Karp v. Avella of Deer Valley Incorporated

Filing 39

ORDER denying 19 Motion to Dismiss for Failure to State a Claim. Signed by Judge David G Campbell on 12/19/2013.(DGC, nvo)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Jeffery Karp,
Plaintiff,

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No. CV-13-01885-PHX-DGC
ORDER

v.
Avella of Deer Valley, Inc.,
Defendant.

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Plaintiff Jeffery Karp has filed a motion to dismiss Count II of Defendant’s

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counterclaim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Doc. 19.

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The motion is fully briefed and no party has requested oral argument. For the reasons

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that follow, the Court will deny the motion.

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I.

Background.

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Plaintiff, a doctor of Pharmacy, was employed by Defendant from January 1999

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through July 2012. Doc. 1-2, ¶ 16. In early 2009, Plaintiff and Defendant executed a

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“Non-Compete/Non-Solicit Agreement” (“2009 Agreement”) which placed restrictions

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on Plaintiff during and after his employment. Id., ¶¶ 52-58. Defendant alleges it paid

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Plaintiff $250,000 as consideration for executing the 2009 Agreement and that Plaintiff

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would not have received this payment had he not signed the agreement. Doc. 14, ¶¶ 50,

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52. Plaintiff was diagnosed with Vertebrobasilar Dolichoectasia (“VBD”) in August

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2011. Doc. 1-2, ¶ 30. Plaintiff was subsequently demoted in December 2011 and his

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salary was reduced. Id., ¶ 38. Defendant then terminated Plaintiff in July 2012. Id. at

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43. Plaintiff instituted this action seeking injunctive relief and a declaratory judgment

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that the restrictive covenants contained in the 2009 Agreement are unenforceable, and

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claiming disability discrimination and FMLA retaliation. Doc. 1-2. Defendant asserted

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several counterclaims, including one alleging that Plaintiff would be unjustly enriched by

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the $250,000 payment if he did not abide by the terms of the 2009 Agreement. Doc. 14.

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The Court partially granted the parties’ requests for injunctive relief in a previous order.

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Doc. 16. Plaintiff now seeks to dismiss Defendant’s unjust enrichment counterclaim.

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II.

Legal Standard.

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When analyzing a complaint for failure to state a claim under Rule 12(b)(6), the

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well-pled factual allegations are taken as true and construed in the light most favorable to

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the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal

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conclusions couched as factual allegations are not entitled to the assumption of truth,

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Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are insufficient to defeat a

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motion to dismiss for failure to state a claim, In re Cutera Sec. Litig., 610 F.3d 1103,

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1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the complaint must plead

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enough facts to state a claim to relief that is plausible on its face. Bell Atl. Corp. v.

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Twombly, 550 U.S. 544, 570 (2007).

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‘probability requirement,’ but it asks for more than a sheer possibility that a defendant

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has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).

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“[W]here the well-pleaded facts do not permit the court to infer more than the mere

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possibility of misconduct, the complaint has alleged – but it has not ‘show[n]’ – ‘that the

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pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).

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III.

This plausibility standard “is not akin to a

Analysis.

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Plaintiff contends that “[d]ismissal is appropriate because the equitable doctrine of

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unjust enrichment may not be used to recover consideration paid for an illegal contract.”

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Doc. 19 at 1. Plaintiff’s position seems to be predicated on the assumption that the 2009

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Agreement is illegal, and he cites Hilb, Rogal & Hamilton v. Holley, 670 S.E.2d 874, 876

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(Ga. Ct. App. 2008), for the proposition that a party cannot bring an unjust enrichment

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claim based on an illegal contract. Holley was an appeal from the trial court’s order

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granting a directed verdict on the unjust enrichment claim and was supported by relevant

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Georgia authority. Although Holley may be relevant, it is not controlling here. The only

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Arizona case cited by Plaintiff, Landi v. Arkules, 835 P.2d 459, 460-61 (Ariz. Ct. App.

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1992), dealt with a contract that was held to be contrary to public policy on a motion for

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summary judgment. The court there declined to allow the defendant to recover for

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services that had been rendered under the illegal contract. Id. at 468.

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Plaintiff asks the Court to reach a similar result in the context of a motion to

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dismiss, without a decision that the 2009 Agreement is illegal or contrary to public

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policy. Because Plaintiff’s argument is based on a decision yet to be made, the Court

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cannot conclude at this stage that Arizona law prohibits Defendant’s claim for unjust

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enrichment.

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IT IS ORDERED that Plaintiff’s motion to dismiss (Doc. 19) is denied.

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Dated this 19th day of December, 2013.

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