Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_19-cv-05399/USCOURTS-azd-2_19-cv-05399-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Amanda V. Solie, et al.,

Plaintiffs,

v. 

Health Care@Home LLC, et al.,

Defendants.

No. CV-19-05399-PHX-JJT

ORDER 

At issue is Defendants Steve Cohn and Lillian Focken’s Motion to Dismiss Second 

Amended Complaint (Doc. 39 Ex. A, “Mot.”),1to which Plaintiffs filed a Response 

(Doc. 38, “Resp.”) and Defendants filed a Reply (Doc. 41, “Reply”). Defendants Health 

Care@Home, LLC, Mark Forrest Cohn, and Susan Cohn (originally named as Jane Doe 

Cohn) joined the Motion (Doc. 28.) This Order refers to Steve Cohn, Focken, Mark Cohn, 

and Health Care@Home as “Moving Defendants.”2 However, the Court will not evaluate 

1 Moving Defendants filed their Motion initially at Doc. 26. After Plaintiffs 

responded, Defendants realized they had inadvertently omitted from the Motion their 

argument pertaining to Plaintiffs’ unjust enrichment claim, Count 9, which Moving 

Defendants had included in their original motion to dismiss Plaintiffs’ First Amended 

Complaint (Doc. 20). Moving Defendants’ counsel obtained consent from Plaintiffs’ 

counsel to file a Notice of Errata with a corrected Motion, which includes the argument 

regarding unjust enrichment. This is filed at Doc. 39.

2 Susan Cohn is omitted from “Moving Defendants” as the term is used throughout 

the Order because none of the SAC’s factual allegations are made against her. The Court 

presumes she is named as a party solely to encumber her and Mark Cohn’s marital assets. 

The Second Amended Complaint also names as Defendants Michelle Hosler, Dana 

Pierson, Rhianna Zastrow, Sanus Fieri Irrevocable Trust, Hosler Irrevocable Trust, and 

Waya, Inc. (the “Nonmoving Defendants”). Waya has been terminated as a party. 

(Doc. 46.) The other Nonmoving Defendants have not answered or otherwise responded to 

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on behalf of Mark Cohn or the Company the arguments made by Steve Cohn and Focken 

that require an analysis of individualized facts or allegations. For the reasons that follow, 

the Court grants in part and denies in part Moving Defendants’ Motion. 

I. BACKGROUND

Plaintiffs are four individuals who worked for Health Care@Home, LLC (the 

“Company”) at different times and in different positions. Although each Plaintiff’s factual 

allegations differ slightly, the essence of the Second Amended Complaint (Doc. 21 

(“SAC”)) is that the Company made untimely or incomplete payment of wages throughout 

their employment and breached promises related to the same. 

According to the Complaint, Steve Cohn was the manager and only member of the 

Company between June 2013 and April 14, 2017. (SAC ¶¶ 23–24; see SAC Exs. A & B.) 

From April 14, 2017 through the remaining time period relevant to the SAC, Mark Cohn 

was listed as a member and manager of the Company, and Focken was listed as a member. 

(SAC ¶¶ 24–26; see SAC Exs. B, C & D.) Nonmoving Defendants were also all added as 

members or managers on or after April 14, 2017. 

Facts Specific to Amanda Solie

Plaintiff Amanda Solie was employed as Director of Personal Care and Support 

Services for the Company from November 7, 2017 through January 1, 2018. (SAC ¶ 27.) 

Her salary was $80,000 and the Company also agreed to make particular reimbursements 

associated with her employment. (SAC ¶¶ 28–29.) “On or around December 4, 2017, the 

Company began making untimely or incomplete payment of wages and expense 

reimbursements to Solie” and “eventually” stopped paying her altogether. (SAC ¶¶ 31–

32.) She was terminated on January 3, 2018. (SAC ¶ 33.) Solie filed a Complaint with the 

Labor Department of the Industrial Commission of Arizona, who eventually awarded her 

unpaid wages in the amount of $3,845.06, and trebled the amount to $11,535.18 plus 4.25% 

interest if Company failed to pay within 10 days of entry of final judgment. (SAC ¶¶ 34–

Second Amended Complaint, and several motions for default judgment are pending. This 

Order addresses only the facts as they pertain to Moving Defendants and, to the extent 

argued in the briefing, the claims against the same.

