Sadler et al v. General Electric Company

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

W.D. Ky.June 2, 2017

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY LOUISVILLE DIVISION Filed Electronically KEVIN SADLER, ) JUDE EDELEN, AND ) MICHAEL KRIMM ) ) PLAINTIFFS ) ) v. ) CIVIL ACTION NO. 3:17CV-328-TBR ) GENERAL ELECTRIC ) COMPANY ) ) DEFENDANT ) ) DEFENDANT GENERAL ELECTRIC COMPANY’S MOTION TO DISMISS Defendant, General Electric Company (“GE”), by counsel, and pursuant to Fed. R. Civ. P. 12(b)(6), hereby moves this Court to dismiss the Plaintiffs Complaint in its entirety. The grounds for this Motion are explained in an attached supporting Memorandum, which is being simultaneously filed. A proposed Order is attached as well. Respectfully submitted, /s/Matthew Barszcz Kathryn A. Quesenberry Matthew Barszcz DINSMORE & SHOHL LLP 101 S. Fifth Street, Suite 2500 Louisville, Kentucky 40202 Telephone: (502) 581-8000 Facsimile: (502) 581-8111 E-Mail: Kathryn.Quesenberry@dinsmore.com E-Mail: Matthew.Barszcz@dinsmore.com Counsel for Defendant, General Electric Company Case 3:17-cv-00328-TBR Document 6 Filed 06/02/17 Page 1 of 2 PageID #: 27 2 CERTIFICATE OF SERVICE I hereby certify that on June 2, 2017, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system, which will send a notice of electronic filing to the following: Samuel G. Hayward, Esq. Adams Hayward & Welsh 4036 Preston Highway Louisville, Kentucky 40213 Telephone: (502) 366-6456 E-Mail: sam@samhaywardlaw.com Counsel for Plaintiffs /s/Matthew Barszcz Counsel for Defendant, General Electric Company Case 3:17-cv-00328-TBR Document 6 Filed 06/02/17 Page 2 of 2 PageID #: 28 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY LOUISVILLE DIVISION Filed Electronically KEVIN SADLER, ) JUDE EDELEN, AND ) MICHAEL KRIMM ) ) PLAINTIFFS ) ) v. ) CIVIL ACTION NO. 3:17CV-328-TBR ) GENERAL ELECTRIC ) COMPANY ) ) DEFENDANT ) ) DEFENDANT GENERAL ELECTRIC COMPANY’S MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS This matter arises from the acquisition of General Electric Appliances (GE) by Haier US Appliance Solutions, Inc., in June 2016. Plaintiffs and current Haier employees Kevin Sadler, Jude Edelen, and Michael Krimm1 bring a handful of common law claims, none of which s sufficient as a matter of law. Plaintiffs allege that, prior to the sale of the facility, they were told by GE that they would not have the opportunity to relocate to another GE location as a result of the sale, but then later were told that they would, in fact, be given the opportunity to relocate. None of the Plaintiffs was successful in his efforts to find a position at another GE facility. At the time of the closing of Haier’s acquisition, the Plaintiffs ceased being GE employees and became Haier employees. The Plaintiffs have filed suit claiming damages in connection with their unsuccessful relocation attempts. 1 All three Plaintiffs were employed with GE as Engineering Technicians and non-union. (Complaint ¶¶ 12, 13, 14). Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 1 of 11 PageID #: 29 2 But, Plaintiffs’ claims fail because they cannot state a claim for promissory estoppel as they have not alleged the existence of a promise by GE, much less alleged facts sufficient to support any “detrimental reliance” on any such promise. Further, there are no facts to support the existence of a contract, implied or otherwise. And, finally, Plaintiffs do not properly plead a claim for fraudulent misrepresentation. Their claims fail as a matter of law and should be dismissed with prejudice. ARGUMENT AND AUTHORITIES I. The Standard of Review Requires Dismissal of the Plaintiffs’ Complaint. Federal Rule of Civil Procedure 8(a)(2) requires a Complaint to contain “a short and plain statement of the claim showing that the pleader is ntitled to relief.” “To state a valid claim, a complaint must contain either direct or inferential allegations respecting all the material elements to sustain recovery under some viable legal theory.” League of United Latin American Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (emphasis added). But if a plaintiff fails to plead “enough facts to state a claim to relief that is plausible on its face,” the Complaint should be dismissed for failure to state a claim upon which relief may be granted. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim for relief can survive a motion to dismiss only when it contains “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. 