Magpiong v. Superdry Retail LLC
Magpiong v. Superdry Retail LLC
Opinion of the Court
Plaintiff Elaine Magpiong's career at defendant Superdry Retail's store in Las Vegas's Grand Bazaar Shops came to an end on June 11, 2015, when she was terminated for purported company-reorganization reasons. She signed a separation agreement, entitling her to a severance package and shielding Superdry from any and all claims, known or unknown, suspected or unsuspected, regardless of whether she discovered new or different facts relating to her employment or termination. Eight months later, Magpiong got word of a lawsuit in New York filed by a former Superdry human resources manager against Superdry. That lawsuit illuminated to Magpiong that Superdry fired her because she is a lesbian, not for innocuous reorganization reasons. So Magpiong sues Superdry, claiming that it discriminated against her based on her sexual orientation, breached the implied covenant of good faith and fair dealing, and fraudulently induced her to sign the claim-barring separation agreement. Superdry moves to dismiss, arguing that Magpiong's fraudulent-inducement claim fails as a matter of fact and law, and thus, the separation agreement is valid, binding, and enforceable and precludes Magpiong's other claims. I agree with Superdry, so I grant the motion and dismiss all of Magpiong's claims with prejudice.
Background
Plaintiff Elaine Magpiong started working for defendant Superdry in October 2011. She excelled at her job and was eventually promoted to manage one of Superdry's two locations on the Las Vegas strip. She had no disciplinary record, received positive performance reviews, and was considered a "strong performer" by her manager.
At some point in the first half of 2015, Rozalind Stewart, the head of Superdry's US Retail Operations, visited Magpiong's store and met her for the first time. Following that visit, Stewart told Human Resources Manager Pamela Brown that she planned to fire Magpiong because she didn't like how Magpiong walked (particularly because she "swaggered"), she felt that Magpiong's clothing style was "off brand,"
On June 11, 2015, Brown-directed by Stewart-terminated Magpiong, citing "company reorganization." Magpiong signed a broad "Separation and General Release Agreement" that released Superdry from all liability relating to Magpiong's employment and termination, and in exchange, Magpiong received $2,230.77 in severance pay. Apparently, Brown returned to her office in New York and voiced her concerns that the company was violating several employment laws, but her whistleblowing was not appreciated, and she, too, was terminated.
About eight months later, Magpiong learned that Brown had filed a lawsuit against Superdry in New York for unlawful employment practices and retaliation. That lawsuit brought to light Stewart's behind-the-scenes motives for terminating Magpiong, so Magpiong filed a claim with the Nevada Equal Rights Commission and, later, this court. Superdry contends that Magpiong is bound by her separation agreement and is in breach of it by maintaining this lawsuit. Magpiong argues that she was fraudulently induced to sign it because, had she known that she was fired for her sexual orientation, she never would've agreed to it.
Discussion
A. Motion-to-dismiss standard
Federal Rule of Civil Procedure 8 requires every complaint to contain "[a] short and plain statement of the claim showing that the pleader is entitled to relief."
District courts employ a two-step approach when evaluating a complaint's sufficiency on a Rule 12(b)(6) motion to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint, recognizing that legal conclusions are not entitled to the assumption of truth.
Review on a motion to dismiss under FRCP 12(b)(6) is normally limited to the four corners of the complaint.
B. I consider the separation agreement in making my ruling.
This is Superdry's second motion to dismiss. In its first motion, Superdry argued that Magpiong is bound by the separation agreement, which prevented her from bringing any claims against it.
Now, in this second round of dismissal arguments, Superdry contends that Magpiong fails to sufficiently allege all of the elements of her fraudulent-inducement claim, and that the "fraudulent inducement claim fails as a matter of law [because] it directly contradicts the terms of an express written contract."
The parties refer repeatedly throughout their briefs to the Separation and General Release Agreement, which was attached as an exhibit to the first motion to dismiss and is incorporated by reference into this new motion. Because both of Superdry's motions to dismiss focus on the separation agreement, Magpiong had an adequate opportunity to challenge its authenticity. Magpiong does not suggest that Superdry's attachment is anything but a true *987and accurate representation of the separation agreement that she signed. Because Magpiong refers to this agreement in her amended complaint, I consider it now in ruling on this motion to dismiss without converting this motion into one for summary judgment.
