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Henkel v. Starwood Hotels & Resorts Worldwide, LLC

United States District Court, M.D. Pennsylvania

January 4, 2018

CHELSEA HENKEL, LISA HASTINGS, LEONORA MOCERINO CRAIG MOCERINO and LIZETH LARKIN, on behalf of themselves and others similarly situated, Plaintiffs



         Pending before the court is the defendant's motion to dismiss all of the claims in plaintiffs' complaint, (Doc. 1), as time-barred by the applicable statutes of limitations. (Doc. 13). Plaintiffs Chelsea Henkel, Lisa Hastings, Leonora Mocerino, Craig Mocerino, and Lizeth Larkin (collectively, “plaintiffs”), are former employees of defendant Starwood Hotels & Resorts Worldwide, LLC (“Starwood”) who worked at one of three Starwood resorts in Pennsylvania as food servers before Starwood sold the resorts in October of 2012. Plaintiffs allege that they were not paid the mandatory gratuity fee Starwood charged its customers in lieu of tipping its employees and, that Starwood failed to pay the fee to them in breach of its contract with its customers. Plaintiffs assert claims on behalf of themselves and as well as a putative class. Starwood contends that plaintiffs' claims are time-barred since their employment with it ended in October of 2012 and plaintiffs did not file this action until March 2, 2017, beyond the two and four year statutes of limitations applicable to their claims. Alternatively, Starwood argues that plaintiffs' complaint fails to state cognizable claims.

         Based upon the court's review of the relevant documents, the court will GRANT Starwood's motion and DISMISS WITH PREJUDICE the complaint as time-barred.

         I. BACKGROUND

         By way of relevant background, plaintiffs allege that they worked as food servers and café attendants in resorts Starwood operated. Plaintiffs allege that they were the type of employees who customarily received gratuities. They allege that a “written contract for services existed between [Starwood] and its customers” that included a provision for a “mandatory gratuity fee” equal to “20% of cost of the room per night.” Starwood also allegedly charged a “resort fee” of $20 per night to all customers staying at their resorts. Plaintiffs allege that the gratuity fee was provided in a written contract for services between Starwood and its customers. Based on the alleged contract, Starwood provided hotel rooms to its customers and its customers paid the hotel rooms' cost. Plaintiffs also allege that, if guests inquired, Starwood's employees informed the guests that Starwood charged the gratuity fee so guests would not need to tip employees, and that the fee would be distributed to Starwood's employees. However, plaintiffs allege that Starwood failed to distribute the tips or gratuities to them and, that Starwood kept the gratuity fee it collected from its customers. Thus, plaintiffs allege that Starwood breached its contract with its customers by failing to distribute gratuities to its service staff, including plaintiffs.

         Plaintiffs filed their complaint on March 2, 2017. (Doc. 1). They assert three causes of action, namely, breach of contract as express or implied third-party beneficiaries, unjust enrichment, and conversion. They aver that this federal court has subject matter jurisdiction based on diversity of citizenship pursuant to 28 U.S.C. §1332. On June 19, 2017, Starwood filed a motion to dismiss plaintiffs' complaint with prejudice, pursuant to Fed.R.Civ.P. 12(b)(6), as time barred. (Doc. 13). Starwood filed its brief in support on June 20, 2017. (Doc. 14). Plaintiffs filed their brief in opposition on July 28, 2017. (Doc. 20). Starwood filed a reply brief on September 1, 2017. (Doc. 23).


         Starwood's motion to dismiss is brought pursuant to the provisions of Fed.R.Civ.P. 12(b)(6). This rule provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated, Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005), and dismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead “enough facts to state a claim to relief that is plausible on its face, ” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974 (2007) (abrogating “no set of facts” language found in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). The facts alleged must be sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. 544, 127 S.Ct. at 1965. This requirement “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of” necessary elements of the plaintiff's cause of action. Id. Furthermore, in order to satisfy federal pleading requirements, the plaintiff must “provide the grounds of his entitlement to relief, ” which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (brackets and quotations marks omitted) (quoting Twombly, 550 U.S. 544, 127 S.Ct. at 1964-65).

         In considering a motion to dismiss, the court generally relies on the complaint, attached exhibits, and matters of public record. See Sands v. McCormick, 502 F.3d 263 (3d Cir. 2007). The court may also consider “undisputedly authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] documents.” Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Moreover, “documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered.” Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir. 2002). However, the court may not rely on other parts of the record in determining a motion to dismiss. See Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).

         Generally, the court should grant leave to amend a complaint before dismissing it as merely deficient. See, e.g., Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247, 252 (3d Cir. 2007); Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002); Shane v. Fauver, 213 F.3d 113, 116-17 (3d Cir. 2000). “Dismissal without leave to amend is justified only on the grounds of bad faith, undue delay, prejudice, or futility.” Alston v. Parker, 363 F.3d 229, 236 (3d Cir. 2004).


         Initially, since the court finds that the face of the complaint conclusively establishes that plaintiffs knew or should have known of their claims at the latest in October 2012, Starwood can raise the statute of limitations defense in a Rule 12(b)(6) motion to dismiss. See Robinson v. Johnson, 313 F.3d 128, 135 (3d Cir. 2002) (Third Circuit held that a statute of limitations defense may only be raised in a 12(b) motion “if the time alleged in the statement of a claim shows that the cause of action has not been brought within the statute of limitations.”) (citation omitted). Thus, “[i]f the bar is not apparent on the face of the complaint, then it may not afford the basis for a dismissal of the complaint under Rule 12(b)(6).” Id.

         Starwood states that since it ceased operations of its resorts in October 2012, at which time the resorts began to be operated by the subsequent owner, Highgate Hotels, plaintiffs' three claims are barred by the expiration of the applicable statute of limitations.[1] Plaintiffs admit that Starwood ceased operating the resorts in October 2012. (Doc. 1, ¶15). The statute of limitations for plaintiffs' breach of contract and unjust enrichment claims is four years under Pennsylvania law. 42 Pa.C.S. §5525. The statute of limitations for Plaintiffs' conversion claim is two years. 42 Pa.C.S. §5524.

         The court finds that it is clear from the face of plaintiffs' complaint that their claims are time-barred, as they were filed more than four years after the incident giving rise to their claims against Starwood, specifically, four years and five months after Starwood ceased operating the resorts. Plaintiffs allege that they “had no ability to discover” Starwood's alleged conduct “until about July 2015.” (Doc. ¶37). Starwood argues that plaintiffs have not plead any facts in their complaint to support this allegation. Thus, it contends that plaintiffs cannot avail themselves to save their action under the discovery rule, by claiming that they timely filed this action. Plaintiffs argue that they have pled facts and circumstances that demonstrate the discovery rule is applicable. Specifically, plaintiffs alleged that they were not aware that Starwood was charging a gratuity fee and ...

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