, (2) he experienced discrimination by his employer, and (3) the discrimination was because of his age. Tickles v. Johnson, 805 Fed.Appx. 204, 207 (4th Cir. 2020).
Here, the discrimination Plaintiff alleges is either that Defendant terminated him or failed to hire him [Doc. 11 ¶¶ 35-36], but either way, the Amended Complaint does not allege facts that would warrant a reasonable inference that Plaintiff was subjected to discrimination because of his age. The only allegation touching on the issue is his assertion that “[o]n information and belief, younger and less experienced and/or less qualified individual[s] have been retained in similar positions or have been hired to replace Plaintiff.” [Doc. 11 ¶ 37.] The conclusory statement that Plaintiff's replacements were “less experienced and/or less qualified” adds little to the mix and does not give rise to an inference that Defendant considered anything other than the relative merits of the candidates in making its employment decisions. See Twombly, 550 U.S. at 555 (noting that conclusory allegations, or allegations that are mere labels, are insufficient to state a plausible claim and cannot survive a motion to dismiss). And the allegation that Plaintiff's replacements were “younger” does not give rise to a reasonable inference that any age difference was significant. See O'Connor v. Consol. Coin Caterers Corp., 517 U.S. 308, 313 (1996) (observing that the inference that an employment decision was motivated by the plaintiff's age “cannot be drawn from the replacement of one worker with another worker insignificantly younger”). Such vague allegations are insufficient to plausibly state an age discrimination claim. See Tickles, 805 Fed.Appx. at 208 (affirming dismissal of an ADEA claim for failure to state a claim and observing, “Notably absent from the Complaint are specific allegations that would give rise to a reasonable inference of age-based discrimination, such as the nature of the requirements for promotion, Appellant's own qualifications, the qualifications and rule violations of his proposed comparators, or even the proposed comparators' proximity in age to his own (i.e., whether they were substantially younger than him).”).
Accordingly, the Court recommends that Defendant's motion to dismiss be granted as to Plaintiff's ADEA claim.
Plaintiff argues that if the Court deems his cause of action“deficient in [the] single respect” that he failed to allege that his replacement was “substantially younger,” the “Court should dismiss without prejudice or simply allow Plaintiff to correct this or any other alleged deficiency.” [Doc. 23 at 10 n.6.] Because the pleading Petitioner would amend “is one to which a responsive pleading is required,” he would be entitled as a matter of course to amend his pleading once within “21 days after service of a responsive pleading.” Fed.R.Civ.P. 15(a)(1)(B). As that period has long past, Plaintiff would be entitled to amend “only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Although the text of Rule 15(a)(2) requires that the Court “freely give leave [to amend] when justice so requires,” Fed.R.Civ.P. 15(a)(2), “a district court may deny leave to amend if the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would have been futile,” United States ex rel. Nathan v. Takeda Parm. N. Am., Inc., 707 F.3d 451, 461 (4th Cir. 2013) (internal quotation marks omitted). “Futility is apparent if the proposed amended complaint fails to state a claim under the applicable rules and accompanying standards.” Kramer v. Omnicare ESC, LLC, 307 F.R.D. 459, 464 (D.S.C. 2015) (internal quotation marks omitted). “Therefore, the futility analysis under Rule 15(a) necessarily requires a preliminary assessment of the allegations of the proposed amendment in light of the substantive law on which the additional claims are based.” Id. Here, Plaintiff has not filed a motion to amend or attached a proposed Second Amended Complaint, and Plaintiff offers no basis for any belief in any event that any such amended complaint could overcome the defects in his claims that this Court has already identified. Accordingly, the Court sees no basis at this time on which to grant Plaintiff's request to amend.
