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Zaki v. Banner Pediatric Specialists LLC

United States District Court, D. Arizona

January 10, 2017

Emad Zaki, Plaintiff,
Banner Pediatric Specialists LLC, et al., Defendants.


          Douglas L. Rayes, United States District Judge

         Before the Court is Defendants Banner Pediatric Specialists, LLC, Banner Health Network, and Banner Medical Group's (collectively Banner) Partial Motion to Dismiss. (Doc. 12.) The motion is fully briefed, and neither party requested oral argument. For the reasons below, the motion is granted.


         Plaintiff Emad Zaki is a physician specializing in pediatric nephrology. (Doc. 18, ¶ 16.) In 2010, Banner hired Zaki to provide pediatric nephrology care and on-call coverage. (Id., ¶ 25.) Pursuant to a Physician Employment Agreement (PEA), Zaki's on-call coverage obligation was not to exceed “fifty percent (50%) of [Banner's] coverage burden for the Physician's specialty.” (Id., ¶ 27.) Banner assured Zaki that it would hire a second pediatric nephrologist so that Zaki would not be responsible for all on-call coverage for his specialty. (Id., ¶ 29.) In the event Zaki worked more than his contractual on-call coverage obligation, he was to receive ninety dollars per hour for such work. (Id., ¶ 31.) The PEA further provided that Zaki was entitled to twenty-eight days of paid time off (PTO) annually. (Id., ¶ 32.) Banner, however, did not hire another pediatric nephrologist during Zaki's tenure, which caused him to perform all on-call coverage responsibilities for his medical specialty and not use any PTO. (Id., ¶¶ 33-35.)

         On June 3, 2014, Zaki took leave from Banner to care for his father in Egypt. (Id., ¶ 38.) While there, Zaki suffered a serious brain injury in a car accident. (Id., ¶ 39.) Due to his injury, Zaki was unable to obtain medical clearance to resume work at Banner. (Id., ¶ 40.) On December 29, 2014, Banner sent Zaki an email informing him that he would be terminated without cause, effective March 29, 2015. (Id., ¶ 41.)

         Sometime in April 2015, after Zaki's effective termination date, several physicians employed by Banner received incentive payments under Banner's Physician Incentive Plan (PIP) for their performance in 2014. (Id., ¶ 43.) Zaki did not receive an incentive payment for his performance in 2014, despite his performance metric being equal to or better than many of the physicians who received incentive payments. (Id., ¶ 44.)

         On October 26, 2015, Zaki filed a charge with the Equal Employment Opportunity Commission (EEOC) alleging various forms of discrimination during his tenure at Banner. (Id., ¶ 45.) He received notice of right to sue from the EEOC on May 20, 2016. (Id., ¶ 47.) On April 25, 2016, Zaki filed a complaint against Banner in Maricopa County Superior Court. (Id., ¶ 51.) Zaki voluntarily dismissed his state court complaint on June 14, 2016 and concurrently filed an identical lawsuit in this Court. (Id., ¶ 52.) On August 22, 2016, Banner filed a partial motion to dismiss, arguing that several of Zaki's claims are time-barred. (Doc. 12.)


         The task when ruling on a motion to dismiss “is to evaluate whether the claims alleged [plausibly] can be asserted as a matter of law.” See Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When analyzing the sufficiency of a complaint, the well-pled factual allegations are taken as true and construed in the light most favorable to the plaintiff. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual allegations, however, are not entitled to the assumption of truth, Iqbal, 556 U.S. at 680, 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. 2008).


         Banner moves to dismiss as untimely Zaki's breach of contract and statutory unpaid wage claims, as well as those of his discrimination claims that are based on alleged adverse actions that occurred on or before June 3, 2014, the last day of Zaki's active employment.[1]

         I. Breach of Contract Claims

         In Count VI of the Amended Complaint, Zaki alleges that Banner breached the PEA by failing to: (1) compensate him for excess on-call coverage, (2) hire an additional physician specializing in pediatric nephrology, thereby causing him to be unable to use his accrued PTO, (3) compensate for his unused PTO, (4) pay his base salary during the ninety-day termination notice period, and (5) pay him a PIP incentive for 2014. (Doc. 18, ¶¶ 103-107.) Under Arizona law, breach of employment contract actions must be brought within one year of accrual. A.R.S. § 12-541(3). A breach of contract action generally accrues at the time the contract is breached. See Angus Med. Co. v. Digital Equip. Corp., 840 P.2d 1024, 1027 (Ariz.Ct.App. 1992). Under the discovery rule, however, “a plaintiff's cause of action does not accrue until the plaintiff knows or, in the exercise of reasonable diligence, should know the facts underlying the cause.” Gust, Rosenfeld & Henderson v. Prudential Ins. Co., 898 P.2d 964, 966 (Ariz. 1995). Thus, Zaki's contract claims are timely only if they were brought within a year after he knew or reasonably should have known the underlying facts.

         Zaki's contract claims are time-barred because they accrued over a year before June 14, 2016, the date he filed this action. Several of the alleged breaches occurred sometime in 2014. First, the PEA required Banner to compensate Zaki for excess on-call coverage “within thirty (30) days of the end of each calendar quarter.” (Doc. 18-1 at 18.) Zaki's last day of active employment was June 3, 2014. Thus, Zaki's claim that Banner failed to compensate him for excess on-call coverage accrued on July 30, 2014, the last date upon which Banner would have owed him compensation from excess on-call coverage. Similarly, Zaki's claim that Banner failed to provide relief from excess on-call coverage by hiring an additional specialist accrued, at the latest, on June 3, 2014. Given that Banner allegedly failed to provide relief from excess on-call coverage throughout Zaki's employment, Zaki certainly would have known that a cause of action existed by his last day of work. Finally, Zaki's claim that Banner failed to compensate him for unused PTO accrued, at the latest, by the end of 2014, the last year in which Zaki could have accrued PTO. The PEA provides that Zaki was entitled to twenty-eight days of PTO per year, and that unused PTO does not carry over from year to year. (Doc. 18-1 at 19.) Notably, the PEA does not state that ...

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