Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Lavender v. Koenig

Superior Court of Delaware, Kent

February 1, 2017

DEWEY RAY LAVENDER, and STEVEN WARREN, Plaintiffs,
v.
SCOTT KOENIG, individually and in his official capacity as City Manager, KIM HAWKINS, individually and in her official capacity as Director of Human Resources, the CITY OF DOVER COUNCIL, and CITY OF DOVER, Defendants.

          Submitted: November 18, 2016

         Upon Consideration of Defendant City of Dover's Motion for Summary Judgment GRANTED

          Michele D. Allen, Esquire, Law Offices of Michele D. Allen, LLC, Hockessin, Delaware for Plaintiffs.

          Daniel A. Griffith, Esquire, Whiteford Taylor Preston, LLC, Wilmington, Delaware for Defendant City of Dover.

          ORDER

          Robert B. Young J.

         SUMMARY

         Dewey Ray Lavender and Steven Warren ("Plaintiffs") filed a Complaint against Scott Koenig, individually and in his capacity as City Manager; Kim Hawkins, individually and in her official capacity as Director of Human Resources; the City of Dover Council, and the City of Dover ("Defendants"). Plaintiffs asserted claims stemming from the manner in which they were allegedly induced to continue working at the McKee Run Generating Station ("Power Plant") and Defendants' denial of their application for pension benefits under the City of Dover's Code of Ordinances. The statute of limitations bars Plaintiffs' claims for breach of the implied covenant of good faith and fair dealing. Further, Plaintiffs' claims for breach of contract fail because Plaintiffs' are not eligible employees under the City of Dover's Code of Ordinances.

         FACTS AND PROCEDURE

         Steven Warren started working at the Power Plant in August 1980. He retired from the Power Plant in 2015. Dewey Ray Lavender started working at the Power Plant in March 1981. He still works at the Power Plant. The parties do not dispute that from 1981 until 1996 the City of Dover ran this Power Plant.

         In 1996, the City of Dover adjusted the way the Power Plant functioned. It did this through an agreement with D/FD Operating Services LLC through its agent Louis Dreyfus Electric Power Inc. Defendants maintain that the City of Dover privatized the Power Plant by transferring control of the Power Plant to D/FD Operating Services LLC. Plaintiffs assert that the City of Dover controlled the Power Plant. The parties agree that the City of Dover reimbursed D/FD Operating Services LLC for the Plaintiffs' wages and benefits under this agreement.

         The parties agree that in February 1996 Plaintiffs signed identical letters allowing them to continue working at the Power Plant.[1] The letters stated "as an employee of the Company, you will no longer be eligible to continue receiving city benefits." Further, the letters asked Plaintiffs to (1) decide whether to decline employment at the Power Plant; (2) accept employment at the Power Plant, while withdrawing fifty percent of the cash value of their unused sick leave, as a bonus, and remaining vested in the City of Dover's pension plan; or (3) accept employment at the Power Plant, while withdrawing 100 percent of the cash value of their unused sick leave, as a bonus, and not remaining vested in the City of Dover's pension plan. Plaintiffs chose the second option to accept employment and remain vested in the City of Dover's pension plan.

         In 2006, Dover adjusted the way the Power Plant functioned again. The City of Dover entered an agreement with North American Energy Services Company ("NAES"). Defendants assert this agreement placed NAES in control of the Power Plant. Plaintiffs claim the City of Dover was still in control of the Power Plant. Plaintiffs continued working at the Power Plant. Under this agreement, the parties agree, the City of Dover reimbursed NAES for Plaintiffs wages and benefits.

         Steven Warren testified that in 2008, he found out about an agreement that allowed Dover paramedics to remain in Dover's pension plan - even after they started working with Kent County.[2] He asserted that he discovered this information on the City of Dover's website. Plaintiffs assert that certain employees were allowed to maintain their City of Dover pension in a manner similar to the paramedics.

         In January 2012, Plaintiffs started the process of applying for unreduced pension benefits with the City of Dover. On February 14, 2012, Scott Koenig, Dover's then City Manager, notified Plaintiffs' attorney that he did not agree that they were entitled to unreduced pension benefits. On July 11, 2012, Plaintiffs sent Kim Hawkins, Dover's then Director of Human Resources, a letter reiterating their belief that they were entitled to unreduced pension benefits. On August 20, 2012, Plaintiffs' application for unreduced pension benefits was formally denied.[3]

         In her deposition testimony, the Controller Treasurer of the City of Dover, Donna S. Mitchell, noted that Plaintiffs have not paid any contribution for a City of Dover pension since, at the latest, October 2000.[4] Further, she asserted that bringing in past employees, similarly situated to Plaintiffs, would create an unfunded liability for the City of Dover. Plaintiffs produced no evidence challenging these assertions.

