Beneficial Life Insurance Company v. Douglas Knobelauch

Plaintiff Beneficial Life Insurance Company (“Beneficial”) appeals the dismissal of its diversity action seeking to recover money paid to a former employee, defendant Knobelauch. The district court dismissed for failure to state a claim upon which relief could be granted. Fed.R.Civ.P. 12(b)(6). As the district court’s interpretation of California law conforms to relevant precedent, we affirm.

I. FACTS

In 1975, Beneficial, a Utah corporation, entered into an employment contract with Knobelauch, a California resident. Beneficial hired Knobelauch to work in California as an insurance salesman. The employment *395 contract incorporated a “Success Unit Financing Plan” whereby beginning sales personnel could receive advances to be offset against future commissions. Paragraph six of a “Success Unit Financing Agreement” (“Agreement”), promulgated pursuant to the Plan, described the circumstances under which advances were to be repaid:

(emphasis added).

In 1977, Knobelauch left Beneficial and took a job in California with another insurance company. At that time, he had accumulated $11,645.67- in advances. Beneficial requested that Knobelauch repay this amount. When he refused, the…

653 F.2d 393 BENEFICIAL LIFE INSURANCE COMPANY, Plaintiff-Appellant, v. Douglas KNOBELAUCH, Defendant-Appellee. No. 79-3816. United States Court of Appeals, Ninth Circuit. Argued and Submitted March 2, 1981. Decided Aug. 10, 1981. Lew W. Cramer, Argue, Freston, Pearson, Harbison & Myers, Los Angeles, Cal., for plaintiff-appellant. Charles H. Kanter, Kindel & Anderson, Santa Ana, Cal., for defendant-appellee. Appeal from the United States District Court for the Central District of California. Before GOODWIN and FERGUSON, Circuit Judges, and MURPHY, * District Judge. FERGUSON, Circuit Judge: 1 Plaintiff Beneficial Life Insurance Company ("Beneficial") appeals the dismissal of its diversity action seeking to recover money paid to a former employee, defendant Knobelauch. The district court dismissed for failure to state a claim upon which relief could be granted. Fed.R.Civ.P. 12(b)(6). As the district court's interpretation of California law conforms to relevant precedent, we affirm. I. FACTS 2 In 1975, Beneficial, a Utah corporation, entered into an employment contract with Knobelauch, a California resident. Beneficial hired Knobelauch to work in California as an insurance…

I respectfully disagree.

*397 This Court holds that the complaint in this diversity action for moneys due and owing fails to state a claim upon which relief can be granted. Because I believe that the affirmance of an order granting defendant’s motion to dismiss, pursuant to F.R.Civ.P. Rule 12(b)(6), deprives plaintiff of its Seventh Amendment right to a jury trial, I dissent.

The complaint, alleging diversity, plaintiff being a Utah corporation with its principal office in Salt Lake City, and defendant a resident and citizen of California, and the necessary monetary amount, alleges that in 1975 at Salt Lake City it and defendant entered into a written contract (a copy of which was attached to the complaint) wherein plaintiff agreed to provide training and advance certain sums of money to defendant which were repayable by him out of future commissions to be earned, and defendant agreed to repay said sums of money to plaintiff out of such commissions. It then alleges that plaintiff has performed all the conditions by it to be performed, including the advancement of some Eleven Thousand-odd Dollars to defendant, and that in March, 1977 defendant failed to perform the conditions of…