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Harvey v. GoBo, Inc.

United States District Court, W.D. Virginia, Lynchburg Division

March 10, 2017

Patricia Harvey, Plaintiff,
v.
GoBo, Inc. and GoBo2, Inc., Defendants.

          MEMORANDUM OPINION

          NORMAN K. MOON, UNITED STATES DISTRICT JUDGE.

         This matter is before the Court upon Defendants GoBo, Inc. (“GoBo1”) and Gobo2, Inc.'s (“GoBo2”) motion to dismiss Plaintiff's Amended Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. 5). The Amended Complaint contains two counts. The first Count alleges employment discrimination and retaliation in violation of Title I of the Americans with Disabilities Act (“ADA”) under 42 U.S.C. § 12112. (Dkt. 7-2 ¶ 1). The second Count alleges fraudulent and voluntary conveyance under Va. Code §§ 55-80, 55-81. (Dkt. 7-2 at ECF 16). The motion will be denied. A prior settlement agreement between GoBo1 and Plaintiff does not bar this action, Plaintiff has adequately pled the fraudulent and voluntary conveyance claim under Virginia state law, and, applying the equitable doctrine of laches, Plaintiff joined GoBo2 in a reasonable time frame after learning about its existence.

         I. Procedural History

         This action was filed originally in state court on December 15, 2014, naming GoBo1 as the sole defendant. (Dkt. 7-2 ¶ 9). That case was the subject of an order of nonsuit on October 13, 2015. (Id. ¶ 10). Plaintiff then re-filed the action on March 30, 2016. (Id. ¶ 11). On November 2016-eight months after Plaintiff's original complaint was filed-Plaintiff discovered GoBo2 existed. (Dkt. 7-2 ¶ 8). GoBo2 had been formed on December 23, 2013, and at some point thereafter, the assets of GoBo1 were transferred to GoBo2, effectively rendering GoBo1 insolvent. (Dkt. 7-2 ¶ 47). Upon learning of the existence of GoBo2 in November of 2016, Plaintiff sought leave to file an Amended Complaint in state court in order to join GoBo2 as a defendant, (id. ¶ 12), and the Virginia state court granted that motion (dkt. 1-3 at ECF 1). Plaintiff then filed an Amended Complaint and Jury Demand on December 15, 2016. (Dkt. 10 at 2). On December 16, 2016, Defendants filed for removal to this Court on the grounds of federal question jurisdiction under 42 U.S.C. §§ 1981(a), 12117. (Dkt. 1 at 1).

         II. Legal Standard

         A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) tests the legal sufficiency of a complaint to determine whether the plaintiff has properly stated a claim; “it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of North Carolina v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). Although a complaint “does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted).

         A court need not “accept the legal conclusions drawn from the facts.” Eastern Shore Markets, Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000). “Factual allegations must be enough to raise a right to relief above the speculative level, ” Twombly, 550 U.S. at 555, with all allegations in the complaint taken as true and all reasonable inferences drawn in the plaintiff's favor. Chao v. Rivendell Woods, Inc., 415 F.3d 342, 346 (4th Cir. 2005). Rule 12(b)(6) does “not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. Consequently, “only a complaint that states a plausible claim for relief survives a motion to dismiss.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).

         III. Facts as Alleged

         GoBo1 employed Plaintiff from May 10, 2010, until April 18, 2013, as a Biscuit Maker at a Bojangles restaurant in Lynchburg, Virginia. (Dkt. 7-2 ¶¶ 15, 21). Defendants are two Virginia corporations-GoBo1 and GoBo2. (Id. ¶¶ 5-6). When Plaintiff worked at Bojangles, GoBo1 controlled and operated two Bojangles restaurant locations; Plaintiff worked at one of these locations. (Id. ¶ 4). On February 13, 2013, Plaintiff sustained an injury to her left knee while performing her work duties. (Id. ¶ 17). This injury required Plaintiff to receive medical treatment, use physical aids, and take prescription medication. (Id. ¶ 17). Plaintiff alleges that the injury constituted a disability under the ADA. (Id. ¶ 18).