C. Superdry's arguments
Superdry offers multiple arguments for why Magpiong's fraudulent-inducement claim fails. First, Superdry suggests that fraudulent inducement is unavailable as a matter of law where the fraudulent-inducement allegations contradict the terms of an express, written contract. Second, Superdry explains why, on these facts, Magpiong has not pled-and cannot plead-sufficient facts to support the elements of her claim. And third, Superdry contends that an employee who releases unknown claims, regardless of newly discovered different or additional facts, may not use a fraudulent termination reason as the basis for a fraudulent-inducement claim.
1. The fraud alleged by Magpiong does not contradict the terms of the release.
Superdry suggests that "a fraudulent[-]inducement claim fails as a matter of law where it directly contradicts the terms of an express written contract."
Superdry's alleged misrepresentation regarding the reason for her termination ... directly contradicts (1) Plaintiff's explicit promise to release any and all claims relating to her termination, whether known or unknown to her at the time of her termination; and (2) her explicit promise that the Release Agreement would remain effective regardless of whether new or different facts came to light with respect to her termination or her released claims.24
The alleged fraud does not, however, contradict the terms of the separation agreement. The separation agreement says nothing about why Magpiong was terminated.
Superdry's cited cases illustrate this point. In Road & Highway Builders v. N. Nev. Rebar ,
R & H initially planned on using pour-in-place RCBs, which required approximately 2.7 million pounds of rebar, and began negotiating a subcontract with NNR to supply all 2.7 million pounds.
The subcontract required NNR to furnish all labor and materials necessary to fully perform and complete the work-including the 2.7 million pounds of rebar. But the subcontract also allowed R & H to "order additions, deletions or revisions in the Work to be performed by NNR," "make any change, including additions of omissions, in the Work to be performed by NNR under [the] Subcontract," and gave R & H "the absolute right to terminate at any time and for any reason."
The Court held that "the purported inducement cannot be something that conflicts with the Subcontract's express terms, as the terms of the contract are the embodiment of all oral negotiations and stipulations."
Soffer v. Five Mile Capital Partners, LLC
Road & Highway and Soffer are distinguishable from this case because, in each case, the allegedly fraudulent statement was contradicted by an express, contractual term. But here, the allegedly fraudulent statement that Magpiong was terminated for company reorganization does not conflict with any express term of her separation agreement. So Magpiong is not precluded from raising a fraudulent-inducement claim on this basis.
2. Magpiong fails to allege true facts to satisfy the elements of her fraudulent-inducement claim.
The parties agree that the separation agreement bars Magpiong's claims, so Magpiong can proceed in this case only if she can plead sufficient facts to allow for an inference that she has a viable claim to rescind it.
To plead a valid fraudulent-inducement claim, Magpiong must specifically allege true facts that allow me to infer that: (1) Superdry made a false representation to her; (2) Superdry knew or should have known that the representation was false; (3) Superdry intended to induce Magpiong with the false representation into signing the agreement; (4) she justifiably relied on that representation; and (5) Magpiong suffered damages.
There are two distinct moments surrounding Magpiong's termination that deserve specific attention: the termination itself and when Magpiong signed the liability release. Magpiong alleges that "Defendant Superdry falsely represented to [her] that she was being terminated due to 'company reorganization.' "
Defendants also argue that Magpiong cannot legitimately plead that she justifiably relied on Superdry's misrepresentation because the separation agreement expressly states that it remains "effective in all respects notwithstanding ... different or additional facts or the discovery of them."
The newly-discovered-facts provision fully states:
Employee acknowledges that Employee may discover facts or law different from, or in addition to, the facts or law that Employee knows or believes to be true with respect to the claims released in this Agreement and agrees, nonetheless, that this Agreement and the release contained in it shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of them.56
Basically, the agreement survives no matter what the facts are. As a practical matter, Magpiong agreed that the facts were of no consequence, so she signed away her right to rely on them, and she cannot now legitimately plead true facts to satisfy the justifiable-reliance element. Fraudulent inducement is thus one of the countless claims, "known or unknown, suspected or unsuspected," that Magpiong released.
I recognize the Catch-22: Magpiong contractually foreclosed herself from pleading all of the elements of her fraudulent-inducement claim, but she claims that she was fraudulently induced to sign the agreement, so she shouldn't be bound by its terms. This brings me back to the third and most critically missing element: Magpiong does not allege facts to show that Superdry's fraud induced her to sign the agreement-she alleges only that the reason for her termination was fraudulent.
*991Magpiong thus fails to sufficiently plead her fraudulent-inducement claim.
3. Superdry's argument that a fraudulent-termination reason can't serve as the basis for a fraudulent-inducement claim is redundant.
