Filed: May 02, 1997
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 95-3682 _ James M. Kulinski, * * Appellant, * * v. * * Medtronic Bio-Medicus, Inc., * * Appellee. * _ Opinion on Panel Rehearing No. 95-3803 and Certification of Question _ to the Minnesota Supreme Court Pursuant to Minn. Stat. James M. Kulinski, * § 480.061 (1996). * Appellee, * * v. * * Medtronic Bio-Medicus, Inc., * * Appellant. * _ Submitted: October 23, 1996 Filed: May 2, 1997 _ Before BRIGHT and MURPHY, Circuit Judges.* * Judge Ma
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 95-3682 _ James M. Kulinski, * * Appellant, * * v. * * Medtronic Bio-Medicus, Inc., * * Appellee. * _ Opinion on Panel Rehearing No. 95-3803 and Certification of Question _ to the Minnesota Supreme Court Pursuant to Minn. Stat. James M. Kulinski, * § 480.061 (1996). * Appellee, * * v. * * Medtronic Bio-Medicus, Inc., * * Appellant. * _ Submitted: October 23, 1996 Filed: May 2, 1997 _ Before BRIGHT and MURPHY, Circuit Judges.* * Judge Mag..
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 95-3682
___________
James M. Kulinski, *
*
Appellant, *
*
v. *
*
Medtronic Bio-Medicus, Inc., *
*
Appellee. *
___________
Opinion on Panel Rehearing
No. 95-3803 and Certification of Question
___________ to the Minnesota Supreme Court
Pursuant to Minn. Stat.
James M. Kulinski, * § 480.061 (1996).
*
Appellee, *
*
v. *
*
Medtronic Bio-Medicus, Inc., *
*
Appellant. *
___________
Submitted: October 23, 1996
Filed: May 2, 1997
___________
Before BRIGHT and MURPHY, Circuit Judges.*
*
Judge Magill, who was originally on the panel hearing this
appeal, recused himself after oral argument. Because a quorum of
the court exists and the two remaining judges agree on the outcome,
a third judge is unnecessary for a determination of this appeal.
1
BRIGHT, Circuit Judge.
James M. Kulinski brought this state law breach of contract action
against Medtronic Bio-Medicus, Inc. (Medtronic). The district court
dismissed Kulinski’s action pursuant to Minnesota’s statute of limitations
for wage claims, Minn. Stat. § 541.07(5)(1990). Kulinski appealed and
Medtronic filed a protective cross-appeal arguing that Kulinski’s claim was
precluded by res judicata. We reversed the dismissal of Kulinski’s claim
but affirmed the denial of Medtronic’s cross-appeal. Kulinski v. Medtronic
Bio-Medicus, Inc., 108 F.3d 904 (8th Cir. 1997). Medtronic then filed a
petition for rehearing by this panel as well as a suggestion for rehearing
en banc. We granted the petition for rehearing by the panel and vacated
the panel’s original opinion, thereby rendering the request for a rehearing
en banc moot.
On rehearing by the panel we again agree with the district court’s
conclusions that the Minnesota statute of limitations, Minn. Stat. §
541.07(5)(1990), applies and again affirm the dismissal of Medtronic’s
cross-appeal. However, we certify to the Minnesota Supreme Court, pursuant
to Minn. Stat. § 480.061 (1996), the question of the district court’s
rejection of the application of the savings statute, Minn. Stat. § 541.18
(1990), to the facts of this case.
BACKGROUND
Kulinski worked for Bio-Medicus, Inc. (Bio-Medicus) as its national
sales manager. In January 1990, Kulinski executed a
2
change-of-control termination agreement (CCTA), or “golden parachute”
agreement, with Bio-Medicus. This CCTA entitled Kulinski to a lump sum
payment as severance if his employment terminated or was otherwise
detrimentally affected as the result of a hostile takeover of Bio-Medicus.
In June 1990, Kulinski signed a second CCTA that entitled him to severance
benefits if his employment terminated or was detrimentally affected as the
result of a friendly merger.
In September 1990, Bio-Medicus merged with Medtronic, Inc. to form
Medtronic Bio-Medicus, Inc. (Medtronic). Kulinski refused the merged
entity’s offer of a two-year position at a reduced salary. Kulinski
resigned and notified Bio-Medicus and Medtronic, Inc. that he experienced
a “change of control termination” under the second CCTA. Bio-Medicus
rejected Kulinski’s request for his lump sum severance payment.