         On April 18, 2013, Plaintiff was terminated from her employment at Bojangles. (Dkt. 7-2 ¶ 21). When Plaintiff sought an explanation for her termination, Defendants' owner, Phil Lynch, failed to provide one and said that Plaintiff's services were “no longer needed.” (Id.). She was replaced by a person who did not suffer from a disability or need an accommodation. (Id. ¶ 23). Plaintiff alleges that because of the absences and accommodations needed at work as a result of her injury, GoBo1 viewed Plaintiff as a “malingerer” who tried to avoid regularly scheduled work. (Dkt. 7-2 ¶ 20). She claims that GoBo1 retaliated against her because of her disability by reducing her hours, holding her to unreasonable work expectations, singling her out for disparate discipline, using her disability as a negative factor in considering her job performance, and ultimately, terminating her based on manufactured and false grounds. (Dkt. 7-2 ¶ 20).

         On December 23, 2013, GoBo2 was formed, and all of Defendant GoBo1's assets were transferred to GoBo2, rendering GoBo1 insolvent and judgment-proof. (Dkt. 7-2 ¶¶ 46-47). Plaintiff alleges that this transfer of assets was done with the knowledge of Plaintiff's claims against GoBo1 and with the intention of avoiding paying any judgment to Plaintiff. (Dkt. 7-2 ¶ 48).

         Claiming discrimination and retaliation prohibited by the ADA, Plaintiff seeks reinstatement to her former position or a position of comparable duties and responsibilities with equal pay and benefits. (Dkt. 7-2 at ECF 17). She seeks a permanent injunction enjoining Defendants from violating her rights under the ADA. (Id.). Additionally, Plaintiff seeks back pay, front pay, prejudgment interest, and recovery for lost employment benefits up to $75, 000. (Id.). Furthermore, Plaintiff seeks compensatory damages under the ADA, reasonable attorney's fees and costs, damages to offset the adverse tax consequences of receiving the award in a lump sum, and interest on the pre- and post-judgment sums. (Id. at ECF 18). Because of the conveyance of GoBo1's assets to GoBo2, Plaintiff seeks an order setting aside the conveyance and directing GoBo2 to compensate Plaintiff from the funds derived from the conveyance. (Id.).

         IV. Analysis of Motion to Dismiss

         A. Supplemental Jurisdiction

         Supplemental jurisdiction exists over Plaintiff's state law claims because the alleged facts bearing on Plaintiff's federal claim and the facts that could establish recovery for Plaintiff's state law claims revolve around a central fact pattern and a common nucleus of operative fact. See 28 U.S.C. § 1367(a); United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966); United States ex rel. Bunk v. Gov't Logistics N.V., 842 F.3d 261, 272 (4th Cir. 2016) (exercising supplemental jurisdiction over a successor liability claim when facts establishing False Claims Act claim served as foundation for defendant's liability as a successor corporate entity).

         Original jurisdiction here is supplied by Plaintiff's ADA claim. The facts used to establish a successor liability theory of recovery for violation of the ADA would be similar to those establishing Plaintiff's state law claims: The Fourth Circuit's successor liability analysis and Virginia's fraudulent and voluntary conveyance statutes have similar elements involving similar badges of fraud. Id. at 273-74, 76; United States v. Carolina Transformer Co., 978 F.2d 832, 838 (4th Cir. 1992); Buchanan v. Buchanan, 266 Va. 207, 211 (2003); Fox Rest Assocs., L.P. v. Little, 282 Va. 277, 285 (2011); see also infra Section IV.C.1. Thus, if Plaintiff can establish GoBo2's liability as a successor corporate entity (in order to recover under the ADA), she could use similar evidence to establish her state law claims. Gov't Logistics, 842 F.3d at 272 (stating that claims “need only revolve around a central fact pattern”). Accordingly, supplemental jurisdiction exists.

         B. ...


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