MEMORANDUM OPINION
I. INTRODUCTION
On January 13, 2014, plaintiff Weyer-haeuser Company (‘Weyerhaeuser”) filed a complaint against defendants Domtar Corporation and Domtar Paper Company) LLC (collectively, “Domtar”) alleging breach of contract with respect to liability for workers compensation claims. (D.I. 1) On February 21, 2014, Domtar filed a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Proce
II. BACKGROUND
Weyerhaeuser sold its fine paper business to Domtar (the “Sale”) on March 7, 2007. (D.I. 1 at ¶8) The Sale was governed by an Amended and Restated Contribution Agreement (the “Contribution Agreement”) and an Amended and Restated Transaction Agreement (the “Transaction Agreement”) (collectively, “the Agreements”).
There are three categories of current and former fine paper employees relevant to the action at bar. (Id. at ¶ 24) The first category consists of fine paper employees who worked for Weyerhaeuser before the Sale and continued to work for Domtar after the Sale (the “Transferred Employees”). (Id.) The second category consists of fine paper employees who were still employed at Weyerhaeuser at the time of the Sale but who were receiving workers compensation benefits and, therefore, not working at the time of the Sale (the “U.S. WC Newco Employees”). (Id. at ¶ 26) The third category consists of the remainder of Weyerhaeuser’s pre-Sale employees, including those who were retired or otherwise terminated before the time of the Sale and, therefore, never became Transferred Employees (the “Retirеd Employees”). (Id. at ¶ 30) The parties dispute liability for workers compensation claims regarding the third category of employees, the Retired Employees, as well as liability for administration costs of workers compensation claims regarding the first category of employees, the Transferred Employees.
III. STANDARD OF REVIEW
A motion filed under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a cоmplaint’s factual allegations. Bell Atl. Corp. v. Twombly,
The court’s determination is not whether the non-moving party “will ultimately prevail” but whether that party is “entitled to offer evidence to support the claims.” United States ex rel. Wilkins v. United Health Grp., Inc.,
IY. DISCUSSION
A. Liability for Workers Compensatiоn Claims of Retired Employees
Weyerhaeuser alleges that the Sale was structured to transfer from Weyerhaeuser to Domtar ail assets and liabilities of the fine paper business except those expressly retained by Weyerhaeuser in the Agreements. (D.I. 1 at ¶ 11) Since workers compensation liability for Retired Employees was not expressly retained by Weyerhaeu-ser, it alleges that suсh liability transferred to Domtar through the Sale. (Id. at ¶ 36) Domtar argues that based on the provisions of the Agreements, Weyerhaeu-ser retained liability for workers compensation claims of Retired Employees, and its breach of contract claim should be dismissed. (D.I. 13 at 4)
Under Delaware law, “to survive a motion to dismiss for failure to state a breach of contract claim, [a] plaintiff must demonstrate: first, the existence of the contract, whether express or implied; second, the breach of an obligation imposed by that contract; and third, the resultant damage to the plaintiff.” VLIW Tech., LLC v. Hewlett-Packard Co.,
Weyerhaeuser satisfies the first requirement since neither party disputes that the Agreements are valid, express contracts governing the Sale of the fine paper business. (D.I. 13 at 2; D.I. 14, exs. A.-B) Weyerhaeuser also satisfies the third requirement by claiming that it has incurred approximately $8.2 million in damages as a
The operative provision of the Contribution Agreement governing Newco Liabilities is Section 2.03(a), which states:
For the purposes of this Agreement, “Newco Liabilities” shall mean all obligations, liabilities and commitments of any nature, whether known or unknown, еxpress or implied, primary or secondary, direct or indirect, liquidated, absolute, accrued, contingent or otherwise and whether due or to become due (“Liabilities”), of Weyerhaeuser or any other member of Weyerhaeuser Group arising out of or primarily relating to the Newco Assets, the Newco Business or the operation or conduct of the Newco Business prior to, on оr after the Contribution Date, excluding the Retained Liabilities, which Newco Liabilities shall include (in each case, other than the Retained Liabilities): ...
(D.I. 14, ex. A at Section 2.03(a))-(empha-sis added) Subsections 2.03(a)(i)-(xi) list Newco Liabilities that Domtar irrevocably assumed.