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36). The Company paid nothing on the judgment. (SAC ¶ 38). Solie alleges she “was not 

paid either minimum wages (FLSA; Minimum Wage Act) or overtime wages (FLSA only) 

for a total of 96 hours during the works weeks spanning November 7, 2017 through 

January 3, 2018, and was not reimbursed costs of $152.90.” (SAC ¶ 45.)

Facts Specific to Roseanne Barrera

Plaintiff Roseanne Barrera was employed as Clinical Manager/Supervisor of the 

Company from March 15, 2017 through August 11, 2017, at a salary of $96,000. (SAC ¶¶ 

46–47.) In June 2017, the Company started making incomplete or late wage payments to 

Barrera. (SAC ¶ 48.) When she demanded payment for her unpaid wages, the Company—

on two occasions—provided her with checks that were later dishonored due to insufficient 

funds. (SAC ¶ 49.) Barrera eventually resigned in August 2017 after the Company stopped 

paying her wages altogether. (SAC ¶ 50.) At that time, the Company agreed to pay Barrera 

both her unpaid wages and for 53.32 hours of accumulated unpaid paid time off; the 

Company never paid either. (SAC ¶¶ 51–52.) On November 2, 2017, Barrera and the 

Company entered into a “Settlement Agreement” in which the Company agreed to pay 

Barrera $15,000 in a series of monthly payments. (SAC ¶ 53; see Ex. H.) The Company 

made only a partial payment of $1000 for the first payment, and never paid anything else. 

(SAC ¶¶ 54–55.) Barrera alleges she “was not paid either minimum wages (FLSA; 

Minimum Wage Act) or overtime wages (FLSA only) during the work weeks beginning 

on June 20, 2017 and continuing through the entire duration of her employment with the 

Company.” (SAC ¶ 63.)

Facts Specific to Joseph Kovach

Plaintiff Joseph Kovach was an Account Executive for the Company from May 27, 

2017 through August 11, 2017 at a salary of $108,000. (SAC ¶ 66–67.) The Company 

began making untimely or incomplete wage payments around June 2017 and eventually 

stopped paying Kovach his wages altogether. (SAC ¶¶ 69–70.) After Kovach was 

terminated from his position as Account Executive on August 11, the Company asked if he 

would provide services as an Occupational Therapist Assistant at a rate of $50 per visit.

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(SAC ¶¶ 66–67.) Kovach completed five visits in this role but was never paid for any of 

them. (SAC ¶ 68.) Kovach alleges he “was not paid either minimum wages (FLSA; 

Minimum Wage Act) or overtime wages (FLSA only) during the work weeks beginning in 

June of 2017 through August 2, 2017” and that he is “entitled to reimbursement for work 

luncheons totaling $978.98 and $515.05 in reimbursement for printed collateral related to 

his position with the Company.” (SAC ¶ 75.)

Facts Specific to Alex Hatchett

Plaintiff Alex Hatchett worked as an Occupational Therapist for the Company from

January 2017 to October 2017. (SAC ¶ 76.) His rate of pay was $120 per visit for visits 

outside the East Valley and $90 per visit within the East Valley. (SAC ¶ 77.) The Company 

began making untimely or incomplete wage payments in March 2017 and eventually 

stopped paying Hatchett his wages altogether. (SAC ¶¶ 78–79.) Hatchett alleges “he was 

not paid either minimum wages (FLSA; Minimum Wage Act) or overtime wages (FLSA 

only) during the work weeks spanning January of 2017 through October of 2017.” (SAC ¶ 

85.)

Facts Relevant to All Plaintiffs 

In addition to the above factual allegations, the SAC alleges Plaintiffs’ paychecks 

came from different sources, including company checks, direct deposit, and sometimes 

third-party vendors. (SAC ¶ 87.) After the Company failed to pay their wages, Plaintiffs 

made demands on the Company but were still never paid. (SAC ¶ 93.) “Mark Cohn told 

each Plaintiff numerous times both verbally and in writing that both he and the Company 

would pay all their wages.” (SAC ¶ 94.) He made these promises until February 2018, at 

which time he ceased all communication with Plaintiffs. (SAC ¶ 96.) 

