United States District Court, E.D. Pennsylvania
June 9, 2004.
MICHAEL J. GANNON, Plaintiff,
NATIONAL RAILROAD PASSENGER CORPORATION, t/a AMTRAK, Defendant.
The opinion of the court was delivered by: JAMES KELLY, Senior District Judge
MEMORANDUM AND ORDER
Presently before the Court is a Motion to Dismiss Defendant's
Counterclaims filed by Plaintiff Michael J. Gannon ("Gannon" or
"Plaintiff") seeking dismissal pursuant to Federal Rule of Civil
Procedure 12(b)(6) of the counterclaims for conversion and unjust
enrichment filed by Defendant National Railroad Passenger
Corporation, t/a Amtrak ("Defendant" or "Amtrak").
Plaintiff initiated suit in this Court alleging that he was
unlawfully terminated from employment following his return from
active military service. Defendant answered Plaintiff's Complaint
and asserted counterclaims for conversion and unjust enrichment
contending that Plaintiff improperly received and retained Amtrak
wages during periods of military service in 1999, and that
Plaintiff's failure to repay those wages violated Amtrak's policy
prohibiting employees from "double-dipping" by simultaneously
receiving Amtrak and military wages.
For the following reasons, Plaintiff's Motion to Dismiss Counterclaims is DENIED.
Plaintiff was employed by Defendant as a Special Agent in its
Office of Inspector General from 1989 through August 31, 2001.
Plaintiff was also a Reservist in the United States Air Force
Reserve and, in 1999, volunteered for military duty in connection
with operations in Kosovo.
As a result of Plaintiff's alleged failure to submit a written
leave request along with copies of military orders to Amtrak in
May 1999, Plaintiff received and retained both his Amtrak salary
and his reserve military pay during the period of May 2, 1999
through December 17, 1999. Upon Plaintiff's return to work at
Amtrak in December 1999, he was advised of his violations of
Amtrak's leave policies and his obligation to repay the wages he
had improperly received during the period of military service. In
the months following his return to work, Plaintiff repeatedly
acknowledged his obligation to repay the wages he had received
from Amtrak during his military service. To date, Plaintiff has
not repaid the improperly received wages.
II. STANDARD OF REVIEW
In deciding a motion to dismiss a counterclaim under Federal Rule of Civil Procedure 12(b)(6), the Court must accept all
wellpleaded facts, and any reasonable inferences derived
therefrom, as true, and view them in the light most favorable to
the nonmoving party. In re Sunrise Sec. Litig., 793 F. Supp. 1306,
1310 (E.D. Pa. 1992). A claim should not be dismissed for
failure to state a claim unless it appears beyond a doubt that
the non-moving party can prove no set of facts in support of its
allegations which would entitle it to relief. Conley v. Gibson,
355 U.S. 41, 45-46 (1957).
Plaintiff contends that Defendant's counterclaim for conversion
is barred by the two-year statute of limitations, and should be
dismissed in its entirety. Plaintiff also contends that
Defendant's counterclaim for unjust enrichment, to the extent
that it seeks damages beyond the four-year statute of
limitations, should be dismissed. Each of Plaintiff's arguments
is addressed below.
An action for conversion must be commenced within two years of
the taking or injury. 42 Pa. Cons. Stat. § 5524(3) (specifying
two-year statute of limitation for "actions for taking, detaining
or injuring personal property, including actions for specific recovery thereof."); Kingston Coal Co. v.
Felton Min. Co., Inc., 690 A.2d 284, 288 (Pa. Super. 1997).
Here, Defendant admits that the period of time during which
Plaintiff improperly received Amtrak salary at the same time that
he received his military pay was from May 2, 1999 through
December 17, 1999. It is also clear from the docket entries that
Defendant asserted its counterclaim for conversion on October 15,
2003, more than two years after the complained-of time period.
