Raya v. Barka

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ROBERT RAYA, Case No.: 19-cv-2295-WQH-AHG

12 Plaintiff, ORDER 13 v. 14 DAVID BARKA; NOORI BARKA; EVELYN BARKA; CALBIOTECH, 15 INC.; CALBIOTECH, INC. 401(k) 16 PROFIT SHARING PLAN; CALBIOTECH, INC. PENSION PLAN, 17 Defendants. 18

19 DAVID BARKA; NOORI BARKA; 20 EVELYN BARKA; CALBIOTECH, 21 INC.; CALBIOTECH, INC. 401(k) PROFIT SHARING PLAN; 22 CALBIOTECH, INC. PENSION PLAN, 23 Counter Claimants, 24 v. 25 ROBERT RAYA, 26 Counter Defendant. 27

28 1 HAYES, Judge: 2 The matter before the Court is the Motion for Partial Reconsideration filed by 3 Plaintiff Robert Raya (ECF No. 116). 4 I. BACKGROUND 5 On December 2, 2019, Plaintiff Robert Raya, proceeding pro se, filed a Complaint 6 against Defendants, including David Barka, Noori Barka, Evelyn Barka, Calbiotech, Inc. 7 (“Calbiotech”), Calbiotech Pension Plan (the “Pension Plan”), and Calbiotech 401(k) Profit 8 Sharing Plan. (ECF No. 1). On December 9, 2020, Plaintiff filed a First Amended 9 Complaint (“FAC”). (ECF No. 39). On June 17, 2021, Defendants filed an Answer to the 10 FAC and a counterclaim for breach of contract. (ECF No. 46). On September 8, 2021, 11 Plaintiff filed the operative Second Amended Complaint (“SAC”), which alleges four 12 claims against Defendants. (ECF No. 64). The first three claims allege, in relevant part, 13 that Defendants violated various provisions of the Employee Retirement Income Security 14 Act of 1974 (“ERISA”) in connection with the administration of the Pension Plan. 15 From September 24, 2021, to February 7, 2022, the parties filed eight motions. (ECF 16 Nos. 60, 77, 79, 83, 92, 97, 102, 106). Among other things, Defendants requested summary 17 adjudication on Plaintiff’s first three ERISA claims relating to the administration of the 18 Pension Plan on the basis that “Plaintiff lacks statutory and Article III standing to bring a 19 claim” relating to the Pension Plan. (ECF No. 83-1 at 11-12). 20 On February 17, 2022, the Court heard oral argument on all pending motions. (ECF 21 No. 103). On March 28, 2022, the Court issued an Order adjudicating all pending motions. 22 (ECF No. 114). With respect to the Pension Plan claims, the Order concluded: 23 The Court has determined that Plaintiff was not eligible to participate in the Pension Plan at any time. There are no facts from which to infer that Plaintiff 24 may become eligible for Pension Plan benefits in the future. Defendants have 25 presented evidence that Plaintiff lacks standing to bring a claim under, or on behalf of, the Pension Plan. Plaintiff has failed to come forward with 26 contravening evidence. The Court concludes that Defendants are entitled to 27 partial summary judgment as to the first three claims to the extent they assert ERISA violations relating to the Pension Plan. 28 1 (Id. at 15-16). 2 The Court determined that Plaintiff was not eligible to participate in the Pension Plan 3 based on the existence of an amendment to the Pension Plan (the “2008 Amendment”)— 4 executed “concurrently” with the Pension Plan’s Adoption Agreement—that excluded 5 Plaintiff from the class of employees who might otherwise be eligible to participate in the 6 Pension Plan. (See id. at 10-14). In its Order, the Court rejected Plaintiff’s contention that 7 the 2008 Amendment was backdated as unsupported by evidence in the record. (See id. at 8 6 n.2 (“David Barka, the Vice President of Calbiotech and a Trustee of the Pension Plan, 9 states in a sworn Declaration that the 2008 Amendment relied on in this Order is “[a] true 10 and correct copy” of the 2008 Amendment to the Pension Plan and “was adopted/executed 11 by Calbiotech concurrently with the Adoption Agreement on December 28, 2008.” (ECF 12 No. 74-2 ¶ 9). Plaintiff has not come forward with any evidence that the 2008 Amendment 13 is not authentic or that the dates listed in the 2008 Amendment are false.” (alteration in 14 original))). 15 On April 25, 2022, Plaintiff filed the Motion for Partial Reconsideration of the 16 March 28, 2022 Order. (ECF No. 116). The motion requests that “the Court reconsider the 17 decision to grant Defendant[s’] Motion as to the first, second, and third claims in the SAC 18 to [the] extent those claims relate to the Pension Plan . . . on the basis of [ ] newly discovered 19 or newly available evidence and [ ] new facts and circumstances . . . which were not 20 previously presented to the Court.” (Id. at 4). On May 13, 2022, Defendants filed a 21 Response in opposition to the Motion for Partial Reconsideration. (ECF No. 117). The 22 docket reflects that no reply brief has been filed. 