         On August 21, 2013, Plaintiffs filed the Complaint for this suit. Defendants removed this suit to federal court on December 19, 2013. After the United States District Court for the District of Delaware dismissed all of the federal claims asserted in the initial suit, it remanded the remaining claims to this Court. The City of Dover then filed the instant Motion for Summary Judgment.

         STANDARD OF REVIEW

         Summary judgment is appropriate where the record exhibits no genuine issue of material fact, and the movant is entitled to judgment as a matter of law.[5] This Court shall consider the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any" in deciding the motion.[6] The moving party bears the initial burden of demonstrating the nonexistence of material issues of fact; the burden then shifts to the nonmoving party to show that there are material issues of fact in dispute.[7] The Court views the record in the light most favorable to the nonmoving party.[8] When material facts are in dispute, or "it seems desirable to inquire more thoroughly into the facts, to clarify the application of the law to the circumstances, " summary judgment will not be appropriate.[9] However, when the facts permit a reasonable person to draw but one inference, the question becomes one for decision as a matter of law.[10]

         DISCUSSION

         Defendant City of Dover argues that the statute of limitations bars Plaintiffs' claims for breach of the implied covenant of good faith and fair dealing and breach of contract[11] because these claims accrued more than three years before Plaintiffs filed suit. Alternatively, Defendant City of Dover argues that Plaintiffs have not provided evidence sufficient to support their breach of the implied covenant of good faith and fair dealing claims. Finally, Defendant City of Dover asserts that Plaintiffs' breach of contract claims should fail because Plaintiffs were not eligible employees under the City of Dover's pension scheme.

         The parties do not dispute the material facts in this action. Thus, summary judgment is appropriate. Plaintiffs asserted their claims for breach of the implied covenant of good faith and fair dealing more than three years after their claims accrued. The discovery rule did not toll the statute of limitations for these claims. Further, Plaintiffs are not eligible employees under the City of Dover's pension scheme.

         I. The Statute of Limitations Bars Plaintiffs' Claims for Breach of the Implied Covenant of Good Faith and Fair Dealing; It Does Not Bar Plaintiffs' Breach of Contract Claims

         The statute of limitations for breaches of contract expires three years after the date on which a cause of action accrues.[12] To determine whether the claims in the instant suit are barred by the statute of limitations this Court must answer two questions. First, when did the claims accrue? Second, if the claims accrued more than three years before Plaintiffs filed their suit, was the statute of limitations tolled at any point?

         Plaintiffs' breach of the implied covenant of good faith and fair dealing claims accrued more than three years before Plaintiffs filed their suit.

         Plaintiffs' breach of contract claims accrued less than three years before Plaintiffs filed their suit.

         The circumstances surrounding Plaintiffs' claims for breach of the implied covenant of good faith and fair dealing did not toll the statute of limitations. Thus, the statute of limitations bars Plaintiffs' claims for breach of the implied covenant of good faith and fair dealing. The statute of limitations does not bar Plaintiffs' claims for breach of contract.

         A. When Did the Claims Accrue?

         In contract actions, the statute of limitations accrues "at the time the contract is broken, not at the time when actual damage results or is ascertained."[13] In U.S. Cellular Investment Company of Allentown v. Bell Atlantic Mobile Systems, Inc., the appellant sued Bell Atlantic for violating an agreement not to compete with a partnership in a specific geographical area.[14] The Delaware Supreme Court held that the statute of limitations in this suit accrued when Bell Atlantic filed an application with the FCC to provide cellular service in areas adjoining the specific geographic area because this was the date on which the contract was breached.[15]

         Plaintiffs' claims for breach of the implied covenant of good faith and fair dealing accrued in February 1996, when Plaintiffs accepted employment with D/FD Operating Services LLC, because that was the point at which Defendants allegedly breached the implied covenant of good faith and fair dealing. In the employment context, a cause of action arises for breach of the implied covenant of good faith and fair dealing when an employer "induces another to enter into an employment contract through actions, words, or withholding information, which is intentionally deceptive in some material way to the contract."[16] Plaintiffs entered the relevant employment contract in February 1996, when they signed their offer letters. They could not have been induced into entering their employment contract at any point after February 1996. Thus, the action could not have accrued at any point after February 1996.

         Plaintiffs' claims for breach of contract accrued in August 2012 when Defendants denied their application for benefits because that was the point at which Defendants allegedly breached their alleged obligation to pay Plaintiffs' benefits. With respect to their breach of contract claims, Plaintiffs maintain that they are entitled to benefits under § 2-327 of the City of Dover Code of Ordinances. Plaintiffs' application for benefits, under this provision of the City of Dover Code of Ordinances, was not denied until August 20, 2012. As such, the breach of contract claims accrued on August 20, 2012.

         B. Was the Statute of Limitations Tolled for Plaintiffs' Breach of Implied Covenant ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.