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Haller v. Advanced Industrial Computer Incorporated

United States District Court, D. Arizona

August 15, 2014

Seth Haller, et al., Plaintiffs,
Advanced Industrial Computer Incorporated, et al., Defendants.


DAVID G. CAMPBELL, District Judge.

Defendant Advanced Industrial Computer, Inc. ("AIC") has filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Doc. 38. The motion is fully briefed. The Court will deny the motion.[1]

I. Background.

According to the second amended complaint, Plaintiff Seth Haller, a white man, was hired by AIC as the Director of Business Management of the Platform Solutions Group ("PSG"), one of AIC's three divisions. Doc. 31, ¶¶ 7, 15. As part of his compensation package, Haller was able to buy investment shares of T-Win Systems, Inc. (T-Win), AIC's parent company. Id., ¶ 7. In addition, Haller would be entitled to a certain number of bonus shares based on the number of investment shares he purchased. Id. Haller purchased 45, 000 investment shares, which entitled him to 30, 000 bonus shares. Id., ¶ 19. After beginning his employment with AIC, Haller was emailed by Sherman Tang, the vice president of PSG, about the bonus shares. Id., ¶ 20. Haller signed a Stock Purchase Agreement ("Agreement") for the bonus shares, which provided that if Haller's group contributed at least $5 in Taiwanese Dollars to earnings per share of AIC stock in 2010, Haller could keep the bonus shares. Id., ¶¶ 21-24. The Agreement was also signed by Michael Liang, the president of both AIC and T-Win. Id., ¶ 23.

Haller believed that he would be able to sell his investment shares and bonus shares after two events occurred: first, T-Win's stock had to have been traded as "penny stocks" in Taiwan for four consecutive quarters; second, the stock had to be listed on the Taiwanese national exchange. Id., ¶ 24. Once both events occurred, Haller would be free to sell all of his investment shares and 25% of his bonus shares. Id. From then on, Haller would be entitled to sell 25% of his bonus shares each year. Id.

During Haller's employment at AIC, he received an additional 5, 000 bonus shares of T-Win stock, but never signed an agreement for the additional shares. Id., ¶ 33. In addition, Haller's group successfully contributed at least $5 in Taiwanese Dollars in earning per share of AIC stock in 2010. Id., ¶ 35.

In 2010, AIC employees began referring to Haller as "head gweilo, " a Cantonese ethnic slur meaning "ghost man." Id., ¶¶ 36-38. Haller complained about the slurs to Tang but never saw any corrective action take place. Id., ¶¶ 39-40.

Eventually, Liang directed Tang to terminate Haller because Liang could not understand Haller due to Liang's poor English skills. Id., ¶ 41. Haller later learned that AIC was in the process of hiring an employee of Asian descent to take over Haller's former clients. Id., ¶ 42. After being terminated, Haller received his 45, 000 investment shares, but never received his 30, 000 bonus shares or the 5, 000 additional bonus shares. Id., ¶ 46.

Plaintiffs brought this action pursuant to the Arizona Civil Rights Act and Title VII of the Civil Rights Act of 1964 alleging discrimination on the basis of race, breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and failure to pay wages pursuant to A.R.S. § 23-355.

II. Legal Standard.

When analyzing a complaint for failure to state a claim under Rule 12(b)(6), the well-pled factual allegations are taken as true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the complaint must plead enough facts to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This plausibility standard "is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not show[n]' - that the pleader is entitled to relief.'" Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).

III. Analysis.

A. Count Three: Breach of Contract.

"For a plaintiff to bring a breach of contract action against a defendant, the plaintiff and defendant must have a contractual relationship." Brown v. Kinross Gold U.S.A., Inc., 531 F.Supp.2d 1234, 1240 (D. Nev. 2008). It therefore "is axiomatic that non-parties cannot be held liable for breach of contract[.]" Herbal Care Sys., ...

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