23 II. CONTENTIONS 24 Plaintiff contends that “new evidence and facts contravene Defendants’ declaration 25 that the 2008 Amendment was adopted concurrently with the Pension Plan in 2008” and 26 instead “support [Plaintiff’s] contentions that the 2008 Amendment is backdated [and] was 27 never implemented between 2008 and 2016.” (ECF No. 116 at 10). “[T]here are therefore 28 genuine issues as to Defendants’ claims that Plaintiff was not a participant in the Pension 1 Plan and lacks standing.” (Id. at 14). In support of his motion, Plaintiff presents: (1) tax 2 forms filed by Calbiotech, which Plaintiff contends “contradict Defendants’ claim that the 3 2008 Amendment was adopted and enacted in 2008” (Id. at 11); (2) a favorable opinion 4 letter issued by the Internal Revenue Service (“IRS”), which Calbiotech “may only rely on 5 . . . if 100% of non-excludable employees benefit under the [Pension] Plan” (Id. at 12); (3) 6 the absence of the 2008 Amendment in Pension Plan documents produced prior to 2019; 7 and (4) the language of the 2008 Amendment itself. 8 Defendants contend that Plaintiff’s Motion for Partial Reconsideration should be 9 denied because Plaintiff was in possession of the evidence offered in support of the motion 10 prior to the hearing on the March 28, 2022 Order and Plaintiff’s arguments could have been 11 raised at an earlier time. Defendants further contend that the evidence presented by Plaintiff 12 fails on the merits to create a genuine dispute as to the authenticity of the 2008 Amendment. 13 III. STANDARD OF REVIEW 14 Rule 59(e) of the Federal Rules of Civil Procedure permits a district court to 15 reconsider and amend a previous order. See Fed. R. Civ. P. 59(e); see also Kona Enters., 16 Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). Reconsideration is “an 17 extraordinary remedy, to be used sparingly in the interest of finality and conservation of 18 judicial resources.” Id. (quotation omitted). “Whether or not to grant reconsideration is 19 committed to the sound discretion of the court.” Navajo Nation v. Confederated Tribes & 20 Bands of the Yakama Indian Nation, 331 F.3d 1041, 1046 (9th Cir. 2003). “Reconsideration 21 is appropriate if the district court (1) is presented with newly discovered evidence, (2) 22 committed clear error or the initial decision was manifestly unjust, or (3) if there is an 23 intervening change in controlling law.” Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 24 1263 (9th Cir. 1993). 25 IV. DISCUSSION 26 A. Discovery of Evidence 27 “A Rule 59(e) motion may not be used to raise arguments or present evidence for 28 the first time when they could reasonably have been raised earlier in the litigation.” Kona 1 Enters., 229 F.3d at 890. “[T]o support a motion for reconsideration of a grant of summary 2 judgment based upon newly discovered evidence, the movant is ‘obliged to show not only 3 that this evidence was newly discovered or unknown to it until after the hearing, but also 4 that it could not with reasonable diligence have discovered and produced such evidence at 5 the hearing.’” Frederick S. Wyle Pro. Corp. v. Texaco, Inc., 764 F.2d 604, 609 (9th Cir. 6 1985) (emphasis in original) (quoting Engelhard Indus., Inc. v. Rsch. Instrumental Corp., 7 324 F.2d 347, 352 (9th Cir. 1963)). 8 Pages of the tax forms presented by Plaintiff—the Pension Plan’s Form 5500 SF 9 documents for 2009-2012, and Schedule SB documents for plan years ending in 2011- 10 2013—were among the exhibits submitted by Plaintiff on March 2, 2019, in support of 11 Plaintiff’s administrative appeal of Calbiotech’s denial of Plaintiff’s administrative claim 12 for benefits. (See ECF Nos. 117-1 ¶ 8; 117-3 at 2). These documents were also filed on the 13 record in this case on September 15, 2021. (See ECF No. 74-9 at 573-79; 598-600). 14 Plaintiff’s Declaration in support of the Motion for Partial Reconsideration acknowledges 15 that “Defendants produced their copies of the Pension Plan Form 5500 Reports for each 16 year between 2009 and 2015 on January 12, 2022” (ECF No. 116 ¶ 17), and Plaintiff’s 17 deposition testimony establishes that he had online access to these forms in 2018 (ECF No. 18 117-4 at 3). The favorable opinion letter issued by the IRS was produced by Defendants to 19 Plaintiff on January 12, 2022, and re-produced by Plaintiff in an email to Defendants on 20 January 24, 2022. (See ECF Nos. 117-1 ¶ 9; 117-5 at 2). Further, Plaintiff acknowledges 21 that the 2008 Amendment was produced to Plaintiff on January 2, 2019, more than three 22 years prior to the hearing on the Court’s March 28, 2022 Order. (See ECF No. 116 ¶ 23). 