Section 9.02 of the Contribution Agreement governs interpretation of the Contribution Agreement and states, “[wjhenever the words ‘include’, ‘includes’ or ‘including’ are used in this Agreement, they shall be deemed to be followed by the words ‘without limitation’.” (Id. at Section 9.02) Based on the рarties’ stipulation, “shall include,” as used in Section 2.03(a), must be interpreted to mean “shall include without limitation” the Newco Liabilities specified in Subsections 2.03(a)(i)-(xi). (Id. at Section 2.03(a))
Under Delaware law, contract language such as “including without limitation” and “including but not limited to” is interpreted broadly. See CorVel Enter. Comp, Inc. v. Schaffer, Civ. No. 4896,
Domtar argues that liability for workers compensation claims falls under Subsection 2.03(a)(vii), which states that Domtar assumes liability for “all employment and employee benefit-related Liabilities with respect to Transferred Employees and their dependents and beneficiaries.... ” (D.I. 14, ex. A at Section 2.03(a)(vii)) Domtar avers that Weyerhaeuser retained liability for workеrs compensation claims of Retired Employees because Subsection 2.03(a)(vii) specifies only Transferred Employees, and no other provision within Subsections 2.03(a)(i)-(xi) explicitly addresses Retired Employees or employment liabilities. (D.I. 13 at 6) Such an interpretation of the Contribution Agreement would violate the “well-established principle that in construing a contract a court cannot in effect rewrite it” because it would effectively read the “shall include without limitation” clause out of the contract. Gertrude L.Q. v. Stephen P.Q.,
Section 2.03(a) broadly trаnsfers all liabilities to Domtar except those explicitly retained by Weyerhaeuser in Section 2.03(b). Subsections 2.03(a)(i)-(xi) are merely illustrative and do not limit the Newco Liabilities beyond what is expressly retained by Weyerhaeuser in Subsections 2.03(b)(i)-(x). Liability for workers compensation claims of Retired Workers is not expressly addressed by Subsections 2.03(b)(i)-(x). Therefore, liability for workers compensation claims of Retired Workers falls within the Newco Liabilities assumed by Domtar, and Weyerhaeuser has demonstrated a breach of an obligation imposed by contract.
B. Statute of Limitations
Domtar avers that, even if Weyer-haeuser’s claim regarding liability for worker compensation claims of Retired Employees survives the motion to dismiss, certain claims are barred by Delaware’s statute of limitations. (D.I. 13 at 9) Under Delaware lаw, there is a three-year statute of limitations for breach of contract claims (10 Del. C. § 8106(a)) which “begins to run when the contract is breached.” In re Marvel Entm’t Grp., Inc., Civ. Nos. 97-638, 98-756,
“Under Delaware law, the statute of limitations is properly tolled under the doctrines of ‘inherently unknowable’ and ‘fraudulent concealment’.” Studiengesellschaft Kohle, mbH v. Hercules, Inc.,
“The statute of limitations can only be tolled until a plaintiff discovers, or by exercising reasonable diligence should' have discovered, facts constituting the basis of the cause of action ..., [and] [t]he doctrines of inherently unknowable injury, and fraudulent concealment, do not apply when the plaintiff has actual knowledge of the breach and potential injuries to follow.” Id. at 11-12. Additionally, parties engaging in settlement negotiations to avoid a suit “is not a proper ground for tolling the statute of limitations” as it “would obviously undermine the public policy behind the statute of limitations.” VLIW Tech,
The doctrines of inherently unknowable injury and fraudulent concealment do not apply to the case at bar because Weyerhaeuser had actual knowledge of the alleged breach and the injuries to follow. Indeed, not only did Weyerhaeuser tender to Domtar many workers compensation claims relating to Retired Employees since the date of the Sale, but Weyerhaeuser administered, paid, and resolved the Retired Employee workers compensation claims at its own expense as a result of Domtar rejecting tender of the claims. (D.I. 1 at ¶¶ 38-41) In two previous settlement agreements, one on December 21, 2009 and the other on February 28, 2013, Weyerhaeuser and Domtar stipulated that each of the parties reserves аll rights with respect to the workers compensation dispute.
