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Sutton v. Heartland Payment Systems, LLC

United States District Court, D. New Mexico

May 6, 2019

TONYA SUTTON, Plaintiff,
v.
HEARTLAND PAYMENT SYSTEMS, LLC, and JOSEPH WAYNE RIGSBY, SR., Defendants.

          Stephen P. Curtis, Attorney at Law, P.C., Albuquerque, New Mexico, for Plaintiff.

          Nelson Franse and Krystle A. Thomas, Rodey Dickason Sloan Akin & Robb P.A., Albuquerque, New Mexico, for Defendant Heartland Payments Systems LLC.

          MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT HEARTLAND PAYMENT SYSTEMS LLC'S MOTION FOR SUMMARY JUDGMENT

          PAUL KELLY, JR. UNITED STATES CIRCUIT JUDGE.

         THIS MATTER is before the court on Defendant Heartland Payment Systems LLC's (Heartland) Motion for Summary Judgment (ECF No. 29). Upon consideration thereof, the court finds the motion is well taken and should be granted.

         Background

         In 2003, Tonya Sutton was hired by Heartland, a company that offers payment processing, payroll, and other financial services. Compl. at 2 (ECF No. 1-1); About Us, Heartland Payment Systems, https://www.heartlandpaymentsystems.com/about-us (last visited May 2, 2019). Before joining Heartland, Ms. Sutton worked for what was then Morgan Stanley Dean Witter's Discover Card business selling various financial services products. Compl. at 1. She accepted an early retirement package from Morgan Stanley, but one condition of her retirement was a noncompete agreement. Id. According to Ms. Sutton, she was then hired by Heartland with the expectation that she would train one of Heartland's existing employees, Joseph Rigsby, Sr., and use her knowledge of the financial industry from Morgan Stanley to acquire clients for Heartland. Id. at 2. By pairing Ms. Sutton with Mr. Rigsby, Heartland was able to solicit Ms. Sutton's Morgan Stanley clients without triggering her noncompete agreement. Id She claims that this arrangement continued throughout her three years at Heartland and was so successful that Mr. Rigsby was promoted to Division Manager for New Mexico. Id. Ms. Sutton retired from Heartland in 2006, but she says that she continued to be involved in Heartland business by assisting Mr. Rigsby (who was still a Heartland employee) in bringing in new clients. Id.

         At the time she retired from Heartland, Ms. Sutton claims she was the owner of a “Heartland Portfolio Account.” Id. This account was a form of deferred income and performance compensation tied to the number of clients she had recruited - the amount in the portfolio account was tied to the number of clients, retention of clients, length of time as a client, and each client's volume of services used. Final Decree of Dissolution of Marriage at 5, ⁋⁋46-51 (ECF No. 29-1, Ex. A) (“Divorce Decree”); Pl.'s Resp. Mot. Summ. J. at 5 n.1 (ECF No. 38). Ms. Sutton states that at the time of her retirement she was the owner of and “fully vested” in her portfolio account. Compl. at 2-3, ¶¶ 16-17.

         In 2004, Ms. Sutton married Mr. Rigsby, but by 2009 the couple had separated and begun divorce proceedings. Id. at 2; Divorce Decree at 1, ⁋4. A final decree of dissolution of their marriage was entered in New Mexico state court on May 16, 2011. Divorce Decree at 1. The final decree made a number of findings, including a tally and division of their individual and marital assets. See generally id. The divorce court also entered a Qualified Domestic Relations Order (QDRO), within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA), that named Ms. Sutton an alternate payee of Mr. Rigsby's 401(k) retirement account managed by Heartland. Qualified Domestic Relations Order at 38-39, ⁋⁋2, 7-9 (ECF No. 1-1, Ex. 4).

         As part of the divorce proceedings, Ms. Sutton says she discovered that Heartland and Mr. Rigsby had stolen the value of her Heartland portfolio account from her. Compl. at 3. At some time after her marriage to Mr. Rigsby, she claims that Heartland merged her portfolio account with Mr. Rigsby's portfolio account without her knowledge. Id. She claims Mr. Rigsby was aware of the merger of their accounts, and she claims that her portfolio account was worth more than $300, 000 at the time. Id. at 3, 5. According to Ms. Sutton, Heartland allowed Mr. Rigsby to cash in the portfolio account and receive funds that rightly belonged to her. Id. at 3. In addition to merging her portfolio account, Ms. Sutton also claims that Heartland failed to pay benefits from Mr. Rigsby's 401(k) account as required by the QDRO. Id. at 4-5.

         On May 10, 2018, Ms. Sutton sued Heartland and Mr. Rigsby in New Mexico state court[1] for (1) breach of contract, (2) conversion, (3) unjust enrichment, and (4) conspiracy. See Compl. Heartland removed the case on the ground that Ms. Sutton's claims regarding Mr. Rigsby's 401(k) account were completely preempted by ERISA § 502(a). See Notice of Removal (ECF No. 1). Ms. Sutton moved to remand, but this court denied that motion. See Mem. Op. & Order Denying Pl.'s Mot. Remand, Sutton v. Heartland Payment Sys. LLC, No. 1:18-cv-00723-PJK-KK, 2019 WL 1795536 (D.N.M. Apr. 24, 2019) (ECF No. 44) (“Remand Order”). Heartland also moved for summary judgment on the ground that all of Ms. Sutton's claims against it are barred by limitations and that it is entitled to judgment as a matter of law on the undisputed material facts. Def.'s Mot. Summ. J. Mr. Rigsby, meanwhile, has not appeared in this action.[2]

         Discussion

         A motion for summary judgment should be granted when there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The court views the factual record and reasonable inferences that may be drawn from it in the light most favorable to the nonmoving party. Banner Bank v. First Am. Title Ins. Co., 916 F.3d 1323, 1326 (10th Cir. 2019). The court already determined that ERISA governs Count II of Ms. Sutton's complaint. Remand Order at *2. The parties appear to agree that New Mexico law governs the remaining state-law claims. See, e.g., Def.'s Mot. Summ. J. at 9-11; Pl.'s Resp. at 4-5.

         A. Count I: Claims Against Heartland for the Portfolio Account

         Ms. Sutton's complaint alleges that Heartland committed the tort of conversion when it merged her portfolio account with Mr. Rigsby's portfolio account without her permission or knowledge. Compl. at 2-4. She seeks damages in the amount of the account's worth at the time it was converted, or $300, 000. Id. at 3. Heartland responds that Ms. Sutton is time barred because she knew or should have known that she had no separate portfolio account by May 16, 2011. Def.'s Mot. Summ. J. at 9-10. New Mexico has a four-year statute of limitations for conversion of personal property, N.M. Stat. Ann. ยง 37-1-4 (West 1978), so the ...


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