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) (internal citations and quotation marks omitted). In Ashcroft v. Iqbal, the Supreme Court of the United States established a two-prong approach for determining whether allegations in a pleading satisfy Federal Rule of Civil Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 2 of 11 PageID #: 30 3 Procedure 8(a)(2)’s requirements. First, the Court must identify whether a pleading consists of factual allegations that will allow it to “draw the r asonable inference that the defendant is liable for the misconduct alleged.” Id. The Court only assumes the veracity of the allegations after this prong is satisfied to then determine whether the alleg tions “plausibly give rise to an entitlement of relief.” Id. at 679. “[T]he court need not accept as true alleg tions that are conclusory or require unwarranted inferences based on the alleged facts.” Newberry v. Silverman, 789 F.3d 636, 640 (6th Cir. 2015). Thus, as the Sixth Circuit Court of Appeals has recognized, “to survive a motion to dismiss under Rule 12(b)(6), a complaint must contain (1) enough facts to state a claim to relief that is plausible; (2) more than a formulaic recitation of a cause of action’s elements; and (3) allegations that suggest a right to relief above a speculative level.” Estate of Smith ex rel. Richardson v. United States, 509 Fed. Appx. 436, 439 (6th Cir. 2012) (internal quotation marks omitted). The Complaint does not state facts that plausibly give rise to a claim for relief. Rather, the Plaintiffs have alleged a litany of unsupported conclusions that do nothing more than suggest a right to relief at a speculative level. The Plaintiffs’ claims are factually and legally deficient and the Court should dismiss the Complaint with prejudice in its entirety. II. The Plaintiffs have not pleaded a plausible claim of promissory estoppel (Count One of the Complaint). The Plaintiffs claim that it was GE’s “standard practice” to give employees the opportunity to relocate by looking for another job within GE when a plant closes. For their promissory estoppel claim, the Plaintiffs allege that they were first told they would not have the opportunity to relocate and that they somehow relied on this alleged promise to their detriment. (Paragraphs 39 & 40). The Plaintiffs also claim that they later were told that they did have the opportunity to relocate and that they also somehow relied on this alleged promise to their detriment. (Paragraphs 41 & 43). These Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 3 of 11 PageID #: 31 4 allegations are insufficient to state a claim for promissory estoppel as a matter of law and the Court should dismiss this claim. A. The Plaintiffs do not allege the existence of a promise by GE. Under Kentucky law, “[a]n at-will employee can claim promissory estoppel only if she can show a specific promise of job security.” Harris v. Burger King Corporation, 993 F. Supp.2d 677, 691 (W.D. Ky. 2014). Further, promissory estoppel requires proof of a promise that prompts detrimental reliance by the plaintiff: [a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third pe son and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limit d as justice requires. Lichtefeld-Massaro, Inc. v. R.J. Manteuffel Co., 806 S.W.2d 42 (Ky. App. 1991). In Downs v. Bel Brands USA, Inc., 2015 U.S. App. LEXIS 9344 (6th Cir. June 2, 2015), the plaintiff claimed promissory estoppel in connection with an alleged promise that he could take old pallets from his employer, re-sell them, and keep the funds from the sales. Id. at *2. The plaintiff was ultimately terminated for engaging in this very practice. The Sixth Circuit Court of Appeals held that the plaintiff’s promissory estoppel claim could not survive a motion to dismiss because “he does not claim that his supervisors made any promises regarding his job security.” Id. at *11. The Sixth Circuit Court of Appeals reached a similar result (applying Ohio law) in Snyder v. AG Trucking, 57 F.3d 484 (6th Cir. 1995). In that case, the plaintiff’s promissory estoppel claim was based upon a statement similar to the one at issue here. The plaintiff in Snyder claimed that he was told by the president and vice-president of the company that “there would be a place there [at the new terminal] for me. That I would be given every opportunity to go and grow with the company. I was told about the retirement plan and could expect to be there until retirement.” Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 4 of 11 PageID #: 32 5 Id. at 489. The Sixth Circuit Court of Appeals recognized, however, that the plaintiff’s claim of promissory estoppel was deficient as a matter of law because “[t]hese statements are general comments about career growth and company policy; they are not sufficiently specific to change plaintiff’s at-will status.” Id. The same result applies here. Here, all three Plaintiffs are clearly at-will employees as conceded by Plaintiffs’ assertion of an “implied-in-fact contract” in Count Two. And, nothing in the Plaintiffs’ Complaint suggests that GE ever made any promise to the Plaintiffs, let alone a promise of job security. Rather, the Plaintiffs allege that GE told them they would not have the opportunity to transfer and that GE later allowed them the opportunity to transfer. Conspicuously absent from these statements is anything resembling a promise. The failure to allege any sort of “promise” made by GE is fatal to their claim for promissory estoppel - without a promise made, there can be no promissory estoppel. As such, the Court should dismiss Count O e of the Plaintiffs’ Complaint with prejudice. B. Plaintiffs do not allege facts supporting detrimental reliance on any alleged promise. Even if the Plaintiffs had alleged the existence of a viable promise concerning their job security, they must also allege facts indicating that t ey relied on this alleged promise to their detriment in order to state a plausible claim for relief. The Complaint is barren of any such facts to indicate this is the case. Instead, the Plaintiffs merely conclude that they relied to their detriment on this alleged promises without providing any factual b sis to justify this conclusion. Nothing in the Complaint indicates what action or frbearance the Plaintiffs allegedly took in reliance on these purported promises. The Plaintiffs have not alleged, for example, that but for their reliance on GE’s statement (again, not a promise) that they would not have the opportunity to relocate, they are somehow in a worse position. Nor have they alleged that but for their reliance on Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 5 of 11 PageID #: 33 6 GE’s later statement that they would have the opportunity to relocate, they are placed in a worse position than if they had not relied on GE’s statement. The Western District of Kentucky considered a similar situation in Harris v. Burger King Corp., 993 F. Supp.2d 677 (W.D. Ky. 2014). The plaintiff in that case claimed that hermanager promised her that she would be returned to her job following a medical leave. Id. at 692. Nevertheless, the Court found that the plaintiff had not shown detrimental reliance on this promise as “[p]laintiff does not allege that, absent this promise, she would not have undergone surgery or would have postponed it.” Id. Because the plaintiff in that case did not allege any action she had taken or had refrained from taking to her detriment as a result of her employer’s promise, th court dismissed her claim of promissory estoppel. Id. Here, the Plaintiffs’ Complaint does not contain any facts to indicate whether or how they relied on GE’s alleged statements to their detim nt. Because there are no facts in the Complaint to indicate a facially plausible claim of promissory estoppel, the Court should dismiss this claim with prejudice. III. The Plaintiffs have not pleaded a plausible claim of breach of implied-in-fact contract (Count Two of the Complaint). Similarly, the Plaintiffs do not state a viable claim for breach of implied-in-fact contract because, simply put, there is no contract, no meeting of the minds, and no agreement between the Plaintiffs and GE. An implied-in-fact contract exists where the conduct of the parties evinces a meeting of the minds showing a tacit understanding of some sort of agreement. See Dorton v. Ashland Oil & Refining Co., 197 S.W.2d 279, 281 (Ky. 1946). “With an implied-in-fact contract, mutual assent is manifested by the parties’ conduct. The foundation of an implied contract is the recognition ‘[w]ords are not the only medium of expression. Conduct may often convey as clearly as words a promise or an assent to a proposed promise.’” JP White, LLC v. Poe Companies, LLC, 2011 Ky. App. Unpub. LEXIS 392, *8 (Ky. App. May 6,2011) (citing Israel’s Adm’r v. Rice, 174 Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 6 of 11 PageID #: 34 7 S.W.2d 517, 518-519 (Ky. 1943)). In Kentucky, the doctrine of “implied contract” under some circumstances requires one party to compensate another for services performed even if no express contract was ever formed between them. Cheshire v. Barbour, 481 S.W.2d 274, 278 (Ky. 1972). Even