United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
W. SIPPEL UNITED STATES DISTRICT JUDGE
Midwest Investment Services Group (“Midwest”)
moves to dismiss Cynthia DeMaine's action against it on
the grounds that DeMaine has split two claims that should be
brought in a single action. Midwest argues that DeMaine's
entire 10-month employment should be considered the same
transaction or occurrence. DeMaine responds that the two
claims are based on different transactions and are
independent of each other regarding evidence to be presented
and damages sought. I find that the two claims arise out of
different transactions and occurrences. Accordingly, I will
deny Midwest's motion to dismiss.
April 29, 2016 DeMaine filed a class action in Circuit Court
of St. Louis County, Missouri, seeking declaratory judgment,
unpaid commissions, and attorneys' fees under state law
claims. DeMaine alleges that Midwest paid commissions that
failed to fully compensate class members for their sales. The
petition named her as the class representative.
August 3, 2016, DeMaine filed a Charge of Discrimination with
the Equal Employment Opportunity Commission and the Missouri
Human Rights Council, alleging that Midwest had created a
hostile work environment based on her gender. DeMaine alleges
that her supervisors repeatedly harassed her through
degrading statements about her gender, that she was
“often and continually singled out as an example in
sales meetings while pointing to her gender, ” and that
these acts made her working environment unbearable. [ECF Doc.
No. 1, p. 3.] After the EEOC issued a Right to Sue Letter,
DeMaine filed this gender discrimination action in this
court. She alleges that she was terminated and discriminated
against due to her gender and in retaliation for complaining
about harassment at work.
ruling on a motion to dismiss, I must accept as true all
factual allegations in the complaint and view them in the
light most favorable to the plaintiff. Hager v. Ark.
Dept. of Health, 1009');">735 F.3d 1009, 1013 (8th Cir. 2013).
The federal rules require only a “short and plain
statement of the claim showing that the pleader is entitled
to relief.” Fed.R.Civ.P. 8(a)(2). An affirmative
defense may be asserted to prove that the pleader is not
entitled to relief, if that defense is “apparent on the
face of the complaint, . . . which may include public records
and materials embraced by the complaint.” Noble
Sys. Corp. v. Alorica Cent., LLC, 543 F.3d 978, 983 (8th
Cir. 2008) (internal citations omitted). Claim splitting is
one such affirmative defense that is a form of claim
preclusion or res judicata. See Friez v. First American
Bank & Trust of Minot, 324 F.3d 580, 581 (8th Cir.
2003). Res judicata, in turn, “is a substantive issue
in a diversity case and is controlled by state law.”
Butts v. Evangelical. Lutheran Good Samaritan Soc.,
1139');">852 F.Supp.2d 1139, 1144 (D.S.D. 2012) (citing Hillary v.
Trans World Airlines, Inc., 123 F.3d 1041');">123 F.3d 1041, 1043 (8th
Cir.1997). Accordingly, I will use Missouri state law to
determine if DeMaine has improperly split her claims, and if
she has stated a claim upon which relief can be granted.
Missouri law, the test for identifying claim splitting is
“(1) whether separate actions brought arise out of the
same act, contract or transaction; or (2) whether the
parties, subject matter and evidence necessary to sustain the
claim are the same in both actions.” Hutnick v.
Beil, 84 S.W.3d 463, 466 (Mo. App. E.D. 2002). For
purposes of this test, the word “transaction”
means the “aggregate of all the circumstances which
constitute the foundation for a claim.” Burke v.
Doerflinger, 1103');">695 F.2d 1103, 407 (Mo. App. 1983).
“It also includes all of the facts and circumstances
out of which an injury arose.” Id. “What
factual grouping constitutes a ‘transaction'. . .
