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Kurilko v. Teletech Holdings

October 26, 2009

ROBERT KURILKO, PLAINTIFF,
v.
TELETECH HOLDINGS, INC., AND DOES 1-10, DEFENDANTS.
TELETECH HOLDINGS, INC., THIRD-PARTY PLAINTIFF,
v.
ASPEN MARKETING SERVICES, INC. AND ASPEN ACQUISITION HOLDINGS LLC, THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER DENYING MOTION TO DISMISS, OR IN THE ALTERNATIVE, MOTION TO SEVER ACTION

Third-party Defendants Aspen Marketing Services, Inc. ("Aspen Marketing") and Aspen Acquisition Holdings LLC ("Aspen Acquisition") (collectively "Aspen") have filed a motion to dismiss the Third-Party Complaint, or, in the alternative, to strike the Third-Party Complaint or sever the action. For the reasons discussed below, Aspen's motion is DENIED.

I. BACKGROUND

A. Kurilko's Claims

On February 20, 2009, Plaintiff Robert Kurilko ("Kurilko") commenced this action against TeleTech Holdings, Inc. ("TeleTech") in the Superior Court of the State of California, County of San Diego. According to the Complaint, on or about May 2006, Kurilko became employed in San Diego, California as the Vice President of Marketing of Newgen Results Corporation ("Newgen"). (Compl. ¶ 3.) Kurilko alleges that TeleTech was the parent company of Newgen and a joint employer. (Compl. ¶ 6.) On or about April 24, 2007, Kurilko entered into a written employment agreement, which included the following term regarding severance pay:

[I]f the Company (a) terminates your employment due to a change in control (in the event that TeleTech does not offer you a comparable job) or (b) terminates your employment without cause, . . . the Company shall pay you severance compensation equal to the sum of six months of base pay, which shall be payable bi-weekly or in a lump sum as mutually agreed, less legally required withholdings, on the first of the month following the termination date. (Compl. ¶ 8.)

Kurilko claims that on or about October 1, 2007, he was terminated due to a change in control when TeleTech entered into an Asset Purchase Agreement with Aspen Marketing. (Compl. ¶ 9.) Kurilko alleges that he was not offered a comparable position by TeleTech upon his termination and has not received the severance payment under the employment agreement. (Compl. ¶ 10.) Kurilko asserts claims for breach of the employment agreement, violation of Cal. Labor Code §§ 201, 203, and 218.5, and intentional interference with contractual relations.

B. Third-Party Claims

On April 8, 2009, TeleTech removed this action to federal court. Shortly thereafter, TeleTech filed its Third-Party Complaint against Aspen.

TeleTech's Third-Party Complaint is based on indemnification provisions in the Asset Purchase Agreement ("APA"). Under the terms of the APA, Aspen agreed to purchase all of the assets of Newgen. Aspen also agreed to make an offer of employment to each current employee of Newgen (except certain specified individuals not including Kurilko) "on substantially the same terms and conditions provided by Seller taken as a whole, which offer shall remain open until the Closing Date." (APA (Ex. B to Third-Party Compl.), § 2.8(a).) Section 10.1(b) of the APA provides that Aspen shall indemnify Newgen "and their managers, members, directors, officers, employees, Affiliates and agents at all times against and in respect of Losses arising from or relating to . . . any breach of Section 2.8(a) and 2.8(c)."

TeleTech contends that if Kurilko prevails on his claim that he was not offered comparable employment, Aspen is obligated to indemnify TeleTech under §§ 2.8(a) and 10.1(b) of the APA. TeleTech asserts claims for breach of contract and contractual indemnification.

C. Prior Lawsuit Against Newgen

On February 8, 2008, Plaintiff filed a state court action against Newgen to recover the severance payments that are allegedly owed to him. (San Diego Superior Court Case No. 37-2008-077697.) On December 22, 2008, Newgen filed for bankruptcy under ...


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