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Lafranchise v. Wal-Mart Stores, Inc.

United States District Court, D. Maryland

May 12, 2015



ELLEN L. HOLLANDER, District Judge.

This case was initiated in the Circuit Court for Anne Arundel County with the filing of a complaint by plaintiff, John Lafranchise, against Wal-Mart Stores, Inc. ("Wal-Mart"), defendant. ECF 2. Defendant removed the case to federal court (ECF 1), alleging diversity jurisdiction under 28 U.S.C. § 1332(a)(1).

Plaintiff is a former employee of Sam's East, Inc. ("Sam's"), a wholly owned subsidiary of Wal-Mart Stores, Inc.[1] The suit is rooted in plaintiff's claim that defendant wrongfully refused to deliver to plaintiff shares of Wal-Mart stock under a Stock Incentive Plan in which plaintiff was a participant during his employment with Sam's. Based on claims of breach of contract, detinue, conversion, and constructive trust, the complaint contains a demand for money judgment in the amount of $132, 981.64, plus a request for attorney's fees, prejudgment interest, and costs.

Defendant has filed a motion to dismiss plaintiff's complaint (ECF 12), supported by a Memorandum of Law (ECF 12-1) (collectively "the Motion"), as well as several exhibits. See ECF XX-X-XX-X. Plaintiff opposes the Motion (ECF 15), and defendant has replied. ECF 16.

The Motion has been fully briefed, and no hearing is necessary to resolve it. See Local Rule 105.6. For the reasons set forth herein, the Motion shall be DENIED.

I. Factual Summary[2]

Plaintiff is a licensed pharmacist in Maryland. ECF 2, ¶ 4. He began working for Wal-Mart in 2001, as a Pharmacy Manager. Id. ¶ 5. Lafranchise was subsequently promoted to District Manager. Id. ¶ 6. In September 2011, plaintiff was terminated from employment. Id. ¶ 14.

According to plaintiff, as part of his compensation, he was a participant in Wal-Mart's Stock Incentive Plan. Id. ¶ 7. Under that plan, he was annually "granted the right... to gain interest in certain quantities of Restricted Stock' in Wal-Mart...." Id. ¶ 8. He avers that, during the course of an employee's continued employment with Wal-Mart, an employee's interest in Restricted Stock would vest "on a particular date in the future." Id.

Plaintiff alleges that, during the course of his employment, he was granted rights to 1, 747 shares of Restricted Stock in Wal-Mart. Id. ¶ 10. Moreover, he claims that, as a term of his compensation, and in addition to his annual salary, he "was to receive the right" to 460 shares of Wal-Mart Restricted Stock, pursuant to Wal-Mart's Stock Incentive Plan of 2005. Id. ¶ 9. Of that sum, 230 shares of Restricted Stock were to vest on April 4, 2011, and another 230 shares were to vest on April 4, 2013. Id. And, once vesting occurs, the stock is not subject to forfeiture. Id. ¶ 12.

On September 27, 2011, plaintiff's employment was terminated, allegedly because of his "inability to perform job." Id. ¶ 14. At the time of his termination, plaintiff was 62 years of age. Id. ¶ 20. According to plaintiff, "the true motive [for his termination] was age discrimination." Id. ¶ 15.[3]

In his suit, plaintiff claims that defendant has wrongfully failed to deliver the Restricted Stock after plaintiff's interest had vested, and thus defendant "breached the terms of its employment agreement...." Id. ¶ 19. In particular, plaintiff asserts that he has not received 1, 747 shares of Restricted Stock. Id. ¶ 21. As to any stock interest that had not yet vested at the time of his termination, plaintiff alleges that "the whole would have vested completely but for the breach of a duty of good faith and fair dealings on the part of Wal-Mart." Id. ¶ 21. In other words, he claims that vesting "was frustrated and interfered with by the Defendant terminating Plaintiff's employment allegedly in bad faith." ECF 15 at 2.

Relying on the Stock Incentive Plan of 2010, attached to the Motion as an exhibit, ECF 12-3, defendant asserts, inter alia, that The Stock Incentive Plan "clearly and unambiguously provides for the forfeiture of any Stock held upon termination of employment...." ECF 12-1 at 2; see also id. at 6. In addition, Wal-Mart argues that plaintiff cannot maintain a claim for breach of contract or breach of the covenant of good faith and fair dealing, because he was an at-will employee. ECF 12-1 at 7. Thus, defendant argues that plaintiff's claims are subject to dismissal.

II. Standard of Review

A motion to dismiss under Fed.R.Civ.P. 12(b)(6) tests the adequacy of a complaint. McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010). To survive a Rule 12(b)(6) motion, a complaint must satisfy the pleading standard articulated in Fed.R.Civ.P. 8(a)(2), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendant with "fair notice" of the claim and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 & n.3 (2007). That showing must consist of more than "a formulaic recitation of the elements of a cause of action" or "naked assertion[s] devoid of further ...

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