Summary
finding that employee was not employed at the time commissions were paid, as required
Summary of this case from Stephenson v. Int'l Bus. Machs. Corp.Opinion
No. COA11–1273.
2012-05-1
Wendy DULANEY, Plaintiff, v. INMAR, INC., Defendant.
The Dummit Law Firm, by Brian P. Simpson, for Plaintiff-appellant. Womble Carlyle Sandridge & Rice, PLLC, by Charles A. Edwards, for Defendant-appellee.
Appeal by Plaintiff from order entered 24 June 2011 by Judge John O. Craig III in Forsyth County Superior Court. Heard in the Court of Appeals 8 February 2012. The Dummit Law Firm, by Brian P. Simpson, for Plaintiff-appellant. Womble Carlyle Sandridge & Rice, PLLC, by Charles A. Edwards, for Defendant-appellee.
HUNTER, JR., ROBERT N., Judge.
I. Factual & Procedural Background
Wendy Dulaney (“Plaintiff”) worked for Inmar, Inc. (“Defendant”) beginning on or about 1 June 2004. As a part of the employment relationship, Plaintiff and Defendant entered into a non-competition agreement (the “Agreement”). Plaintiff was compensated with a base salary and incentive payments based on a percentage of the revenue her accounts produced for Defendant. Prior to 1 January 2010, Defendant provided Plaintiff with its “2010 Promotion Services Rebate and Fulfillment Services Sales and Renewal Incentive Plan” (the “Plan”).
The Plan provided for incentive payments calculated on a quarterly basis. The Plan stated that “[t]o receive payment, the associate must be in the role of a participant at the time of incentive payout.” Payouts under the Plan were to “be made approximately six weeks after quarter end.”
The second quarter of 2010 was from 1 April 2010 to 30 June 2010. Plaintiff resigned from her employment with Defendant on 22 July 2010. Defendant did not pay Plaintiff an incentive payment from the second quarter, citing the provision in the Plan that an associate must be a participant at the time of the payout to receive the payout. At the time of her resignation, Plaintiff asserts that in response to her inquiries regarding the Agreement, Defendant stated that she must comply with the non-competition agreement and that Defendant had been successful in enforcing the Agreement in court.
Plaintiff filed a complaint on 7 April 2011 in Forsyth County Superior Court alleging violation of the N.C. Wage and Hour Act, constructive trust, and seeking declaratory judgment regarding the Agreement. On 6 May 2011, Defendant filed a motion to dismiss. On 24 June 2011, Judge John O. Craig III issued an order dismissing the Complaint for failure to state a claim upon which relief can be granted. Plaintiff timely filed a notice of appeal to this Court on 14 July 2011.
II. Jurisdiction & Standard of Review
Plaintiff appeals from the final judgment of a superior court, and appeal therefore lies with this Court pursuant to N.C. Gen.Stat. § 7A–27(b) (2011).
We review the motion to dismiss de novo. Leary v. N.C. Forest Prods., Inc., 157 N.C.App. 396, 400, 580 S.E.2d 1, 4,aff'd per curiam,357 N.C. 567, 597 S.E.2d 673 (2003). “The motion to dismiss under N.C.R. Civ. P. 12(b)(6) tests the legal sufficiency of the complaint. In ruling on the motion the allegations of the complaint must be viewed as admitted, and on that basis the court must determine as a matter of law whether the allegations state a claim for which relief may be granted.” Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979) (internal citation omitted).
III. Analysis
Plaintiff first argues that the trial court erred in dismissing her Wage and Hour Act claim. We disagree.
The North Carolina Wage and Hour Act provides:
Employees whose employment is discontinued for any reason shall be paid all wages due on or before the next regular payday either through the regular pay channels or by mail if requested by the employee. Wages based on bonuses, commissions or other forms of calculation shall be paid on the first regular payday after the amount becomes calculable when a separation occurs. Such wages may not be forfeited unless the employee has been notified in accordance with G.S. 95–25.13 of the employer's policy or practice which results in forfeiture. Employees not so notified are not subject to such loss or forfeiture.
