Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_19-cv-04930/USCOURTS-azd-2_19-cv-04930-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Before the Court is Defendants HD Supply Management, Inc. and HD Supply 

Facilities Maintenance, Ltd.’s (collectively “Defendants”) Motion to Dismiss Plaintiff’s 

Second Amended Complaint (the “Motion”) (Doc. 29), which is fully briefed. For the 

reasons that follow, the motion will be granted without prejudice.

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I. Background

Plaintiff Stephen Hill (“Hill”) initiated this action on July 29, 2019 in state court 

(Doc. 1-3) and Defendants removed it to federal court on August 9, 2019 (Doc. 1). In his 

second amended complaint (the “SAC), which is the operative complaint in this case and 

was filed on October 2, 2019, Plaintiff alleges that he was employed by Defendants from 

July 2017 through April 2019 as an area sales manager. (Doc. 28 at 2, ¶ 6) Hill alleges that 

he was entitled to payment of a yearly salary of $91,468.50, plus a yearly bonus and 

1 Because it would not assist in resolution of the instant issues, the Court finds the 

pending motion is suitable for decision without oral argument. See L.R. Civ. 7.2(f); Fed. 

R. Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).

Stephen A. Hill,

 

Plaintiff, 

vs. 

HD Supply Management, Inc., et al.,

Defendants. 

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No. CV-19-04930-PHX-SPL

ORDER

Case 2:19-cv-04930-SPL Document 46 Filed 04/08/20 Page 1 of 7
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monthly commissions based on performance. (Doc. 28 at 2, ¶ 8) Hill further alleges that,

at the time of termination, Defendants owed him $52,359.17 in unpaid yearly bonus (Doc. 

28 at 2, ¶ 10) but only paid him $18,974.63 after unilaterally modifying the terms of his 

employment contract, including the commissions structure. (Doc. 28 at 2, ¶11) Hill also 

alleges that he was owed commissions for the month of February 2019 in the amount of

$3,500. (Doc. 28 at 2, ¶ 15) Accordingly, Hill alleges that Defendants owe him $33,384.54 

in unpaid bonus and $3,500 in unpaid commissions. The SAC contains four counts: (1) 

unpaid wages under Arizona Revised Statutes (“A.R.S.”) § 23-350; (2) breach of contract; 

(3) breach of the covenant of good faith and fair dealing; and (4) unjust 

enrichment/quantum meruit. (Doc. 28 at 3–4) Defendants filed the Motion on October 16, 

2019. (Doc. 29)

II. Standard of Review

Rule 8(a)(2) requires a “short and plain statement of the claim showing that the 

pleader is entitled to relief,” so that the defendant has “fair notice of what the ... claim is 

and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) 

(internal quotations omitted). Also, a complaint must contain sufficient factual matter, 

which, if accepted as true, states a claim to relief that is “plausible on its face.” Ashcroft v. 

Iqbal, 556 U.S. 662, 678 (2009). Facial plausibility exists if the pleader pleads factual 

content that allows the court to draw the reasonable inference that the defendant is liable 

for the misconduct alleged. Id. Plausibility does not equal “probability,” but plausibility 

requires more than a sheer possibility that a defendant acted unlawfully. Id. “Where a 

complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops 

short of the line between possibility and plausibility of entitlement to relief.’” Id. (citing 

Twombly, 550 U.S. at 557).

Although a complaint attacked for failure to state a claim does not need detailed 

factual allegations, the pleader’s obligation to provide the grounds for relief requires “more 

than labels and conclusions, and a formulaic recitation of the elements of a cause of action 

will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). Rule 8(a)(2) “requires 

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a ‘showing,’ rather than a blanket assertion, of entitlement to relief. Without some factual 

allegation in the complaint, it is hard to see how a claimant could satisfy the requirement 

of providing not only ‘fair notice’ of the nature of the claim, but also ‘grounds’ on which 

the claim rests.” Id. (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 

1202, pp. 94, 95 (3d ed. 2004)). Thus, Rule 8’s pleading standard demands more than “an 

unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 

(citing Twombly, 550 U.S. at 555).

