Warner v. Nutrien, Ltd.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Nina Y. Wang United States Magistrate Judge.

         This matter comes before the court for recommendation on Defendant Nutrien, Ltd.’s Motion to Dismiss Under Fed.R.Civ.P. 12(b)(6) (“Motion to Dismiss” or “Motion”), filed July 13, 2018. [#15]. The undersigned considers the Motion pursuant to 28 U.S.C. § 636(b), Rule 72 of the Federal Rules of Civil Procedure, and the memorandum dated July 16, 2018 [#17]. This court concludes that oral argument will not materially assist in the resolution of this matter. Accordingly, having reviewed the Motion and associated briefing, the applicable case law, and otherwise being fully advised, I respectfully RECOMMEND that the Motion to Dismiss be GRANTED IN PART and DENIED IN PART.

         BACKGROUND

         This court draws the following facts from the Complaint and presumes they are true for purposes of the instant Motion. Plaintiff Thomas Warner (“Plaintiff” or “Mr. Warner”), a citizen of Texas, alleges that in 2017 he was the Vice President of International Retail Operations for Agrium, Inc.-a company that later merged with PotashCorp to form Nutrien, Ltd. [Id. at ¶¶ 4-5]. Defendant Nutrien, Ltd. (“Defendant” or “Nutrien”)^[1] is a Canadian corporation with its principal place of business located in Saskatoon, Saskatchewan and its United States headquarters in Loveland, Colorado. See [id. at ¶ 6].

         Sometime in late 2017, Mr. Warner “expressed his discontent with the current direction” of Nutrien and sought “a long-term role at [Nutrien] that would be meaningful and satisfactory to him.” [Id. at ¶ 13]. In or about January 2018, Plaintiff learned that Nutrien was investigating certain allegations lodged against Plaintiff back in September 2017. See [id. at ¶¶ 14-15]. These included a false allegation that Plaintiff was having an affair with his assistant and that Plaintiff “used an unauthorized travel agent to book company travel to South America”-an allegation previously raised to and addressed by Mr. Warner. See [id.]. Despite assurances that the investigation was “nothing to worry about and would be resolved soon, ” Plaintiff met with Nutrien’s outside counsel who largely focused the meeting on various expense reports prepared by Plaintiff and the “business purpose” for each. [Id. at ¶¶ 17-18]. Nutrien terminated Plaintiff “for cause” based on Plaintiff’s business expenses and unauthorized use of a travel agent on March 2, 2018. See [id. at ¶ 19].

         Through his employment Mr. Warner participated in Agrium, Inc.’s Performance Recognition Plan (“PRP”) and Performance Share Unit (“PSU”) and Restricted Share Unit (“RSU”) Plan (“PSU/RSU Plan”). See [#2 at ¶ 10]. Mr. Warner alleges that the PRP “was essentially an annual bonus”, while the PSU/RSU Plan was a “type of bonus that effectively award[ed] stocks to participants.” [Id. at ¶¶ 11-12]. Plaintiff alleges that at the time of his termination Nutrien informed him “that he would receive his vested PSUs and RSUs, ” totaling roughly $500, 000, but that he would not receive any severance, 2017 PRP bonus, unvested PSUs/RSUs, or vested SARs.^[2] See [id. at ¶¶ 20-22]. Nutrien did, however, offer Mr. Warner $1 million (a total exceeding his SARs and 2017 PRP bonus) in exchange for Mr. Warner signing a non-compete agreement. See [id. at ¶ 20]. In response to Mr. Warner’s questioning of the scope of the non-compete agreement, Nutrien informed Plaintiff that it would withhold Plaintiff’s vested PSUs and RSUs, though it increased its offer to $1.5 million (a total exceeding the withheld SARs, 2017 PRP bonus, and PSUs and RSUs) if Plaintiff would sign the non-compete agreement. See [id. at ¶¶ 22-23].

         Believing he is entitled to his 2017 PRP bonus and vested PSUs and RSUs despite the “for cause” termination (and perhaps additional monies if his termination was without cause) and believing that Nutrien’s withholding of the same violates the terms of the PRP and PSU/RSU Plan, Plaintiff filed suit against Nutrien in the Larimer County District Court. See generally [#1; #2]. Mr. Warner asserts claims for breach of contract (or “Claim 1”) and civil theft (or “Claim 2”). See generally [#2]. Defendant removed this matter to this District, invoking this court’s diversity jurisdiction pursuant to 28 U.S.C. § 1332. See [#1]; see also [#24 (denying Plaintiff’s Motion for Remand)].