Kulinski brought his first action against Medtronic on February 26,
1991, asserting a claim under the Employee Retirement Income Security Act
(ERISA), 29 U.S.C. §§ 1001-1461 (1988 & Supp. III 1991), for breach of the
CCTA. Both parties and the district court agreed that federal question
jurisdiction existed under ERISA. Kulinski did not bring any pendant state
law claims at this time. After a bench trial, the district court awarded
Kulinski $254,566 in severance pay, in addition to attorney’s fees, costs,
and prejudgment interest.
Medtronic appealed without challenging the application of ERISA.
This court held, sua sponte, that no ERISA plan existed and, therefore, the
district court lacked subject matter jurisdiction. Kulinski v. Medtronic
Bio-Medicus, Inc., 21 F.3d 254, 258 (8th Cir. 1994). We vacated the
judgment for Kulinski and
3
remanded the case with instructions to dismiss for lack of subject matter
jurisdiction. Id. Kulinski then moved to amend his ERISA complaint to
allege a state law breach of contract claim under diversity jurisdiction.
The district court denied Kulinski’s motion and dismissed the case with
prejudice.
Kulinski appealed that decision on July 18, 1994. This court upheld
the district court’s decision to dismiss Kulinski’s ERISA action with
prejudice. Kulinski v. Medtronic Bio-Medicus, Inc., 60 F.3d 830 (8th Cir.
1995) (per curiam) (unpublished).
Before we reviewed that appeal, however, Kulinski filed a new action
against Medtronic in federal district court based on diversity
jurisdiction. Kulinski raised the state law breach of contract claim that
the district court previously dismissed by rejecting Kulinski’s motion to
amend his first (ERISA) action. Medtronic moved to dismiss this second
action pursuant to Fed. R. Civ. P. 12(b)(6) on the grounds of res judicata
and the statute of limitations. The district court held Medtronic’s motion
under advisement pending Kulinski’s appeal.
After Kulinski lost his appeal, the district court granted
Medtronic’s motion to dismiss Kulinski’s state law action as barred by
Minnesota’s statute of limitations for wage claims, Minn. Stat. §
541.07(5). The court, however, rejected Medtronic’s argument that res
judicata precluded Kulinski’s action. These appeals followed.
DISCUSSION
Kulinski raises three issues on appeal. Kulinski first argues that
his claim is not barred by the statute of limitations because
4
he is not bringing a claim for “wages” for purposes of Minn. Stat. §
541.07(5). Kulinski also argues that, even if the statute applies, his
claim is not subject to the statute of limitations because the claim is
saved under Minn. Stat. § 541.18 (1990). In the alternative, Kulinski
seeks equitable relief from the statute of limitations. In addition to
contesting Kulinski’s appeal, Medtronic argues that Kulinski’s claim is
precluded by res judicata. We review the district court’s dismissal of
Kulinski’s complaint de novo, Carney v. Houston, 33 F.3d 893, 894 (8th Cir.
1994), and presume all of Kulinski’s factual allegations as true. Miree
v. DeKalb County, Georgia,
433 U.S. 25, 27 n.2 (1977).
I.
According to Minn. Stat. § 541.07(5), an action shall be commenced
within two years if it is:
For the recovery of wages or overtime or damages, fees or
penalties accruing under any federal or state law respecting
the payment of wages or overtime or damages, fees or penalties
except, that if the employer fails to submit payroll records by
a specified date upon request of the department of labor and
industry or if the nonpayment is willful and not the result of
mistake or inadvertence, the limitation is three years. (The
term “wages” means all remuneration for services or employment,
including commissions and bonuses and the cash value of all
remuneration in any medium other than cash, where the
relationship of master and servant exists . . . )[.]
Minn. Stat. § 541.07(5).
It is undisputed that the time allotted in § 541.07(5) expired before
Kulinski filed this diversity action. Nearly four years passed between
Medtronic’s alleged breach of contract in 1990 and
5
the filing of Kulinski’s second action in 1994. Kulinski, however, argues
that § 541.07(5) is not applicable because he does not bring a claim for
“wages” within the meaning of that section. Instead, Kulinski argues that
his action is covered by Minnesota’s six-year statute of limitations for
actions based “[u]pon a contract or other obligation, express or implied,
as to which no other limitation is expressly prescribed . . . .” Minn.
Stat. § 541.05, subd. 1(1) (1990). We disagree.