N.C. Gen.Stat. § 95–25.7 (2011). Section 95–25.13 provides:
Every employer shall:
(1) Notify its employees, orally or in writing at the time of hiring, of the promised wages and the day and place for payment;
(2) Make available to its employees, in writing or through a posted notice maintained in a place accessible to its employees, employment practices and policies with regard to promised wages;
(3) Notify employees, in writing or through a posted notice maintained in a place accessible to its employees, at least 24 hours prior to any changes in promised wages. Wages may be retroactively increased without the prior notice required by this subsection....
N.C. Gen.Stat. § 95–25.13 (2011). We have previously interpreted these statutory provisions as providing that
[o]nce the employee has earned the wages and benefits under this statutory scheme, the employer is prevented from rescinding them, with the exception that for certain benefits such as commissions, bonuses and vacation pay, an employer can cause a loss or forfeiture of such pay if he has notified the employee of the conditions for loss or forfeiture in advance of the time when the pay is earned.
Narron v. Hardee's Food Sys., Inc., 75 N.C.App. 579, 583, 331 S.E.2d 205, 208 (1985), overruled on other grounds by J & B Slurry Seal Co. v. Mid–South Aviation, Inc., 88 N.C.App. 1, 362 S.E.2d 812 (1987).
Plaintiff asserts that she earned commissions at the end of the second quarter, as the commissions were then “calculable.” She also asserts that there could be no forfeiture of the commissions, as she was not provided with a legitimate time or place for payment as required by N.C. Gen.Stat. § 95–25.13.
The Plan clearly states that “[t]o receive payment, the associate must be in the role of a participant at the time of incentive payout.” In addition, although the Plan does not offer a precise date for payment, it does indicate that “[p]ayouts will be made approximately six weeks after quarter end.” The Plan provides both the written notice of the approximate day for payment and the practices and policies with regard to the promised incentives and is thus sufficient to comport with N.C. Gen.Stat. § 95–25.13.
The second quarter ended on 30 June 2010. The approximate date of the incentive payout, according to the Plan, would have been 11 August 2010. Plaintiff resigned on 22 July 2010, prior to the Plan's approximate date for the incentive payout. Plaintiff had been provided with the Plan, which constituted written notice that by resigning prior to the date of the payout, she would not receive an incentive payment under the Plan. The provision was clear and unambiguous as to the condition of forfeiture, and Plaintiff's incentive payment was therefore forfeited at the time of her resignation. Compare Kranz v. Hendrick Auto. Group, Inc., 196 N.C.App. 160, 165–66, 674 S.E.2d 771, 775 (2009) (finding summary judgment appropriate for a breach of contract claim where the compensation plan stated that “[the employee] must be an employee on each payment date in order to receive the bonuses” and the employment ended prior to the time the bonus would have been paid), with Kornegay v. Aspen Asset Group, LLC, 204 N.C.App. 213, 228–30, 693 S.E.2d 723, 735–36 (2010) (finding insufficient written notice of forfeiture where the employer's memo did not specify conditions for loss or forfeiture, but instead contained a vague statement that there would be “[no] bonuses ... [u]ntil [the employer] sees fit & confident [it is] making money”).
Plaintiff relies heavily on Ross v. Ligand Pharmaceuticals, Inc ., 639 S.E.2d 460 (S.C.App.2006), which the trial court distinguished from the case at hand. Ross is a South Carolina case, and “while decisions from other jurisdictions may be instructive, they are not binding on the courts of this State.” Morton Buildings, Inc. v. Tolson, 172 N.C.App. 119, 127, 615 S .E.2d 906, 912 (2005). Given our discussion of North Carolina law supra, we do not address Plaintiff's arguments based on Ross. The trial court did not err in dismissing Plaintiff's Wage and Hour Act claim as Plaintiff forfeited any incentive payment at the time of her resignation according to the Plan.
Plaintiff also argues the trial court erred in dismissing her action for constructive trust.