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) is designed to “test[] the legal sufficiency 

of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A dismissal under Rule 

12(b)(6) for failure to state a claim can be based on either (1) the lack of a cognizable legal 

theory or (2) insufficient facts to support a cognizable legal claim. Balistreri v. Pacifica 

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Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). When analyzing a complaint 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). On a Rule 12(b)(6) motion, Rule 8(a) governs and requires that, to avoid 

dismissal of a claim, Plaintiffs must allege “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). 

III. ANALYSIS 

Plaintiffs filed this action in state court on August 13, 2019, and filed their First 

Amended Complaint (“FAC”) on September 6, 2019. Moving Defendants removed the 

action to this Court (Doc. 1) and filed a motion to dismiss (Doc. 20). Rather than respond 

to that motion, Plaintiffs filed the SAC later that same day. (Doc. 21.)

The SAC alleges 10 counts total, with each Plaintiff alleging each count against 

different Defendants, depending on who was a member of the Company during the alleged 

violations.3 The following counts are alleged: (1) failure to pay overtime wages under the 

Fair Labor Standards Act (“FLSA”); (2) failure to pay minimum wages under the FLSA;

(3) failure to pay wages under the Arizona Wage Act (“AWA”); (4) failure to pay minimum 

wages under the Arizona Minimum Wage Act (“AMWA”); (5) breach of contract related 

to Mark Cohn’s promises to pay Plaintiffs’ wages; (6) breach of contract related to 

Barrera’s Settlement Agreement; (7) breach of implied duty of good faith and fair dealing;

(8) negligent misrepresentation; (9) unjust enrichment; and (10) alter ego. Moving 

Defendants move to dismiss all counts. 

3 For example, Solie and Kovach do not assert claims against Steve Cohn because 

he was no longer a member of the Company during the times either Plaintiff worked for 

the Company. (SAC ¶ 21.) 

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A. Counts 3 & 7: Failure to Pay Wages under the AWA & Breach of 

Implied Duty of Good Faith and Fair Dealing

In their Response to Moving Defendants’ present Motion, Plaintiffs ask the Court 

to dismiss Counts 3 and 7 without prejudice. (Resp. at 2 n.4.) Moving Defendants respond 

that these counts should be dismissed with prejudice. The Court agrees with Moving 

Defendants. 

Plaintiffs have had ample opportunity to substantively respond to Moving 

Defendants’ arguments regarding Counts 3 and 7 and have not done so. Counsel for 

Moving Defendants certify that on October 19, 2019, they notified Plaintiffs via letter of

the defects in the FAC as required by LRCiv 12(c). (Doc. 20 at 1 n.1.) Moving Defendants 

later filed their first motion to dismiss and, as noted above, Plaintiffs then unilaterally filed 

the SAC instead of responding to that motion. (See Docs. 20, 21.) Moving Defendants 

certify that before they filed the present Motion, they again notified Plaintiffs that the SAC 

failed to address the issues or cure the defects raised in their October 19 letter and the first 

motion to dismiss. (Mot. at 2 n.1.) 

The effect of all this is that Moving Defendants have been forced to expend 

resources on moving to dismiss the same counts several times, and Plaintiffs have still not 

addressed the merits of their arguments. To allow Plaintiffs to now dismiss these claims 

with an opportunity to raise them again down the line—after having had multiple chances 

to defend the viability of said claims—would manipulate the system and work an 

unfairness on Moving Defendants. Accordingly, Counts 3 and 7 are dismissed with 

prejudice as to Moving Defendants and without prejudice as to Nonmoving Defendants. 

B. Alter Ego Liability 

Before the Court turns to the substance of the remaining counts, it must first address 

Count 10, the outcome of which will inform the Court’s analysis of other counts. In 

Count 10, Plaintiffs seek to impose liability for the Company onto the “Individual 

Defendants” (Moving Defendants Steve Cohn, Mark Cohn, and Focken, and Nonmoving 

Defendants Hosler, Zastrow, and Pierson) under a theory of alter ego liability. 