23 The Court finds that Plaintiff has failed to demonstrate that any evidence in support 24 of Plaintiff’s Motion for Reconsideration “was newly discovered or unknown to [Plaintiff] 25 until after the hearing” for the March 28, 2022 Order, and that Plaintiff “could not with 26 reasonable diligence have discovered and produced such evidence at the hearing.” 27 Frederick S. Wyle, 764 F.2d at 609 (quoting Engelhard, 324 F.2d at 352). 28 /// 1 B. Consideration on the Merits 2 Defendants previously presented a document as an exhibit to the sworn Declaration 3 of David Barka that is “a true and correct copy” of the 2008 Amendment. (ECF No. 74-2 4 ¶ 9). By its terms, the 2008 Amendment was “executed … this 28th day of December, 5 2008.” (ECF No. 74-6 at 2). David Barka states in the Declaration that the 2008 6 Amendment “was adopted/executed by Calbiotech concurrently with the Adoption 7 Agreement on December 28, 2008.” (ECF No. 74-2 ¶ 9). Defendants have provided 8 evidence that the 2008 Amendment was executed on December 28, 2008. Plaintiff’s 9 evidence must create a genuine dispute as to the authenticity of the 2008 Amendment for 10 Plaintiff to prevail on the merits of his Motion for Partial Reconsideration. 11 Plaintiff first contends that the adoption of the 2008 Amendment would have negated 12 the pre-approved status of the Pension Plan, but that Defendants nevertheless represented 13 on 2009-2015 tax forms that the Pension Plan was pre-approved. Plaintiff contends that the 14 inconsistency between the adoption of the 2008 Amendment and Defendants’ subsequent 15 representations on the Pension Plan tax forms is evidence that the 2008 Amendment was 16 backdated. Defendants contend that the representations contained in the Pension Plan tax 17 forms are consistent with the prior adoption of the 2008 Amendment and that “[e]ven were 18 a mistake of any kind made on any Form 5500, it does not call into question the authenticity 19 of the 2008 Amendment.” (ECF No. 117 at 14). 20 The governing documents of the Pension Plan provide in part: 21 ADDITIONAL RESTRICTIONS TO RETAIN PROTOTYPE STATUS: The Sponsoring Employer may amend the plan by completing a new Adoption 22 Agreement on an approved prototype form or by executing an Adoption 23 Agreement addendum. The Sponsoring Employer may also amend the plan by adding a model amendment published by the Internal Revenue Service 24 which specifically provides that its adoption will not cause the plan to be 25 treated as individually designed. If the Sponsoring employer amends in any other way, . . . the amended plan ceases to enjoy the status of a prototype plan 26 approved in advance as to form by the Internal Revenue Service. 27 28 1 (ECF Nos. 74-5 at 6; 74-8 at 232). Defendants indicated in their response to Question 9A 2 on the Form 5500-SF documents for the 2009-2012 tax years that the Pension Plan is a 3 “[p]re-approved pension plan.” (ECF No. 116 at 24, 26, 29, 32, 38). Defendants also 4 represented in Schedule SB documents that “[a]ll employees excluding non-resident aliens, 5 members of an excluded class and union” were eligible for participation in the Pension 6 Plan. (ECF No. 116 at 27, 30, 34). 7 The evidence in the record demonstrates that the 2008 Amendment was properly 8 adopted. (See ECF No. 74-5 at 6 (“The Sponsoring Employer may amend the plan … at 9 any time.”)). There is no evidence to support Plaintiff’s position that the 2008 Amendment 10 would have negated the pre-approved status of the Pension Plan or that Defendants’ 11 representations on the Form 5500-SF and Schedule SB documents are inconsistent with 12 the prior adoption of the 2008 Amendment. Reconsideration on the basis of the tax forms 13 provided by Plaintiff is denied. 14 Plaintiff next contends that an IRS favorable opinion letter relied on by the Pension 15 Plan is conditioned on “100% of all nonexcludable employees benefit[ing] under the plan,” 16 and because Plaintiff did not benefit from the Pension Plan, the opinion letter could not 17 apply to the Pension Plan after the 2008 Amendment. (ECF No. 116 at 41). Defendants 18 contend that Plaintiff was an excludable employee and that “Plaintiff is merely rehashing 19 flawed arguments previously submitted to the Court concerning the tax-qualified status of 20 the Pension Plan.” (ECF No. 117 at 16). 