an implied contract “requires an actual agreement or meeting of minds although not expressed. It is implied or presumed from acts or circumstances which, according to the ordinary course of dealing and the common understanding of men, a mutual intent to contract is shown.” Id. (Emphasis added). The Plaintiffs have not alleged the existence of any writing or documentation outlining any alleged promise or assent to a proposed promise. Nor have they pleaded any facts demonstrating any conduct, “facts or circumstances” evidencing any agreement whatsoever. The Plaintiffs allege that it was “standard practice” for GE to allow employees to transfer to another location in the event of a plant closing; but they nowhere allege that they and GE mutually assented to such transfer opportunities. Nor do they allege that, when GE advised that they did not have an opportunity to transfer, they and GE enter d into any sort of agreement regarding a chance to relocate. Instead, the Plaintiffs allege only that GE has in the past allowed employees the opportunity to relocate in the event of a plant sale or closing. (Paragraph 49). The Plaintiffs also allege that GE allowed them this same opportunity. (Paragraph 41). The Court need not even reach the issue of whether the Plaintiffs have alleged facts sufficient to support a claim for breach of an implied-in-fact contract because the Complaint itself makes clear that the Plaintiffs have not alleged any facts to indicate any sort of breach of this implied-in-fact contract. Rather, the Plaintiffs have alleged that they too were given the opportunity to transfer, but were unsuccessful in doing so. These allegations do not give rise to a Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 7 of 11 PageID #: 35 8 facially plausible claim for a breach of an implied-in-fact contract and, as such, the Court should dismiss this claim with prejudice. IV. The Plaintiffs have not pleaded a facially plausible claim of fraudulent inducement/misrepresentation (Count Three of the Complaint). The Plaintiffs’ claim for fraudulent inducement/misrepresentation also fails as a matter of law because the Plaintiffs do not come close to adequat ly pleading such a claim. The crux of the Plaintiffs’ claim for fraud is contained in Paragraph 54 of the Complaint, in which the Plaintiffs allege that GE “represented” that “employees would have the opportunity to transfer in the event of a plant closure or buyout.” Not only is this allegation legally insufficient to state a claim for fraud, but it is directly contradicted by the preceding paragraphs of the Complaint in which the Plaintiffs aver that they did, in fact, have the opportunity to transfer in the event of a plant sale. Indeed, Paragraph 41 specifically states that the Plaintiffs were informed “that they did in fact have the opportunity to relocate[.]” By the very allegations of their own verified Complaint, the Plaintiffs refute their own theory of fraud or misrepresentation and the Court should dismiss this claim with prejudice. Even if the Plaintiffs did not contradict their own claim, they still do not plead a viable claim for relief because they do not meet the explicit pleading requirement for fraud. Federal Rule of Civil Procedure 9(b) imposes a heightened pl ading standard for any claim of fraud. A person alleging fraud “must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). To satisfy this heightened pleading requirement, a party is required to “1) specify the time, place, and content of the alleged misrepresentation; (2) identify the fraudulent scheme and the fraudulent intent of the defendant; and (3) describe the injury resulting from the fraud.” SFS Check, LLC v. First Bank of Delaware, 774 F.3d 351, 358 (6th Cir. 2014). (Emphasis added). Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 8 of 11 PageID #: 36 9 “[A] plaintiff alleging negligent misrepresentation under Kentucky law must adhere to the heightened pleading standard articulated by Federal Rule of Civil Procedure 9(b), which is designed to prevent fishing expeditions, to protect defendants’ reputations from allegations of fraud, and to narrow potentially wide-ranging discovery to relevant matters.” Martin v. Bayer Healthcare Pharmaceuticals, Inc., 2015 U.S. Dist. LEXIS 112064, *5-*6 (W.D. Ky. Aug. 25, 2015) (internal quotation marks omitted). The Plaintiffs’ bare-bones allegations in the Complaint here fail to satisfy this heightened standard. In Gaunce v. CL Medical, Inc., 2015 U.S. Dist. LEXIS 25661 (E.D. Ky. Mar. 2, 2015), the Court determined that a claim