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“[A]lter-ego status . . . exists when there is such a unity of interest and ownership 

that the separate personalities of the corporation and owners cease to exist.” Dietel v. Day, 

492 P.2d 455, 457 (Ariz. Ct. App. 1972). Arizona courts will disregard the corporate entity 

only if the plaintiff pleads facts sufficient to show that the corporation is the person’s alter 

ego and that shedding the separate status is vital to preventing injustice or fraud. Loiselle 

v. Cosas Mgmt. Grp., LLC, 228 P.3d 943, 950 (Ariz. Ct. App. 2010). Relevant factors to 

consider in determining the existence of an alter ego relationship include “payment of 

salaries and expenses” by the owner, an “owners’ making of interest-free loans to the 

corporation,” “commingling of personal and corporate funds,” “diversion of corporate 

property” for personal use, and the “observance of formalities at corporate meetings,” 

among others. Deutsche Credit Corp. v. Case Power & Equip. Co., 876 P.2d 1190, 1195–

96 (Ariz. Ct. App. 1994).

The SAC alleges “there is such a unity of interest and ownership” between the 

Individual Defendants and the Company that no separation between the two exists, and to 

treat them separately would work an injustice on Plaintiffs. (SAC ¶ 198–199.) More 

specifically, upon information and belief, the Individual Defendants (1) paid personal 

expenses from Company funds; (2) took or received improper distributions and/or 

payments from the Company; (3) co-mingled their personal funds with the Company funds 

(and the Company made no distinction between its own funds and the funds of the 

Individual Defendants); and (4) failed to keep proper corporate and payroll records for the 

Company. (SAC ¶¶ 193–197.) The SAC asserts the Company’s inability to meet its payroll 

obligations so soon after it hired Plaintiffs supports these allegations. 

Although the above allegations contain the hallmarks of boilerplate pleading, courts 

in this district and circuit permit alter ego theories to survive with similar factual 

allegations. See, e.g., Barba v. Seung Heun Lee, No. CV 09-1115-PHX-SRB, 2009 WL 

8747368, at *5 (D. Ariz. Nov. 4, 2009); Whitney v. Wurtz, 2006 WL 83119, at *2 (N.D. 

Cal. Jan. 11, 2006). And while the Court agrees with Defendants that it may not be likely

that all six Individual Defendants engaged in the above pattern of behavior, discovery and 

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later motion practice will bear this out. For now, the allegations make alter ego liability 

plausible—the standard under Rule 8 and Supreme Court precedent. Plaintiffs’ counsel are 

reminded, however, that each paper they submit to the Court, including the SAC, includes 

a certification that they sought credible information in determining the veracity of the 

contents and factual bases therein. See Fed. R. Civ. P. 11(b); Cal. Architectural Bldg. 

Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1472 (9th Cir. 1987).

Accordingly, Moving Defendants are not entitled to dismissal of the claims against 

the Company for which the law permits piercing of the corporate veil. 

C. FLSA and AMWA Claims 

The FLSA has two major wage provisions. It requires employers pay (1) an hourly 

minimum wage that is set by statute and calculated according to the number of hours 

worked in a week, and (2) overtime wages at a rate of 1.5 times an employee’s hourly wage 

for every hour worked over 40 hours in a week. See 29 U.S.C. § 206(a)(1) (minimum 

wage); 29 U.S.C. § 207(a)(1) (overtime); see also Probert v. Family Centered Servs. of 

Alaska, Inc., 651 F.3d 1007, 1009–10 (9th Cir. 2011). 

1. Count 1: FLSA Overtime 

Moving Defendants argue the SAC fails to state a claim under the FLSA overtime 

provisions because it does not clearly allege “any time, much less a specific workweek, in 

which Plaintiffs worked more than forty hours without being compensated for overtime 

hours.” (Mot. at 5) (emphasis in original). The Court agrees. 

The Ninth Circuit holds that, “to survive a motion to dismiss, a plaintiff asserting a 

claim to overtime payments must allege that she worked more than forty hours in a given 

workweek without being compensated for the overtime hours worked during that 

workweek.” Landers v. Quality Commc’ns, Inc., 771 F.3d 638, 645 (9th Cir. 2014). 

Plaintiffs are not expected to allege “with mathematical precision” the amount of overtime 

compensation owed, but the more facts alleged regarding the number of hours worked, the 

length of an average workweek, and an estimated amount of overtime owed, “the closer 

the complaint moves toward plausibility.” Id. at 645–46. At the very least, plaintiffs “must 

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be able to specify at least one workweek in which they worked in excess of forty hours and 

were not paid overtime wages.” Id. (emphasis added). 

