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Ronald Wood v. Kinetic Systems

February 4, 2011

RONALD WOOD, PLAINTIFF,
v.
KINETIC SYSTEMS, INC., A CALIFORNIA CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Honorable Candy W. Dale Chief United States Magistrate Judge

MEMORANDUM DECISION AND ORDER

INTRODUCTION

Before the Court are Defendant's Motion for Summary Judgment (Dkt. 31), Defendant's Motion to Strike the Affidavit of Ronald Wood (Dkt. 40), and Plaintiff's Motion to Strike (Dkt. 44). The Court is asked to decide whether, as a matter of law, Plaintiff Ronald Wood's ("Wood") employment as a Labor Manager, or in any other position held at Kinetic Systems, Inc. ("KSI") during his term of employment, is exempt from the overtime compensation provisions of the Fair Labor Standards Act pursuant to the executive employee exemption. In addition, KSI asserts the statute of limitations bars Wood's alternative claims under Idaho state law for overtime compensation and wages in the form of vacation pay.

The Court conducted a hearing on the pending motions on February 3, 2011, at which all parties appeared represented by counsel. After considering the parties' arguments, briefing, and the relevant authorities, the Court will deny Defendant's Motion to Strike; partially grant Plaintiff's Motion to Strike; and grant in part and deny in part Defendant's Motion for Summary Judgment.

FACTS*fn1

Wood contends he entered into a written employment contract with KSI on November 30, 2003, pursuant to which he alleges he was promised an hourly wage of $62.50 and vacation pay equivalent to four weeks each year, among other benefits.*fn2 Wood's employment with KSI was terminated on January 20, 2009. (Decl. of Koontz ¶ 20, Dkt. 31-8; Aff. of Wood ¶ 21, Dkt. 35-2.) Wood was paid on a weekly basis for at least forty hours of work per week from November of 2003 through the date of his termination from employment. (Decl. of Koontz ¶ 13, Dkt. 31-8; Aff. of Wood ¶ 6, Dkt. 35-2.) KSI's payroll department calculated Wood's payout for accrued wages and vacation pay, and paid Wood on January 22, 2009, via direct deposit. (Decl. of Koontz ¶ 20, Dkt. 31-8; Aff. of Wood ¶ 21, Dkt. 35-2.) Wood requested review of the vacation pay calculation, claiming he was owed for additional unused vacation time. KSI decided to grant an additional 97.23 hours of vacation pay and paid Wood $6,509.55. (Decl. of Koontz ¶ 20, Dkt. 31-8.) However, Wood contends that he is owed additional wages in the form of unpaid but accrued vacation pay in the amount of $64,472.85, as well as wages owed as overtime in the amount of $343,261.60. (Aff. of Wood ¶¶ 6, 21, Dkt. 35-2; Compl. ¶ 38, Dkt. 1-3.)

Wood filed the Complaint in this matter on October 8, 2009, in the Fourth Judicial District of the State of Idaho. The Complaint asserts a wage claim under Idaho Code § 45-606 and a breach of contract claim for unpaid wages owed as overtime and wages owed as vacation pay from January 1, 2000 through January 20, 2009. In addition, Wood asserts two claims under the Fair Labor Standards Act ("FLSA"), both for failure to pay overtime during the two year period immediately preceding the filing of the complaint, or alternatively during the three year period immediately preceding the filing of the complaint. Wood stipulated to dismissal of the fifth and final count for defamation. (Pl. Mem. at 20, Dkt. 35.)

KSI removed the matter to this Court on diversity grounds on November 10, 2009. KSI filed a motion to dismiss for lack of jurisdiction, which motion was denied on March 9, 2010, (Dkt. 15), and thereafter KSI filed an answer on March 17, 2010. KSI's answer does not specifically assert the statute of limitations as an affirmative defense.

The Case Management Order entered in this case on March 29, 2010, and amended on September 3 and 7, 2010, required amended pleadings to be filed on or before June 4, 2010, and dispositive motions to be filed by December 1, 2010. (Dkt. 21, 29, 30.) KSI filed its motion for summary judgment on October 12, 2010. Trial is set to commence on April 4, 2011.

ANALYSIS

1. Summary Judgment Standards

Motions for summary judgment are governed by Fed. R. Civ. P. 56(c)(2)*fn3 , which provides, in pertinent part, that judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c)(2). A moving party may show that no genuine issue of material fact exists by demonstrating that "there is an absence of evidence to support the non-moving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the moving party meets the requirement of Rule 56 by either showing that no genuine issue of material fact remains or that there is an absence of evidence to support the non-moving party's case, the burden shifts to the party resisting the motion who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). It is not enough for the [nonmoving] party to "rest on mere allegations or denials of his pleadings." Id. Genuine factual issues must exist that "can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250.

In determining whether a genuine issue of material fact exists, facts and inferences must be viewed most favorably to the non-moving party. To deny the motion, the Court need only conclude that a result other than that proposed by the moving party is possible under the facts and applicable law. Aronsen v. Crown Zellerbach, 662 F.2d 584, 591 (9th Cir. 1981). The Ninth Circuit has emphasized that summary judgment may not be avoided merely because there is some purported factual dispute, but only when there is a "genuine issue of material fact." Hanon v. Dataproducts Corp., 976 F.2d 497, 500 (9th Cir. 1992). The Ninth Circuit has found that, to resist a motion for summary judgment, the non-moving party:

(1) must make a showing sufficient to establish a genuine issue of fact with respect to any element for which it bears the burden of proof; (2) must show that there is an issue that may reasonably be resolved in favor of either party; and (3) must come forward with more persuasive evidence than would otherwise be necessary when the factual context makes the nonmoving party's claim implausible.