Although it appears that no Minnesota court has specifically
addressed whether wages under § 541.07(5) include severance benefits,
Minnesota courts consistently hold that “all damages arising out of the
employment relationship are subject to [§ 541.07(5)].” Stowman v. Carlson
Companies, Inc., 430 N.W.2d 490, 493 (Minn. Ct. App. 1988) (applying
Portlance v. Golden Valley State Bank,
405 N.W.2d 240, 243 (Minn. 1987));
see also Levin v. C.O.M.B. Co.,
441 N.W.2d 801, 804 (Minn. 1989) (unpaid
commissions due pursuant to an employment contract);
Portlance, 405 N.W.2d
at 243 (wrongful discharge based on an oral contract of employment
allegedly modified by an employees’ manual); Worwa v. Solz Enters., Inc.,
238 N.W.2d 628, 631 (Minn. 1976) (contractual wage claims); Roaderick v.
Lull Eng’g Co.,
208 N.W.2d 761, 762-63 (Minn. 1973) (commission or bonus
payments); Kohout v. Shakopee Foundry Co.,
162 N.W.2d 237, 239-40 (Minn.
1968) (accrued but unpaid vacation pay); Kletschka v. Abbott-Northwestern
Hosp., Inc.,
417 N.W.2d 752, 755 (Minn. Ct. App. 1988) (salary increases
and “adjustment of all fringe benefits”); cf. Adamson v. Armco, Inc.,
44
F.3d 650, 652-53 (8th Cir.) (construing Stowman to conclude that Minnesota
courts construe § 541.07(5) broadly), cert. denied,
116 S. Ct. 85 (1995).
The Minnesota Supreme Court has also explicitly recognized the “broad
definition of wages stated in [§ 541.07(5)] . . . .”
Roaderick, 208 N.W.2d
at 763.
6
In light of the consistently broad construction given to § 541.07(5),
we affirm the district court in considering Kulinski’s claim as one within
the general concept of wages.2 The district court did not err in applying
the two-year limitation under § 541.07(5).
II.
Kulinski argues that even if the statute of limitation applies, his
claim is “saved” by Minnesota’s savings statute:
Except where the uniform commercial code otherwise
prescribes, if judgment be recovered by plaintiff in an action
begun within the prescribed period of limitation and such
judgment be afterward arrested or reversed on error or appeal,
the plaintiff may begin a new action within one year after such
reversal or arrest.
Minn. Stat. § 541.18 (1990). This statute, virtually unchanged since its
enactment in 1851, is rarely utilized and is not interpreted by any
appellate court. Furthermore, no legislative history is available. The
district court considered the savings statute “inapplicable to the facts
of this case as Kulinski is not bringing a new action based on the same
claim as had been previously reversed, rather he is asserting a new claim.”
Appellant’s Add. at 8.
2
Kulinski proposes a very different reading of Minnesota case
law. He cites McDaniel v. United Hardware Distrib. Co., 469 N.W.2d
84 (Minn. 1991), for the proposition that the two-year statute of
limitations does not apply unless the claim is either for hourly
pay or for wages that would have been earned had the employee not
been wrongfully terminated. That action rested on rights created
by statute and is, therefore, distinguishable.
7
Kulinski filed his original complaint five months after the alleged
breach of contract and within the statute of limitations. He prevailed at
trial and was awarded over $250,000 in damages. This court reversed that
judgment for lack of subject matter jurisdiction. Kulinski v. Medtronic
Bio-Medicus, Inc., 21 F.3d 254, 258 (8th Cir. 1994). Kulinski then began
this action based on diversity jurisdiction within one year of our
reversal. His claim that Medtronic breached the CCTA agreement is the same
in both actions, thus, both actions share identical operative documents,
witnesses, measure of recovery and essentially the same legal issues.3 The
only distinction is that Kulinski now asserts a state law breach of
contract under diversity jurisdiction rather than an ERISA claim under
federal question jurisdiction.
“In the absence of controlling precedent in the decisions of the
Minnesota Supreme Court which would enable this court to reach a sound
decision without indulging in speculation or conjecture, we believe the
better practice is to seek a definitive resolution of th[is] state law
question[] by the Minnesota Supreme Court.” Kaiser v. Memorial Blood
Center of Minneapolis, Inc., 938 F.2d 90, 93-94 (8th Cir. 1991).
Accordingly, we certify the following question to the Minnesota Supreme
Court pursuant to Minn. Stat. § 480.061: can a plaintiff in the particular
circumstances of this case, whose favorable verdict and judgment was
vacated on appeal for lack of subject matter jurisdiction, bring the same
claim under a different legal theory and be saved by the operation of
Minnesota’s savings statute, § 541.18 (1990), from the bar of the statute
of limitations under Minn. Stat. § 541.07(5)(1990)?
