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Aeschliman v. Dealer Marketing Services, Inc.

United States District Court, C.D. Illinois, Peoria Division

May 29, 2015

DEALER MARKETING SERVICES, INC., and Illinois Corporation, and JOHN PALMER, Defendants.


JOE B. McDADE, District Judge.

This matter is before the Court on the Defendants' Partial Motion To Dismiss For Failure To State A Claim Or Alternatively To Strike (Doc. 8). The motion is fully briefed and ready for decision. For the reasons stated below, the motion is GRANTED.


Plaintiff Steve Aeschliman was employed by Defendant Dealer Marketing Services, Inc. ("DMS"), of which Defendant John Palmer is the owner and chief executive officer. Plaintiff sued DMS and Palmer in Illinois state court alleging state law claims of breach of contract and violation of the Illinois Wage Payment and Collection Act, 820 Ill. Comp. Stat. § 115/1 et. seq., and a federal claim of violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et. seq. Since an ERISA claim arises under federal law, Defendants removed the entire civil action from the Circuit Court of Tazewell County, Illinois to this Court pursuant to 28 U.S.C. § 1441 on the basis of federal question jurisdiction. On April 4, 2015 Plaintiff was given leave to file an amended complaint and did so two days later. Defendants now seek to dismiss portions of Counts III and IV of the First Amended Complaint that allege violations of the Illinois Wage Payment and Collection Act, or alternatively, to strike certain paragraphs. Although the motion to dismiss sub judice was filed before the First Amended Complaint was filed, the nature of the motion was still relevant such that the Magistrate Judge allowed Defendants to revive their motion to dismiss as it applies to Counts III and IV of the First Amended Complaint.[2] (Doc. 16).


A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). "In evaluating the sufficiency of the complaint, [courts] view it in the light most favorable to the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from the allegations in the plaintiff's favor." AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). "To survive a motion to dismiss, the complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 934-35 (7th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662 (2009)) (internal quotation marks omitted).


As an initial matter, Plaintiff contends that the Court should deny the motion outright because it is allegedly untimely. The instant motion purports to be made under Federal Rule of Civil Procedure 12(b)(6) in so far as it requests the Court to dismiss portions of Counts III and IV and Rule 12(f)(2) in the alternative, in as much as it asks the Court to strike certain material from the First Amended Complaint (Doc. 18). A motion asserting a defense under Rule 12(b)(6) "must be made before pleading if a responsive pleading is allowed." Plaintiff points out that Defendants have already brought a Rule 12(b) motion and should therefore be barred from bringing another under Rule 12(g), which provides a party that makes a motion under Rule 12 must not make another motion under it raising a defense or objection that was available to the party but omitted from its earlier motion except as provided in Rule 12(h)(2) or (3). Plaintiff's argument is not really based on the timeliness of the instant motion; it is based upon the motion being illegitimately successive under Rule 12(g). In any event, Plaintiff has ignored that the instant motion is a revived motion to dismiss and therefore is to be treated as a first 12(b) motion against the First Amended Complaint (Doc. 18) rather than a successive 12(b) motion against the original Complaint ( see Doc. 1). Therefore, the Court will reach the motion's merits.

Counts III and IV of Plaintiff's First Amended Complaint allege Defendants violated the Illinois Wage Payment and Collection Act (the "Wage Act") by failing to pay Plaintiff certain final compensation that he is owed. Plaintiff alleges he was employed under the terms of an agreement he attached to his First Amended Complaint (Doc. 18-1). The term of employment provided in the agreement began on January 1, 2014 and was due to expire on January 1, 2019. (Doc. 18-1 at 2). Plaintiff alleges he was terminated without cause in either September or October of 2014 and is due salary for every month for which he would have been paid under the agreement.

Section 2.1 of the agreement deals with compensation and provides that Plaintiff was to be paid a "Monthly Guaranteed Salary in the amount of Twelve Thousand Dollars ($12, 400.00)" a month.[3] (Doc. 18-1 at 1). It goes on to state

In the event Employee's employment with the Company is terminated during a calendar month, employee's Salary shall be prorated on the basis of the ratio that the number of days worked bears to the total number of working days (which shall be deemed to refer to the days of Monday through Friday, except legal holidays) in such month.

(Doc. 18-1 at 1). It should be noted that the above quoted provision applies to termination without regard to whether such termination is with or without cause. Section 3 of the agreement also purports to deal with termination and it provides that Plaintiff should expect payment of all Guaranteed Salary within sixty days of termination. Apparently, Plaintiff interprets the term "all Guaranteed Salary" that appears in section 3 of the agreement to mean his complete monthly salary throughout the entire term of his employment agreement. Defendants apparently interpret the term "all Guaranteed Salary" to mean only salary earned as of the date of termination. Therefore, the Defendants interpret the term "monthly guaranteed salary in the amount of $632, 400" in the First Amended Complaint as a request for "unpaid future wages" that are not recoverable under the Wage Act under recent Illinois case precedent.

In the recent case of Majmudar v. House of Spices (India), Inc., an Illinois appellate court explained that "[t]he purpose of the [Wage] Act is to provide employees with a cause of action for the timely and complete payment of earned wages or final compensation." 1 N.E.3d 1207, 1210 (Ill.App.Ct. 1st Dist. 2014) (emphasis added). The court recognized that under the Wage Act, terminated employees can seek "final compensation, " which is defined as "wages, salaries, earned commissions, earned bonuses, and the monetary equivalent of earned vacation and earned holidays, and any other compensation owed the employee by the employer pursuant to an employment contract or agreement between the 2 parties." 820 Ill. Comp. Stat. § 115/2 (2015). The Majmudar court held that "unpaid future compensation for the remainder of a terminated contract where there is a question as to whether the employee was terminated for cause did not fall under the Wage Act's definition of final compensation.'" 1 N.E.3d at 1216. It further held the defendant could not have violated the Wage Act even though it did not pay the plaintiff unpaid future compensation for the remainder of the plaintiff's terminated contract. Id. The Majmudar court reasoned that:

"[o]nce plaintiff's employment was terminated, so was the agreement, particularly because there was a question at the time of termination as to whether plaintiff was terminated for cause. Then, it necessarily follows that at the time of termination defendant owed plaintiff no further compensation pursuant to the contract as final compensation, ' because defendant was no longer ...

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