for fraudulent misrepresentation failed to satisfy Rule 9(b)’s heightened pleading requirement where it did not specify the time, place, and nature of the communications at issue. “The Complaint discusses CL Medical’s allegedly fraudulent actions and omissions only at a high level of generality, insufficient to sustain claims of fraud and fraudulent concealment under Rule 9(b)’s heightened pl ading standard.” Id. at *6. As such, the Court granted the defendant’s motion for dismissal of this claim. A similar result was reached in ZelTiq Aesthetics, Inc. v. Medshare, Inc., 2015 U.S. Dist. LEXIS 68908 (W.D. Ky. May 28, 2015), where the allegations of fraudulent inducement were merely generalities as the Plaintiffs’ allegations i the Complaint here. The counterclaimant (Medshare) in ZelTiq alleged that ZelTiq’s “representations that it would provide financing to Medshare, deliver a coolsculpt machine to Medshare’s facility and train Medshare’s staff on the use of the coolsculpt machine in time for Medshare to begin treating its patients were false when Zeltiq’s representatives made them.” Id. at *12. Medshare also alleged that it relied on these representations and suffered damages as a result of its reliance. Id. at *12-*13. Nevertheless, the Court determined that this was insufficient to satisfy Rule 9(b)’s heightened requirements: Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 9 of 11 PageID #: 37 10 These four paragraphs fall well short of the Rule 9(b) pleading requirements. While the counterclaim identifies the general nature of the statements that Medshare claims were fraudulent, it fails every other element. Who made the statements? Where did he or she make them? When? And why were these statements fraudulent? Id. at *13. Thus, the Court dismissed these claims. Here, the Plaintiffs have not articulated any facts to indicate the substance of any alleged fraudulent statement or misrepresentation, when the alleged statement was made, or what was false about the alleged statement. Instead, the Plaintiffs simply allege that GE “made a false representation [that] employees would have the opportunity to transfer” and in fact, gave them the opportunity to transfer. (Complaint, ¶ 54). Simply put, the Plaintiffs fail to plead any facts that could conceivably give rise to a claim for fraud. They allege that GE said it would do something and then did the very thing that it said it would do. This is not a misrepresentation and it is not fraudulent. Even so, the Plaintiffs do not plead with any of the required specificity on who, what, where, when and how the so-called “false representation” was made. These deficiencies are fatal to their fraudulent misrepresentation claim. Because the Plaintiffs fail to allege anything within the universe of fraud (much less fraudulent conduct that is actionable), the Court should dismiss with prejudice Count Three of the Complaint, along with Counts One a d Two. Respectfully submitted, /s/ Matthew Barszcz Kathryn A. Quesenberry Matthew Barszcz DINSMORE & SHOHL LLP 101 S. Fifth Street, Suite 2500 Louisville, Kentucky 40202 Telephone: (502) 581-8000 Facsimile: (502) 581-8111 E-Mail: Kathryn.Quesenberry@dinsmore.com E-Mail: Matthew.Barszcz@dinsmore.com Counsel for Defendant, General Electric Company Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 10 of 11 PageID #: 38 11 CERTIFICATE OF SERVICE I hereby certify that on June 2, 2017, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system, which will send a notice of electronic filing to the following: Samuel G. Hayward, Esq. Adams Hayward & Welsh 4036 Preston Highway Louisville, Kentucky 40213 Telephone: (502) 366-6456 E-Mail: sam@samhaywardlaw.com Counsel for Plaintiffs /s/ Matthew Barszcz Counsel for Defendant, General Electric Company Case 3:17-cv-00328-TBR Document 6-1 Filed 06/02/17 Page 11 of 11 PageID #: 39 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY LOUISVILLE DIVISION Filed Electronically KEVIN SADLER, ) JUDE EDELEN, AND ) MICHAEL KRIMM ) ) PLAINTIFFS ) ) v. ) CIVIL ACTION NO. 3:17CV-328-TBR ) GENERAL ELECTRIC ) COMPANY ) ) DEFENDANT ) ) ORDER Upon Motion of Defendant General Electric Company, to dismiss the Plaintiffs Complaint, and the Court being otherwise sufficiently advised, IT IS HEREBY ORDERED AND ADJUDGED that Defendant General Electric Company’s Motion is GRANTED. The Plaintiffs Complaint is dismissed in its entirety, with prejudice. This is a final and appealable order and there is no just cause for delay. Case 3:17-cv-00328-TBR Document 6-2 Filed 06/02/17 Page 1 of 1 PageID #: 40