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Kaminskiy v. Kimberlite Corp.

United States District Court, N.D. California

May 27, 2014



MAXINE M. CHESNEY, District Judge.

Before the Court are two motions: (1) defendants Kimberlite Corporation ("Kimberlite") and Kimberlite Corporation Employee Stock Ownership Plan's ("the ESOP") "Motion to Dismiss (12(b)(6)) First Amended Complaint and Motion to Strike Jury Demand (39(a)(2), " filed March 12, 2014;[1] and (2) plaintiff Tatyana Kaminskiy's "Motion to Amend Complaint, " filed April 10, 2014. Both motions have been fully briefed.[2] Having read and considered the papers filed in support of and in opposition to the motions, the Court rules as follows.[3]


The following facts, taken either from the First Amended Complaint ("FAC") or the terms of the Summary Plan Description of Kimberlite's Employee Stock Ownership Plan ("SPD"), [4] are assumed true at the pleading stage.

Plaintiff was employed by Kimberlite from December 26, 2001 to June 6, 2008. (See FAC ¶¶ 10, 12.) While employed by Kimberlite, she entered into an "ESOP contract, " the terms of which allowed her to purchase shares of Kimberlite. (See FAC ¶ 11.) During her employment, she purchased approximately 2600 shares, which shares, as of December 31, 2012, had a value of approximately $158, 606.88. (See id.)

The SPD provides that if a plan participant "separate[s] from service with [Kimberlite] for reasons other than death, Disability, or prior to attaining Normal Retirement Age, " then "distribution of [the participant's] Accounts will commence as soon as administratively feasible during the sixth (6th) Plan Year following the Plan Year in which [the participant] separated from service." (See Rao-Russell Decl. Ex. A at 14.) Such distribution of benefits, however, is subject to the following exception: "[T]he Plan shall not be required to distribute any Employer Securities acquired with the proceeds of a Securities Acquisition Loan until the close of the Plan Year in which such Securities Acquisition Loan has been repaid in full." (See id.)[5]

On May 22, 2013, plaintiff requested from defendants five documents, or types of documents, such as "any and all documents relating to any loan(s) to the ESOP, " which documents defendants thereafter did not provide. (See FAC ¶¶ 13, 28.) On July 13, 2013, plaintiff again requested the documents (see FAC ¶ 14) and, on August 27, 2013, made a third such request (see FAC ¶ 15). Thereafter, defendants provided plaintiff with "2011 financial reports that address the balance of the loan, " but refused to provide her with the other documents she had requested. (See FAC ¶¶ 16, 28.)

On August 29, 2013, plaintiff "made a claim for benefits" (see FAC, second ¶ 19), [6] and her claim was "thereafter denied by defendants" (see id.). "Defendants claim that the ESOP has not repaid the originating loan and therefore they are not required to make a distribution to ESOP participants."[7] (See FAC, first ¶ 18.)[8]


Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. See Balistreri v. Pacifica Police Dep't , 901 F.2d 696, 699 (9th Cir. 1990). Rule 8(a)(2), however, "requires only a short and plain statement of the claim showing that the pleader is entitled to relief.'" See Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555 (2007) (quoting Fed.R.Civ.P. 8(a)(2)). Consequently, "a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations." See id. Nonetheless, "a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." See id. (internal quotation, citation, and alteration omitted).

In analyzing a motion to dismiss, a district court must accept as true all material allegations in the complaint, and construe them in the light most favorable to the nonmoving party. See NL Indus., Inc. v. Kaplan , 792 F.2d 896, 898 (9th Cir. 1986). "To survive a motion to dismiss, a complaint must contain sufficient factual material, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Twombly , 550 U.S. at 570). "Factual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly , 550 U.S. at 555. Courts "are not bound to accept as true a legal conclusion couched as a factual allegation." See Iqbal , 556 U.S. at 678 (internal quotation and citation omitted).


The FAC consists of three causes of action. In the First Cause of Action, brought pursuant to 29 U.S.C. § 1132(a)(1)(B), plaintiff seeks to recover benefits allegedly due her under the ESOP. In the Second Cause of Action, titled "ERISA Breach of Fiduciary, " plaintiff seeks both recovery of benefits and equitable relief, based on her allegation that defendants denied her claim for benefits and did not provide her with documents she requested. In the Third Cause of Action, brought pursuant to 29 U.S.C. § 1132(c), plaintiff seeks imposition of a monetary penalty against ...

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