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Farris v. International Paper Co.

United States District Court, C.D. California

October 7, 2014

DANIEL FARRIS
v.
INTERNATIONAL PAPER COMPANY, et al.

Jason Campbell Amy Gillinger Attorneys Present for Defendants.

Lauren Morrison Douglas Silverstein Attorneys Present for Third Party Defendants

CIVIL MINUTES - GENERAL

CHRISTINA A. SNYDER, District Judge.

Proceedings: DEFENDANT INTERNATIONAL PAPER COMPANY'S MOTION TO DISMISS THIRD-PARTY DEFENDANT YEGHIA BEKIARIAN'S CROSSCLAIM AND COUNT FOR INDEMNITY

I. INTRODUCTION

On February 6, 2013, plaintiff Daniel Farris filed this action against International Paper Company, Inc. ("IP") and Does 1-100 in San Bernardino County Superior Court. IP removed the action to this Court on March 15, 2013, and it was assigned to the Honorable Virginia A. Phillips. Dkt. 1. By order dated July 14, 2014, this action was transferred to the undersigned judge. Dkt. 59. The operative second amended complaint ("SAC") asserts claims for failure to pay vested vacation wages upon termination in violation of Labor Code § 227.3, [1] failure to pay wages and waiting time penalties pursuant to Labor Code §§ 202-03, violation of the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200, et seq. , and violation of the record-keeping provisions set forth in Labor Code § 226. Dkt. 21.

On May 30, 2014, IP filed a third-party complaint against Yeghia Bekiarian. Dkts. 38, 41. The third-party complaint asserts claims against Bekiarian for breach of fiduciary duty, breach of the duty of loyalty, gross negligence, and intentional misrepresentation. Id . On June 19, 2014, Bekiarian filed a motion to dismiss the third-party complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. 45. The Court denied Bekiarian's motion on July 21, 2014. Dkt. 66.

On August 11, 2014, Bekiarian filed an answer to IP's third-party complaint in which he also asserts a counterclaim against IP. Dkt. 75 ("Answer"). Specifically, Bekiarian argues that IP is required to reimburse and indemnify him pursuant to Labor Code § 2802, California Corporations Code § 317, and IP's corporate bylaws. Id . IP moved to dismiss Bekiarian's counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(6) on September 2, 2014. Dkt. 88. Bekiarian opposed the motion on September 15, 2014, dkt. 118, and IP replied on September 22, 2014, dkt. 154. The Court held a hearing on October 6, 2014. Having considered the parties' arguments, the Court finds and concludes as follows.

II. BACKGROUND

Plaintiff Daniel Farris is a former employee of defendant IP who alleges that IP has failed to pay him vested vacation wages that he accrued during his employment. See generally SAC. The crux of IP's third-party complaint is that, to the extent that IP is liable to plaintiff Farris for accrued vacation pay, Bekiarian is responsible for creating this liability. Specifically, IP asserts that Bekiarian-a former managerial employee of IP-subjected IP to liability for vacation wages by promising plaintiff Farris that he would be entitled to paid vacation. Third-Party Compl. ("TPC") ¶¶ 8, 25, 30, 35, 39. IP further alleges that Bekiarian instructed human resources and accounting employees under his control not to provide paid vacation for IP's sales representatives, including plaintiff Farris, and not to account for accruing vacation pay liability. Id . ¶¶ 9, 15.

In his counterclaim, Bekiarian asserts that IP is statutorily and contractually obligated to reimburse him for the expenses he has incurred responding to IP's claims, and to indemnify him for any potential liability resulting therefrom. Answer ¶ 46-48. According to Bekiarian, he is entitled to this relief because IP's claims against him arise out of actions Bekiarian took as an employee of IP. Id.

III. LEGAL STANDARD

A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in a complaint. "While a [pleading] attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, 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." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555 (2007). "[F]actual allegations must be enough to raise a right to relief above the speculative level." Id.

In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all material allegations in the complaint, as well as all reasonable inferences to be drawn from them. Pareto v. F.D.I.C. , 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be read in the light most favorable to the nonmoving party. Sprewell v. Golden State Warriors , 266 F.3d 979, 988 (9th Cir. 2001); Parks Sch. of Bus., Inc. v. Symington , 51 F.3d 1480, 1484 (9th Cir. 1995). However, "[i]n keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 1950 (2009); Moss v. United States Secret Service , 572 F.3d 962, 969 (9th Cir. 2009) ("[F]or a complaint to survive a motion to dismiss, the non-conclusory factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.") (citing Twombly and Iqbal); Sprewell , 266 F.3d ...


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