Federal courts are courts of limited jurisdiction, “constrained to exercise only the authority conferred by Article III of the Constitution and affirmatively granted by federal statute.” In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998). A defendant may remove a case to federal court if the court would have had original jurisdiction over the case. See 28 U.S.C. § 1441(a). Generally, federal district courts have original jurisdiction over two types of cases, referred to as (1) federal question cases, pursuant to 28 U.S.C. § 1331, and (2) diversity cases, pursuant to 28 U.S.C. § 1332. As noted, this case was removed on the basis of diversity jurisdiction. [Doc. 1.] Diversity jurisdiction requires (1) complete diversity of the parties and (2) an amount in controversy in excess of $75,000.00. See 28 U.S.C. § 1332(a). The parties are completely diverse only if no party on one side is a citizen of the same state as any party on the other side. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373-74 (1978).
Plaintiff's Breach of Contract Claim
Defendant next argues that Plaintiff fails to state a claim for breach of contract. The Court agrees.
South Carolina follows the doctrine of at-will employment. E.g., Mathis v. Brown & Brown of S.C., Inc., 698 S.E.2d 773, 778 (S.C. 2010); see also Prescott v. Farmers Tel. Coop., Inc., 516 S.E.2d 923, 925 (S.C. 1999) (“We find the policy of employment at-will provides necessary flexibility for the marketplace and is, ultimately, an incentive to economic development. Accordingly, we affirm and adhere to the employment at-will doctrine in South Carolina.”). “Under the at-will employment doctrine an at-will employee may be terminated at any time for any reason or for no reason, with or without cause.” Legette v. Nucor Corp., 2:12-cv-1020-PMD, 2012 WL 3029650, at *3 (D.S.C. July 25, 2012) (internal quotation marks omitted); see King v. Marriott Int'l, Inc., 520 F.Supp.2d 748, 755 (D.S.C. 2007). “An employment contract for an indefinite term is presumptively terminable at will, while a contract for a definite term is presumptively terminable only upon just cause.” Cape v. Greenville Cnty. Sch. Dist., 618 S.E.2d 881, 883 (S.C. 2005).
“In determining the propriety of removal, the court looks to the complaint as it existed at the time of removal. The court, therefore, disregards the Amended Complaint and considers only the Complaint in effect at the time of removal in determining the existence of subject matter jurisdiction.” Johnson v. Time Warner Ent.-Advance/Newhouse P'ship, No. 3:15-cv-01727-CMC, 2015 WL 13790673, at *2 (D.S.C. June 23, 2015) (internal citations omitted). The Court concludes removal was proper on the basis of diversity jurisdiction here. At the time this case was removed, Removing Defendants asserted that the parties were diverse insofar as Removing Defendants were citizens of Georgia and North Carolina and Plaintiff was alleged to be a citizen and resident of South Carolina. [Doc. 1 at 2-5; see Doc. 1-2 ¶¶ 3-8.] They also asserted that the amount in controversy exceeded $75,000. [Doc. 1 at 6-9.] In support, they submitted records indicating that Plaintiff was paid $196,014.54 in wages in 2002 and they noted that Plaintiff was seeking punitive damages. [Doc. 1-2 ¶ 9.]
An at-will employment status “may be altered by an oral contract of definite employment.” Prescott, 516 S.E.2d at 926. “In order to prove the existence of a definite contract of employment, the employee must establish all of the elements of a contract.” Id. Under South Carolina law, “[t]he necessary elements of a contract are an offer, acceptance, and valuable consideration.” Sauner v. Pub. Serv. Auth. of S.C., 581 S.E.2d 161, 166 (S.C. 2003). “Valuable consideration may consist of some right, interest, profit, or benefit accruing to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” Hennes v. Shaw, 725 S.E.2d 501, 505 (S.C. Ct. App. 2012) (internal quotation marks omitted).
Plaintiff alleges that Defendant “offered [him] employment for a minimum term of six (6) months,” that Plaintiff “accepted the offer of employment,” and that “[h]e was to begin providing services to Defendant upon the completion of the purchase of the Bradshaw Automotive dealerships” but that “Defendant breached [that agreement] by terminating Plaintiff without cause before the six (6) month term.” [Doc. 11 ¶¶ 20-22.]
