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Buckley v. G.D USA, Inc.

United States District Court, W.D. Arkansas, Fayetteville Division

August 7, 2014

LIAM BUCKLEY, Plaintiff,
G.D USA, INC., Defendant.


P. K. HOLMES, Chief District Judge.

Before the Court are Defendant G.D USA, Inc.'s ("G.D USA") motion to dismiss Plaintiff Liam Buckley's original complaint or, in the alternative, transfer venue (Doc. 14); G.D USA's motion to dismiss Buckley's amended complaint or, in the alternative, transfer venue (Doc. 27) and brief in support (Doc. 28); and Buckley's response in opposition (Doc. 30) and brief in support (Doc. 31). The Court finds that G.D USA's motion to dismiss the original complaint was superseded by G.D USA's motion to dismiss the amended complaint. Accordingly, G.D USA's motion to dismiss the original complaint is DENIED AS MOOT. For the reasons stated herein, G.D USA's motion to dismiss the amended complaint is DENIED.

I. Background

This is an action by a former employee of G.D USA to recover unpaid sales commissions under an alleged sales commission agreement. The relevant facts, as alleged in the complaint, [1] are as follows: On November 12, 2012, [2] G.D USA offered Buckley employment with the position of Volpak/ACMA Sales (Central Region) (the "Sales Position"). Buckley declined the offer. G.D USA offered the Sales Position to Buckley again on December 7, 2012, but this time with additional terms, including a sales commission scheme in addition to a regular salary. Buckley accepted the second offer of employment. The sales commission scheme provided for 17% commission on an as-sold gross margin on sales over $2, 000, 000, with a graduating commission structure on sales up to $2, 000, 000. It also provided for an uncapped commission on machine sales.

Buckley began working for G.D USA on December 15, 2012. During the first week in January of 2013, he initiated contact and began negotiations with Schreiber Foods Inc. ("Schreiber"), a company that had not been in contact with G.D USA prior to that time and was on the verge of placing an order with a competitor. On March 15, 2013, G.D USA sent Buckley a document entitled "2013 Annual Sales Commission Plan for Liam Buckley" that drastically reduced his sales commission rate. Under the new sales commission scheme, Buckley would earn 1% commission on orders between $0 and $450, 000; 1.5% commission on orders between $450, 001 and $900, 000; and 2% commission on orders greater than $900, 001, with a cap of $100, 000 on commissions earned per order. The scheme also included a payment plan whereby commissions were broken down into two 50% payments, the first of which was to be made during the month following the close of each quarter in which the order was received and the second of which was to be made in the month following the quarter in which the revenue was recognized. The effective date of the new sales commission scheme was March 15, 2013. On May 24, 2013, Schreiber issued a purchase order for a machine valued at $855, 892. On May 30, 2013, Schreiber issued another purchase order, this time for four machines valued at $10, 890, 892. At that time, Schreiber submitted a down payment of $100, 000 for preliminary work. Schreiber submitted another payment on July 30, 2013, in the amount of $2, 250, 450.70. Buckley entered his resignation on August 2, 2013, and his final day of employment with G.D USA was August 16, 2013. G.D USA has refused to pay Buckley the commissions allegedly owed to him for the sales made to Schreiber.

Buckley filed the instant action, alleging state law claims for breach of contract, promissory estoppel, unjust enrichment, and fraud. G.D USA now asserts that the complaint should be dismissed in its entirety for failure to state a claim for relief.