In deciding a motion to dismiss the Court must construe the facts alleged in the 

complaint in the light most favorable to the drafter of the complaint and must accept all 

well-pleaded factual allegations as true. OSU Student Alliance v. Ray, 699 F.3d 1053, 1061 

(9th Cir. 2012); Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000). Nonetheless, 

the Court does not have to accept as true a legal conclusion couched as a factual allegation. 

Papasan v. Allain, 478 U.S. 265, 286 (1986). 

III. Analysis

A. Breach of Contract and Covenant of Good Faith and Fair Dealing

On the face of the SAC, Plaintiff’s claims appear to be based on a “contractual 

relationship” and “contractual expectation” for his bonus and commissions (Doc. 28 at 2, 

¶¶ 7, 9) but the SAC does not set forth any contractual term which would have given rise 

to the causes of action. Instead, Plaintiff recites allegations that he had a contractual 

expectation for his bonus and commissions and that the Defendants unilaterally modified 

the commissions structure to deprive him of what he had earned. (Doc. 28 at 2) This is not 

sufficient under federal pleading standards. Although it is true that the federal rules do not 

require attaching a contract or agreement to the complaint when alleging breach of contract 

or other claims based on the terms of such contract, it can, and is usually helpful to do so. 

Plaintiff clarifies in his response to the Motion that “he took the job with the understanding 

he would be paid based on meeting sales goal,” he based his allegations on his “history of 

receiving monthly bonuses and commissions,” and in a footnote mentions that he could 

“plead these facts if necessary in an amended complaint.” (Doc. 34 at 2, fn.1) Furthermore, 

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Plaintiff states, for the first time, that he “has not alleged the existence of a written contract, 

[but] has alleged that an implied-in-fact contract existed with Defendants as part of his 

employment” which covered his claims. (Doc. 34 at 2) This is a new allegation. Nowhere 

in the SAC can the Court find a mention of a quasi- or implied-in-fact contract. The vague 

allegation of a “contractual expectation” and that the nature of the parties’ relationship was 

“contractual in nature” is insufficient for the Court to decipher that the claims sounded in 

equity. In this respect, the SAC is grossly deficient under the relevant pleading standard. 

Plaintiff cannot save the SAC from dismissal by adding factual allegations in his response, 

those allegations should be contained in the SAC. Indeed, the Court is bound to looking at 

the four corners of the complaint when deciding a motion to dismiss under 12(b)(6). See 

Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)

Plaintiff bears the burden to establish three elements for a breach of contract claim: 

(1) the existence of a valid contract; (2) a breach; and (3) damages. Graham v. Ashbury, 

112 Ariz. 184, 185 (1975). Additionally, Plaintiff must make a showing that there was “an 

offer, an acceptance, consideration, and sufficient specification of terms so that the

obligations involved are ascertainable.” KnightBrook Ins. Co. v. Payless Car Rental Sys., 

Inc., 43 F. Supp. 3d 965, 974 (D. Ariz. 2014) (internal quotations omitted), overruled on 

other grounds. Plaintiff alleges that he had an expectation of a bonus and commissions but 

does not offer any other factual support for the formation of a contract or any of its terms. 

To be clear, Plaintiff’s SAC does not need “detailed factual allegations” but the SAC in 

this case does nothing more than list allegations of the “the-defendant-harmed-me” type 

regarding the breach of contract claim. It might be that once Plaintiff amends his complaint 

to clearly set forth the factual support for his claim that he is seeking recovery in quasicontract and equity then he will have actually stated a claim upon which relief can be 

granted under an implied-in-fact contract. The SAC fails to do so because it offers no 

allegations of what representations and course of conduct specifically gave rise to his 

“contractual expectation” to receive more money and how a quasi-contract could exist in 

this case.

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Similarly, without a valid contract, written or implied-in-fact, there can be no claim 

for a breach of the covenant of good faith and fair dealing. Indeed, such claim is derivative 

of the existence and breach of a contract and cannot stand on its own. See, e.g., Schwartz 

v. Chase Home Fin., LLC, 2010 WL 5151326, at *1 (D. Ariz. Dec 13, 2010). As discussed 

above, the SAC is deficient on the breach of contract claim and derivatively fails on the 

breach of the covenant of good faith and fair dealing. Plaintiff argues in his response to the 