C. Liability for Administration Costs of Workers Compensation Claims for Transferred Employees
Additionally, Weyerhaeuser alleges that Domtar has not taken responsibility for
First, the existence of a valid contract is undisputed. (See D.I. 13 at 2; D.I. 14, exs. A-B) Domtar “irrevocably assume[d] and agree[d] to faithfully pay, perform and discharge when due all the New-co Liabilities” including “all employment and employee benefit-related Liabilities with respect tо Transferred Employees-” (D.I. 14, ex. A at Section 2.01(b); Id. at Section 2.03(a)(vii)) Administration of workers compensation claims of Transferred Employees falls within the scope of employment-related Liabilities. (See D.I. 14, ex. B at Section 4.12(c)) Second, Weyerhaeuser sufficiently pled the breach of an obligation imposed by the contract by alleging that Domtar has refused to take responsibility for the administrаtion of workers compensation claims made by Transferred Employees. (D.I. 1 at ¶ 58) Finally, Weyerhaeuser sufficiently pled damages by alleging that it has incurred significant expenses in administering workers compensation claims made by Transferred Employees, and that Domtar has refused to reimburse Weyerhaeuser for these incurred expenses. (Id. at ¶¶ 56-57)
Domtar asserts that the claim should be dismissed becausе Weyerhaeuser did not “allege any demand by Weyerhaeuser that Domtar make any payment or the existence of any purportedly unpaid invoices or amounts.” (D.I. 13 at 9-10) However, Delaware law does not require Weyerhaeuser to demonstrate that a demand was made and refused in order to survive a motion to dismiss a breach of contract claim. See VLIW Tech.,
V. CONCLUSION
For the reasons discussed above, Dom-tar’s motion to dismiss (D.I. 12) is grаnted to the extent that Weyerhaeuser’s claims regarding liability for workers compensation claims of Retired Employees that accrued prior to January 13, 2011 are barred by the statute of limitations. Otherwise, the motion is denied. An appropriate order shall issue.
ORDER
At Wilmington' this 30th day of July, 2014, consistent with the memorandum opinion issued this same date;
IT IS ORDERED that Domtar’s motion to dismiss (D.I. 12) is granted to the extent that Weyerhaeuser’s claims regarding liability for workers compensation claims of Retired Employees that accrued prior to
Notes
. Weyerhaeuser accomplished the Sale, in part, by transferring its fine paper business to Domtar Paper Company, LLC, and then transferring ownership of Domtar Paper Company, LLC to Domtar Corporation. (D.I. 1 at ¶ 9) Domtar Paper Company, LLC was created by Weyerhaeuser in August 2006 specifically to hold the fine paper business for the purposes of the Sale and is referred to as "Newco” in the Agreements. (Id. at ¶ 10; D.I. 14, ex. A at 1)
. Domtar accepts responsibility for all workers compensation claims asserted by Transferred Employees (D.I. 13 at 2; D.I. 14, ex. A at § 2.03(a)(vii)), but contests Weyerhaeusеr’s asserted administration costs. (D.I. 13 at 9) The parties also agree that Weyerhaeuser retained all post-Sale workers compensation liability for U.S. WC Newco Employees unless, and until, those employees became Transferred Employees. (D.I. 1 at ¶ 28; D.I. 14, ex. B at § 6.09(a)(iii)) At the time of the Sale, there were approximately twelve U.S. WC Newco Employees, three of which later became Transferred Employees by returning to work for Domtar. (D.I. 1 at ¶ 29)
. Weyerhaeuser has itself administered, paid, and resolved Retired Employee workers compensation claims in order to ensure that such obligations to Retired Employees do not go unmet. (D.I. 1 at ¶¶ 40-41)
. Under Section 2.01(b) of the Contribution Agreement, Domtar "irrevocably assume[d] and agree[d] to faithfully pay, perform and discharge when due all thе Newco Liabilities. ...” (D.I. 14, ex. A at Section 2.01(b))
. Section 6.09(a)(iii) of the Transaction Agreement is consistent with this conclusion because it does not address liability for workers compensation claims of Retired Employees and only stipulates that Weyerhaeuser retains liability for workers compensation claims of U.S. WC Newco Employees. (D.I. 14, ex. B at Section 6.09(a)(iii))
. The December 21, 2009 settlement agrеement between Weyerhaeuser and Domtar states, “Each of the [pjarties reserves all rights, and grants no releases, with respect to any matter other than the Post-Closing Resolved Items as set forth herein.” (D.I. 1 at ¶ 43) The February 28, 2013 settlement agreement between the parties states, "The [parties intend to address issues relating to these Non-Addressed Workers Comp Claims at a later date after thе [p]arties have finalized the population of claims to be included in a settlement. Pending the later addressing of those issues, the [pjarties reserve all rights with respect to the Non-Addressed Workers Comp Claims.” (Id. at' ¶ 44)
. Additionally, a settlement agreement executed on February 28, 2013 could not have tolled workers compensation claims that had already accrued at least two years earlier by January 13, 2011.