Superdry suggests that it "is an issue of first impression in Nevada ... whether an employee can rescind an otherwise enforceable release agreement under a fraudulent-inducement theory based solely on the reason given by the employer for the termination" where the employee released unknown claims regarding her employment and termination and agreed that the release would remain effective regardless of newly discovered different or additional facts.
This argument is simply a redundant recharacterization of Superdry's insufficient-pleading argument. In each of Superdry's supporting cases, the court held that the plaintiff was either not induced by the fraudulent termination reason to sign the separation agreement
D. A release of unknown and unsuspected claims does not bar a fraudulent-inducement claim.
Magpiong argues that "cases in the Ninth Circuit support the supposition that 'a release of unknown claims does not bar a claim for fraudulent concealment premised on the assertion that the defendant's misconduct induced the plaintiff into executing the release.' "
E. Nevada enforces liability releases of unknown claims.
Magpiong also argues that, according to the Ninth Circuit in Matsuura v. Alston & Bird ,
Conclusion
Accordingly, IT IS HEREBY ORDERED that Superdry's motion to dismiss [ECF No. 25] is GRANTED. This case is DISMISSED with prejudice . The Clerk of Court is directed to ENTER JUDGMENT accordingly and CLOSE THIS CASE .
At this motion-to-dismiss stage, I accept all of Magpiong's well-pled facts as true and consider them in the light most favorable to her. See NL Industries, Inc. v. Kaplan ,
Magpiong wore Superdry clothing to work, but she wore clothes from the men's line instead of the women's line. ECF No. 24 at 7, ¶ 49.
Fed. R. Civ. P. 8(A)(2) ; Bell Atl. Corp v. Twombly ,
Twombly ,
Iqbal ,
Twombly ,
Iqbal ,
Twombly ,
See Lee v. City of Los Angeles ,
Fed. R. Civ. P. 12(b) ; See United States v. Ritchie ,
Ritchie ,
Branch v. Tunnell ,
ECF No. 5 at 6-8.
Id. at 8-10.
Magpiong's original complaint included one claim for negligent misrepresentation and another claim for intentional misrepresentation and fraud. The original pleading wasn't exactly clear, but I gleaned from it that Magpiong actually intended a fraudulent-inducement claim rather than these other two claims. See ECF No. 23 at 5.
ECF No. 23 at 6.
Id. at 17.
ECF No. 25 at 2 (quoting Soffer v. Five Mile Capital Partners, LLC ,
Soffer ,
ECF No. 25 at 3.
See generally ECF No. 5-2 at 4-7.
Id. at 4, ¶ 1.
Road & Highway Builders v. N. Nev. Rebar ,
Id. at 379.
Id. 378-379.
Id. at 379.
Id. at 379-80.
Id. at 390.
Id. at 390-91.
Id. at 391.
Soffer v. Five Mile Capital Partners, LLC ,
Id. at *9
See ECF No. 26 at 10 ("What Plaintiff seeks is to prove that the Release was procured by fraud and therefore invalidating the Release pursuant to contractual principles. Plaintiff is not introducing the evidence of Defendant's fraud to alter the Release nor is Plaintiff intending to change the terms of the release. Rather, Plaintiff is attempting to prove that the entire contract is void ....") (Pl.'s opp'n to def.'s mot. to dismiss).
J.A. Jones Const. Co. v. Lehrer McGovern Bovis, Inc. ,
ECF No. 24 at 9.
Id. at 10.
ECF No. 25 at 14; ECF No. 5-2 at 5.
ECF No. 25 at 16 n.10.
ECF No. 26 at 10 (citing Information Systems & Networking Consultants, LP v. Robinson ,
Id. at 11.
ECF No. 5-2 at 5.
See, e.g. , Yassan v. J.P. Morgan Chase & Co. ,
ECF No. 25 (emphasis in original).
Id. at 3-4.
See Yassan ,
See Pallonetti v. Liberty Mut. ,
ECF No. 26 at 7 (quoting Burton Way Hotels, Ltd. v. Four Seasons Hotels, Ltd. ,
Matsuura v. Alston & Bird ,
ECF No. 26 at 7 (quoting Matsuura ,
Matsuura ,
The parties don't dispute that Nevada contract law controls, and the separation agreement has a Nevada choice-of-law provision. See ECF No. 5-2 at 6 ("This Agreement shall be governed by and interpreted in accordance with the laws of Nevada without regard to rules governing conflicts of laws.").
See, e.g. , In re Amerco Derivative Litigation ,
Reference
- Full Case Name
- Elaine MAGPIONG v. SUPERDRY RETAIL LLC
- Cited By
- 2 cases
- Status
- Published