Steinke v. SafeGuard World International LLC

Filing 42

ORDER denying SafeGuard's 32 Motion to Dismiss. (See Order for details.) Signed by Judge Douglas L Rayes on 4/11/2017.(MMO)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Stuart Steinke,
Plaintiff,

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ORDER

v.

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No. CV-16-03491-PHX-DLR

SafeGuard World International LLC,

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Defendant.

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Plaintiff Stuart Steinke worked as a Regional Sales Manager for Defendant

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SafeGuard World International LLC (SafeGaurd) from October 2014 until he was

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terminated in February 2016. The offer letter SafeGaurd sent to Steinke stated that, in

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addition to his $105,000 annual salary, Steinke would “be paid a guaranteed commission

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of $1,500 each month for [his] first full 5 months.” After 6 months, Steinke would “be

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expected to start repaying 50% of [his] commission back to the company at a minimum

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rate of $500 per month,” regardless of whether Steinke was actually earning commissions

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after that point. Further, the offer letter explained that “commissions will be paid on the

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first years sales order value commensurate with the [2014 fiscal year] Sales Incentive

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Plan[.]” Steinke alleges that he made approximately $3.2 million in qualifying sales over

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the course of his employment, and that SafeGuard still owes him approximately $60,000

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in unpaid commissions.

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At issue is SafeGuard’s Motion to Dismiss Steinke’s Second Amended Complaint,

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which asserts claims for breach of contract and violations of Arizona wage laws. (Doc.

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32.) The motion is fully briefed and neither party requested oral argument. For the

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following reasons, the motion is denied.

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I. Legal Standard

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When analyzing a complaint for failure to state a claim to relief under Rule

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12(b)(6), the well-pled factual allegations are taken as true and construed in the light

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most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th

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Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the

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assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009), and therefore are

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insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec.

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Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid dismissal, the complaint must

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

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v. Twombly, 550 U.S. 544, 570 (2007). This plausibility standard “is not akin to a

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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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II. Discussion

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SafeGuard contends that Steinke has not sufficiently alleged a breach of contract

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claim. Although SafeGuard does not discuss Steinke’s statutory claim, it nonetheless

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requests complete rather than partial dismissal. The Court understands SafeGuard’s

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position to be that Steinke cannot plausibly allege a violation of wage payment laws if he

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cannot also plausibly allege that he is owed unpaid commissions under his breach of

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contract claim. Accordingly, the Court will limit it discussion to Steinke’s breach of

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contact allegations.

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To state a plausible breach of contract claim, a plaintiff must allege (1) the

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existence of a contract, (2) a breach of that contract, and (3) resulting damages.

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Thunderbird Metallurgical, Inc. v. Ariz. Testing Labs., 423 P.2d 124, 126 (Ariz. Ct. App.

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1967). Steinke has adequately alleged each of these elements.

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First, Steinke alleges that the signed offer letter, the 2014 Sales Incentive Plan, and

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the parties’ course of conduct under those instruments collectively constitute the relevant

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contract governing his entitlement to commissions. SafeGuard argues that Steinke’s

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claim should be dismissed because his allegations require the Court to speculate about the

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terms in the contract. The Court disagrees. Steinke attached to his Second Amended

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Complaint both the terms of the 2014 Sales Incentive Program and the offer letter. The

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Court need not speculate about the terms contained in these documents. Although the

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offer letter only details the 2014 incentive figures, it alludes to the possibility of

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commissions during the following year. Steinke also alleges that SafeGuard continued

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paying him commissions after December 31, 2014, indicating that the offer letter did not

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limit commissions to the 2014 fiscal year. Taken together, Steinke as plausibly alleged

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the existence of a contract to pay commissions beyond 2014.

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Second, Steinke alleges that SafeGuard breached this contract by failing to pay

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him commissions on qualifying sales.

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sufficiently alleged a breach of contract because he does not detail how and why his sales

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were made in accordance with the Sales Incentive Plan. The Court disagrees.

SafeGuard contends that Steinke has not

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Steinke specifies that he grossed approximately $3.2 million in sales that “met the

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eligibility requirements of the Sales Incentive Program” and “went ‘live’ per the Sales

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Incentive Program” prior to his termination.

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required to allege “detailed factual allegations” to state a plausible claim to relief.

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Twombly, 550 U.S. at 555. Steinke has no obligation to identify each and every sale he

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made while employed, nor is he required to mimic the exact language of the contract or

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use magic words to describe his sales. SafeGuard is in a better position to obtain its own

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sales and payroll records, and Steinke has provided sufficient information for SafeGuard

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to reasonably prepare a response.

At the pleading stage, Steinke is not

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Finally, Steinke alleges that he suffered approximately $60,000 in damages due to

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SafeGuard’s breach, and that he is entitled to treble this amount under Arizona’s wage

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laws. Accordingly, taking the well-pled facts as true and construing them in the light

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most favorable to Steinke, the Second Amended Complaint adequately alleges a claim for

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breach of contract.

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IT IS ORDERED that SafeGuard’s Motion to Dismiss (Doc. 32) is DENIED.

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Dated this 11th day of April, 2017.

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Douglas L. Rayes
United States District Judge

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