21 The opinion letter states that its application “with respect to the requirements of Code 22 section 410(b) and 401(a)(26)” is conditioned on “100% of all nonexcludable employees 23 benefit[ing] under the plan.” (ECF No. 116 at 41). While an amendment that restricts 24 nonexcludable employees from benefiting under the Pension Plan would limit the opinion 25 letter’s applicability, the opinion letter does not preclude such an amendment. The 26 existence of the opinion letter is not in conflict with the prior execution of a plan 27 amendment. Reconsideration on the basis of the IRS favorable opinion letter provided by 28 Plaintiff is denied. 1 Plaintiff further contends that the fact that the 2008 Amendment was not produced 2 by Defendants in 2018 as part of the production of “all Plan Documents” is evidence that 3 it is backdated. (Id. at 13). Defendants contend that the non-inclusion of the 2008 4 Amendment in prior production of Pension Plan documents is immaterial because 5 Defendants never agreed to provide “all” Pension Plan documents. (ECF No. 117 at 17). 6 In connection with Defendants’ production of Pension Plan documents in 2018, 7 Defendants repeatedly represented that only “certain documents” were being produced. 8 (Id. at 43, 45-46). Plaintiff acknowledged in his deposition that he was never told that he 9 would receive a “complete” set of plan documents in 2018. (ECF No. 117-4 at 11). The 10 2008 Amendment was produced to Plaintiff on January 2, 2019. (See ECF No. 116 ¶ 23). 11 In the absence of evidence that Defendants had an obligation to produce the 2008 12 Amendment or represented that they were producing “all” Pension Plan documents in 13 2018, Defendants’ non-production of the 2008 Amendment in 2018 does not support the 14 assertion that the 2008 Amendment is backdated. Reconsideration on the basis that the 15 2008 Amendment was not produced in 2018 is denied. 16 Plaintiff’s fourth basis for his request for reconsideration is that the 2008 17 Amendment’s use of the word “heretofore” in describing the establishment of the Pension 18 Plan contradicts Defendants’ position that the 2008 Amendment was adopted concurrently 19 with the Pension Plan. Plaintiff contends that the use of the word “heretofore” demonstrates 20 that “there was a period of time (no matter how short) in which [Plaintiff] was, or may have 21 been a participant with a vested interest in the Pension Plan.” (ECF No. 116 at 14). 22 Defendants contend that the language cited by Plaintiff “is without relevance” and that in 23 any case, Plaintiff never satisfied the Pension Plan’s other eligibility requirements prior to 24 the execution of the 2008 Amendment. (ECF No. 117 at 19). 25 The Pension Plan’s Adoption Agreement was executed on December 28, 2008, 26 retroactively effective September 1, 2008. The 2008 Amendment is dated December 28, 27 2008 (also retroactively effective September 1, 2008) and provides that “the Employer 28 heretofore established a Pension Plan.” (ECF No. 74-6 at 2). 1 The use of the word “heretofore” in the 2008 Amendment does not support 2 || Plaintiff's broader position “that the 2008 Amendment is backdated [and] was never 3 ||implemented between 2008 and 2016.” (ECF No. 116 at 10). Plaintiff instead contends that 4 ||he has standing as a participant in the Pension Plan based on the gap in time on December 5 ||28, 2008, between the execution of the Pension Plan and the execution of the 2008 6 || Amendment. However, the undisputed facts provided by the parties demonstrate that 7 || Plaintiff was not eligible to participate in the Pension Plan on or before December 28, 2008, 8 || for reasons independent of the 2008 Amendment—namely, that Plaintiff had not satisfied 9 ||the one-year service requirement.' (See ECF Nos. 74-2 at 3; 74-3 at 2 (letter offering 10 || Plaintiff employment at Calbiotech dated May 26, 2008); 74-4 at 3 (one-year service 11 |/requirement in Adoption Agreement)). Reconsideration on the basis of the language 12 contained in the 2008 Amendment is denied. 13 V. CONCLUSION 14 IT IS HEREBY ORDERED that Plaintiff Robert Raya’s Motion for Partial 15 || Reconsideration (ECF No. 116) is denied. 16 || Dated: June 30, 2022 Nitta Ze. A a 17 Hon, William Q. Hayes 18 United States District Court 19 20 21 22 23 24 25 26 ' Plaintiff's “statement of fact” that “Plaintiff began performing service for Calbiotech before June of 27 2008” does not articulate when Plaintiff began performing service and thus does not create a genuine 28 whether Plaintiff had satisfied the service time requirement by December 28, 2008. (ECF