Defendant maintains that the Amended Complaint fails to plausibly allege that Defendant and Plaintiff altered Plaintiff's at-will status and specifically does not plausibly allege that they entered into a contract of employment for a minimum six-month term. [Docs. 19-1 at 4-8; 26 at 1-6.] Defendant primarily argues that Plaintiff has not alleged that such a contract was supported by valuable consideration. [Docs. 19-1 at 4-8; 26 at 1-6.] Plaintiff responds that he accepted Defendant's offer for a minimum six-month term of employment by attending employee on-boarding sessions, registering as an employee on Defendant's portal, and registering for benefits. [Doc. 23 at 7.] Regarding consideration, Plaintiff appears to contend that the parties exchanged promises, with Plaintiff “agree[ing] to continue to perform his job for the same pay for that six-month term.” [Id.] Plaintiff also argues that “[t]he letter sent by [Defendant's] CEO to Plaintiff acknowledging the formation of an employer-employee relationship is strong evidence that a contract was formed.” [Id.] And Plaintiff adds that he alleges that, based on Defendant's promise of continued employment, Plaintiff did not leave or seek employment elsewhere. [Id. at 7 n.3.] The Court does not agree with Plaintiff.
Regarding Plaintiff's argument that he exchanged a promise for a promise, the Court notes that the promises alleged in the Amended Complaint were made by Defendant. The promises were that Breakaway employees “would remain as employees of Defendant for at least six (6) months during a transition after Defendant took ownership” and that “all of the employees['] pay would either remain the same or would [increase] for the first six months.” [Doc. 11 ¶ 10; see id. ¶ 12 (“[E]mployees were guaranteed their jobs and their compensation for six (6) months if they accepted employment.”).] Plaintiff alleges that “this promise was made repeatedly.” [Id. ¶ 10.] There is no allegation that Plaintiff promised Defendant that he would work the entire six-month term or made any other promise in exchange for Defendant's promise.
As for the welcoming letter that Plaintiff received from Defendant, the Amended Complaint does not allege that the letter indicated that Plaintiff had promised to begin working for Defendant when Defendant's purchase of the dealerships was completed, let alone that he promised to work for his new employer for at least six months.
The Court also does not agree that Plaintiff's refraining from seeking employment elsewhere constituted valuable consideration that could support the formation of a contract for employment for a term of at least six months. “‘[T]o constitute consideration, a performance or a return promise must be bargained for'; that is, ‘sought by the promisor in exchange for his promise and . . . given by the promisee in exchange for that promise.'” Hyman v. Ford Motor Co., 142 F.Supp.2d 735, 741 (D.S.C. 2001) (alteration in original) (quoting Restatement (Second) of Contracts § 71(1), (2)). Here, the Amended Complaint does not allege that Defendant sought a promise from Plaintiff that he would not seek employment elsewhere, nor does it allege that Plaintiff made such a promise.
Although Plaintiff does not appear to specifically argue that he plausibly alleged the formation of a unilateral contract with Defendant for an employment term of at least six months, see, e.g., Prescott, 516 S.E.2d at 926 (“Most employment agreements are unilateral.”), the Court notes that the Amended Complaint does not allege facts that would support liability on that theory. The elements of a unilateral contract are “1) a specific offer, 2) communication of the offer to the employee, and 3) performance of job duties in reliance of the offer.” Id. Plaintiff's Amended Complaint does not allege that he ever began working for Defendant. Rather, it alleges that although he “was to begin providing services to Defendant upon the completion of the purchase of the Bradshaw Automotive dealerships[,] . . . Defendant breached the Employment Agreement by terminating Plaintiff without cause before the six (6) month term.” [Doc. 11 ¶¶ 21-22; see also Doc. 23 at 8 (Plaintiff's brief asserting that “Plaintiff was terminated the day before Defendant began operating the dealership.”).]
In sum, for these reasons, the Court recommends that Defendant's motion to dismiss be granted as to Plaintiff's breach of contract claim.
Plaintiff's Misrepresentation/Negligent Misrepresentation Claim
Defendant finally argues that Plaintiff fails to state a claim for misrepresentation/negligent misrepresentation. [Doc. 19-1 at 8-17.] The Court agrees.
