United States District Court, N.D. Georgia, Atlanta Division
WRITTEN OPINION AND ORDER
JANET F. KING, Magistrate Judge.
On May 1, 2014, Plaintiff Jardon Bouska filed a complaint in the Superior Court of Fulton County against Defendant Fiserv, Inc., seeking damages for an alleged breach of contract or, in the alternative, under the doctrine of promissory estoppel and for intentional and negligent misrepresentation. [Doc. 1-1 ("Complaint")]. On June 2, 2014, Defendant removed the case to this court. [Doc. 1]. In lieu of filing an answer, on June 23, 2014, Defendant filed a motion to dismiss the Complaint, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief can be granted. [Doc. 4]. And on July 21, 2014, Plaintiff filed a response to the motion to dismiss [Doc. 7] and a motion for partial summary judgment as to Count One of the Complaint which alleges a breach of contract. [Doc. 6]. On August 1, 2014, in lieu of filing a response to the motion for partial summary judgment, Defendant filed a motion for discovery, pursuant to Fed.R.Civ.P. 56(d). [Doc. 12]. Plaintiff opposes Defendant's Rule 56(d) motion. [Doc. 16]. The parties have consented to proceed before the undersigned Magistrate Judge. [Doc. 11].
I. The Complaint
The Complaint alleges that in 2007, Plaintiff and Checkfree Corporation entered into a Retention Agreement because of the anticipated sale to Defendant Fiserv, Inc., and that Defendant assumed the obligations under the contract when it purchased the business. [Complaint ¶¶ 6-10]. The contract provided that Plaintiff could terminate his employment for "Good Reason, " as defined in section 6(c), upon written notice as provided for in the contract (see sections 1(b) and 6(d)), and that, upon compliance with these contract terms, Defendant would pay Plaintiff a severance package as outlined in the contract, section 7. [Id. ¶¶ 11-12, Exhibit 1 ("Retention Agreement")]. The Complaint alleges that, in February 2014, Defendant notified Plaintiff of changes in the terms of his employment which fell within the "Good Reason" provisions of the contract, that Plaintiff notified Defendant as required under the terms of the contract, and that Defendant declined to correct or reverse the change in terms of Plaintiff's employment and, instead, terminated Plaintiff's employment. [Id. ¶¶ 13-16, Exhibits 3-4].
Count One of the Complaint alleges that Defendant breached the terms of the contract by failing to pay Plaintiff as required under the terms of section 7 of the Retention Agreement, noting that Defendant's reliance on the Amendment to the Retention Agreement, which is not supported by consideration, is misplaced because the Amendment does not alter Defendant's contract obligations. [Id. ¶¶ 18-24, Exhibit 2 ("Amendment")]. Count Two asserts a cause of action under the doctrine of promissory estoppel contending that, pursuant to the Retention Agreement, Defendant promised to pay Plaintiff severance benefits if any action constituting "Good Reason" occurred which was not limited by any time period, that Defendant should have reasonably expected Plaintiff to rely on that promise to continue his employment, that Plaintiff did continue his employment, and that Defendant must be forced to comply with the promise to pay the severance benefits or Plaintiff will suffer a grave injustice. [Id. ¶¶ 25-32]. And in Count Three, the Complaint alleges intentional and negligent misrepresentation based on the wording of the Amendment in which "Defendant stated that the Amendment was intended to clarify the circumstances under which Good Reason' could be invoked pursuant to section 6(c)(iii)" (inferring that the language did not include the other "Good Reason" clauses) of the Retention Agreement and based on the representations of Defendant in regard to the Amendment. The Complaint asserts that Defendant now contends that the Amendment, for which no consideration was provided, limits the time period during which Plaintiff could receive severance benefits for any of the reasons listed in section 6(c) of the Retention Agreement. Accordingly, Defendant intentionally or negligently misrepresented the purpose of the Amendment knowing that Plaintiff would rely on those misrepresentations. [Id. ¶¶ 33-43]. And Plaintiff seeks attorney's fees and expenses pursuant to state law and the terms of the Retention Agreement. [Id. ¶¶ 44-46].
