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Armijo v. Fedex Ground Package System, Inc.

United States District Court, D. New Mexico

January 3, 2018

JAIME LOREE ARMIJO, on behalf of herself and all others similarly situated, Plaintiff,
FEDEX GROUND PACKAGE SYSTEM, INC., a foreign company Defendant.



         This matter is before the Court on FedEx Ground Package System, Inc.'s Motion to Dismiss in Part, filed on June 15, 2017. (Doc. 20.) Jurisdiction arises under 28 U.S.C. § 1332.[1]Having considered the submissions of counsel and the relevant law, the Court will GRANT IN PART the Motion as outlined below.

         Plaintiff Jaime Loree Armijo drove a delivery truck for FedEx Ground Package System, Inc. (FedEx) for three years. During her tenure as a driver, she routinely worked substantial overtime hours, but because she was hired as an “independent contractor, ” FedEx was not obligated to pay her a penny of overtime. She was also responsible for a wide variety of business charges. Plaintiff, on behalf of herself and others similarly situated, now brings suit to dispute the legality of her relationship with FedEx and recover monetary damages to which she feels entitled.

         I. Background[2]

         “On July 27, 2013, Plaintiff executed a contract with FedEx Ground to work as a ‘pickup and delivery contractor'” (a “driver”). (See Doc. 1 (Compl.) ¶ 10; see also Doc. 1-1.) Plaintiff alleges that despite this contract, the terms and conditions of her employment were such that she and other drivers were employees of FedEx, not independent contractors. (Id. ¶¶ 17-41.) The question of whether Plaintiff was an independent contractor or an employee is not directly at issue in FedEx's Motion; consequently, the Court will assume for purposes of its analysis that Plaintiff can successfully demonstrate she was an employee of FedEx.

         When Plaintiff was hired as a driver for FedEx, she signed a “Pick-up and Delivery Contractor Operating Agreement” (Operating Agreement). (See Id. ¶¶ 1, 10; see also Doc. 1-1.) The Operating Agreement provides for certain deductions to be made from the driver's paycheck (referred to as a “settlement check” or a “settlement statement” (see Doc. 1-1 at 14-16)), [3]including, but not limited to, fuel products, a “Time-Off Program, ” and a “Business Support Package, ” which includes “uniforms, communications and data processing equipment, D.O.T. inspections, equipment washing, drug tests meeting D.O.T. requirements, and other items and services found in . . . Addendum 7” to the Operating Agreement. (See Id. at 18-19, 37, 62, 70- 75.) Plaintiff elected, at a minimum, to participate in the “Business Support Package.” (Id. at 71- 72.) The Operating Agreement also provides that FedEx “shall have no responsibility to make deductions for, or to pay wages, benefits, health, welfare and pension costs, withholding for income taxes, unemployment insurance premiums, payroll taxes, disability insurance premiums, social security taxes, or any other similar charges ___” (Id. at 15.)

         Plaintiff alleges that “[f]or most of her tenure at FedEx Ground, [she] routinely worked 60 hours a week, or more.” (Compl. ¶ 13.) Plaintiff did not receive overtime pay for any hours she worked over 40 in a week. (Id. ¶ 59.)

         Plaintiff brings three claims against FedEx. First, she alleges that FedEx violated N.M. Stat. Ann. § 50-4-22(D) by not paying drivers overtime pay for hours worked over 40 in one week. (Id. ¶¶ 53-59.) Second, Plaintiff claims FedEx violated N.M. Stat. Ann. § 14-13-11, because it withheld certain amounts from each driver's paycheck in contravention of the statute. (Id. ¶¶ 60-67.) Third, Plaintiff asserts a common law claim for unjust enrichment. (Id. ¶¶ 68-74.) FedEx now moves to dismiss Plaintiff's second and third claims, as well as the claim for liquidated damages in Plaintiff's first claim for relief. (See Doc. 20 at 1.)

         II. Legal Standard

         In reviewing a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the Court “must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff.” In re Gold Res. Corp. Sec. Litig., 776 F.3d 1103, 1108 (10th Cir. 2015) (citation omitted). “To survive a motion to dismiss, ” the complaint does not need to contain “detailed factual allegations, ” but it “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, 555, 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. (citing Twombly, 550 U.S. at 556). Plausibility does not equate to probability, but there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556.)

         “[W]hile ordinarily, a motion to dismiss must be converted to a motion for summary judgment when the court considers matters outside the complaint, see Fed. R. Civ. P. 12(d), matters that are judicially noticeable do not have that effect, see Duprey v. Twelfth Judicial Dist. Court, 760 F.Supp.2d 1180, 1192-93 (D.N.M. 2009) ___” Genesee Cty. Emps.' Ret. Sys. v. Thornburg Mortg. Sec. Tr. 2006-3, 825 F.Supp.2d 1082, 1122 (D.N.M. 2011) (internal citation omitted).

