United States District Court, D. Arizona
Dominic W. Lanza United States District Judge.
lawsuit, Plaintiff Sam Sobh sues his former employer, Phoenix
Graphix Incorporated (“PGI”), as well as
PGI's profit-sharing plan, president, and vice-president
(collectively, “Defendants”). In a nutshell, Sobh
contends that, after he was terminated, Defendants improperly
rejected his request to “cash out” the benefits
he was owed under the profit-sharing plan, failed to pay him
the bonuses and paid time-off he'd earned prior to his
termination, and failed to provide any documentation
concerning these denials. Based on these allegations, Sobh
asserts various claims under the Employee Retirement Income
Security Act (“ERISA”), as well as state-laws
claim for unlawful retention of wages and unjust enrichment.
pending before the Court is Defendants' motion to
dismiss. (Doc. 12.) For the following reasons, the motion will
complaint (Doc. 1) contains the following factual
allegations, which the Court accepts as true for the purpose
of resolving Defendants' motion to dismiss:
a former employee of PGI, an Arizona corporation.
(Id. ¶¶ 13, 18.) PGI's president and
vice-president are Brian and Anne Kotarski. (Id.
employed by PGI, Sobh became a beneficiary of the PGI Profit
Sharing Plan (“the Plan”). (Id. ¶
20.) PGI later “terminated” Sobh's employment
because their relationship had become
“untenable.” (Id. ¶¶ 5, 19.)
his termination, Sobh “requested that his benefits
under [the Plan] be cashed out.” (Id. ¶
22.) This request “was denied” by an unspecified
person or entity. (Id. ¶ 23.) Afterward, Sobh
“requested the corresponding documentation regarding
the reason for his denial, procedure for appeal, and
supporting paperwork as required under [the Plan] and as
required by ERISA, ” but this request “was
refused” by an unspecified person or entity.
(Id. ¶¶ 24-25.) Additionally,
“PGI” refused to pay Sobh the “bonuses and
paid time off” he had earned “prior to his
termination.” (Id. ¶ 31.)
The Plan Documents Subject To Judicial Notice
the scope of review on a motion to dismiss for failure to
state a claim is limited to the contents of the
complaint.” Marder v. Lopez, 450 F.3d 445, 448
(9th Cir. 2006). However, “[a] court may consider
evidence on which the complaint ‘necessarily
relies' if: (1) the complaint refers to the document; (2)
the document is central to the plaintiff's claim; and (3)
no party questions the authenticity of the copy attached to
the 12(b)(6) motion.” Id.
the complaint refers repeatedly to the Plan, the Plan is
central to Sobh's ERISA-based claims, and Defendants have
enclosed, as exhibits to their motion to dismiss, (1) the
Plan (Doc. 12-1 at 2-57) and (2) the Summary Plan Description
(“SPD”) (Doc. 12- I at 59-75). In his opposition,
Sobh doesn't contest the authenticity of these documents.
(Doc. 15.) Accordingly, the Court will consider them when
ruling on Defendants' motion. Daniels-Hall v.
Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir.
2010). These documents reveal the following
additional facts that are relevant to the Court's
Plan designates “the Employer” as the Plan
Administrator unless the board of directors designates a new
Plan Administrator and the designation is accepted in
writing. (Doc. 12-1 at 12 [Art. II § 2.22].) PGI is the
default Plan Administrator, and Brian and Anne Kotarski are
the named trustees. (Doc. 12-1 at 5, 55.) Under the Plan, a
participant may receive benefits through, among other
methods, a “Cash-Out” or a “Hardship
Distribution.” (Doc. 12-1 at 30-31 [Art. VII
§§ 7.1-7.1A.) A Cash-Out “shall be made as
soon as administratively feasible in the Plan Year
following the Plan Year of termination of employment
. . . .” (Doc. 12-1 at 32 [Art. VII §
contrast, the Plan Administrator retains discretion to
immediately disburse a Hardship Distribution if the
participant demonstrates “immediate and heavy financial
need” and the distribution is “necessary”
to satisfy that need. (Doc. 12-1 at 30-31 [Art. VII §
7.1A].) However, the Plan imposes various limitations on
Hardship Distributions. Among other things, (1) such a
distribution must be limited to the precise amount required
to alleviate the hardship and (2) “financial
hardship” is limited to medical expenses, purchase of a
principal residence, payment of tuition or other educational
fees, rent or mortgage payments necessary to prevent eviction
or foreclosure, and “such other financial needs as
prescribed by the Commissioner of the Internal Revenue
Service.” (Id.) Additionally, the Plan
Administrator's hardship determination is “final
and binding.” (Id.)
survive a motion to dismiss, a party must allege
‘sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face.'”
In re Fitness Holdings Int'l, Inc., 714 F.3d
1141, 1144 (9th Cir. 2013) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)). “A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Id. (quoting Iqbal, 556 U.S. at 678).
“[A]ll well-pleaded allegations of material fact in the
complaint are accepted as true and are construed in the light
most favorable to the non-moving party.” Id.
at 1144-45 (citation omitted). However, the court need not
accept legal conclusions couched as factual allegations.
Iqbal, 556 U.S. at 679-80. The court also may
dismiss due to “a lack of a cognizable legal
theory.” Mollett v. Netflix, Inc., 795 F.3d
1062, 1065 (9th Cir. 2015) (citation omitted).
is a comprehensive statute designed to promote the interests
of employees and their beneficiaries in employee benefit
plans.” Shaw v. Delta Air Lines, Inc., 463
U.S. 85, 90 (1983) (citations omitted). Any plan
“established or maintained by an employer” is
defined as an employee welfare benefit plan under ERISA to
the extent it “was established or is maintained for the
purpose of providing for its participants or their
beneficiaries . . . medical, surgical, or hospital care ...