“A constructive trust is a duty, or relationship, imposed by courts of equity to prevent the unjust enrichment of the holder of title to, or of an interest in, property which such holder acquired through fraud, breach of duty or some other circumstance making it inequitable for him to retain it against the claim of the beneficiary of the constructive trust.... [A] constructive trust is a fiction of equity, brought into operation to prevent unjust enrichment through the breach of some duty or other wrongdoing. It is an obligation or relationship imposed irrespective of the intent with which such party acquired the property, and in a well-nigh unlimited variety of situations.... [T]here is a common, indispensable element in the many types of situations out of which a constructive trust is deemed to arise. This common element is some fraud, breach of duty or other wrongdoing by the holder of the property....”
Roper v. Edwards, 323 N.C. 461, 464, 373 S.E.2d 423, 424–25 (1988) (citation omitted) (alterations in original). If there is no fraud, breach of a duty, wrongdoing, or improper acquisition of property, there cannot be a constructive trust. See Graham v. Martin, 149 N.C.App. 831, 835–36, 561 S.E.2d 583, 586 (2002).
Plaintiff asserts that Defendant was unjustly enriched by keeping the commissions “it had promised to Plaintiff.” For the reasons stated supra, we find that any such promise was conditioned upon Plaintiff being an employee at the time of the payout. In addition, although Plaintiff states that Defendant was unjustly enriched by her “exemplary work performance” and “the continued accounts and the revenue generated,” Plaintiff was paid a base salary separate from the incentive payments, and Defendant was not unjustly enriched by Plaintiff performing the job she was paid a salary to perform. There is no allegation in the complaint or evidence of Defendant engaging in fraud, breach of a duty to Plaintiff, wrongdoing, or improper acquisition of property. Thus, the trial court did not err in dismissing Plaintiff's claim for constructive trust.
Finally, Plaintiff argues the trial court erred in dismissing Plaintiff's declaratory judgment action seeking a declaration of her rights under the non-competition agreement. We disagree.
A motion to dismiss under Rule 12(b)(6) “ ‘is seldom an appropriate pleading in actions for declaratory judgments.’ “ Poole v. Bahamas Sales Assoc., LLC, ––– N.C.App. ––––, ––––, 705 S.E.2d 13, 18 (2011) (quoting N.C. Consumer Powers, Inc. v. Duke Power Co., 285 N.C. 434, 439, 206 S.E.2d 178, 182 (1974)). However, a motion to dismiss is allowed where “ ‘the record clearly shows that there is no basis for declaratory relief as when the complaint does not allege an actual, genuine existing controversy.’ “ Id. “ ‘Mere apprehension or the mere threat of an action or a suit is not enough.’ “ Id. (quoting Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230, 234, 316 S.E.2d 59, 62 (1984)).
In North Carolina, there must be an actual controversy before there can be a declaratory judgment action. Sharpe v. Park Newspapers of Lumberton, Inc., 317 N.C. 579, 583, 347 S.E.2d 25, 29 (1986). The Declaratory Judgment Act “ ‘does not undertake to convert judicial tribunals into counsellors and impose upon them the duty of giving advisory opinions to any parties who may come into court and ask for either academic enlightenment or practical guidance concerning their legal affairs.... [It] does not license litigants to fish in judicial ponds for legal advice.’ “ Id. at 584, 347 S.E.2d at 29 (quoting Lide v. Mears, 231 N.C. 111, 117, 56 S.E.2d 404, 409 (1949)).
In the present case, there is no actual controversy. Plaintiff has not competed with Defendant. She alleges in her complaint that she “has significant work potential and opportunities” but “cannot accept any employment because of the Non Compete and the threat of litigation.” She also alleges Defendant stated to her that she must comply with the Agreement and that Defendant has been successful in enforcing the Agreement in the courts. These two facts do not create a controversy but instead show a “mere threat” not appropriate for declaratory judgment. The trial court did not err in dismissing Plaintiff's claim for declaratory judgment.
IV. Conclusion
For the reasons stated above, the order of the trial court is
Affirmed. Judges STEELMAN and GEER concur.
Report per Rule 30(e).