II. Legal Standard

For each claim asserted, the complaint must include a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Federal Rule of Civil Procedure 12(b)(6) provides an avenue for dismissal of a pleading on grounds that it "fail[s] to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). "To survive a motion to dismiss, 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, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In ruling on a 12(b)(6) motion, a court accepts as true all of the factual allegations contained in a complaint and reviews the complaint to determine whether its allegations show that the pleader is entitled to relief. Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir. 2008). The court is to consider only the pleadings and "materials that are necessarily embraced by the pleadings and exhibits attached to the complaint." Whitney v. Guys, Inc., 700 F.3d 1118, 1128 (8th Cir. 2012) (internal quotation omitted). G.D USA has submitted a letter dated December 7, 2012 in support of its motion that it contends serves as the basis for Buckley's claims. G.D USA argues that this letter is proof that no contract existed between G.D USA and Buckley. However, the Court will not assume that the letter is the basis for Buckley's asserted claims. Accordingly, the Court's analysis of G.D USA's arguments for dismissal under Rule 12(b)(6) is limited to a review of the complaint itself.

III. Discussion

Buckley alleges that he and G.D USA had an employment contract that included an agreement concerning a sales commission structure. Although a written contract is not attached to the pleading, the terms of the agreement regarding the sales commission structure are described in the complaint. Buckley further alleges that G.D USA breached the parties' agreement by failing to pay him all commissions to which he is entitled. In response, G.D USA argues that no contract exists.

As explained above, when ruling on a motion to dismiss under Rule 12(b)(6), the Court is limited to examining the complaint to determine whether sufficient facts have been set forth by Buckley that, if proven true, would entitle him to relief. Any further inquiry into the factual or legal sufficiency of such allegations is not appropriate at this time. Whether a valid contract exists and whether G.D USA breached the terms of the contract in any way are factual disputes that are potentially relevant at the summary judgment or trial stage of the proceedings. For now, the Court cannot and will not engage in an analysis of disputed facts, and instead must assume the facts as stated by Buckley in the complaint to be true. Buckley has alleged the offer and acceptance of an agreement regarding a sales commission structure, as well as the basic terms thereof and G.D USA's breach of the terms. Therefore, Buckley has stated a plausible claim for relief under a theory of breach of contract.

G.D USA next contends that Buckley's claim of promissory estoppel must be dismissed as Virginia does not recognize promissory estoppel as a cause of action. Buckley does not directly challenge G.D USA's assertion that Virginia law applies, but does argue that he has set forth a claim for promissory estoppel.

"A district court sitting in diversity must apply the choice-of-law rules of the state in which it sits." Lane v. Celadon Trucking, Inc., 543 F.3d 1005, 1007 (8th Cir. 2008). Accordingly, Arkansas' choice-of-law principles apply here. "In resolving a choice-of-law issue, the court must first determine what type of claim is involved because courts employ different choice-of-law methods depending on the claim." Lane v. Celadon Trucking, Inc., 543 F.3d 1005, 1007 (8th Cir. 2008). G.D USA contends that Virginia law applies whether the Arkansas choice-of-law principles for either contract or tort law apply.

"Where there is no effective choice of law by the parties in a cause of action arising in contract, Arkansas courts employ the most significant relationship' test to determine which state's laws to apply." Tyler v. Alltel Corp., 265 F.R.D. 415, 424 (E.D. Ark. 2010) (citing Crisler v. Unum Ins. Co. of Am., 366 Ark. 130, 133 (2006)). Under this test, a court must consider the nature and quantity of each state's contacts with the transaction at issue, evaluating the following relevant factors: "(1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the domicile, residence, nationality, place of incorporation and place of business of the parties." Id. Here, the transaction at issue is the sales commission agreement.[3] The details regarding the place of contracting and the place of negotiation are not mentioned in the complaint.[4] The sales commission agreement is related to Buckley's acceptance of the Sales Position, which involves the "Central Region." Buckley's sales territory included Arkansas, but not Virginia. Buckley is, and was at the time of the transaction, a citizen and resident of Arkansas, and his office was located in Arkansas. Buckley conducted his employment for G.D USA from Arkansas, and he contacted and conversed with potential customers from Arkansas. G.D USA is a Virginia corporation with its principal place of business in Virginia that is authorized to do business in Arkansas. At the beginning of Buckley's employment with G.D USA, he traveled to Virginia for training. Based on these facts and ...

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