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Carlotta Oliver, et al v. Black Knight Asset Management

September 26, 2011


The opinion of the court was delivered by: Emmet G. Sullivan United States District Judge


Plaintiffs Carlotta Oliver and Joe Seymour*fn1 brought an eight-count Amended Complaint alleging breaches of contract, unjust enrichment, retaliation, breach of settlement agreement, and violations of federal securities and employment benefit statutes against their former employer, Black Knight Asset Management, LLC ("Black Knight" or "the Company"), and its controlling officers, Daryl Dennis and Stanley Snow.*fn2 In the Amended Complaint, plaintiff Oliver alleges that defendants failed to compensate her in accordance with the terms of her employment agreement, terminated her in retaliation for filing a wage and hour claim, and deprived her of benefits under the Company's welfare and benefit plans.

Pending before the Court is defendants' motion to dismiss under Rule 12(b)(1) for lack of jurisdiction or, in the alternative, under Rule 12(b)(6) for failure to state a claim upon which relief can be granted on any of the federal claims. In addition, pending before the Court is plaintiffs' motion for partial summary judgment. Upon consideration of the motions, the responses and the replies thereto, the applicable law, and for the reasons set forth below, the motion to dismiss for lack of jurisdiction is DENIED,*fn3 the motion to dismiss for failure to state a claim is GRANTED IN PART AND DENIED IN PART, and the motion for partial summary judgment is DENIED.


Plaintiff Oliver was hired by Black Knight as Managing Director, Business Development, in March 2007. Am. Compl. ¶ 2. Under the terms of Ms. Oliver's employment agreement, Black Knight was required to pay her salary and related entitlements and benefits. Id. ¶ 11. According to plaintiff, in June 2008, without justification and in violation of her employment agreement, Black Knight unilaterally and unlawfully attempted to modify her pay structure. Id. Black Knight ceased paying Ms. Oliver altogether in January 2010. Id. ¶ 12. Shortly thereafter, she filed a complaint with the District of Columbia Wage and Hour Office. Id. ¶ 13. In response, Black Knight's CEO, Daryl Dennis, represented to the Wage and Hour Office that Black Knight would pay all compensation owed to Ms. Oliver--approximately $24,000--the following day. Id. Instead, and as plaintiff alleges, in retaliation for her wage and hour claim, Black Knight terminated Ms. Oliver on February 26, 2010, a few days short of the date on which, under Black Knight's equity participation plan, her five percent equity interest in the Company was to vest. Id. ¶ 14. On May 26, 2010, upon learning that Ms. Oliver intended to file the instant action, Black Knight paid Ms. Oliver $18,000. Id. ¶ 15. To date, defendant has not paid Ms. Oliver the remainder of what it had promised to pay her, nor has it paid her the equity interest to which she alleges she is entitled under the Company's equity participation plan. Id. Plaintiff also alleges that Black Knight was obligated to pay her six months' severance plus health benefits if she was terminated without cause; it has failed to honor this obligation. Id.

Plaintiff Seymour was hired by Black Knight in April 2008 to direct the Company's 401(k) business development division.

Id. ¶ 4. Under the terms of his employment agreement with Black Knight, he was entitled to be paid a base salary plus a percentage of the assets he developed for Black Knight, as well as his expenses. Id. ¶ 54. Although Mr. Seymour developed business and incurred expenses in compliance with his agreement, Black Knight has failed to pay him his base salary or his percentage of assets, or to reimburse his expenses, since October 2009. Id. ¶ 55. On May 26, 2010, upon learning that Mr. Seymour intended to file suit for bad faith refusal to compensate, Black Knight paid Mr. Seymour $7,700, a portion of what he is owed. Id. Black Knight has failed to pay Mr. Seymour the remainder of what he was owed under his employment agreement.

