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Rose v. Harloe Management Corp.

United States District Court, D. Maryland

January 17, 2017

DOMINIC J. ROSE, SR., Plaintiff,
HARLOE MANAGEMENT CORP., et al., Defendants.


          George L. Russell, III United States District Judge.

         THIS MATTER arises out of Plaintiff Dominic Rose, Sr.'s termination from Defendant Harloe Management Corporation (“Harloe Management”). Pending before the Court is Harloe Management and Diana Harloe's Partial Motion to Dismiss (ECF No. 10). The Motion is fully briefed and no hearing is necessary. See Local Rule 105.6 (D.Md. 2016). For the reasons outlined below, the Court will grant in part and deny in part the Motion.

         I. BACKGROUND

         A. Factual Background

         In March 1987, William Harloe, Jr., late husband of Defendant Diana Harloe, hired Mr. Rose as an employee of Harloe Management, a small family-owned business. (Compl. ¶¶ 7-8, ECF No. 2). At his initial hiring, Mr. Rose did not receive a written employment agreement. (Id. ¶ 9).

         For the next seven years, Mr. Rose served as a “general employee” of the corporation until he was promoted to “Director of Operations” in 1994. (Id. ¶ 10). After he accepted this promotion, Mr. Rose and Harloe Management did not execute a written employment agreement outlining Mr. Rose's compensation and duties. (Id.). Instead, Mr. Harloe promised Mr. Rose that “if things went well, ” then Mr. Rose would be transferred a percentage of the company. (Id. ¶ 12).

         As the Director of Operations, Mr. Rose was in charge of managing and operating all nine of Harloe Management's Burger King franchises. (Id. ¶ 11). At that time, Burger King Corporation required one district manager for every four stores. (Id. ¶ 12). Mr. Harloe acknowledged that Mr. Rose saved Harloe Management from having to pay two other salaried employees. (Id.)

         Under Mr. Rose's tenure, Harloe Management was very successful. (Id. ¶ 13). As a result of this positive performance, Mr. Harloe contacted his attorney, Seymore Goldstein, to discuss the potential ownership transfer promised previously. (Id. ¶ 14). After that meeting, Mr. Harloe followed up with Mr. Rose and explained that Mr. Goldstein was uncomfortable with the transfer because Mr. Rose was not family. (Id.). Nevertheless, Mr. Harloe insisted that he would find a way to follow through with his promise to Mr. Rose. (Id.).

         In the years that followed, Mr. Rose continued to work as the Director of Operations and satisfy his duties, never taking vacations or calling out sick. (Id. ¶ 18-19). During this time, Mr. Harloe would frequently acknowledge Mr. Rose's work ethic and sacrifices for Harloe Management. (Id. ¶ 19).

         Then, in 2010, Mr. Harloe, facing personal issues, stopped coming into the office or his stores. (Id. ¶ 20). In his place, Mrs. Harloe became more involved in the business. (Id.). In August 2012, Mr. Harloe committed suicide. (Id. ¶ 21). The night of Mr. Harloe's death, Mr. Rose visited Mrs. Harloe and stayed with her until 9:00 a.m., helping her with initial matters after Mr. Harloe's death. (Id.). Mrs. Harloe thanked Mr. Rose and told him that she would not be able to run Harloe Management without him. (Id.).

         Shortly thereafter, Mr. Goldstein and Mrs. Harloe's accountant told Mr. Rose that all business affairs were now his responsibility. (Id. ¶ 22). They also indicated that going forward, Mr. Rose would need to participate in all financial meetings and strategic decisions. (Id.). Mrs. Harloe communicated Mr. Rose's responsibilities as the remaining operating partner to all of the Burger King managers. (Id. at ¶ 21-22). She also promised Mr. Rose that she would formally address the ownership transfer in the immediate future. (Id. ¶ 23). At that point, Mr. Rose believed that he was operating as part owner of Harloe Management. (Id.).

         In April 2013, Mr. Rose met with Mrs. Harloe, Mr. Goldstein, and Mrs. Harloe's accountant to discuss his future in Harloe Management. (Id.). During this meeting, Mrs. Harloe repeatedly told Mr. Rose that she was in the process of making him a franchisee and formally finalizing his ownership in Harloe Management. (Id.). Mrs. Harloe also presented Mr. Rose with an offer guaranteeing employment for multiple years with his current salary and ten percent of the net proceeds if the company was sold. (Id. ¶ 24). After the meeting, Mrs. Harloe personally assured Mr. Rose that he would receive a percentage of the company, regardless of whether Mr. Goldstein approved. (Id.). In response, Mr. Rose indicated that he was satisfied with the offer so long as all that was presented to him came to fruition. (Id.).

         Over the next year and a half, Mrs. Harloe continually referred to Mr. Rose as a partner to the Burger King Corporation, its clients, and its associates. (Id. ¶ 26). Nonetheless, the ownership interest was never transferred due to what Mrs. Harloe described as an “estate issue.” (Id.).

         In early 2015, Mrs. Harloe and Mr. Rose began to disagree on how to move forward with the business. (Id. ¶ 27). Ultimately, their relationship deteriorated so severely that Mrs. Harloe fired Mr. Rose in a meeting on October 26, 2015 and offered him a separation agreement. (Id. ¶ 28). At this meeting, and later in a letter to the Defendants' counsel dated November 6, 2015, Mr. Rose expressed his concerns with the termination. (Id. ¶ 40). On November 10, 2015, Mr. Goldstein responded via letter that Mr. Rose was “discharged for cause” and retracted the severance package offered to Mr. Rose on October 26, 2015. (Id. ¶ 41).

         Mr. Rose alleges Defendants failed to compensate him in several ways. First, he asserts that Defendants did not pay him for three of the days he worked during his final pay period. (Id. ¶ 29). Second, he asserts that Defendants did not compensate him for unused vacation that he accumulated at Harloe Management. (Id. ¶ 30). Third, he alleges that Defendants did not compensate him for unused sick leave that he also accumulated. (Id. ¶ 31). Fourth, Mr. Rose asserts that he worked at least twenty hours a week of uncompensated overtime. (Id. ¶ 33).

         B. Procedural Background

         Mr. Rose commenced this action in the Circuit Court for Baltimore County, Maryland on January 29, 2016. (ECF No. 1). Defendants removed the case to this Court on March 16, 2016. (Id.). Mr. Rose asserts the Defendants violated three statutes: (1) Maryland Wage and Hour Law (“MWHL”), Md. Code Ann., Lab. & Empl. (“Lab. & Empl.”) §§ 3-401, et. seq. (West 2017) (Count I); the Maryland Wage Payment and Collection Law (“MWPCL”), Lab. & Empl. §§ 3-501, et. seq. (Count III); and the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et. seq. (Count II). (Compl., ECF No. 2). Mr. Rose also raises seven common law claims: (1) breach of contract (Count IV); (2) specific performance (Count V); (3) unjust enrichment (Count VI), (4) promissory estoppel (Count VII); (5) intentional misrepresentation (Count VIII);[1] (6) negligent misrepresentation (Count IX); and (7) fraud (Count X). (Id.).

         On March 22, 2016, Defendants moved to dismiss Counts I, II, and III in part, and dismiss Counts VI, VIII, and X in their entirety. (ECF No. 10). Mr. Rose responded in opposition (ECF No. 13) on April 6, 2016, and Defendant replied (ECF No. 16) on April 25, 2016.

         II. ...

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