Aboulhosn v. Merrill Lynch, Pierce, Fenner & Smith Inc., Case No. CV 12–00891 MMM (SPx).

Decision Date16 April 2013
Docket NumberCase No. CV 12–00891 MMM (SPx).
Citation940 F.Supp.2d 1203
CourtU.S. District Court — Central District of California
PartiesMarwan ABOULHOSN, Plaintiff, v. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED; Roe business organizations I–X, and Doe individuals I–X, Defendants.

OPINION TEXT STARTS HERE

Anthony Albert Liberatore, A. Liberatore Law Offices, Los Angeles, CA, for Plaintiff.

Patricia S. Riordan, Edwards Wildman Palmer LLP, Los Angeles, CA, for Defendants.

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF'S COMPLAINT; MOTION FOR SUMMARY JUDGMENT ON CROSS–COMPLAINT

MARGARET M. MORROW, District Judge.

On February 1, 2012, Marwan Aboulhosn filed this action against Merrill Lynch Pierce Fenner and Smith, Inc. (Merrill Lynch) and certain fictitious defendants.1On April 12, 2012, Merrill Lynch filed a counterclaim against Aboulhosn.2 On December 17, 2012, Merrill Lynch filed a motion for summary judgment on its counterclaim,3 and a motion for summary judgment on the claims asserted in Aboulhosn's complaint.4 Aboulhosn opposes both motions.5

I. FACTUAL BACKGROUND
A. Aboulhosn's Employment and the Promissory Note

Aboulhosn commenced employment with Bank of America Investment Services, Inc. (“BAI”) on August 6, 2007.6 On February 10, 2009, Aboulhosn and BAI executed a payment agreement (“the Agreement”) 7 that, subject to the provisions of the Agreement, obligated BAI to make six annual payments of $91,735.83 to Aboulhosn as consideration for his continued services.8 Aboulhosn contends that the payments under the Agreement represented a bonus BAI had agreed to pay if he successfully maintained and/or increased the assets he was managing.9

On the same day that the parties executed the Agreement, they also executed a promissory note (“the Note”) that obligated Aboulhosn to pay BAI six annual payments of $91,735.83 in consideration for a $550,415 loan (“the Loan”). 10 Aboulhosn agreed that the Note would become “immediately due and payable, without notice or demand, if [his] employment with BAI [was] voluntarily or involuntarily suspended or terminated.” 11 The Note provided that interest on the loan would accrue at the rate of 5% per annum. 12 Aboulhosn also agreed to reimburse Merrill Lynch for any and all damages, losses, costs and expenses, including attorneys' fees, incurred by it due to a breach of the note.13 Aboulhosn asserts that the Note secured the bonus to be paid under the Agreement; he contends that, on an annual basis, he was to make an installment payment under the Note, at which point, BAI was to pay that amount to him less taxes and deductions under the Agreement.14 He contends that this pair of transactions was completed once before he was terminated.15

In addition to the Note, Aboulhosn read and signed an “Important Acknowledgment Form” (“the Form”).16 In the Form, Aboulhosn acknowledged that the loan was not a bonus, and that if his employment was terminated for any reason, all outstanding principal and interest under the Note would become immediately due and payable.17

The Agreement states, in relevant part: “Employee understands that Employee is employed on an at-will basis. This agreement does not constitute an agreement by [BAI] to employ Employee for a specified period of time, and employee's employment may be terminated at any time, with or without notice or cause.” 18 The Note states: “This agreement does not constitute an agreement [by BAI] to employ Employee for a specified period of time, and Employee's employment may be terminated at any time, with or without notice or cause.” 19 Aboulhosn read and understood the Note before he voluntarily signed it.20 Thus, as of February 10, 2009, Aboulhosn understood that he was an at-will employee, and that Merrill Lynch could terminate him at any time with or without cause.21

On October 26, 2009, BAI merged with Merrill Lynch.22 Merrill Lynch thus became the holder and owner of the Note.23

BAI paid $550,415 to Aboulhosn pursuant to the Note on or about February 17, 2009.24 Aboulhosn made only one payment on the Note—a $91,735.84 payment on February 9, 2010.25 Merrill Lynch forgave the interest due on the Note through that date.26 As of July 1, 2010, the remaining principal balance on the Loan was $458,679.16.27

When Aboulhosn commenced his employment with Merrill Lynch, his manager told him the Associate Handbook (“the Handbook”) was available and accessible to him online.28 The Handbook states:

“The provisions of the Associate Handbook do not establish enforceable employee rights, contractual or otherwise, and they do not establish an employment relationship enforceable by associates. The provisions are not promises; they are subject to change at any time without notice and are subject to management's discretion in their application. [Nothing] in this handbook or any other Bank publication, policy or guideline shall interfere with or limit in any way the right of the company to terminate any associate's employment without cause or notice at any time, or confer upon any associate any right to change an associate's existing at-will employee status. Associates remain employed at-will and the at-will employment relationship can only be changed by an authorized company representative in writing.” 29

B. Merrill Lynch's Family Care Leave Policy

Merrill Lynch's family care leave policy permits an employee to take up to 26 weeks of unpaid leave from work to care for the serious health condition of a family member.30 Employees on family care leave can also receive job-protected Family Medical Leave Act (“FMLA”) leave for up to 12 work weeks in a rolling twelve-month period.31 If a family care leave qualifies for FMLA protection, the FMLA and family care leave periods run concurrently. 32

The 2010 Handbook contains Merrill Lynch's medical leave policy, including its family care leave policy policy and FMLA policy.33 As noted, Aboulhosn knew throughout the course of his employment at Merrill Lynch that he could access the Handbook online.34

The Handbook directs employees to contact Aetna, Merrill Lynch's leave administrator, to initiate a family care leave.35 It also provides Aetna's phone number.36 The Handbook states: “Once the leave has been initiated, the required health care provider certification and request forms must be completed and returned to the Leave Administrator within 15 days. Failure ... to complete the required documentation in a timely fashion could result in a denial of the leave request.” 37

C. Aboulhosn's 2010 Leave

In early May 2010, Aboulhosn informed his manager, Deanna Norris, that he had to take a leave to care for his father in Lebanon.38 Norris told Aboulhosn that he had two options: family care leave or personal leave. 39 She advised Aboulhosn that he would have to submit documentation from his father's doctor to demonstrate that he qualified for family care leave.40 Aboulhosn thus understood in early May 2010 that if he took family care leave, he would have to submit documentation to support the leave. 41 Aboulhosn's managers encouraged him to take family medical leave, 42 and he ultimately chose that option.43

Aboulhosn called Aetna to initiate his leave on May 21, 2010.44 Aetna told Aboulhosn: he would have to submit documents before his leave could be approved,45and said it would send him the documents he needed to submit for approval.46 Aetna also gave Aboulhosn a facsimile number to which he could fax the documents supporting his leave request. 47 Aboulhosn instructed Aetna to send mail to his home address until he left for Lebanon.48

While Aboulhosn was in Lebanon, he had his mail forwarded from his house to his brother's house.49 Aboulhosn called Aetna from Lebanon and instructed it to send communications to him to his brother's address.50

Merrill Lynch asserts that Aetna sent Aboulhosn a letter on May 24, 2010, which enclosed a document that detailed his rights under the Family Medical Leave Act of 1993, an Authorization for the Release of Medical Information, and a Fair Employment and Housing Commission Certification of Health Care Provider. 51 The letter purportedly stated that Aboulhosn was required to provide a completed Health Care Provider Certification by June 8, 2010, and warned that his absence would not be approved until Aetna made a final determination concerning his request.52 Aboulhosn contends he never received the letter and attachments, and disputes that they were sent. 53

Merrill Lynch asserts that Aetna sent Aboulhosn a second letter on May 28, 2010, reminding him to complete the documentation required for his leave request.54 Aboulhosn contends he never saw the letter, and disputes that it was sent.55 Merrill Lynch also asserts that on June 14, 2010, Aetna sent Aboulhosn a letter stating that his leave request had been denied because he had failed to complete the required documentation.56 Aboulhosn disputes that the letter was sent or received by him.57

On June 14, 2010, Lori Morales, the assistant to Aboulhosn's manager, sent Aboulhosn an email forwarding a notice from Aetna that his leave had been denied for failure to complete the required documentation.58 The email advised Aboulhosn to call Aetna directly.59 It stated:

“Aetna makes three calls to the associate and then forwards an email to the manager as the final notice. To date, they have made the first phone call to you and are looking to discuss the status of your leave request. You may still be able to submit medical documentation at this point, but must contact Aetna ASAP as the window is very short.” 60

On June 17, 2010, Aboulhosn's manager, Jeffrey Smith, emailed him.61 Smith's email stated that he had unsuccessfully attempted to reach Aboulhosn twice by telephone.62 It also stated that Aboulhosn's assistance was needed because his leave had been denied for failure to provide the necessary documents to Aetna's leave manager.63 The email attached Aetna's paperwork.64

Aboulhosn received Smith's email,65 and responded on June 18, 2010. He noted...

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