Here, the SAC makes no such allegation. It merely states the Company stopped 

paying Plaintiffs their wages or made incomplete payments at various times. In an attempt 

to specify a week, the SAC alleges “Defendants first failed to pay them earned wages 

during the following weeks: (1) Solie – week of November 6, 2017, (2) Barrera – week of 

March 15, 2017, (3) Kovach – May 28, 2017, and (4) Hatchett – week of January 1, 2017.” 

(SAC ¶ 108.) But this does not demonstrate Plaintiffs worked more than 40 hours during 

that week—or any other given workweek—and failed to receive overtime wages for that 

work. Accordingly, Plaintiffs fail to state a claim for FLSA overtime violations. 

2. Counts 2 & 4: Minimum Wages

Plaintiffs’ minimum wages claims are similarly deficient. The SAC alleges that “on 

or around” a certain date or month specific to each Plaintiff, the Company “began making 

untimely or incomplete” wage payments. (SAC ¶¶ 31, 50, 69, 78.) This is insufficient 

because it fails to identify a week in which their average hourly pay fell below the federal 

minimum wage of $7.25 for the FLSA, 29 U.S.C. § 206(A)(1)(C), or Arizona’s minimum 

wage of $10 to $10.50, depending on the year, A.R.S. § 23-363(A)(1). Because minimum 

wages are calculated by averaging the hourly wage over the number of hours worked in a 

week, wage payments can be untimely or incomplete yet still satisfy minimum wage 

requirements. See Maravilla v. Rosas Bros. Constr., Inc., 401 F. Supp. 3d 886, 896 (N.D. 

Cal. 2019).

In a similar vein, the SAC again alleges “Defendants first failed to pay them earned 

wages during the following weeks: (1) Solie – week of November 6, 2017, (2) Barrera –

week of March 15, 2017, (3) Kovach – May 28, 2017, and (4) Hatchett – week of January 1, 

2017.” (SAC ¶ 139) (emphasis added). First, these dates conflict with the dates or months 

alleged throughout the rest of the SAC, making it difficult to discern the weeks during 

which the alleged violations occurred.4 Second, even with the more particular workweeks 

4 For example, other sections of the SAC allege the Company began making 

untimely or incomplete wage payments to Solie on December 4, 2017; to Barrera on 

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identified in Paragraph 139, the SAC still fails to demonstrate Plaintiffs were paid below 

the minimum wage. Plaintiffs had salaries ranging from $80,000–$108,000 and rates of 

$50 to $120 per occupational visit. Thus, a failure to pay Plaintiffs’ “earned wages” does 

not, in light of their higher salaries, translate into a failure to pay minimum wages. See

Adair v. City of Kirkland, 185 F.3d 1055, 1059 (9th Cir. 1999) (“Because the salary, when 

averaged across the total actual number of hours worked, still paid more per hour than the 

minimum wage, [the defendants] complied with the FLSA’s minimum wage 

requirements.”).

Finally, the SAC contains general allegations that (1) the Company eventually 

stopped paying each Plaintiff his or her wages altogether, and (2) each Plaintiff “was not 

paid either minimum wages [] or overtime wages” for a specified period of time that ranged 

from three months (Barrera) to ten months (Hatchett). These allegations are too vague to 

state a claim for either minimum wages or overtime wages for the reasons the Court has 

already stated. See Landers, 771 F.3d at 646.

In sum, the SAC’s lack of specificity and consistency fails to state a claim for 

violations under either the FLSA or the AMWA. The Court acknowledges this may be a 

function of the potential complications in keeping organized ten claims by four different 

plaintiffs against ten defendants. This, however, does not excuse Plaintiffs from satisfying 

the pleading requirements spelled out in Landers and its progeny. Nonetheless, because the 

Plaintiffs might save their overtime and minimum wage claims by providing more precise

factual allegations, leave to amend shall be granted. See Lopez v. Smith, 203 F.3d 1122, 

1127 (9th Cir. 2000).

