Protective Life Ins. Co. v. Jenkins

386 So.3d 443

PROTECTIVE LIFE INSURANCE COMPANY

v.Andrew Chong JENKINS

SC-2022-1047

Supreme Court of Alabama.

June 2, 2023

Alto Lee Teague IV and Jonathan E. Raulston of Engel Hairston -- Raulston Brown, PC, Birmingham, for appellant.

Submitted on appellant’s brief only.

SELLERS, Justice.

Protective Life Insurance Company ("Protective") appeals from the judgment of the Jefferson Circuit Court dismissing its action against Andrew Chong Jenkins pursuant to Rule 12(b)(6), Ala. R. Civ. P. We reverse and remand.

I. Facts

Jenkins was an executive employed by Protective at its corporate headquarters in Birmingham. During his employment, Jenkins elected to participate in Protective’s deferred-compensation plan. That plan allowed Jenkins to receive bonuses and other performance incentives on a tax-deferred basis. During his employment, Jenkins had access to the funds in his deferred-compensation account. In October 2019, Jenkins gave notice to Protective that he was terminating his employ- ment. A month after the notice’s effective date, on November 15, 2019, $105,230 was entered into Protective’s accounting system as the amount of deferred compensation owed to Jenkins. In reality, Protective owed Jenkins only $1,052.30. After Protective deducted taxes and withholdings, Jenkins was mistakenly overpaid by $73,752.64. Protective asserts that the reason for the two-digit mistake was a data-entry error.

On January 10, 2020, Protective’s payroll department discovered the error and communicated this fact to Jenkins, ultimately sending him a letter detailing the overpayment and asking him to repay the money. Jenkins did not return the money after receiving Protective’s letter. On April 5, 2022, Protective commenced this action in the Jefferson Circuit Court, asserting claims of breach of contract, unjust enrichment, money paid by mistake, and account stated. Jenkins filed a motion to dismiss, arguing, among other things, that Protective’s claims were barred under the two-year statute of limitations contained in § 6-2-38(m), Ala. Code 1975.¹ The circuit court granted the motion to dismiss, finding that the purpose of the action was to recover wages and, thus, that it was barred under § 6-2-38(m). Protective filed a motion to vacate. That motion was denied, and this appeal followed.

II. Standard of Review

[1, 2] "This Court reviews a dismissal under Rule 12(b)(6)[, Ala. R. Civ. P.,] de novo. A dismissal for failure to state a claim upon which relief can be granted is warranted only when the allegations of the complaint, viewed most strongly in favor of the pleader, demonstrate that the pleader can prove no set of facts that would entitle the pleader to relief."

[3, 4] Cathedral of Faith Baptist Church, Inc. v. Moulton, 373 So.3d 816, 818 (Ala. 2022) (citation omitted).²

III. Analysis

[5, 6] Jenkins has not filed an appellate brief. "Where the appellant submits the cause on brief and no brief is filed by the appellee, the court considers the cause on its merits on the assumption that appellee is interested in having the judgment sustained." United Sec, Life Ins. Co. v. Dupree, 41 Ala. App. 601, 602-03, 146 So. 2d 91, 93 (1962) (citing Tri-City Gas Co. v. Britton, 230 Ala. 283, 160 So. 896 (1935)). For its part, Protective reasserts its argument that the circuit court erred in applying § 6-2-38(m) to the action. We agree.

Because the overpayment made in error to Jenkins cannot be considered "wages" for the purpose of § 6-2-38(m), and because § 6-2-38(m) applies only to actions "accruing under laws respecting the payment of wages, overtime, damages, fees, and penalties," the circuit court’s judgment is due to be reversed.

The circuit court described Protective’s action as, "at its core, a suit to recover wages … paid to [Jenkins] by mistake." In our view, however, the overpayment mistakenly paid to Jenkins cannot be fairly described as wages. Interpreting § 6-2-38(m), the Court of Civil Appeals adopted the definition of "wage" as:

" ‘Payment for labor or services, usu[ally] based on time worked or quantity produced; specif[ically], compensation of any employee based on time worked or output of production Wages include every form of remuneration payable for a given period to an individual for personal services, including salaries, commissions, vacation pay, bonuses, and the reasonable value of board, lodging payments in kind, tips, and any similar advantage received from the employer. An employer usu[ally] must withhold income taxes from wages ….’ "

Jefferson Cnty. v. Birchfield, 142 So. 3d 556, 566-67 (Ala. Civ. App. 2011) (quoting Black’s Law Dictionary 1610 (8th ed. 2004)) (emphasis omitted).³ Simply put, the overpayment that Protective mistakenly paid to Jenkins in was neither "payment for labor or services" nor "remuneration." It was not based upon any action undertaken by Jenkins; rather, its sole basis is a data-entry error. Accordingly, Protective’s action cannot be characterized or limited as being one for the recovery of wages, because the amount it seeks to recover is divorced from any amount it owed to Jenkins.

