Opinion
Civil Action No. 99C-11-077-JOH Arbitration.
Submitted: June 20, 2002.
Decided: July 8, 2002.
Upon Motion of Defendant Breeding Day, Inc. to Dismiss — DENIED
R. Stokes Nolte, Esq., of Nolte, Brodoway Saltz, P. A., of Wilmington, Delaware, attorney for plaintiff.
Bayard J. Snyder, Esq., of Snyder Associates, P.A., of Wilmington, Delaware, attorney for defendant.
MEMORANDUM OPINION
Defendant Breeding Day, Inc., has moved to dismiss plaintiff James E. Grove, Jr.'s action for his share of its 1998 profits. It contends his action is one for wages and benefits and that he had to file suit within one year of being terminated. Since Grove's last day of work was October 2, 1998, his action filed November 8, 1999, it claims, is untimely.
Grove makes alternative counter-arguments. First, he says his action is for breach of contract which is subject to a three year limitation. If not such an action, however, he contends that his action did not accrue until the end of Breeding Day's fiscal year which was December 31, 1998.
Since Grove's action is for a share of company profits, the Court holds that it is governed by the one year statute of limitations, But those profits were determinable only as of December 31, 1998, making his November 1999 action timely. Breeding Day's motion is, therefore, DENIED.
Facts
Breeding Day hired Grove February 19, 1998. The terms of the employment agreement were contained in a February 26, 1998, letter from the company's president Clifford Breeding, Jr.Dear Jim,
The following is a reinforcement and backup of the verbal agreements we discussed before you came on board here at Breeding and Day, Inc.
You will be compensated Seventy-five Thousand ($75,000) per year salary. You will also receive two weeks paid vacation — six paid holidays — an auto — gas card and health insurance.
Other agreements are that on June 1, 1998, you will be offered to take part in the company's 401-K plan of which you may contribute up to 6% of your net income. Also, at the end of the year, you will receive 25% of all distributed profits whether it be as a bonus or 401-K or a combination of both.
Grove was terminated September 28, 1998. His last day of work was October 2, 1998. The company did not pay Grove 25% of all distributed profits. On November 9, 1999, Grove filed a complaint to recoup the 25% he claims he is still owed. Breeding Day's fiscal year coincides with the calendar year, ending December 31st. The defendant filed this motion to dismiss, claiming the action is barred by the 1-year statute of limitations in title 10, section 8111.
That information was given orally to the Court by counsel for both parties. The word "year" in the letter quoted above is not defined. In this instance, therefore, the Court need not be concerned with any ambiguity that could have resulted from a difference between a company taxable-fiscal year and the calendar year.
Applicable Standard
A motion to dismiss for failure to state a claim upon which relief can be granted made pursuant to Superior Court Civil Rule 12(b)(6) will not be granted if the plaintiff may recover under any conceivable set of circumstances susceptible of proof under the complaint. When, however, matters outside of the complaint are considered the motion becomes one for summary judgment. In that instance, the moving party must show there are genuine issues of material fact and that it is entitled to judgment as a matter of law. All factual inferences must be viewed in a light most favorable to the non-moving party. There are no factual issues in dispute in this case; the issue is only one of law.
Spence v. Funk, 396 A.2d 967 (Del. 1978).
Chrysler Corp. v. Airtemp, Del. Super., 426 A.2d 845, 847 (1980).
Grasso v. First USA Bank, Del. Super., 713 A.2d 304, 307 (1998).
Alabi v. DHL Airways, Inc., Del.Super., 583 A.2d 1358, 1361 (1990).
Discussion
Breeding Day contends that the one-year statute of limitations in title 10, section 8111 controls this claim. Grove claims that the 3-year period in section 8106 applies, and, in the alternative, his claim was timely filed under section 8111. The distinction between the sections has been succinctly summarized as follows:
If plaintiff alleges a breach of a duty to provide benefits or to pay wages for work already performed, then the one year statute of limitations in section 8111 governs. On the other hand, if plaintiff alleges that his employer breached a different duty arising out of the employment agreement, then the three year statute of limitations period in section 8106 applies.
Compass v. American Mirrex Corp., 72 F.Supp.2d 462, 467 (D. Del. 1999).
Grove's claim involves allegations of breach of a duty to provide benefits, therefore, the one-year statute of limitations applies. Like the Compass case, the facts needed to calculate Grove's bonus would not be known until the company's fiscal year ended and "distributed profits" could be determined. Breeding Day's fiscal year ended December 31, 1998. It was not until that date the facts needed to calculate the bonus were known and Grove's claim "matured."
Id. at 468.
His year-end bonus/401-K contribution was not based on his own performance but rather on the company's performance determined at year-end. The year-end distributed profits would not be known until its fiscal year ended and the calculations could be made; unlike a personal performance bonus that could be determined when Grove's job for Breeding Day ceased October 2, 1998.
Following Breeding Day's reasoning, it would have to have presented a check to Grove on October 2, 1998, that represented 25% of the company's year end distributed profits despite the fact that two months remained in the fiscal (calendar) year. That not being the condition of Grove's employment, he had until December 31, 1999, to file suit. The complaint was filed November 9, 1999, within 1-year from the "accruing of the cause of action" specified in section 8111 and was, therefore, timely.
Conclusion
For the reasons stated above, defendant's motion to dismiss is DENIED.