United States District Court, D. Colorado
WILLIAM POWERS, MAP MANAGEMENT LLC, and BLACK WIDOW LLC, Plaintiffs,
EMCON ASSOCIATES, INC., MICHAEL COCUZZA, and MICHAEL MICHOWSKI, Defendants.
Kathleen M Tafoya United States Magistrate Judge
This matter is before the court on Defendants’ “Motion to Dismiss.” (Doc. No. 28 [“Mot.”], filed Apr. 24, 2015.) Plaintiffs have filed a response (Doc. No. 36 [“Resp.”], filed May 22, 2015), to which Defendants replied. (Doc. No. 46 [“Reply”], filed June 5, 2015).
STATEMENT OF THE CASE
Plaintiff William Powers entered into an Employment Agreement (“EA”) with former Defendant FMNow, LLC (“FMNow”) in October 2012. (Doc. No. 1 (“Am. Comp.”) at 4.) Plaintiff Powers was employed as “Director and Business Analyst, Industrial Sector, a management position, in addition to facilitating the creation of the industrial market segment, representing the company in engaged contracts, and supporting the selling of its services nationwide.” (Id.) The parties executed the EA in Colorado and it was signed by Plaintiff Powers and then-FMNow President, Patricia Moscarelli. (Am. Comp. at 2; Doc. No. 1-1 at 9-10 [“EA”].) With regard to compensation, the EA provided FMNow would pay MAP Management LLC (Plaintiff Powers’ company) a monthly stipend of $8.000.00 per month the first full week Monday of each month, beginning “on or before February 4, 2013.” (Am. Comp. at 4; EA at 1-2, 11.) The EA further provided Plaintiff Powers would receive (1) variable compensation on a quarterly schedule based upon a percentage of quarterly revenue, (2) a quarterly bonus based upon FMNow’s achievement of a mark-up percentage above ten percent, (3) inclusion in FMNow’s medical and dental insurance benefits, if any, after an initial six month period and (4) participation in an Employee Stock Option Program to be established during 2013. (Am. Comp. at 4-5; EA at 2, 11.) The EA also established it could be terminated by either party without cause if they provide 60 days’ written notice and could be terminated with cause effective immediately upon delivery of notice. (Am. Comp. at 5; EA at 6.) Finally, the EA provided if FMNow terminated the EA without cause, it would continue to compensate Plaintiff Powers “for the duration of 12 months earned compensation on all accounts sold at the date of termination.” (Am. Comp. at 5-6; EA at 6.)
Plaintiff Powers began working part time for FMNow in September 2012 and full time on or about the effective date of the EA, October 15, 2012. (Am. Comp. at 6.) However, contrary to the EA, FMNow did not begin making the monthly stipend payments in February 2013. (Id.) Instead, FMNow made a partial payment in May 2013 and thereafter made only sporadic and partial payments. (Id.) By July 2013, FMNow had paid only $19, 000 of the monthly stipends owed to Plaintiff Powers under the EA. (Id.) Beginning August 2013, Plaintiff Powers was placed on the payroll of Defendant Emcon and Emcon paid his monthly stipend from August 2013 until his employment was terminated in February 2014. (Id.) According to Defendants, when Plaintiff Powers was placed on Emcon’s payroll, he became an employee of Emcon. (Mot. at 2.) In spite of repeated requests, at no time did Plaintiff Powers receive the variable compensation that was due under the terms of the EA, nor was he provided with medical insurance after the initial six-month period, even though Emcon had an employee health insurance plan in place. (Am. Comp. at 10-11.) He was also never provided employee stock options. (Am. Comp. at 10.)
On February 5, 2014, Plaintiff Powers sent an email to Defendant Cocuzza, Emcon’s CEO, “requesting a loan to cover his mortgage payment, in light of FMNow’s failure to reimburse his expenses or to pay his outstanding compensation under the [EA].” (Am. Comp. at 11.) On that same date, Plaintiff Powers requested payment of outstanding compensation and requested a compensation review pursuant to the EA. (Id.) FMNow’s Chief Financial Officer, Ward Anderson, informed Plaintiff Powers that he was not aware of the EA and FMNow’s president, Mr. Mattei, informed Plaintiff Powers that FMNow did not have the money to pay him. (Id.) Upon subsequently learning Plaintiff Powers had requested a loan from Emcon’s CEO, Mr. Mattei terminated his employment, effective February 28, 2014. (Am. Comp. at 11-12.) On February 21, 2014, Emcon’s Director of Human Resources sent Plaintiff Powers a termination letter, stating in the cover email: “In accordance with your conversations with Mr. Mattei, attached is an employment termination letter.” (Am. Comp. at 12.)
