United States District Court, C.D. California
September 5, 2014
TERRANCE D. RUTHERFORD, individually and on behalf of other similarly situated individuals, Plaintiff,
FIA CARD SERVICES, N.A., (Bank of America), ALASKA AIRLINES, INC. and HORIZON AIR INDUSTRIES, INC., Defendants.
ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS
DEAN D. PREGERSON, District Judge.
Presently before the court are two Motions to Dismiss, one filed by Defendant FIA Card Services, N.A. ("FIA" or "the Bank") and the other by Defendants Alaska Airlines, Inc. ("Alaska") and Horizon Air Industries, Inc. (together with Alaska, the "Airlines"). Having considered the submissions of the parties and heard oral argument, the court grants the motions and adopts the following order.
As described in detail in this court's earlier orders, Plaintiff works for Alaska. FIA operates Bank of America's credit card operations. The Airlines and FIA entered into a marketing partnership, under which FIA agreed to issue "Alaska Airlines" brand credit cards and make payments to the Airlines. The Airlines and Bank further agreed to establish an "Incentive Program, " under which airline employees would be trained by the airlines and paid by the Bank to market the Alaska credit cards to consumers.
Under the Incentive Program, Airlines employees would distribute credit card applications, which included a space for the employees' identifying information, to passengers and other third parties. Applicants could either submit the applications through the distributing Airlines employees or mail the applications directly to the Bank.
Employees were offered five dollars for each credit card application submitted to the Bank, so long as the application contained enough information to allow the Bank to accept or reject the application. Employees were offered forty-five dollars for applications that were ultimately approved. The Airlines would deposit these incentive amounts into employee bank accounts, along with wages. (Second Amended Complaint ("SAC") ¶ 40.) The Airlines also encouraged employee participation in the incentive program by offering cash and other prizes to "top performers." (SAC ¶¶ 38-39).
The SAC alleges that Plaintiff distributes over 200 applications per month. (SAC ¶ 47.) The SAC lists several dozen instances in which, between January and September 2013, Plaintiff received credit card applications and forwarded them to the Bank. (SAC ¶ 51.) Plaintiff alleges, however, that the vast majority of people to whom applications are distributed do not return their applications to Plaintiff. (SAC ¶ 48.) Plaintiff does not know whether the Bank processed any of the applications submitted directly by applicants, with his identifying information. (SAC ¶¶ 54-55.) Plaintiff has, however, received incentive payments during the relevant period of $5, 260. (SAC ¶ 56.) Plaintiff also alleges that he is ranked as a "top performer" in the incentive program. (SAC ¶ 55.)
Plaintiff alleges that he has not been paid the amounts due to him under the incentive program. (SAC ¶ 61.) His SAC alleges causes of action for an accounting, common count for the reasonable value of services rendered, and common count for a book account. Defendants now move to dismiss the SAC.
II. Legal Standard
A complaint will survive a motion to dismiss when it contains "sufficient factual matter, 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 Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes , 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint need not include "detailed factual allegations, " it must offer "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal , 556 U.S. at 678. Conclusory allegations or allegations that are no more than a statement of a legal conclusion "are not entitled to the assumption of truth." Id . at 679. In other words, a pleading that merely offers "labels and conclusions, " a "formulaic recitation of the elements, " or "naked assertions" will not be sufficient to state a claim upon which relief can be granted. Id . at 678 (citations and internal quotation marks omitted).
"When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief." Id . at 679. Plaintiffs must allege "plausible grounds to infer" that their claims rise "above the speculative level." Twombly , 550 U.S. at 555. "Determining whether a complaint states a plausible claim for relief" is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal , 556 U.S. at 679.
A. Whether the SAC Alleges an Amount Owed
Defendants first contend that the SAC must be dismissed because it fails to allege facts to support Plaintiff's contention that Defendants owe him any money. In response, Plaintiff contends that the facts alleged, specifically those regarding the number of applications he distributed and submitted, and the amount of compensation he received, are sufficient to give rise to a plausible inference that he has been underpaid.
Defendants highlight the fact that the amount of compensation plaintiff received, $5, 260, is within five dollars of the amount Plaintiff would have received if every single one of the applications he submitted had been approved. Plaintiff does not dispute that it is extremely implausible that every application he submitted was approved. Indeed, Defendants argue that it is implausible that every application that every one of the 117 applications contained sufficient information to be processed, let alone approved.
The question, however, is whether these facts could support an inference that Plaintiff has been underpaid. Defendants argue that Plaintiff's receipt of so much money, given the relatively small number of applications Plaintiff himself submitted, indicates that Plaintiff must have received payment for some applications submitted directly by applicants. This inference, plausible though it may be, is not the only one supported by the facts alleged.
Plaintiff has alleged that fully 90% of customers do not return their applications to Plaintiff. While Plaintiff cannot confirm at this stage that any of those customers, who likely exceed 1, 000 in number, actually did submit an application, Defendants concede that some of them must have. Considering Plaintiff's status as a "top performer" and the possibility that Plaintiff's submissions, comprising only 10% of distributed applications, alone could account for almost all of the payments received, the SAC alleges sufficient facts to give rise to an inference that Plaintiff has not been fully compensated.