3. Employers under the FLSA and AMWA

Moving Defendants also argue the SAC does not adequately allege they were 

employers of Plaintiffs. An employer who violates FLSA minimum wage or overtime 

provisions is liable to affected employees, 29 U.S.C. § 216, as is an employer who violates 

the AMWA, A.R.S. § 23-364(G). Because the parties do not cite any cases interpreting the 

June 20, 2017; to Kovach in June 2017; and to Hatchett in October 2017. 

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meaning of “employer” under the AMWA, the Court will look to case law interpreting the 

FLSA definition because the two statutes define the term similarly. See 29 U.S.C. § 203(d);

A.R.S. § 23-362; Cramton v. Grabbagreen Franchising LLC, No. CV-17-04663-PHXDWL, 2019 WL 7048773, at *24 (D. Ariz. Dec. 23, 2019).

An FLSA employer is an individual who exercises “control over the nature and 

structure of the employment relationship, or economic control over the relationship.”

Lambert v. Ackerley, 180 F.3d 997, 1012 (9th Cir. 1999). The Ninth Circuit applies a fourfactor “economic reality” test that considers whether the alleged employer (1) had the 

power to hire and fire the employees, (2) supervised and controlled employee work 

schedules or conditions of employment, (3) determined the rate and method of payment, 

and (4) maintained employment records. See Bonnette v. Cal. Health & Welfare Agency, 

704 F.2d 1465, 1470 (9th Cir. 1983).

Here, the SAC alleges that as members of the Company, Steve Cohn, Mark Cohn, 

Focken, Pierson, Hosler, Zastrow, Hosler Trust, Sanus Fieri Trust, and Waya “had control 

over the Company.” They also “had the authority to hire and fire employees, supervise and 

control the work schedules or the conditions of the employment, determine the rate of pay 

and method of payment, and maintain employment records in connection with” Plaintiffs’ 

employment. (SAC ¶¶ 41–42; 59–60; 71–72; 81–82.)

The analysis here is similar to that of alter ego liability under Count 10. That is, the 

SAC just barely puts forth enough allegations to make it plausible that Steve Cohn and 

Focken were Plaintiffs’ “employers.”

5 While discovery and summary judgment may 

ultimately reveal the unlikelihood that all nine member-Defendants had and exercised these 

authorities, this matter is currently in the pleading stage, and Plaintiffs’ counsel has averred 

by signing the SAC that they have a good faith basis for alleging the above. See Fed. R. 

Civ. P. 11. Additional allegations regarding Mark Cohn strengthen the claim against him. 

For example, after each Plaintiff was terminated, Mark Cohn allegedly repeatedly promised

that he and the Company would pay all of Plaintiffs’ unpaid wages. He also signed the 

5 However, because Steve Cohn was no longer a member as of April 2014, he could 

not have been Solie’s or Kovach’s employer. 

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Settlement Agreement with Barrera as Chief Executive Officer of the Company. These 

demonstrate economic control over the employment relationships. 

Accordingly, taking the allegations as true, the SAC asserts sufficient allegations to 

make it plausible that Moving Defendants Mark Cohn, Steve Cohn, and Focken were 

Plaintiffs’ employers under the FLSA and AWMA.

4. Timeliness

Moving Defendants assert that Plaintiffs’ FLSA and AMWA claims are mostly 

untimely. The statute of limitations for a claim under either is two years, but can be 

extended to three if a plaintiff demonstrates the defendant willfully violated the statutes. 29

U.S.C. § 255(a); A.R.S. § 12-364(H). Generally, in order to even reach the willfulness 

inquiry, the Court would have to first determine whether there was a statutory violation in 

the first instance, and here the Court determined above that Plaintiffs failed to state a claim 

under the FLSA or AMWA. However, because the Court granted Plaintiffs leave to amend

their claims, in the interest of efficiency it will evaluate Moving Defendants’ untimeliness 

argument.

An employer acts willfully when it “either knew or showed reckless disregard for 

the matter of whether its conduct was prohibited by the statute.” McLaughlin v. Richland

Shoe Co., 486 U.S. 128, 133 (1988). The SAC alleges generally that “[e]ach Defendant 

knew that the Company had an obligation to pay earned wages to Plaintiffs” under the 

FLSA and the AMWA and “intentionally did not pay those wages despite these 

obligations.” (SAC ¶ 97.) This alone is enough at the pleading stage. See Rivera v. Peri & 

Sons Farms, Inc., 735 F.3d 892, 902 (9th Cir. 2013) (finding dismissal inappropriate on 

statute of limitations grounds when the Complaint alleged the employer’s violations were 

“deliberate, intentional, and willful”); see also Fed. R. Civ. P. 9(b) (“[C]onditions of a 

person’s mind may be alleged generally.”). Beyond that, the SAC also alleged that during

her employment, Barrera demanded payment of her unpaid wages but continued to not be 

paid. After being confronted by Barrera, the Company gave her dishonored checks—twice. 