By this action, Plaintiffs have asserted claims against Emcon only for breach of contract, violation of the Colorado Wage Act (“CWA”), retaliation under the CWA and retaliation under the Fair Labor Standards Act (“FLSA”). (Claims I, II, III and V, respectively.) Additionally, Plaintiffs have asserted claims against Emcon, Emcon’s Chief Administrative Officer, Defendant Michowski, and Emcon’s Chief Executive Officer, Defendant Cocuzza, for unjust enrichment and a violation of the FLSA for failure to pay wages. (Claims IV, VI, respectively.) Defendants have moved to dismiss Plaintiffs’ claims in their entirety.
1. Lack of Personal Jurisdiction
Federal Rule of Civil Procedure 12(b)(2) provides that a defendant may move to dismiss a complaint for a lack of jurisdiction over the person. Fed.R.Civ.P. 12(b)(2). Plaintiffs bear the burden of establishing personal jurisdiction over Defendants. OMI Holdings, Inc. v. Royal Ins. Co., 149 F.3d 1086, 1091 (10th Cir. 1998). In the preliminary stages of litigation, Plaintiffs’ burden is light. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995). Where, as here, there has been no evidentiary hearing, and the motion to dismiss for lack of personal jurisdiction is decided on the basis of affidavits and other materials, Plaintiffs need only make a prima facie showing that jurisdiction exists. Id.
Plaintiffs have the duty to support jurisdictional allegations in a complaint by competent proof of the supporting facts if the jurisdictional allegations are challenged by an appropriate pleading. Pytlik v. Prof’l Res., Ltd., 887 F.2d 1371, 1376 (10th Cir. 1989). The allegations in Plaintiffs’ complaint “must be taken as true to the extent they are uncontroverted by [Defendants’] affidavits.” Wenz, 55 F.3d at 1505 (quoting Doe v. Nat’l Med. Servs., 974 F.2d 143, 145 (10th Cir. 1992)). If the parties present conflicting affidavits, all factual disputes must be resolved in Plaintiffs’ favor, and “plaintiff[s’] prima facie showing is sufficient notwithstanding the contrary presentation by the moving party.” Id. (citation omitted). Only well-pleaded facts, as opposed to mere conclusory allegations, must be accepted as true. Id.
To determine whether a federal court has personal jurisdiction over a nonresident defendant, the court looks to the law of the forum state. Taylor v. Phelan, 912 F.2d 429, 431 (10th Cir. 1990). In Colorado, the assertion of personal jurisdiction must both: (1) satisfy the requirements of the long-arm statute; and (2) comport with due process. Id.; Doering v. Copper Mountain, Inc., 259 F.3d 1202, 1209 (10th Cir. 2001); Classic Auto Sales, Inc. v. Schocket, 832 P.2d 233, 235 (Colo. 1992). Colorado’s long-arm statute subjects a defendant to personal jurisdiction for engaging in - either in person or by an agent - the “commission of a tortious act within this state, ” or the “transaction of any business within this state.” Colo. Rev. Stat. §§ 13-1-124(1)(a)-(b) (2007). To comport with due process, a defendant must have minimum contacts with the forum state such that maintenance of the lawsuit would not offend “traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Colorado’s long-arm statute is a codification of the “minimum contacts” principle required by due process. See Lichina v. Futura, Inc., 260 F.Supp. 252, 255 (D. Colo. 1966). Accordingly, under Colorado law, a court may assert jurisdiction to the fullest extent permitted by the Due Process Clause of the Fourteenth Amendment. See OMI Holdings, Inc., 149 F.3d at 1090; Scheur v. Dist. Ct., 684 P.2d 249 (Colo. 1984).
2. Failure to State a Claim Upon Which Relief Can Be Granted
Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff’s complaint alone is legally sufficient to state a claim for which relief may be ...