Motion that such covenant can exist on its own if the conduct giving rise to the claim is 

one other than the termination of the contract. (Doc. 34 at 4) Plaintiff further argues that 

he properly alleged such claim here because it is not the termination of his employment but 

instead the unilateral modifications of the bonus structure that gives rise to the breach of 

the covenant. (Doc. 34 at 4) This again might be true but there still must be some allegations 

in the complaint regarding the alleged bonus expectation from plaintiff and also how the 

alleged compensation structure was changed. As discussed above, the SAC falls short on 

this issue. The SAC does not offer more than a conclusory statement that Plaintiff expected 

a bonus and commissions and that Defendants changed the structure without explaining at 

all the basis for such allegations. Accordingly, the Court will grant Defendants’ Motion to 

Dismiss on Count 2 and 3 of the SAC.

B. Unpaid Wages

Plaintiff alleges that “the wages owed to [him] are wages under A.R.S. § 23-350” 

and that there is no “good faith reason for Defendants to withhold such wages.” (Doc. 28 

at 3, ¶¶ 17, 18) The SAC contains not other allegations or statement supporting such claim. 

In Arizona, wages are defined are “nondiscretionary compensation due an employee in 

return for labor or services rendered by an employee for which the employee has a 

reasonable expectation to be paid whether determined by a time, task, piece, commission 

or other method of calculation.” A.R.S. § 23-350(7). The only allegation supporting 

Plaintiff’s reasonable expectation for the bonus and the commissions is that he had a 

contractual expectation. He also responds that whether his expectation was reasonable is a 

question of fact the Court cannot resolve at this stage of the case. (Doc. 34 at 6) Indeed, 

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the reasonableness of such expectation is a question for the trier of fact. This does not 

change the fact that the first hurdle for this count, like counts 2 and 3 of the SAC, still is 

that the “contractual expectation” Plaintiff allegedly had is plead so poorly that his claim 

for unpaid wages must be dismissed. Without any factual basis offered in the SAC for his 

“contractual expectation,” this claim fails as a matter of law. Accordingly, the Court will 

grant Defendants’ Motion to Dismiss on Count I of the SAC.

C. Unjust Enrichment/Quantum Meruit

The only allegations related to this Count are that “Defendants, by their conduct, as 

alleged herein, have been unjustly enriched at the expense of [Plaintiff].” (Doc. 28 at 4, ¶ 

32) In Arizona, a claim for unjust enrichment requires proving that there was “(1) an 

enrichment, (2) an impoverishment, (3) a connection between the [two], (4) the absence of 

a justification for the [two], and (5) the absence of a remedy provided at law.” Wang Elec., 

Inc. v. Smoke Tree Resort, LLC, 230 Ariz. 314, 318 (Ct. App. 2012). Although Plaintiff 

does not have to prove the elements with his complaint, he must still present factual 

allegations which, if taken as true, could support such a claim. Plaintiff’s barebones 

allegations fail to meet such standard. Indeed, all Plaintiff alleges in the SAC is his 

“contractual expectation” of a specific amount of bonus and commissions and the 

conclusory statement that Defendants were unjustly enriched. This is nothing more than a 

legal conclusion disguised as a factual allegation and it not enough under Iqbal and 

Twombly. Accordingly, the Court will grant Defendants’ Motion to Dismiss on Count 4 of 

the SAC.

Although the Court will grant Defendants’ Motion to Dismiss entirely, it will do so 

without prejudice to the filing of a third amended complaint. It is possible that Plaintiff can 

plead enough facts to advance to the next stage of the case although the SAC fails to do so 

now. The Court, however, will not grant any further leave to amend the complaint.

Accordingly,

IT IS ORDERED that Defendants’ Motion to Dismiss (Doc. 29) is granted in full. 

The Second Amended Complaint is dismissed without prejudice in its entirety.

Case 2:19-cv-04930-SPL Document 46 Filed 04/08/20 Page 6 of 7
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IT IS FURTHER ORDERED that the Court grants Plaintiff leave to amend the 

complaint and no further leave will be granted.

IT IS FURTHER ORDERED that Plaintiff shall have until April 21, 2020 to file 

an amended complaint in compliance with this order.

Dated this 7th day of April, 2020.

Honorable Steven P. Logan

United States District Judge

Case 2:19-cv-04930-SPL Document 46 Filed 04/08/20 Page 7 of 7