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Maher Habashy et al v. Farmers Group Inc et al

April 15, 2011

MAHER HABASHY ET AL
v.
FARMERS GROUP INC ET AL



The opinion of the court was delivered by: Honorable Gary Allen Feess

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CIVIL MINUTES - GENERAL

Present: The

Renee Fisher None N/A Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

None None

Proceedings: (In Chambers)

ORDER RE: PLAINTIFF'S MOTION TO REMAND

I. INTRODUCTION AND BACKGROUND

On August 10, 2010, Plaintiff Maher Habashy ("Plaintiff") filed this suit against Defendants Farmers Group, Inc.; Farmers Insurance Company; Truck Insurance Exchange; Farmers Insurance Group of Companies; Farmers Insurance Exchange; Fire Insurance Exchange; Mid-Century Insurance Company; Wendy Cochran; Jason Kelly; John Gonzalez; David Ehrlich; Sandy Gomez; Robert Woudstra; Paul Norman Hopkins; and Does 1 through 200 (collectively, "Defendants") in Los Angeles County Superior Court. (Docket No. 1., Not. of Removal ¶ 1 & Ex. 1 at 18 [Compl.].) On January 21, 2011, Plaintiff filed and served on Defendants a First Amended Complaint. (Not. ¶ 3 & Ex. 30 [First Am. Compl. ("FAC")].) Defendants then removed the case to this Court on February 18, 2011, on the basis of federal question jurisdiction. (Docket No. 1, Not.)

Plaintiff alleges that he began working for Farmers in the mid-1980's, and that he has been a dedicated and conscientious employee. (FAC ¶ 1.) According to the complaint, Farmers terminated him in December 2009 without cause on the basis of his age and Egyptian national origin, and because he had objected to the company's illegal claims practices and wage and hour violations. (Id. ¶¶ 1, 5, 131.)

As is relevant to this motion to remand, Plaintiff's FAC contains allegation that his termination was based on, and resulted in, the wrongful denial of employee benefits. For example, the FAC alleges that Plaintiff's termination "was designed to allow Farmers to avoid

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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 11-1526 GAF (PLAx)

Date April 15, 2011

Maher Habashy et al v. Farmers Group Inc et al

paying Plaintiff benefits." (Id. ¶ 125.) Plaintiff alleges that Farmers had an "institutional policy of trying to 'rid itself' of employees 50 years or older, prompted by Farmers['] objective to avoid paying pensions and other benefits tied to age." (Id. ¶ 65.) According to the FAC, "[t]he fact that certain [health] benefits would become effective on January 1, 2010 was one of the many illegal reasons Farmers terminated Plaintiff effective December 14, 2009." (Id. ¶ 113.)

On the basis of these and other allegations, Plaintiff asserts fifteen state-law causes of action. (Id. ¶¶ 161--256.) Some of these causes of action are explicitly based in part on the denial of benefits. First, Plaintiff alleges that Farmers breached an employment contract that provided, among other things, that "Plaintiff would receive benefits, including, but not limited to profit sharing, pension, health insurance, the option of 'early retirement,' and various other benefits." (Id. ¶ 162(O).) According to the complaint, Farmers terminated Plaintiff "immediately prior to receipt of various benefits," "attempted to terminate [him] so as to cause him and his family to lose health insurance benefits," and "attempted to terminate Plaintiff to cause him to lose his pension and the option of early retirement." (Id. ¶ 165(I), (L), (M).)

Second, Plaintiff alleges that Farmers breached its fiduciary duty by, among other things, "purposefully [] terminat[ing] Plaintiff immediately prior to receipt of various benefits," "attempt[ing] to terminate Plaintiff so as to cause him and his family to lose health insurance benefits," "attempt[ing] to terminate Plaintiff to cause him to lose his pension and the option of early retirement," and "terminat[ing] Plaintiff in order for him to lose important rights and benefits, including the 20% increase in pension benefits." (Id. ¶¶ 170(I), (L), (M), 171(K).)

Third, Plaintiff asserts a cause of action for fraud based in part on Farmers' alleged misrepresentation that it "would not prematurely and in bad faith terminate Plaintiff in order to avoid paying benefits that were linked to his time with Farmers." (Id. ¶ 176(D).) Plaintiff also asserts other causes of action, including a claim for wrongful termination in violation of public policy. (Id. ¶¶ 225--29.)

On the basis of these allegations, which Defendants contend were included for the first time in Plaintiff's FAC, Defendants concluded that Plaintiff's claims were completely preempted by the Employee Retirement Income Security Act (ERISA). (Not. ΒΆΒΆ 7, 11--12.) Because claims that are completely preempted by ERISA arise under federal law, Defendants concluded that the FAC presented a federal question over which this Court has jurisdiction and accordingly removed ...


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