Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-01885/USCOURTS-azd-2_13-cv-01885-1/pdf.json

Nature of Suit Code: 445
Nature of Suit: Americans with Disabilities Act - Employment
Cause of Action: 28:1441 Petition for Removal - Employment Discrimination

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Jeffery Karp, 

Plaintiff, 

v. 

Avella of Deer Valley, Inc., 

Defendant.

No. CV-13-01885-PHX-DGC

ORDER 

 Plaintiff Jeffery Karp has filed a motion to dismiss Count II of Defendant’s 

counterclaim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Doc. 19. 

The motion is fully briefed and no party has requested oral argument. For the reasons 

that follow, the Court will deny the motion. 

I. Background. 

Plaintiff, a doctor of Pharmacy, was employed by Defendant from January 1999 

through July 2012. Doc. 1-2, ¶ 16. In early 2009, Plaintiff and Defendant executed a 

“Non-Compete/Non-Solicit Agreement” (“2009 Agreement”) which placed restrictions 

on Plaintiff during and after his employment. Id., ¶¶ 52-58. Defendant alleges it paid 

Plaintiff $250,000 as consideration for executing the 2009 Agreement and that Plaintiff 

would not have received this payment had he not signed the agreement. Doc. 14, ¶¶ 50, 

52. Plaintiff was diagnosed with Vertebrobasilar Dolichoectasia (“VBD”) in August 

2011. Doc. 1-2, ¶ 30. Plaintiff was subsequently demoted in December 2011 and his 

salary was reduced. Id., ¶ 38. Defendant then terminated Plaintiff in July 2012. Id. at 

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43. Plaintiff instituted this action seeking injunctive relief and a declaratory judgment 

that the restrictive covenants contained in the 2009 Agreement are unenforceable, and 

claiming disability discrimination and FMLA retaliation. Doc. 1-2. Defendant asserted 

several counterclaims, including one alleging that Plaintiff would be unjustly enriched by 

the $250,000 payment if he did not abide by the terms of the 2009 Agreement. Doc. 14. 

The Court partially granted the parties’ requests for injunctive relief in a previous order. 

Doc. 16. Plaintiff now seeks to dismiss Defendant’s unjust enrichment counterclaim. 

II. Legal Standard. 

When analyzing a complaint for failure to state a claim under Rule 12(b)(6), the 

well-pled factual allegations are taken as true and construed in the light most favorable to 

the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal 

conclusions couched as factual allegations are not entitled to the assumption of truth, 

Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are insufficient to defeat a 

motion to dismiss for failure to state a claim, In re Cutera Sec. Litig., 610 F.3d 1103, 

1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the complaint must plead 

enough facts to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 570 (2007). This plausibility standard “is not akin to a 

‘probability requirement,’ but it asks for more than a sheer possibility that a defendant 

has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). 

“[W]here the well-pleaded facts do not permit the court to infer more than the mere 

possibility of misconduct, the complaint has alleged – but it has not ‘show[n]’ – ‘that the 

pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). 

III. Analysis. 

Plaintiff contends that “[d]ismissal is appropriate because the equitable doctrine of 

unjust enrichment may not be used to recover consideration paid for an illegal contract.” 

Doc. 19 at 1. Plaintiff’s position seems to be predicated on the assumption that the 2009 

Agreement is illegal, and he cites Hilb, Rogal & Hamilton v. Holley, 670 S.E.2d 874, 876 

(Ga. Ct. App. 2008), for the proposition that a party cannot bring an unjust enrichment 

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claim based on an illegal contract. Holley was an appeal from the trial court’s order 

granting a directed verdict on the unjust enrichment claim and was supported by relevant 

Georgia authority. Although Holley may be relevant, it is not controlling here. The only 

Arizona case cited by Plaintiff, Landi v. Arkules, 835 P.2d 459, 460-61 (Ariz. Ct. App. 

1992), dealt with a contract that was held to be contrary to public policy on a motion for 

summary judgment. The court there declined to allow the defendant to recover for 

services that had been rendered under the illegal contract. Id. at 468. 

 Plaintiff asks the Court to reach a similar result in the context of a motion to 

dismiss, without a decision that the 2009 Agreement is illegal or contrary to public 

policy. Because Plaintiff’s argument is based on a decision yet to be made, the Court 

cannot conclude at this stage that Arizona law prohibits Defendant’s claim for unjust 

enrichment. 

IT IS ORDERED that Plaintiff’s motion to dismiss (Doc. 19) is denied. 

 Dated this 19th day of December, 2013. 

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