Roy Carlus Riley & J&R Mfg., Inc. v. Barringer

337 F. Supp. 3d 647
CourtDistrict Court, W.D. Virginia
DecidedOctober 9, 2018
DocketCase No. 1:18CV00007
StatusPublished
Cited by11 cases

This text of 337 F. Supp. 3d 647 (Roy Carlus Riley & J&R Mfg., Inc. v. Barringer) is published on Counsel Stack Legal Research, covering District Court, W.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Roy Carlus Riley & J&R Mfg., Inc. v. Barringer, 337 F. Supp. 3d 647 (W.D. Va. 2018).

Opinion

James P. Jones, United States District Judge

The plaintiffs, a business corporation and its president, allege in this case that defendant Teresa B. Barringer was a long-time company employee in charge of the company's finances and a fiduciary of the company's retirement plan. It is claimed that she engaged in a fraudulent scheme to embezzle money from the company and pay portions of it into her own retirement account, as well as to embezzle money from the retirement accounts of other plan beneficiaries, including the president, Roy Carlus Riley. The plaintiffs' action and the jurisdiction of this court are based on sections 409 and 502(a) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1109 and 1132(a)(2).

Barringer has filed a Counterclaim, which the plaintiffs have moved to dismiss, along with Barringer's demands for punitive damages and attorneys' fees. For the reasons that follow, I will grant the plaintiffs' motion in part and deny it in part.

I.

The Counterclaim alleges the following facts, which I must accept as true for the purpose of deciding the Motion to Dismiss.

Plaintiff Riley is the president and sole shareholder of plaintiff J and R Manufacturing, Inc. ("J & R"). In the first cause of action asserted in the her Counterclaim, Barringer alleges that Riley authorized Barringer to execute negotiable instruments and other documents on Riley's behalf and in Riley's name during the course of Barringer's employment with J & R. Due to J & R's financial difficulties, Riley directed Barringer to make loans to J & R out of Riley and Barringer's personal funds. At the time Riley directed Barringer to make the loans to J & R, he did not intend that J & R would repay Barringer. With Riley's knowledge and permission, Barringer withdrew a total of $581,880.85 from her retirement account and her personal funds and deposited it in J & R's bank account. J & R has not repaid that money to Barringer.

For her second cause of action, Barringer alleges that during her last two years of employment with J & R, J & R failed to contribute to the employee retirement plan on her behalf, and from on or about September 1, 2016, to October 28, 2016, J & R and Riley failed to pay Barringer's wages, resulting in a loss to Barringer of $29,686.

Finally, for her third cause of action, Barringer contends that during her employment at J & R, she brought to her workplace and kept there the following items of her personal property: a Sam's MasterCard, four manila envelopes containing documents, calendars, personal mail with tax documents, personal crates of files, two Lowe's gift cards and one Amazon gift card, a flashlight new in the package, a box of quota information, a crate, and personal files, all of which have been converted by J & R and Barringer.

In Barringer's first cause of action, she asserts state law1 claims of breach of express *652or implied contract, unjust enrichment, and fraud against both J & R and Riley. In her second cause of action, she asserts Virginia state law claims of breach of contract and unjust enrichment against both J & R and Riley. In her third cause of action, Barringer asserts state law claims of conversion, breach of express or implied contract, and unjust enrichment against both J & R and Riley. Barringer contends that the court has supplemental jurisdiction over these state law claims under 28 U.S.C. § 1367(a) because they so relate to the claims alleged in the Complaint that they form part of the same case or controversy.

J & R and Riley have moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) all of the Counterclaim except the cause of action against J & R regarding its failure to pay Barringer's wages. The Motion to Dismiss has been fully briefed and is now ripe for decision.2

II.

Federal courts have supplemental jurisdiction over a state cause of action if both the state and federal claims at issue "derive from a common nucleus of operative fact." UMWA v. Gibbs , 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). A common nucleus of operative fact may not exist where an employer-employee relationship is the sole link between the state and federal claims. See Williams v. Long , 558 F.Supp.2d 601, 604 (D. Md. 2008) (finding an employer-employee relationship insufficient for supplemental jurisdiction in a Fair Labor Standards Act action); Stadler v. McCullouch , 949 F.Supp. 311, 313-14 (E.D. Pa. 1996) (finding the same in an ERISA action).

Here, the court has subject-matter jurisdiction over the federal claims in the plaintiffs' Complaint pursuant to 28 U.S.C. § 1331 (providing for federal-question jurisdiction). The court has subject-matter jurisdiction over the state claims in the Complaint pursuant to 28 U.S.C. § 1367(a) (providing for supplemental jurisdiction). The court also has supplemental subject-matter jurisdiction over Barringer's first and second causes of action regarding the $581,880.85 she deposited in J & R's bank account, J & R's alleged failure to contribute to the employee retirement plan, and J & R's alleged failure to pay Barringer's wages. These causes of action require consideration of facts already at issue under the plaintiffs' claims that Barringer embezzled funds from J & R and that she unlawfully accessed retirement funds.

However, I decline to exercise supplemental jurisdiction over Barringer's third cause of action. The employer-employee relationship is the sole link between this cause of action and the federal claims in this case. Accordingly, I will dismiss without prejudice for lack of subject-matter jurisdiction Barringer's cause of action alleging conversion, breach of express or implied contract, and unjust enrichment against both J & R and Riley regarding the personal property she took to her workplace.

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Bluebook (online)
337 F. Supp. 3d 647, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roy-carlus-riley-jr-mfg-inc-v-barringer-vawd-2018.