United States District Court, D. Kansas
JULIE A. SMITH, Plaintiff,
KANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM, Defendant.
MEMORANDUM AND ORDER
MURGUIA UNITED STATES DISTRICT JUDGE
Julie A. Smith brought this discrimination and retaliation
action against her former employer, defendant Kansas Public
Employees Retirement System. Plaintiff claims that she was
subject to disparate treatment and retaliation in violation
of the Americans with Disabilities Act (“ADA”),
Age Discrimination in Employment Act (“ADEA”),
and the Family Medical Leave Act (“FMLA”).
Defendant filed a counterclaim for breach of contract,
arguing that plaintiff agreed in writing to release her
claims against defendant in exchange for retaining a position
with defendant through October 1, 2018. Plaintiff then filed
a Motion to Dismiss for Failure to State a Claim Upon Which
Relief Can Be Granted (Doc. 6). In this motion, plaintiff
argues that (1) defendant failed to include a statement of
jurisdiction in its counterclaim; (2) defendant's
counterclaim does not satisfy the notice pleading standard of
Fed.R.Civ.P. 8; (3) defendant cannot assert release/breach of
contract as a counterclaim; and (4) defendant cannot assert a
claim for attorney's fees. The court addresses each of
these arguments below.
defendant required to include a statement of jurisdiction in
alleges that defendant's counterclaim requires a
statement of jurisdiction, and, because it does not include
one, should be dismissed. Specifically, plaintiff alleges
that her claim arises under federal law and that defendant
must state why this court has jurisdiction over its state law
breach of contract counterclaim. Defendant responds that a
statement of jurisdiction is not required when the
counterclaim is compulsory. Plaintiff disagrees that the
counterclaim is compulsory.
Civ. P. 8(a)(1) requires a statement of the grounds for the
court's jurisdiction unless the court already has
jurisdiction and the claim needs no jurisdictional support.
Whether the district court has jurisdiction over a
counterclaim depends upon whether the counterclaim is
compulsory. Adamson v. Dataco Derex, Inc., 178
F.R.D. 562, 564 (D. Kan. 1998) (citing Pipeliners Local
Union No. 798 v. Ellerd, 503 F.2d 1193, 1198 (10th Cir.
1974)); Gus T. Handge & Son Painting Co. v. Douglass
State Bank, 543 F.Supp. 374, 380 (D. Kan. 1982). If the
counterclaim is compulsory, the court has jurisdiction.
Pipeliners Local Union No. 798, 503 F.2d at 1198. If
the counterclaim is permissive, there must be an independent
ground of federal jurisdiction. Id.
counterclaim is compulsory “if it arises out of the
same transaction or occurrence that is the subject matter of
the opposing party's claim.” Fed.R.Civ.P. 13(a). If
it does not arise out of the same transaction or occurrence,
the counterclaim is permissive. Fed.R.Civ.P. 13(b). The sole
issue, therefore, is whether defendant's counterclaim for
breach of contract “arises out of the same transaction
or occurrence” as plaintiff's employment claims.
Tenth Circuit joined “most courts” in its
adoption of four factors to consider when deciding if a
counterclaim is compulsory:
(1) Are the issues of fact and law raised by the claim and
counterclaim largely the same?
(2) Would res judicata bar a subsequent suit on
defendants' claim absent the compulsory counterclaim
(3) Will substantially the same evidence support or refute
plaintiffs' claim as well as defendants'
(4) Is there any logical relation between the claim and the
counterclaim? Pipeliners Local Union No. 798, 503
F.2d at 1198 (citing Wright and Miller, Federal Practice and
Procedure, Civil § 1410). “The ‘logical
relation' test is the most controlling.”
Id. (citing Moore v. N.Y. Cotton Exch., 270
U.S. 593 (1926)).
of its importance, the court looks first at the
“logical relation” test. It appears that, when
considering the totality of the facts presented, there is a
strong logical relationship between the claims. Both claims
center around plaintiff's employment and the conditions
thereof. Defendant's counterclaim alleges that by signing
the agreement, plaintiff released many of the exact claims
she has brought here. Though she does not challenge the
agreement's validity, plaintiff alleges that the
agreement was essentially a turning point in her constructive
discharge. And defendant's answer raises an affirmative
defense of release, requiring the court to examine the
release as part of the case. The logical relationship between
the agreement and discrimination claims is very close and the
“most controlling” factor is convincing on its
the court looks at the issues of fact and law. Issues of fact
raised by both claims appear largely the same.
Plaintiff's various claims allege she was discriminated
against and include specific claims she was put under immense
pressure to choose between immediate termination and signing
the employment agreement at issue in the counterclaim.
Although resolution of plaintiff's claims will require
evidence regarding her specific treatment and her medical
condition outside the agreement, she specifically alleges
that circumstances surrounding the agreement led to her
constructive discharge, making the agreement a central issue
to her case. As a result, the agreement at issue in the
counterclaim relates to plaintiff's claims because the
agreement is a major event supporting her claims of
termination/constructive discharge and the terms of the
agreement are crucial to the events alleged after it was
signed. Plaintiff will need to provide evidence of the timing
and circumstances surrounding the agreement, the terms of her
demotion, and the specific terms of the agreement. The
agreement also acts a time marker in plaintiff's
timeline. After describing the agreement and the difficult
decision she was forced to make in signing it, the complaint
alleges that her working conditions significantly
deteriorated into a constructive discharge after she
signed the agreement and accepted the demotion- she was
forced to train her replacement and excluded from team
meetings based on her new job title under the agreement. The
court expects that plaintiff will offer a substantial amount
of evidence relating to the counterclaim as part of her own
court next turns to the issue of res judicata. Res judicata
bars a claim “when there is a final judgment on the
merits which precludes the parties or their privies from
relitigating the issues that were decided or issues that
could have been raised in the earlier action.”
Driver Music Co. v. Commercial Union Ins. Cos., 94
F.3d 1428, 1435 (10th Cir. 1996) (quoting Frandsen v.
Westinghouse Corp., 46 F.3d 975, 978 (10th Cir. 1995)
(citing Allen v. McCurry, 449 U.S. 90, 94 (1980))).
Res judicata principles bar a claim “when the prior
action involved identical claims and the same parties or
their privies.” Id. (quoting
Frandsen, 46 F.3d at 978). Here, the link between
the claims is probably too tenuous to ...