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Billups v. Laboratory Corporation of America

United States District Court, District of Columbia

January 30, 2017

SCOTT CHRISTOPHER BILLUPS, Plaintiff,
v.
LABORATORY CORPORATION OF AMERICA, Defendant.

          MEMORANDUM OPINION [Dkt. #10]

          RICHARD J. LEON United States District Judge

         Plaintiff Scott Christopher Billups ("plaintiff or "Billups") brings this action against his former employer, defendant Laboratory Corporation of America Holdings ("defendant" or "LabCorp"), demanding a jury trial and seeking damages for breach of contract. Specifically, Billups alleges that LabCorp breached a binding obligation when it failed to pay him certain sales commissions he believes he was owed pursuant to the company's incentive compensation plan. Before the Court is LabCorp's Motion to Dismiss Plaintiffs Complaint ("Def.'s Mot.") [Dkt. #10]. Upon consideration of the pleadings, relevant law, and the entire record herein, the Motion is GRANTED.

         BACKGROUND

         LabCorp hired Billups as an entry-level sales executive in 2007, and in 2009, promoted him to the role of Senior Marketing Executive ("SME"). Compl! ¶¶ 4, 13 [Dkt. #1-1]. As a SME, Billups was entitled to receive incentive compensation for the sale of products and services to accounts within his sales territories. Id. ¶¶ 13-17.

         Billups' incentive compensation was governed by LabCorp's Senior Marketing Executive Traditional Incentive Compensation Plan ("Plan"). Compl. ¶¶ 16-17.[1] The Plan provides that SMEs may earn monthly commissions based on the "rolling six-month baseline sales total" in the SME's sales territory. Id. ¶ 17. Sales territories are "assigned based on a geographical (using zip codes) area, " Plan at 3, and "LabCorp reserves the right to 'alter, change, redefine, reduce, or expand the geographic area' of an SME, " Compl. ¶33 (quoting Plan at 5). LabCorp also "has the sole and exclusive discretion to determine whether an SME should be denied incentive compensation." Plan at 6. Billups' assigned sales territories included locations in Washington, D.C. Compl. ¶ 6.

         One account for which Billups received commissions was that of The George Washington ("GW") University Medical Faculty Associates.[2] Billups alleges that he "secured" this account for LabCorp in 2009, id. ¶ 7, and that in "early 2011, " he and his supervisor, Betsy Lewis, "worked closely with the GW Executive Leadership team to make LabCorp the primary laboratory for the entire GW system, " id. ¶ 18 (parenthetical omitted). These efforts resulted in the addition of "approximately twenty" GW-affiliated healthcare offices located in Maryland. Id. ¶ 19. According to the complaint, the addition of the Maryland offices "should have resulted in $350, 000 to $500, 000 in annual commissions" being paid to Billups under the Plan as "the sole SME on the GW sales account." Id. ¶¶ 20-21.

         Billups reports that he did not receive commissions on sales to GW-affiliated healthcare offices in Maryland. Rather, in July 2011, shortly after the Maryland offices were added to the GW account, Lewis informed Billups that she was going to "even things out" among the sales executives. Id. ¶¶ 26, 31. Going forward, Billups would continue to receive commissions On the GW account for sales to GW facilities in the District of Columbia, but two Maryland-based SMEs, Connie Penalosa and Tracy Fuhr, would receive the commissions for sales to GW facilities in Maryland. Id. ¶¶ 31-32.

         Billups filed this action in the Superior Court of the District of Columbia on April 4, 2016, and served the complaint on LabCorp on July 5, 2016. The one-count complaint alleges that LabCorp breached its contract with Billups, i.e., the Plan, when it "transferred to other LabCorp employees" "sales commissions from revenue obtained from Maryland-based sales from the GW account." Id. ¶¶ 49-53. The complaint demands a jury trial, and seeks award of compensatory damages, interest, court costs, and fees. Id., Prayer for Relief, ¶¶ 1-4. LabCorp removed the action to this Court and filed a motion to dismiss, arguing that Billups' claim is barred by the District's three year statute of limitations, and that its decision to transfer the commissions to its Maryland-based SMEs did not breach the Plan. Billups filed an opposition to the motion to dismiss, Pl.'s Resp. to Def.'s Mot. To Dismiss and Supp.'g Statement of P. & A. ("Pl.'s Resp.") [Dkt. #11], and LabCorp filed a reply, Def. LabCorp's Reply in Supp. of its Mot. to Dismiss Pl.'s Compl. ("Def.'s Reply") [Dkt. #13].

         STANDARD OF REVIEW

         LabCorp moves to dismiss the complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). At the motion to dismiss stage, the role of the district court is to "assess the legal feasibility of the complaint." Jones v. Kirchner, 835 F.3d 74, 80 (D.C. Cir. 2016) (quoting Howard v. Office of Chief Admin. Officer of U.S. House of Representatives, 720 F.3d 939, 950 (D.C. Cir. 2013)). The complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). This claim must be "plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). That is, it must include factual allegations that, when taken as true, "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). The complaint crosses this threshold "when it contains factual allegations that, if proved, would 'allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1129 (D.C. Cir. 2015) (quoting Iqbal, 556 U.S. at 678) (alteration omitted).

         LabCorp also invokes the statute of limitations as an affirmative defense. Such a defense is properly raised on a pre-answer Rule 12(b)(6) motion "when the facts that give rise to the defense are clear from the face of the complaint." Smith-Haynie v. District of Columbia, 155 F.3d 575, 578 (D.C. Cir. 1998). "[T]he court should be cautious in granting a motion to dismiss on such grounds, " however, "because statute of limitations defenses often are based on contested facts." Rudder v. Williams, 47 F.Supp.3d 47, 50 (D.D.C. 2014). "[Dismissal is appropriate only if the complaint on its face is conclusively time-barred." Id. (quoting Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996)).

         ANALYSIS

          I. Statute of Limitations

          LabCorp argues that Billups' breach of contract claim is barred by the statute of limitations. Although Billups disputes that conclusion, both sides agree that District of Columbia law provides the relevant limitation period. Def.'s Mot. 5; Pl.'s Resp. 4.[3] The District's statute provides that actions on a contract "may not be brought" more than three years "from the time the right to maintain the action accrues." D.C. Code § 12-301(7). It is settled that "[a] cause of action for breach of contract accrues, and the statute of limitations begins to run, at the time of the breach." Eastbanc, Inc. v. Georgetown Park Assocs. II, L.P.,940 A.2d 996, 1004 (D.C. 2008); acco ...


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