Exhibits attached to a complaint are properly treated as part of the pleadings for purposes of ruling on a motion to dismiss. Ordinarily, consideration of material attached to a defendant's answer or motion to dismiss requires the court to convert the motion into one for summary judgment and afford the parties notice and an opportunity to present relevant evidence. However, facts subject to judicial notice may be considered in a Rule 12(b)(6) motion without converting the motion to dismiss into a motion for summary judgment. This allows the court to take judicial notice of its own files and records, as well as facts which are a matter of public record. However, the documents may only be considered to show their contents, not to prove the truth of matters asserted therein.

Id. at 1122-23 (quoting Tal v. Hogan, 453 F.3d 1244, 1264 n.24 (10th Cir. 2006) (internal quotation marks, alterations, and citations omitted)).

         III. Count II: Plaintiff fails to state a claim for a violation of N.M. Stat. Ann. § 14-13-11.

         Plaintiff's second claim revolves around certain deductions FedEx took from Plaintiff's paycheck. (See Compl. ¶¶ 60-67.) Plaintiff alleges that FedEx violated N.M. Stat. Ann. § 14-13-11 by taking deductions without following the process required by Section 14-13-11(A). (Compl. ¶¶ 60-67.) Section 14-13-11(A) provides:

All assignments of wages or salaries due or to become due to any person, in order to be valid, shall be acknowledged by the party making the assignment before a notary public or other officer authorized to take acknowledgments. The assignment shall be recorded in the office of the county clerk of the county in which the money is to be paid and a copy served upon the employer or person who is to make payment.

N.M. Stat. Ann. § 14-13-11(A).

         Count II is devoid of details regarding these deductions, but a generous reading of the Complaint and Operating Agreement shows that Plaintiff enrolled in FedEx's Business Support Package program and authorized FedEx to take daily deductions from her paycheck for certain business expenses. (See Id. ¶¶ 32-33, 60-67; see also Doc. 1-1 at 70-72.) Plaintiff argues that she and all “class members are entitled to be reimbursed by FedEx Ground for all” such deductions held in violation of this statute. (Id. ¶ 67.) FedEx contends that any deductions taken from Plaintiff's paycheck are not properly defined as “assignments”; therefore, Section 14-13-11 is inapplicable to the facts of this case. (Doc. 20-1 at 5-7.) The Court agrees that Plaintiff fails to state a claim pursuant to Section 14-13-11.

         A. Rules of Statutory Construction

         Plaintiff can point to no case or regulation applying Section 14-13-11 in a similar situation. (See Doc. 30 at 8-10.) Because “no controlling state decision exists” on this issue, the Court “must attempt to predict what the state's highest court would do ___” Coffey v. United States, 870 F.Supp.2d 1202, 1246 (D.N.M. 2012) (quoting Wade v. EMCASCO Ins. Co., 483 F.3d 657, 665-66 (10th Cir. 2007) (internal quotation omitted)).

         “When interpreting statutes, [a court's] responsibility is to search for and give effect to the intent of the legislature.” Cummings v. X-Ray Assocs. of N.M., P.C., 918 P.2d 1321, 1334 (N.M. 1996). A court's “understanding of legislative intent is based primarily on the language of the statute, and [the court must] first consider and apply the plain meaning of such language.” Id. (citing Roberts v. Sw. Cmty. Health Servs., 837 P.2d 442, 445 (N.M. 1992) (internal citation omitted)). “This standard is sometimes called the ‘plain meaning rule.'” Id. The “rule does not require a mechanical, literal interpretation of the statutory language.” Id. (citing D'Avignon v. Graham, 823 P.2d 929, 931 (N.M. Ct. App. 1991) (internal citations omitted)). Courts must not rest “conclusions upon the plain meaning of the language if the intention of the legislature suggests a meaning different from that suggested by the literal language of the law.” Id. (citing Draper v. Mountain States Mut. Cas. Co., 867 P.2d 1157, 1159 (N.M. 1994) (internal citations omitted)). “If the strict wording of the law suggests an absurd result, [courts] may interpret the statute to avoid such a result.” Id. (citing New Mexico v. Gutierrez, 854 P.2d 878, 879 (N.M. Ct. App.), cert. denied, 854 P.2d 872 (N.M. 1993) (internal citations omitted)). “When analyzing a statute from a particular statutory act, ” courts “must read the act in its entirety and construe all the provisions together and attempt to view them as a harmonious whole.” Id. (citing Roberts, 837 P.2d at 445 (internal citation omitted)). “The plain meaning of particular statutory language will sometimes be modified when considered in the context of other statutes from the same act.” Id.

         B. Interpretation of Section 14-13-11

         Plaintiff asserts that a wage deduction is the same as a wage assignment; thus Section 14-13-11's requirement that “[a]ll assignments of wages or salaries due” be notarized and recorded applies to deductions taken by an employer. (Doc. 30 at 9.) An assignment is “[t]he act by which one person transfers to another, or causes to vest in that other, the whole of the right[, ] interest, or property which he has in any realty or personalty, in possession or in action, or any share, interest, or subsidiary estate therein.” (Id. (quoting Assignment, The Law Dictionary, available at Plaintiff believes this “definition easily covers the transaction at issue, which is FedEx's retention of certain sums otherwise payable to Armijo and the class.” (Id.) While the Court agrees that the plain meaning of “assignment” could possibly be ...

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