3
The only legal issue present in Kulinski’s first (ERISA) action
which need not be examined in Kulinski’s second action is whether
the CCTA constituted an employee welfare benefit plan under ERISA.
8
The full record of this matter, including briefs of the parties,
shall be forwarded to the Minnesota Supreme Court.
III.
We decline to determine Kulinski’s claim for equitable relief,
pending resolution of the certified question by the Minnesota Supreme
Court.
IV.
Medtronic raises a cross-appeal asserting that, even if Kulinski’s
claim survives the statute of limitations, his claim is precluded by res
judicata. Claim preclusion requires three elements: (1) identical parties
in the lawsuits; (2) identical claims or causes of action; and (3) a final
judgment on the merits in the prior action. Lane v. Peterson, 899 F.2d
737, 741 (8th Cir. 1990). In this case, the parties and claims are
identical in both suits. The only issue, then, is whether the district
court rendered a final judgment on the merits in the original action. The
district court held that the dismissal of Kulinski’s first complaint under
ERISA for lack of jurisdiction was not an adjudication on the merits of
that claim and, therefore, was not a final judgment.
Medtronic first argues that res judicata requires Kulinski to plead
all bases for jurisdiction in his original pleading. This argument is
inconsistent with our precedent. In McCarney v. Ford Motor Co., 657 F.2d
230 (8th Cir. 1981), we held that a dismissal based on subject matter
jurisdiction:
should preclude relitigation of the same [jurisdiction] issue
but not a second suit on the same claim even if
9
arising out of the identical set of facts. . . . [W]here the
second suit presents new theories of relief, admittedly based
upon the same operative facts as alleged in the first action,
it is not precluded because the first decision was not on the
merits of the substantive claim.
Id. at 233-34 (citations omitted); cf. Oglala Sioux Tribe v. Homestake
Mining Co.,
722 F.2d 1407, 1411 (8th Cir. 1984) (holding second action
barred by res judicata because plaintiff “assert[ed] identical claims and
jurisdictional grounds” as the first action). Kulinski based his first
action on federal ERISA law and his second action on state contract law.
Thus, the dismissal of Kulinski’s first action precludes another ERISA
claim, but not the same claim under a different theory and jurisdictional
basis.4
Medtronic next argues that a denial of a motion for leave to file an
amended complaint has preclusive effect as to claims in the amended
complaint. The procedural history of all three cases cited by Medtronic,
however, included an adjudication of the first complaint on the merits.
See, e.g., King v. Hoover Group, Inc., 958 F.2d 219, 221 (8th Cir. 1992)
(original complaint dismissed on summary judgment); Nagle v. Lee,
807 F.2d
435, 443 (5th Cir. 1987) (original complaint dismissed for failure to
prosecute); Carter v. Money Tree Co.,
532 F.2d 113, 114 (8th Cir. 1976)
(original claim
4
Medtronic’s attempt to persuade us to ignore our precedent is
unconvincing. Medtronic cites to two cases for support. Kale v.
Combined Ins. Co. of America,
924 F.2d 1161 (1st Cir. 1991); Shaver
v. F.W. Woolworth Co.,
840 F.2d 1361, 1367 n.2 (7th Cir. 1988).
These cases differ significantly from the case at bar because in
both Kale and Shaver the original cause of action was dismissed on
the merits and with prejudice. Here, of course, Kulinski’s initial
claim was dismissed for lack of subject matter jurisdiction and was
not on the merits. Johnson v. Boyd-Richardson Co.,
650 F.2d 147,
148 (8th Cir. 1981) (“[W]hen a dismissal is for ‘lack of
jurisdiction,’ the effect is not an adjudication on the merits, and
therefore the res judicata bar does not arise.”).
10
dismissed for failure to state a claim). Kulinski’s first complaint, on
the other hand, was dismissed only for lack of subject matter jurisdiction.
We decline to contort the district court’s denial of Kulinski’s proposed
amended complaint into a denial on the merits.
Finally, Medtronic argues that the district court’s dismissal “with
prejudice” operates as an adjudication on the merits and, therefore,
precludes subsequent actions. We disagree. In McCarney, we held the
plaintiff’s second suit was not barred by the dismissal of his first suit
despite its label “with prejudice” because it did not reach the merits.
657 F.2d at 234.
CONCLUSION
For the foregoing reasons, we again agree with the district court’s
determination that the Minnesota statute of limitations, Minn. Stat. §
541.07(5), applies and again affirm the district court’s denial of
Medtronic’s cross-appeal. We certify the issue of the applicability of the
savings statute, Minn. Stat. § 541.18 (1990), to the Minnesota Supreme
Court.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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