Protective also argues that the plain language of § 6-2-38(m) limits its application to actions to recover wages "accruing under laws respecting the payment of wages, overtime, damages, fees, and penalties." Because there is no statute, law, or regulation that controls a private employer’s recovery of unearned money from a former employee, Protective argues that the statute has no application in this case. Although we have not directly held that § 6-2-38(m) is applicable only to cases seeking to recover wages provided for by law, Protective correctly notes that Alabama’s appellate courts have applied that statute only in such cases. See Jefferson Cnty. v. Birchfield, 142 So. 3d 556 (Ala. Civ. App. 2011); Jones v. Teel, 101 So. 3d 756 (Ala. Civ. App. 2012); Barnhart v. Ingalls, 275 So. 3d 1112 (Ala. 2018), overruled on other grounds by Ex parte Pinkard, 373 So.3d 192 (Ala. 2022); and Nelson v. Megginson, 165 So. 3d 567 (Ala. 2014). Protective suggests that the selective application of § 6-2-38(m) to that situation implies that the statute is limited in application to actions seeking to recover wages accruing pursuant to a statute, law, or regulation. In our view, such a limitation finds support in the plain language of § 6-2-38(m); the statute applies to "actions for the recovery of wages … accruing under laws respecting the payment of wages, overtime, damages, fees, and penalties."⁴ Here, because there was a data-entry error resulting in Jenkins’s receiving sums he had not earned and was not entitled to, § 6-2-38(m) is inapplicable.

Our holding is consistent with a line of cases interpreting a similar Georgia statute, Ga. Code Ann. § 9-3-22, which provides, in relevant part, that "all actions for the recovery of wages, overtime, or damages and penalties accruing under laws respecting the payment of wages and overtime shall be brought within two years after the right of action has accrued." That statute is "materially identical" to § 6-2-38(m). Musick v. Goodyear Tire & Rubber Co., 81 F.3d 136, 139 (11th Cir. 1996). As stated by the United States Court of Appeals for the Fifth Circuit, "Georgia courts have stated that [the predecessor to Ga. Code Ann. § 9-3-22] applies only to rights which arise under legislative enactment and which would not exist except for some act of the legislature …. " McMillian v. City of Rockmart, 653 F.2d 907, 910 (5th Cir. Unit B 1981). And, although that statement arose in the context of § 9-3-22’s first clause, which provides a 20-year statute of limitations, the Supreme Court of Georgia has similarly held with respect to the statute’s second clause, which is "materially identical" to § 6-2-38(m), that § 9-3-22 applied when it was "undisputed that [the plaintiff’s] compensation … is determined by state law, [a] Local Law, and [a] Supplemental [County] Ordinance, and that [the plaintiff’s] claims for back pay [were] rooted in the interpretation of these laws …. " Cowen v. Clayton Cnty., 306 Ga. 698, 699, 832 S.E. 2d 819, 822 (2019) (footnote omitted). In essence, these cases explicitly state, with regard to the Georgia statute, what Alabama courts have implicitly held regarding § 6-2-38(m). Thus, an action based on a data-entry error causing an overpayment of the balance of a deferred-compensation account to an employee is not an action to recover wages accruing under any law so as to implicate the two-year statute of limitations in § 6-2-38(m).

[7] Finally, although the circuit court’s judgment was limited to the applicability of § 6-2-38(m), we briefly address the other grounds raised in Jenkins’s motion to dismiss. First, Jenkins cited Auburn University v. International Business Machines, Corp., 716 F. Supp. 2d 1114, 1118 (M.D. Ala. 2010), for the proposition that Protective’s unjust-enrichment claim was based on a tortious action and, thus, was barred by the two-year statute of limitations in § 6-2-38(l).⁵ In that case, the federal District Court for the Middle District of Alabama noted that, for the purpose of determining whether an unjust-enrichment claim was subject to the statute of limitations in § 6-2-38(l), some unjust-enrichment claims "clearly arise from tort injuries," while others "clearly arise from contract injuries." Id. Whether Protective's unjust-enrichment claim falls into either category requires a factual inquiry, and, therefore, Protective’s allegations in its complaint were sufficient to survive Jenkins’s motion to dismiss insofar as it was premised on the applicability of § 6-2-38(l) to Protective’s unjust-enrichment claim. See Moulton, 373 So. 3d at —.

[8] Additionally, Jenkins alleged that Protective had failed to sufficiently plead its claims of breach of contract, money paid by mistake, and account stated. We conclude that, in viewing the complaint in a manner most favorable to Protective, the complaint contained and stated a " ‘provable set of facts … upon...