Mark Cohn also repeatedly promised to pay Plaintiffs their outstanding wages. Together, 

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these allegations sufficiently demonstrate Defendants’ knowledge that their conduct 

violated the FLSA or AMWA or reckless disregard of the same. 

D. Count 5: Breach of Contract – Mark Cohn’s Promise to Pay

All four Plaintiffs allege that Mark Cohn promised he would pay their wages after 

they were terminated or left the company. These promises were repeatedly made orally and 

in writing until February 2018. Moving Defendants argue Count 5 is untimely under A.R.S. 

§ 12-541(3), which provides a one-year statute of limitations for a “breach of an oral or 

written employment contract.” A.R.S. § 12-541(3). Plaintiffs argue the limitations periods 

of either A.R.S. § 12-548 (six years for breach of written contract) or A.R.S. § 12-543 

(three years for breach of oral promise to pay a debt) applies.6

Arizona courts broadly construe the term “employment contract” under § 12-541(3)

and have “interpreted it as applying to almost all disputes between an employer and 

employee.” Blood Sys., Inc. v. Roesler, 972 F. Supp. 2d 1150, 1155 (D. Ariz. 2013) (citing 

Redhair v. Kinerk, Beal, Schmidt, Dyer & Sethi, P.C., 183 P.3d 544, 549 (Ariz. Ct. App. 

2008)). The definition includes “all contracts defining specific responsibilities of the 

employer to the employee” and any agreement related to “the nature, conditions, or 

duration” of employment. Redhair, 183 P.3d 547–49.

Plaintiffs contend that despite this broad interpretation, Mark Cohn’s promises 

cannot be “employment contracts” because they were made after Plaintiffs’ employment 

terminated. (Resp. at 15.) However, Plaintiffs fail to cite any cases to support this temporal 

distinction. Consistent with other decisions from this district, the Court finds that a promise 

or assurance to pay wages owed after the employment relationship ends is still an 

employment contract because it defines the responsibilities of the employer and extends a 

term or condition of the employment. 

In Gillard v. Good Earth Power AZ LLC, two plaintiffs sued their former employer 

to recover wages the employer had “deferred” throughout the plaintiffs’ employment.

6 Plaintiffs also cite to A.R.S. § 12-550, arguing a three-year limitations period for 

written promises to pay applies. (Resp. at 16.) However, that section of the statute imposes 

a four-year limitations period for “actions other than for recovery of real property for which 

no limitation is otherwise prescribed.”

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No. CV-17-01368-PHX-DLR, 2019 WL 1280946, at *6 (D. Ariz. Mar. 19, 2019). The 

court found that, under the discovery rule, the limitations period could theoretically be 

extended beyond the date of termination based on the employer’s “post-termination 

assurances that [the plaintiffs] would be ‘made whole.’” Id. On the other hand, the court in 

Lytikainen v. Schaffer's Bridal LLC held that the employer’s post-termination promises to 

pay the plaintiff’s unpaid salary did not extend the limitations period under § 12-541(3) 

because the plaintiff knew of the employer’s breach by the time she was terminated. 409 

F. Supp. 3d 767, 777 (D. Ariz. 2019). While these cases arrived at different conclusions 

regarding application of the discovery rule, they share an underlying legal premise: posttermination promises to pay wages already owed are “employment contracts” under § 12-

541(3). Thus, even taking the more generous view that the limitations period began to run 

in February 2018 after Mark Cohn’s last promise, Plaintiffs’ claims are still untimely 

because they are based on employment contracts subject to a one-year limitations period.