1. Whether Alaska Owes Plaintiff Anything
In addition to the argument discussed above, Alaska contends that all claims against Alaska must be dismissed because the SAC does not allege that Alaska itself owes Plaintiff any money. Though the SAC alleges that Alaska deposits incentive payments into employee bank accounts, nowhere does it allege that Alaska actually pays employees. Rather, the SAC alleges that the Bank pays Alaska employees. (SAC ¶ 40.) Plaintiff's opposition to Alaska's Motion does not address this argument. Accordingly, all claims against Alaska are DISMISSED.
B. Accounting Claim
The Bank next asserts that Plaintiff's claim for an accounting must be dismissed because an accounting is a remedy, not a cause of action. Indeed, some courts have held "that an accounting is merely an equitable remedy, and therefore cannot be maintained as an independent cause of action." Fradis v. Savebig.com, No. CV 11-7275 GAF, 2011 WL 7637785 at *8 (C.D. Cal. Dec. 2, 2011). Other courts, however, citing Tesselle v. Mcloughlin , 173 Cal.App.4th 156 (2009), have concluded that an accounting can exist as an independent equitable cause of action. See, e.g., Dahon North Am., Inc. v. Hon, No. 11-cv-5835 ODW, 2012 WL 1413681 at * 11 (C.D. Cal. Apr. 24, 2012); see also Baidoobonso-Iam v. Bank of Am., No. CV 10-9171 CAS, 2011 WL 3103165 at *6 (C.D. Cal. Jul. 25, 2011) ("An accounting may take the form of either a legal remedy or an equitable claim."). This court agrees with the latter approach.
A cause of action for an accounting requires that "a relationship exist between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting." Though the relationship giving rise to an accounting claim need not necessarily be a fiduciary one, courts typically require that it reflect some degree of confidentiality or closeness. Tesselle , 173 Cal.App.4th at 179.; Dahon, 2012 WL 1413681 at *13; Fradis, 2011 WL 7637785 at *9; Canales v. Fed. Home Loan Mortgage Corp., No. CV 11-2819 PSG , 2011 WL 3320478 at * 8 (C.D. Cal. Aug. 1, 2011).
Here, the SAC conclusorily alleges that both the Airlines and the Bank owe Plaintiff a fiduciary duty (SAC ¶¶ 79-80). The SAC makes no further factual allegations regarding this supposed fiduciary relationship, nor do Plaintiff's Oppositions make any attempt to argue that such a duty exists beyond a single statement that "present circumstances, where Defendant holds all the books and records necessary to calculate proper payment [are] one of trust and repose.'" (Opp. at 11-12.) The allegations of the SAC are insufficient to establish Plaintiff and the Bank shared the type of relationship that would give rise to an independent accounting claim.
C. Common Count for Reasonable Value of Services Rendered
"[I]t is well settled that there is no equitable basis for an implied-in-law promise to pay reasonable value when the parties have an actual agreement covering compensation." Hedging Concepts, Inc. v. First Alliance Mortgage Co.. 41 Cal.App.4th 1410 , 1419 (1996). The SAC alleges the existence of an agreement to pay Plaintiff precise amounts for various types of submitted applications. Nevertheless, Plaintiff contends that the Second Cause of Action for Common Count for Reasonable Value of Services Rendered is adequately pled because Federal Rule of Civil Procedure 8(d)(3) allows inconsistent claims to be pled. Rule 8 does not, however, allow a plaintiff to circumvent state law by stating a claim for both express and quasi contract. See In re Facebook Privacy Litigation , 761 F.Supp.2d 705, 718 (N.D. Cal. 2011) ("Although Rule 8... allows a party to state multiple, even inconsistent claims, the rule does not allow a party invoking state law to assert an unjust enrichment claim while also alleging an express contract."); Custom LED, LLC v. eBay, Inc., No. C 12-350 SI, 2012 WL 1909333 at *5 (N.D. Cal. 2012). Plaintiff's Second Cause of Action is DISMISSED with prejudice.
D. Common Count for A Book Account
"A book account is a detailed statement of debit/credit transactions kept by a creditor in the regular course of business, and in a reasonably permanent manner." Reigelsperger v. Siller. 40 Cal.4th 574 , 579 n.5 (2007). "A book account is created by the agreement or conduct of the parties in a commercial transaction. Nonetheless, the mere recording... or the incidental keeping of accounts under an express contract does not of itself create a book account." H. Russell Taylor's Fire Preverntion Serv., Inc. v. Cocal Cola Bottling Corp. , 99 Cal.App.3d 711, 728 (1979).
Here, the SAC alleges only that "a book account was created... as a result of Plaintiff's... participation in the Incentive program for Defendants' benefit." (SAC ¶ 106.) This naked assertion is insufficient to sustain a common count for a book account. Plaintiff's Third Cause of Action is DISMISSED, with prejudice.
For the reasons stated above, Defendants' Motions to Dismiss are GRANTED. Plaintifss' SAC is DISMISSED with prejudice.
IT IS SO ORDERED.