         Defendant now moves to dismiss Mr. Warner’s claims. [#15]. Plaintiff has since responded, following a stay of the response deadline pending Judge Arguello’s ruling on Plaintiff’s Motion for Remand, and Defendant has replied. Because the Motion is ripe for Recommendation, I consider the Parties’ arguments below.

         LEGAL STANDARD

         Under Rule 12(b)(6) a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In deciding a motion under Rule 12(b)(6), the court must “accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). A plaintiff may not rely on mere labels or conclusions, “and a formulistic formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009); see also Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (explaining that plausibility refers “to the scope of the allegations in a complaint, ” and that the allegations must be sufficient to nudge a plaintiff’s claim(s) “across the line from conceivable to plausible.”). The court may also consider materials beyond the complaint if the documents are central to the plaintiff’s claims, referred to in the complaint, and if the parties do not dispute their authenticity. See Cty. of Santa Fe, N.M. v. Public Serv. Co. of N.M., 311 F.3d 1031, 1035 (10th Cir. 2002). The court must ultimately “determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.” Forest Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).

         ANALYSIS

         I. Conflicts of Law

         Before addressing the Parties’ substantive arguments this court must first ascertain the law that governs Plaintiff’s claims. Ordinarily, “[i]n a diversity action, [this court] appl[ies] the substantive law of the forum state, including its choice of law rules.” Pepsi-Cola Bottling Co. of Pittsburg v. PepsiCo, Inc., 431 F.3d 1241, 1255 (10th Cir. 2005). Colorado is the forum state in this action. “In contract and tort, ‘Colorado follows the ‘most significant relationship’ approach of the Restatement (Second) of Conflict of Laws.’” Gorsuch, Ltd., B.C. v. Wells Fargo Nat. Bank Ass’n, 771 F.3d 1230, 1236 n.7 (10th Cir. 2014) (quoting ITT Specialty Risk Servs. v. Avis Rent A Car Sys., Inc., 985 P.2d 43, 47 (Colo.App. 1998)).

         A. Choice-of-Law Provisions

         Colorado courts typically apply the law chosen by the Parties in the choice-of-law provisions to govern their contractual rights. See, e.g., Kipling v. State Farm Mut. Auto. Ins. Co., 159 F.Supp. 3d 1254, 1265 (D. Colo. 2016); Wright v. Martek Power, Inc., 314 F.Supp.2d 1065, 1067-68 (D. Colo. 2004). The PRP’s and the PSU/RSU Plan’s (collectively, “the Plans”) choice-of-law provisions state, in pertinent part, “This Plan shall be governed and interpreted in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.” [#2 at 13, 30]. Both Parties appear to agree that Canadian law governs Mr. Warner’s breach of contract claim, and this court finds no reason to deviate from the Parties’ expressed intent in the choice-of-law provisions. See King v. PA Consulting Grp., Inc., 485 F.3d 577, 585 (10th Cir. 2007) (discussing exceptions contained in § 187(2) of the Restatement (Second) of Conflict of Laws to applying the contract’s choice-of-law provisions).

         The Parties do, however, dispute whether the choice-of-law provisions govern Mr. Warner’s civil theft claim. Defendant contends that the civil theft claim arises from the same facts as the breach of contract claim and, accordingly, Canadian law is governs Claim 2. [#15 at 6-7]. Nutrien further argues that assuming the choice-of-law provisions do not apply, Plaintiff also fails to demonstrate that Colorado has the most significant relationship to the occurrence and parties to permit a claim of civil theft under Colorado law. See [#15 at 6-7; #22 at 7-8]. Plaintiff counters that the choice-of-law provisions do not contemplate a claim for civil theft, and that Colorado law applies because the theft and injury occurred in Colorado. See [#27 at 12-13]. To resolve this preliminary issue, this court must determine whether the choice-of-law provisions are broad enough to subsume the tort claim of civil theft.

The Plans provide,

“The Plan shall be governed and interpreted in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein. . . . Any actions, proceedings or claims in any way pertaining to the Plan shall be commenced in the courts of the State of Colorado in the case of a Designated employee who was last employed in the United States by the Corporation or an Affiliate.”

[#2 at 13, 30]. By the plain terms of the Plans, Canadian law governs the interpretation of the agreement and its choice-of-law provisions. [Id.]. Under Canadian law, “[t]he overriding concern is to determine ‘the intent of the parties and the scope of their understanding’”; thus, “a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract.” Creston MolyCorp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633 (S.C.C.) at ¶ 47; see also Thuenken v. Schweer, [1987] 83 N.B.R. 2d 244 (N.B. C.A.) at ¶ 6 (“The contents of any express term or terms are basic to a true understanding of the nature, scope and extent of the contractual rights and duties of the parties”). “The primary interpretive principle is that when the language of the policy is unambiguous, the court should give effect to clear language, reading ...