Johnson v. Student Funding Group, LLC ( 2015 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CURTIS JOHNSON, )
Plaintiff, )
v. )
)
STUDENT FUNDING GROUP, ) C.A. No. N14C-08-098 ALR
LLC, a Delaware Limited Liability )
Company, & SERGIO SOTOLONGO, )
Individually, )
Defendants. )
Upon Defendants’ Motion to Dismiss — DENIED
Submitted: December 1, 2014
Decided: January 26, 2015
Curtis Johnson, Plaintiff, filed this action in August 2014 alleging that
Sergio Sotolongo and Student Funding Group, Defendants, breached the Deferred
Compensation Agreement (“DCA”) and alleging violations of the Delaware Wage
Payment & Collection Act (“WPCA”). Defendants have moved to dismiss
Plaintiff’s complaint for failure to state a claim upon which relief can be granted,
for lack of subject matter jurisdiction, and on statute of limitations grounds.
Plaintiff opposes the motion to dismiss.
Upon consideration of Defendants’ motion to dismiss and Plaintiff’s
opposition thereto, the Court finds as follows:
1. “A motion to dismiss must be decided solely upon the allegations in the
complaint.”1 The Court shall accept all “well-pleaded” allegations as true
and make all reasonable inferences in favor of the non-moving party.2
Factual allegations, even if vague, are “well-pleaded” if they provide notice
of the claim to the other party. 3 The Court should deny the motion if the
claimant “may recover under any reasonably conceivable set of
circumstances susceptible of proof.”4
2. Generally, the Court will not consider matters outside of the pleadings when
considering a motion to dismiss.5 However, if a party presents extraneous
documents in support of its motion to dismiss, it is within the Court’s
discretion to include or exclude the extraneous documents from its
consideration.6 If the Court excludes the extraneous documents from its
consideration, the motion to dismiss remains preserved. 7 On the other hand,
1
Am. Bottling Co. v. Crescent/Mach I Partners, L.P., 2009 WL 3290729, at *2 (Del. Super.
Sept. 30, 2009).
2
Spence v. Funk, 396 A.2d 967, 968 (Del. 1978); Ramunno v. Cawley, 705 A.2d 1029, 1034
(Del. 1998).
3
Spence, 396 A.2d at 968.
4
Id.
5
Super. Ct. Civ. R. 12(b); In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d 59, 68 (Del.
1995).
6
Doe 30’s Mother v. Bradley, 58 A.3d 429, 444 (Del. Super. 2012) (explaining that the trial
court has “full discretion to accept and consider extraneous submissions when adjudicating a
motion to dismiss under 12(b)(6).”). See also Vanderbilt Income & Growth Assoc., L.L.C. v.
Arvida/JMB Managers, Inc., 691 A.2d 609, 612-13 (Del. 1996).
7
Super. Ct. Civ. R. 12(b)(6) (“If on a [12(b)(6)] motion . . . matters outside the pleadings are
presented to and not excluded by the Court, the motion shall be treated as one for summary
judgment.”) (emphasis added).
2
if the Court considers the extraneous documents, the Court shall treat the
motion to dismiss as a motion for summary judgment, unless an exception
applies. 8
3. There are two instances where the Court’s consideration of extraneous
documents will not require conversion of the motion to dismiss to a motion
for summary judgment. “The first exception is when the document is
integral to the plaintiff’s claim and incorporated into the complaint . . . [t]he
second exception is when the document is not being relied upon to prove the
truth of its contents.”9
4. In presenting the motion to dismiss, Defendants have relied upon matters
outside the pleadings, including a copy of the Executive Employment
Agreement (“EEA”) and an affidavit by Defendant Sergio Sotolongo.
Defendants argue that the Court should review the EEA upon consideration
of the motion to dismiss because the EEA is “incorporated by reference” in
the DCA and is therefore “integral to Plaintiff’s claims and Complaint.” 10 In
opposition, Plaintiff takes the position that the documents appended to
8
In re Santa Fe Pac. Corp, 669 A.2d at 69.
9
Vanderbilt Income & Growth Assoc., L.L.C., 691 A.2d at 613 (citing In re Santa Fe Pac. Corp.
S’holder Litig., 669 A.2d 59, 70 (Del. 1995)).
10
Defs.’ Reply at 4.
3
Defendants’ motion are matters outside the pleadings and that Court should
not consider any reference to the documents by Defendants. 11
5. Here, consideration of the extraneous documents requires conversion of the
motion to dismiss to a motion for summary judgment because neither
exception applies. While Plaintiff’s complaint does incorporate the EEA by
reference, the Court finds that the EEA is not integral to Plaintiff’s claim
because Plaintiff’s claim alleges breach of the DCA, the contract succeeding
the terminated EEA. Likewise, Defendants submitted an affidavit of
Defendant Sergio Sotolongo, seeking to verify the contents and the truth of
the EEA.12
6. Accordingly, the Court shall exclude the extraneous documents from its
consideration of Defendants’ motion to dismiss. If Defendants want the
Court to consider the extraneous documents, Defendants may file a motion
for summary judgment.
7. Plaintiff’s complaint is “well-pleaded” and states a claim upon which relief
may be granted. As a result, dismissal for failure to state a claim is
inappropriate.
11
Pl.’s Answer at 3.
12
In re Santa Fe Pac. Corp., 669 A.2d at 70 (permitting consideration of outside documents
when “the documents are the very documents that are alleged to contain the various
misrepresentations or omissions and are relevant not to prove the truth of their contents but only
to determine what the documents stated.”) (internal quotation marks omitted).
4
8. Next, dismissal for lack of jurisdiction is inappropriate because the DCA
includes a choice of law provision and provides Delaware as the exclusive
forum to resolve disputes arising out of the DCA. Generally, Delaware
courts will honor such choice of law provisions “so long as the jurisdiction
selected bears some material relationship to the transaction.” 13 A material
relationship exists here because Defendant Student Funding Group is a
Delaware limited liability company.
9. Finally, it is premature for the Court to dismiss Plaintiff’s claim as time-
barred because, without discovery, it is unclear when Plaintiff’s claim
accrued and/or if the alleged violation by Defendants is ongoing and may
trigger new causes of action. Under these circumstances, Defendants are not
entitled to dismissal as a matter of law for lack of jurisdiction or on the basis
of statute of limitations.
NOW, THEREFORE, this 26th day of January, 2015, Defendants’ Motion
to Dismiss is hereby DENIED.
IT IS SO ORDERED.
Andrea L. Rocanelli
__________________________________
The Honorable Andrea L. Rocanelli
13
J.S. Alberici Constr. Co. v. Mid-West Conveyor Co., 750 A.2d 518, 520 (Del. 2000).
5