To state a claim for negligent misrepresentation, a plaintiff must allege “(1) the defendant made a false representation to the plaintiff; (2) the defendant had a pecuniary interest in making the statement; (3) the defendant owed a duty of care to see that he communicated truthful information to the plaintiff; (4) the defendant breached that duty by failing to exercise due care; (5) the plaintiff justifiably relied on the representation; and (6) the plaintiff suffered a pecuniary loss as the proximate result of his reliance upon the representation.” AMA Mgmt. Corp. v. Strasburger, 420 S.E.2d 868, 874 (S.C. Ct. App. 1992).
In its initial memorandum supporting its motion to dismiss, Defendant argued that Plaintiff failed to state a claim for negligent misrepresentation and also that Plaintiff failed to state a claim for fraudulent misrepresentation. [Doc. 19-1 at 8-17.] Plaintiff addressed only negligent misrepresentation in his response. [Doc. 23 at 7-8.] Accordingly, the Court concludes that Plaintiff has abandoned any fraudulent misrepresentation claim and the Court addresses only negligent misrepresentation. See Jones v. Family Health Ctr., Inc., 323 F.Supp.2d 681, 690 (D.S.C. 2003) (noting claim not addressed in opposition memorandum had been abandoned); Cousar v. Richland Cnty. Sheriff's Dep't, 3:08-392-CMC, 2009 WL 982414, at *6 (D.S.C. Apr.10, 2009) (applying same principle to abandonment of claim against particular defendant).
Defendant argues that Plaintiff has not plausibly alleged that he suffered a pecuniary loss as the proximate result of his reliance upon the representation. [Doc. 19-1 at 13-14, 17; 26 at 9-10.] The Court agrees. Plaintiff's alleged reliance consisted of his decision not to “begin seeking other employment.” [Doc. 11 ¶ 27.] The entirety of Plaintiff's allegations concerning the pecuniary loss element is that he suffered “lost compensation as a direct result of” his termination and that he suffered “loss of income as a result” of his reliance on Defendant's representations. [Id. ¶¶ 18, 30.] The Amended Complaint does not offer any factual basis that would support an inference that he suffered a loss of income by continuing to work in his then-current position and not seeking another position. Indeed, he does not allege that he experienced any period of unemployment after he was terminated, let alone that he would have likely been unemployed for a shorter period had he begun his search earlier. In the absence of any specific supporting facts, Plaintiff's conclusory allegation that he suffered a pecuniary loss as a proximate result of his reliance is insufficient to state a plausible misrepresentation claim. See Twombly, 550 U.S. at 555.
For this reason, the Court recommends that Defendant's motion to dismiss be granted as to Plaintiff's misrepresentation/negligent misrepresentation claim.
Because the Court concludes that Plaintiff fails to plausibly allege that he suffered a pecuniary loss as a proximate result of his reliance on the alleged representations, the Court declines to address Defendant's alternative arguments in support of the dismissal of the misrepresentation claim. As for negligent misrepresentation, those include Defendant's argument that allowing Plaintiff's claim would essentially nullify South Carolina's employment at-will doctrine. [Doc. 19-1 at 14-15.] They also include the contention that Plaintiff has not plausibly alleged the following: that Defendant owed any duty of care to Plaintiff at the time of the alleged misrepresentations-or breached any such a duty; that Defendant knew or should have known that the representations made to Plaintiff were false when they were made; or that any reliance by Plaintiff on the representations was justifiable. [Id. at 10-13; Doc. 26 at 6-9.] As for fraudulent misrepresentation, Defendant points to the same pleading deficiencies in addition to the argument that Plaintiff has not satisfied the heightened pleading requirement for fraud claims. [Doc. 19-1 at 16-17.]
RECOMMENDATION
Wherefore, based upon the foregoing, the Court recommends that Defendant's motion to dismiss [Doc. 19] be GRANTED .
IT IS SO RECOMMENDED.