E. Count 6: Breach of Contract – Barrera’s Settlement Agreement

Moving Defendants seek dismissal of Count 6 for similar reasons. Namely, they 

argue the Settlement Agreement is not a settlement agreement at all because it lacks 

consideration, and is therefore not a written contract subject to the six-year limitations 

period under A.R.S. § 12-548. (Reply at 7.) They argue it is, at most, a promise to pay

wages and assert the one-year statute of limitations for employment contracts applies. See

A.R.S. §§ 12-541(3). Beyond pure argument, however, Moving Defendants offer no

support—statutory, case law, or otherwise—for their position. Without more, the Court 

cannot conclude at this early stage that the signed document was not in fact a contract or 

settlement agreement. Evaluation of the terms of the document, intent of the parties, and 

validity of the agreement is more appropriate for a later stage of litigation. 

Although Barrera also offers little substantive response and simply reasserts the sixyear statute of limitations applies, the Court finds Defendants have failed to demonstrate

expiration of the limitations period for Barrera’s breach of contract claim. Accordingly, the 

Court will not dismiss Count 6 as untimely at this stage. See Cervantes v. Countrywide 

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Home Loans, 656 F.3d 1034, 1045 (9th Cir. 2011) (holding courts may dismiss a complaint 

only “[i]f the running of the statute is apparent on the face of the complaint”). As this claim 

is alleged against only the Company, it survives against the other Moving Defendants only 

to the extent Plaintiffs prove alter ego liability. 

F. Count 8: Negligent Misrepresentation 

Moving Defendants did not address Plaintiffs’ claim for negligent misrepresentation 

in their Motion; in their Reply, Steve Cohn and Focken state only that the claim was not 

made specifically against them. (Reply at 11.) It was, however, brought specifically against 

Mark Cohn, a joining Defendant, who made no individualized argument for dismissal of 

this claim or any others. Count 8 therefore survives as to Mark Cohn. Further, Plaintiffs

alleged negligent misrepresentation against the Company. The claim thus survives against 

Steve Cohn and Focken to the extent the law imputes liability for an LLC’s negligent 

misrepresentation onto its alter ego members.

G. Count 9: Unjust Enrichment 

As stated in footnote 1, Moving Defendants inadvertently omitted from their Motion 

their argument regarding Plaintiffs’ unjust enrichment claim. (See Docs. 26, 39.) “Upon 

realizing this error, counsel for the Moving Defendants sought consent from Plaintiffs’

counsel to file a Notice of Errata with a corrected Motion adding the argument regarding 

unjust enrichment.” (Reply at 7.) Moving Defendants filed their corrected Motion as 

Exhibit A at Doc. 39. The parties agreed that Plaintiffs would have additional time to revise 

their Response in order to respond to the unjust enrichment argument. (Doc. 39 at 1.) 

However, Plaintiffs never filed a revised Response and consequently did not address the 

arguments raised by Moving Defendants. Failure to respond to a motion may be deemed 

consent to the Court’s granting of that Motion. LRCiv 7.2(i). Accordingly, the Court 

dismisses Plaintiffs’ unjust enrichment claim.

IV. CONCLUSION

Plaintiffs failed to state a claim for Counts 1, 2, and 4, but are granted leave to 

amend. Failure to cure the defects will result in dismissal with prejudice. Count 5 is 

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dismissed with prejudice as to Moving Defendants on statute of limitations grounds. 

Counts 3, 7, and 9 are dismissed with prejudice as to Moving Defendants. Counts 6 and 8 

survive Moving Defendants’ Motion to Dismiss. The Court finds that Count 10 sufficiently 

alleges alter ego liability for the Company against Moving Defendants Steve Cohn, Mark 

Cohn and Focken, as well as Nonmoving Defendants Zastrow, Pierson, and Hosler. Thus, 

any claims that survive as to the Company also survive as to the Individual Defendants 

who worked for the Company during the requisite time periods, to the extent the law 

permits alter ego liability.

IT IS THEREFORE ORDERED granting in part and denying in part Defendants 

Steve Cohn and Lillian Focken’s Motion to Dismiss Second Amended Complaint filed at 

Doc. 26, which Defendants Mark Forrest Cohn, Susan Cohn, and Health Care@Home LLC 

joined at Doc. 28.

IT IS FURTHER ORDERED that Plaintiffs have 14 days from this Order to file 

their Third Amended Complaint. 

Dated this 10th day of April, 2020.

Honorable John J. Tuchi

United States District Judge

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