British Motor Car Distrib. Ltd. v. San Francisco Automotive Indus. Welfare Fund, 882 F.2d 371, 374 (9th Cir. 1989).

A. Counts I and II Under State Law

Count I of the Complaint alleges violation of Idaho's Wage Claim statute, Idaho Code § 45-606(1), while Count II of the Complaint alleges KSI breached the employment agreement with Wood under Idaho law by failing to pay overtime, double time, vacation, and other benefits. KSI contends that both claims under Idaho state law are barred by the six month statute of limitations contained in Idaho Code § 45-614. Wood does not dispute the factual contentions KSI makes in support of its statute of limitations argument, contending instead that by failing to plead the statute of limitations as a defense in its answer, KSI waived its right to assert the defense upon summary judgment. Wood argues alternatively that KSI cannot establish good cause under Dist. Idaho Loc. Civ. R. 16 to amend its answer to include a statute of limitations defense. In response, KSI asserts that Wood has misapplied Idaho law, specifically the holding of Callenders, Inc. v. Beckman, 814 P.2d 429, 434--35 (Idaho 1991), and that its answer sufficiently raised four affirmative defenses*fn4 encompassing Wood's inability to assert claims for additional wages due to the expiration of the statute of limitations.

(1) The Statute of Limitations Bars Plaintiff's State Law Claims Idaho Code § 45-614 requires any action to "collect wages, penalties and liquidated damages provided . . . pursuant to a contract of employment" to be filed within two (2) years after the cause of action accrued, provided, however, that in the event salary or wages have been paid to any employee and such employee claims additional salary, wages, penalties or liquidated damages, because of work done or services performed during his employment for the pay period covered by said payment, any action therefor shall be commenced within six (6) months from the accrual of the cause of action. It is further provided that if any such cause of action has accrued prior to the effective date of this act, and is not barred by existing law, action thereon may be commenced within six (6) months from the effective date of this act. In the event an action is not commenced as herein provided, any remedy on the cause of action shall be forever barred.

A cause of action for the collection of wages accrues when an employee has a right to collect the wages that are allegedly owed to him. Callenders, Inc. v. Beckman, 814 P.2d 429, 434 (Idaho Ct. App. 1991).

Wood does not dispute that he was paid on a weekly basis during the course of his employment, or that he was paid final wages as well as wages in the form of unpaid but accrued vacation pay at the time his employment was terminated. The complaint explicitly requests "additional" wages for specified periods of employment in the form of overtime and double time, as well as additional accrued vacation pay, which is characterized as wages owed but unpaid. (Compl. ¶¶ 13--27, Dkt. 1-3.) Wood's claims under Idaho Code § 45-606(1) specifically relate to claims for additional salary or wages and accrued but unpaid vacation pay characterized as additional wages for identified pay periods for which Wood already received payment of salary or wages. The same is true for Wood's breach of contract claim for unpaid wages and accrued vacation pay in the form of wages. Accordingly, the six month limitations period applies to both claims. See Johnson v. Allied Stores Co., 679 P.2d 640, 644 (Idaho 1984) (explaining the application of the limitations period in Idaho Code § 45-614, and holding that a claim for unpaid wages under a breach of contract theory falls within the parameters of Idaho Code § 45-608); Callenders, Inc., 814 P.2d at 434 (finding wage claim for unpaid "additional wages" to be subject to six month period of limitation in Idaho Code § 45-614).

Wood's claim under Idaho's Wage Claim statute and his breach of contract claim based upon the alleged employment agreement are untimely. Wood's employment was terminated on January 20, 2009, but he delayed filing the Complaint until ten months later, on October 8, 2009. Accordingly, the six month statute of limitations contained within Idaho Code § 45-614 bars the claims for unpaid overtime and vacation pay in Counts I and II of the Complaint.*fn5

Wood does not contest the arguments made by KSI, or otherwise refute the applicability of the six month statute of limitations. Instead, Wood argues that by failing to affirmatively assert the statute of limitations in its answer, KSI waived the defense under Fed. R. Civ. P. 12(b) and 8(c) and may not assert the statute of limitations in its motion for summary judgment. Rules 8(c) and 12(b) require every defense to be affirmatively asserted in any responsive pleading, and such practice is generally preferred. However, under federal law, absent a showing of prejudice to the plaintiff, a defendant may raise an affirmative defense for the first time in a motion for summary judgment, including the defense of the statute of limitations. Rivera v. Anaya, 726 F.2d 564, 566 (9th Cir. 1984). Idaho courts are in accord. Callenders, Inc., 814 P.2d at 434 (holding that a statute of limitations defense under Idaho Code § 45-614 not asserted in an answer may be pled for the first time in a motion for summary judgment).

In the instant case, Wood based his wage claim upon Idaho Code § 45-608(1) and sought unpaid wages pursuant to the terms of his contract. The statute of limitations applicable to wage claims and to claims for wages pursuant to a contract of employment is clearly set forth in Idaho Code § 45-614. Wood does not mention the court's holding in either Rivera or Callenders, Inc., or otherwise argue that Rivera is inapplicable in this matter. The authorities Wood did cite in support of his waiver argument, Grabner v. Willys Motors, Inc., 282 F.2d 644, 647 n.2, n.5 (9th Cir. 1960) and 389 Orange Street Partners, 179 F.3d 656, 663 n.3 (9th Cir. 1999), are inapposite. Grabner interpreted Oregon law concerning the limitations period applicable to personal service, while 389 Orange Street interpreted Connecticut's statute of limitations applicable to claims under its fraudulent concealment statute. Moreover, in 389 ...


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