Karp v. Avella of Deer Valley Incorporated, 2:13-cv-01885

Karp, a pharmacist, worked for Avella of Deer Valley from 1999 to July 2012.
In 2009, the parties executed a Non-Compete/Non-Solicit Agreement with restrictions during and after employment.
Defendant paid Karp $250,000 as consideration for signing the 2009 Agreement.
Karp was diagnosed with Vertebrobasilar Dolichoectasia (VBD) in August 2011, later facing demotion and salary reduction in December 2011.
Karp was terminated in July 2012; he seeks injunctive relief and a declaratory judgment that the 2009 Agreement is unenforceable, plus disability discrimination and FMLA retaliation claims.
Defendant asserts an unjust enrichment counterclaim seeking recovery of the $250,000 if Karp breaches the 2009 Agreement; the court previously granted some injunctive relief and now denies dismissal of the unjust enrichment claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether unjust enrichment claim survives given alleged illegality	Karp argues the contract is illegal, so unjust enrichment cannot be based on it.	Holley supports allowing unjust enrichment unless contract legality is established; not yet decided.	The court declines to dismiss; Arizona illegality not yet decided at this stage.

Hilb Rogal & Hamilton v. Holley, 670 S.E.2d 874 (Ga. Ct. App. 2008) (unjust enrichment claim not categorically barred by illegality in contract (Georgia authority cited))
Landi v. Arkules, 835 P.2d 459 (Ariz. Ct. App. 1992) (services rendered under an illegal contract may deny recovery)