III. Standard of Law
On a motion to dismiss under Rule 12(b)(6), the complaint's factual allegations are assumed true and construed in the light most favorable to the plaintiff. Hardy v. Regions Mortg., Inc., 449 F.3d 1357, 1359 (11th Cir. 2006); M.T.V. v. DeKalb County School Dist., 446 F.3d 1153, 1156 (11th Cir. 2006). "However, conclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal." Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002) (citations omitted). The Federal Rules of Civil Procedure include no requirement that a plaintiff detail the facts upon which the plaintiff bases a claim. Rule 8(a)(2) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2) (as amended 2007).
"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[.]" Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007) (citations omitted); accord Financial Sec. Assur., Inc. v. Stephens, Inc., 500 F.3d 1276, 1282-83 (11th Cir. 2007) (recognizing that "while notice pleading may not require that the pleader allege a specific fact to cover every element or allege with precision each element of a claim, it is still necessary that a complaint contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory") (citations and internal quotation marks omitted). "Factual allegations must be enough to raise a right to relief above the speculative level[, ]" i.e., they must do more than merely create a "suspicion [of] a legally cognizable right of action, ' on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 127 S.Ct. at 1965 (citations omitted) (emphasis omitted). "Stated differently, the factual allegations in a complaint must possess enough heft' to set forth a plausible entitlement to relief[.]'" Stephens, 500 F.3d at 1282 (quoting Twombly, 127 S.Ct. at 1966-67).
The court's inquiry at this stage of the proceedings focuses on whether the challenged pleadings "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007) (citations and internal quotation marks omitted). And a court reviewing a motion to dismiss must keep in mind that a "motion to dismiss for failure to state a claim upon which relief can be granted merely tests the sufficiency of the complaint; it does not decide the merits of the case." Wein v. American Huts, Inc., 313 F.Supp.2d 1356, 1359 (S.D. Fla. 2004) (citing Milburn v. United States, 734 F.2d 762, 765 (11th Cir. 1984)). "Regardless of the alleged facts, however, a court may dismiss a complaint on a dispositive issue of law." Bernard v. Calejo, 17 F.Supp.2d 1311, 1314 (S.D. Fla. 1998) (citing Marshall County Bd. of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993) ("[T]he court may dismiss a complaint... when, on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action.")); see also Glover v. Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006) (same); Aque v. Home Depot U.S.A., Inc., 629 F.Supp.2d 1336, 1350 (N.D.Ga. 2009).
The court will apply these standards in ruling on the motion to dismiss.
III. Contentions of the Parties
Defendant moves to the dismiss all counts in the Complaint asserting that, applying Delaware law as specified in the Retention Agreement, the agreement as modified by the Amendment places temporal limitations on Plaintiff's right to terminate his employment for "Good Reason" under all of the subsections of section 6(c) and to, accordingly, receive severance benefits. [Doc. 4]. Defendant contends that the Plaintiff's right to terminate for "Good Reason" pursuant to clauses 6(c)(i), (ii), (iv), (v) and (vi) of the modified Retention Agreement fell between the dates of December 3, 2007, and June 3, 2009, and pursuant to clause 6(c)(iii) of the modified Retention Agreement fell between the dates of December 3, 2007, and June 3, 2010. [Doc. 4 at 6]. In support of this argument, Defendant relies on the following language in the Amendment which states that "[t]he first sentence in Section 6(c) shall be amended in its entirety to read as follows:
Executive's employment may be terminated by Executive during the Employment Period for Good Reason; provided however, that in the event the Change in Control Date occurs by reason of the Effective Time (as defined in the Merger Agreement), Executive's employment may be terminated for Good Reason during the eighteen (18) month period following the Effective Time, in respect of clauses (i), (ii), (iv), (v) and (vi) below, and during the thirty (30) month period following the Effective Time, in respect of clause (iii) below, and, in each case, be entitled to the benefits under Section 7(a), notwithstanding any earlier termination of the Employment Period."