While Defendant's counterclaim for conversion was filed beyond
Pennsylvania's two-year statute of limitations, our analysis does
not stop here. Pennsylvania law recognizes that the
acknowledgment doctrine may serve to toll a statute of
limitations where there is an unequivocal acknowledgment of a
debt as an existing obligation: "A clear, distinct and
unequivocal acknowledgment of a debt as an existing obligation,
such as is consistent with a promise to pay, is sufficient to
toll the statute [of limitations]." Huntingdon Finance Corp. v.
Newtown Artesian Water Co., 659 A.2d 1052, 1054 (
Pa. Super. 1995).
In this case, both Defendant and Plaintiff alike have pleaded
sufficient facts for Defendant to assert this doctrine to toll
the statute of limitations for its counterclaim for conversion.
Specifically, Defendant averred that for months following
Plaintiff's returned from military service, Plaintiff repeatedly
acknowledged his obligation to repay the wages and that he promised to honor that obligation. (Ans. ¶ 79.) Further,
Plaintiff's own Complaint acknowledges that he attempted in good
faith to reach a repayment arrangement with Defendant. (Compl. ¶
28.) Since the parties agree, to at least some extent, that
Plaintiff acknowledged his debt, there exists, at a minimum, a
factual question as to whether the acknowledgment doctrine
applies here. Accordingly, at this procedural juncture, we deny
Plaintiff's Motion to Dismiss Defendant's counterclaim for
B. Unjust Enrichment
Defendant also counterclaims for unjust enrichment, which is a
quasi-contractual claim based on an a contract implied in law.
See Salvino Steel & Iron Works, Inc. v. Fletcher & Sons,
Inc., 580 A.2d 853, 856 (Pa. Super. 1990) ("A quasi-contract,
also referred to as a contract implied in law, imposes a duty,
not as a result of any agreement, whether express or implied, but
in spite of the absence of an agreement when one party receives
an unjust enrichment at the expense of another."). A four-year
statute of limitations applies to claims under the
quasicontractual theory of unjust enrichment. 42 Pa. Cons. Stat.
§ 5525(4); Cole v. Lawrence, 701 A.2d 987, 989 (
Pa. Super. 1997). The statute of limitations begins to run on a claim from
the time the cause of action accrues. Cole, 701 A.2d at 989
(citing Packer Society Hill Travel Agency, Inc. v. Presbyterian
University of Pennsylvania Medical Center, 635 A.2d 649, 652
(Pa. Super. 1993)). In general, an action based on contract
accrues at the time of breach. Id. Where the contract is a
continuing one, the statute of limitations runs from the time
when the breach occurs or when the contract is in some way
terminated. Id. (citing Thorpe v. Schoenbrun, 195 A.2d 870,
872 (Pa. Super. 1963)).
Since the contract implied in law here was a continuing one,
based on the employment relationship between Plaintiff and
Defendant, Defendant states a cognizable claim for unjust
enrichment accruing from the date on which the employment
relationship between the parties was terminated. It is undisputed
that the employment relationship ended on August 31, 2001, and it
is on this date that the four-year limitations period began to
run. Defendant filed its counterclaim for unjust enrichment on
October 15, 2003, well within the four-year limitations period
permitted by statute for that claim. Accordingly, we also deny
Plaintiff's Motion to Dismiss Defendant's counterclaim for unjust enrichment.*fn2
For these foregoing reasons, Plaintiff's Motion to Dismiss
Counterclaims is DENIED. ORDER
AND NOW, this day of June, 2004, in consideration of the
Motion to Dismiss Defendant's Counterclaim (Doc. No. 7) filed by
Plaintiff Michael J. Gannon ("Plaintiff") and the Memorandum in
Opposition to Plaintiff's Motion to Dismiss Counterclaim (Doc.
No. 9) filed by Defendant National Railroad Passenger
Corporation, t/a Amtrak ("Defendant"), IT IS ORDERED that
Plaintiff's Motion to Dismiss Defendant's Counterclaim is