Plaintiffs filed their initial complaint on August 25, 2010 alleging breaches of contract, retaliation, and unjust enrichment. On September 16, 2010, defendants filed a motion to dismiss the case under Rule 12(b)(1) due to a lack of complete diversity of citizenship, as several members of the LLC, including defendant Stanley Snow, are, like plaintiff Oliver, citizens of Maryland. Defs.' Mem. at 1. Plaintiffs then filed an Amended Complaint on September 30, 2010, adding two claims under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq., and one claim under the Investment Advisers Act, 15 U.S.C. § 80b-1 et seq. In response, defendants filed another motion to dismiss, in which they argue that plaintiffs have failed to state claims for any violations of ERISA or the Investment Advisers Act, such that the Court does not have federal question jurisdiction over this case. Defendants also argue that plaintiffs have failed to make any allegations as to defendants Daryl Dennis and Stanley Snow in their individual capacities, and that the case should be dismissed as to them. On April 19, 2011, plaintiffs filed a motion for partial summary judgment concerning the issue of whether Ms. Oliver has retained her five unit equity interest in the Company. The motion to dismiss and the motion for partial summary judgment are now ripe for determination by the Court.


A.Rule 12(b)(1)

On a motion to dismiss for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, the plaintiff bears the burden of establishing that the court has jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). The subject-matter jurisdiction of the federal district courts is limited and is set forth generally at 28 U.S.C. §§ 1331 and 1332. Under those statutes, federal jurisdiction is available only when a "federal question" is presented, or the parties are of diverse citizenship and the amount in controversy exceeds $75,000. See Arbaugh v. Y & H Corp., 546 U.S. 500, 513 (2006). A party seeking relief in the district court must plead facts that bring the suit within the court's jurisdiction. See Fed. R. Civ. P. 8(a). Failure to plead such facts warrants dismissal of the action. See Fed. R. Civ. P. 12(h)(3); see also Bell v. Hood, 327 U.S. 678, 682-83 (1946) (stating that a suit may be dismissed for lack of jurisdiction where "the alleged claim under the Constitution or federal statutes clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction"); Tooley v. Napolitano, 586 F.3d 1006, 1009 (D.C. Cir. 2009) ("A complaint may be dismissed on jurisdictional grounds when it 'is patently insubstantial, presenting no federal question suitable for decision.'" (quoting Best v. Kelly, 39 F.3d 328, 330 (D.C. Cir. 1994))). If the court concludes that it lacks subject-matter jurisdiction, the court must dismiss the complaint in its entirety. See Arbaugh, 546 U.S. at 514.

In deciding a Rule 12(b)(1) motion, moreover, the court must give the plaintiff's factual allegations closer scrutiny than would be required for a Rule 12(b)(6) motion because subject-matter jurisdiction focuses on the court's power to hear the claim. See Macharia v. United States, 334 F.3d 61, 64, 69 (D.C. Cir. 2003). Thus, to determine whether it has jurisdiction over a claim, the court may consider materials outside the pleadings where necessary to resolve disputed jurisdictional facts. Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992); Alliance for Democracy v. Fed. Election Comm'n, 362 F. Supp. 2d 138, 142 (D.D.C. 2005).

B.Rule 12(b)(6)

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). A complaint must contain "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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks and citations omitted). "'[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint[,]'" Atherton v. D.C. Office of the Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009) (quoting Erickson v. Pardus, 551 U.S. 89, 94 (2007)), and grant the plaintiff "the benefit of all inferences that can be derived from the facts alleged." Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). A court need not, however, "accept inferences drawn by plaintiffs if such inferences are unsupported by the facts set out in the complaint. Nor must the court accept legal conclusions cast in the form of factual allegations." Id. In addition, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 1950.

C.Rule 56

Summary judgment should be granted only if the moving party has shown that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). "A fact is material if it 'might affect the outcome of the suit under the governing law,' and a dispute about a material fact is genuine 'if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Steele v. Schafer, 535 F.3d 689, 692 (D.C. Cir. 2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The moving party bears the initial burden of demonstrating the absence of genuine issues of material fact. See Celotex, 477 U.S. at 322-23. In determining whether a genuine issue of material facts exists, the Court must view all facts in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Keyes v. Dist. of Columbia, 372 F.3d 434, 436 (D.C. Cir. 2004). The non-moving party's opposition, however, must consist of more than mere unsupported allegations or denials; rather, it must be supported by affidavits or other competent evidence setting forth specific facts showing ...

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