[is] to be determined pragmatically.” Poe v. John
Deere Co., 1103');">695 F.2d 1103, 1106 (8th Cir. 1982)
(interpreting Missouri Law). In making that determination, I
should consider “whether the facts are related in time,
space, origin, or motivation, whether they form a convenient
trial unit, and whether their treatment as a unit conforms to
the parties' expectations or business understanding or
cites three cases to prove that DeMaine's ten-month
employment relationship itself constitutes “the
transaction” for purposes of claim splitting. The case
that chiefly stands for this proposition is a Tenth Circuit
case, Wilkes v. Wyoming Department of Employment Division
of Labor Standards, 14 F.3d 501');">314 F.3d 501 (10th Cir. 2002). In
Wilkes, the court held that “all claims
arising from the same employment relationship constitute the
same transaction or series of transactions for claim
preclusion purposes.” Id. at 504. Accordingly,
the court found that Wilkes' Equal Pay Act claim
(alleging that women were paid less than men at the Wyoming
Department of Employment) and her Title VII retaliation claim
(alleging that Wilkes was harassed for reporting an improper
workplace relationship) were a single claim for the purposes
of res judicata.
other two cases that Midwest cites for this proposition are
district court cases in the Eighth Circuit. First, in
MacIntyre v. Lender Processing Servs., No. 12-1514
(PAM/SER), 2012 WL 4872678, (D. Minn. Oct. 15, 2012), the
district of Minnesota found that an employee's claims-for
unpaid bonuses and for gender discrimination in promotions,
pay, and severance packages-were improperly split.
Id. at *2. In reaching that conclusion, the court
never defined the scope of the “transaction” for
claim splitting purposes. In another case, the Missouri Court
of Appeals found that a property owner's claims-for
defamation, deprivation of constitutional rights, and
trespassing-arose out of the same act, contract, or
transaction. Jordan v. Kan. City, 929 S.W.2d 882,
887 (Mo. App. W.D. 1996). In Jordan, the plaintiff
had sued the city's Neighborhood and Community Services
Department, both for allegedly defaming him at a meeting of
its board and for a separate incident when an inspector of
the department allegedly trespassed on plaintiff's
these cases unpersuasive in this context. The Tenth Circuit
case, Wilkes, is not controlling in this court.
Additionally, only three years prior to Wilkes, the
Tenth Circuit had noted that “[n]o other court applying
the transactional test has held that suits arising from the
same employment relationship are thereby necessarily grounded
upon the same transaction.” Yapp v. Excel
Corp, 186 F.3d 1222');">186 F.3d 1222, 1228 (10th Cir. 1999). In
MacIntyre, the court never defined “the
transaction” as the entire employment relationship, as
Midwest suggests. Finally, Jordan does not involve
an employment relationship at all, and its facts are
significantly different from the facts of this case.
Accordingly, defendant's conception of “the
transaction” is overbroad.
I find that the DeMaine's two cases arise out of
different transactions or occurrences. DeMaine's claims
in her state court case arise out of Midwest's alleged
underpayment of commissions to “[a]ll persons employed
by [Midwest] as a Sales Representative in the past five
years.” [ECF Doc. No. 8-1, p. 3]. These claims extend
beyond DeMaine's own employment relationship with
Midwest. They arise from payroll processing actions taken by
Midwest for the preceding five years and have no alleged link
to her termination or harassment at the hands of supervisors.
Likewise, DeMaine's harassment claims have no alleged
connection to payroll processing actions. Under these
circumstances, DeMaine's claims, as alleged in her state
and federal complaint, arise out of different transactions or
claims could still fail the “transaction” test if
“the parties, subject matter and evidence necessary to
sustain the claim are the same in both actions.”
Hutnick v. Beil, 84 S.W.3d 463, 466. Midwest does
not argue this other possible grounds for claim splitting.
Instead, Midwest acknowledges that evidence relevant to the
gender discrimination claim “may not be directly
relevant to [DeMaine's] state-law claim.” [ECF Doc.
No. 14, p. 3.] Midwest then seeks to place the burden on
DeMaine, stating that “Plaintiff fails to establish
that a jury could not hear” evidence for both claims
together. Id This argument misconstrues the
“transaction” test for splitting that Midwest
relies on. The test is not whether evidence for two theories
can be presented in the same case. Instead, the test is
whether evidence for the ...