[Amendment ¶ 2]. Defendant contends, therefore, that Plaintiff's - written notice of intent to terminate his employment for "Good Reason" pursuant to the Retention Agreement is not timely and that Defendant was under no obligation to pay severance benefits as specified in section 7 of the agreement. [Doc. 4 at 7, 11-12]. Defendant contends that, as a matter of law, the court should find that there was no breach of the amended Retention Agreement. [Id. at 8-12].
Defendant further argues that Plaintiff's promissory estoppel claim fails, under Georgia law, because Plaintiff is seeking to recover on the underlying contract, that is, the Retention Agreement, and that, due to this reliance, Plaintiff may not plead promissory estoppel even as an alternative means of relief. [Id. at 13-15]. And Defendant argues that Plaintiff's claim of intentional or negligent misrepresentation also fails because he has sought to enforce - not rescind - the Retention Agreement which contains a merger clause. For that reason, Plaintiff's claim that Defendant misrepresented the purpose of the Amendment by making statements or other promises not contained in the contract must fail as not being in writing. The clause relied on by Defendant states: "(c) Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives." [Retention Agreement § 14(c)]. Defendant further argues that Plaintiff cannot establish a claim of misrepresentation based on the language in the Amendment's recitals as alleged in the Complaint and that any alleged reliance thereon under the circumstances is not justifiable. [Doc. 4 at 16-20].
In addition to filing a response to the motion to dismiss, Plaintiff filed a motion for partial summary judgment on the breach of contract claim in Count One of the Complaint. [Docs. 6 and 7]. Plaintiff, in agreement with Defendant, relied on Delaware law and argues as a matter of law that the court should decide the issue of breach of contract. [Id. at 13]. And Plaintiff contends that Defendant's motion to dismiss the claims of promissory estoppel and intentional or negligent misrepresentation should be denied because Plaintiff has stated causes of action upon which relief may be granted. [Id. at 28-40].
Plaintiff's argument in support the partial motion for summary judgment on the breach of contract claim and in opposition to Defendant's motion to dismiss that claim relies on interpretation of the Retention Agreement as originally entered by the parties. [Doc. 7 at 12-19]. As Plaintiff points out, the Retention Agreement did not impose time limits on payment of severance benefits unless Defendant provided notice that the protections would not be extended. [Retention Agreement § 1(b)]. Plaintiff also pointed out that the term "Good Reason" was specifically defined in section 6(c) of the Retention Agreement and that, if that definition is satisfied and if he provides notice revise the terms of the Agreement to clarify the circumstances under which the Executive may terminate employment for Good Reason' (as defined in the Agreement) pursuant to Section 6(c)(iii) of the Agreement...." [Id.]. as required in the Retention Agreement, then the severance benefits of paragraph 7 are triggered. [Doc. 7 at 15-16 (citing Retention Agreement §§ 6(c), 7)]. Plaintiff argues that, although he fully complied with the requirements of the Retention Agreement, Defendant denied payment of his severance benefits causing him damages. [Id. at 18-19].
Plaintiff next argues that the Amendment to the Retention Agreement is not effective due to lack of consideration supporting the modification. [Doc. 19 at 23]. However, even if the Amendment is enforceable, Plaintiff asserts that the language therein does not impose the time limits asserted by Defendant and contends that the language of the Amendment is ambiguous. In construing the Amendment, Plaintiff relies heavily on the phrasing, previously noted, in the recital about the "parties desire" for entering the Amendment as limiting the impact of the Amendment to the "Good Reason" provision in section 6(c)(iii) and only preventing invocation of that subsection for the first year after Defendant ...